Falcon's Beyond Global FBYD Form 10-Q filing Q2 FY2026

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

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

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

See accompanying notes to unaudited condensed consolidated financial statements.

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

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

See accompanying notes to unaudited condensed consolidated financial statements.

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

(in thousands of U.S. dollars)

See accompanying notes to unaudited condensed consolidated financial statements.

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See accompanying notes to unaudited condensed consolidated financial statements.

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

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

Description of business and basis of presentation

Merger with FAST II

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

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

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

Nature of operations

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

Basis of presentation

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

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

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

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

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

Principles of consolidation

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

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

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

Liquidity

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

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

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

Summary of significant accounting policies

Concentration of credit risk

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

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

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

Reclassifications

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

Recently issued accounting standards

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

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

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

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

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

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

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Revenue

Disaggregated components of revenue consisted of:

Accounts receivable consisted of:

Geographic information

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

Investments and advances to equity method investments

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

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Falcon’s Creative Group

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

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

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

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PDP

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

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Karnival

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

Investments and advances to equity method investments consisted of:

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

Share of income (loss) from FCG consisted of:

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

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

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

Related party activity for FCG and PDP consisted of:

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consisted of:

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Long-term debt and borrowing arrangements

Indebtedness consisted of:

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

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

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

$5.5 million revolving credit arrangement

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

$15 million revolving credit arrangement

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

€1.5 million term loan

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

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€7 million term loan

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

$0.9 million term loan

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

$0.5 million demand note

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

$0.25 million demand note

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

Commitments and contingencies

Litigation

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

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

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Indemnification

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

Commitments

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

Stock warrants

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

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

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

Net income (loss) per share

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

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

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

Share-based compensation

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

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

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

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

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

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

Income taxes

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

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

Tax receivable agreement

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

Segment information

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

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

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

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

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

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A reconciliation of segment income (loss) from operations to net income (loss) before taxes is as follows:

Identifiable assets and capital expenditures are comprised of:

Related party transactions

Accounts Receivable

The Company has a receivable from PDP for $0.2 million as of both March 31, 2026 and December 31, 2025.

Other current assets

The Company has a short-term advance to fund working capital to FCG for $1.1 million and $1.0 million as of March 31, 2026 and December 31, 2025, respectively.

Related party debt

The Company has various long-term debt instruments with Infinite Acquisitions. These loans had $0 and $0.3 million accrued interest as of March 31, 2026 and December 31, 2025, respectively.

Loans with Katmandu Ventures, LLC had accrued interest of $0.2 million as of both March 31, 2026 and December 31, 2025.

A loan with Cecil and Marty Magpuri had accrued interest of less than $0.1 million as of both March 31, 2026 and December 31, 2025.

During 2026, the Company entered into multiple non-interest bearing short-term working capital loans with Cecil Magpuri for $0.5 million. The loans were repaid in full by March 31, 2026.

Accrued interest is included within Accrued expenses and other current liabilities on the unaudited condensed consolidated balance sheets.

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Services provided to equity method investments

FCG has been contracted for various design, master planning, attraction design, hardware sales and commercial services for themed entertainment offerings by the Company’s equity method investments. Destinations Operations recognizes management and incentive fees from the Company’s equity method investments.

Intercompany Services Agreement between FCG and the Company

There were accounts receivable balances of $2.0 million and $1.6 million outstanding as of March 31, 2026 and December 31, 2025, respectively, related to the Intercompany Services Agreement.

The Company recognizes related party revenue for corporate shared service support provided to FCG. The Company recognized $1.9 million and $1.6 million revenue related to services provided to FCG for the three months ended March 31, 2026 and 2025, respectively.

FCG also provides marketing, research and development, and other services to FBG. The Company owes FCG $0.1 million related to these services as of both March 31, 2026, and December 31, 2025. The Company and FCG have also incurred reimbursable costs on behalf of each other. The Company had $1.0 million and $0.6 million in accounts receivable from FCG related to reimbursable costs as of March 31, 2026 and December 31, 2025, respectively.

Equity method investment financing

Scott Demerau, the Executive Chairman and his wife are investors of the lender that provided $2.75 million financing to a third party buyer of land sold by FCG in February 2026.

Subsequent events

The Company has evaluated subsequent events through May 14, 2026 and determined that there have been no events that have occurred that would require adjustments to our disclosures in the unaudited condensed consolidated financial statements except for the following:

The Company repaid $0.7 million and drew $0.9 million pursuant to the $5.5 million and the $15.0 million revolving credit arrangements with Infinite Acquisitions, respectively.

On May 11, 2026, the Company entered into two Master Products and Services Agreements (the “VAI Agreements”) with VAI Amusement Park, LLC. Pursuant to the VAI Agreements, Falcon’s Attractions and its affiliates will provide the design, engineering, fabrication and installation of two separate dark ride vehicle systems. Each agreement is valued at approximately $9 million, with an aggregate value of approximately $18 million across both agreements. The VAI Agreements include milestone-based payment terms tied to the progress of these services, which are expected to occur over the respective project execution periods.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations is provided to supplement our unaudited condensed consolidated financial statements and the accompanying notes as of and for the three months ended March 31, 2026, and 2025, included elsewhere in this Quarterly Report. We intend for this discussion to provide the reader with information to assist in understanding our unaudited condensed 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. 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 Note Regarding Forward-Looking Statements,” in this Quarterly Report.

Overview of Business

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

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

On October 5, 2023 FAST II merged with and into Pubco (the “SPAC Merger”), with Pubco surviving as the sole owner of Merger Sub, followed by a contribution by Pubco of all of its cash (except for cash required to pay certain transaction expenses) to Merger Sub to effectuate the “UP-C” structure; and on October 6, 2023 Merger Sub merged with and into Falcon’s Opco (the “Acquisition Merger,” and collectively with the SPAC Merger, the “Business Combination”), with Falcon’s Opco as the surviving entity of such merger.

Our unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). All amounts are shown in thousands of U.S. dollars unless otherwise stated.

The following reflects our results of operations for the three months ended March 31, 2026 and 2025.

Liquidity and Going Concern

We have continued to invest in initiatives focused primarily on expanding its Falcon's Beyond Brands division, including product development, talent acquisition, and selective strategic investments. These activities have contributed to continued operating losses and negative cash flows from operations. Accordingly, we 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 interim unaudited condensed consolidated financial statements.

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

We assess our ability to meet obligations over the next twelve months based on current liquidity, assuming continued execution of our operating plan and financing and capital initiatives. While we believe these assumptions are reasonable, we have incurred recurring

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operating losses and negative cash flows from operations. These conditions, together with our ongoing capital needs to support its growth initiatives and working capital requirements, raise substantial doubt about our ability to continue as a going concern. We continue to take active steps to strengthen its capital position and improve liquidity, including pursuing additional financing and evaluating strategic alternatives. While management believes these actions may enhance our financial flexibility, they do not change the conclusion that substantial doubt exists about our ability to continue as a going concern. There can be no assurance that additional capital or financing, if obtained, will provide sufficient funding for the next twelve months from the date of this Quarterly Report on Form 10-Q. This Quarterly Report on Form 10-Q does not reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the possible inability of us to continue as a going concern.

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. The following table summarizes our results of operations for the following periods:

Revenue

Revenue increased for the three months ended March 31, 2026, compared to the same period in 2025, primarily driven by new attractions contracts.

Project design and build expense

Project design and build expense increased for the three months ended March 31, 2026, compared to the same period in 2025, primarily driven by new attractions service contracts.

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Cost of product sales

Cost of product sales increased for the three months ended March 31, 2026, compared to the same period in 2025, primarily driven by new attractions product sales.

Selling, general and administrative expense

Selling, general and administrative expense increased for the three months ended March 31, 2026, compared to the same period in 2025, primarily driven by an increase in payroll, payroll taxes, and benefits, professional fees, occupancy costs and marketing to support the continued expansion of the attraction services business.

Transaction expense (credit)

We recognized a transaction credit of $11.1 million for the three months ended March 31, 2026 for the reversal of accrued transaction expenses related to the Business Combination. See "Note 7 – Commitments and contingencies" in our unaudited condensed consolidated financial statements for additional discussion. We incurred $1.5 million of transaction expense for the three months ended March 31, 2025 related to a proposed underwritten offering of our Class A common stock that was not completed.

Research and development expense

We incurred $0.1 million of research and development expense for the three months ended March 31, 2025 related to the development of a location based entertainment experience which was subsequently terminated in 2025 with no impact to the statement of operations for the corresponding period.

Depreciation and amortization expense

Depreciation and amortization expense increased for the three months ended March 31, 2026, compared to the same period in 2025, primarily driven by the May 2025 acquisition of Oceaneering Engineering Services ("OES").

Share of gain (loss) from equity method investments

Share of loss from equity method investments increased for the three months ended March 31, 2026, compared to the same period in 2025, primarily driven by:

• PDP: Share of net loss from PDP increased for the three months ended March 31, 2026, compared to the same period in 2025, primarily driven by the sale of the Sol Tenerife Hotel in the second quarter of 2025. Following the prior-year sale of the Sol Tenerife Hotel, which operated year-round and generated peak occupancy during the winter season, current-period results reflect the loss of its full-year contribution and the seasonal nature of the remaining property, which was closed for most of the first quarter. Accordingly, current-period results reflect expected seasonal fluctuations.
• Karnival: Share of net gain from Karnival decreased for the three months ended March 31, 2026, compared to the same period in 2025, primarily driven by joint venture partner cash distributions and decrease in interest rates.
• FCG: We recognize 100% of net gain (loss), 9% preferred return to QIC and amortization of the basis difference on deconsolidation of FCG. See "Segment Reporting" below for further details.

Interest expense

Interest expense decreased for the three months ended March 31, 2026, compared to the same period in 2025, primarily driven by decreases in both short and long-term debt resulting from principal payments made during the period and exchange of debt and accrued interest for shares of Series B Preferred Stock in the third quarter of 2025.

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Change in fair value of warrant liability

As of March 31, 2025, all warrant liabilities were reclassified to equity and do not require subsequent fair value measurement. See Note 8 – Stock warrants in our unaudited condensed consolidated financial statements.

Foreign exchange transaction gain (loss)

Foreign exchange transaction gain decreased for the three months ended March 31, 2026, compared to the same period in 2025. The change is primarily attributable to the decrease of the U.S. denominated related party debt with a Spanish subsidiary.

Segment Reporting

The following table presents selected information about our segments’ results:

• FCG segment income increased for the three months ended March 31, 2026, compared to the same period in 2025, primarily as a result of an increase in margins on certain current long-term contracts and gain on sale of land. FCG's net income (loss) was adjusted for accretion of preference dividend and fees, and amortization of basis difference as follows:

FCG revenues increased for the three months ended March 31, 2026, compared to the same period in 2025, as a result of the timing of certain contract performance obligations. As of March 31, 2026, the contracted pipeline for FCG was $29.2 million.

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FCG project design and build expense increased for the three months ended March 31, 2026, compared to the same period in 2025, primarily driven by an increase in project revenues.

• Destinations Operations segment loss from operations decreased for the three months ended March 31, 2026, compared to the same period in 2025, primarily driven by decreased shared services allocations.
• PDP's share of segment loss increased for the three months ended March 31, 2026, compared to the same period in 2025, as a result of the sale of the resort hotel at Tenerife.
• Falcon's Attractions segment loss for the three months ended March 31, 2026, compared to the same period in 2025, remained consistent as a result of investment in the scaling of the segment's operations. Falcon's Attractions revenues, project design and build expense and cost of product sales increased for the three months ended March 31, 2026, compared to the same period in 2025, as a result of acquisition of OES in May 2025.

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. 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 (loss) from reportable segments and our unaudited condensed consolidated financial results. For more information about our Segment Reporting, see Note 13 – Segment information in our unaudited condensed consolidated financial statements.

Non-GAAP Financial Measures

We prepare our unaudited condensed consolidated financial statements in accordance with U.S. GAAP. In addition to disclosing financial results prepared in accordance with U.S. GAAP, we disclose information regarding Adjusted EBITDA which is a non-GAAP measure. We define Adjusted EBITDA as net income (loss), determined in accordance with U.S. GAAP, for the period presented, before net interest and expense, income tax (expense) benefit, depreciation and amortization, transaction expense (credit) related to the Business Combination and change in fair value of warrant liabilities.

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 and eliminating the change in fair value of warrant liabilities, which may not be comparable with other companies based on our structure.

Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under U.S. GAAP. 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.

The presentation of non-GAAP financial measures is not intended to be considered in isolation or as a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP.

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The following table sets forth reconciliations of net income (loss) under U.S. GAAP to Adjusted EBITDA for the following periods:

FCG prepares standalone consolidated financial statements in accordance with U.S. GAAP. In addition to disclosing FCG's standalone financial results prepared in accordance with U.S. GAAP, we disclose information regarding FCG's standalone Adjusted EBITDA which is a non-GAAP measure. FCG defines Adjusted EBITDA as net income, determined in accordance with U.S. GAAP, for the period presented, before net interest and expense, income tax expense, depreciation and amortization and gain on sale of land.

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.

Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of FCG's standalone results as reported under U.S. GAAP. Some of these limitations are (i) it does not reflect FCG's cash expenditures, or future requirements for capital expenditures or contractual commitments, (ii) it does not reflect changes in, or cash requirements for, FCG's working capital needs, (iii) it does not reflect interest expense, or the cash requirements necessary to service interest or principal payments, on FCG's 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 FCG's statements of cash flows, and (vi) other companies in our industry may calculate these measures differently than FCG does, limiting their usefulness as comparative measures.

The following table sets forth reconciliations of net income (loss) for FCG under U.S. GAAP to Adjusted EBITDA for the following periods:

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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. 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. 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 March 31, 2026, our total indebtedness was approximately $16.7 million. We had approximately $1.2 million of cash and $13.2 million available for borrowing under our lines of credit.

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 our portfolio of assets can provide additional liquidity over the next twelve months to meet our short-term needs. Management’s assessment of our ability to meet its obligations over the next twelve months is based on current liquidity levels and assumes the continued execution of its operating plan and certain financing and capital initiatives. While management believes these assumptions are reasonable, we have incurred recurring operating losses and negative cash flows from operations. These conditions, together with our ongoing capital needs to support its growth initiatives and working capital requirements, raise substantial doubt about our ability to continue as a going concern. We continue to take active steps to strengthen its capital position and improve liquidity, including pursuing additional financing and evaluating strategic alternatives. While management believes these actions may enhance our financial flexibility, they do not change the conclusion that substantial doubt exists about our ability to continue as a going concern.

As of March 31, 2026, we have a working capital deficiency of $12.9 million, including short-term debt obligations of $9.3 million. We are actively evaluating refinancing and other alternatives with respect to these obligations.

Our capital requirements will depend on many factors, including the timing and extent of spending to support our research and development efforts, investments in technology, the expansion of sales and marketing activities, and market adoption of new and enhanced products and features. In addition, we expect to incur additional costs as a result of operating as a public company. 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. Our future access to, and the availability of credit on acceptable terms and conditions, is impacted by many factors, including capital market liquidity and overall economic conditions. In the event that additional financing is required from outside sources, we cannot be sure that any additional financing will be available to us on acceptable terms if at all. If we are unable to raise additional capital when desired, our business, operating results, and financial condition could be adversely affected. 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, we 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. Pursuant to the Tax Receivable Agreement, among other things, we are 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. In certain cases, our obligations under the Tax Receivable Agreement may accelerate and become due and payable, based on certain assumptions, upon a change in control and certain other termination events, as defined in the Tax Receivable Agreement. On October 24, 2024, we and Exchange TRA Holders entered into an Amendment to the Tax Receivable Agreement to clarify the rights of a TRA Holder that transfers units but does not assign the transferee its rights under the TRA Agreement with respect to such transferred units.

Transaction costs

Transaction costs related to the Business Combination of $5.1 million are not yet settled as of March 31, 2026 and we are actively negotiating to settle them over the next 24 months. These transaction costs are recorded in accrued expenses. Negotiations regarding the terms of the costs yet to be settled are still ongoing and may change materially from these amounts accrued.

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As previously disclosed in our Annual Report, on March 27, 2024, a lawsuit was filed against us by Guggenheim Securities, LLC (“Guggenheim”) in which Guggenheim alleges that we owe 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”). We have denied all liability. We filed counterclaims against Guggenheim for fraud, breach of contract, breach of fiduciary duty, and equitable rescission. On March 31, 2026, the Supreme Court of the State of New York (the “Court”) heard oral arguments on each party’s motions for summary judgment. The Court denied our motion and granted Guggenheim’s motion in part; however, the Court allowed certain of our counterclaims to proceed. The Court denied Guggenheim’s motion for summary judgment on its claims and ordered that the matter would proceed to trial. The parties filed cross notices of appeal. In light of the order from the Court for the motions for summary judgment, management reevaluated its prior conclusion regarding the likelihood of loss associated with the Guggenheim matter. Based on the current procedural posture, including the Court’s findings and the viability of our counterclaims, management no longer believes that a loss related to Guggenheim’s claims is probable. Rather, we have concluded that the risk of loss is reasonably possible. Accordingly, during the three months ended March 31, 2026, we reversed the previously recorded accrual of $11.1 million associated with the alleged amended engagement agreement with Guggenheim. See "Note 7 – Commitments and contingencies" in our unaudited condensed consolidated financial statements for further discussion.

Related Party Loans

We have two financing agreements with Infinite Acquisitions with a total outstanding balance of $7.3 million as of March 31, 2026.

We have a financing agreement with Katmandu Ventures, LLC (“Katmandu Ventures”) with a total outstanding balance of $0.6 million as of March 31, 2026. The loan was due on May 16, 2025 and we are in negotiations to amend the loan.

We have a financing agreement with Cecil and Marty Magpuri with an outstanding balance of $0.1 million as of March 31, 2026.

See "Note 6 – Long-term debt and borrowing arrangements" and "Note 14 – Related party transactions" in our unaudited condensed consolidated financial statements.

Cash Flows

The following table summarizes our cash flows for the period presented:

Cash Flows from Operating Activities

Our cash flows used in operating activities increased for the three months ended March 31, 2026, compared to the same period in 2025, due to the continued investment in working capital for the growth of the Falcon's Attractions business, partially offset by a $1.7 million dividend distribution from PDP.

Cash Flows from Investing Activities

Net cash provided by investing activities increased for the three months ended March 31, 2026, compared to the same period in 2025, primarily related to a $1.5 million dividend distribution from Karnival.

Cash Flows from Financing Activities

Net cash provided by financing activities increased for the three months ended March 31, 2026, compared to the same period in 2025, primarily related to net proceeds of $1.2 million of debt.

Critical Accounting Estimates

Our critical accounting policies have not changed materially from those reported in our Annual Report on Form 10-K filed with the SEC on March 30, 2026.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk.

This item is not applicable as we are a smaller reporting company.

Item 4. Controls and Procedures.

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities and Exchange Act of 1934, as amended (“Exchange Act”)) as of the end of the period covered by this Quarterly Report. Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosures. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and procedures. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of March 31, 2026, our disclosure controls and procedures were not effective due to the identification of material weaknesses in our internal control over financial reporting.

Previously Reported Material Weaknesses

As previously disclosed in Part II Item 9A of our Annual Report on Form 10-K for the year ended December 31, 2025, in connection with the preparation and audit of the 2023 consolidated financial statements, management concluded that material weaknesses existed in our internal control over financial reporting with respect to our Risk Assessment, Control Activities, Monitoring, Control Environment and Information and Communication. These material weaknesses continue to exist as of March 31, 2026.

Remediation Efforts

We are in the process of implementing measures designed to improve our internal control over financial reporting and remediate the deficiencies that led to the material weaknesses discussed above. Our detailed remediation plans, which are currently in process, include the following actions:

• We have designed and implemented systems and controls to enable effective and timely review of period end close procedures and accounting review processes.
• We have engaged a third-party global consulting firm to enhance our review of significant accounting transactions and other new technical accounting and financial reporting issues and preparing and reviewing accounting memoranda. We have hired additional qualified accounting and financial reporting personnel to support the nature, growth and complexity of our business.
• We are in the process of designing and implementing controls and documentation of segregation of duties over information technology systems used to create or maintain financial reporting records.

In addition, as we continue to evaluate and work to improve our internal control over financial reporting, management may decide to take additional measures to address control deficiencies or determine to modify our remediation plan.

In light of the material weaknesses discussed above, we performed additional procedures to ensure that our consolidated financial statements included in this Quarterly Report were prepared in accordance with U.S. GAAP. Following such additional procedures, our management, including our Chief Executive Officer and Chief Financial Officer, has concluded that our consolidated financial statements present fairly, in all material respects, our financial position, results of operations and cash flows for the periods presented in this Quarterly Report, in conformity with U.S. GAAP.

Changes in Internal Control over Financial Reporting

Except as otherwise described herein, there was no change in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the quarter ended March 31, 2026 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. 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.

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

FAST Sponsor II Settlement

On February 20, 2026, the parties filed a Stipulation of Discontinuance and Order with the Supreme Court of the State of New York, New York County and on February 28, 2026, the action was discontinued without prejudice pursuant to the parties’ stipulation. See “Note 7 – Commitments and contingencies – Litigation” for additional discussion.

Item 1A. Risk Factors.

Factors that could cause our actual results to differ materially from those in this Quarterly Report are any of the risks described in our Annual Report. Any of these factors could result in a significant or material adverse effect on our results of operations or financial condition. Additional risk factors not presently known to us or that we currently deem immaterial may also impair our business or results of operations. As of the date of this Quarterly Report, there have been no material changes to the risk factors disclosed in the Annual Report. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

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Item 5. Other Information.

On May 11, 2026, the Company entered into two Master Products and Services Agreements (the “VAI Agreements”) with VAI Amusement Park, LLC. Pursuant to the VAI Agreements, Falcon’s Attractions and its affiliates will provide the design, engineering, fabrication and installation of two separate dark ride vehicle systems. Each agreement is valued at approximately $9 million, with an aggregate value of approximately $18 million across both agreements. The VAI Agreements include milestone-based payment terms tied to the progress of these services, which are expected to occur over the respective project execution periods.

10b5-1 Trading Arrangements.

During the quarter ended March 31, 2026, none of our directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

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Item 6. Exhibits.

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report:

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21.1* List of Subsidiaries of Falcon's Beyond Global, Inc. 31.1* Certification of Principal Executive Officer pursuant to Exchange Act Rule 13a-14(a). 31.2* Certification of Principal Financial Officer pursuant to Exchange Act Rule 13a-14(a). 32.1** Certification of Principal Executive Officer pursuant to Exchange Act Rule 13a-14(b) and 18 U.S.C. Section 1350. 32.2** Certification of Principal Financial Officer pursuant to Exchange Act Rule 13a-14(b) and 18 U.S.C. Section 1350. 101.INS* Inline XBRL Instance Document 101.SCH* Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Document (104) Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

• Filed herewith

** Furnished herewith

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