Falcon's Beyond Global, Inc.

(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.

FAST II and Falcon’s Opco’s transaction costs related to the Business Combination of $4.1 million and $12.2 million, respectively, are not yet settled at September 30, 2025. Negotiations regarding the terms of the costs yet to be settled are still ongoing and may change materially from the amounts accrued.

Nature of Operations

The Company operates at the intersection of content, technology, and experiences. 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. The Company has three business divisions, which are conducted through four operating segments. Our three business lines feed into each other to accelerate our growth strategy: (i) Falcon’s Creative Group, LLC (“FCG”) creates master plans, designs attractions and experiential entertainment, and produces content, interactives and software; (ii) Falcon’s Beyond Destinations develops a diverse range of entertainment experiences using both owned and third-party licensed intellectual property, consisting of Producciones de Parques, S.L. (“PDP”), and Destinations Operations, which develops a diverse range of entertainment experiences using both Company owned and third party licensed intellectual property, spanning location-based entertainment, dining, and retail; and (iii) Falcon’s Beyond Brands brings brands and intellectual property to life through animation, movies, licensing and merchandising, gaming, as well as ride and technology sales.

Basis of presentation

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

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

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

The unaudited condensed consolidated financial statements and notes are presented in accordance with the accrual basis of accounting in accordance with U.S. GAAP, with the rules and regulations of the Securities and Exchange Commission (“SEC”) and do not contain certain information included in the Company’s Annual Report on Form 10-K filed with the SEC on April 3, 2025.

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 (loss) income, 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 been engaged in expanding its physical operations through its equity method investments, developing new product offerings, raising capital and recruiting personnel. As a result, the Company has incurred a loss from operations of $11.4 million for the nine months ended September 30, 2025 and has negative cash flows from operating activities of $20.3 million for thenine months ended September 30, 2025. 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.

On September 8, 2025, the Company issued $28.7 million of shares of a newly created series of preferred stock designated as “11% Series B Cumulative Convertible Preferred Stock” (the “Series B Preferred Stock”) for$8.0 million in cash and the exchange of $20.7 million of outstanding debt. The $8.0 million in cash was utilized for the expansions of the attractions division. See "Note 16– Equity".

The Company’s development plans and investments have been funded by a combination of debt and equity contributions from its stockholders and third parties, and from the sale of non-core assets by our equity method investments. The Company is reliant upon its stockholders and third parties to obtain additional financing through debt or equity raises to fund its working capital needs, contractual commitments, and expansion plans. The Company's cash and cash equivalents as of September 30, 2025 were $4.3 million. As of September 30, 2025 and December 31, 2024, the Company has accrued material amounts of expenses in relation to its external advisors in relation to its Form S-4 and other filings. As of September 30, 2025, the Company has a working capital deficiency of $27.0 million including $8.2 million debt that matured on May 16, 2025 and debt coming due of $1.9 million.

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. There can be no assurance that the additional debt or equity raises, if completed, in combination with remaining commitments that are available on existing credit facilities, will provide the necessary funding for the next twelve months from the date these unaudited condensed consolidated financial statements will be issued. As a result, substantial doubt exists as to the Company’s ability to continue as a going concern for the twelve-month period following the issuance of these unaudited condensed consolidated financial statements. The accompanying unaudited condensed consolidated financial statements do not include any adjustments to 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 and Accounts receivable. The Company places its Cash and cash equivalents with financial institutions of high credit quality. At times, such amounts exceed federally insured limits. Management believes that no significant concentration of credit risk exists with respect to these cash balances because of its assessment of the creditworthiness and financial viability of the respective financial institutions.

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

The Falcon’s Creative Group segment hadtwo customers with revenue greater than 10% of its total revenue. FCG had revenue from Qiddiya Investment Company ("QIC") of $2.2 million and $15.8 million for the three and nine months ended September 30, 2025, respectively. The second customer had revenue of $3.2 million and $7.9 million for the three and nine months ended September 30, 2025, respectively.

The Company hadthree customers with revenue greater than 10% of total revenue. FBG had revenue from FCG of$1.8 million (44% of total revenue) and $1.7 million (83% of total revenue) for thethree months ended September 30, 2025 and 2024, respectively. FBG had revenue from FCG of $5.0 million (61% oftotal revenue) and $4.9 million (92% of total revenue) for thenine months ended September 30, 2025 and 2024, respectively. Accounts receivable balances from FCG totaled $1.5 million (52% of total Accounts receivable) and $1.4 million (83% of total Accounts receivable) as of September 30, 2025 and December 31, 2024, respectively.

Revenue from the second customer totaled$0.4 million (11% of total revenue) and $0.3 million (17% of total revenue) for thethree months ended September 30, 2025 and 2024, respectively. Revenue from the second customer totaled $0.6 million (7% oftotal revenue) and $0.4 million (8% of total revenue) for thenine months ended September 30, 2025 and 2024, respectively. Accounts receivable balances from the second customer totaled $0.6 million (21% of total Accounts receivable) and $0.3 million (17% of total Accounts receivable) as of September 30, 2025 and December 31, 2024, respectively.

Revenue from the third customer totaled $0.6 million (14% of total revenue) and $1.1 million (13% of total revenue) for thethree and nine months ended September 30, 2025. Accounts receivable balances from the third customer totaled $0.3 million (12% of total Accounts receivable) and $0 as of September 30, 2025 and December 31, 2024, respectively.

Leases

The Company evaluates leases at the commencement of the lease to determine the classification as an operating or finance lease. A right-of-use (“ROU”) asset and corresponding lease liability are recorded at lease commencement. Operating lease liabilities are recognized based on the present value of minimum lease payments over the remaining expected lease term. Lease expenses related to operating leases are recognized on a straight-line basis as a component of Selling, general and administrative expense in the consolidated statements of operations and comprehensive (loss) income.

Intangible assets

The Company initially records its intangible assets at fair value. Definite lived intangible assets are located in the United States of America and consist of developed technology, tradenames and trademarks, OES trade name and software rights which are amortized over their estimated useful lives.

The Company reviews definite lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Recoverability of these amortizing intangible assets is determined by comparing the forecasted undiscounted net cash flows of the operation to which the assets relate to the carrying amount. If the operation is determined to be unable to recover the carrying amount of its assets, then the assets are written down to fair value. Fair value is determined based on discounted cash flows or appraised values, depending on the nature of the assets.

Recoverability of other long-lived assets

The Company’s other long-lived assets consist primarily of property and equipment and lease ROU assets located in the United States of America. The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate the carrying value of such assets may not be recoverable. For property and equipment and lease ROU assets, the Company compares the estimated undiscounted cash flows generated by the asset or asset group to the current carrying value of the asset. If the undiscounted cash flows are less than the carrying value of the asset, then the asset is written down to fair value.

Revenue recognition

Attraction maintenance services

The Company's Falcon Beyond Brands segment provides attraction maintenance services to its customers on a time and material basis. The Company recognizes revenue related to these services using the right to invoice practical expedient.

Transaction (credit) expenses

The Company recognized a credit of $3.5 million for the nine months ended September 30, 2025 as a result of a reduction in accrued transaction expenses due to a negotiated settlement with the service provider. The Company also recognized $1.7 million in transaction expenses for the nine months ended September 30, 2025 related to a proposed underwritten offering of the Company's Class A common stock during the first quarter in 2025 that was not completed.

Cyber security

During the year ended December 31, 2023, the Company incurred costs related to consultants, experts and data recovery efforts as a result of a network intrusion. During the three months ended September 30, 2025, the Company reached an agreement for $0.6 million in full settlement of a claim against a third party network service provider to recover expenses related to the network intrusion. The amount was recorded as Selling, general and administrative expense in theu naudited condensed consolidated statements of operations and comprehensive (loss) income.

Business combinations

The Company utilizes the acquisition method of accounting under ASC 805, Business Combinations ("ASC 805"), for all transactions and events in which it obtains control over one or more other businesses (even if less than 100% ownership is acquired), to recognize the fair value of all assets and liabilities assumed and to establish the acquisition date fair value as of the measurement date.

While the Company uses its best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed as of the acquisition date, the estimates and assumptions are inherently uncertain and subject to refinement. As a result, during the measurement period, which may be up to one year from the acquisition date, the Company records adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill or bargain purchase to the extent we identify adjustments to the preliminary fair values. For changes in the valuation of intangible assets between the preliminary and final purchase price allocation, the related amortization is adjusted in the period it occurs. Subsequent to the measurement period, any adjustment to assets acquired or liabilities assumed is included in operating results in the period in which the adjustment is determined. Transaction expenses that are incurred in connection with a business combination, other than costs associated with the issuance of debt or equity securities, are expensed as incurred.

Contingent consideration is classified as a liability or as equity on the basis of the definitions of a financial liability and an equity instrument; contingent consideration payable in cash is classified as a liability. The Company recognizes the fair value of any contingent consideration that is transferred to the seller in a business combination on the date at which control of the acquiree is obtained. Contingent consideration payments related to acquisitions are measured at fair value each reporting period using Level 3 unobservable inputs (as defined in the Fair value measurement policy included in the Company’s Annual Report on Form 10-K filed with the SEC on April 3, 2025). When reported, any changes in the fair value of these contingent consideration payments are included in contingent earnout expense on the consolidated statements of operations and comprehensive (loss) income.

Reclassifications

Certain prior year amounts in these unaudited condensed consolidated financial statements have been reclassified to conform to the presentation for the three and nine months ended September 30, 2024 and as of the year ended December 31, 2024.

Recently issued accounting standards

On November 27, 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, “Improvements to Reportable Segment Disclosures.” This ASU requires additional reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses. In addition, the ASU enhances interim disclosure requirements effectively making the current annual requirements a requirement for interim reporting. This ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company adopted this ASU as of December 31, 2024, and the previously reported segment disclosures have been recast to reflect the new presentation under ASU 2023-07 guidance.

In March 2024, the FASB issued ASU 2024-02, “Codification Improvements-Amendments to Remove References to the Concepts Statements”. The amendments in this ASU affect a variety of Topics in the Codification. The amendments apply to all reporting entities within the scope of the affected accounting guidance. This ASU contains amendments to the Codification that remove references to various Concepts Statements. In most instances, the references are extraneous and not required to understand or apply the guidance. In other instances, the references were used in prior statements to provide guidance in certain topical areas. This ASU is effective for public business entities for fiscal years beginning after December 15, 2024. The Company adopted this ASU as of March 31, 2025 and it had no material impact to the condensed consolidated financial statements.

Recently issued accounting standards not yet adopted as of September 30, 2025

On December 14, 2023, the FASB issued ASU 2023-09, "Improvements to Income Tax Disclosures," which is primarily applicable to public companies and requires a significant expansion of the granularity of the income tax rate reconciliation as well as an expansion of other income tax disclosures. ASU 2023-09 requires a company to disclose specific income tax categories within the rate reconciliation table and provide additional information for reconciling items that meet a quantitative threshold (if the effect of those reconciling items is equal to or greater than 5 percent of the amount computed by multiplying pretax income (or loss) by the applicable statutory income tax rate. There are also additional disclosures related to income taxes paid disaggregated by jurisdictions, and to income taxes paid. The ASU is effective for fiscal years beginning after December 15, 2024 and for interim periods in fiscal years beginning after December 15, 2025. The guidance will be applied on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. The Company is evaluating the impact of ASU 2023-09 on its income tax disclosures.

In November 2024, the FASB issued ASU 2024-03, "Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40)". The amendments in this Update 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, is applied prospectively and may be applied retrospectively. The Company is evaluating the impact of ASU 2024-03.

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". The amendments in this ASU provide a practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. Under ASU 2025-05, an entity is required to disclose whether it has elected to use the practical expedient. An entity that makes the accounting policy election is required to disclose the date through which subsequent cash collections are evaluated. The ASU is effective for fiscal years beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. The Company is evaluating the impact of ASU 2025-05.

Business combination

On May 9, 2025, the Company purchased certain tangible assets and portfolio of intellectual property, including patented technologies, proprietary engineering and manufacturing processes, from Oceaneering Entertainment Systems (“OES”), a division of Oceaneering International Inc. (“OII”) for $1.6 million cash consideration, the ("OES Acquisition"). The acquisition is part of the Falcon's Beyond Brands segment and was completed to expand our attractions services business. The Company also assumed the lease for a 103,000+ square-foot facility to be utilized by the Falcon’s Beyond Brands division for research, development, manufacturing, and integration of attraction sales and services. The Company had an option to acquire vehicle inventory and lifting assets on or before July 23, 2025, for an additional $7.5 million (the "Option”), or pay $0.5 million additional consideration for the May 9th acquisition, if the Company chose not to exercise the option. The Company did not exercise the Option and recorded an accounts payable additional consideration of $0.5 million. In February 2025, the Company hired a team of 29 employees that had previously worked for OES. Employees were hired under customary terms and conditions for newly hired employees and no benefits or obligations from OES were paid or assumed associated with these employees.

The OES Acquisition was accounted for as a business combination under ASC 805, which requires that purchase consideration, assets acquired and liabilities assumed be measured at their fair values as of the acquisition date. The fair value of the intangible assets was determined using an income approach based on the relief from royalty method. For the favorable lease fair values, we used market rent, market growth rate and discount rate, as relevant, that market participants would consider when estimating fair values. The fair value of the property and equipment was determined using a combination of the cost and market approaches. The estimation of the property and equipment fair value considered the cost, replacement cost, ages, condition, expected useful life, and the intended use for each asset. The allocation of purchase price considerations is preliminary, and is subject to revision as more detailed analyses are completed and additional information about the fair value of assets acquired and liabilities assumed becomes available.

The total purchase price was allocated to the individual assets acquired and liabilities assumed based on their relative fair values. The total purchase price was allocated and revised as follows:

The fair value of the identifiable assets acquired and liabilities assumed exceeded the fair value of the purchase price. As a result, the Company reassessed the recognition and measurement of identifiable assets acquired and liabilities assumed and concluded that the valuation procedures and resulting measurements were appropriate. Accordingly, the acquisition has been accounted for as a bargain purchase and as a result, the Company recognized a gain of$1.1 million associated with the acquisition for the three and nine months ended September 30, 2025 included in gain on bargain purchase of OES Acquisition in the unaudited condensed consolidated statements of operations and comprehensive (loss) income. The bargain purchase was a result of OES's plan to divest certain non-core operations.

The Company recognized $1.8 million in revenues and $0.8 million in net loss (including shared service allocation of $0.6 million), respectively, attributable to OES forthree months ended September 30, 2025 and $2.7 million in revenues and $3.6 million in net loss (including shared service allocation of $1.6 million), respectively, attributable to OES fornine months ended September 30, 2025. The Company didnot incur transaction costs related to the OES Acquisition.

The following table presents the Company’s unaudited pro forma revenue and net income:

The unaudited combined pro forma revenue and earnings were prepared as if the OES acquisition had occurred on January 1, 2024. The pro forma information was compiled from pre-acquisition financial information and includes pro forma adjustments for depreciation and amortization expense.

The pro forma financial information is for informational purposes only and does not purport to present what the Company’s results would actually have been had the transaction actually occurred on the dates presented or to project the combined company’s results of operations or financial position for any future period.

Revenue

Disaggregated components of revenue consisted of:

Accounts receivable, net 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:

i)

Falcon’s Creative Group

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

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

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

ii)

PDP

PDP is an unconsolidated joint venture with Meliá Hotels International, S.A. (“Meliá Group”) for the development and operation of hotel resorts and theme parks. The Company has 50% voting rights and shares 50% of profits and losses in this joint venture. PDP operates one hotel resort and theme park located in Mallorca, Spain. PDP operated a hotel located at Tenerife in the Canary Islands until the sale on May 30, 2025. PDP sold all the shares of Tertian XXI, S.L., ("Tertian") a wholly-owned subsidiary of PDP, which owned the real estate assets comprising the resort hotel at Tenerife, the ("Tenerife Sale").

The Company received $27.0 million in a cash dividend distribution from PDP as a result of the transaction. PDP recognized a pre tax gain on sale of $60.0 million. The Company recognized its 50% share of the gain of $30.0 million inshare of (loss) gain from equity method investments included in the unaudited condensed consolidated statements of operations and comprehensive (loss) income. All summarized balance sheets and statements of operations below are presented with discontinued operations for Tertian on a retroactive basis.

Partial Impairment of Investment in PDP

The Tenerife sale represents a significant change in circumstances that could impact the fair value of the Company’s remaining investment in PDP. Accordingly, the Company performed an impairment evaluation of its equity method investment in PDP to determine whether the remaining carrying amount of the investment exceeds its fair value.

The Company evaluated its remaining equity investment in PDP for impairment as of June 30, 2025 and determined that it was other-than-temporarily impaired. The Company estimated the fair value of its investment in PDP using the direct capitalization method of the income approach. The Company used the property's estimated net operating income, yearly growth rate, capital expenditure reserves and a capitalization rate as the primary significant unobservable inputs (Level 3). The estimated fair value is based upon assumptions that Management believes are reasonable, and the impact of variations in these estimates or the underlying assumptions could be material. The fair value of the Company’s investment in PDP was determined to be $27.1 million. As of June 30, 2025, the Company recognized an other-than-temporary impairment charge of $5.3 million, which is recorded in share of (loss) gain from equity method investments in the consolidated statement of operations and comprehensive (loss) income.

iii)

Karnival

The Company has a 50% interest in Karnival, an unconsolidated joint venture with Raging Power Limited, a subsidiary of New World Development Company Limited (“Raging Power”). The purpose of the joint venture was to hold ownership interests in entities developing and operating amusement centers located in the People’s Republic of China. The Company has concluded that Karnival is a VIE, because the Company does not have the power to direct the activities that most significantly impact the economic performance of Karnival, as such decisions are taken by the unanimous consent of the representatives of the joint venture partners. The Company, therefore, does not consolidate Karnival and accounts for the investment as an equity method investment. In October 2025, the Company and its joint venture partners agreed to terminate this project and windup the joint venture due to protracted delays in the underlying location development schedule. As of September 30, 2025, the Company had funded$6.6 million (HKD 51 million). The advances provided to Karnival are accounted for as investments and classified within Investments and advances to unconsolidated joint ventures equity method investments.

Partial Impairment of Investment in Karnival

The winding up process of the joint venture represents a significant change in circumstances that could impact the fair value of the Company’s remaining investment in Karnival. Accordingly, the Company performed an impairment evaluation of its equity method investment in Karnival to determine whether the remaining carrying amount of the investment exceeds its fair value.

The Company evaluated its remaining equity investment in Karnival for impairment as of September 30, 2025 and determined that it was other-than-temporarily impaired. The Company estimated the fair value of its investment in Karnival using the liquidation value of cash and cash equivalents less estimated costs to liquidate valuation inputs (Level 2). The estimated fair value is based upon assumptions that Management believes are reasonable, and the impact of variations in these estimates or the underlying assumptions could be material. The fair value of the Company’s investment in Karnival was determined to be $4.2 million. As of September 30, 2025, the Company recognized an other-than-temporary impairment charge of $3.0 million, which is recorded in share of (loss) gain from equity method investments in the consolidated statement of operations and comprehensive (loss) income.

Sierra Parima

Sierra Parima was an equity method investment with Meliá Group focused on the development and operation of hotel resorts and theme parks. The Company had 50% voting rights and shares 50%of profits and losses in this joint venture. The Sierra Parima Katmandu Park closed in March 2024 following financial, operational, and infrastructure challenges. As of December 31, 2023, the equity investment wasdeemed to be other-than-temporarily impaired. On May 30, 2025, the investment was sold for nominal consideration and no gain or loss on the sale was recognized.

Investments and advances to equity method investments consisted of:

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

Share of (loss) income from FCG consisted of:

Share of income (loss) from PDP consisted of:

Share of (loss) income from Karnival consisted of:

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.

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

Related party activity for FCG and PDP consisted of:

Leases

During May 2025, the Company assumed a warehouse lease as part of the OES Acquisition with a term through 2029.

The Company recorded $0.2 million and $0.4 million in lease expense for the three and nine months ended September 30, 2025, respectively, included in Selling, general and administrative expense in the unaudited condensed consolidated statements of operations and comprehensive (loss) income.

Operating lease supplemental cash flow information is as follows:

The Company determined that the discount rate implied in the lease was determinable and was closely aligned with the lessors third party borrowing rate based on the payment terms of the lease which was designed for the lease payments to cover the property owners financing and related costs.

The weighted-average remaining lease terms and discount rates are as follows:

Operating lease liabilities annual maturities are as follows:

Intangible assets, net

Intangible assets consisted of:

Intangible asset amortization was $0.1 million and $0.1 million for the three and nine months ended September 30, 2025, respectively.

Estimated future amortization of intangible assets as are as follows:

Accrued expenses and other current liabilities

Accrued expenses and other current liabilities consisted of:

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 estimated fair value of the €7 million term loan and the $15 million revolving credit arrangement as of September 30, 2025 was$2.4 million and $4.0 million, respectively. The Company considers its debt to be Level 2 in the fair value hierarchy.

The estimated fair value of the €7 million term loan, the $14.77 million term loan and the $15 million revolving credit arrangement as of December 31, 2024 was $3.1 million, $12.0 million, and $11.4 million, respectively. The Company considers its debt to be Level 2 in the fair value hierarchy.

As of September 30, 2025, the remaining commitment available under the Company’s related party revolving credit arrangements was as follows:

$15 million revolving credit arrangement

The Company had a revolving credit arrangement with Infinite Acquisitions Partners LLC (“Infinite Acquisitions”) for $15.0 million. On September 8, 2025, the Company exchanged $5.5 million of the balance of revolving credit arrangement for Series B Preferred Stock. See "Note 16 - Equity". On November 10, 2025, concurrently with the issuance of a new $15.0 million revolving credit arrangement between Infinite Acquisitions and Falcon's Attractions, LLC, the borrowing capacity on this facility was reduced to $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%.

€1.5 million term loan

In April 2020, the Company entered into asix-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 is payable monthly in arrears.

€7 million term loan

In March 2019, the Company entered into aneight-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 was payable monthly in arrears. The loan is collateralized by the Company’s investment in PDP and matures in April 2027.

$1.25 million term loan

Falcon's Opco has aone-year $1.25 million term loan with FAST Sponsor II, LLC (“FAST II Sponsor”). The loan bears a fixed interest rate at 11.75% per annum. Interest and principal payments were due May 16, 2025. The loan also required an additional payment of $0.5 million if the loan is not paid off by the due date. As of September 30, 2025, we have accrued interest and the additional $0.5 million in interest expense included in the unaudited condensed consolidated statements of operations and comprehensive (loss) income. See "Note 13 – Commitments and contingencies" for the details of the claim from the counterparty.

$7.22 million term loan

Falcon's Opco has aone-year $7.22 million term loan with FAST II Sponsor for $6.3 million and with Katmandu Ventures, LLC (“Katmandu Ventures”) for $0.9 million. The loan bears a fixed interest rate at 11.75% per annum. Interest and principal payments were due May 16, 2025. As of September 30, 2025, we have accrued interest in interest expense included in the unaudited condensed consolidated statements of operations and comprehensive (loss) income. See "Note 13 – Commitments and contingencies" for details of the claim from FAST II Sponsor.

$14.77 million term loan

The Company had aten-year $14.77 million term loan with Infinite Acquisitions. The loan's original maturity was September 30, 2034 and had a fixed interest rate at 8.00% per annum. Payments were interest only through September 2029, thereafter, principal and interest is payable quarterly in arrears. On September 8, 2025, the Company exchanged the term loan and accrued interest of $0.2 million for Series B Preferred Stock. See "Note 16 - Equity".

Related party transactions

Accounts Receivable

The Company has a receivable from PDPfor $0.6 million and$0.3 million as of September 30, 2025 and December 31, 2024.

Accounts Payable

The Company reimburses certain audit and professional fees on behalf of PDP and Sierra Parima. There were $0 and $1.4 million unreimbursed audit and professional fees as of September 30, 2025 and December 31, 2024 related to PDP and Sierra Parima. The Company incurred expenses related to reimbursable audit and professional fees of $0 for the $0.2 million for thethree and nine months ended September 30, 2024, respectively.

Other current assets

The Company has a short-term advance from FCG for $2.0 million and $0 as of September 30, 2025 and December 31, 2024, respectively.

Related party debt

The Company has various long-term debt instruments with Infinite Acquisitions. On September 8, 2025, the Company exchanged $20.5 million of debt and accrued interest for the issuance of $20.5 million of shares of Series B Preferred Stock. See "Note 16– Equity". These loans had $0.2 million and$0.5 million accrued interest as of September 30, 2025 and December 31, 2024, respectively.

Loans with Katmandu Ventures, LLC had accrued interest of $0.2 million and$0.1 million as of September 30, 2025 and December 31, 2024, respectively. Accrued interest is included within Accrued expenses and other current liabilities on the unaudited condensed consolidated balance sheets.

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 wasa $1.1 million and $0.7 million accounts receivable balance outstanding as of September 30, 2025 and December 31, 2024 related to the Intercompany Services Agreement.

The Company recognizes related party revenue for corporate shared service support provided to FCG and PDP. Total related party revenues from services provided to our equity method investments were $2.2 million and$2.0 million for the three months ended September 30, 2025 and 2024, respectively. Of the total related party revenues from services provided to our equity method investments, the Company recognized $1.8 million and $1.7 million revenue related to services provided to FCG for thethree months ended September 30, 2025 and 2024, respectively.

Total related party revenues from services provided to our equity method investments were $5.6 million and $5.3 million for thenine months ended September 30, 2025 and 2024, respectively. Of the total related party revenues from services provided to our equity method investments, the Company recognized $5.0 million and $4.9 million revenue related to services provided to FCG for thenine months ended September 30, 2025 and 2024.

FCG also provides marketing, research and development, and other services to FBG. The Company owes FCG $0.1 million and $0.2 million related to these services as of September 30, 2025, and December 31, 2024, respectively. The Company and FCG have also incurred reimbursable costs on behalf of each other. The Company had$0.3 million and $0.7 million in accounts receivable from FCG related to reimbursable costs as of September 30, 2025 and December 31, 2024, respectively.

Subscription agreement with Infinite Acquisitions

Infinite Acquisitions irrevocably committed to invest $12.8 million in the Company. As of September 30, 2025, Infinite Acquisitions has not met its commitment.

Series B Preferred stock

On September 8, 2025, the Company issued 307,627 shares of Series B Preferred Stock to Gino P. Lucadamo, a director of the Company in exchange for $1.5 million in cash. See "Note 16 – Equity".

Income taxes

The tax provisions for the three and nine months ended September 30, 2025, and 2024 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 ratewas 0% for the three and nine months ended September 30, 2025. The Company paidno income taxes for the three and nine months ended September 30, 2025. The Company paid less than $0.1 million in income taxes for thethree and nine months ended September 30, 2024.

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.

On July 4, 2025, H.R. 1, “An Act to provide for reconciliation pursuant to title II of H. Con. Res. 14”, commonly referred to as the "One Big Beautiful Bill Act,” was enacted in the United States. The Company has evaluated the impact of the guidance provided to date and determined that it is not expected to have a material impact on fiscal year 2025. The Company will continue to evaluate the impact of the various provisions that could affect our gross deferred tax liability, including changes related to bonus depreciation and the expensing of research and development expenditures, among other topics.

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.

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. 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 in response to the Guggenheim Complaint. In addition, the Company filed counterclaims against Guggenheim. Guggenheim denied all liability as to those amended counterclaims. On June 30, 2025, Guggenheim filed a Notice of Issue and Certificate of Readiness for trial, and on October 27, 2025 Guggenheim moved for summary judgment on its claims, which the Company opposed; on the same day, the Company moved for partial summary judgment on its claims which Guggenheim opposed. Pursuant to 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 September 30, 2025 and December 31, 2024, within Accrued expenses and other current liabilities on the unaudited condensed consolidated balance sheets, with respect to the alleged amended engagement agreement with Guggenheim.

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 owes 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 Motion is before the Court, and the parties expect it to schedule oral argument on the Motion. The Company intends to vigorously defend itself against the claims alleged in the Motion.

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 September 30, 2025, and December 31, 2024, there were no known events or circumstances that have resulted in a material indemnification liability.

Commitments — The Company has entered into a commitment with The Hershey Licensing Company (“Hershey”) to develop venues themed with Hershey’s licensed trademarks and intellectual property in at least four locations by 2028. For each location, the Company is required to pay a one-time $0.3 million development fee and an on-going royalty fee of 6% of gross sales starting in the year 2025. The development fee is due no later than 12 months prior to the scheduled opening of the respective locations. Under the agreement, the royalty is at minimum $0.3 million for the year 2025 and 85% of the previous year’s actual royalty paid for 2026 onward. As of September 30, 2025, the Company paid the $0.3 million development fee and accrued $0.3 million in minimum royalty fees for one location.

As of February 24, 2023, the Company has entered into 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 for the years 2024 through 2032.

Segment information

The Company hasfour reportable operating segments, Falcon’s Creative Group, PDP, Destinations Operations and Falcon’s Beyond Brands. 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 thesegments' performance by using each segments' 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 (loss) income from operations include costs directly attributable to the segment including project design and build expenses, selling, general and administrative expenses, research and development expenses, and the share of (loss) gain from equity method investments, excluding impairments and gain from Tenerife Sale. 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 (loss) income from operations and the Company’s unaudited condensed consolidated financial statement results.

FCG provides master planning, media, interactive and audio production, project management, experiential technology and attraction hardware development services and attraction hardware sales on a work-for-hire model. 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 (loss). To reconcile total segment revenue to the Company's total consolidated revenue, FCG's segment revenue is eliminated. To reconcile segment (loss) income from operations to the Company's consolidated net (loss) income before taxes, FCG's segment (loss) income from operations is eliminated and the Company's share of FCG's equity method gain (loss) is added. Prior quarter segment results for FCG have been recast to show FCG segment results on a comparable basis, as if it had been consolidated by the Company for the entire quarter.

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 new development opportunities, including our investment in Karnival. The Company collectively refers to the Destinations Operations and PDP as Falcon’s Beyond Destinations.

Falcon’s Beyond Brands is utilized for the development and commercialization of Company owned and third-party intellectual property through consumer products and media.

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

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

Identifiable assets and capital expenditures are comprised of:

Fair value measurement

Assets and liabilities measured at fair value on a recurring basis are comprised of:

The warrant liability fair value is based on quoted market prices in active markets, and therefore is classified within Level 1 of the fair value hierarchy. See "Note 18 – Stock warrants".

There were no transfers between Level 1 and Level 2, nor into and out of Level 3, during the period presented.

Equity

Common Stock

Each holder of common stock is entitled to one vote for each share of common stock held of record by such holder on all matters on which stockholders generally are entitled to vote. Shares of Class B Common Stock carry the same voting rights as shares of Class A Common Stock but have no economic terms. Class B Common Stock is exchangeable, along with common units of Falcon’s Opco, into Class A Common Stock.

Series B Preferred Stock

On September 8, 2025, the Company entered into subscription agreements (the “Subscription Agreements”) with accredited investors, including Infinite Acquisitions, a greater than 5% shareholder and creditor of the Company, and Gino P. Lucadamo, a director of the Company (the “Investors”). The Company issued $28.7 million of shares of a newly created series of preferred stock, par value $0.0001 per share, designated as “11% Series B Cumulative Convertible Preferred Stock” (the “Series B Preferred Stock”), at a purchase price of $5.00 per share, for 5,747,742 shares of Series B Preferred Stock. The Company received $8.0 million in cash and the exchange of $20.7 million of outstanding debt and accrued interest.

Debt Exchange Agreement

On September 8, 2025, the Company entered into a Debt Exchange Agreement (the “Debt Exchange Agreement”) with Infinite Acquisitions to exchange $20.5 million of debt and accrued interest for $20.5 million of shares of Series B Preferred Stock, at a per share price of $5.00, for 4,092,326 shares of Series B Preferred Stock. The debt exchanged included the $14.77 million term loan, term loan accrued interest of $0.2 million and $5.5 million of the outstanding amount under the revolving credit arrangement. The exchange was accounted for as a debt extinguishment.

Series B Preferred Stock Liquidation Preferences

The Series B Preferred Stock ranks senior to the shares of the Company’s common stock with respect to the payment of dividends and the distribution of assets upon a liquidation, dissolution or winding up of the Company. The Series B Preferred Stock has a liquidation preference equal to the greater of $5.00 per share, plus accrued and unpaid dividends, or the amount per share as would have been paid had all shares of Series B Preferred Stock been converted into shares of Class A Common Stock immediately prior to the liquidation event.

Series B Preferred Stock Dividend

The Series B Preferred Stock has an annual cumulative dividend rate of 11% of the $5.00 per share liquidation preference, which accrues quarterly. Prior to January 1, 2027, accrued dividends will be paid in Series B Preferred Stock (the “Dividend Shares”) equal to the aggregate accrued dividends unpaid divided by $5 when and if declared by the Board. On and after January 1, 2027, all dividends accrued will be paid in cash. Any dividends not declared and paid in Dividend Shares or cash will be added to the liquidation preference of each share of Series B Preferred Stock.

Upon the declaration of a dividend on the Class A Common Stock, the Series B Preferred Stockholders will receive a dividend, equal to the product of the dividend on each share of Class A Common Stock and the number of shares of Class A Common Stock issuable upon conversion of a share of Series B Preferred Stock.

Series B Preferred Stock Conversion Rights

The Series B Preferred Stock will convert into shares of Class A Common Stock at the then-applicable conversion rate, automatically following the third anniversary of the original issuance date, if at any time the volume weighted average sale price of one share of Class A Common Stock equals or exceeds $10.00 per share, as adjusted, for a period of at least 21 trading days out of 30 consecutive trading days. The initial conversion rate isone-to-one. The holders of Series B Preferred Stock do not have the right to elect to convert the Series B Preferred Stock.

In the event of a reorganization involving the Company, such as a merger, consolidation, reclassification, or statutory exchange, where Class A Common Stock is exchanged for cash, securities, or other property, each outstanding share of Preferred Stock will become convertible into the same form and proportion of consideration that a holder of Class A Common Stock would have received, had the Preferred Stock been converted immediately prior to the event. This conversion right is contingent upon all holders of pari passu and subordinated equity instruments receiving the same form of consideration. If each share of Class A Common Stock, or pari passu or subordinated equity instrument, is entitled to receive a mix of kind or amount of securities, cash and/or other property upon such reorganization event, the Preferred Stock holders shall be entitled to receive the same mix and form of consideration.

Series B Preferred Voting Rights

The holders of Series B Preferred Stock have the right to vote on an as-converted to Class A Common Stock basis on all matters presented to the Company’s stockholders. Additionally, holders of Series B Preferred Stock have customary protective provisions.

Net loss per share

On September 30, 2024, the Company’s board of directors declared a stock dividend of 0.2 shares of Class A common stock per share of Class A common stock outstanding, paid on December 17, 2024, to stockholders of record as of December 10, 2024 (the “Stock Dividend”). Additionally, as a result of the Stock Dividend, holders of the Company’s Class B common stock received a stock dividend of 0.2 shares of Class B common stock per share of Class B common stock outstanding, and the Falcon’s Beyond Global, LLC common units that are issued and outstanding were adjusted to reflect the same economic equivalent of the Stock Dividend. Outstanding warrants, restricted stock units(“RSUs”) and other equity awards were similarly adjusted in accordance with their terms. All references in the unaudited condensed consolidated financial statements to per share amounts, the number Class A and Class B shares issued and outstanding, outstanding warrants, RSUs, and other equity awards have been adjusted to reflect the Stock Dividend on a retroactive basis.

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

The Company applies the treasury stock method to the warrants and RSUs, the contingently issuable shares method to the Earnout shares, and the if-converted method for the Exchangeable noncontrolling interests, if dilutive.

During the quarter ended September 30, 2025, the Company issued convertible Series B Preferred Stock. The convertible Series B Preferred Stock receives dividends and participates in earnings alongside common stockholders and is therefore classified as a participating security. For basic earnings per share, the Company applies the two-class method. Under the two-class method, net income is reduced by the preferred dividends and earnings allocated to participating securities. Further, because the Series B Preferred Stock is convertible into Class A common stock, it also represents a potential common share for diluted EPS. For participating securities that are convertible into common stock, the Company calculates the diluted earnings per share using the more dilutive of the two-class method and the if-converted method.

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:

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 (loss) income. 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 September 30, 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.

Earnouts

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 unaudited condensed consolidated statements of operations and comprehensive (loss) income. On September 30, 2024, earnout participants agreed to forfeit all remaining earnout shares held in escrow, which were to be released and earned based on meeting EBITDA and revenue targets.

The forfeiture is treated as a modification of the original earnout agreement. 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. The total adjusted liability balance, including the amount associated with the forfeited earnout shares, was reclassified into equity as of September 30, 2024. After the reclassification to equity, the earnout shares do not require subsequent fair value measurement.

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 respectto 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. A summary of the Plan’s RSUs award activity is as follows:

The RSUs under the Plan generally vest over asix-month tofive year period following the date of grant.

The RSUs granted under the Plan on February 7, 2025 vestone-third each year following the grant date.

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.

The Company recognized stock-based compensation expense of$0.4 million for the three months ended September 30, 2025 and 2024, and $1.2 million and $1.1 million for thenine months ended September 30, 2025 and 2024, respectively, which is included within Selling, general and administrative expenses in the unaudited condensed consolidated statements of operations and comprehensive (loss) income. The $0.1 million and $0.2 million compensation cost for RSU’s granted to FCG employees for thethree months ended September 30, 2025 and 2024, respectively; and the $0.5 million and $0.6 million for thenine months ended September 30, 2025 and 2024, respectively, are recognized as a reimbursement from FCG and do not impact the Company’s unaudited condensed consolidated statements of operations and comprehensive (loss) income.

As of September 30, 2025 and December 31, 2024, stock-based compensation expense not yet recognized relating to nonvested awards was$6.9 million and $10.0 million, respectively, of which $2.4 million and $3.4 million relates to compensation cost for RSU’s granted to FCG employees, respectively. Stock compensation expense recognized by FCG is reimbursed to FBG.

Subsequent events

The Company has evaluated subsequent events through November 14, 2025 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:

On November 10, 2025, Falcon's Attractions, LLC, a wholly owned subsidiary of the Company, entered into a new revolving credit arrangement with Infinite Acquisitions Partners LLC 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%. In conjunction with the second line of credit the Company reduced the capacity on its existing $15.0 million revolving credit arrangement to $5.5 million.

On November 7, 2025, in accordance with the Subscription Agreements, the Company issued 39,837 Series B Preferred Shares to holders of record as of October 23, 2025, as a dividend paid-in-kind (“PIK”) on the Series B Preferred Stock. The PIK dividend is recorded at fair value as of the respective declaration date.

On November 6, 2025, Infinite Acquisitions submitted a redemption notice to the Company to convert its 11,151,367 Class B common stock holding to Class A common stock.