Falcon's Beyond Global, Inc.
For the period ended Jun 30, 2026. Filed Aug 13, 2026.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 13, 2026
FBYD$6.85+1.1%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-14.
0001193125-26-224203
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-13.
0001193125-26-347885
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 85 previous paragraphs and 106 current paragraphs.
36 unchanged; 34 reworded; 34 added; 14 removed; 1 previous and 2 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (34)
Current report
Acquisition of OES
Current report
On May 9, 2025, we acquired certain tangible assets and intellectual property, including patented technologies and proprietary engineering and manufacturing processes, from Oceaneering Entertainment Systems (“OES”), a division of Oceaneering International, Inc., for $1.6 million. The acquisition expanded our attractions services business and formed the foundation of the Falcon's Attractions segment.
Current report
Transaction credit
Current report
As of June 30, 2025, the Company recognized an other-than-temporary impairment charge of $5.3 million, which is recorded in Share of gain (loss) from equity method investments.
Current report
Management believes Adjusted EBITDA provides useful supplemental information regarding the operating performance of our business by excluding the effects of financing decisions, capital structure, depreciation and amortization, and other items that may not be representative of ongoing operations. Adjusted EBITDA should not be considered in isolation or as a substitute for net income (loss), operating income (loss), cash flows from operating activities, or other measures prepared in accordance with U.S. GAAP. A reconciliation of net income (loss), the most directly comparable U.S. GAAP measure, to Adjusted EBITDA is included below.
Current report
FCG believes Adjusted EBITDA provides useful supplemental information regarding the operating performance of our business by excluding the effects of financing decisions, capital structure, depreciation and amortization, and other items that may not be representative of ongoing operations. Adjusted EBITDA should not be considered in isolation or as a substitute for net income (loss), operating income (loss), cash flows from operating activities, or other measures prepared in accordance with U.S. GAAP. A reconciliation of net income (loss), the most directly comparable U.S. GAAP measure, to Adjusted EBITDA is included below.
Current report
As of June 30, 2026, we have a working capital deficit of $8.4 million, driven by the $6.9 million Deferred Loan Settlement, which is included within the $8.9 million of debt obligations classified as current based on their contractual maturity dates. We are actively evaluating refinancing and other alternatives with respect to these obligations. See “Note 6 – Long-term debt and borrowing arrangements” in our unaudited condensed consolidated financial statements for further discussion.
Current report
Based on developments from the court cases related to the Business Combination, payments of previously accrued expenses are no longer probable, which resulted in the recognition of a transaction credit of $4.0 million and $15.1 million for the three and six months ended June 30, 2026, respectively. Following the reversal of these no longer probable accrued transaction expenses, we have a remaining accrual for transaction expenses related to the Business Combination of $1.1 million.
Current report
See “Note 6 – Long-term debt and borrowing arrangements” in our unaudited condensed consolidated financial statements for further discussion.
Current report
Revenue recognition
Current report
We recognize revenue in accordance with ASC 606, Revenue from Contracts with Customers (“ASC 606”). Revenue is recognized when control of goods or services transfers to customers in an amount that reflects the consideration we expect to be entitled to in exchange for those goods or services.
Current report
We generate revenue from the following revenue streams:
Current report
Shared services: We provide corporate shared services to FCG on a time-and-materials basis and recognizes revenue using the right-to-invoice practical expedient.
Current report
Destinations operations services: Revenue is derived from management and incentive fees, typically based on a percentage of revenues or profits of managed operations. We apply the practical expedient to recognize revenue for the amount invoiced when the invoice corresponds directly to the value of our performance to date.
Current report
Attraction services: The Falcon's Attractions segment provides engineering services, fabrication, integration, installation and maintenance services and in-service support for ride systems and attraction hardware, typically under project-specific contractual arrangements or on a time-and-materials basis. Revenue from project-based arrangements is recognized over time using the cost-to-cost input method when the criteria for over-time recognition are met, based on costs incurred relative to total estimated costs. Revenue from time-and-materials arrangements is recognized over time as the services are provided using the right-to-invoice practical expedient when the amount invoiced corresponds directly to the value of our performance completed to date.
Current report
Product sales: The Falcon's Attractions segment provides ride system components and hardware for theme park attractions, with revenue recognized at a point in time when control of goods transfers to the customer.
Current report
We account for contracts once the parties have approved the contract, the rights and payment terms are identifiable, the contract has commercial substance, and collectability of consideration is probable. We evaluate contracts to determine whether they should be combined or accounted for separately in accordance with ASC 606. Contracts are combined when entered into with the same customer at or near the same time and are negotiated with a single commercial objective or have interdependent consideration. Based on its historical analysis, we have not identified instances requiring contract combination. Contract modifications are assessed to determine whether they should be accounted for as a separate contract or as part of the existing contract, depending on whether the additional goods or services are distinct and priced at their standalone selling prices.
Current report
Performance obligations represent promises to transfer distinct goods or services to a customer. Our contracts may include one or multiple performance obligations depending on the nature of the arrangement. Our conclusions regarding performance obligations vary by revenue stream:
Current report
Shared services arrangements generally contain multiple performance obligations, as each service type is distinct.
Current report
Destinations operations and attraction services for time-and-materials contracts generally consist of a single performance obligation satisfied over time, representing a series of distinct services that are substantially the same and have the same pattern of transfer.
Current report
Attraction services for project-based contracts typically contain a single performance obligation involving the delivery of highly customized and integrated goods and services.
Current report
Product sales contracts may include multiple performance obligations, as individual goods are typically distinct.
Current report
We have concluded that we act as principal in our significant revenue arrangements given we control the specified goods or services before being transferred to the customer.
Current report
The transaction price represents the consideration we expect to be entitled to in exchange for transferring goods or services to a customer. Customer contracts predominantly contain a single performance obligation and, in a limited number of cases, include variable consideration. Based on the facts and circumstances of each contract, management applies judgment in determining the transaction price, allocating the transaction price to performance obligations, and recognizing revenue. Variable consideration consists of incentive fees, milestone payments, or performance-based penalties. Estimated variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal of revenue recognized will not occur when the related uncertainty is resolved. We reassess estimates of variable consideration at each reporting date and update such estimates as facts and circumstances change.
Current report
Revenue is recognized either over time or at a point in time depending on when control of the goods or services transfers to the customer. Revenue is recognized over time when one of the following criteria is met:
Current report
The customer simultaneously receives and consumes the benefits of our performance as it occurs; or
Current report
Our performance creates or enhances an asset that has no alternative use to us and for which we have an enforceable right to payment for performance completed to date.
Current report
We apply judgment in determining the timing of revenue recognition and the measurement of progress toward completion of performance obligations. Significant estimates include total contract costs, progress toward completion, and the estimation of variable consideration and related constraints. Changes in estimates are recognized in the period of change and may result in adjustments to revenue or profitability.
Current report
Our payment terms consist of those services billed regularly as provided and those products delivered at a point in time, which are invoiced after the performance obligation is satisfied. Product and service contracts with milestone payments due at agreed progress points during the contract are invoiced when those milestones are reached, which may differ from the timing of revenue recognition. Contract balances arise from the timing of revenue recognition, billings, and cash collections. Contract assets represent revenue recognized in excess of amounts billed to customers. Contract liabilities represent billings in excess of revenue recognized. We assess contract assets for impairment in accordance with applicable accounting guidance.
Current report
We expense freight and shipping costs as incurred. Taxes assessed by governmental authorities that are imposed on and concurrent with specific revenue-producing transactions and collected from customers are excluded from revenue.
Current report
We have concluded that our contracts do not include a significant financing component, as payment terms are consistent with industry practices and are not intended to provide financing to either party.
Current report
We use the equity method, in accordance with ASC 323, Investments - Equity Method and Joint Ventures(“ASC 323”), to account for investments in corporate joint ventures when we have the ability to exercise significant influence over the operating decisions of the investee. Such investments are initially recorded at cost and subsequently adjusted for our proportionate share of the net earnings or loss of the investee. This proportionate share is included in Share of gain (loss) from equity method investments in the condensed consolidated statements of operations and comprehensive income (loss).
Current report
Cash distributions received, if any, from these investees are evaluated to determine whether they represent a return on investment or a return of investment. Distributions determined to be a return on investment are recognized in earnings. Distributions determined to be a return of investment reduce the carrying amount of the investment. When cumulative distributions exceed the carrying amount of an investment, we reduce the carrying amount to zero, and any additional distributions are generally recognized in earnings in the period received. This determination requires judgment and considers factors including the investee’s earnings, retained earnings, and cash flow characteristics. When an investment’s carrying amount is reduced to zero, we discontinue recognizing its share of further income or loss unless it has incurred obligations or committed to provide financial support to the investee. Subsequent earnings are recognized only after our share of such earnings exceeds previously unrecognized losses.
Current report
We evaluate equity method investments for impairment when events or changes in circumstances indicate that fair value may be below carrying value. An impairment charge is recorded when such impairment is deemed to be other-than-temporary. In making this determination, we consider the severity and duration of the decline in fair value, the financial condition and near-term prospects of the investee, and other relevant market conditions.
Removed paragraphs (14)
Previous report
Transaction expense (credit)
Previous report
Research and development expense
Previous report
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.
Previous report
Depreciation and amortization expense
Previous report
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").
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
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.
Previous report
We have a financing agreement with Cecil and Marty Magpuri with an outstanding balance of $0.1 million as of March 31, 2026.
Previous report
See "Note 6 – Long-term debt and borrowing arrangements" and "Note 14 – Related party transactions" in our unaudited condensed consolidated financial statements.
Reworded paragraphs (34)
Previous wording
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.
Current wording
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 and six months ended June 30, 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.
Previous wording
The following reflects our results of operations for the three months ended March 31, 2026 and 2025.
Current wording
The following reflects our results of operations for the three and six months ended June 30, 2026 and 2025.
Previous wording
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.
Current wording
We have continued to invest in initiatives focused primarily on expanding our Falcon's Beyond Brands division, including product development, talent acquisition, and selective strategic investments. These activities have contributed to operating losses and negative cash flows from operations. Net cash used in operating activities was $0.3 million for the six months ended June 30, 2026, a reduction compared with comparable prior periods. Accordingly, we evaluated our 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.
Previous wording
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.
Current wording
Our development plans and associated working capital needs have been funded by a combination of debt and equity investments from our 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 our ongoing growth strategy and working capital requirements. As of June 30, 2026, we have a working capital deficit of $8.4 million that was driven by the Deferred Loan Settlement of $6.9 million, which is included within the $8.9 million of debt obligations classified as current based on their contractual maturity dates. We are actively evaluating refinancing and other alternatives with respect to these obligations. See “Note 6 – Long-term debt and borrowing arrangements” in our unaudited condensed consolidated financial statements for further discussion.
Previous wording
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 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.
Current wording
We assess our ability to meet obligations over the next twelve months based on current liquidity levels and assume the continued execution of our operating plan and certain financing and capital initiatives. Although cash flows from operations have improved compared with prior comparable periods, we have incurred operating losses and negative cash flows from operations in recent periods and have ongoing capital needs to support our growth initiatives and to settle short-term debt obligations. These conditions raise substantial doubt about our ability to continue as a going concern. We continue to take active steps to strengthen our capital position and improve liquidity, including pursuing additional financing and evaluating strategic alternatives; however, because these actions had not been completed as of the date of issuance of these financial statements, they do not alleviate the substantial doubt described above. 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.
Previous wording
Revenue increased for the three months ended March 31, 2026, compared to the same period in 2025, primarily driven by new attractions contracts.
Current wording
Revenue increased for the three and six months ended June 30, 2026, compared to the same period in 2025, primarily driven by the growth of the Falcon's Attractions business. As of June 30, 2026, Falcon's Attractions had a contracted pipeline of $28.4 million.
Previous wording
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.
Current wording
Project design and build expense increased for the three and six months ended June 30, 2026, compared to the same period in 2025, primarily driven by new attractions service contracts.
Previous wording
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.
Current wording
Cost of product sales increased for the three and six months ended June 30, 2026, compared to the same period in 2025, primarily driven by new attractions product sales.
Previous wording
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.
Current wording
Selling, general and administrative expense increased for the three and six months ended June 30, 2026, compared to the same period in 2025, primarily driven by the OES integration, growth of attraction services, and support functions required to scale operations.
Previous wording
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.
Current wording
We recognized a transaction credit of $4.0 million and $15.1 million for the three and six months ended June 30, 2026, respectively, 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.
Previous wording
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:
Current wording
Share of gain from equity method investments decreased for the three months ended June 30, 2026 and share of loss from equity method investments increased for the six months ended June 30, 2026, compared to the same periods in 2025, primarily driven by:
Previous wording
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.
Current wording
PDP: Share of gain from PDP decreased for the three months ended June 30, 2026 and share of loss for the six months ended June 30, 2026 increased, 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.
Previous wording
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.
Current wording
Karnival: Share of net gain from Karnival increased for the three and six months ended June 30, 2026, compared to the same period in 2025, primarily driven by a gain on excess distributions over investment of $1.2 million.
Previous wording
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.
Current wording
FCG: We recognize 100% of net gain (loss), less 9% preferred return to QIC and amortization of the basis difference on deconsolidation of FCG. See “Segment Reporting” below for further details.
Previous wording
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.
Current wording
Interest expense decreased for the three and six months ended June 30, 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.
Previous wording
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.
Current wording
Foreign exchange transaction gain decreased for the three and six months ended June 30, 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.
Previous wording
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:
Current wording
FCG segment income decreased for the three months ended June 30, 2026, compared to the same period in 2025, primarily as a result of timing of certain current long-term contracts. FCG segment income increased for the six months ended June 30, 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:
Previous wording
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.
Current wording
FCG revenues increased for the three and six months ended June 30, 2026, compared to the same period in 2025, as a result of the timing of certain contract performance obligations. As of June 30, 2026, the contracted pipeline for FCG was $17.1 million.
Previous wording
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.
Current wording
FCG project design and build expense decreased for the three months ended June 30, 2026, compared to the same period in 2025, primarily driven by timing of certain current long-term contracts. FCG project design and build expense increased for the six months ended June 30, 2026, compared to the same period in 2025, primarily driven by an increase in project revenues.
Previous wording
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.
Current wording
Destinations Operations segment loss from operations decreased for the three and six months ended June 30, 2026, compared to the same period in 2025, primarily driven by decreased shared services allocations.
Previous wording
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.
Current wording
PDP's share of segment income decreased for the three months ended June 30, 2026 and share of segment loss increased for the six months ended June 30, 2026, compared to the same period in 2025, as a result of the sale of the resort hotel at Tenerife.
Previous wording
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.
Current wording
Falcon's Attractions segment loss decreased for the three and six months ended June 30, 2026, compared to the same period in 2025, primarily due to increased revenue from attraction services and product sales, which more than offset higher related operating costs. The improvement in segment performance was also impacted by the acquisition of OES in May 2025, which contributed to increases in revenue, project design and build expense, and cost of product sales for the three and six months ended June 30, 2026, compared to the prior periods. As of June 30, 2026, Falcon's Attractions had a contracted pipeline of $28.4 million.
Previous wording
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.
Current wording
We prepare our consolidated financial statements in accordance with U.S. GAAP. In addition to financial measures prepared in accordance with U.S. GAAP, we present Adjusted EBITDA, a non-GAAP financial measure. We define Adjusted EBITDA as net income (loss) before interest expense, interest income, income taxes, depreciation and amortization, transaction-related credits, changes in the fair value of warrant liabilities, impairment charges, and certain gains or losses associated with equity method investments that are not considered indicative of our core operating performance.
Previous wording
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.
Current wording
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 (loss) before interest expense, interest income, income taxes, depreciation and amortization, and gain on sale of land.
Previous wording
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.
Current wording
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 operations, borrowings, equity contributions from our existing investors, distributions from equity method investees and cash on hand.
Previous wording
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.
Current wording
As of June 30, 2026, our total indebtedness was approximately $16.5 million. We had approximately $3.1 million of cash and $12.9 million available for borrowing under our lines of credit.
Previous wording
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.
Current wording
We anticipate managing our operations to ensure that our existing cash on hand and unused capacity on our existing lines of credit, along with cash flows from operations, 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 our obligations over the next twelve months is based on current liquidity levels and assumes the continued execution of our operating plan and certain financing and capital initiatives. Although cash flows from operations have improved compared with prior comparable periods, we have incurred operating losses and negative cash flows from operations in recent periods and have ongoing capital needs to support our growth initiatives and to settle short-term debt obligations. These conditions raise substantial doubt about our ability to continue as a going concern. We continue to take active steps to strengthen our capital position and improve liquidity, including pursuing additional financing and evaluating strategic alternatives; however, because these actions had not been completed as of the date of issuance of these financial statements, they do not alleviate the substantial doubt described above. We continue to take active steps to strengthen our 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.
Previous wording
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.”
Current wording
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 compliance and oversight 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.”
Previous wording
We have two financing agreements with Infinite Acquisitions with a total outstanding balance of $7.3 million as of March 31, 2026.
Current wording
We have two financing agreements with Infinite Acquisitions with a total outstanding balance of $7.6 million and $5.0 million as of June 30, 2026 and December 31, 2025, respectively.
Previous wording
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.
Current wording
We have a financing agreement with Katmandu Ventures, LLC (“Katmandu Ventures”) with a total outstanding balance of $0.6 million as of June 30, 2026. The loan was due on May 16, 2025 and we are in negotiations to amend the loan. There was a total outstanding balance of $1.1 million as of December 31, 2025, which was inclusive of a second financing agreement that was repaid in full during February 2026.
Previous wording
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.
Current wording
Net cash flows used in operating activities decreased for the six months ended June 30, 2026, compared to the same period in 2025, primarily due to improved operating performance and favorable changes in working capital. In addition, we received a $1.7 million dividend distribution from PDP in the current period.
Previous wording
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.
Current wording
Net cash provided by investing activities decreased for the six months ended June 30, 2026, compared to the same period in 2025, primarily related to the dividend distribution from PDP from the gain on sale from Tenerife in the prior period. In the current period we received $5.4 million dividend distributions from Karnival and made short-term advances of $4.3 million to FCG.
Previous wording
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.
Current wording
Net cash provided by financing activities decreased for the six months ended June 30, 2026, compared to the same period in 2025, primarily due to lower net borrowings. Net debt proceeds were $0.9 million during the current period, compared to $6.9 million during the prior period.
Previous wording
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.
Current wording
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, except for the addition of the following:
Rearranged current paragraphs (2)
Current report — wording carried from elsewhere
We recognized a transaction credit of $3.5 million for the six months ended June 30, 2025, as a result of a transaction expense settlement. The transaction credit was partially offset by $1.7 million transaction expenses for the six months ended June 30, 2025 related to a proposed underwritten offering of our Class A common stock that was not completed.
Current report — wording carried from elsewhere
See “Note 7 – Commitments and contingencies” in our unaudited condensed consolidated financial statements for further discussion.
Rearranged previous paragraphs (1)
Previous report — wording carried elsewhere
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.