Financial Performance Overview

Falcon’s Beyond Global, Inc. (the “Company”) is a diversified entertainment company that operates in the intersection of content, technology, and experiences. The Company has three main business divisions: Falcon’s Creative Group (FCG), Falcon’s Beyond Destinations (FBD), and Falcon’s Beyond Brands (FBB).

For the three months ended March 31, 2025, the Company reported total revenue of $1.7 million, up from $1.5 million in the same period in 2024. This increase was driven by higher shared services revenue from FCG and new attraction sales and services. However, the Company incurred a net loss of $8.1 million, compared to net income of $114 million in the prior year period.

The key factors contributing to the net loss were:

• Increased share of loss from equity method investments, particularly from FCG, which recorded a net loss of $3 million.
• Higher interest expense due to increased debt levels and interest rates.
• Transaction expenses of $1.5 million related to a proposed stock offering that was not completed.
• Partially offset by a $2.9 million gain from the change in fair value of warrant liabilities.

Segment Performance

The Company’s three business divisions performed as follows:

Falcon’s Creative Group (FCG)

• Revenues decreased 58% to $6.3 million due to the timing of certain long-term contracts.
• Segment loss from operations increased to $2.5 million, compared to $1.9 million income in the prior year, due to lower margins on some projects.
• FCG’s net loss was $3 million, which included $1.6 million in adjustments for preference dividends and amortization of basis differences.

Falcon’s Beyond Destinations (FBD)

• Segment loss from operations remained consistent at $0.4 million.
• The Company’s 50% joint venture PDP contributed $0.5 million in segment income, similar to the prior year.

Falcon’s Beyond Brands (FBB)

• Segment loss from operations increased to $1.4 million, up from $0.7 million, due to higher payroll costs to support the Destinations division.

Liquidity and Going Concern

The Company has been funding its operations and growth through a combination of cash flows, debt, and equity contributions from shareholders. However, as of March 31, 2025, the Company had a working capital deficiency of $39.1 million and $10.4 million in debt maturing within the next 12 months.

The Company does not currently have sufficient cash or liquidity to pay its near-term liabilities and fund ongoing operations. There is substantial doubt about the Company’s ability to continue as a going concern within 12 months from the date of this report. The Company is reliant on additional capital raises, distributions from equity investments, and support from shareholders to meet its obligations and fund future growth.

Strengths and Weaknesses

Strengths:

• Diversified business model spanning content, technology, and experiences
• Established creative capabilities through FCG division
• Partnerships with major brands and IP owners (e.g. Dragon Ball)
• Growing Destinations and Brands divisions provide avenues for expansion

Weaknesses:

• Significant net losses and liquidity challenges
• Heavy reliance on equity method investments, which have been underperforming
• High debt levels and interest expense burden
• Execution challenges in certain long-term projects within FCG

Outlook and Future Plans

The Company’s near-term focus will be on addressing its liquidity and going concern issues. This will likely require additional capital raises, renegotiation of debt terms, and potentially restructuring or divesting underperforming business units.

Longer-term, the Company aims to leverage its creative capabilities, brand partnerships, and diversified business model to drive growth in its Destinations and Brands divisions. Key initiatives include:

• Expanding location-based entertainment experiences through FBD
• Accelerating the monetization of intellectual property through FBB’s animation, licensing, and technology sales

However, the Company’s ability to execute on these plans will depend on its success in securing sufficient funding and improving the operational and financial performance of its core business units.

Overall, Falcon’s Beyond Global faces significant near-term challenges related to its liquidity and profitability. While the Company has promising long-term growth opportunities, it must first address its immediate financial constraints to position itself for sustainable success.