Falcon's Beyond Global, Inc.

Location · ApproximateSize · Use · Business Segment

Calvià, Mallorca (Spain) · 15,205 m2 · Owned Property Sol Katmandu Park and Resort* · Falcon’s Beyond Destinations

Calvià, Mallorca (Spain) · 6,600 m2 · Leased Golf Course* · Falcon’s Beyond Destinations

Orlando, Florida (headquarters) · 53,600 ft2 · Office Space · Falcon’s Creative Group

Makati City, Manila (Philippines) · 6,772 ft2 · Leased Office Space · Falcon’s Creative Group

Orlando, Florida · 103,722 ft2 · Warehouse · Falcon's Attractions

* Owned through joint venture

• Our development of new sources of revenue depends on development activities that expose us to project cost and completion risks.
• We are subject to numerous other risks associated with acquisitions, dispositions, business combinations, or joint ventures.
• We operate in certain international regions that experience varying degrees of social, political, military, and economic instability. These conditions may include civil unrest, geopolitical tensions, armed conflicts, acts of terrorism, or other disruptions that could adversely affect our operations, supply chain, workforce, or the ability of customers and partners to conduct business with us. Any escalation of these risks in the countries where we operate could negatively impact our financial results, business continuity, and long term strategic objectives.
• We are exposed to risks related to operating in the Kingdom of Saudi Arabia.
• Changes in foreign trade policies and tariff structures, as well as the potential impacts of legal challenges related to such policies, could adversely affect our business, financial condition, and results of operations.
• Damage to our reputation or brands may negatively impact our company.
• Our indebtedness and liabilities could limit the cash flow available for our operations, which may adversely affect our financial condition and future financial results. The principal, premium, if any, and interest payment obligations of such debt may restrict our future operations and impair our ability to invest in our businesses.
• The growth of our business depends upon our ability to source projects with new and existing customers and take such projects to completion.
• We may expand into new lines of business in our FBB division and may face risks associated with such expansion.
• Risks Related to our Joint Ventures
• The failure to satisfy the requirements imposed by our joint venture partners and disagreements with our joint venture partners could have a material adverse effect on us.
• We have entered and expect to continue to enter into joint venture, strategic collaborations, teaming and other business arrangements, and these activities involve risks and uncertainties. A failure of any such relationship could have a material adverse effect on our business and results of operations.
• Our FBD joint ventures with Meliá leverage Meliá’s operational expertise, management services, infrastructure, local knowledge and corporate priorities. As such, any damage to Meliá’s financial condition or change in its corporate priorities could negatively impact the Company. Our participation in the joint ventures with Meliá also exposes us to liability and reputational harm resulting from improper actions of Meliá.
• Our partnership or joint venture investments could be adversely affected by our lack of sole decision-making authority.
• The operating season our hotel and our theme park is of limited duration, which can magnify the impact of adverse conditions or events occurring within that operating season.
• Operational Risks and Risks Related to Our Industries
• Increased competitive pressures may reduce our revenues or increase our costs.
• Misalignment with public and consumer tastes and preferences for entertainment, travel and consumer products, and failure to keep pace with developments in technology, could negatively impact demand for our entertainment offerings and products and adversely affect the profitability of any of our business divisions.
• Increased costs of labor and employee health and welfare benefits may impact our results of operations.
• If we are unable to hire, retain, train and motivate qualified personnel and senior management for our businesses and deploy our personnel and resources to meet customer demand around the world, our business could suffer.
• We are dependent on the continued contributions of our senior management and other key employees, and the loss of any of whom could adversely affect our business, operating results, and financial condition.
• A variety of events beyond our control may reduce demand for or consumption of our products and services, impair our ability to provide our products and services or increase the cost or reduce the profitability of providing our products and services.
• Failures in, material damage to, or interruptions in our information technology systems, software or websites, and difficulties in updating our systems or software or implementing new systems or software could adversely affect our businesses or operations.
• Protection of electronically stored data and other cybersecurity is costly, and if our data or systems are materially compromised in spite of this protection, we may incur additional costs, lost opportunities, damage to our reputation, disruption of services or theft of our assets.
• Cyber-attacks could have a disruptive effect on our business.
• Exchange rate fluctuations could result in significant foreign currency gains and losses and may adversely affect our business and operating results and financial conditions.
• Our insurance may not be adequate to cover potential losses, liabilities and damages of our product divisions, the cost of insurance may continue to increase materially and we may not be able to secure insurance to cover all of our risks, all of which could have a material adverse effect on us.
• Risks Related to Our Intellectual Property
• Theft of our intellectual property, including unauthorized exhibition of our content, may decrease our licensing, franchising and programming revenue which may adversely affect our business and profitability.
• Third parties may allege that our products or services infringe their patents and other intellectual property rights, which could result in the payment of royalties, damages, and other fees and fines that may negatively affect our profits, subject us to costly and time-consuming litigation, or cause us to lose the ability to provide the related products or services.
• Risks Related to Regulatory, Tax, Legal and Compliance Matters
• Changes in regulations applicable to our businesses may impair the profitability of our businesses, and our failure to comply with applicable laws and regulations may increase our costs, reduce our earnings or limit our growth.
• Our operations outside the United States may be adversely affected by the operation of laws in those jurisdictions, or by other macroeconomic factors
• Data privacy regulations and the costs to comply with such regulations could adversely impact our businesses.
• We could be exposed to liabilities under the Foreign Corrupt Practices Act and other anti-corruption laws and regulations, including non-U.S. laws, which could have a material adverse impact on us.
• We are a holding company and our only material assets are our interest in Falcon’s Opco and our other equity method investments. Accordingly, we are generally dependent upon distributions from Falcon’s Opco and our other equity method investments to pay taxes, make payments under the Tax Receivable Agreement and pay dividends.
• Under the Tax Receivable Agreement, the Company is required to make payments to the Company’s initial or current unitholders for certain tax benefits to which the Company may become entitled, and those payments may be substantial.
• In certain cases, payments under the Tax Receivable Agreement may be accelerated and/or significantly exceed the actual benefits the Company realizes in respect of the tax attributes subject to the Tax Receivable Agreement.
• If Falcon’s Opco were to become a publicly traded partnership taxable as a corporation for U.S. federal income tax purposes, the Company and Falcon’s Opco might be subject to potentially significant tax inefficiencies, and the Company would not be able to
• recover payments previously made by it under the Tax Receivable Agreement even if the corresponding tax benefits were subsequently determined to have been unavailable due to such status.
• Changes in applicable tax laws, interpretations of existing tax laws, loss of tax incentives, or adverse determinations by tax authorities could increase our tax burden or otherwise adversely affect our financial condition or results of operations.
• United States or international environmental laws and regulations may cause us to incur substantial costs or subject us to potential liabilities.
• Adverse litigation judgments or settlements resulting from legal proceedings in which we may be involved in the normal course of our business could adversely affect our financial condition or results of operations.
• Risks Related to Operating as a Public Company
• Our senior management team has limited experience managing a public company, and regulatory compliance obligations may divert its attention from the day-to-day management of our businesses.
• As a public reporting company, we are subject to rules and regulations established from time to time by the SEC and Public Company Accounting Oversight Board regarding our internal control over financial reporting. If we fail to establish and maintain effective internal control over financial reporting and disclosure controls and procedures, we may not be able to accurately report our financial results or report them in a timely manner.
• We have identified material weaknesses in our internal controls over financial reporting. If we are unable to remediate these material weaknesses, if management identifies additional material weaknesses in the future or if we otherwise fail to maintain effective internal controls over financial reporting, we may not be able to accurately or timely report our financial position or results of operations, which may adversely affect our business and stock price or cause our access to the capital markets to be impaired.
• We are an “emerging growth company” and a “smaller reporting company” within the meaning of the Securities Act, and we intend to take advantage of certain exemptions from disclosure requirements available to emerging growth companies and/or smaller reporting companies, which could make our securities less attractive to investors and may make it more difficult to compare our performance with that of other public companies.
• We have incurred, and will continue to incur, significant costs as a result of operating as a public company.
• Risks Related to Ownership of Our Securities
• The price of our securities may be volatile.
• If analysts do not publish research about our business or if they publish inaccurate or unfavorable research, the price and trading volume of the Company’s securities could decline.
• There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq.
• The Warrant Exchange may result in the delisting of the Warrants from Nasdaq.
• An active trading market for our Class A Common Stock may not be sustained, and you may not be able to resell your Class A Common Stock at the time when you want.
• We do not intend to pay cash dividends on our common stock for the foreseeable future.
• The Demerau family controls over 50% of our voting power and is able to exert significant influence over stockholder decisions because of its share ownership.
• Cecil D. Magpuri, our Chief Executive Officer, controls over twenty percent of our voting power and is able to exert significant influence over the direction of our business.
• Delaware law and the Charter and Bylaws contain certain provisions, including anti-takeover provisions that limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.
• The provisions of the Charter requiring exclusive forum in the Court of Chancery of the State of Delaware and the federal district courts of the United States for certain types of lawsuits may have the effect of discouraging lawsuits against our directors and officers.
• The Company may be subject to securities class action litigation, which may harm its business and operating results.
• The Warrant Agreement designates the courts of the State of New York or the United States District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our Warrants, which could limit the ability of Warrant holders to obtain a favorable judicial forum for disputes with our Company.
• The Series B Preferred Stock may be converted automatically, at a time that is disadvantageous to holders; holders have no ability to elect to convert the Series B Preferred Stock.
• The Series B Preferred Stock is equity and is subordinate to the Company’s existing and future indebtedness.
• The Series B Preferred Stock may be junior to other preferred stock the Company may issue in the future.
• The Series B Preferred Stock will rank junior to all of the Company’s and its subsidiaries’ liabilities in the event of a bankruptcy, liquidation or winding-up.
• The Series B Preferred Stock is perpetual in nature.
• An active trading market for the Series B Preferred Stock may not develop or continue, and the market price and trading volume of the Series B Preferred Stock may fluctuate significantly.