Falcon's Beyond (FBYD) - 2024 Q4 - Annual Report

Financial Performance and Challenges - Katmandu Park in Punta Cana was closed in March 2024 due to financial and operational challenges, leading to losses in the Sierra Parima segment in 2023[29]. - Sierra Parima segment reported a fixed asset impairment of $46.7 million due to financial and operational challenges at Katmandu Park DR, resulting in a fair value of zero for the Company's investment in Sierra Parima[77]. Strategic Partnerships and Agreements - The FBB division entered a licensing agreement with The Hershey Company in January 2024 to develop Hershey-branded LBE experiences in the US and international markets[30]. - A non-binding letter of intent was signed in November 2024 for Infinite Acquisitions to acquire OES, a developer of complex ride systems, with the Company to operate OES if the transaction proceeds[32]. - The joint venture with Raging Power Limited will develop the Vquarium experience at the 11 SKIES project, with Falcon's receiving 16.6% to 20.6% of gross revenue from this location[66]. - The joint ventures with Meliá allow for shared capital contributions and responsibilities in developing FBD resort destinations, enhancing operational efficiency[69]. Asset Management and Sales - The Company anticipates approximately$ 30 million from the potential sale of non-core assets identified for disposition, aligning with its long-term asset-efficient strategy[33]. - FCG anticipates a total contract value of approximately $83.1 million from the Consultancy Services Agreement if all opportunities are won[95]. Employee and Workforce Management - As of December 31, 2024, Falcon's had 207 full-time employees, with 174 in Orlando and 33 in the Philippines[118]. - The joint ventures with Meliá employed approximately 179 year-round, full-time employees, with 170 in Spain and 9 in the Dominican Republic[120]. - A pre-agreement for a 5.0% wage increase in 2023 and 3.3% in 2024 was announced for positions covered by collective bargaining agreements in Spain[121]. - Falcon's was awarded the Top Workplaces Orlando regional award for the second consecutive year in 2023[118]. Marketing and Brand Development - The marketing strategy emphasizes brand development and visibility, targeting customers, clients, and investors through integrated campaigns and public relations efforts[87]. - The FBB division aims to monetize original brands through strategic content and consumer product activations, leveraging data to optimize audience engagement[79]. - The company is focused on expanding its intellectual property, including Vquarium and other original brands, across various entertainment formats[67]. Insurance and Risk Management - The company maintains insurance coverage deemed commercially reasonable for various liabilities, including property and general liability[123]. - Joint ventures maintain insurance for property and professional services liability, which is considered adequate for foreseeable losses[126]. - The majority of current insurance policies were renewed at the beginning of the second quarter of 2024[128]. - The company evaluates its insurance policies annually, which may involve renegotiation of terms as necessary[128]. - There is no assurance that insurance coverage will be adequate to cover all potential claims, which could materially affect the company[125]. - The joint ventures may experience material losses that exceed or are not covered by their insurance[127]. Operational Developments - Falcon's Attractions was created in March 2024 to operate rides and attractions sales efforts within the FBB division[31]. - Falcon's Central plans to create mixed-use entertainment destinations in high-traffic areas, featuring a variety of retail, dining, and entertainment experiences[78]. - FBD's new strategy focuses on building relationships with commercial developers and brands to create diverse entertainment destinations[97]. - Falcon's is the lead master planner for a water theme park in Qiddiya, planned to span over 252,000 square meters with 22 rides and attractions[58]. - FCG has been engaged to lead the design of 26 different entertainment assets located in Qiddiya, Saudi Arabia[109]. Shareholder and Stock Information - A stock dividend of 0.2 shares of Class A Common Stock per share was declared on September 30, 2024, with a total of 2,017,640 shares issued on December 17, 2024[34][35]. - An Earnout Forfeiture occurred, resulting in the forfeiture of 437,500 shares of Class A Common Stock and 17,062,500 shares of Class B Common Stock[36]. - The Company has 1,000,000 earnout shares of Class A Common Stock and 39,000,000 earnout shares of Class B Common Stock outstanding, contingent on stock price milestones during the Earnout Period[37][38]. Future Growth and Development - The company is currently accessing potential acquisition targets to support growth in its B2B marketing efforts[98]. - Falcon's Beyond Destinations (FBD) is implementing an asset-efficient strategy to expand operations quickly and reduce risks by partnering with developers of existing commercial properties[63]. - Over the last 25 years, the company has realized over$ 120 billion in location-based entertainment projects[99].