v3.26.1
Business Combination
 12 Months Ended
Dec. 31, 2025
Business Combination [Abstract]  
Business Combination
3.
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 Attractions 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 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. The Company paid the additional consideration of $0.5 million in January 2026. 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 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:

 

 

 

May 9, 2025 as initially reported

 

 

Adjustments

 

 

May 9, 2025 as adjusted

 

Assets acquired

 

 

 

 

 

 

 

 

 

Intangible assets

 

$

—

 

 

$

1,210

 

 

$

1,210

 

Operating lease right-of-use asset

 

 

3,588

 

 

 

—

 

 

 

3,588

 

Property and equipment

 

 

1,020

 

 

 

28

 

 

 

1,048

 

Prepaid rent and lease deposit

 

 

132

 

 

 

—

 

 

 

132

 

Total assets acquired

 

$

4,740

 

 

$

1,238

 

 

$

5,978

 

 

 

 

 

 

 

 

 

 

 

Liabilities assumed

 

 

 

 

 

 

 

 

 

Loss making contract

 

$

—

 

 

$

140

 

 

$

140

 

Operating lease liability

 

 

2,608

 

 

 

—

 

 

 

2,608

 

Total liabilities assumed

 

$

2,608

 

 

$

140

 

 

$

2,748

 

 

 

 

 

 

 

 

 

 

 

Net assets acquired

 

 

2,132

 

 

 

1,098

 

 

 

3,230

 

 

 

 

 

 

 

 

 

 

 

Bargain purchase gain

 

 

—

 

 

 

(1,098

)

 

 

(1,098

)

 

 

 

 

 

 

 

 

 

 

Purchase consideration

 

 

 

 

 

 

 

 

 

Cash paid at closing

 

 

1,632

 

 

 

—

 

 

 

1,632

 

Consideration payable

 

 

500

 

 

 

—

 

 

 

500

 

Total purchase consideration

 

$

2,132

 

 

$

—

 

 

$

2,132

 

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 year ended December 31, 2025 included in gain on bargain purchase of OES Acquisition in the consolidated statements of operations and comprehensive income. The bargain purchase was a result of OES's plan to divest certain non-core operations.

 

The Company recognized $7.8 million in revenues and $2.5 million in net loss (including shared service allocation of $2.1 million), respectively, attributable to OES for year ended December 31, 2025. The Company did not incur transaction costs related to the OES Acquisition.

 

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

 

(UNAUDITED) Year ended

 

 

December 31,
2025

 

 

December 31,
2024

 

Revenue

 

$

14,896

 

 

$

13,533

 

Net Income

 

 

6,086

 

 

 

151,822

 

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.