Item 1.01. Entry into a Material Definitive Agreement.
Agreement and Plan of Merger
On July 11, 2022, FAST Acquisition Corp. II, a Delaware corporation
("Acquiror"), Falcon's Beyond Global, LLC, a Florida limited liability company
(the "Company"), Palm Holdco, Inc., a Delaware corporation and a wholly owned
subsidiary of the Company ("Pubco"), and Palm Merger Sub LLC, a Delaware limited
liability company and a wholly owned subsidiary of Pubco ("Merger Sub") entered
into an agreement and plan of merger (as it may be amended and/or restated from
time to time, the "Merger Agreement"), a copy of which is attached hereto as
Exhibit 2.1 and incorporated herein by reference. Capitalized terms used in this
Current Report on Form 8-K but not otherwise defined herein have the meanings
given to them in the Merger Agreement.
The Mergers
Pursuant to the Merger Agreement, and subject to the terms and conditions
contained therein, the business combination will be effected in two steps: (a)
Acquiror will merge with and into Pubco (the "SPAC Merger"), with Pubco
surviving as the sole owner of Merger Sub (sometimes referred to as the
"Surviving Corporation"), followed by a contribution by Pubco of all of its cash
to Merger Sub to effectuate the "UP-C" structure; and (b) on the date
immediately following the SPAC Merger, Merger Sub will merge with and into the
Company (the "Acquisition Merger," and collectively with the SPAC Merger, the
"Mergers"), with the Company as the surviving entity of such merger. Following
the consummation of the transactions contemplated by the Merger Agreement (the
"Closing," and the date on which the Closing occurs, the "Closing Date"), the
direct interests in the Company will be held by Pubco and the holders of common
units of the Company (the "Company Units") outstanding as of immediately prior
to the Mergers.
Structure and Merger Consideration
The Merger Agreement provides that, among other things and upon the terms and
subject to the conditions thereof, the following transactions will occur:
(i) At the effective time of the SPAC Merger, (a) each SPAC Unit outstanding
immediately prior to the effective time of the SPAC Merger will be
automatically detached and the holder thereof will be deemed to hold one
share of SPAC Class A Common Stock and one-quarter of a SPAC Warrant; (b)
each current share of SPAC Class A Common Stock will be automatically
exchanged for the right to receive (x) 0.5 shares of Pubco Class A Common
Stock and 0.5 shares of the Series A Preferred Stock of Pubco ("Pubco
Preferred Stock") and (y) 50% of the Additional SPAC Share Consideration; (c)
each share of SPAC Class A Common Stock converted from the SPAC Class B
Common Stock of FAST Sponsor II LLC, a Delaware limited liability company
(the "Sponsor"), pursuant to the Class B Exchange (described below) will
automatically be exchanged for one newly issued share of Pubco Class A Common
Stock; and (d) each SPAC Warrant outstanding immediately prior to the SPAC
Merger effective time will be assumed by Pubco.
(ii) Immediately prior to the effective time of the Acquisition Merger, following
the SPAC Merger, the Surviving Corporation will contribute to Merger Sub all
of the Closing Surviving Corporation Cash.
(iii) At the effective time of the Acquisition Merger, (a) each issued and
outstanding Company Unit (other than the Cancelled Units and Company
Financing Units) will be converted into the right to receive (x) a number
of shares of Pubco Class B Common Stock and a number of New Company Units,
in each case equal to the Acquisition Merger Exchange Number (the "Per Unit
Consideration") and (y) the applicable portion of any Seller Earnout Shares
(defined below); (b) each Company Unit issued in connection with the
Company Financing (the "Company Financing Units") will be converted into
the right to receive (x) the Per Unit Consideration and (y) a number of
shares of Pubco Class B Common Stock and a number of New Company Units, in
each case equal to the Additional Consideration Number (the "Additional
Company Financing Unit Consideration"); (c) each Company Unit held in
treasury of the Company as of immediately prior to the effective time of
the Acquisition Merger (collectively, the "Cancelled Units") will be
cancelled without any conversion and no payment or distribution will be
made with respect thereto; (d) the units of Merger Sub that are issued and
outstanding will be converted into and become (x) a number of New Company
Units equal to the number of shares of Pubco Class A Common Stock
outstanding immediately after the SPAC Merger, (y) a number of Preferred
Units equal to the number of shares of Pubco Preferred Stock outstanding
immediately after the SPAC Merger and (z) a number of Warrant Units equal
to the number of Pubco Warrants outstanding immediately after the SPAC
Merger, in each case of the foregoing clauses (x) through (z) after giving
effect to the redemption of any shares of SPAC Common Stock in connection
with the Offer, the Class B Exchange and the Conversion.
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Holders of Company Units immediately before the Closing also will be entitled to
receive a pro rata portion of a total of up to (i) 40,000,000 New Company Units
and 40,000,000 shares of Class B Common Stock of Pubco (together, the "Seller
Earnout Shares"), in each case that will be deposited into escrow at the Closing
and be earned, released and delivered upon satisfaction of certain milestones
related to the volume weighted average closing sale price of shares of Pubco
Common Stock ("Pubco Common Share Price") during the five-year period beginning
on the one-year anniversary of the Acquisition Merger Closing and ending on the
six-year anniversary of the Closing Date (the "Earnout Period"). 15,000,000 of
the Seller Earnout Shares will vest and be released from escrow if the Pubco
Common Share Price is at least $20 for 20 trading days during any 30-consecutive
trading day period; another 15,000,000 of the Seller Earnout Shares will vest
and be released from escrow if the Pubco Common Share Price is at least $25 for
20 trading days during any 30-consecutive trading day period; and the final
10,000,000 of the Seller Earnout Shares will vest and be released from escrow if
the Pubco Common Share Price is at least $30 for 20 trading days during any
30-consecutive trading day period, in each case during the Earnout Period.
Sponsor Vesting Shares
In connection with the Mergers, the Sponsor agreed to forfeit a number of SPAC
Class B Common Stock, as further described under the section of this current
report titled "Sponsor Support Agreement."
Closing Conditions
The consummation of the Mergers is subject to the satisfaction or waiver of
certain customary closing conditions, including, among other things, (i) the
expiration or termination of the waiting period (or any extension thereof)
applicable under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and
the rules and regulations promulgated thereunder, (ii) that there not be in
. . .
Item 3.02. Unregistered Sales of Equity Securities.
The disclosure set forth above in Item 1.01 of this Current Report on Form 8-K
under the heading "Subscription Agreement" is incorporated by reference herein.
The Common Units issuable in connection with the private placement will not be
registered under the Securities Act in reliance on the exemption from
registration provided by Section 4(a)(2) of the Securities Act and/or Regulation
D promulgated thereunder.
Item 7.01. Regulation FD Disclosure.
On July 12, 2022, Acquiror issued a press release announcing the execution of
the Merger Agreement and other matters relating to the Mergers. The press
release is attached hereto as Exhibit 99.1 and incorporated herein by reference.
Attached as Exhibit 99.2 hereto and incorporated herein by reference is the
investor presentation dated July 12, 2022, which will be used by Acquiror with
respect to the transaction.
On July 12, 2022, Acquiror and the Company made a webcast available on their
respective websites in which members of their respective managements discussed
the Mergers and the other transactions contemplated by the Merger Agreement (the
"Webcast"). A copy of the transcript for the Webcast is attached hereto as
Exhibit 99.3 and is incorporated herein by reference.
On July 12, 2022, Acquiror and the Company also made a net roadshow recording
available on their respective websites in which members of their respective
managements discussed the Mergers and the other transactions contemplated by the
Merger Agreement (the "Net Roadshow Recording"). A copy of the transcript for
the Net Roadshow Recording is attached hereto as Exhibit 99.4 and is
incorporated herein by reference.
The information in this Item 7.01, including Exhibits 99.1, 99.2, 99.3 and 99.4
are furnished and shall not be deemed "filed" for purposes of Section 18 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or otherwise
subject to liabilities under that section, and shall not be deemed to be
incorporated by reference into the filings of Acquiror under the Securities Act
or the Exchange Act, regardless of any general incorporation language in such
filings. This Current Report on Form 8-K will not be deemed an admission as to
the materiality of any information of the information in this Item 7.01,
including Exhibits 99.1, 99.2, 99.3 and 99.4.
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Important Information About the Mergers and Where to Find It
In connection with the Mergers, Acquiror intends to file with the SEC a
registration statement on Form S-4 (the "Registration Statement") containing a
proxy statement/prospectus and certain other related documents, which will be
both the proxy statement to be distributed to holders of Acquiror's common stock
in connection with Acquiror's solicitation of proxies for the vote by Acquiror's
stockholders with respect to the Mergers and other matters as may be described
in the Registration Statement, as well as the prospectus relating to the offer
and sale of the securities of Acquiror to be issued in connection with the
Mergers. Acquiror's stockholders and other interested persons are advised to
read carefully and in their entirety, when available, the preliminary proxy
statement/prospectus included in the Registration Statement (including any
amendments or supplements thereto) and the definitive proxy
statement/prospectus, as well as other documents filed with the SEC, as these
materials will contain important information about the parties to the Merger
Agreement, Acquiror and the Mergers. After the Registration Statement is
declared effective, the definitive proxy statement/prospectus will be mailed to
stockholders of Acquiror as of a record date to be established for voting on the
Mergers and other matters as may be described in the Registration Statement.
Stockholders will also be able to obtain copies of the proxy
statement/prospectus and other documents filed with the SEC that will be
incorporated by reference in the proxy statement/prospectus, without charge,
once available, at the SEC's web site at sec.gov, or by directing a request to:
FAST Acquisition Corp. II, 109 Old Branchville Road, Ridgefield, CT 06877,
Attention: Chief Financial Officer, (201) 956-1969.
Participants in the Solicitation
Acquiror and its directors and executive officers may be deemed participants in
the solicitation of proxies from Acquiror's stockholders with respect to the
Mergers. A list of the names of those directors and executive officers and a
description of their interests in Acquiror is contained in Acquiror's
registration statement on Form S-1 (as amended to date), which was initially
filed with the SEC on July 26, 2021, and is available free of charge at the
SEC's web site at sec.gov, or by directing a request to FAST Acquisition Corp.
II, 109 Old Branchville Road, Ridgefield, CT 06877, Attention: Chief Financial
Officer, (201) 956-1969. Additional information regarding the interests of such
participants will be contained in the Registration Statement when available.
Falcon's Beyond Global, LLC and its managers and executive officers may also be
deemed to be participants in the solicitation of proxies from the stockholders
of Acquiror in connection with the Mergers. A list of the names of such
directors and executive officers and information regarding their interests in
the Mergers will be contained in the Registration Statement when available.
Forward-Looking Statements
This Current Report on Form 8-K includes "forward-looking statements" within the
meaning of the "safe harbor" provisions of the Private Securities Litigation
Reform Act of 1995. Acquiror's and Falcon's Beyond Global, LLC's actual results
may differ from their expectations, estimates and projections and consequently,
you should not rely on these forward-looking statements as predictions of future
events. Words such as "expect," "estimate," "project," "budget," "forecast,"
"anticipate," "intend," "plan," "may," "will," "could," "should," "believe,"
"predict," "potential," "continue," and similar expressions are intended to
identify such forward-looking statements. These forward-looking statements
include, without limitation, Acquiror's and Falcon's Beyond Global, LLC's
expectations with respect to future performance and anticipated financial
impacts of the Mergers, the satisfaction of the closing conditions to the
Mergers and the timing of the completion of the Mergers. These forward-looking
statements involve significant risks and uncertainties that could cause actual
results to differ materially from expected results, including factors that are
outside of Acquiror's and Falcon's Beyond Global, LLC's control and that are
difficult to predict. Factors that may cause such differences include, but are
not limited to: (1) changes in domestic and foreign business, market, financial,
political, and legal conditions in general and in the entertainment industry in
particular; (2) the outcome of any legal proceedings that may be instituted
against Acquiror, the Company or Pubco following the announcement of the Merger
Agreement and the transactions contemplated therein, (3) the inability of the
parties to successfully or timely consummate the Mergers or the other
transactions contemplated by the Merger Agreement, including the risk that any
regulatory approvals or the SEC's declaration of the effectiveness of the proxy
statement/prospectus relating to the transaction are not obtained, are delayed
or are subject to unanticipated conditions that could adversely affect Pubco or
the expected benefits of the transactions contemplated by the Merger Agreement
or that the approval of the requisite equity holders of Acquiror is not
obtained; (4) the occurrence of any event, change or other circumstance that
could give rise to the termination of the Merger Agreement, (5) volatility in
the price of Acquiror's or Pubco's securities, (6) the risk that the Mergers or
the other transactions contemplated by the Merger Agreement disrupt current
plans and operations as a result of the announcement and consummation thereof,
(7) the enforceability of the Company's intellectual property, including its
patents, and the potential infringement on the intellectual property rights of
others, cyber security risks or potential breaches of data security, (8) any
failure to realize the anticipated benefits of the Mergers or the other
transactions contemplated by the Merger Agreement; (9) risks relating to the
uncertainty of the projected financial information with respect to the Company;
(10) risks related to the rollout of the Company's business and the timing of
expected business milestones; (11) the effects of competition on the Company's
business; (12) the risk that the Mergers or the other transactions contemplated
by the Merger Agreement may not be completed by Acquiror's deadline and the
potential failure to obtain an extension of its business combination deadline if
sought by Acquiror, (13) the amount of redemption requests made by stockholders
of Acquiror; (14) the ability of Acquiror, the Company or Pubco to issue equity
or equity-linked securities or obtain debt financing in connection with the
Mergers or the other transactions contemplated by the Merger Agreement or in the
future; (15) and those factors discussed in Acquiror's final prospectus dated
March 15, 2021 under the heading "Risk Factors," and other documents Acquiror
has filed, or will file, with the SEC.
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Acquiror cautions that the foregoing list of factors is not exhaustive. Although
Acquiror believes the expectations reflected in these forward-looking statements
are reasonable, nothing in this Current Report on Form 8-K should be regarded as
a representation by any person that the forward-looking statements or
projections set forth herein will be achieved or that any of the contemplated
results of such forward-looking statements or projections will be achieved.
There may be additional risks that Acquiror and Falcon's Beyond Global, LLC
presently do not know of or that Acquiror and Falcon's Beyond Global, LLC
currently believe are immaterial that could also cause actual results to differ
from those contained in the forward-looking statements. Acquiror cautions
readers not to place undue reliance upon any forward-looking statements, which
speak only as of the date made. Neither Acquiror nor Falcon's Beyond Global, LLC
undertakes any duty to update these forward-looking statements, except as
otherwise required by law.
No Offer or Solicitation
This Current Report on Form 8-K and the exhibits hereto shall not constitute a
solicitation of a proxy, consent, or authorization with respect to any
securities or in respect of the Mergers. This Current Report on Form 8-K shall
also not constitute an offer to sell or the solicitation of an offer to buy any
securities, nor shall there be any sale of securities in any state or
jurisdiction in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of such state or
jurisdiction. No offering of securities shall be made except by means of a
. . .
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
Number Description
2.1† Merger Agreement, dated as of July 11, 2022, by and among FAST
Acquisition Corp., II, Falcon's Beyond Global, LLC, and the other
parties thereto.
Form of Tax Receivable Agreement (Exhibit D to Merger Agreement).
Form of Registration Rights Agreement (Exhibit E to Merger
Agreement).
10.1 Sponsor Support Agreement, dated as of July 11, 2022, by and among
FAST Acquisition Corp., II, FAST Sponsor II LLC, and the other parties
thereto.
10.2 Sponsor Lock-Up Agreement, dated as of July 11, 2022, by and among
FAST Acquisition Corp., II, FAST Sponsor II LLC, and the other parties
thereto.
10.3 Subscription Agreement, dated as of July 11, 2022, by and among
Falcon's Beyond Global, LLC, FAST Acquisition Corp., II and Katmandu
Collections, LLLP.
10.4 Form of Company Member Support Agreement.
10.5 Form of Company Member Lock-Up Agreement.
99.1 Press release, dated July 12, 2022.
99.2 Investor Presentation, dated July 12, 2022
99.3 Transcript of Netroadshow Presentation, dated July 12, 2022
99.4 Transcript of Investor call, dated July 12, 2022
104 Cover Page Interactive Data File (embedded with the Inline XBRL
document)
† Certain of the exhibits and schedules to this Exhibit have been omitted in
accordance with Regulation S-K Item 601(a)(5). The Registrant agrees to furnish
a copy of all omitted exhibits and schedules to the SEC upon its request.
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