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Overview
Pubco was incorporated in Delaware on July 8, 2022 solely for the purpose of effecting a business combination transaction (the “Business Combination”) among Pubco, Falcon’s Beyond Global, LLC, a Florida limited liability company (which has since redomesticated as a Delaware limited liability company, “Falcon’s”) and FAST Acquisition Corp. II, a Delaware corporation (“FAST II”), pursuant to that certain Amended and Restated Agreement and Plan of Merger, dated as of January 31, 2023, as amended by Amendment No. 1 dated June 25, 2023, Amendment No. 2 dated July 7, 2023, and Amendment No. 3 dated September 1, 2023 (the “Merger Agreement”), by and among Pubco, Falcon’s, FAST II, and Palm Merger Sub, LLC, a Delaware limited liability company and a wholly-owned subsidiary of Pubco (“Merger Sub”). As of September 30, 2023, Pubco was a wholly-owned subsidiary of Falcon’s.
As of September 30, 2023, and prior to the completion of the Business Combination, Pubco had no assets, no operations, and only nominal capitalization.
Recent Developments
The Business Combination was effected between October 5, 2023 and October 6, 2023 in two steps: (a) on October 5, 2023 (the “SPAC Merger Effective Time”), FAST II merged with and into Pubco (the “SPAC Merger”), with Pubco surviving as the sole owner of Merger Sub, followed by a contribution by Pubco of all of its cash (except for cash required to pay certain transaction expenses) to Merger Sub to effectuate the “UP-C” structure; and (b) on October 6, 2023 (the “Acquisition Merger Effective Time”), Merger Sub merged with and into Falcon’s (the “Acquisition Merger”), with Falcon’s as the surviving entity of such merger. Following the consummation of the Business Combination, the direct interests in Falcon’s were held by Pubco and certain holders of the limited liability company units of Falcon’s outstanding as of immediately prior to the Business Combination.
See our Current Report on Form 8-K, filed with the SEC on October 12, 2023, for more information about the consummation of the Business Combination.
See the Form 8-K/A, which will be filed following the filing of this Quarterly Report on Form 10-Q, for the unaudited consolidated financial statements of Falcon’s for the three and nine month periods ended September 30, 2023 and related Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Results of Operations
From inception to September 30, 2023, and prior to the Business Combination, Pubco had no operations.
Liquidity and Capital Resources
From inception to September 30, 2023, and prior to the Business Combination, Pubco had no assets and no liabilities.
Off-Balance Sheet Financing Arrangements
Pubco did not have any off-balance sheet arrangement as of September 30, 2023.
Contractual Obligations
As of September 30, 2023, Pubco did not have any long-term debt, capital or operating lease obligations.
Critical Accounting Estimates
The preparation of financial statements and related disclosures in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and income and expenses during the periods reported. As of September 30, 2023, and prior to the completion of the Business Combination, Pubco had no assets, no operations, and only nominal capitalization and accordingly no critical accounting estimates.
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JOBS Act
Pubco is an “emerging growth company” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a registration statement under the Securities Act declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. Pubco has not elected to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, Pubco, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.
This may make comparison of Pubco’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
Pubco will remain an emerging growth company until the earlier of: (1) the last day of the fiscal year (a) following the fifth anniversary of the effectiveness of Pubco’s Registration Statement on Form S-4 (File No. 333-269778), (b) in which Pubco has total annual revenue of at least $1,235,000,000, or (c) in which Pubco is deemed to be a large accelerated filer, which means the market value of its common equity that is held by non-affiliates exceeds $700 million as of the end of the prior fiscal year’s second fiscal quarter; and (2) the date on which Pubco has issued more than $1.00 billion in non-convertible debt securities during the prior three-year period.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
During the period covered by this Quarterly Report on Form 10-Q, Pubco did not conduct any activities other than those incidental to its formation and matters contemplated by the Merger Agreement, and therefore did not incur any significant interest rate risk, liquidity risk, credit risk, foreign currency exchange rate risk or other relevant market risks.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
In designing and evaluating Pubco’s disclosure controls and procedures, Pubco’s management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
Pubco’s management, with the participation of its principal executive officer and principal financial officer, evaluated, as of the end of the period covered by this Quarterly Report on Form 10-Q, the effectiveness of Pubco’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, Pubco’s principal executive officer and principal financial officer concluded that Pubco’s disclosure controls and procedures were effective as of September 30, 2023.
As of September 30, 2023, prior to the completion of the Business Combination, Pubco had no assets, no operations, and only nominal capitalization and was a wholly-owned subsidiary of Falcon’s. In connection with the Business Combination, Falcon’s management identified several material weaknesses in the internal control over financial reporting of Falcon’s. For more information see the sections of the Form S-4 and Form S-1 entitled “Risk Factors - We have identified material weaknesses in our internal control 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 control 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.”
Changes in Internal Control over Financial Reporting
There has been no change in Pubco’s internal control over financial reporting during the quarter ended September 30, 2023 that has materially affected, or is reasonably likely to materially affect, Pubco’s internal control over financial reporting.
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PART II. OTHER INFORMATION
**Item
- Legal Proceedings.**
From time to time, we may become involved in litigation or other legal proceedings. We are not currently a party to any litigation or legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.
Item 1A. Risk Factors.
Pubco is subject to those risk factors set forth under the caption “Risk Factors” in the Proxy Statement/Prospectus, which is incorporated herein by reference.
Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
None.
**Item
- Exhibits**
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q:
2.1† Amendment No. 2, dated July 7, 2023, to Amended and Restated Agreement and Plan of Merger, dated January 31, 2023, by and among FAST Acquisition Corp. II, Falcon’s Beyond Global, LLC, Falcon’s Beyond Global, Inc. and Palm Merger Sub, LLC (incorporated herein by reference to Exhibit 2.3 to Amendment No. 3 to the Registration Statement on Form S-4 (File No. 333-269778) filed August 14, 2023).
2.2 Amendment No. 3, dated September 1, 2023, to Amended and Restated Agreement and Plan of Merger, dated January 31, 2023, by and among FAST Acquisition Corp. II, Falcon’s Beyond Global, LLC, Falcon’s Beyond Global, Inc. and Palm Merger Sub, LLC (incorporated herein by reference to Exhibit 2.1 to Amendment No. 4 to the Registration Statement on Form S-4 (File No. 333-269778) filed September 1, 2023). 31.1* Certification of Principal Executive Officer pursuant to Exchange Act Rule 13a-14(a). 31.2* Certification of Principal Financial Officer pursuant to Exchange Act Rule 13a-14(a). 32** Certification of Principal Executive Officer and Principal Financial Officer pursuant to Exchange Act Rule 13a-14(b) and 18 U.S.C. Section 1350. 101.INS* Inline XBRL Instance Document 101.SCH* Inline XBRL Taxonomy Extension Schema Document 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* Inline XBRL Taxonomy Extension Label Linkbase Document 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document (104) Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
* Filed herewith
** Furnished herewith
† 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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