References to the "Company," "FAST Acquisition Corp.," "our," "us" or "we" refer
to FAST Acquisition Corp. The following discussion and analysis of the Company's
financial condition and results of operations should be read in conjunction with
the financial statements and the notes thereto contained elsewhere in this
report. Certain information contained in the discussion and analysis set forth
below includes forward-looking statements that involve risks and uncertainties.
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Cautionary Note Regarding Forward-Looking Statements
This Annual Report on Form 10-K includes forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act. We have based these forward-looking statements on our current expectations
and projections about future events. These forward-looking statements are
subject to known and unknown risks, uncertainties and assumptions about us that
may cause our actual results, levels of activity, performance or achievements to
be materially different from any future results, levels of activity, performance
or achievements expressed or implied by such forward-looking statements. In some
cases, you can identify forward-looking statements by terminology such as "may,"
"should," "could," "would," "expect," "plan," "anticipate," "believe,"
"estimate," "continue," or the negative of such terms or other similar
expressions. For information identifying important factors that could cause
actual results to differ materially from those anticipated in the
forward-looking statements, please refer to the Risk Factors section of the
Company's final prospectus for its initial public offering filed with the SEC.
The Company's securities filings can be accessed on the EDGAR section of the
SEC's website at www.sec.gov. Except as expressly required by applicable
securities law, the Company disclaims any intention or obligation to update or
revise any forward-looking statements whether as a result of new information,
future events or otherwise.
Overview
We are a blank check company incorporated in Delaware on June 4, 2020 for the
purpose of effecting a merger, capital stock exchange, asset acquisition, stock
purchase, reorganization or similar business combination with one or more
businesses. We are an emerging growth company and, as such, we are subject to
all of the risks associated with emerging growth companies.
Our Sponsor is FAST Sponsor, LLC, a Delaware limited liability company. The
registration statement for our initial public offering was declared effective on
August 20, 2020. On August 25, 2020, we consummated our initial public offering
of 20,000,000 units, at $10.00 per unit, generating gross proceeds
of $200.0 million, and incurring offering costs of approximately $11.5 million,
inclusive of $7.0 million in deferred underwriting commissions. The
underwriters were granted a 45-day option from the date of the final prospectus
relating to the initial public offering to purchase up to 3,000,000 additional
units to cover over-allotments, if any, at $10.00 per unit. The over-allotment
expired unexercised on October 9, 2020.
Simultaneously with the closing of the initial public offering, we consummated
the private placement of 6,000,000 private placement warrants to our Sponsor,
each exercisable to purchase one share of Class A common stock at $11.50 per
share, at a price of $1.00 per private placement warrant, generating gross
proceeds to us of $6.0 million. If the over-allotment option was exercised, our
Sponsor could have purchased an additional amount of up to 600,000 private
placement warrants at a price of $1.00 per private placement warrant. The
over-allotment expired unexercised on October 9, 2020.
Upon the closing of the initial public offering and the private
placement, $200.0 million ($10.00 per unit) of the net proceeds of the sale of
the units in the initial public offering and the private placement was placed in
the trust account located in the United States at JP Morgan Chase Bank, N.A.
with Continental Stock Transfer & Trust Company acting as trustee, and has been
invested only in U.S. "government securities," within the meaning of Section
2(a)(16) of the Investment Company Act having a maturity of 185 days or less or
in money market funds meeting certain conditions under Rule 2a-7 promulgated
under the Investment Company Act which invest only in direct U.S. government
treasury obligations, as determined by the Company, until the earlier of: (i)
the completion of a business combination and (ii) the distribution of the trust
account as described below.
Our management has broad discretion with respect to the specific application of
the net proceeds of the initial public offering and the sale of private
placement warrants, although substantially all of the net proceeds are intended
to be applied generally toward consummating a business combination.
If we are unable to complete a business combination within 24 months from the
closing of the initial public offering, or August 25, 2022, we will (i) cease
all operations except for the purpose of winding up, (ii) as promptly as
reasonably possible but not more than ten business days thereafter, redeem the
public shares, at a per-share price, payable in cash, equal to the aggregate
amount then on deposit in the trust account, including interest earned on the
funds held in the trust account (net of permitted withdrawals and up to $100,000
of interest to pay dissolution expenses), divided by the number of then
outstanding public shares, which redemption will completely extinguish public
stockholders' rights as stockholders (including the right to receive further
liquidating distributions, if any), and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of the remaining stockholders
and the board of directors, liquidate and dissolve, subject in each case to our
obligations under Delaware law to provide for claims of creditors and the
requirements of other applicable law.
Termination of Proposed Business Combination and Settlement
On February 1, 2021, we entered into the Merger Agreement with FEI, FAST Merger
Corp. and Merger Sub. However, on December 9, 2021, we entered into the
Settlement Agreement with FEI, FAST Merger Corp., Merger Sub and the Sponsor,
pursuant to which the parties agreed to mutually terminate the Merger Agreement
as of December 9, 2021 and fully and finally resolve all disputes that have
arisen between them relating to FEI's purported termination of the Merger
Agreement. The Settlement Agreement mutually terminates the Merger Agreement as
of December 9, 2021. By virtue of the termination of the Merger Agreement, the
PIPE Subscription Agreements and all other Ancillary Agreements (as defined in
the Merger Agreement) terminate in accordance with their terms. The Settlement
Agreement provides for both immediate and deferred payments from FEI to the
Company. The Settlement Agreement provides that FEI will pay $6.0 million to the
Company within three business days of the Effective Date (as defined in the
Settlement Agreement) of the Settlement Agreement and will further loan $1.0
million to the Company within five business days of the Effective Date of the
Settlement Agreement. The Settlement Agreement provides that FEI will further
pay to the Company either (i) $10.0 million in the event that the Company
consummates an initial business combination, or (ii) $26.0 million if the
Company does not consummate an initial business combination and determines to
redeem its public shares and liquidate and dissolve. The Settlement Agreement
contains mutual releases by all parties, for all claims known and unknown,
relating and arising out of, or relating to, among other things, the Merger
Agreement and FEI's purported termination notice dated December 1, 2021. The
Settlement Agreement also contains a covenant not to sue and other customary
terms. As of December 31, 2021, we received the $6.0 million in cash and the
$1.0 million loan proceeds. The $1.0 million loan agreement was entered into
December 14, 2021 and is convertible, in any amount, at the option of the payee
into warrants to purchase shares of Class A common stock of the Company at a
conversion price of $1.00 per warrant. If converted the warrants would be
identical to the private placement warrants. The Convertible Promissory Note
bears no interest and matures on the date of a business combination.
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The Settlement Agreement contains mutual releases by all parties, for all claims
known and unknown, relating and arising out of, or relating to, among other
things, the Merger Agreement and FEI's purported termination notice dated
December 1, 2021. The Settlement Agreement also contains a covenant not to sue
and other customary terms.
The foregoing description of the Settlement Agreement does not purport to be
complete and is qualified in its entirety by reference to the text of the
Settlement Agreement, a copy of which was filed with the SEC on a Current Report
on Form 8-K on December 10, 2021.
Liquidity and Going Concern
As of December 31, 2021, we had approximately $5.0 million in our operating bank
account and working capital of approximately $3.6 million. Prior to the
completion of the initial public offering, our liquidity needs were satisfied
through a payment of $25,000 from our Sponsor in exchange for the issuance of
founder shares, the loan under the Note (as defined below), as well as
advancement of funds from our Sponsor of approximately $354,000 to us to cover
for offering costs in connection with the initial public offering. Subsequent to
the consummation of the initial public offering on August 25, 2020, our
liquidity needs had been satisfied with the net proceeds from the consummation
of the private placement not held in the trust account. We fully repaid the Note
and advanced funds on August 25, 2020. In addition, in order to finance
transaction costs in connection with a business combination, our officers,
directors and initial stockholders may, but are not obligated to, provide us
Working Capital Loans. To date, there were no amounts outstanding under any
Working Capital Loans.
According to the Settlement Agreement, on December 14, 2021, we received $1.0
million from under the Convertible Promissory Note to finance our working
capital needs. As described above, $1.0 million may be convertible into warrants
to purchase Class A common stock at a conversion price of $1.00 per warrant. The
Convertible Promissory Note was determined at fair value at issuance and
subsequently. As of December 31, 2021, there was approximately $4.7 million of
the Convertible Promissory Note presented on the consolidated balance sheets.
In connection with the management assessment of going concern considerations in
accordance with FASB ASC 205-40, "Basis of Presentation - Going Concern,"
management has determined that mandatory liquidation and subsequent dissolution
raise substantial doubt about our ability to continue as a going concern. No
adjustments have been made to the carrying amounts of assets or liabilities
should we be required to liquidate after August 25, 2022. The financial
statements do not include any adjustment that might be necessary if we are
unable to continue as a going concern.
Risks and Uncertainties
Management continues to evaluate the impact of the COVID-19 pandemic and has
concluded that the specific impact is not readily determinable as of the date of
these unaudited condensed consolidated financial statements. The consolidated
financial statements do not include any adjustments that might result from the
outcome of this uncertainty.
Results of Operations
Our entire activity from inception up to December 31, 2021, was in preparation
for our formation, the initial public offering, and since the closing of our
initial public offering, a search for business combination candidates. We will
not generate any operating revenues until the closing and completion of our
initial business combination, at the earliest.
For the year ended December 31, 2021, we had a net loss of approximately $40.6
million, which consisted of approximately $38.3 million of loss from changes in
fair value of derivative warrant liabilities, general and administrative
expenses of approximately $3.6 million, related party administrative fees of
$180,000, franchise tax expense of approximately $201,000, and approximately
$595,000 income tax expense, partially offset by income from our investments
held in the trust account of approximately $57,000 and gain on settlement
agreement of $3.3 million.
For the period from June 4, 2020 (inception) through December 31, 2020, we had a
net loss of approximately $16.1 million, which consisted of approximately $15.3
million loss from changes in fair value of derivative warrant liabilities,
approximately $474,000 financing costs and general and administrative expenses
of approximately $214,000, related party administrative fees of $60,000, and
franchise tax expense of approximately $114,000, partially offset by income from
our investments held in the trust account of approximately $68,000.
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Related Party Transactions
Founder Shares
On June 19, 2020, we issued 7,187,500 founder shares to our Sponsor for a
payment of $25,000. On August 4, 2020, we effected a share capitalization
resulting in an aggregate of 5,750,000 Class B common stock outstanding. All
shares and associated amounts have been retroactively restated to reflect the
share capitalization. The initial stockholders agreed to forfeit up to 750,000
founder shares to the extent that the over-allotment option was not exercised in
full by the underwriters. The forfeiture would be adjusted to the extent that
the over-allotment option is not exercised in full by the underwriters so that
the founder shares would represent 20.0% of our issued and outstanding shares
after the initial public offering. The over-allotment expired unexercised on
October 9, 2020, resulting in the forfeiture of such shares.
The initial stockholders agreed, subject to limited exceptions, not to transfer,
assign or sell any of the founder shares until the earlier to occur of: (i) one
year after the completion of the initial business combination and (ii) the date
following the completion of the initial business combination on which we
complete a liquidation, merger, capital stock exchange or other similar
transaction that results in all of our stockholders having the right to exchange
their common stock for cash, securities or other property. Notwithstanding the
foregoing, if (1) the last reported sales price of the Class A common stock
equals or exceeds $12.00 per share (as adjusted for stock splits, stock
capitalizations, reorganizations, recapitalizations and the like) for any 20
trading days within any 30-trading day period commencing at least 150 days after
the initial business combination or (2) if we consummate a transaction after the
initial business combination which results in the our stockholders having the
right to exchange their shares for cash, securities or other property, the
founder shares will be released from the lock-up.
Private Placement Warrants
Simultaneously with the closing of the initial public offering, we consummated
the private placement of 6,000,000 private placement warrants to our Sponsor,
each exercisable to purchase one share of Class A common stock at $11.50 per
share, at a price of $1.00 per private placement warrant, generating gross
proceeds to us of $6.0 million.
A certain portion of the proceeds from the sale of the private placement
warrants to out Sponsor was added to the proceeds from the initial public
offering held in the trust account. If we do not complete a business combination
within the Combination Period, the private placement warrants will expire
worthless. The private placement warrants will be non-redeemable for cash and
exercisable on a cashless basis so long as they are held by our Sponsor or its
permitted transferees.
Our Sponsor and officers and directors agreed, subject to limited exceptions,
not to transfer, assign or sell any of their private placement warrants until 30
days after the completion of the initial business combination.
Related Party Loans
On June 4, 2020, the Sponsor agreed to loan us an aggregate of up to $300,000 to
cover expenses related to the initial public offering pursuant to a promissory
note (the "Note"). This loan was non-interest bearing and payable upon the
completion of the initial public offering. Through August 25, 2020, we borrowed
the full $300,000 under the Note and received additional advances of
approximately $54,000 from the Sponsor to cover certain offering expenses. We
fully repaid the Note and the advances to the Sponsor on August 25, 2020.
In addition, in order to fund working capital deficiencies or finance
transaction costs in connection with a business combination, the Sponsor or an
affiliate of the Sponsor, or certain of our officers and directors may, but are
not obligated to, loan us Working Capital Loans. If we complete a business
combination, we may repay the Working Capital Loans out of the proceeds of the
trust account released to us. Otherwise, the Working Capital Loans would be
repaid only out of funds held outside the trust account. In the event that a
business combination does not close, we may use a portion of proceeds held
outside the trust account to repay the Working Capital Loans but no proceeds
held in the trust account would be used to repay the Working Capital Loans. The
Working Capital Loans would either be repaid upon consummation of a business
combination or, at the lenders' discretion, up to $1.5 million of such Working
Capital Loans may be convertible into warrants of the post business combination
entity at a price of $1.00 per warrant. The warrants would be identical to the
private placement warrants. Except for the foregoing, the terms of such Working
Capital Loans, if any, have not been determined and no written agreements exist
with respect to such loans. To date, we had no Working Capital Loans with
related parties.
Contractual Obligations
Registration Rights
The holders of founder shares, private placement warrants and warrants that may
be issued upon conversion of Working Capital Loans, if any (and any shares of
Class A common stock issuable upon the exercise of the private placement
warrants and warrants that may be issued upon conversion of Working Capital
Loans and upon conversion of the founder shares), are entitled to registration
rights pursuant to a registration rights agreement. These holders will be
entitled to certain demand and "piggyback" registration rights. We will bear the
expenses incurred in connection with the filing of any such registration
statements.
43
Underwriting Agreement
The underwriters were entitled to an underwriting discount of $0.20 per unit, or
$4.0 million in the aggregate, paid upon the closing of the initial public
offering. In addition, $0.35 per unit, or $7.0 million in the aggregate will be
payable to the underwriters for deferred underwriting commissions. The deferred
fee will become payable to the underwriters from the amounts held in the trust
account solely in the event that we complete a business combination, subject to
the terms of the underwriting agreement.
Administrative Services Agreement
Commencing on August 21, 2020 and continuing until the earlier of the
consummation of a business combination or our liquidation, we agreed to pay the
Sponsor a total of $15,000 per month for office space, utilities, and
secretarial and administrative support services provided to members of our
management team. For the year ended December 31, 2021 and for the period from
June 4, 2020 (inception) through December 31, 2020, we incurred and paid
$180,000 and $60,000 related to these services, respectively.
The Sponsor, officers and directors, or any of their respective affiliates will
be reimbursed for any out-of-pocket expenses incurred in connection with
activities performed on our behalf such as identifying potential target
businesses and performing due diligence on suitable business combinations.
Critical Accounting Policies
Investments Held in the Trust Account
Our portfolio of investments held in the trust account is comprised of U.S.
government securities, within the meaning set forth in Section 2(a)(16) of the
Investment Company Act, with a maturity of 185 days or less, or investments in
money market funds that invest in U.S. government securities, or a combination
thereof. The investments held in the trust account are classified as trading
securities. Trading securities are presented on the balance sheet at fair value
at the end of each reporting period. Gains and losses resulting from the change
in fair value of these securities are included in net gain from investments held
in trust account on the statement of operations. The estimated fair values of
investments held in the trust account are determined using available market
information.
Derivative Warrant liabilities
We do not use derivative instruments to hedge exposures to cash flow, market, or
foreign currency risks. We evaluate all of our financial instruments, including
issued stock purchase warrants, to determine if such instruments are derivatives
or contain features that qualify as embedded derivatives, pursuant to ASC 480
and ASC 815-15. The classification of derivative instruments, including whether
such instruments should be recorded as liabilities or as equity, is re-assessed
at the end of each reporting period.
The warrants issued in connection with the initial public offering (the "public
warrants") and the private placement warrants are recognized as derivative
liabilities in accordance with ASC 815, paragraph 40, Contracts in Entity's Own
Equity ("ASC 815-40"). Accordingly, we recognize the warrant instruments as
liabilities at fair value and adjust the instruments to fair value at each
reporting period. The liabilities are subject to re-measurement at each balance
sheet date until exercised, and any change in fair value is recognized in the
Company's statement of operations. The fair value of the public warrants issued
in connection with the initial public offering and private placement warrants
were initially measured at fair value using a Monte Carlo simulation model and
subsequently, the fair value of the private placement warrants have been
estimated using a Monte Carlo simulation model each measurement date. The fair
value of public warrants issued in connection with the initial public offering
have subsequently been measured based on the listed market price of such
warrants.
Class A Common Stock Subject to Possible Redemption
We account for our Class A common stock subject to possible redemption in
accordance with the guidance in ASC Topic 480 "Distinguishing Liabilities from
Equity." Shares of Class A common stock subject to mandatory redemption (if any)
are classified as liability instruments and are measured at fair value. Shares
of conditionally redeemable Class A common stock (including Class A common stock
that feature redemption rights that are either within the control of the holder
or subject to redemption upon the occurrence of uncertain events not solely
within our control) are classified as temporary equity. At all other times,
shares of Class A common stock are classified as stockholders' equity. Our
Class A common stock features certain redemption rights that are considered to
be outside of our control and subject to the occurrence of uncertain future
events. Accordingly, at December 31, 2021, 20,000,000 shares of Class A common
stock subject to possible redemption are presented as temporary equity, outside
of the stockholders' equity section of the balance sheet.
The Company recognizes changes in redemption value immediately as they occur and
adjusts the carrying value of the Class A common stock subject to possible
redemption to equal the redemption value at the end of each reporting period.
Immediately upon the closing of the initial public offering, the Company
recognized the accretion from initial book value to redemption amount, which,
resulted in charges against additional paid-in capital (to the extent available)
and accumulated deficit.
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Net Income (Loss) Per Common Share
We comply with accounting and disclosure requirements of FASB ASC Topic 260,
"Earnings Per Share." We have two classes of shares, which are referred to as
Class A common stock and Class B common stock. Income and losses are shared pro
rata between the two classes of shares. Net income (loss) per common share is
calculated by dividing the net income (loss) by the weighted average shares of
common stock outstanding for the respective period.
We did not consider the effect of the warrants issued in connection with the
initial public offering and the private placement to purchase an aggregate of
16,000,000 shares of common stock in the calculation of diluted income (loss)
per share because their exercise is contingent upon future events. Accretion
associated with the redeemable Class A common stock is excluded from earnings
per share as the redemption value approximates fair value.
JOBS Act
The JOBS Act contains provisions that, among other things, relax certain
reporting requirements for qualifying public companies. We qualify as an
"emerging growth company" and under the JOBS Act are allowed to comply with new
or revised accounting pronouncements based on the effective date for private
(not publicly traded) companies. We are electing to delay the adoption of new or
revised accounting standards, and as a result, we may not comply with new or
revised accounting standards on the relevant dates on which adoption of such
standards is required for non-emerging growth companies. As a result, the
financial statements may not be comparable to companies that comply with new or
revised accounting pronouncements as of public company effective dates.
Additionally, we are in the process of evaluating the benefits of relying on the
other reduced reporting requirements provided by the JOBS Act. Subject to
certain conditions set forth in the JOBS Act, if, as an "emerging growth
company," we choose to rely on such exemptions we may not be required to, among
other things, (i) provide an auditor's attestation report on our system of
internal controls over financial reporting pursuant to Section 404, (ii) provide
all of the compensation disclosure that may be required of non-emerging growth
public companies under the Dodd-Frank Wall Street Reform and Consumer Protection
Act, (iii) comply with any requirement that may be adopted by the Public Company
Accounting Oversight Board regarding mandatory audit firm rotation or a
supplement to the auditor's report providing additional information about the
audit and the financial statements (auditor discussion and analysis) and (iv)
disclose certain executive compensation related items such as the correlation
between executive compensation and performance and comparisons of the CEO's
compensation to median employee compensation. These exemptions will apply for a
period of five years following the completion of our initial public offering or
until we are no longer an "emerging growth company," whichever is earlier.
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