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 unaudited condensed 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.
Cautionary Note Regarding Forward-Looking Statements
This Quarterly Report on Form 10-Q 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 5, 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 5, 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 were
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 will be 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.
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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.
Liquidity and Capital Resources
As of September 30, 2020, we had approximately $1.1 million in our operating
bank account, and working capital of approximately $1.3 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 well as advancement of
funds from a related party of approximately $350,000 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.
Based on the foregoing, management believes that we will have sufficient working
capital and borrowing capacity to meet our needs through the earlier of the
consummation of a Business Combination or one year from this filing. Over this
time period, we will be using these funds for paying existing accounts payable,
identifying and evaluating prospective initial Business Combination candidates,
performing due diligence on prospective target businesses, paying for travel
expenditures, selecting the target business to merge with or acquire, and
structuring, negotiating and consummating the Business Combination.
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 financial statements. The financial statement does not include any
adjustments that might result from the outcome of this uncertainty.
Results of Operations
Our entire activity since inception up to September 30, 2020 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.
For the period from June 4, 2020 (inception) through September 30, 2020, we had
a net loss of approximately $147,000 which consisted of approximately $101,000
in general and administrative expenses and approximately $64,000 in franchise
tax expense, partially offset by income from our investments held in the Trust
Account.
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 5, 2020 resulting in the forfeiture of such shares.
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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 the
Company completes a liquidation, merger, capital stock exchange or other similar
transaction that results in all of the Company's 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.
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 the Note. This
loan was non-interest bearing and payable upon the completion of the Initial
Public Offering. Through August 25, 2020, we fully borrowed the $300,000 Note
and received additional advances of approximately $54,000 from the Sponsor to
cover for 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 the 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 borrowings under the Working
Capital Loans.
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.
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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.
The underwriters would have been entitled to an additional fee of $0.6 million
upon closing of the underwriters' over-allotment option and approximately $1.1
million in deferred underwriting commissions if the over-allotment option is
exercised in full. The over-allotment expired unexercised on October 5, 2020.
Administrative Services Agreement
Commencing on the date that our securities were first listed on the New York
Stock Exchange 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, secretarial and administrative
support services provided to members of our management team. In the three months
ended September 30, 2020 and for the period from June 4, 2020 (inception)
through September 30, 2020, we incurred and paid $15,000 related to these
services.
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 sheets at fair value
at the end of each reporting period. Gains and losses resulting from the change
in fair value of these securities is included in gain on marketable securities,
dividends and interest held in Trust Account in the accompanying unaudited
condensed statement of operations. The estimated fair values of investments held
in the Trust Account are determined using available market information.
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 September 30, 2020, 18,933,265 shares of Class A common
stock subject to possible redemption are presented as temporary equity, outside
of the stockholders' equity section of the accompanying balance sheets
Net Loss Per Common Share
We comply with accounting and disclosure requirements of FASB ASC Topic 260,
"Earnings Per Share." Net loss per share is computed by dividing net loss by the
weighted average number of shares of common stock outstanding during the period,
excluding common stock subject to forfeiture. Weighted average shares at
September 30, 2020 were reduced for the effect of an aggregate of 750,000 shares
of Class B common stock that are subject to forfeiture if the
over-allotment option is not exercised in full or in part by the underwriters.
The over-allotment expired unexercised on October 5, 2020 resulting in the
forfeiture of such shares. We have not considered the effect of the warrants
sold in the Initial Public Offering and Private Placement to purchase an
aggregate of 16,000,000 shares of Class A common stock in the calculation of
diluted earnings per share, since their inclusion would be anti-dilutive under
the treasury stock method. As a result, diluted earnings per share is the same
as basic earnings per share for the periods presented.
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Our statements of operations include a presentation of income per share for
common stock subject to redemption in a manner similar
to the two-class method of income per share. Net loss per share, basic and
diluted for Class A common stock is calculated by dividing the investment income
earned on the Trust Account, net of applicable income and franchise taxes, by
the weighted average number of shares of Class A common stock outstanding since
the initial issuance. Net loss per share, basic and diluted for Class B common
stock is calculated by dividing the net income, less income attributable to
Class A common stock, by the weighted average number of shares of Class B common
stock outstanding for the period.
Off-Balance Sheet Arrangements
As of September 30, 2020, we did not have any off-balance sheet arrangements as
defined in Item 303(a)(4)(ii) of Regulation S-K.
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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