Correspondence 0001213900-23-040010 from Falcon's Beyond Global, Inc. (FBYD, FBYDW) (CIK 0001937987) (FBYD)
Falcon's Beyond Global, Inc. (FBYD, FBYDW) (CIK 0001937987)
Date: May 15, 2023 · CIK: 0001937987 · Accession: 0001213900-23-040010
AI Filing Summary & Sentiment
File numbers found in text: 333-269778
Referenced dates: March 13, 2022
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CORRESP
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filename1.htm
May 15, 2023
VIA
EDGAR
United
States Securities and Exchange Commission
Division
of Corporation Finance
Office
of Trade &Services
100
F Street NE
Washington, D.C. 20549
Attn:
Taylor Beech and Dietrich King
Re: Falcon’s
Beyond Global, Inc.
Registration
Statement on Form S-4
Filed
February 14, 2023
File
No. 333-269778
Dear Ms.
Beech and Mr. King:
On
behalf of our client, Falcon’s Beyond Global, Inc., a Delaware corporation (the “Company” or “Falcon’s”),
we are writing to submit the Company’s responses to the comments of the staff of the Division of Corporation Finance (the “Staff”)
of the United States Securities and Exchange Commission (the “Commission”) contained in the Staff’s letter dated
March 13, 2022 (the “Comment Letter”), with respect to the above-referenced Registration Statement on Form S-4, filed
on February 14, 2022 (the “Registration Statement”).
The
Company has filed via EDGAR Amendment No. 1 to the Registration Statement (“Amendment No. 1”), which reflects the
Company’s responses to the comments received by the Staff and certain updated information. For ease of reference, each comment
contained in the Comment Letter is printed below in bold and is followed by the Company’s response. All page references in the
responses set forth below refer to page numbers in Amendment No. 1. Capitalized terms used but not defined herein have the meanings set
forth in Amendment No. 1.
Amendment No. 1 to Registration Statement on Form S-4 filed on
May 15, 2023
Notice
of Special Meeting of Stockholders
1. We
note that you appear to unbundle the Pubco Organizational Documents Advisory Proposals on
page 152. Please revise your presentation of these proposals in your notice of meeting to
list each separate vote you are taking in connection with these proposals. Make conforming
changes to your proxy card, when filed.
Response: The
Company has revised the notice of meeting of Amendment No. 1 to address the Staff’s comment.
2. We
note your disclosure here and throughout your filing provides that the approval of the Business
Combination Proposal requires the affirmative vote of the holders of a majority of outstanding
shares of FAST II’s common stock as of the FAST II Record Date, voting as a single
class; however, Section 9.2(e) of FAST II’s current charter provides that the affirmative
vote of the holders of a majority of the shares of the Common Stock that are voted at a stockholder
meeting held to consider such initial Business Combination is the requisite voting standard.
Please revise for consistency and disclose how many public shares of FAST II would need to
be voted in order to approve the proposal, assuming only a quorum is present.
Response: The
Company has revised the notice of meeting and the disclosure on pages xxx, 9, 90 and 94 of Amendment No. 1 to address the Staff’s
comment.
Cover
Page
3. Please
disclose on your prospectus cover and in your Questions and Answers and Prospectus Summary
sections the aggregate value of the consideration to be paid in the business combination,
as implied by the equity value of the Company.
Response: The
Company has revised the cover and the disclosure on pages xvi and 5 of Amendment No. 1 to address the Staff’s comment.
4. Please
revise to include a discussion of the Company Financing, including the amounts received under
the Subscription Agreement to date.
Response:
The Company has revised the cover of Amendment No. 1 to address the Staff’s comment.
5. Please
revise to explicitly identify the national securities exchange where the securities of the
post-combination company will be listed. In this regard, your disclosure currently only states
that the securities of the post-combination company will be listed on an “an Approved
Exchange.” Refer to Item 501(b)(4) of Regulation S-K.
Response:
The Company has revised the cover of Amendment No. 1 to address the Staff’s comment.
6. On
your prospectus cover and in your Summary and Questions and Answers sections, please add
a description of the voting rights of the PubCo Class A Common Stock, Class B Common Stock,
and Series A Preferred Stock. We also note your disclosure on page 56 that for so long as
Mr. Demerau continues to control Katmandu Ventures, LLC and Mr. Magpuri continues to control
CilMar Ventures, LLC, they will continue to control a significant percentage of the voting
power of Pubco Common Stock, and will be able to influence the composition of the Pubco Board
and management and the approval of actions requiring stockholder approval. Please include
comparable disclosure in each of the sections referenced above.
Response: The Company
has revised the cover and the disclosure on pages xviii, xix, xxii, 56 and 57 of Amendment No. 1 to address the Staff’s comment.
7. Please
clarify here and on page xiii that the SPAC Warrants, once assumed by PubCo, will be convertible
into Series A Preferred Stock, including the Private Placement Warrants held by the Sponsor.
Response: The Company has revised the
cover and the disclosure on page xiii of Amendment No. 1 to address the Staff’s comments.
8. Please
revise your presentation of the ownership interests of the post-combination company here,
and on pages xvii and 14, to include all dilutive securities. In this regard, we note that
you include a separate table on pages xvii and page 14 depicting the additional sources of
dilution, yet you do not include a presentation of how such dilution would impact each party’s
holdings.
Response: The Company has revised the
cover and the disclosure on pages xviii-xxiii of Amendment No. 1 to address the Staff’s comment.
2
9. Here,
and elsewhere in your filing as applicable, please revise to clarify the source and features
of the Bonus Shares. In this regard, we note your disclosure indicates the Bonus Shares are
allocable pursuant to the Warrant Agreement, and we note page 36 of the Investor Presentation
filed as an exhibit to FAST II’s Form 8-K filed February 23, 2023 indicates that the shares
forfeited by the Sponsor will create a share bonus pool structure.
Response: The Company has
revised the cover and the disclosure on page xx of Amendment No. 1 to address the Staff’s comment. The Company advises the
Staff that it has replaced the term “Bonus Shares” with the term “Additional SPAC Share Consideration”
throughout Amendment No. 1 to reflect the term used in the A&R Agreement and Plan of Merger.
Questions
and Answers
10. Please
include a Q&A and related risk factor disclosure addressing the fact that the Merger
Agreement does not include a minimum cash condition and how that may increase the risk that
the post-combination company is under-capitalized. Address the fact that the Sponsor appears
to be seeking additional financing beyond the Company Financing, and ensure your disclosure
accounts for any redemptions made in connection with FAST II’s Special Meeting held
on March 3, 2023.
Response: The Company has revised the
disclosure on pages xvii, xviii, 65 and 66 of Amendment No. 1 to address the Staff’s comment.
Q:
WHAT WILL FAST II STOCKHOLDERS RECEIVE IN THE BUSINESS COMBINATION?, page xiii
11. Where
you discuss the Series A Preferred in this section and the Summary, revise to disclose the
terms of conversion, including the conversion ratio, for the Series A Preferred. We also
note your disclosure on page 264 that prior to ____, 2024, the Series A Quarterly Dividends
will be paid in additional shares of Pubco Series A Preferred Stock. Include comparable disclosure
in these sections.
Response: The
Company has revised the disclosure on pages xiii, xiv and 2 of Amendment No. 1 to address the Staff’s comment.
Q:
WHAT EQUITY STAKE WILL CURRENT FAST II PUBLIC STOCKHOLDERS..., page xvii
12. Please
revise footnote 4 to the ownership table, here and on page 14, to state that Infinite Acquisitions
is controlled by the adult children of Mr. and Mrs. Demerau, as you indicate on page 252.
Response: The
Company has revised footnote 3 to the ownership table on page xix of Amendment No. 1 to address the Staff’s comment.
Risk
Factors
If
we are not able to satisfy the requirements imposed by our FBD joint venture partners..., page 31
13. We
note your disclosure that you may be subject to liquidated damage payments or other damages
under your joint venture agreements. To the extent material, please quantify the aggregate
liquidated damage payments you may be required to make.
Response: The Company respectfully acknowledges
the Staff’s comment and submits that, pursuant to its joint venture agreements with Melia and Raging Power Limited, the Company
is not subject to liquidated damage payments or other damages. In response to the Staff’s comment, the Company has modified the
disclosure on page 31 of Amendment No. 1 to clarify that it is not subject to any currently quantified damage payments under its joint
venture agreements.
If
the Business Combination is consummated, FAST II’s stockholders will experience dilution, page 64
14. Please
revise this risk factor to address the potential dilution to FAST II’s public stockholders
upon conversion of the Class B common stock into Class A common stock following the waiver
or expiration of the Company Member Lock-Up Period.
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Response: The
Company respectfully advises the Staff that FAST Acquisition Corp. II’s (“FAST II”) public stockholders will not experience
dilution upon any issuance of Pubco Class A Common Stock in exchange for New Company Units and cancellation of the Pubco Class B Common
Stock following the waiver or expiration of the Company Member Lock-Up Period.
Following
the waiver or expiration of the Company Member Lock-Up Period, each Company Unitholder will have the option to cause Falcon’s Beyond
Global, LLC’s (“FBG”) to redeem its New Company Units in whole or in part. Upon any such redemption: (a) FBG will cause
such redeemed New Company Units to be cancelled, (b) the Company will cancel, for no additional consideration, the corresponding shares
of Pubco Class B Common Stock, and (c) the Company will exchange such redeemed New Company Units for, at the discretion of a disinterested
majority of the Pubco Board, either (i) an equivalent number of shares of Pubco Class A Common Stock (“Share Settlement”)
or (ii) an amount of cash equal to the fair market value of such number of shares of Pubco Class A Common Stock (“Cash Settlement”).
In
the case of the Share Settlement, when shares of Pubco Class A Common Stock are issued, an equivalent number of New Company Units are
issued to the Company. As a result, even though there are more shares of Pubco Class A Common Stock outstanding following the Share Settlement,
the Company has a greater percentage of the interest in FBG than before the Share Settlement, and such increase is exactly equal to the
number of Pubco Class A Shares being issued. The end result is that each holder of Pubco Class A Common Stock will have the same indirect
percentage interest in FBG before and after the Share Settlement. The holders of Pubco Class A Common Stock are therefore not diluted
economically by the conversion of the Pubco Class B Common Stock.
The
same result occurs if the Company elects to effect a direct exchange of the redeemed New Company Units for the Share Settlement. In such
case, subject to the limitations set forth in the A&R Operating Agreement, the Company will acquire the redeemed New Company Units
and will be treated for all purposes as the owner of such units. Therefore, each holder of Pubco Class A Common Stock will have the same
indirect percentage interest in FBG before and after the Share Settlement in this scenario as well.
With
regards to voting rights, the pro forma share ownership tables in Amendment No. 1 already
present the voting power of the Pubco Class A Common Stock and Pubco Class B Common Stock on an as-converted basis. Pubco Class
B Common Stock and Pubco Class A Common Stock each have one vote per share, so the conversion of Pubco Class B Common Stock into Pubco
Class A Common Stock will not dilute the voting power of holders of Pubco Class A Common Stock (except in any circumstance where a separate
vote of the Pubco Class A Common Stock is required, which is generally only required for charter amendments that would alter or change
the powers, preferences or special rights of the Pubco Class A Common Stock in a manner that is disproportionately adverse as compared
to the Pubco Class B Common Stock).
Unaudited
Pro Forma Condensed Combined Financial Information
Description
of the Business Combination, page 73
15. On
page 74, you discuss that the Earnout Shares and Earnout units will be deposited into escrow
at the time of the merger and earned released and delivered upon