Form 4: Falcon's Beyond Global: FAST Sponsor II LLC Reports Changes in Beneficial Ownership Due to Earnout Target Adjustments

FAST Sponsor II LLC reports adjustments in its holdings of Falcon's Beyond Global Class A Common Stock due to the achievement and non-achievement of certain earnout targets.

Summary

• FAST Sponsor II LLC, a significant shareholder in Falcon's Beyond Global, reported changes in its beneficial ownership of Class A Common Stock on May 10, 2024.
• These changes are due to the achievement and non-achievement of certain earnout targets related to the Business Combination with Falcon's Beyond Global LLC.
• 187,500 Earnout Shares were forfeited because certain earnout targets were not met.
• 112,500 Earnout Shares were released to the Reporting Person because certain earnout targets were achieved.
• Following these transactions, FAST Sponsor II LLC beneficially owns 3,066,544 shares of Class A Common Stock, including 862,500 shares held in escrow.
• Garrett Schreiber, as the sole member of FAST Sponsor II Manager LLC, disclaims beneficial ownership of the securities held by the Reporting Person, except to the extent of his pecuniary interest therein.

Sentiment

Score: 5

Explanation: Neutral sentiment as the document primarily reports changes in ownership due to pre-existing earnout agreements. The forfeiture of shares is a negative, but the release of shares is a positive, balancing the overall sentiment.

Positives

• The achievement of certain earnout targets resulted in the release of 112,500 Earnout Shares to FAST Sponsor II LLC.

Negatives

• The non-achievement of certain earnout targets led to the forfeiture of 187,500 Earnout Shares by FAST Sponsor II LLC.

Risks

• Future performance may not meet earnout targets, potentially impacting the value of holdings.
• The value of the Class A Common Stock is subject to market fluctuations.

Future Outlook

The document does not contain specific forward-looking statements beyond the implications of the earnout structure.

Management Comments

• Garrett Schreiber disclaims any beneficial ownership of the securities held by the Reporting Person, except to the extent of his pecuniary interest therein.

Industry Context

This filing reflects standard practices related to earnout provisions in business combinations, where the ultimate allocation of shares is contingent on the achievement of specific performance targets.

Comparison to Industry Standards

• Earnout structures are common in mergers and acquisitions, particularly in industries with high growth potential or uncertainty.
• The specific earnout targets and their achievement rates would need to be compared to similar deals in the entertainment and theme park industry to assess performance relative to peers.
• Companies like Comcast (Universal Parks & Resorts) and Disney (Disney Parks, Experiences and Products) often use performance-based incentives, but direct comparisons are difficult without detailed deal terms.

Stakeholder Impact

• The changes in ownership may have a minor impact on shareholder confidence, depending on the perceived implications of the earnout target achievements.
• Employees may be indirectly affected if the earnout targets are tied to operational performance.

Key Dates