What changed in Beachbody Company, Inc.'s 10-K — 2023 vs 2024
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Paragraph-level year-over-year comparison of Beachbody Company, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.
+537 added−459 removedSource: 10-K (2025-03-28) vs 10-K (2024-03-11)
Top changes in Beachbody Company, Inc.'s 2024 10-K
537 paragraphs added · 459 removed · 348 edited across 1 sections
- Item 1C. Cybersecurity+537 / −459 · 348 edited
Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
348 edited+189 added−111 removed203 unchanged
Item 1C. Cybersecurity
Cybersecurity — threats and controls disclosure
348 edited+189 added−111 removed203 unchanged
2023 filing
2024 filing
Biggest changeConsol idated Statements of Cash Flows (in thousands) Year Ended December 31, 2023 2022 Cash flows from operating activities: Net loss $ ( 152,641 ) $ ( 194,192 ) Adjustments to reconcile net loss to net cash used in operating activities: Impairment of goodwill 40,000 — Impairment of intangible assets 3,092 19,907 Impairment of other investments 4,000 — Depreciation and amortization expense 39,573 74,848 Amortization of content assets 23,755 24,276 Provision for inventory and inventory purchase commitments 10,561 39,757 Realized losses on hedging derivative financial instruments 222 108 Change in fair value of warrant liabilities ( 2,679 ) ( 8,322 ) Equity-based compensation 23,891 17,620 Deferred income taxes ( 191 ) ( 2,961 ) Amortization of debt issuance costs 1,899 733 Paid-in-kind interest expense 1,310 598 Loss on partial debt extinguishment 3,168 — Change in lease assets 1,967 — Other non-cash items — 1,219 Changes in operating assets and liabilities: Inventory 17,508 41,510 Content assets ( 10,226 ) ( 19,787 ) Prepaid expenses 2,340 2,806 Other assets ( 4,438 ) 4,241 Accounts payable ( 7,103 ) ( 26,705 ) Accrued expenses ( 20,293 ) ( 8,673 ) Deferred revenue 2,163 ( 9,563 ) Other liabilities ( 415 ) ( 4,593 ) Net cash used in operating activities ( 22,537 ) ( 47,173 ) Cash flows from investing activities: Purchase of property and equipment ( 6,576 ) ( 26,493 ) Investment in restricted short-term investments ( 4,250 ) — Net cash used in investing activities ( 10,826 ) ( 26,493 ) Cash flows from financing activities: Proceeds from exercise of stock options — 3,162 Remittance of taxes withheld from employee stock awards — ( 308 ) Debt borrowings — 50,000 Debt repayments ( 17,000 ) ( 625 ) Proceeds from issuance of common shares in the Employee Stock Purchase Plan 553 — Tax withholdings payments for vesting of restricted stock ( 2,178 ) ( 183 ) Payment of debt issuance costs — ( 4,485 ) Proceeds from issuance of Equity Offering, net of issuance costs 4,908 — Net cash (used in) provided by financing activities ( 13,717 ) 47,561 Effect of exchange rates on cash 398 ( 858 ) Net decrease in cash, cash equivalents and restricted cash ( 46,682 ) ( 26,963 ) Cash, cash equivalents and restricted cash, beginning of year 80,091 107,054 Cash, cash equivalents and restricted cash, end of year $ 33,409 $ 80,091 Supplemental disclosure of cash flow information: Cash paid during the year for interest $ 5,389 $ 2,082 Cash paid during the year for income taxes, net 11 389 Supplemental disclosure of noncash investing activities: Property and equipment acquired but not yet paid for $ 817 $ 2,025 Supplemental disclosure of noncash financing activities: Warrants issued in relation to Term Loan $ — $ 5,236 Change in fair value of Term Loan warrants due to amended exercise price 802 — Paid-in-kind fee recorded as incremental debt issuance cost 488 — The accompanying notes are an integral part of these consolidated financial statements. 73 The Beachbody Company, Inc.
Biggest changeConsol idated Statements of Cash Flows (in thousands) Year Ended December 31, 2024 2023 Cash flows from operating activities: Net loss $ ( 71,642 ) $ ( 152,641 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Impairment of goodwill 20,000 40,000 Impairment of intangible assets — 3,092 Impairment of other investments — 4,000 Depreciation and amortization expense 31,439 39,573 Amortization of content assets 15,667 23,755 Provision for inventory 4,204 10,561 Realized losses on hedging derivative financial instruments 64 222 Change in fair value of warrant liabilities ( 1,144 ) ( 2,679 ) Equity-based compensation 17,069 23,891 Deferred income taxes 5 ( 191 ) Amortization of debt issuance costs 2,490 1,899 Paid-in-kind interest expense 808 1,310 Loss on partial debt extinguishment 2,379 3,168 Change in lease assets — 1,967 Gain on sale of property and equipment ( 784 ) — Changes in operating assets and liabilities: Inventory 4,376 17,508 Content assets ( 6,487 ) ( 10,226 ) Prepaid expenses 1,681 2,340 Other assets 17,237 ( 4,438 ) Accounts payable ( 906 ) ( 7,103 ) Accrued expenses ( 16,570 ) ( 20,293 ) Deferred revenue ( 16,693 ) 2,163 Other liabilities ( 631 ) ( 415 ) Net cash provided by (used in) operating activities 2,562 ( 22,537 ) Cash flows from investing activities: Purchase of property and equipment ( 4,542 ) ( 6,576 ) Investment in restricted short-term investments — ( 4,250 ) Proceeds from sale of property and equipment 5,600 — Net cash provided by (used in) investing activities 1,058 ( 10,826 ) Cash flows from financing activities: Debt repayments ( 15,877 ) ( 17,000 ) Proceeds from issuance of common shares in the Employee Stock Purchase Plan 272 553 Tax withholdings payments for vesting of restricted stock ( 263 ) ( 2,178 ) Proceeds from issuance of Equity Offering, net of issuance costs — 4,908 Net cash used in financing activities ( 15,868 ) ( 13,717 ) Effect of exchange rates on cash, cash equivalents and restricted cash ( 974 ) 398 Net decrease in cash, cash equivalents and restricted cash ( 13,222 ) ( 46,682 ) Cash, cash equivalents and restricted cash, beginning of year 33,409 80,091 Cash, cash equivalents and restricted cash, end of year $ 20,187 $ 33,409 Supplemental disclosure of cash flow information: Cash paid during the year for interest $ 3,561 $ 5,389 Cash paid during the year for income taxes, net 232 11 Supplemental disclosure of noncash investing activities: Property and equipment acquired but not yet paid for $ 225 $ 817 Supplemental disclosure of noncash financing activities: Change in fair value of Term Loan warrants due to amended exercise price $ 192 $ 802 Paid-in-kind fee recorded as incremental debt issuance cost 818 488 The accompanying notes are an integral part of these consolidated financial statements. 75 The Beachbody Company, Inc.
A 95% average digital retention rate would translate into a loss at the end of a quarter of approximately 15% of the subscribers existing at the beginning of the quarter. This calculation excludes new customer acquisitions or subscribers added in a specific month, so this calculation can never exceed 100%.
A 95% average digital retention rate would translate into a loss at the end of the quarter of approximately 15% of the subscribers existing at the beginning of the quarter. This calculation excludes new customer acquisitions or subscribers added in a specific month, so this calculation can never exceed 100%.
Deferred gains and losses associated with cash flow hedges of third-party payments are recognized in cost of revenue, selling and marketing, or general and administrative expenses, as applicable, during the period when the hedged underlying transaction affects earnings.
Deferred gains and losses associated with cash flow hedges of third-party payments are recognized in cost of revenue, selling and marketing, or general and administrative expenses, as applicable, during the period when the hedged underlying transaction affects earnings.
The changes in fair value are included in the consolidated statements of operations as a component of change in fair value of warrant liabilities and in the consolidated balance sheets as other liabilities.
The changes in fair value are included in the consolidated statements of operations as a component of change in fair value of warrant liabilities and in the consolidated balance sheets as other liabilities.
The changes in fair value are included in the consolidated statements of operations as a component of change in fair value of warrant liabilities and in the consolidated balance sheets as other liabilities.
The changes in fair value are included in the consolidated statements of operations as a component of change in fair value of warrant liabilities and in the consolidated balance sheets as other liabilities.
The cash flows used to determine fair value are dependent on a number of significant management assumptions such as the Company’s expectations of future performance and the expected future economic environment, which are partly based upon the Company’s historical experience. The Company’s estimates are subject to change given the inherent uncertainty in predicting future results.
The cash flows used to determine fair value are dependent on a number of significant management assumptions such as the Company's expectations of future performance and the expected future economic environment, which are partly based upon the Company's historical experience. The Company's estimates are subject to change given the inherent uncertainty in predicting future results.
Additionally, the discount rate and the terminal growth rate are based on the Company’s judgment of the rates that would be utilized by a hypothetical market participant. The Company also considered its market capitalization in assessing the reasonableness of the combined fair values estimated for its RU.
Additionally, the discount rate and the terminal growth rate are based on the Company's judgment of the rates that would be utilized by a hypothetical market participant. The Company also considered its market capitalization in assessing the reasonableness of the combined fair values estimated for its RU.
The Second Amendment, among other things, amended certain terms of the Financing Agreement including, but not limited to, (1) amended the minimum revenue financial covenant to test revenue levels for each fiscal quarter on a standalone basis, and to adjust the minimum revenue levels to (a) $ 100.0 million, commencing with the fiscal quarter ended June 30, 2023, for each fiscal quarter ending on or prior to March 31, 2024 and (b) $ 120.0 million for each fiscal quarter thereafter and or prior to December 31, 2025; (2) amended the minimum liquidity financial covenant to adjust the minimum liquidity levels to (a) $ 20.0 million at all times from the Second Amendment Effective Date through March 31, 2024 and (b) $ 25.0 million at all times thereafter through the maturity of the Term Loan; (3) modified the maturity date of the Term Loan from August 8, 2026 to February 8, 2026 ; and (4) amended certain financial definitions, reporting covenants and other covenants thereunder.
The Term Loan Second Amendment, among other things, amended certain terms of the Financing Agreement including, but not limited to, (1) amended the minimum revenue financial covenant to test revenue levels for each fiscal quarter on a standalone basis, and to adjust the minimum revenue levels to (a) $ 100.0 million, commencing with the fiscal quarter ended June 30, 2023, for each fiscal quarter ending on or prior to March 31, 2024 and (b) $ 120.0 million for each fiscal quarter thereafter and or prior to December 31, 2025; (2) amended the minimum liquidity financial covenant to adjust the minimum liquidity levels to (a) $ 20.0 million at all times from the Term Loan Second Amendment Effective Date through March 31, 2024 and (b) $ 25.0 million at all times thereafter through the maturity of the Term Loan; (3) modified the maturity date of the Term Loan from August 8, 2026 to February 8, 2026 ; and (4) amended certain financial definitions, reporting covenants and other covenants thereunder.
The initial fair value of the Term Loan Warrants of $ 5.2 million, is being amortized as a debt discount over the term of the Term Loan using the effective interest method. In connection with the Second Amendment, the Company also amended and restated the Term Loan Warrants.
The initial fair value of the Term Loan Warrants of $ 5.2 million, is being amortized as a debt discount over the term of the Term Loan using the effective interest method. In connection with the Term Loan Second Amendment, the Company also amended and restated the Term Loan Warrants.
The amended exercise price increased the fair value of the Term Loan Warrants as of the Second Amendment Effective Date by $ 0.8 million and was recorded as of the Second Amendment Effective Date as an incremental debt discount, and in addition to the remaining debt discount, is being amortized over the amended term of the Term Loan using the effective-interest method.
The amended exercise price increased the fair value of the Term Loan Warrants as of the Term Loan Second Amendment Effective Date by $ 0.8 million and was recorded as of the Term Loan Second Amendment Effective Date as an incremental debt discount, and in addition to the remaining debt discount, is being amortized over the amended term of the Term Loan using the effective-interest method.
On June 14, 2023, the Board adopted the Company’s 2023 Employment Inducement Incentive Award Plan (the “Inducement Plan”) for the grant of non-qualified stock options, stock appreciation rights, restricted stock, RSU's, dividend equivalents and other stock or cash-based awards to prospective employees.
Inducement Plan On June 14, 2023, the Board adopted the Company’s 2023 Employment Inducement Incentive Award Plan (the “Inducement Plan”) for the grant of non-qualified stock options, stock appreciation rights, restricted stock, RSU's, dividend equivalents and other stock or cash-based awards to prospective employees.
The Financing Agreement contains customary events of default, which among other things include (subject to certain exceptions and cure periods): (1) failure to pay principal, interest, or any fees or certain other amounts when due; (2) breach of any representation or warranty, covenant, or other agreement in the Financing Agreement and other related loan documents; (3) the occurrence of a bankruptcy or insolvency proceeding with respect to any Loan Party; (4) any failure by a Loan Party to make a payment with respect to indebtedness having an aggregate principal amount in excess of a specified threshold; and (5) certain other customary events of default. 93 In connection with the Term Loan, the Company issued to certain holders affiliated with Blue Torch warrants for the purchase of 94,335 shares of the Company’s Class A common stock at an exercise price of $ 92.50 per share.
The Financing Agreement contains customary events of default, which among other things include (subject to certain exceptions and cure periods): (1) failure to pay principal, interest, or any fees or certain other amounts when due; (2) breach of any representation or warranty, covenant, or other agreement in the Financing Agreement and other related loan documents; (3) the occurrence of a bankruptcy or insolvency proceeding with respect to any Loan Party; (4) any failure by a Loan Party to make a payment with respect to indebtedness having an aggregate principal amount in excess of a specified threshold; and (5) certain other customary events of default. In connection with the Term Loan, the Company issued to certain holders affiliated with Blue Torch warrants for the purchase of 94,335 shares of the Company’s Class A common stock at an exercise price of $ 92.50 per share.
On August 8, 2022, the Company, Beachbody, LLC, a Delaware limited liability company and wholly-owned direct subsidiary of the Company (the “Borrower”), and certain subsidiaries of the Company (together with the Company, the “Guarantors”), entered into a financing agreement (as amended, the “Financing Agreement”) with the lenders party thereto and Blue Torch Finance, LLC, ("Blue Torch") as administrative agent and collateral agent for such lenders, providing for a senior secured term loan facility in an initial aggregate principal amount of $50.0 million (the “Term Loan”).
Term Loan On August 8, 2022, the Company, Beachbody, LLC, a Delaware limited liability company and wholly-owned direct subsidiary of the Company (the “Borrower”), and certain subsidiaries of the Company (together with the Company, the “Guarantors”), entered into a financing agreement (as amended, the “Financing Agreement”) with the lenders party thereto and Blue Torch as administrative agent and collateral agent for such lenders, providing for a senior secured term loan facility in an initial aggregate principal amount of $50.0 million (the “Term Loan”).
Debt On August 8, 2022 (the “Effective Date”), the Company, Beachbody, LLC as borrower (a wholly owned subsidiary of the Company), and certain other subsidiaries of the Company as guarantors (the “Guarantors”), the lenders (the “Lenders”), and Blue Torch Finance, LLC, ("Blue Torch") as administrative agent and collateral agent for such lenders (the “Term Loan Agent”) entered into a financing agreement which was subsequently amended (collectively with any amendments thereto, the “Financing Agreement”).
Debt On August 8, 2022 (the “Effective Date”), the Company, Beachbody, LLC as borrower (a wholly owned subsidiary of the Company), and certain other subsidiaries of the Company as guarantors (the “Guarantors”), the lenders (the “Lenders”), and Blue Torch as administrative agent and collateral agent for such lenders (the “Term Loan Agent”) entered into a financing agreement which was subsequently amended (collectively with any amendments thereto, the “Financing Agreement”).
The Company had 531,515 Amended Underwater Options which had their exercise price amended to $ 17.35 per option. Excluded from the Repricing were, among others, Underwater Options held by members of the Board, the Company's CEO and Executive Chairman; any Underwater Options with an exercise price less than $ 50.00 ; and options granted to consultants who are no longer providing services to the Company.
The Company had 531,515 2023 Amended Underwater Options which had their exercise price amended to $ 17.35 per option. Excluded from the 2023 Repricing were, among others, 2023 Underwater Options held by members of the Board, the Company's CEO and Executive Chairman; any 2023 Underwater Options with an exercise price less than $ 50.00 ; and options granted to consultants who are no longer providing services to the Company.
On December 10, 2023, the Company entered into a securities purchase agreement for the issuance and sale of 420,769 shares of Class A common stock at a purchase price of $ 9.75 per share and pre-funded warrants to purchase up to 122,821 shares of Class A common stock at a pre-funded purchase price of $ 9.7499 per share with certain institutional investors in a registered direct offering.
On December 10, 2023, the Company entered into a securities purchase agreement for the issuance and sale of 420,769 shares of Class A common stock at a purchase price of $ 9.75 105 per share and pre-funded warrants to purchase up to 122,821 shares of Class A common stock at a pre-funded purchase price of $ 9.7499 per share with certain institutional investors in a registered direct offering.
We define a monthly active user as a unique user streaming content on our platform in that same month. Non-GAAP Information We use Adjusted EBITDA, which is a non-GAAP performance measure, to supplement our results presented in accordance with accounting principles generally accepted in the United States of America ("GAAP").
We define a monthly active user as a unique user streaming content on our platform in that same month. 52 Non-GAAP Information We use Adjusted EBITDA, which is a non-GAAP performance measure, to supplement our results presented in accordance with accounting principles generally accepted in the United States of America ("GAAP").
The allowance for credit losses is based on several factors, including the length of time accounts receivable are past due, the Company's 75 previous loss history, the specific customer's ability to pay its obligations and any other forward looking data regarding customers' ability to pay which may be available.
The allowance for credit losses is based on several factors, including the length of time accounts receivable are past due, the Company's previous loss history, the specific customer's ability to pay its obligations and any other forward looking data regarding customers' ability to pay which may be available.
The Company performed a qualitative assessment which leveraged information from the June 30, 2023 quantitative assessment, in which it estimated the fair value of its RU and determined that the fair value of its RU was greater than its carrying value, resulting in no impairment. 2023 Annual Goodwill Impairment Test The Company assessed its long-lived assets for impairment prior to its goodwill impairment test.
The Company performed a qualitative assessment which leveraged information from the June 30, 2023 quantitative assessment, in which it estimated the fair value of its RU and determined that the fair value of its RU was greater than its carrying value, resulting in no impairment. 2023 Annual Goodwill Impairment Test 94 The Company assessed its long-lived assets for impairment prior to its goodwill impairment test.
Reverse Stock Split 98 At the 2023 Annual Shareholder Meeting, which was held on November 20, 2023, our stockholders approved an amendment to our second amended and restated certificate of incorporation to effect a reverse stock split of all of our issued and outstanding common stock by a ratio in the range of 1-for-10 to 1-for-50 .
Reverse Stock Split At the 2023 Annual Shareholder Meeting, which was held on November 20, 2023, our stockholders approved an amendment to our second amended and restated certificate of incorporation to effect a reverse stock split of all of our issued and outstanding common stock by a ratio in the range of 1-for-10 to 1-for-50 .
If the interest rate on our Term Loan were to increase or decrease by 1% for the year and our indebtedness remained constant throughout the period, our annual interest expense would not change materially. Further, our exposure to interest rate volatility is partially mitigated by interest income on our highly liquid investments.
If the interest rate on our Term Loan were to increase or decrease by 1% for the year and our indebtedness remained constant throughout the period, 66 our annual interest expense would not change materially. Further, our exposure to interest rate volatility is partially mitigated by interest income on our highly liquid investments.
Connected Fitness Cost of Revenue Connected fitness cost of revenue consists of product costs, including bike and tablet hardware costs, duties and other applicable importing costs, shipping costs, warehousing and logistics costs, costs associated with service calls and repairs of the products under warranty, payment processing and financing fees, customer service expenses, and personnel-related expenses associated with supply chain and logistics.
Connected Fitness Cost of Revenue Connected fitness cost of revenue consists of product costs, including bike and tablet hardware costs, duties and other applicable importing costs, shipping, fulfillment, warehousing and logistics costs, costs associated with service calls and repairs of the products under warranty, payment processing and financing fees, customer service expenses, and personnel-related expenses associated with supply chain and logistics.
In addition, the Financing Agreement permits the Company to borrow up to an additional $ 25.0 million, subject to the terms and conditions set forth in the Financing Agreement. Borrowings under the Term Loan are unconditionally guaranteed by the Guarantors, and all present and future material U.S. and Canadian subsidiaries of the Company.
In addition, 96 the Financing Agreement permits the Company to borrow up to an additional $ 25.0 million, subject to the terms and conditions set forth in the Financing Agreement. Borrowings under the Term Loan are unconditionally guaranteed by the Guarantors, and all present and future material U.S. and Canadian subsidiaries of the Company.
In reaching this conclusion, management considered the definition of the Chief Operating Decision Maker (“CODM”); how the business is defined by the CODM; the nature of the information provided to the CODM and how that information is used to make operating decisions; and how resources and performance are accessed. The Company's CODM is the chief executive officer ("CEO").
In reaching this conclusion, management considered the definition of the Chief Operating Decision Maker (“CODM”); how the business is defined by the CODM; the nature of the information provided to the CODM and how that information is used to make operating decisions; and how resources and performance are accessed. The Company's CODM is its chief executive officer ("CEO").
Term Loan Warrants The Company determined the fair value of the Term Loan Warrants using a Black-Scholes option-pricing model and the quoted price of the Company’s Class A common stock. Volatility was based on the implied volatility derived from the average of the actual market activity of the Company’s peer group and the Company's historical volatility.
Term Loan Warrants The Company determined the fair value of the Term Loan Warrants using a Black-Scholes option-pricing model and the quoted price of the Company’s Class A common stock. Volatility was based on the implied volatility derived primarily from the average of the actual market activity of the Company’s peer group and the Company's historical volatility.
The changes in fair value are included in the consolidated statements of operations as a component of change in fair value of warrant liabilities and in the consolidated balance sheets as other liabilities. Fair Value on a Non-recurring Basis Certain assets have been measured at fair value on a non-recurring basis, using significant unobservable inputs (Level 3).
The changes in fair value are included in the consolidated statements of operations as a component of change in fair value of warrant liabilities and in the consolidated balance sheets as other liabilities. 90 Fair Value on a Non-recurring Basis Certain assets have been measured at fair value on a non-recurring basis, using significant unobservable inputs (Level 3).
The risk-free interest rates are based on the U.S. Treasury rates as of the grant dates for the expected terms of the options. The price volatilities represent calculated values based on the historical price volatilities of publicly traded companies within 103 the Company’s industry group and the Company's historical volatility over the options’ expected terms.
The risk-free interest rates are based on the U.S. Treasury rates as of the grant dates for the expected terms of the options. The price volatilities represent calculated values based on the historical price volatilities of publicly traded companies within the Company’s industry group and the Company's historical volatility over the options’ expected terms.
With the participation of our Chief Executive Officer and our Chief Financial Officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria set forth in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
With the participation of our Chief Executive Officer and our Interim Chief Financial Officer, management conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria set forth in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
The Company determined the fair value of the Public Warrants after November 24, 2023 using a Black-Scholes option-pricing model and the quoted price of the Company’s Class A common stock. Volatility was based on the implied volatility derived primarily from the Company's historical volatility.
The Company determined the fair value of the Public Warrants after November 24, 2023 using a Black-Scholes option-pricing model and the quoted price of the Company’s Class A common stock. Volatility was based on the implied volatility derived from the Company's historical volatility.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.
Assets and liabilities that are measured using significant other observable inputs are valued by reference to similar assets or liabilities, such as quoted prices for similar assets or liabilities, quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data (Level 2).
Assets and liabilities that are measured using significant other observable inputs are valued by reference to similar assets or liabilities, such as quoted prices for similar assets or liabilities, 77 quoted prices in markets that are not active, or other inputs that are observable or can be corroborated by observable market data (Level 2).
To date, the Company has not identified any such event or changes in circumstances. Property and Equipment, Net Property and equipment, which includes computer software and web development costs, are recorded at cost less accumulated depreciation.
To date, the Company has not identified any such event or changes in circumstances. 78 Property and Equipment, Net Property and equipment, which includes computer software and web development costs, are recorded at cost less accumulated depreciation.
In addition, the Term Loan borrowings bear additional interest at 3.00 % per annum, paid in kind by capitalizing such interest and adding such capitalized interest to the outstanding principal amount of the Term Loan 92 on each anniversary of the Effective Date.
In addition, the Term Loan borrowings bear additional interest at 3.00 % per annum, paid in kind by capitalizing such interest and adding such capitalized interest to the outstanding principal amount of the Term Loan on each anniversary of the Effective Date.
The incurrence of additional debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financial covenants that would restrict our operations. The sale of additional 60 equity would result in additional dilution to our shareholders.
The incurrence of additional debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financial covenants that would restrict our operations. The sale of additional equity would result in additional dilution to our shareholders.
Except for the modification of the exercise price, all other terms and conditions of the Amended Underwater Options remain in effect. The Company determined that the Repricing represented a modification of share-based awards under ASC 718.
Except for the modification of the exercise price, all other terms and conditions of the 2024 Amended Underwater Options remain in effect. The Company determined that the Repricing represented a modification of share-based awards under ASC 718.
These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements.
These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance 47 to be materially different from those expressed or implied by these forward-looking statements.
We define and calculate Adjusted EBITDA as net income (loss) adjusted for impairment of goodwill and intangible assets, depreciation and amortization, amortization of capitalized cloud computing implementation costs, amortization of content assets, interest expense, income tax provision (benefit), equity-based compensation and other items that are not normal, recurring, operating expenses necessary to operate the Company’s business as described in the reconciliation below.
We define and calculate Adjusted EBITDA as net income (loss) adjusted for impairment of goodwill and intangible assets, depreciation and amortization, amortization of capitalized cloud computing implementation costs, amortization of content assets, interest expense, income tax provision, equity-based compensation, restructuring costs and other items that are not normal, recurring, operating expenses necessary to operate the Company’s business as described in the reconciliation below.
Accordingly, the Company recognized incremental stock-based compensation of $ 1.6 million which was recorded as of the Repricing, related to 255,174 vested Amended Underwater Options as of the Repricing.
Accordingly, the Company recognized incremental stock-based compensation of $ 1.6 million which was recorded as of the 2023 Repricing, related to 255,174 vested 2023 Amended Underwater Options as of the 2023 Repricing.
Management’s Evaluation of Disclosure Controls and Procedures Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of December 31, 2023, which is the end of the period covered by this Annual Report, to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
Management’s Evaluation of Disclosure Controls and Procedures Under the supervision and with the participation of our management, including our Chief Executive Officer and Interim Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of December 31, 2024, which is the end of the period covered by this Annual Report, to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms.
The partial prepayment of $ 15.0 million was accounted for as a partial debt extinguishment and the Company wrote off the proportionate amount of unamortized debt discount and debt issuance costs as of the Second Amendment Effective Date ($ 2.4 million) which in addition to the prepayment premium ($ 0.8 million) was recorded as a loss on partial debt extinguishment of $ 3.2 million in the year ended December 31, 2023.
The partial prepayment of $ 15.0 million was accounted for as a partial debt extinguishment and the Company wrote off the proportionate amount of unamortized debt discount and debt issuance costs as of the Term Loan Second Amendment Effective Date ($ 2.4 million) which in addition to the prepayment premium ($ 0.8 million) was recorded as a loss on partial debt extinguishment of $ 3.2 million in the year ended December 31, 2023.
If the unrecognized tax benefits were not recorded it would affect the Company’ s effective tax rate. The Company files U.S. federal, numerous state and local income, franchise, U.K., and Canada tax returns. With a few exceptions, the Company is no longer subject to U.S. federal, state, local, or Canada tax examination by taxing authorities for years prior to 2020.
If the unrecognized tax benefits were not recorded it would affect the Company’ s effective tax rate. The Company files U.S. federal, numerous state and local income, franchise, U.K., and Canada tax returns. With a few exceptions, the Company is no longer subject to U.S. federal, state, local, or Canada tax examination by taxing authorities for years prior to 2021.
For the years ended December 31, 2023 and 2022, approximately 10% of our revenue in each year was in foreign currencies. These sales were primarily denominated in Canadian dollars and British pounds. We may use derivative instruments to manage the effects of fluctuations in foreign currency exchange rates on our net cash flows.
For the years ended December 31, 2024 and 2023, approximately 10% of our revenue in each year was in foreign currencies. These sales were primarily denominated in Canadian dollars and British pounds. We may use derivative instruments to manage the effects of fluctuations in foreign currency exchange rates on our net cash flows.
Recently Adopted Accounting Pronouncement In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires an acquirer to apply ASC 606 to recognize and measure contract assets and liabilities from contracts with customers acquired in a business combination on the acquisition date rather than the general guidance in ASC 805.
Recently Adopted Accounting Pronouncements In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers , which requires an acquirer to apply ASC 606 to recognize and measure contract assets and liabilities from contracts with customers acquired in a business combination on the acquisition date rather than the general guidance in ASC 805.
Securities Authorized for Issuance under Equity Compensation Plans The information required by this item will be included in our Proxy Statement for the 2024 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2023 and is incorporated herein by reference.
Securities Authorized for Issuance under Equity Compensation Plans The information required by this item will be included in our Proxy Statement for the 2025 Annual Meeting of Stockholders to be filed with the SEC within 120 days of the fiscal year ended December 31, 2024 and is incorporated herein by reference.
This resulted in an acceleration of the content asset amortization of $ 2.1 million for the year ended December 31, 2023. 88 Note 8.
This resulted in an acceleration of the content asset amortization of $ 2.1 million for the year ended December 31, 2023. Note 8.
The Company recognizes the expense on a straight-line basis over the requisite service period, and forfeitures are accounted for as they occur. Equity-based compensation expense is included in cost of revenue, 80 selling and marketing, enterprise technology and development, and general and administrative expense within the consolidated statements of operations.
The Company recognizes the expense on a straight-line basis over the requisite service period, 83 and forfeitures are accounted for as they occur. Equity-based compensation expense is included in cost of revenue, selling and marketing, enterprise technology and development, and general and administrative expense within the consolidated statements of operations.
These warrants vest 25 % at the grant date and 25 % at each of the first, second, and third anniversaries of the grant date. The warrants have a 10-year contractual term. As of December 31, 2023, 79,612 warrants were exercisable. Compensation cost associated with the warrants was recognized over the requisite service period, which was 4.25 years.
These warrants vest 25 % at the grant date and 25 % at each of the first, second, and third anniversaries of the grant date. The warrants have a 10-year contractual term. As of December 31, 2024, 79,612 warrants were exercisable. Compensation cost associated with the warrants was recognized over the requisite service period, which was 4.25 years.
In connection with the Financing Agreement, the Company incurred $ 4.5 million of third-party debt issuance costs which are recorded in the consolidated balance sheets as a reduction of long-term debt as of December 31, 2023 and 2022 and are being amortized over the term of the Term Loan using the effective-interest method.
In connection with the Financing Agreement, the Company incurred $ 4.5 million of third-party debt issuance costs which are recorded in the consolidated balance sheets as a reduction of long-term debt as of December 31, 2024 and 2023 and are being amortized over the term of the Term Loan using the effective-interest method.
Gains and losses related to the recurring measurement and settlement of foreign currency transactions are included as a component of other income, net in the consolidated statements of operations and were a loss of $ 0.2 million and a gain of $ 0.6 million during the years ended December 31, 2023 and 2022, respectively.
Gains and losses related to the recurring measurement and settlement of foreign currency transactions are included as a component of other income, net in the consolidated statements of operations and were a gain of $ 0.6 million and a loss of $ 0.2 million during the years ended December 31, 2024 and 2023, respectively.
There can be no assurances that we will be able to raise additional capital in amounts or on terms acceptable to us. Critical Accounting Policies and Estimates Our consolidated financial statements included elsewhere in this Annual Report have been prepared in accordance with GAAP.
There can be no assurances that we will be able to raise additional capital in amounts or on terms acceptable to us. Critical Accounting Estimates Our consolidated financial statements included elsewhere in this Annual Report have been prepared in accordance with GAAP.
Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
However, as there is no specific requirement to allocate any losses of the Company to the holders of the Forest Road Earn-out Shares and there is no legal requirement to have them fund such losses, the two-class method for earnings per share is not applicable for loss periods. Note 21.
However, as there is no specific requirement to allocate any losses of the Company to the holders of the Forest Road Earn-out Shares and there is no legal requirement to have them fund such losses, the two-class method for earnings per share is not applicable for loss periods. Note 22.
Given that such proceedings are subject to uncertainty, there can be no assurance that such legal proceedings, either individually or in the aggregate, will not have a material adverse effect on our business, results of operations, financial condition or cash flows. Note 14.
Given that such proceedings are subject to uncertainty, there can be no assurance that such legal proceedings, either individually or in the aggregate, will not have a material adverse effect on our business, results of operations, financial condition or cash flows.
Examples of events or circumstances that could result in changes to the underlying key assumptions and judgments used in the Company's goodwill impairment tests, and ultimately impact the estimated fair value of its RU may include the demand for at-home fitness solutions, the Company's subscriber growth rates, adverse macroeconomic conditions, and volatility in the equity and debt markets which could result in higher weighted-average cost of capital.
Examples of events or circumstances that could result in changes to the underlying key assumptions and judgments used in the Company's goodwill impairment tests, and ultimately impact the estimated fair value of its RU may include supply chain disruptions, the demand for at-home fitness solutions, adverse macroeconomic conditions, volatility in the equity and debt markets which could result in higher weighted-average cost of capital and the Company's subscriber growth rates.
All of the Public and Private Placement Warrants remained outstanding as of December 31, 2023 and 2022. The Public Warrants were publicly traded on the New York Stock Exchange (the "NYSE") but were delisted by the NYSE on November 24, 2023 due to their abnormally low price levels.
All of the Public and Private Placement Warrants remained outstanding as of December 31, 2024 and 2023. The Public Warrants were publicly traded on the New York Stock Exchange (the "NYSE") but were delisted by the NYSE on November 24, 2023 due to their abnormally low price levels.
Any Forest Road Earn-out Shares that do not vest within ten years will be forfeited. The Forest Road Earn-out Shares are accounted for as equity-classified equity instruments and recorded in additional paid in capital. As of December 31, 2023, all Forest Road Earn-out Shares are unvested.
Any Forest Road Earn-out Shares that do not vest within ten years will be forfeited. The Forest Road Earn-out Shares are accounted for as equity-classified equity instruments and recorded in additional paid in capital. As of December 31, 2024, all Forest Road Earn-out Shares are unvested.
See Note 1, Description of Business and Summary of Significant Accounting Policies and Note 8, Goodwill, to our consolidated financial statements included elsewhere in this Report for additional information regarding the goodwill impairment recorded in the year ended December 31, 2023.
See Note 1, Description of Business and Summary of Significant Accounting Policies and Note 8, Goodwill, to our consolidated financial statements included elsewhere in this Report for additional information regarding the goodwill impairment recorded for the year ended December 31, 2024.
At this point, we do not believe that our liquidity has been materially affected by the debt market uncertainties noted in the last few years, and we do not believe that our liquidity will be significantly impacted in the near future. 64 Ite m 8.
At this point, we do not believe that our liquidity has been materially affected by the debt market uncertainties noted in the last few years, and we do not believe that our liquidity will be significantly impacted in the near future. 67 Ite m 8.
The guidance in this update will be effective for public companies for annual periods beginning after December 15, 2023 and interim periods for years beginning after December 15, 2024. The Company is evaluating the potential impact of adopting this guidance on its consolidated financial statements.
The guidance in this update will be effective for public companies for annual periods beginning after December 15, 2024 and interim periods for years beginning after December 15, 2025. The Company is evaluating the potential impact of adopting this guidance on its consolidated financial statements.
The following table summarizes the weighted average assumptions used to determine the fair value of the Performance-Vesting Options: December 31, 2023 Risk-free rate 3.7 % Dividend yield rate — Volatility 53.7 % Expected term (in years) 10.00 Weighted-average grant date fair value $ 13.00 The vesting periods are based on the terms of the option grant agreements, generally four to five years .
The following table summarizes the weighted average assumptions used to determine the fair value of the Performance-Vesting Options granted in the year ended December 31, 2023: December 31, 2023 Risk-free rate 3.7 % Dividend yield rate — Volatility 53.7 % Expected term (in years) 10.00 Weighted-average grant date fair value $ 13.00 The vesting periods are based on the terms of the option grant agreements, generally four to five years .
Stockholders' Equity As of December 31, 2023, 2,000,000,000 shares, $ 0.0001 par value per share are authorized, of which, 1,600,000,000 shares are designated as Class A common stock, 200,000,000 shares are designated as Class X common stock, 100,000,000 shares are designated as Class C common stock, and 100,000,000 shares are designated as preferred stock.
Stockholders' Equity As of December 31, 2024, 2,000,000,000 shares, $ 0.0001 par value per share are authorized, of which, 1,600,000,000 shares are designated as Class A common stock, 200,000,000 shares are designated as Class X common stock, 100,000,000 shares are designated as Class C common stock, and 100,000,000 shares are designated as preferred stock.
Accordingly, the following condensed financial information is presented on a "Parent Only" basis in which The Beachbody Company, Inc.'s investment in its consolidated subsidiaries are presented under the equity method of accounting. 108 Schedule I The Beachbody Company, Inc.
Accordingly, the following condensed financial information is presented on a "Parent Only" basis in which The Beachbody Company, Inc.'s investment in its consolidated subsidiaries are presented under the equity method of accounting. 118 Schedule I The Beachbody Company, Inc.
In testing for goodwill impairment as of December 31, 2023, we elected to bypass the optional qualitative test and proceeded to perform a quantitative test by comparing the carrying value of our RU to estimated fair value.
In testing for goodwill impairment as of December 31, 2024, we elected to bypass the optional qualitative test and proceeded to perform a quantitative test by comparing the carrying value of our RU to estimated fair value.
(2) The non-cash charge for employee incentives which were expected to be settled in equity was recorded and included in the Adjusted EBITDA calculation during the year ended December 31, 2022.
(4) The non-cash charge for employee incentives which were expected to be settled in equity was recorded and included in the Adjusted EBITDA calculation during the year ended December 31, 2022.
It also includes customer service costs, payment processing fees, depreciation of production equipment, live trainer costs, facilities, and related personnel expenses. Nutrition and Other Cost of Revenue Nutrition and other cost of revenue includes product costs, shipping and handling, fulfillment and warehousing, customer service, and payment processing fees.
It also includes customer service costs, payment processing fees, depreciation of production equipment, live trainer costs, facilities, and related personnel expenses. Nutrition and Other Cost of Revenue Nutrition and other cost of revenue includes product costs, shipping, logistics, fulfillment and warehousing, customer service, and payment processing fees.
Control of services, 78 which are primarily digital subscriptions, transfers over time, and as such, revenue is recognized ratably over the subscription period (up to 38 months). Shipping and handling charges billed to customers are included in revenue. The Company markets and sells its products primarily in the United States, Canada, the United Kingdom, and France.
Control of services, which are primarily digital subscriptions, transfers over time, and as such, revenue is recognized ratably over the subscription period (up to 38 months). Shipping and handling charges billed to customers are included in revenue. The Company markets and sells its products primarily in the United States, Canada, the United Kingdom (the "UK"), 81 and France.
In order to help retain and motivate holders of Underwater Options, and align their interests with those of stockholders, on September 14, 2023, the Compensation Committee of the Board resolved that it was in the best interests of the Company and its stockholders to amend certain of the Underwater Options (the “Amended Underwater Options”) for current employees and consultants of the Company that were either (1) not maturing in fiscal 2023 or (2) that had not been issued at an exercise price of less than $ 50 in the prior twelve months, to reduce the exercise 102 price of each Amended Underwater Option to the closing per share price of the Company’s common stock on September 14, 2023 (the “Repricing”).
In order to help retain and motivate holders of the 2023 Underwater Options, and align their interests with those of stockholders, on September 14, 2023, the Compensation Committee of the Board resolved that it was in the best interests of the Company and its stockholders to amend certain of the 2023 Underwater Options (the “2023 Amended Underwater Options”) for current employees and consultants of the Company that were either (1) not maturing in fiscal 2023 or (2) that had not been issued at an exercise price of less than $ 50 in the prior twelve months, to reduce the exercise price of each 2023 Amended Underwater Option to the closing per share price of the Company’s common stock on September 14, 2023 (the “2023 Repricing”).
Interest Rate Risk Our exposure to interest rate risk is primarily associated with our Term Loan borrowings, which were SOFR loans during the year ended December 31, 2023 and subject to variability in the SOFR rate.
Interest Rate Risk Our exposure to interest rate risk is primarily associated with our Term Loan borrowings, which were SOFR loans during the year ended December 31, 2024 and subject to variability in the SOFR rate.
The Common Stock Warrants may be exercised at any time beginning June 13, 2024 and will expire on June 13, 2029. See Note 15, Stockholders' Equity , for additional information on the Equity Offering and the Common Stock Warrants.
The Common Stock Warrants may be exercised at any time beginning June 13, 2024 and will expire on June 13, 2029. See Note 16, Stockholders' Equity , for additional information on the Equity Offering and the Common Stock Warrants.
See note 15, Stockholders' Equity , for information on the pre-funded warrants. Diluted net loss per common share adjusts net loss and net loss per common share for the effect of all potentially dilutive shares of the Company’s common stock.
See Note 16, Stockholders' Equity , for information on the pre-funded warrants. Diluted net loss per common share adjusts net loss and net loss per common share for the effect of all potentially dilutive shares of the Company’s common stock.
Term Loan Warrants In connection with the Term Loan (defined later), the Company issued warrants for the purchase of 94,335 shares of the Company’s Class A common stock at an exercise price of $ 92.50 per share to certain holders affiliated with Blue Torch Finance, LLC (the “Term Loan Warrants”).
Term Loan Warrants In connection with the Term Loan (as defined below), the Company issued warrants for the purchase of 94,335 shares of the Company’s Class A common stock at an exercise price of $ 92.50 per share to certain holders affiliated with Blue Torch Finance, LLC (the “Term Loan Warrants”).
Expenses also include payroll and related costs for employees involved in the research and development of new and existing products and services, enterprise technology hosting expenses, depreciation of enterprise technology-related assets, and equipment leases.
Expenses also include payroll and related costs for employees involved in the research and development of new and existing products and services, enterprise technology hosting expenses, depreciation of enterprise technology-related assets, software licenses and technology equipment leases.
Repurchases of Our Common Stock There were no repurchases of common stock during the fourth quarter of 2023. It em 6. Reserved. It em 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Repurchases of Our Common Stock There were no repurchases of common stock during the fourth quarter of 2024. It em 6. Reserved. It em 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Other Income (Expenses) The change in fair value of warrant liabilities consists of the fair value changes of the public, private placement, Term Loan and Common Stock warrants. Interest expense primarily consists of interest expense associated with our borrowings and amortization of debt discount and issuance costs for our Term Loan (defined below) in 2023 and 2022.
Other Income (Expenses) The change in fair value of warrant liabilities consists of the fair value changes of the public, private placement, Term Loan and Common Stock warrants. Interest expense primarily consists of interest expense associated with our borrowings and amortization of debt discount and issuance costs for our Term Loan (as defined below).
We believe that existing cash and cash equivalents and cost control initiatives will provide the Company with sufficient liquidity to meet our anticipated cash needs, including debt service requirements, for the next twelve months as well as for the longer-term (i.e., beyond the next twelve months).
We believe that existing cash and cash equivalents and management's plan related to cost control initiatives will provide the Company with sufficient liquidity to meet our anticipated cash needs, including debt service requirements, for the next twelve months as well as for the longer-term (i.e., beyond the next twelve months).
Deferred Revenue Deferred revenue is recorded for nonrefundable cash payments received for the Company’s performance obligation to transfer, or stand ready to transfer, goods or services in the future. Deferred revenue consists of subscription fees billed that have not been recognized and physical products sold that have not yet been delivered.
Deferred Revenue Deferred revenue is recorded for non-refundable cash payments received for the Company’s performance obligation to transfer, or stand ready to transfer, goods or services in the future. Deferred revenue consists of subscription fees billed that have not been recognized and physical products sold that have not yet been delivered.
The Company has historically performed its annual goodwill impairment assessment as of October 1. During the fourth quarter of 2023, the Company decided to change the date of its annual impairment assessment from October 1 to December 31.
The Company had historically performed its annual goodwill impairment assessment as of October 1. During the fourth quarter of 2023, the Company decided to change the date of its annual impairment assessment from October 1 to December 31.
Income Taxes The Company is subject to income taxes in the United States, Canada, and the United Kingdom. The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets ("DTAs") and liabilities ("DTLs") for the expected future tax consequences of events to be included in the financial statements.
Income Taxes The Company is subject to income taxes in the United States, Canada, and the UK. The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets ("DTAs") and liabilities ("DTLs") for the expected future tax consequences of events to be included in the consolidated financial statements.
On July 24, 2023 (the "Second Amendment Effective Date"), the Company and Blue Torch entered into Amendment No. 2 to the Financing Agreement (the "Second Amendment"), which amended the Company's existing Financing Agreement.
On July 24, 2023 (the "Term Loan Second Amendment Effective Date"), the Company and Blue Torch entered into Amendment No. 2 to the Financing Agreement (the "Term Loan Second Amendment"), which amended the Company's existing Financing Agreement.
The Company withheld shares of common stock with an aggregate fair value and remitted taxes of $ 2.2 million and $ 0.2 million during the years ended December 31, 2023 and 2022, respectively, which were classified as financing cash outflows in the consolidated statements of cash flows.
The Company withheld shares of common stock with an aggregate fair value and remitted taxes of $ 0.3 million and $ 2.2 million during the years ended December 31, 2024 and 2023, respectively, which were classified as financing cash outflows in the consolidated statements of cash flows.
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