(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| ☐ | TRANSITION REPORT PURSUANT TO Section 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
.
Delaware | 85-3222090 | |
(State or other jurisdiction of
| (I.R.S. Employer
|
| ||
3301 Exposition Blvd, Santa Monica, California | 90404 | |
(Address of | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Class A Common Stock, par value $0.0001 per share | BODY | The New York Stock Exchange | ||
Redeemable | BODY WS | The New York Stock e |
| Large Accelerated Filer ☐ | Accelerated Filer ☐ | Non-Accelerated Filer ☒ | Smaller Reporting Company ☐ | Emerging |
As
FOREST ROAD ACQUISITION CORP.
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2021
TABLE OF CONTENTS
Page | ||||||
PART I. | ||||||
Item 1. | ||||||
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| 3 | ||||||
| 4 | ||||||
| 5 | ||||||
| 6 | ||||||
Item 2. | ||||||
| 28 | ||||||
Item 3. | ||||||
| 42 | ||||||
Item 4. | ||||||
PART II. | ||||||
Item 1. | 43 | |||||
Item | ||||||
| 43 | ||||||
Item 2. | ||||||
| 73 | ||||||
Item | ||||||
| 73 | ||||||
Item | ||||||
| 74 | ||||||
| 75 | ||||||
i
FOREST ROAD ACQUISITION CORP.CONDENSED BALANCE SHEETS
| March 31, 2021 (Unaudited) | December 31, 2020 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | 730,435 | $ | 1,183,830 | ||||
| Prepaid expenses | 254,931 | 294,383 | ||||||
| Total current assets | 985,366 | 1,478,213 | ||||||
| Marketable Securities Held in Trust account | 300,004,432 | 300,000,000 | ||||||
| Total assets | $ | 300,989,798 | $ | 301,478,213 | ||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | 2,675,348 | $ | 409,896 | ||||
| Due to related party | 20,600 | — | ||||||
| Franchise tax payable | — | 54,149 | ||||||
| Total current liabilities | 2,695,948 | 464,045 | ||||||
| Warrant Liabilities | 45,605,664 | 31,735,421 | ||||||
| Deferred underwriters’ discount payable | 10,500,000 | 10,500,000 | ||||||
| Total liabilities | 58,801,612 | 42,699,466 | ||||||
| Commitments | ||||||||
| Class A common stock subject to possible redemption, 23,718,818 and 25,377,874 shares at redemption value at March 31, 2021 and December 31, 2020, respectively | 237,188,180 | 253,778,740 | ||||||
| Stockholders’ equity: | ||||||||
| Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding | — | — | ||||||
| Class A common stock, $0.0001 par value; 300,000,000 shares authorized; 6,281,182 shares and 4,622,126 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively (excluding 23,718,818 and 25,377,874 shares subject to possible redemption, respectively) | 628 | 462 | ||||||
| Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 7,500,000 shares issued and outstanding at March 31, 2021 and December 31, 2020 | 750 | 750 | ||||||
| Additional paid-in capital | 29,506,028 | 12,915,634 | ||||||
| Accumulated deficit | (24,507,400 | ) | (7,916,839 | ) | ||||
| Total stockholders’ equity | 5,000,006 | 5,000,007 | ||||||
| Total liabilities and stockholders’ equity | $ | 300,989,798 | $ | 301,478,213 | ||||
Statements.
(in thousands) | ||||||||
As of June 30, 2021 | As of December 31, 2020 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 347,229 | $ | 56,827 | ||||
Accounts receivable, net | 3,165 | 855 | ||||||
Inventory, net | 74,238 | 65,354 | ||||||
Prepaid expenses | 10,438 | 8,650 | ||||||
Other current assets | 46,286 | 37,364 | ||||||
Total current assets | 481,356 | 169,050 | ||||||
Property and equipment, net | 94,439 | 80,169 | ||||||
Content assets, net | 30,955 | 19,437 | ||||||
Intangible assets, net | 95,917 | 21,120 | ||||||
Goodwill | 176,903 | 18,981 | ||||||
Right-of-use | 29,366 | 33,272 | ||||||
Other assets | 7,026 | 14,224 | ||||||
Total assets | $ | 915,962 | $ | 356,253 | ||||
Liabilities and Stockholders’ Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 50,648 | $ | 28,981 | ||||
Accrued expenses | 87,440 | 79,955 | ||||||
Deferred revenue | 116,590 | 97,504 | ||||||
Current portion of lease liabilities | 9,976 | 10,371 | ||||||
Other current liabilities | 2,352 | 3,106 | ||||||
Total current liabilities | 267,006 | 219,917 | ||||||
Long-term lease liabilities, net | 26,466 | 31,252 | ||||||
Deferred tax liabilities | 7,977 | 3,729 | ||||||
Warrant liabilities | 50,173 | — | ||||||
Other liabilities | 5,887 | 2,097 | ||||||
Total liabilities | 357,509 | 256,995 | ||||||
Commitments and contingencies (Note 14) | 0 | 0 | ||||||
Stockholders’ equity: | ||||||||
Preferred stock, $0.0001 par value; 100,000,000 shares authorized, 00none issued and outstanding as of June 30, 2021 and December 31, 2020 | 0— | 0— | ||||||
Common stock, $0.0001 par value, 1,900,000,000 shares authorized (1,600,000,000 Class A, 200,000,000 Class X and 100,000,000 Class C); 166,925,632 and 101,762,614 Class A shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively; 141,250,310 Class X shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively and 0 Class C shares issued and outstanding at June 30, 2021 and December 31, 2020. | 31 | 24 | ||||||
Additional paid-in capital | 597,598 | 96,097 | ||||||
Accumulated other comprehensive loss | (17 | ) | (202 | ) | ||||
Retained earnings (accumulated deficit) | (39,159 | ) | 3,339 | |||||
Total stockholders’ equity | 558,453 | 99,258 | ||||||
Total liabilities and stockholders’ equity | $ | 915,962 | $ | 356,253 | ||||
CONDENSED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2021
(Unaudited)
| Operating costs | $ | 2,724,770 | ||
| Loss from operations | (2,724,770 | ) | ||
| Other Income (Expense) | ||||
| Interest income | 20 | |||
| Change in fair value of warrant liabilities | (13,870,243 | ) | ||
| Interest income on marketable securities held in Trust account | 4,432 | |||
| Total other income (expense) | (13,865,791 | ) | ||
| Net loss | $ | (16,590,561 | ) | |
| Weighted average shares outstanding - Class A common stock | 30,000,000 | |||
| Basic and diluted net income per share of common stock – Class A common stock | $ | 0.00 | ||
| Weighted average shares outstanding - Class B common stock | 7,500,000 | |||
| Basic and diluted net income per share of common stock – Class B common stock | $ | (2.21 | ) |
(in thousands, except per share data) | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Revenue: | ||||||||||||||||
Digital | $ | 94,325 | $ | 78,357 | $ | 189,475 | $ | 140,882 | ||||||||
Nutrition and other | 128,783 | 140,127 | 259,852 | 246,938 | ||||||||||||
Total revenue | 223,108 | 218,484 | 449,327 | 387,820 | ||||||||||||
Cost of revenue: | ||||||||||||||||
Digital | 11,612 | 9,292 | 22,734 | 17,664 | ||||||||||||
Nutrition and other | 57,158 | 50,097 | 114,153 | 90,572 | ||||||||||||
Total cost of revenue | 68,770 | 59,389 | 136,887 | 108,236 | ||||||||||||
Gross profit | 154,338 | 159,095 | 312,440 | 279,584 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling and marketing | 140,194 | 134,666 | 284,890 | 228,892 | ||||||||||||
Enterprise technology and development | 26,949 | 22,373 | 54,038 | 43,706 | ||||||||||||
General and administrative | 17,231 | 14,522 | 35,177 | 29,706 | ||||||||||||
Total operating expenses | 184,374 | 171,561 | 374,105 | 302,304 | ||||||||||||
Operating loss | (30,036 | ) | (12,466 | ) | (61,665 | ) | (22,720 | ) | ||||||||
Other income (expense) | ||||||||||||||||
Change in fair value of warrant liabilities | 5,390 | 0 | 5,390 | 0 | ||||||||||||
Interest expense | (305 | ) | (248 | ) | (428 | ) | (343 | ) | ||||||||
Other income, net | 1,654 | 34 | 2,953 | 442 | ||||||||||||
Loss before income taxes | (23,297 | ) | (12,680 | ) | (53,750 | ) | (22,621 | ) | ||||||||
Income tax benefit | 10,857 | 2,677 | 11,252 | 4,290 | ||||||||||||
Net loss | $ | (12,440 | ) | $ | (10,003 | ) | $ | (42,498 | ) | $ | (18,331 | ) | ||||
Net loss per common share, basic | $ | (0.05 | ) | $ | (0.04 | ) | $ | (0.17 | ) | $ | (0.08 | ) | ||||
Net loss per common share, diluted | $ | (0.05 | ) | $ | (0.04 | ) | $ | (0.17 | ) | $ | (0.08 | ) | ||||
Weighted-average common shares outstanding, basic | 247,062 | 238,143 | 245,049 | 238,143 | ||||||||||||
Weighted-average common shares outstanding, diluted | 247,062 | 238,143 | 245,049 | 238,143 | ||||||||||||
CONDENSED STATEMENT OF CHANGES IN STOCKHOLDERS’ EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 2021
(Unaudited)
| Common Stock | Additional | Total | ||||||||||||||||||||||||||
| Class A | Class B | Paid-In | Accumulated | Stockholders’ | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Capital | Deficit | Equity | ||||||||||||||||||||||
| Balance as of December 31, 2020 | 4,622,126 | $ | 462 | 7,500,000 | $ | 750 | $ | 12,915,634 | $ | (7,916,839 | ) | $ | 5,000,007 | |||||||||||||||
| Change in Class A common stock subject to possible redemption | 1,659,056 | 166 | — | — | 16,590,394 | — | 16,590,560 | |||||||||||||||||||||
| Net loss | — | — | — | — | — | (16,590,561 | ) | (16,590,561 | ) | |||||||||||||||||||
| Balance as of March 31, 2021 | 6,281,182 | $ | 628 | 7,500,000 | $ | 750 | $ | 29,506,028 | $ | (24,507,400 | ) | $ | 5,000,006 | |||||||||||||||
(in thousands) | ||||||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Net loss | $ | (12,440 | ) | $ | (10,003 | ) | $ | (42,498 | ) | $ | (18,331 | ) | ||||
Other comprehensive income (loss): | ||||||||||||||||
Change in fair value of derivative financial instruments, net of tax | (99 | ) | (217 | ) | (208 | ) | 193 | |||||||||
Reclassification of losses on derivative financial instruments included in net | 172 | (73 | ) | 339 | (47 | ) | ||||||||||
Foreign currency translation adjustment | 12 | 49 | 54 | (327 | ) | |||||||||||
Total other comprehensive income (loss) | 85 | (241 | ) | 185 | (181 | ) | ||||||||||
Total comprehensive loss | $ | (12,355 | ) | $ | (10,244 | ) | $ | (42,313 | ) | $ | (18,512 | ) | ||||
CONDENSED STATEMENT OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2021
(Unaudited)
| Cash Flows from Operating Activities: | ||||
| Net loss | $ | (16,509,561 | ) | |
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||
| Change in fair value of warrant liabilities | 13,870,243 | |||
| Interest income on trust account | (4,432 | ) | ||
| Changes in current assets and current liabilities: | ||||
| Prepaid assets | 39,452 | |||
| Accounts payable and accrued expenses | 2,265,452 | |||
| Due to related party | 20,600 | |||
| Franchise tax payable | (54,149 | ) | ||
| Net cash used in operating activities | (453,395 | ) | ||
| Net Change in Cash | (453,395 | ) | ||
| Cash - Beginning | 1,183,830 | |||
| Cash - Ending | $ | 730,435 | ||
| Supplemental Disclosure of Non-cash Financing Activities: | ||||
| Change in value of Class A common stock subject to possible redemption | $ | (16,590,560 | ) | |
(in thousands) | ||||||||||||||||||||||||||||||||
Redeemable | ||||||||||||||||||||||||||||||||
Convertible | Accumulated | Retained | ||||||||||||||||||||||||||||||
Series A | Additional | Other | Earnings | Total | ||||||||||||||||||||||||||||
Preferred | Common | Common Stock | Paid-In | Comprehensive | (Accumulated | Stockholders’ | ||||||||||||||||||||||||||
Units | Units | Shares | Amount | Capital | Income (Loss) | (Deficit) | Equity | |||||||||||||||||||||||||
Balances at December 31, 2019, as previously reported | $ | 98,245 | $ | (35,626 | ) | $ | — | $ | — | $ | — | $ | 12 | $ | 24,771 | $ | (10,843 | ) | ||||||||||||||
Retroactive application of recapitalization | (98,245 | ) | 35,626 | 238,142,972 | 24 | 62,595 | — | — | 98,245 | |||||||||||||||||||||||
Balance at December 31, 2019, after effect of reverse | — | — | 238,142,972 | 24 | 62,595 | 12 | 24,771 | 87,402 | ||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | (8,328 | ) | (8,328 | ) | ||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 60 | — | 60 | ||||||||||||||||||||||||
Equity-based compensation | — | — | — | — | 895 | — | — | 895 | ||||||||||||||||||||||||
Balances at March 31, 2020 | $ | — | $ | — | 238,142,972 | $ | 24 | $ | 63,490 | $ | 72 | $ | 16,443 | $ | 80,029 | |||||||||||||||||
Net loss | — | — | — | — | — | — | (10,003 | ) | (10,003 | ) | ||||||||||||||||||||||
Other comprehensive loss | — | — | — | — | — | (241 | ) | — | (241 | ) | ||||||||||||||||||||||
Equity-based compensation | — | — | — | — | 1,013 | — | — | 1,013 | ||||||||||||||||||||||||
Balances at June 30, 2020 | $ | — | $ | — | 238,142,972 | $ | 24 | $ | 64,503 | $ | (169 | ) | $ | 6,440 | $ | 70,798 | ||||||||||||||||
Redeemable | ||||||||||||||||||||||||||||||||
Convertible | Accumulated | Retained | ||||||||||||||||||||||||||||||
Series A | Additional | Other | Earnings | Total | ||||||||||||||||||||||||||||
Preferred | Common | Common Stock | Paid-In | Comprehensive | (Accumulated | Stockholders’ | ||||||||||||||||||||||||||
Units | Units | Shares | Amount | Capital | Income (Loss) | (Deficit) | Equity | |||||||||||||||||||||||||
Balances at December 31, 2020, as previously reported | $ | 98,110 | $ | (1,989 | ) | — | $ | — | $ | — | $ | (202 | ) | $ | 3,339 | $ | 1,148 | |||||||||||||||
Retroactive application of recapitalization | (98,110 | ) | 1,989 | 243,012,924 | 24 | 96,097 | — | — | 98,110 | |||||||||||||||||||||||
Balance at December 31, 2020, after effect of reverse acquisition | — | — | 243,012,924 | 24 | 96,097 | (202 | ) | 3,339 | 99,258 | |||||||||||||||||||||||
Net loss | — | — | — | — | — | — | (30,058 | ) | (30,058 | ) | ||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 100 | — | 100 | ||||||||||||||||||||||||
Equity-based compensation | — | — | — | — | 2,573 | — | — | 2,573 | ||||||||||||||||||||||||
Balances at March 31, 2021 | $ | — | $ | — | 243,012,924 | $ | 24 | $ | 98,670 | $ | (102 | ) | $ | (26,719 | ) | $ | 71,873 | |||||||||||||||
Net loss | — | — | — | — | — | — | (12,440 | ) | (12,440 | ) | ||||||||||||||||||||||
Other comprehensive income | — | — | — | — | — | 85 | — | 85 | ||||||||||||||||||||||||
Equity-based compensation | — | — | — | — | 2,522 | 0 | — | 2,522 | ||||||||||||||||||||||||
Business Combination, net of redemptions and equity issuance costs of $47.0 million | — | — | 51,616,515 | 5 | 333,850 | 0 | — | 333,855 | ||||||||||||||||||||||||
Myx acquisition | — | — | 13,546,503 | 2 | 162,556 | 0 | — | 162,558 | ||||||||||||||||||||||||
Balances at June 30, 2021 | $ | — | $ | — | 308,175,942 | $ | 31 | $ | 597,598 | $ | (17 | ) | $ | (39,159 | ) | $ | 558,453 | |||||||||||||||
4
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 1 —
(in thousands) | ||||||||
Six Months Ended June 30, | ||||||||
2021 | 2020 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (42,498 | ) | $ | (18,331 | ) | ||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization expense | 25,941 | 20,678 | ||||||
Amortization of content assets | 6,119 | 3,196 | ||||||
Provision for excess and obsolete inventory | 2,791 | (76 | ) | |||||
Allowance for doubtful accounts | 0 | 32 | ||||||
Change in fair value of derivative financial instruments | 169 | 199 | ||||||
Gain on investment in convertible instrument | (3,114 | ) | 0 | |||||
Change in fair value of warrant liabilities | (5,390 | ) | 0 | |||||
Equity-based compensation | 5,095 | 1,908 | ||||||
Deferred income taxes | (11,349 | ) | (3,973 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (2,007 | ) | (2,184 | ) | ||||
Inventory | (194 | ) | (2,477 | ) | ||||
Content assets | (14,237 | ) | (6,399 | ) | ||||
Prepaid expenses | (1,789 | ) | 6,502 | |||||
Other assets | (5,604 | ) | (5,487 | ) | ||||
Accounts payable | 6,656 | (1,013 | ) | |||||
Accrued expenses | (461 | ) | 17,831 | |||||
Deferred revenue | 16,547 | 40,502 | ||||||
Other liabilities | (2,162 | ) | (6,862 | ) | ||||
Net cash provided by (used in) operating activities | (25,487 | ) | 44,046 | |||||
Cash flows from investing activities: | ||||||||
Purchase of property and equipment | (27,200 | ) | (18,756 | ) | ||||
Investment in convertible instrument | (5,000 | ) | 0 | |||||
Equity investment | (5,000 | ) | 0 | |||||
Cash paid for acquisition of Myx, net of cash acquired | (37,280 | ) | 0 | |||||
Net cash used in investing activities | (74,480 | ) | (18,756 | ) | ||||
Cash flows from financing activities: | ||||||||
Borrowings under Credit Facility | 42,000 | 32,000 | ||||||
Repayments under Credit Facility | (42,000 | ) | (32,000 | ) | ||||
Business Combination, net of issuance costs paid | 389,775 | 0 | ||||||
Net cash provided by financing activities | 389,775 | 0 | ||||||
Effect of exchange rates on cash | 594 | (638 | ) | |||||
Net increase in cash and cash equivalents | 290,402 | 24,652 | ||||||
Cash and cash equivalents, beginning of period | 56,827 | 41,564 | ||||||
Cash and cash equivalents, end of period | $ | 347,229 | $ | 66,216 | ||||
Supplemental disclosure of cash flow information: | ||||||||
Cash paid during the year for interest | $ | 283 | $ | 84 | ||||
Cash paid during the year for income taxes, net | $ | 198 | $ | 11 4 | ||||
Supplemental disclosure of noncash investing activities: | ||||||||
Property and equipment acquired but not yet paid for | $ | 15,322 | $ | 3,103 | ||||
Class A Common Stock issued in connection with the acquisition of Myx | $ | 162,558 | $ | 0 | ||||
Fair value of Myx instrument and promissory note held by Old Beachbody | $ | 22,618 | $ | 0 | ||||
Supplemental disclosure of noncash financing activities: | ||||||||
Business Combination transaction costs, accrued but not paid | $ | 650 | $ | — | ||||
Net assets assumed from Forest Road in the Business Combination | $ | 293 | $ | 0 | ||||
1. | Organization, Business and Summary of Accounting Policies |
Organization and General
On February 9, 2021, by and among Forest Road, entered into an Agreement and Plan of Merger (the “Merger Agreement”the Beachbody Company Group, LLC (“Old Beachbody”) with, BB Merger Sub, LLC, a Delaware limited liability company(“BB Merger Sub”), MFH Merger Sub, LLC (“Myx Merger Sub”), and direct,Myx Fitness Holdings, LLC (“Myx”).
On February 9, 2021, Forest Roadstreaming channel on OTT devices such as Apple TV, Roku, Amazon Fire, and certain investors entered into subscription agreements (the “Subscription Agreements”) pursuantChromecast; and online. Myx’s interactive fitness platform provides commercial grade stationary bikes and accessories and
As of March 31, 2021direct response advertising. Beachbody markets and December 31, 2020, the Company had not yet commenced any operations. All activity through March 31, 2021, relates to the Company’s formation and the initial public offering (“IPO”) described below. The Company will not generate any operating revenues until after the completion ofsells its initial business combination, at the earliest. The Company will generate non-operating incomeproducts primarily in the formUnited States, United Kingdom, and Canada, and approximately 35% of interest income on cash and cash equivalents from the proceeds derived from the IPO.
The Company’s sponsor is Forest Road Acquisition Sponsor LLC, a Delaware limited liability company (the “Sponsor”). The registration statementBeachbody’s revenues for the Company’s IPO was declared effective by the U.S. Securitiesthree and Exchange Commission (the “SEC”) on November 24, 2020 (the “Effective Date”). On Novembersix months ended June 30, 2020, the Company consummated the IPO2021 are attributable to Shakeology, Beachbody’s premium nutritional shake.
Simultaneously with the closing of the IPO, the Company consummated the private placement (“Private Placement”) with the Sponsor of an aggregate of 5,333,333 warrants (“Private Placement Warrants”) to purchase Class A common stock, each at a price of $1.50 per Private Placement Warrant, generating total proceeds of $8,000,000 (Note 4).
Transaction costs amounted to $16,979,438, consisting of $6,000,000 of underwriting discount, $10,500,000 of deferred underwriters’ fee and $479,438 of other offering costs.
Trust Account
Following the closing of the IPO on November 30, 2020, an amount of $300,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants was placed in a trust account (“Trust Account”) which was invested 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, until the earlier of (a) the completion of the Company’s initial Business Combination, (b) the redemption of any public shares properly submitted in connection with a stockholder vote to amend the Company’s certificate of incorporation, or (c) the redemption of the Company’s public shares if the Company is unable to complete the initial Business Combination within 24 months from the closing of the IPO, or November 30, 2022 (the “Combination Period”).
5
FOREST ROAD ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Initial Business Combination
The Company’s management has broad discretion with respect to the specific application of the net proceeds of the IPO and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete a Business Combination with one or more operating businesses or assets that together have an aggregate fair market value equal to at least 80% of the net assets held in the Trust Account (net of amounts disbursed to management for working capital purposes, if permitted, and excluding the amount of any deferred underwriting commissions) at the time of the Company’s signing a definitive agreement in connection with its initial Business Combination. However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires an interest in the target business or assets sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”).
The Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company. The public stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.
The Company will only proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 either prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by applicable law or stock exchange rules and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the SEC and file tender offer documents with the SEC prior to completing a Business Combination.
If, however, stockholder approval of the transaction is required by applicable law or stock exchange rules, or the Company decides to obtain stockholder approval for business or other reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 5), and any Public Shares purchased during or after the IPO in favor of approving a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction or do not vote at all.
6
FOREST ROAD ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Notwithstanding the above, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Amended and Restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company. The Sponsor has agreed (a) to waive its redemption rights with respect to its Founder Shares and Public Shares held by it in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated Certificate of Incorporation (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s initial Business Combination or to redeem 100% of its Public Shares if the Company does not complete a Business Combination or (ii) with respect to any other provision relating to stockholders’ rights (including redemption rights) or pre-initial business combination activity, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.
There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete a Business Combination within the Combination Period. The Sponsor has agreed to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor acquires Public Shares in or after the IPO, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period.
In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (1) $10.00 per Public Share and (2) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account nor will it apply to any claims under the Company’s indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except the Company’s independent registered public accounting firm), prospective target businesses and other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.
FOREST ROAD ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Liquidity
As of March 31, 2021, the Company had cash outside the Trust Account of $730,435 available for working capital needs. All remaining cash held in the Trust Account is generally unavailable for the Company’s use, prior to an initial Business Combination, and is restricted for use either in a Business Combination or to redeem common stock. As of March 31, 2021, none of the amount in the Trust Account was available to be withdrawn as described above.
Through March 31, 2021, the Company’s liquidity needs were satisfied through receipt of $25,000 from the sale of the founder shares, advances from the Sponsor in an aggregate amount of $141,881 and the remaining net proceeds from the IPO and the sale of Private Placement Warrants.
The Company anticipates that the $730,435 outside of the Trust Account as of March 31, 2021 will be sufficient to allow the Company to operate for at least the next 12 months from the issuance of the unaudited condensed financial statements, assuming that a Business Combination is not consummated during that time. Until consummation of its Business Combination, the Company will be using the funds not held in the Trust Account, and any additional Working Capital Loans (as defined in Note 5) from the initial stockholders, the Company’s officers and directors, or their respective affiliates (which is described in Note 5), for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the Business Combination.
The Company does not believe it will need to raise additional funds in order to meet the expenditures required for operating its business. However, if the Company’s estimates of the costs of undertaking in-depth due diligence and negotiating business combination is less than the actual amount necessary to do so, the Company may have insufficient funds available to operate its business prior to the business combination. Moreover, the Company will need to raise additional capital through loans from its Sponsor, officers, directors, or third parties. None of the Sponsor, officers or directors is under any obligation to advance funds to, or to invest in, the Company. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of its business plan, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all.
8
FOREST ROAD ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Risks and Uncertainties
On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus (the “COVID-19 outbreak”). In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve. The impact of the COVID-19 outbreak on the Company’s financial position will depend on future developments, including the duration and spread of the outbreak and related advisories and restrictions. These developments and the impact of the COVID-19 outbreak on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period, the Company’s financial position may be materially adversely affected. Additionally, the Company’s ability to complete an initial Business Combination may be materially adversely affected due to significant governmental measures being implemented to contain the COVID-19 outbreak or treat its impact, including travel restrictions, the shutdown of businesses and quarantines, among others, which may limit the Company’s ability to have meetings with potential investors or affect the ability of a potential target company’s personnel, vendors and service providers to negotiate and consummate an initial Business Combination in a timely manner. The Company’s ability to consummate an initial business combination may also be dependent on the ability to raise additional equity and debt financing, which may be impacted by the COVID-19 outbreak and the resulting market downturn.
Note 2 — Significant Accounting Policies
and Principles of Consolidation
The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K, as amended, as of December 31, 2020 andMyx for the period from September 24, 2020 (inception) through December 31, 2020 as filed with the SEC on May 3,June 26, 2021 which contains the auditedto June 30, 2021.
Emerging Growth Company Status
The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reportscontrolled subsidiaries. All intercompany transactions and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.
Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those thatbalances have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.
9
FOREST ROAD ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Cash
in the opinion of management, include all adjustments consisting of only normal recurring adjustments necessary for the fair statement of the Company’s financial position as of June 30, 2021, its results of operations for the three and six months ended June 30, 2021 and 2020 and cash flows for the six months ended June 30, 2021 and 2020. The financial data and other financial information disclosed in the notes to these condensed consolidated financial statements related to the three- and
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Balance, beginning of period | $ | 16 | $ | 55 | $ | 16 | $ | 69 | ||||||||
Charges | 0 | — | — | 32 | ||||||||||||
Write-offs | — | (14 | ) | — | (60 | ) | ||||||||||
Balance, end of period | $ | 16 | $ | 41 | $ | 16 | $ | 41 | ||||||||
2. | Business Combination |
Marketableequal to the value of such shares not to exceed $37.7
Recapitalization | ||||
Cash- Forest Road trust and cash, net of redemptions | $ | 216,444 | ||
Cash- PIPE Financing | 225,000 | |||
Less: Non-cash net assets assumed from Forest Road | 293 | |||
Less: Fair value of Public and Private Warrants | (60,900 | ) | ||
Less: Transaction costs and advisory fees for Beachbody allocated to equity | (19,923 | ) | ||
Less: Transaction costs and advisory fees for Forest Road | (27,059 | ) | ||
Net Business Combination | 333,855 | |||
Less: Non-cash net assets assumed from Forest Road | (293 | ) | ||
Less: Transaction costs and advisory fees for Beachbody allocated to warrants | (5,337 | ) | ||
Add: Non-cash fair value of Forest Road warrants | 60,900 | |||
Add: Accrued transaction costs and advisor fees | 650 | |||
Net cash contributions from Business Combination | $ | 389,775 | ||
Common stock of Forest Road, net of redemptions | 21,616,515 | |||
Forest Road shares held by the Sponsor (1) | 7,500,000 | |||
Shares issued in PIPE Financing | 22,500,000 | |||
Business Combination and PIPE Financing shares - Class A C ommonS tock | 51,616,515 | |||
Myx equity units - Class A Common Stock | 13,546,503 | |||
Old Beachbody equity units - Class A C ommonS tock(2) | 101,762,614 | |||
Old Beachbody equity units - Class X C ommonS tock(3) | 141,250,310 | |||
Total shares of common stock immediately after Business Combination | 308,175,942 |
| (1) | Includes 3,750,000 Forest Road Earn-out Shares. |
(2) | The number of Old Beachbody equity units - Class A Common Stock was determined from 20,220,589 common units and 10,068,841preferred units of Old Beachbody outstanding immediately prior to the closing of the Business Combination converted at the Exchange Ratio. |
(3) | The number of Old Beachbody equity units - Class X Common Stock was determined from 42,042,850common units of Old Beachbody outstanding immediately prior to the closing of the Business Combination converted at the Exchange Ratio. |
3. | Revenue |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
United States | $ | 198,529 | $ | 200,008 | $ | 401,245 | $ | 355,032 | ||||||||
Rest of world 1 | 24,579 | 18,476 | 48,082 | 32,788 | ||||||||||||
Total revenue | $ | 223,108 | $ | 218,484 | $ | 449,327 | $ | 387,820 | ||||||||
| (1) | Consists of Canada, United Kingdom and France. |
4. | Fair Value Measurements |
June 30, 2021 | ||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
Assets | ||||||||||||
Derivative assets | $ | — | $ | 22 | $ | — | ||||||
Total Assets | $ | — | $ | 22 | $ | — | ||||||
Liabilities | ||||||||||||
Public Warrants | $ | 29,800 | $ | — | $ | — | ||||||
Private Placement Warrants | — | — | 20,373 | |||||||||
Total Liabilities | $ | 29,800 | $ | 0 | $ | 20,373 | ||||||
December 31, 2020 | ||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||
Assets | ||||||||||||
Derivative assets | $ | — | $ | 164 | $ | — | ||||||
Investment in convertible instrument | — | — | 10,288 | |||||||||
Total Assets | $ | — | $ | 164 | $ | 10,288 | ||||||
At Marchthe fair value measurement of the Private Placement Warrants is the implied volatility. Significant changes in the implied volatility would result in a significantly higher or lower fair value measurement, respectively.
As of June 25, 2021 | As of June 30, 2021 | |||||||
Risk-free rate | 0.9 | % | 0.9 | % | ||||
Dividend yield rate | 0.0 | % | 0.0 | % | ||||
Volatility | 45.0 | % | 45.0 | % | ||||
Contractual term (in years) | 5.00 | 4.99 | ||||||
Exercise price | $ | 11.50 | $ | 11.50 | ||||
Three Months Ended June 30, 2021 | Six Months Ended June 30, 2021 | |||||||
Balance, beginning of period | $ | 0 | $ | 0 | ||||
Assumed in Business Combination | 26,400 | 26,400 | ||||||
Change in fair value | (6,027 | ) | (6,027 | ) | ||||
Balance, end of period | $ | 20,373 | $ | 20,373 | ||||
Three Months Ended June 30, 2021 | Six Months Ended June 30, 2021 | |||||||
Balance, beginning of period | $ | 16,667 | $ | 10,288 | ||||
Investment in convertible instrument | — | 5,000 | ||||||
Change in fair value | 1,735 | 3,114 | ||||||
Conversion of investment | (18,402 | ) | (18,402 | ) | ||||
Balance, end of period | $ | 0 | $ | 0 | ||||
June 30, 2021 | December 31, 2020 | |||||||
Raw materials and work in process | $ | 26,046 | $ | 26,480 | ||||
Finished goods | 48,192 | 38,874 | ||||||
Total inventory | $ | 74,238 | $ | 65,354 | ||||
6. | Other Current Assets |
June 30, 2021 | December 31, 2020 | |||||||
Deferred coach costs | $ | 33,510 | $ | 29,967 | ||||
Deposits | 9,945 | 3,035 | ||||||
Other | 2,831 | 4,362 | ||||||
Total other current assets | $ | 46,286 | $ | 37,364 | ||||
7. | Property and Equipment, Net |
June 30, 2021 | December 31, 2020 | |||||||
Computer software | $ | 203,741 | $ | 194,314 | ||||
Leasehold improvements | 24,197 | 24,197 | ||||||
Computer equipment | 21,264 | 21,172 | ||||||
Computer software and web development projects in-process | 26,013 | 12,380 | ||||||
Furniture, fixtures and equipment | 6,978 | 7,016 | ||||||
Property and equipment, gross | 282,193 | 259,079 | ||||||
Less: Accumulated depreciation | (187,754 | ) | (178,910 | ) | ||||
Property and equipment, net | $ | 94,439 | $ | 80,169 | ||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
| Cost of revenue | $ | 4,146 | $ | 3,037 | $ | 7,884 | $ | 6,076 | ||||||||
Selling and marketing | 389 | 552 | 840 | 1,068 | ||||||||||||
Enterprise technology and development | 5,340 | 5,277 | 12,651 | 10,214 | ||||||||||||
General and administrative | 617 | 818 | 1,263 | 1,620 | ||||||||||||
Total depreciation | $ | 10,492 | $ | 9,684 | $ | 22,638 | $ | 18,978 | ||||||||
8. | Content Assets, Net |
June 30, 2021 | December 31, 2020 | |||||||
Released, less amortization | $ | 25,215 | $ | 17,306 | ||||
In production | 5,740 | 2,131 | ||||||
Content assets, net | $ | 30,955 | $ | 19,437 | ||||
9. | Acquisitions |
Purchase Price | ||||
Cash c onsideration (1) | $ | 37,700 | ||
Share consideration (2) | 162,558 | |||
Fair value of Myx instrument held by Old Beachbody (3) | 18,402 | |||
Promissory note held by Old Beachbody (4) | 4,216 | |||
Total consideration | $ | 222,876 |
| (1) | Cash consideration includes, among other things, the payoff of certain of Myx’s existing debt obligations , payments of certain of Myx’s transaction expenses, and cash payments as consideration for certain Myx equity units. |
( 2 ) | Share consideration was calculated based on 13,546,503shares of Class A Common Stock issued multiplied by the share closing price on the Closing Date of $12.00. |
| (3) | Fair value of Myx instrument held by Old Beachbody was effectively settled on the Closing Date, see Note 1. |
| (4) | In April and June 2021, Old Beachbody entered into promissory note agreements with Myx. Such promissory notes were effectively settled on the Closing Date. |
Allocation | ||||
Goodwill | $ | 157,922 | ||
Intangible assets: | ||||
Trade name/ Trademark | 43,700 | |||
Developed technology | 14,000 | |||
Customer relationships | 20,400 | |||
| 78,100 | ||||
Cash acquired | 420 | |||
Inventory, net | 11,447 | |||
Other assets | 3,354 | |||
Content assets | 3,400 | |||
Deferred revenue | (2,168 | ) | ||
Other liabilities | (14,039 | ) | ||
Deferred tax liabilities | (15,560 | ) | ||
| $ | 222,876 | |||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Pro forma combined: | ||||||||||||||||
| Revenue | $ | 237,286 | $ | 220,791 | $ | 480,543 | $ | 390,775 | ||||||||
Net | (25,362 | ) | (14,597 | ) | (67,747 | ) | (27,073 | ) | ||||||||
Purchase Price | ||||
Common units issued in connection with acquisition (1) | $ | 27,889 | ||
Allocation | ||||
Goodwill | $ | 11,606 | ||
Intangible assets: | ||||
Trade name | 7,500 | |||
Customer-related | 300 | |||
Formulae | 1,950 | |||
Talent and representation contracts | 10,300 | |||
| 20,050 | ||||
Cash acquired | 1,247 | |||
Other assets acquired | 1,132 | |||
Liabilities acquired | (1,834 | ) | ||
Deferred tax liabilities | (4,312 | ) | ||
| $ | 27,889 | |||
| (1) | The fair value of common units issued in connection with the acquisition was calculated based on 1,449,537 common units ofOld multiplied by the estimated fair value per unit of $19.24. Beachbody |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||
2020 | 2020 | |||||||
Pro forma combined: | ||||||||
Revenue | $ | 219,302 | $ | 389,244 | ||||
Net loss income | (11,582 | ) | (22,000 | ) | ||||
June 30, 2021 | ||||
Goodwill, beginning of period | $ | 18,981 | ||
Acquisition of Myx | 157,922 | |||
Goodwill, end of period | $ | 176,903 | ||
June 30, 2021 | December 31, 2020 | |||||||||||||||||||||||||||
Acquired Intangibles, Gross | Accumulated Amortization | Acquired Intangibles, Net | Acquired Intangibles, Gross | Accumulated Amortization | Acquired Intangibles, Net | Weighted-Average Remaining Useful Life (years) | ||||||||||||||||||||||
Contract-based | $ | 300 | $ | (200 | ) | $ | 100 | $ | 300 | $ | (150 | ) | $ | 150 | 1.0 | |||||||||||||
Customer-related | 21,100 | (606 | ) | 20,494 | 700 | (337 | ) | 363 | 2.9 | |||||||||||||||||||
Technology-based | 20,200 | (6,249 | ) | 13,951 | 6,200 | (4,650 | ) | 1,550 | 2.8 | |||||||||||||||||||
Talent and representation contracts | 10,300 | (1,931 | ) | 8,369 | 10,300 | (644 | ) | 9,656 | 3.3 | |||||||||||||||||||
Formulae | 1,950 | (147 | ) | 1,803 | 1,950 | (49 | ) | 1,901 | 9.3 | |||||||||||||||||||
Trade name | 51,200 | — | 51,200 | 7,500 | — | 7,500 | Indefinite | |||||||||||||||||||||
| $ | 105,050 | $ | (9,133 | ) | $ | 95,917 | $ | 26,950 | $ | (5,830 | ) | $ | 21,120 | |||||||||||||||
Six months ended December 31, 2021 | $ | 6,660 | ||
Year ended December 31, 2022 | 13,233 | |||
Year ended December 31, 2023 | 13,070 | |||
Year ended December 31, 2024 | 8,932 | |||
Year ended December 31, 2025 | 1,896 | |||
Thereafter | 926 | |||
| $ | 44,717 | |||
June 30, 2021 | December 31, 2020 | |||||||
Coach costs | $ | 20,508 | $ | 19,126 | ||||
Advertising | 14,172 | 3,626 | ||||||
Employee compensation and benefits | 13,359 | 28,855 | ||||||
Information technology | 11,878 | 5,621 | ||||||
Inventory, shipping and fulfillment | 9,877 | 10,244 | ||||||
Sales and income taxes | 4,114 | 4,132 | ||||||
Other accrued expenses | 13,532 | 8,351 | ||||||
Total accrued expenses | $ | 87,440 | $ | 79,955 | ||||
Concentration ofthree and six months ended June 30, 2020.
Financial instruments that potentially subjectFacility contains certain reporting and financial covenants which require the Company to concentrationsmaintain a minimum consolidated EBITDA amount and comply with a maximum capital expenditures amount. The Company was in compliance with all covenants as of credit risk consist ofJune 30, 2021.
Common Stock Subject to Possible Redemption
The Company accounts for its Class A common stock subject to possible redemption in accordance withexercise these options. Variable expenses generally represent the guidance in Accounting Standard Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” Class A common stock subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value. Conditionally redeemable common stock (including common stock that feature redemption rights that are either within the controlCompany’s share of the holder or subjectlandlord operating expenses.
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Finance lease costs: | ||||||||||||||||
Amortization of right-of-use | $ | 36 | $ | 36 | $ | 73 | $ | 73 | ||||||||
Interest on lease liabilities | 4 | 5 | 8 | 11 | ||||||||||||
Operating lease costs | 2,510 | 2,459 | 4,903 | 4,919 | ||||||||||||
Short-term lease costs | 21 | 75 | 22 | 132 | ||||||||||||
Variable lease costs | 165 | (65 | ) | 336 | (113 | ) | ||||||||||
Total lease costs | $ | 2,736 | $ | 2,510 | $ | 5,342 | $ | 5,022 | ||||||||
Six Months Ended June 30, | ||||||||||||||||
2021 | 2020 | |||||||||||||||
Cash paid for amounts included in the measurement of lease liabilities | ||||||||||||||||
Operating cash flows from finance leases | $ | 8 | $ | 11 | ||||||||||||
Operating cash flows from operating leases | 6,179 | 6,221 | ||||||||||||||
Financing cash flows from finance leases | 73 | 70 | ||||||||||||||
Right-of-use | — | — | ||||||||||||||
Weighted-average remaining lease term—finance leases | 2.8 | 3.8 | ||||||||||||||
Weighted-average remaining lease term—operating leases | 3.5 | 4.4 | ||||||||||||||
Weighted-average discount rate—finance leases | 4.0 | % | 4.0 | % | ||||||||||||
Weighted-average discount rate - operating leases | 5.5 | % | 5.5 | % | ||||||||||||
Operating Leases | Finance Leases | Total | ||||||||||
Six Months Ended December 31, 2021 | $ | 4,343 | $ | 81 | $ | 4,424 | ||||||
Year ended December 31, 2022 | 11,183 | 161 | 11,344 | |||||||||
Year ended December 31, 2023 | 11,780 | 123 | 11,903 | |||||||||
Year ended December 31, 2024 | 12,616 | 3 | 12,619 | |||||||||
Year ended December 31, 2025 | — | — | — | |||||||||
Thereafter | — | — | — | |||||||||
Total | 39,922 | 368 | 40,290 | |||||||||
Less present value discount | (3,831 | ) | (17 | ) | (3,848 | ) | ||||||
Lease liabilities at June 30, 2021 | $ | 36,091 | $ | 351 | $ | 36,442 | ||||||
10
FOREST ROAD ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Net Income (Loss) per Common Stock
Net income (loss) per share of common stock is computed by dividing net income (loss) by the weighted average number of common stock outstanding for the period.
The Company complies with accountingother technology projects.
Six Months Ended December 31, 2021 | $ | 124,020 | ||
Year ended December 31, 2022 | 7,413 | |||
Year ended December 31, 2023 | 1,431 | |||
Year ended December 31, 2024 | 1,250 | |||
Year ended December 31, 2025 | 1,250 | |||
| $ | 135,364 | |||
Warrant liabilities
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815-15. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period.
The Company accounts for its 15,333,333 common stock warrants issued in connection with its IPO (10,000,000) and Private Placement (5,333,333) as derivative warrant liabilities in accordance with ASC 815-40. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjusts the instruments to fair value at each reporting period. The liabilities are subject to remeasurement at each balance sheet date until exercised, and any change in fair value is recognized in the Company’s statement of operations. The fair value of warrants issued by the Company in connection with the IPO and Private Placement has been estimated using Monte Carlo simulations at each measurement date.
11
FOREST ROAD ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Fair Value of Financial Instruments
The fair value of the Company’s assets and liabilities, which qualify as financial instruments under the Financial Accounting Standards Board (“FASB”) ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet.
Income Taxes
The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.
ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.
12
FOREST ROAD ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Recent Accounting Standards
Managementlitigation from time to time in the ordinary course of business. Such claims typically involve its products, intellectual property, and relationships with suppliers, customers, distributors, employees, and others. Contingent liabilities are recorded when it is both probable that a loss has occurred and the amount of the loss can be reasonable estimated. Although it is not possible to predict how litigation and other claims will be resolved, the Company does not believe that any recently issued, but not effective, accounting standards, if currently adopted, wouldidentified claims or litigation matters will have a material adverse effect on the Company’s unaudited condensedits consolidated financial statements.
Note 3 — Initialposition or results of operations.
On November 30, 2020, the Company sold 30,000,000 Units at a priceWarrants and 5,333,333 Private Placement warrants outstanding.
Note 4 — Private Placement
Simultaneously with the closing of the IPO, the Sponsor purchased an aggregate of 5,333,333 Private Placement Warrants, at a price of $1.50 per unit, for an aggregate purchase price of $8,000,000. A portion of the proceeds from the Private Placement Warrants was added to the net proceeds from the IPO held in the Trust Account. Each Private Placement Warrant is exercisable to purchase one share of Class A common stock at $11.50 per share. A portion of the proceeds from the Private Placement Warrants will be added to the proceeds from the IPO to be held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law), and the Private Placement Warrants will expire worthless.
13
FOREST ROAD ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 5 — Related Party Transactions
Founder Shares
On September 29, 2020, the Sponsor paid $25,000 to cover certain offering costs of the Company in consideration of 7,187,500 shares of the Company’s Class B common stock (the “Founder Shares”).adjustments. The Founder Shares included an aggregate of up to 937,500 shares subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment option was not exercised in full. On November 24, 2020, as part of an upsizing of the IPO, the Sponsor was issued an additional 316,250 Founder Shares by the Company, resulting in a increase in the total number of shares of Class B common stock outstanding from 7,187,500 to 7,503,750 (of which 978,750 were subject to surrender for no consideration depending on the extent to which the underwriters exercised their over-allotment option). On November 30, 2020, the underwriters partially exercised their over-allotment option and forfeited the remaining over-allotment option, hence, 975,000 Founder Shares were no longer subject to forfeiture and 3,750 Founder Shares were forfeited, resulting in an aggregate of 7,500,000 Founder Shares outstanding at March 31, 2021 and December 31, 2020.
Promissory Note — Related Party
The Sponsor had agreed to loan the Company an aggregate of up to $300,000 to be used for the payment of costs related to the IPO. The promissory note was non-interest bearing, unsecured and was due on the earlier of June 30, 2021 and the closing of the IPO. The promissory note was paid in full out of the IPO proceeds on November 30, 2020, As of March 31, 2021 and December 31, 2020, there was no balance outstanding under the promissory note.
Administrative Service Fee
The Company has agreed, commencing on the effective date of the IPO through the earlier of the Company’s consummation of a Business Combination or its liquidation, to pay an affiliate of the Sponsor a monthly fee of $10,000 for office space, administrative and support services. Upon completion of the initial Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. For the three months ended March 31, 2020, the Company has paid $30,000 of administrative fees.
Related Party Loans
In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor may, but is not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company may repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans may be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company 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, other than the interest on such proceeds that may be released for working capital purposes. 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. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $1.50 per warrant. The warrants would be identical to the Private Placement Warrants. As of March 31, 2021 and December 31, 2020, no Working Capital Loans were outstanding.
14
FOREST ROAD ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 6 — Commitments & Contingencies
Registration Rights
The holders of the Founder Shares, Private Placement Warrants, and warrants that may be issued upon conversion of Working Capital Loans (and any shares of common stock issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) are entitled to registration rights pursuant to a registration rights agreement signed on the effective date of the IPO requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to shares of Class A common stock). The holders of these securities will be entitled to make up to three demands, excluding short-form registration demands, that the Company register such securities. In addition, the holders will have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriters Agreement
On November 30, 2020, the underwriters were paid a cash underwriting fee of 2% of the gross proceeds of the IPO, totaling $6,000,000. In addition, $0.35 per unit, or approximately $10,500,000 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 the Company completes a Business Combination, subject to the terms of the underwriting agreement.
Note 7 — Warrants
Public Warrants may only be exercised for a whole number of shares.shares of Class A Common Stock. No fractional warrantsshares will be issued upon separationexercise of the Units and only whole warrants will trade.warrants. The Public Warrants will become exercisable on the later of (a) 12 months from the closing of the IPO and (b)November 30, days after the completion of a Business Combination. The Company will not be obligated to deliver any shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the Class A common stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to2021, provided that the Company satisfying its obligationshas an effective registration statement.
15
FOREST ROAD ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Redemption of warrants for cash.
as described above unless an effective registration statement under the Securities Act covering the Class A Common Stock issuable upon exercise of the warrants is effective and a current prospectus relating to those Class A Common Stock is available throughout the
Note 8 — Stockholder’sissuance of the Public and Private Placement Warrants of $5.3 million were also recorded as a component of change in fair value of warrant liabilities in the unaudited condensed consolidated statements of operations, resulting in a net change in fair value of warrant liabilities of $5.4 million.
Preferred Stock — The Company is authorized to issue a total
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.
Class B Common Stock — The Company is authorized to issue a total
Holders of Class A common stock and Class B common stock will vote together as a single class on all matters submitted to a vote of stockholders except as required by law. The shares of Class B common stock will automatically convertconverted into
Unrealized Gain (Loss) on Derivatives | Foreign Currency Translation Adjustment | Total | ||||||||||
Balances at December 31, 2019 | $ | (99 | ) | $ | 111 | $ | 12 | |||||
Other comprehensive income (loss) before reclassifications | 246 | (327 | ) | (81 | ) | |||||||
Amounts reclassified from accumulated other comprehensive income (loss) | (47 | ) | — | (47 | ) | |||||||
Tax effect | (53 | ) | — | (53 | ) | |||||||
Balances at June 30, 2020 | $ | 47 | $ | (216 | ) | $ | (169 | ) | ||||
Balances at December 31, 2020 | $ | (246 | ) | $ | 44 | $ | (202 | ) | ||||
Other comprehensive income (loss) before reclassifications | (170 | ) | 54 | (116 | ) | |||||||
Amounts reclassified from accumulated other comprehensive income (loss) | 339 | — | 339 | |||||||||
Tax effect | (38 | ) | — | (38 | ) | |||||||
Balances at June 30, 2021 | $ | (115 | ) | $ | 98 | $ | (17 | ) | ||||
FOREST ROAD ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
Note 9 — Fair Value Measurements
Fair value is definedactivity under the plans are as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tierfollows:
Options Outstanding | ||||||||||||
Number of Options | Weighted- Average Exercise Price (per option) | Weighted- Average Remaining Contractual Term (in years) | ||||||||||
Outstanding at December 31, 2020 (as previously reported) | 10,170,288 | $ | 7.04 | 5.70 | ||||||||
Conversion of awards due to recapitalization | 23,998,437 | (4.94 | ) | |||||||||
Outstanding at December 31, 2020, after effect of reverse acquisition | 34,168,725 | 2.10 | ||||||||||
Granted | 890,300 | 9.65 | ||||||||||
Exercised | — | — | ||||||||||
Forfeited | (470,505 | ) | 2.48 | |||||||||
Outstanding at June 30, 2021 | 34,588,520 | $ | 2.29 | 5.28 | ||||||||
Exercisable at June 30, 2021 | 23,444,367 | $ | 1.88 | 3.89 | ||||||||
At March 31, 2021, there were 10,000,000 Public Warrants and 5,333,333 Private Placement Warrants outstanding.
date of grant is estimated using a Black-Scholes option-pricing model. The following table presents information aboutsummarizes the Company’s assets that are measured at fair value on a recurring basis at March 31, 2021 and indicatesassumptions used to determine the fair value hierarchyof option grants:
Six Months Ended June 30, | ||||||||
2021 | 2020 | |||||||
Risk-free rate | 0.7 | % | 0.5 | % | ||||
Dividend yield rate | 0.0 | % | 0.0 | % | ||||
Volatility | 53.9 | % | 55.0 | % | ||||
Expected term (in years) | 6.23 | 6.23 | ||||||
Weighted-average exercise price | $ | 9.65 | $ | 2.52 | ||||
| March 31, | Quoted Prices In Active Markets | Significant Other Observable Inputs | Significant Other Unobservable Inputs | |||||||||||||
| 2021 | (Level 1) | (Level 2) | (Level 3) | |||||||||||||
| Description | ||||||||||||||||
| Warrant Liability – Public Warrants | $ | 26,900,000 | $ | 26,900,000 | $ | - | $ | - | ||||||||
| Warrant Liability – Private Warrants | $ | 18,705,664 | $ | - | $ | - | $ | 18,705,664 | ||||||||
| $ | 45,605,664 | $ | 26,900,000 | $ | - | $ | 18,705,664 | |||||||||
17
FOREST ROAD ACQUISITION CORP.
NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
The Company utilizes a Monte Carlo simulation model to value the warrants at each reporting period, with changes in fair value recognized in the statement of operations. The estimated fair value of the warrant liability is determined using Level 3 inputs. Inherent in a binomial options pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its shares of common stock based on historical volatility that matches the expected remaining life of the warrants.option grant agreements. The risk-free interest rate isrates are based on the U.S. Treasury zero-coupon yield curve onrates as of the grant datedates for a maturity similarthe expected terms of the options. Given the lack of public market for the Company’s common units prior to the expected remaining life ofBusiness Combination and minimal history as a public company subsequent to the warrants. The expected life ofBusiness Combination, the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate isprice volatilities represent calculated values based on the historical rate,price volatilities of publicly traded companies within the Company’s industry group over the options’ expected terms. The expected terms of the options granted were estimated using the simplified method by taking an average of the vesting periods and the original contractual terms. Prior to the Business Combination, the exercise prices represent the estimated fair values of one common unit of the Company’s equity on the grant dates. Subsequent to the Business Combination, the Company’s
Number of Options | Weighted- Average Grant Date Fair Value (per option) | |||||||
Unvested at December 31, 2020 (as previously reported) | 3,701,114 | $ | 4.34 | |||||
Conversion of awards due to recapitalization | 8,733,309 | (3.05 | ) | |||||
Unvested at December 31, 2020, after effect of reverse acquisition | 12,434,423 | 1.29 | ||||||
Granted | 890,300 | 4.91 | ||||||
Vested | (1,710,066 | ) | 1.29 | |||||
Forfeited | (470,504 | ) | 1.19 | |||||
Unvested at June 30, 2021 | 11,144,153 | $ | 1.58 | |||||
The aforementioned warrant liabilities are not subject to qualified hedge accounting.
Transfers to/from Levels 1, 2 and 3 arewarrants will be recognized atover the end of the reporting period. There were no transfers between levelsrequisite service period, which is
Three Months Ended��June 30, | Six Months Ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Cost of revenue | $ | 91 | $ | 50 | $ | 182 | $ | 106 | ||||||||
Selling and marketing | 1,616 | 265 | 3,333 | 393 | ||||||||||||
Enterprise technology and development | 357 | 306 | 663 | 594 | ||||||||||||
General and administrative | 458 | 392 | 917 | 815 | ||||||||||||
Total equity-based compensation | $ | 2,522 | $ | 1,013 | $ | 5,095 | $ | 1,908 | ||||||||
Company’s outstanding foreign exchange options was $24.5 million and $34.0 million, respectively. There were 0outstanding forward contracts as of June 30, 2021 and December 31, 2020.
| As of March 31, 2020 | As of December 31, 2020 | |||||||
| Stock price | $ | 10.12 | $ | 10.50 | ||||
| Strike price | $ | 11.50 | $ | 11.50 | ||||
| Term (in years) | 5.0 | 5.0 | ||||||
| Volatility | 43.3 | % | 31.3 | % | ||||
| Risk-free rate | 0.92 | % | 0.44 | % | ||||
| Dividend yield | 0.0 | % | 0.0 | % | ||||
Note 10 — Subsequent Events
of the Company’s derivative instruments which are included in other current assets in the unaudited condensed consolidated balance sheets (in thousands):
June 30, | December 31, | |||||||
2021 | 2020 | |||||||
Derivatives designated as hedging instruments | $ | 18 | $ | 134 | ||||
Derivatives not designated as hedging instruments | 4 | 30 | ||||||
Total derivative assets | $ | 22 | $ | 164 | ||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||
Financial Statement Line Item | 2021 | 2020 | 2021 | 2020 | ||||||||||||||
Unrealized (losses) gains | Other comprehensive income (loss) | $ | (78 | ) | $ | (308 | ) | $ | (170 | ) | $ | 246 | ||||||
(Losses) gains reclassified from accumulated (loss) into net loss | Cost of revenue | (65 | ) | 22 | (138 | ) | 13 | |||||||||||
General and administrative | (107 | ) | 51 | (201 | ) | 34 | ||||||||||||
Total amounts reclassified | (172 | ) | 73 | (339 | ) | 47 | ||||||||||||
(Losses) gains recognized derivatives not designated as hedging instruments | Cost of revenue | (20 | ) | (73 | ) | (41 | ) | 31 | ||||||||||
19. | Income Taxes |
20. | Earnings per Share |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Numerator: | ||||||||||||||||
Net loss available to common shareholders-basic and diluted | $ | (12,440 | ) | $ | (10,003 | ) | $ | (42,498 | ) | $ | (18,331 | ) | ||||
Denominator: | ||||||||||||||||
Weighted-average common shares outstanding- basic and diluted | 247,062,134 | 238,142,972 | 245,048,715 | 238,142,972 | ||||||||||||
Net loss per common shareholder, basic | $ | (0.05 | ) | $ | (0.04 | ) | $ | (0.17 | ) | $ | (0.08 | ) | ||||
Net loss per common shareholder, diluted | $ | (0.05 | ) | $ | (0.04 | ) | $ | (0.17 | ) | $ | (0.08 | ) | ||||
June 30, | ||||||||
2021 | 2020 | |||||||
Options | 34,588,520 | 33,389,285 | ||||||
Compensati o n Warrants | 3,980,656 | — | ||||||
Public and Private Placement Warrants | 15,333,333 | — | ||||||
Forest Road Earn-out Shares | 3,750,000 | — | ||||||
| 57,652,509 | 33,389,285 | |||||||
21. | Related Party Transactions |
22. | Segment Information |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Beachbody: | ||||||||||||||||
Revenue | $ | 218,607 | $ | 216,370 | $ | 440,357 | $ | 384,733 | ||||||||
Contribution | 49,545 | 53,623 | 96,020 | 104,317 | ||||||||||||
Other: | ||||||||||||||||
Revenue | 4,501 | 2,114 | 8,970 | 3,087 | ||||||||||||
Contribution | (6,411 | ) | (8,520 | ) | (11,547 | ) | (12,642 | ) | ||||||||
Consolidated: | ||||||||||||||||
Revenue | $ | 223,108 | $ | 218,484 | $ | 449,327 | $ | 387,820 | ||||||||
Contribution | 43,134 | 45,103 | 84,473 | 91,675 | ||||||||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Consolidated contribution | $ | 43,134 | $ | 45,103 | $ | 84,473 | $ | 91,675 | ||||||||
Amounts not directly related to segments: | ||||||||||||||||
Cost of revenue (1) | 8,118 | 6,712 | 15,960 | 13,447 | ||||||||||||
Selling and marketing (2) | 20,872 | 13,962 | 40,963 | 27,536 | ||||||||||||
Enterprise technology and development | 26,949 | 22,373 | 54,038 | 43,706 | ||||||||||||
General and administrative | 17,231 | 14,522 | 35,177 | 29,706 | ||||||||||||
Change in fair value of warrant liabilities | (5,390 | ) | — | (5,390 | ) | — | ||||||||||
Interest expense | 305 | 248 | 428 | 343 | ||||||||||||
Other income, net | (1,654 | ) | (34 | ) | (2,953 | ) | (442 | ) | ||||||||
Loss before income taxes | $ | (23,297 | ) | $ | (12,680 | ) | $ | (53,750 | ) | $ | (22,621 | ) | ||||
| (1) | Cost of revenue not directly related to segments includes certain allocated costs related to management, facilities, and personnel-related expenses associated with quality assurance and supply chain logistics. Depreciation of certain software and production equipment and amortization of formulae and technology-based intangible assets are also included in this line. |
| (2) | Selling and marketing not directly related to segments includes indirect selling and marketing expenses and certain allocated personnel-related expenses for employees and consultants. Depreciation of certain software and amortization of contract-based intangible assets are also included in this line. |
23. | Subsequent Events |
ReferencesOperations.
(in thousands) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Net loss | $ | (12,440 | ) | $ | (10,003 | ) | $ | (42,498 | ) | $ | (18,331 | ) | ||||
Adjusted for | ||||||||||||||||
Depreciation and amortization | 12,215 | 10,534 | 25,941 | 20,678 | ||||||||||||
Amortization of capitalized cloud computing implementation costs | 168 | — | 336 | — | ||||||||||||
Amortization of content assets | 3,302 | 1,715 | 6,119 | 3,196 | ||||||||||||
Interest expense | 305 | 248 | 428 | 343 | ||||||||||||
Income tax benefit | (10,857 | ) | (2,677 | ) | (11,252 | ) | (4,290 | ) | ||||||||
Equity-based compensation | 2,522 | 1,013 | 5,095 | 1,908 | ||||||||||||
Transaction costs | 1,509 | — | 2,142 | — | ||||||||||||
Other adjustment items (1) | 6,038 | — | 6,038 | — | ||||||||||||
Non-operating costs (2) | (7,147 | ) | 60 | (8,478 | ) | 54 | ||||||||||
Adjusted EBITDA | $ | (4,385 | ) | $ | 890 | $ | (16,129 | ) | $ | 3,558 | ||||||
| (1) | Other adjustment items includes incremental costs associated with COVID-19. |
| (2) | Non-operating primarily includes the change in fair value of warrant liabilities, interest income and gain on investment in the Myx convertible instrument. |
As of June 30, | ||||||||
2021 | 2020 | |||||||
Digital Subscriptions (millions) | 2.7 | 2.4 | ||||||
Nutritional Subscriptions (millions) | 0.4 | 0.5 | ||||||
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Average Digital Retention | 94.9 | % | 96.3 | % | 95.4 | % | 95.6 | % | ||||||||
Total Streams (millions) | 44.5 | 55.5 | 100.4 | 88.7 | ||||||||||||
DAU/MAU | 31.9 | % | 33.2 | % | 33.5 | % | 31.6 | % | ||||||||
Revenue (millions) | $ | 223.1 | $ | 218.5 | $ | 449.3 | $ | 387.8 | ||||||||
Gross profit (millions) | $ | 154.3 | $ | 159.1 | $ | 312.4 | $ | 279.6 | ||||||||
Gross margin | 69 | % | 73 | % | 70 | % | 72 | % | ||||||||
Net loss (millions) | $ | (12.4 | ) | $ | (10.0 | ) | $ | (42.5 | ) | $ | (18.3 | ) | ||||
Adjusted EBITDA (millions) (1) | $ | (4.4 | ) | $ | 0.9 | $ | (16.1 | ) | $ | 3.6 | ||||||
| (1) | Please see the section titled “—Non-GAAP Information” for a reconciliation of net loss to Adjusted EBITDA and an explanation for why we consider Adjusted EBITDA to be a helpful metric for investors. |
(in thousands) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2021 | 2020 | 2021 | 2020 | |||||||||||||
Revenue: | ||||||||||||||||
Digital | $ | 94,325 | $ | 78,357 | $ | 189,475 | $ | 140,882 | ||||||||
Nutrition and other | 128,783 | 140,127 | 259,852 | 246,938 | ||||||||||||
Total revenue | 223,108 | 218,484 | 449,327 | 387,820 | ||||||||||||
Cost of revenue: | ||||||||||||||||
Digital | 11,612 | 9,292 | 22,734 | 17,664 | ||||||||||||
Nutrition and other | 57,158 | 50,097 | 114,153 | 90,572 | ||||||||||||
Total cost of revenue | 68,770 | 59,389 | 136,887 | 108,236 | ||||||||||||
Gross profit | 154,338 | 159,095 | 312,440 | 279,584 | ||||||||||||
Operating expenses: | ||||||||||||||||
Selling and marketing | 140,194 | 134,666 | 284,890 | 228,892 | ||||||||||||
Enterprise technology and development | 26,949 | 22,373 | 54,038 | 43,706 | ||||||||||||
General and administrative | 17,231 | 14,522 | 35,177 | 29,706 | ||||||||||||
Total operating expenses | 184,374 | 171,561 | 374,105 | 302,304 | ||||||||||||
Operating loss | (30,036 | ) | (12,466 | ) | (61,665 | ) | (22,720 | ) | ||||||||
Change in fair value of warrant liabilities | 5,390 | — | 5,390 | — | ||||||||||||
Interest expense | (305 | ) | (248 | ) | (428 | ) | (343 | ) | ||||||||
Other income, net | 1,654 | 34 | 2,953 | 442 | ||||||||||||
Loss before income taxes | (23,297 | ) | (12,680 | ) | (53,750 | ) | (22,621 | ) | ||||||||
Income tax benefit (provision) | 10,857 | 2,677 | 11,252 | 4,290 | ||||||||||||
Net loss | $ | (12,440 | ) | $ | (10,003 | ) | $ | (42,498 | ) | $ | (18,331 | ) | ||||
Three Months Ended June 30, | ||||||||||||||||
2021 | 2020 | $ Change | % Change | |||||||||||||
(dollars in thousands) | ||||||||||||||||
Revenue | ||||||||||||||||
Digital | $ | 94,325 | $ | 78,357 | $ | 15,968 | 20 | % | ||||||||
Nutrition and other | 128,783 | 140,127 | (11,344 | ) | (8 | %) | ||||||||||
Total revenue | $ | 223,108 | $ | 218,484 | $ | 4,624 | 2 | % | ||||||||
Six Months Ended June 30, | ||||||||||||||||
2021 | 2020 | $ Change | % Change | |||||||||||||
(dollars in thousands) | ||||||||||||||||
Revenue | ||||||||||||||||
Digital | $ | 189,475 | $ | 140,882 | $ | 48,593 | 34 | % | ||||||||
Nutrition and other | 259,852 | 246,938 | 12,914 | 5 | % | |||||||||||
Total revenue | $ | 449,327 | $ | 387,820 | $ | 61,507 | 16 | % | ||||||||
Three Months Ended June 30, | ||||||||||||||||
2021 | 2020 | $ Change | % Change | |||||||||||||
(dollars in thousands) | ||||||||||||||||
Cost of revenue | ||||||||||||||||
Digital | $ | 11,612 | $ | 9,292 | $ | 2,320 | 25 | % | ||||||||
Nutrition and other | 57,158 | 50,097 | 7,061 | 14 | % | |||||||||||
Total cost of revenue | $ | 68,770 | $ | 59,389 | $ | 9,381 | 16 | % | ||||||||
Gross profit | ||||||||||||||||
Digital | $ | 82,713 | $ | 69,065 | $ | 13,648 | 20 | % | ||||||||
Nutrition and other | 71,625 | 90,030 | (18,405 | ) | (20 | %) | ||||||||||
Total gross profit | $ | 154,338 | $ | 159,095 | $ | (4,757 | ) | (3 | %) | |||||||
Gross margin | ||||||||||||||||
Digital | 88 | % | 88 | % | ||||||||||||
Nutrition and other | 56 | % | 64 | % | ||||||||||||
Six Months Ended June 30, | ||||||||||||||||
2021 | 2020 | $ Change | % Change | |||||||||||||
(dollars in thousands) | ||||||||||||||||
Cost of revenue | ||||||||||||||||
Digital | $ | 22,734 | $ | 17,664 | $ | 5,070 | 29 | % | ||||||||
Nutrition and other | 114,153 | 90,572 | 23,581 | 26 | % | |||||||||||
Total cost of revenue | $ | 136,887 | $ | 108,236 | $ | 28,651 | 26 | % | ||||||||
Gross profit | ||||||||||||||||
Digital | $ | 166,741 | $ | 123,218 | $ | 43,523 | 35 | % | ||||||||
Nutrition and other | 145,699 | 156,366 | (10,667 | ) | (7 | %) | ||||||||||
Total gross profit | $ | 312,440 | $ | 279,584 | $ | 32,856 | 12 | % | ||||||||
Gross margin | ||||||||||||||||
Digital | 88 | % | 87 | % | ||||||||||||
Nutrition and other | 56 | % | 63 | % | ||||||||||||
Three Months Ended June 30, | ||||||||||||||||
2021 | 2020 | $ Change | % Change | |||||||||||||
(dollars in thousands) | ||||||||||||||||
Selling and marketing | $ | 140,194 | $ | 134,666 | $ | 5,528 | 4 | % | ||||||||
As a percentage of total revenue | 62.8 | % | 61.6 | % | ||||||||||||
Six Months Ended June 30, | ||||||||||||||||
2021 | 2020 | $ Change | % Change | |||||||||||||
(dollars in thousands) | ||||||||||||||||
Selling and marketing | $ | 284,890 | $ | 228,892 | $ | 55,998 | 24 | % | ||||||||
As a percentage of total revenue | 63.4 | % | 59.0 | % | ||||||||||||
Three Months Ended June 30, | ||||||||||||||||
2021 | 2020 | $ Change | % Change | |||||||||||||
(dollars in thousands) | ||||||||||||||||
Enterprise technology and development | $ | 26,949 | $ | 22,373 | $ | 4,576 | 20 | % | ||||||||
As a percentage of total revenue | 12.1 | % | 10.2 | % | ||||||||||||
Six Months Ended June 30, | ||||||||||||||||
2021 | 2020 | $ Change | % Change | |||||||||||||
(dollars in thousands) | ||||||||||||||||
Enterprise technology and development | $ | 54,038 | $ | 43,706 | $ | 10,332 | 24 | % | ||||||||
As a percentage of total revenue | 12.0 | % | 11.3 | % | ||||||||||||
Three Months Ended June 30, | ||||||||||||||||
2021 | 2020 | $ Change | % Change | |||||||||||||
(dollars in thousands) | ||||||||||||||||
General and administrative | $ | 17,231 | $ | 14,522 | $ | 2,709 | 19 | % | ||||||||
As a percentage of total revenue | 7.7 | % | 6.6 | % | ||||||||||||
Six Months Ended June 30, | ||||||||||||||||
2021 | 2020 | $ Change | % Change | |||||||||||||
(dollars in thousands) | ||||||||||||||||
General and administrative | $ | 35,177 | $ | 29,706 | $ | 5,471 | 18 | % | ||||||||
As a percentage of total revenue | 7.8 | % | 7.7 | % | ||||||||||||
Three Months Ended June 30, | ||||||||||||||||
2021 | 2020 | $ Change | % Change | |||||||||||||
(dollars in thousands) | ||||||||||||||||
Change in fair value of warrant liabilities | $ | 5,390 | $ | — | $ | 5,390 | n/m | |||||||||
Interest expense | (305 | ) | (248 | ) | (57 | ) | -23 | % | ||||||||
Other income, net | 1,654 | 34 | 1,620 | 4765 | % | |||||||||||
Six Months Ended June 30, | ||||||||||||||||
2021 | 2020 | $ Change | % Change | |||||||||||||
(dollars in thousands) | ||||||||||||||||
Change in fair value of warrant liabilities | $ | 5,390 | $ | — | $ | 5,390 | n/m | |||||||||
Interest expense | (428 | ) | (343 | ) | (85 | ) | -25 | % | ||||||||
Other income, net | 2,953 | 442 | 2,511 | 568 | % | |||||||||||
Three Months Ended June 30, | ||||||||||||||||
2021 | 2020 | $ Change | % Change | |||||||||||||
(dollars in thousands) | ||||||||||||||||
Income tax benefit | $ | 10,857 | $ | 2,677 | $ | 8,180 | 306 | % | ||||||||
Six Months Ended June 30, | ||||||||||||||||
2021 | 2020 | $ Change | % Change | |||||||||||||
(dollars in thousands) | ||||||||||||||||
Income tax benefit | $ | 11,252 | $ | 4,290 | $ | 6,962 | 162 | % | ||||||||
Six Months Ended June 30, | ||||||||
2021 | 2020 | |||||||
(dollars in thousands) | ||||||||
Net cash provided by (used in) operating activities | $ | (25,487 | ) | $ | 44,046 | |||
Net cash used in investing activities | (74,480 | ) | (18,756 | ) | ||||
Net cash provided by financing activities | 389,775 | — | ||||||
Total | Less than 1 Year | 1-3 Years | 3-5 Years | More than 5 Years | ||||||||||||||||
| (in thousands) | ||||||||||||||||||||
Operating lease obligations | $ | 39,922 | $ | 4,343 | $ | 22,963 | $ | 12,616 | $ | — | ||||||||||
Finance lease obligations | 368 | 81 | 284 | 3 | — | |||||||||||||||
Noncancelable service and inventory purchase obligations | 135,364 | 124,020 | 8,844 | 2,500 | — | |||||||||||||||
Total | $ | 175,654 | $ | 128,444 | $ | 32,091 | $ | 15,119 | $ | — | ||||||||||
Cautionary Note Regarding Forward-Looking Statements
All statements other than statements of historical fact included in this report including, without limitation, statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. When used in this report, words such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar expressions, as they relate to us or the Company’s management, identify forward-looking statements. Such forward-looking statementsdisclosures. We
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Results of Operations and Known Trends or Future Events
We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities, those necessary to prepare for our initial public offering and identifying a target company for our initial business combination. We do not expect to generate any operating revenues until after completion of our initial business combination. We generate non-operating income in the form of interest income on cash and cash equivalents held in the trust account. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
We have neither engaged in any operations nor generated any revenues to date. Our only activities since inception have been organizational activities, those necessary to prepare for our initial public offering and identifying a target company for our initial business combination. We do not expect to generate any operating revenues until after completion of our initial business combination. We generate non-operating income in the form of interest income on cash and cash equivalents held in the trust account. We incur expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as expenses as we conduct due diligence on prospective business combination candidates.
For the three months ended March 31, 2021, we had a net loss of $16,590,561. We incurred $2,724,770 of operating costs, consisting of public company operating expenses and costs related to preparing for the initial business combination. We had interest income of $20 of interest on the bank account and investment income of $4,432 from marketable securities held in trust account. For the three months ended March 31, 2021, the change in fair value of warrants resulted in an increase in the liabilityconsideration transferred over the fair value of approximately $13,870,243.
Liquiditythe underlying identifiable assets and Capital Resources
As of March 31, 2021, we had cash outside the trust account of $730,435 available for working capital needs. All remaining cash held in the trust account are generally unavailable for the Company’s use, prior to an initial business combination, and is restricted for use eitherliabilities acquired in a business combinationcombination. Goodwill and intangible assets deemed to have an indefinite life are not amortized, but instead are assessed for impairment annually in the fourth quarter as of October 1. Additionally, if an event or to redeem common stock.
Through March 31, 2021,change in circumstances occurs that would more likely than not reduce the Company’s liquidity needs were satisfied through receipt of $25,000 from the salefair value of the founder shares, advances fromreporting unit below its carrying value, we would evaluate goodwill and other intangibles at that time.
The Company anticipatesevents or circumstances lead to a determination that it is more likely than not that the $730,735 of cash held outsidefair value of the trust account asreporting unit is less than its carrying amount. If, after assessing the totality of March 31, 2021, will be sufficient to allow the Company to operate for at least the next 12 months, assumingevents and circumstances, we conclude that a business combinationit is not consummated duringmore likely than not that time. Until consummationthe fair value of our business combination, a reporting unit is less than its carrying amount, then performing
The Company does not believe it will need to raise additional funds in order to meet the expenditures required for operating its business. However, if the Company’s estimates of the costs of undertaking in-depth due diligence and negotiating business combinationestimated fair value is less than the actual amount necessarycarrying value, an impairment charge will be recorded to do so,reduce the Company mayreporting unit to fair value.
Derivative Warrant Liabilities
Black-Scholes option-pricing model. We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815-15. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period.
We issued an aggregate of 15,333,333 warrants in connection with our initial public offering and private placement, which are recognized as derivative liabilities in accordance with ASC 815-40. Accordingly, we recognize the warrantsexpense on a straight-line basis over the requisite service period, and forfeitures are accounted for as liabilities atthey 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 unaudited condensed consolidated statements of operations.
Not required
Procedures.
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
To remediate the material weakness pertaining to the presentation of the Company’s warrants as equity instead of liability, as disclosed in the Company’s Annual Report on Form 10-K, as amended on May 5, 2021, for the period ended December 31, 2021, the Company has reviewed its internal controls and enhanced the supervisory review of accounting procedures incovered by this financial reporting area.
report.
During the most recently completed fiscal quarter ended March 31, 2021, there was
a timely basis and our consolidated financial statements may be materially misstated. Effective internal control is necessary for us to produce reliable financial reports and is important to prevent fraud.
Use of Proceeds
On November 30, 2020, we consummated
SimultaneouslyCurrent Report on Form 8-K filed with the closingSEC on July 1, 2021, there were no sales of our initial public offering, we completedunregistered equity securities during the private sale of an aggregate of 5,333,333 private placement warrants to Forest Road Acquisition Sponsor LLC, our sponsor, at a purchase price of $1.50 per private placement warrant, generating gross proceeds to us of $8,000,000. This issuance of private placement warrants was be made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.
A total of $300,000,000, comprised of $292,000,000 of the proceeds from our initial public offering (which amount includes $10,500,000 of the underwriters’ deferred discount) and $8,000,000 of the proceeds of the sale of the private placement warrants, was placed in a U.S.-based trust account maintained by Continental Stock Transfer & Trust Company, acting as trustee. The proceeds held in the trust account are invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations.
There has been no material change in the planned use of the proceeds from the Initial Public Offering and Private Placement as is described in the Company’s final prospectus related to the Initial Public Offering.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not Applicable.
None.
(in thousands) | Three Months Ended | |||||||||||||||||||||||
March 31, | June 30, | September 30, | December 31, | March 31, | June 30, | |||||||||||||||||||
2020 | 2020 | 2020 | 2020 | �� | 2021 | 2021 | ||||||||||||||||||
(unaudited) | ||||||||||||||||||||||||
Revenue: | ||||||||||||||||||||||||
Digital | $ | 62,525 | $ | 78,357 | $ | 99,082 | $ | 94,841 | $ | 95,150 | $ | 94,325 | ||||||||||||
Nutrition and other | 106,811 | 140,127 | 152,397 | 129,442 | 131,069 | 128,783 | ||||||||||||||||||
Total revenue (1) | 169,336 | 218,484 | 251,479 | 224,283 | 226,219 | 223,108 | ||||||||||||||||||
Cost of revenue: | ||||||||||||||||||||||||
Digital | 8,372 | 9,292 | 9,843 | 10,778 | 11,122 | 11,612 | ||||||||||||||||||
Nutrition and other | 40,475 | 50,097 | 61,082 | 59,768 | 56,995 | 57,158 | ||||||||||||||||||
Total cost of revenue | 48,847 | 59,389 | 70,925 | 70,546 | 68,117 | 68,770 | ||||||||||||||||||
Gross profit | 120,489 | 159,095 | 180,554 | 153,737 | 158,102 | 154,338 | ||||||||||||||||||
Operating expenses: | ||||||||||||||||||||||||
Selling and marketing | 94,226 | 134,666 | 123,980 | 111,128 | 144,696 | 140,194 | ||||||||||||||||||
Enterprise technology and development | 21,333 | 22,373 | 23,852 | 25,478 | 27,089 | 26,949 | ||||||||||||||||||
General and administrative | 15,184 | 14,522 | 16,523 | 18,589 | 17,946 | 17,231 | ||||||||||||||||||
Restructuring gain | — | — | (1,677 | ) | — | — | — | |||||||||||||||||
Total operating expenses | 130,743 | 171,561 | 162,678 | 155,195 | 189,731 | 184,374 | ||||||||||||||||||
Operating income (loss) | (10,254 | ) | (12,466 | ) | 17,876 | (1,458 | ) | (31,629 | ) | (30,036 | ) | |||||||||||||
Change in fair value of warrant liabilities | — | — | — | — | — | 5,390 | ||||||||||||||||||
Interest expense | (95 | ) | (248 | ) | (90 | ) | (95 | ) | (123 | ) | (305 | ) | ||||||||||||
Other income, net | 408 | 34 | 114 | 111 | 1,299 | 1,654 | ||||||||||||||||||
Income (loss) before income taxes | (9,941 | ) | (12,680 | ) | 17,900 | (1,442 | ) | (30,453 | ) | (23,297 | ) | |||||||||||||
Income tax benefit (provision) | 1,613 | 2,677 | (4,129 | ) | (15,430 | ) | 395 | 10,857 | ||||||||||||||||
Net income (loss) | $ | (8,328 | ) | $ | (10,003 | ) | $ | 13,771 | $ | (16,872 | ) | $ | (30,058 | ) | $ | (12,440 | ) | |||||||
Adjusted for: | ||||||||||||||||||||||||
Depreciation and amortization | 10,144 | 10,534 | 11,203 | 12,376 | 13,726 | 12,215 | ||||||||||||||||||
Amortization of capitalized cloud computing implementation costs | — | — | — | 186 | 168 | 168 | ||||||||||||||||||
Amortization of content assets | 1,481 | 1,715 | 1,907 | 2,382 | 2,817 | 3,302 | ||||||||||||||||||
Interest expense | 95 | 248 | 89 | 95 | 123 | 305 | ||||||||||||||||||
Income tax provision (benefit) | (1,613 | ) | (2,677 | ) | 4,129 | 15,430 | (395 | ) | (10,857 | ) | ||||||||||||||
Equity-based compensation | 895 | 1,013 | 1,261 | 2,229 | 2,573 | 2,522 | ||||||||||||||||||
Transaction costs | — | — | 612 | 855 | 633 | 1,509 | ||||||||||||||||||
Restructuring gain | — | — | (1,677 | ) | — | — | — | |||||||||||||||||
Other adjustment items | — | — | — | — | — | 6,038 | ||||||||||||||||||
Non-operating costs | (6 | ) | 60 | 77 | (151 | ) | (1,331 | ) | (7,147 | ) | ||||||||||||||
Adjusted EBITDA | $ | 2,668 | $ | 890 | $ | 31,372 | $ | 16,530 | $ | (11,744 | ) | $ | (4,385 | ) | ||||||||||
Myx revenue (1) | 647 | 2,307 | 9,124 | 17,592 | 17,038 | 14,265 | ||||||||||||||||||
Pro forma consolidated revenue (2) | 169,983 | 220,791 | 260,603 | 241,875 | 243,257 | 237,286 | ||||||||||||||||||
| (1) | Includes Myx revenue for the period from June 26, 2021 to |
| (2) | Reflects combined revenue as if Myx had been fully consolidated in the results presented above. |
In accordance with
| The Beachbody Company | ||||||
| Date: | By: | /s/ | ||||
| Carl Daikeler | ||||||
| Chief Executive Officer | ||||||
| (Principal Executive Officer) | ||||||
| Date: | By: | /s/ | ||||
| Sue Collyns | ||||||
| President and Chief Financial Officer | ||||||
| (Principal Financial | ||||||
23