| Item 1.01 | Entry into a Material Definitive Agreement. |
Financing Agreement Amendment
On July 24, 2023 (the “Closing Date”), The Beachbody Company, Inc. (the “Company”), Beachbody, LLC (the “Borrower”), certain subsidiaries of the Company, the lenders party thereto and Blue Torch Finance, LLC (“Blue Torch”), as collateral agent and as administrative agent, entered into that certain Amendment No. 2 to Financing Agreement (the “Second Amendment”), which amended the Company’s existing Financing Agreement, dated as of August 8, 2022 (as previously amended, the “Financing Agreement”), by and among the Company, the Borrower, the lenders party thereto from time to time and Blue Torch, as collateral agent and as administrative agent, which provided for a senior secured term loan facility in an original aggregate principal amount of $50.0 million (the “Credit Facility”).
The Second Amendment, among other things, amends certain terms of the Financing Agreement, including without limitation, to (i) amend the minimum revenue financial covenant to test revenue levels for each fiscal quarter on a standalone basis, and to adjust the minimum revenue levels to (A) $100.0 million, commencing with the fiscal quarter ended June 30, 2023, for each fiscal quarter ending on or prior to March 31, 2024 and (B) $120.0 million for each fiscal quarter ending thereafter and on or prior to December 31, 2025; (ii) amend the minimum liquidity financial covenant to adjust the minimum liquidity levels to (A) $20.0 million at all times from the Closing Date through March 31, 2024, and (B) $25.0 million at all times thereafter through the maturity of the Credit Facility; (iii) modify the maturity date from August 8, 2026 to February 8, 2026; and (iv) amend certain financial definitions, reporting covenants and other covenants thereunder.
In connection with the Second Amendment, on the Closing Date, the Borrower made a partial prepayment of the term loans under the Credit Facility in an aggregate principal amount of $15.0 million, together with accrued interest thereon and a related prepayment premium equal to $0.75 million.
The foregoing summary of the Second Amendment is qualified in its entirety by reference to the full text of the Second Amendment, which is filed as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.
Warrant Amendment
In connection with the Second Amendment, the Company also amended and restated the aggregate 4,716,756 warrants to purchase the Company’s Class A common stock, par value $0.0001 per share (“Class A Common Stock”), originally issued to affiliates of the lenders and Blue Torch (the “Blue Torch Warrants”). The Warrant Amendment amends the exercise price of the warrants from $1.85 per share of Class A Common Stock to $0.41 per share.
The foregoing summary of the Warrant Amendment is qualified in its entirety by reference to the full text of the form of Amended and Restated Warrant to Purchase Stock, which is filed as Exhibit 10.2 to this Current Report on Form 8-K and incorporated herein by reference.
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information contained in Item 1.01 to this Current Report on Form 8-K is incorporated herein by reference.
| Item 9.01. | Financial Statements and Exhibits. |
(d) Exhibits.
| ^ | Schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company will furnish copies of any such schedules and exhibits to the SEC upon request. |
