Beachbody Company, Inc. - Quarter Report: 2022 June (Form 10-Q)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022


☐	TRANSITION REPORT PURSUANT TO Section 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number: 001-39735

The Beachbody Company, Inc.

(Exact name of registrant as specified in its charter)


Delaware	85-3222090
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

400 Continental Blvd, Suite 400 El Segundo, California	90245
(Address of principal executive offices)	(Zip Code)

(310) 883-9000

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:


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 warrants, each whole warrant exercisable for one Class A common stock at an exercise price of $11.50	BODY WS	The New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated Filer ☐	Accelerated Filer ☒	Non-Accelerated Filer ☐	Smaller Reporting Company ☐	Emerging Growth Company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

There were 170,263,772 shares of the registrant’s Class A Common Stock, par value $0.0001 per share, and 141,250,310 shares of the registrant’s Class X Common Stock, par value $0.0001 per share, outstanding as of August 04, 2022.

Table of Contents


Part I.	Financial Information	3
Item 1.	Financial Statements	3
	Condensed Consolidated Balance Sheets	3
	Unaudited Condensed Consolidated Statements of Operations	4
	Unaudited Condensed Consolidated Statements of Comprehensive Loss	5
	Unaudited Condensed Consolidated Statements of Stockholders’ Equity	6
	Unaudited Condensed Consolidated Statements of Cash Flows	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	37
Item 4.	Controls and Procedures	37
Part II.	Other Information	38
Item 1.	Legal Proceedings	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 3.	Defaults Upon Senior Securities	38
Item 4.	Mine Safety Disclosures	38
Item 5.	Other Information	38
Item 6.	Exhibits	40
Signatures		41

PART I—FINANCIAL INFORMATION

Item 1. Financial Statements.

The Beachbody Company, Inc.

Condensed Consolidated Balance Sheets

(in thousands, except share and per share data)


	June 30,			December 31,
	2022			2021
	(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	57,060		$	104,054
Restricted cash		-			3,000
Inventory, net		72,271			132,730
Prepaid expenses		10,317			15,861
Other current assets		44,828			43,727
Total current assets		184,476			299,372
Property and equipment, net		92,301			113,098
Content assets, net		38,098			39,347
Goodwill and intangible assets, net		162,361			171,533
Other assets		12,803			14,262
Total assets	$	490,039		$	637,612
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	22,676		$	48,379
Accrued expenses		62,349			74,525
Deferred revenue		107,282			107,095
Other current liabilities		4,564			6,233
Total current liabilities		196,871			236,232
Deferred tax liabilities		2,031			3,165
Other liabilities		10,981			12,830
Total liabilities		209,883			252,227
Commitments and contingencies (Note 8)

Stockholders’ equity:
Preferred stock, $0.0001 par value; 100,000,000 shares authorized, none issued and outstanding at June 30, 2022 and December 31, 2021		—			—
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);
Class A: 170,263,772 and 168,333,463 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively;		17			17
Class X: 141,250,310 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively;		14			14
Class C: no shares issued and outstanding at June 30, 2022 and December 31, 2021		—			—
Additional paid-in capital		620,643			610,418
Accumulated other comprehensive loss		(75	)		(21	)
Accumulated deficit		(340,443	)		(225,043	)
Total stockholders’ equity		280,156			385,385
Total liabilities and stockholders’ equity	$	490,039		$	637,612

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

The Beachbody Company, Inc.

Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share data)


	Three months ended June 30,						Six months ended June 30,
	2022			2021			2022			2021

Revenue:
Digital	$	78,015		$	94,325		$	159,760		$	189,475
Connected fitness		10,605			10			30,118			10
Nutrition and other		90,516			128,773			188,180			259,842
Total revenue		179,136			223,108			378,058			449,327
Cost of revenue:
Digital		18,406			11,612			34,831			22,734
Connected fitness		31,459			156			76,165			156
Nutrition and other		42,002			57,002			86,776			113,997
Total cost of revenue		91,867			68,770			197,772			136,887
Gross profit		87,269			154,338			180,286			312,440
Operating expenses:
Selling and marketing		86,624			140,194			193,068			284,890
Enterprise technology and development		24,133			26,949			57,830			54,038
General and administrative		19,584			17,231			39,657			35,177
Restructuring		1,332			—			8,555			—
Total operating expenses		131,673			184,374			299,110			374,105
Operating loss		(44,404	)		(30,036	)		(118,824	)		(61,665	)
Other income (expense):
Change in fair value of warrant liabilities		2,070			5,390			2,334			5,390
Interest expense		(3	)		(305	)		(22	)		(428	)
Other income, net		189			1,654			125			2,953
Loss before income taxes		(42,148	)		(23,297	)		(116,387	)		(53,750	)
Income tax benefit		281			10,857			987			11,252
Net loss	$	(41,867	)	$	(12,440	)	$	(115,400	)	$	(42,498	)

Net loss per common share, basic and diluted	$	(0.14	)	$	(0.05	)	$	(0.38	)	$	(0.17	)
Weighted-average common shares outstanding, basic and diluted		307,205			247,062			306,786			245,049

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

The Beachbody Company, Inc.

Unaudited Condensed Consolidated Statements of Comprehensive Loss

(in thousands)


	Three months ended June 30,						Six months ended June 30,
	2022			2021			2022			2021

Net loss	$	(41,867	)	$	(12,440	)	$	(115,400	)	$	(42,498	)
Other comprehensive loss:
Change in fair value of derivative financial instruments, net of tax		35			(99	)		(150	)		(208	)
Reclassification of losses on derivative financial instruments included in net loss		74			172			143			339
Foreign currency translation adjustment		(51	)		12			(47	)		54
Total other comprehensive income (loss)		58			85			(54	)		185
Total comprehensive loss	$	(41,809	)	$	(12,355	)	$	(115,454	)	$	(42,313	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

The Beachbody Company, Inc.

Unaudited Condensed Consolidated Statements of Stockholders’ Equity

(in thousands)



							Accumulated			Retained
					Additional		Other			Earnings			Total
	Common Stock				Paid-In		Comprehensive			(Accumulated)			Stockholders’
	Shares		Amount		Capital		Loss			(Deficit)			Equity

Balances at December 31, 2020		243,013	$	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		243,013	$	24	$	98,670	$	(102	)	$	(26,719	)	$	71,873
Net loss		—		—		—		—			(12,440	)		(12,440	)
Other comprehensive income		—		—		—		85			—			85
Equity-based compensation		—		—		2,522		—			—			2,522
Business Combination, net of redemptions and equity issuance costs of $47.0 million		51,617		5		333,850		—			—			333,855
Common shares issued in connection with acquisition		13,546		2		162,556		—			—			162,558
Balances at June 30, 2021		308,176	$	31	$	597,598	$	(17	)	$	(39,159	)	$	558,453

							Accumulated
					Additional		Other						Total
	Common Stock				Paid-In		Comprehensive			Accumulated			Stockholders’
	Shares		Amount		Capital		Loss			Deficit			Equity

Balances at December 31, 2021		309,584	$	31	$	610,418	$	(21	)	$	(225,043	)	$	385,385
Net loss		—		—		—		—			(73,533	)		(73,533	)
Other comprehensive loss		—		—		—		(112	)		—			(112	)
Equity-based compensation		—		—		4,564		—			—			4,564
Options exercised, net of tax withholdings		1,132		—		1,923		—			—			1,923
Balances at March 31, 2022		310,716	$	31	$	616,905	$	(133	)	$	(298,576	)	$	318,227
Net loss		—		—		—		—			(41,867	)		(41,867	)
Other comprehensive income		—		—		—		58			—			58
Equity-based compensation		210		—		3,001		—			—			3,001
Options exercised, net of tax withholdings		588		—		737		—			—			737
Balances at June 30, 2022		311,514	$	31	$	620,643	$	(75	)	$	(340,443	)	$	280,156

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

The Beachbody Company, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

(in thousands)


	Six months ended June 30,
	2022			2021

Cash flows from operating activities:
Net loss	$	(115,400	)	$	(42,498	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		41,552			25,941
Amortization of content assets		13,180			6,119
Provision for inventory and net realizable value adjustment		32,019			2,791
Realized losses on hedging derivative financial instruments		143			339
Gain on investment in convertible instrument		—			(3,114	)
Change in fair value of warrant liabilities		(2,334	)		(5,390	)
Equity-based compensation		7,565			5,095
Deferred income taxes		(1,143	)		(11,349	)
Other non-cash items		311			—
Changes in operating assets and liabilities:
Inventory		28,400			(194	)
Content assets		(11,940	)		(14,237	)
Prepaid expenses		5,545			(1,789	)
Other assets		167			(5,774	)
Accounts payable		(22,753	)		6,656
Accrued expenses		(7,739	)		(461	)
Deferred revenue		1,000			16,547
Other liabilities		(1,829	)		(4,169	)
Net cash used in operating activities		(33,256	)		(25,487	)
Cash flows from investing activities:
Purchase of property and equipment		(19,222	)		(27,200	)
Investment in convertible instrument		—			(5,000	)
Other investment		—			(5,000	)
Cash paid for acquisition, net of cash acquired		—			(37,280	)
Net cash used in investing activities		(19,222	)		(74,480	)
Cash flows from financing activities:
Proceeds from exercise of stock options		2,968			—
Remittance of taxes withheld from employee stock awards		(308	)		—
Borrowings under Credit Facility		—			42,000
Repayments under Credit Facility		—			(42,000	)
Business combination, net of issuance costs paid		—			389,775
Net cash provided by financing activities		2,660			389,775
Effect of exchange rates on cash		(176	)		594
Net (decrease) increase in cash and cash equivalents		(49,994	)		290,402
Cash, cash equivalents and restricted cash, beginning of period		107,054			56,827
Cash and cash equivalents, end of period	$	57,060		$	347,229
Supplemental disclosure of cash flow information:
Cash paid during the year for interest	$	17		$	283
Cash paid during the year for income taxes, net		310			198
Supplemental disclosure of noncash investing activities:
Property and equipment acquired but not yet paid for	$	2,330		$	15,322
Class A Common Stock issued in connection with acquisition		—			162,558
Fair value of Myx instrument and promissory note held by Old Beachbody		—			22,618
Supplemental disclosure of noncash financing activities:
Business Combination transaction costs, accrued but not paid		—			650
Net assets assumed in the Business Combination		—			293

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

The Beachbody Company, Inc.

Notes to Unaudited Condensed Consolidated Financial Statements

1. Description of Business and Summary of Significant Accounting Policies

Business

The Beachbody Company, Inc. (“Beachbody” or the “Company”) is a leading subscription health and wellness company and the creator of some of the world’s most popular fitness programs. The Company’s fitness programs are available for streaming through subscription to the Beachbody On Demand (“BOD”) or Openfit digital platform, and, together with the Company’s live fitness and comprehensive nutrition programs, through subscription to Beachbody On Demand Interactive (“BODi”). Beachbody offers nutritional products such as Shakeology nutrition shakes, BEACHBAR snack bars, and Ladder premium supplements, which have been designed and clinically tested to help customers achieve their goals. Beachbody also offers a professional-grade stationary cycle with a 360-degree touch screen tablet and connected fitness software. The Company’s revenue has historically been generated primarily through a network of micro-influencers (“Coaches”), social media marketing channels, and direct response advertising. During the six months ended June 30, 2022, the Company commenced a process of consolidating its Openfit streaming fitness offering onto a single Beachbody digital platform. See Note 13, Strategic Realignment, for additional information regarding our strategic realignment initiative.

Basis of Presentation and Principles of Consolidation

The Company prepares its consolidated financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) as determined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and pursuant to the regulations of the U.S. Securities and Exchange Commission (“SEC”).

The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that impact the amounts reported in the unaudited condensed consolidated financial statements and accompanying notes. Significant estimates include, but are not limited to, the useful life and recoverability of long-lived assets, the recognition and measurement of income tax assets and liabilities, the valuation of intangible assets, impairment of goodwill, and the net realizable value of inventory. The Company bases these estimates on historical experience and on various other assumptions that it believes are reasonable under the circumstances, the results of which form the basis for making judgements about the carrying amounts of assets and liabilities. Actual results could differ from those estimates.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited annual consolidated financial statements and, in the opinion of management, include all normal recurring adjustments necessary for the fair statement of the Company’s financial position, results of operations, and cash flows. The financial data and other financial information disclosed in the notes to these unaudited condensed consolidated financial statements are also unaudited. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and the related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. Interim results are not necessarily indicative of the results expected for the full fiscal year or any other period.

Summary of Changes in Significant Accounting Estimates

Goodwill and Intangible Assets, Net

Interim Impairment Test

Goodwill represents the excess of the fair value of the consideration transferred in a business combination over the fair value of the underlying identifiable assets and liabilities acquired. Goodwill and intangible assets deemed to have an indefinite life are not amortized, but instead are assessed for impairment annually as of October 1 and between annual tests if an event or change in circumstances occurs that would more likely than not reduce the fair value of a reporting unit below its carrying value or indicate that it is more likely than not that the indefinite-lived asset is impaired.

Due to the sustained decline in the Company’s market capitalization and macro-economic conditions observed in the three months ended June 30, 2022, the Company performed an interim test for impairment of its goodwill as of June 30, 2022. In performing the interim impairment test for goodwill, the Company elected to bypass the optional qualitative test and proceeded to perform quantitative tests by comparing the carrying value of each reporting unit to its estimated fair value. The Company previously tested its reporting units for impairment as of December 31, 2021 which resulted in an impairment and write-off of all goodwill in the Company’s Other reporting unit. The results of the Company’s interim test for impairment at June 30, 2022 concluded that the fair value of its Beachbody reporting unit exceeded its carrying value, resulting in no impairment.

Indefinite-lived Intangible Assets

During the three months ended March 31, 2022, the Company determined that one of its acquired trade names no longer has an indefinite life. The Company tested the trade name for impairment before changing the useful life and determined there was no impairment based on its assessment of fair value. The Company will prospectively amortize the trade name over its remaining estimated useful life of two years beginning January 1, 2022. The Company recorded $1.9 million, or $0.01 per share, and $3.8 million, or $0.01 per share, of amortization expense as a component of selling and marketing expenses for this trade name during the three and six months ended June 30, 2022, respectively.

Long-Lived Assets

Management reviews long-lived assets (including property and equipment, content assets, and definite-lived intangible assets) for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Recoverability of assets is determined by comparing their carrying value to the forecasted undiscounted cash flows associated with the assets. If the evaluation of the forecasted cash flows indicates that the carrying value of the assets is not recoverable, the assets are written down to their fair value. The Company performed a test for recoverability at June 30, 2022 and concluded that the carrying value of its long-lived assets is recoverable.

Recently Adopted Accounting Pronouncements

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40), to simplify the accounting for certain financial instruments with characteristics of liabilities and equity. The FASB reduced the number of accounting models for convertible debt and convertible preferred stock instruments and made certain disclosure amendments to improve the information provided to users. In addition, the FASB amended the derivative guidance for the “own stock” scope exception and certain aspects of the EPS guidance. The Company adopted this new accounting guidance on a prospective basis on January 1, 2022, and the adoption did not have a material effect on its unaudited condensed consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

In October 2021, the FASB issued ASU 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers, which requires an acquirer to apply ASC 606 to recognize and measure contract assets and liabilities from contracts with customers acquired in a business combination on the acquisition date rather than the general guidance in ASC 805. The guidance in this update will be effective for public companies for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years with early adoption permitted. The Company is evaluating the potential impact of adopting this guidance on its consolidated financial statements.

2. Revenue

The Company’s revenue disaggregated by revenue type and geographic region is as follows (in thousands):


	Segment
	Beachbody		Other		Total

Three months ended June 30, 2022
Revenue Type:
Digital	$	71,355	$	6,660	$	78,015
Connected fitness		9,451		1,154		10,605
Nutrition and other		89,416		1,100		90,516
Total revenue	$	170,222	$	8,914	$	179,136

Geographic region:
United States	$	151,107	$	8,914	$	160,021
Rest of world1		19,115		—		19,115
Total revenue	$	170,222	$	8,914	$	179,136


	Segment
	Beachbody		Other		Total

Three months ended June 30, 2021
Revenue Type:
Digital	$	90,488	$	3,837	$	94,325
Connected fitness		—		10		10
Nutrition and other		128,119		654		128,773
Total revenue	$	218,607	$	4,501	$	223,108

Geographic region:
United States	$	194,028	$	4,501	$	198,529
Rest of world1		24,579		—		24,579
Total revenue	$	218,607	$	4,501	$	223,108


	Segment
	Beachbody		Other		Total

Six months ended June 30, 2022
Revenue Type:
Digital	$	145,997	$	13,763	$	159,760
Connected fitness		23,940		6,178		30,118
Nutrition and other		186,392		1,788		188,180
Total revenue	$	356,329	$	21,729	$	378,058

Geographic region:
United States	$	316,899	$	21,729	$	338,628
Rest of world1		39,430		—		39,430
Total revenue	$	356,329	$	21,729	$	378,058


	Segment
	Beachbody		Other		Total

Six months ended June 30, 2021
Revenue Type:
Digital	$	181,933	$	7,542	$	189,475
Connected fitness		—		10		10
Nutrition and other		258,424		1,418		259,842
Total revenue	$	440,357	$	8,970	$	449,327

Geographic region:
United States	$	392,275	$	8,970	$	401,245
Rest of world1		48,082		—		48,082
Total revenue	$	440,357	$	8,970	$	449,327

(1) Consists of Canada, United Kingdom, and France. No single country accounted for more than 10% of total revenue during the three and six months ended June 30, 2022 and 2021.

Deferred Revenue

Deferred revenue is recorded for nonrefundable cash payments received for the Company’s performance obligation to transfer, or stand ready to transfer, goods or services in the future. Deferred revenue consists of subscription fees billed that have not been recognized and physical products sold that have not yet been delivered. During the three and six months ended June 30, 2022, the Company recognized $25.6 million and $88.1 million of revenue that was included in the deferred revenue balance as of December 31, 2021. During the three and six months ended June 30, 2021, the Company recognized $23.6 million and $79.2 million of revenue that was included in the deferred revenue balance as of December 31, 2020.

3. Fair Value Measurements

The Company’s financial assets and liabilities subject to fair value measurements on a recurring basis and the level of inputs used for such measurements were as follows (in thousands):


	June 30, 2022
	Level 1		Level 2		Level 3

Assets
Derivative assets	$	—	$	337	$	—
Total assets	$	—	$	337	$	—

Liabilities
Public warrants	$	1,700	$	—	$	—
Private placement warrants		—		—		800
Total liabilities	$	1,700	$	—	$	800

	December 31, 2021
	Level 1		Level 2		Level 3

Assets
Derivative assets	$	—	$	314	$	—
Total assets	$	—	$	314	$	—

Liabilities
Public warrants	$	2,701	$	—	$	—
Private placement warrants		—		—		2,133
Total liabilities	$	2,701	$	—	$	2,133

Fair values of cash and cash equivalents, accounts receivable, accounts payable, and accrued expenses approximate the recorded value due to the short period of time to maturity. The fair value of the public warrants, which trade in active markets, is based on quoted market prices. The fair value of derivative instruments is based on Level 2 inputs such as observable forward rates, spot rates, and foreign currency exchange rates. The Company’s private placement warrants are classified within Level 3 of the fair value hierarchy because their fair values are based on significant inputs that are unobservable in the market.

Private Placement Warrants

The Company determined the fair value of the private placement warrants using a Black-Scholes option-pricing model and the quoted price of the Company’s Class A Common Stock. Volatility was based on the implied volatility derived primarily from the average of the actual market activity of the Company’s peer group. The expected life was based on the remaining contractual term of the private placement warrants, and the risk-free interest rate was based on the implied yield available on U.S. treasury securities with a maturity equivalent to the warrants’ expected life. The significant unobservable input used in the 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.

The following table presents significant assumptions utilized in the valuation of the private placement warrants on June 30, 2022 and December 31, 2021:



	June 30, 2022			December 31, 2021

Risk-free rate		3.0	%		1.2	%
Dividend yield rate		—			—
Volatility		75.0	%		65.0	%
Contractual term (in years)		3.99			4.49
Exercise price	$	11.50		$	11.50

The following table presents changes in the fair value of the private placement warrants for the three and six months ended June 30, 2022 and 2021:


	Three months ended June 30,						Six months ended June 30,
	2022			2021			2022			2021
Balance, beginning of period	$	1,920		$	—		$	2,133		$	—
Assumed in Business Combination		—			26,400			—			26,400
Change in fair value		(1,120	)		(6,027	)		(1,333	)		(6,027	)
Balance, end of period	$	800		$	20,373		$	800		$	20,373

For the three and six months ended June 30, 2022 and 2021, the change in the fair value of private placement warrants resulted from the change in price of the Company’s Class A Common Stock, remaining contractual term, and risk-free rate. The changes in fair value are included in the unaudited condensed consolidated statements of operations as a component of change in fair value of warrant liabilities and in the unaudited condensed consolidated balance sheets as other liabilities.

4. Inventory, Net

Inventory, net consists of the following (in thousands):


	June 30, 2022		December 31, 2021

Raw materials and work in process	$	19,039	$	24,436
Finished goods		53,232		108,294
Total inventory, net	$	72,271	$	132,730

Adjustments to the carrying value of excess inventory and inventory on hand to net realizable value were $15.1 million and $32.0 million during the three and six months ended June 30, 2022, respectively, and $0.8 million and $2.8 million during the three and six months ended June 30, 2021, respectively. These adjustments are included in the unaudited condensed consolidated statements of operations as a component of connected fitness cost of revenue and nutrition and other cost of revenue.

5. Other Current Assets

Other current assets consist of the following (in thousands):


	June 30, 2022		December 31, 2021
Deferred coach costs	$	33,633	$	30,928
Deposits		7,070		8,915
Accounts receivable, net		1,382		1,225
Other		2,743		2,659
Total other current assets	$	44,828	$	43,727

6. Property and Equipment, Net

Property and equipment, net consists of the following (in thousands):



	June 30, 2022			December 31, 2021

Computer software and web development	$	253,296		$	231,943
Computer equipment		23,449			23,691
Buildings		5,158			5,158
Leasehold improvements		4,600			5,157
Furniture, fixtures and equipment		1,874			2,442
Computer software and web development projects in-process		12,876			26,490
Property and equipment, gross		301,253			294,881
Less: Accumulated depreciation		(208,952	)		(181,783	)
Total property and equipment, net	$	92,301		$	113,098

All of the Company’s property and equipment is located in the U.S. The Company recorded depreciation expense related to property and equipment in the following expense categories of its unaudited condensed consolidated statements of operations as follows (in thousands):


	Three months ended June 30,				Six months ended June 30,
	2022		2021		2022		2021

Cost of revenue	$	7,743	$	4,146	$	16,824	$	7,884
Selling and marketing		102		389		381		840
Enterprise technology and development		7,486		5,340		14,935		12,651
General and administrative		49		617		241		1,263
Total depreciation	$	15,380	$	10,492	$	32,381	$	22,638

7. Accrued Expenses

Accrued expenses consist of the followings (in thousands):


	June 30, 2022		December 31, 2021
Employee compensation and benefits	$	19,372	$	8,996
Coach costs		13,626		19,168
Inventory, shipping and fulfillment		13,927		14,360
Sales and other taxes		4,049		5,097
Information technology		2,222		10,150
Advertising		1,128		4,033
Customer service expenses		643		1,773
Other accrued expenses		7,382		10,948
Total accrued expenses	$	62,349	$	74,525

8. Commitments and Contingencies

Inventory Purchase and Service Agreements

The Company has noncancelable inventory purchase and service agreements with multiple service providers which expire at varying dates through 2028. During the three and six months ended June 30, 2022, the Company recorded losses on inventory purchase commitments related to connected fitness hardware of $1.8 million and $2.4 million, respectively. These losses are included in accrued expenses in the unaudited condensed consolidated balance sheets and connected fitness cost of revenue in the unaudited condensed consolidated statements of operations. Service agreement obligations include amounts related to fitness and nutrition trainers, future events, information systems support, and other technology projects.

Future minimum payments under noncancelable service and inventory purchase agreements for the periods succeeding June 30, 2022 are as follows (in thousands):


Six months ending December 31, 2022	$	30,887
Year ending December 31, 2023		4,019
Year ending December 31, 2024		1,410
Year ending December 31, 2025		1,385
Year ending December 31, 2026		100
Thereafter		150
	$	37,951

The preceding table excludes royalty payments to fitness trainers, talent, and others that are based on future sales as such amounts cannot be reasonably estimated.

Lease Commitments

The Company leases facilities under noncancelable operating leases expiring through 2027 and certain equipment under a finance lease expiring in 2024. These lease obligations, of which $6.1 million is included in other current liabilities and other liabilities in the unaudited condensed consolidated balance sheets, will require payments of approximately $1.3 million during the six months ending December 31, 2022 and $6.0 million in 2023 and thereafter.

Contingencies

The Company is subject to litigation 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 currently identified claims or litigation matters will have a material adverse effect on its consolidated financial position or results of operations.

9. Acquisition

On June 25, 2021, the Company acquired 100% of the equity of Myx pursuant to the Business Combination Agreement. The Company recognized the acquired assets and assumed liabilities of Myx based on estimates of their acquisition date fair values. There were no adjustments to the purchase price allocations during the three and six months ended June 30, 2022.

The following unaudited pro forma financial information presents the combined results of operations of the Company and Myx as if the companies had been combined as of January 1, 2021. The unaudited pro forma financial information includes the accounting effects of the business combination, including amortization of intangible assets. The unaudited pro forma financial information is presented for information purposes only and is not indicative of the results of operations that would have been achieved if the acquisition had taken place at the beginning of the period presented, nor should it be taken as indication of the Company’s future consolidated results of operations.


(in thousands)	Three Months Ended	Six Months Ended
	June 30, 2021	June 30, 2021
Pro forma combined:
Revenue	$237,286	$480,543
Net loss	(25,362)	(67,747)

10. Stockholders’ Equity

As of June 30, 2022, 2,000,000,000 shares, $0.0001 par value per share are authorized, of which, 1,600,000,000 shares are designated as Class A Common Stock, 200,000,000 shares are designated as Class X Common Stock, 100,000,000 shares are designated as Class C Common Stock and 100,000,000 shares are designated as Preferred Stock.

Accumulated Other Comprehensive Loss

The following tables summarize changes in accumulated other comprehensive loss by component during the three months ended June 30, 2022 and 2021 (in thousands):


	Unrealized Gain (Loss) on Derivatives			Foreign Currency Translation Adjustment			Total

Balances at March 31, 2021	$	(188	)	$	86		$	(102	)
Other comprehensive loss before reclassifications		(78	)		12			(66	)
Amounts reclassified from accumulated other comprehensive income (loss)		172			—			172
Tax effect		(21	)		—			(21	)
Balances at June 30, 2021	$	(115	)	$	98		$	(17	)


Balances at March 31, 2022	$	(148	)	$	15		$	(133	)
Other comprehensive loss before reclassifications		13			(51	)		(38	)
Amounts reclassified from accumulated other comprehensive income (loss)		74			—			74
Tax effect		22			—			22
Balances at June 30, 2022	$	(39	)	$	(36	)	$	(75	)

The following tables summarize changes in accumulated other comprehensive loss by component during the six months ended June 30, 2022 and 2021 (in thousands):


	Unrealized Gain (Loss) on Derivatives			Foreign Currency Translation Adjustment			Total

Balances at December 31, 2020	$	(246	)	$	44		$	(202	)
Other comprehensive 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	)


Balances at December 31, 2021	$	(32	)	$	11		$	(21	)
Other comprehensive loss before reclassifications		(149	)		(47	)		(196	)
Amounts reclassified from accumulated other comprehensive income (loss)		143			—			143
Tax effect		(1	)		—			(1	)
Balances at June 30, 2022	$	(39	)	$	(36	)	$	(75	)

11. Equity-Based Compensation

Equity Compensation Plans

A summary of the option activity under the Company’s equity compensation plans is as follows:


	Options Outstanding
	Number of Options			Weighted-Average Exercise Price (per option)		Weighted-Average Remaining Contractual Term (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2021		41,753,042		$	3.86		5.92	$	11,379
Granted		15,509,878			1.21
Exercised		(1,720,163	)		1.55
Forfeited		(6,075,160	)		2.17
Expired		(167,868	)		1.22
Outstanding at June 30, 2022		49,299,729		$	2.98		6.06	$	1,425
Exercisable at June 30, 2022		24,065,850		$	2.30		2.91	$	—

The intrinsic value of options exercised was $0.8 million for the six months ended June 30, 2022.

A summary of RSU activity is as follows:


	RSUs Outstanding
	Number of RSUs			Weighted-Average Fair Value (per RSU)
Outstanding at December 31, 2021		573,678		$	5.97
Granted		2,606,735			1.23
Vested		(210,146	)		6.68
Forfeited		(251,082	)		4.62
Outstanding at June 30, 2022		2,719,185		$	1.49

On January 1, 2022, the number of shares available for issuance under the 2021 Incentive Award Plan (the “2021 Plan”) increased by 15,479,188 pursuant to the terms of the 2021 Plan. As of June 30, 2022, 20,319,069 shares of Class A Common Stock were available for issuance under the 2021 Plan.

Equity-Based Compensation Expense

The fair value of each award as of the date of grant is estimated using a Black-Scholes option-pricing model. The following table summarizes the weighted-average assumptions used to determine the fair value of option grants:


	Six months ended June 30,
	2022			2021
Risk-free rate		2.8	%		0.7	%
Dividend yield rate		—			—
Volatility		52.6	%		53.9	%
Expected term (in years)		6.25			6.23
Weighted-average grant date fair value	$	0.64		$	4.91

Equity-based compensation expense for the three and six months ended June 30, 2022 and 2021 was as follows (in thousands):


	Three months ended June 30,					Six months ended June 30,
	2022			2021		2022		2021

Cost of revenue	$	382		$	91	$	717	$	182
Selling and marketing		1,018			1,616		2,657		3,333
Enterprise technology and development		(17	)		357		910		663
General and administrative		1,618			458		3,281		917
Total equity-based compensation	$	3,001		$	2,522	$	7,565	$	5,095

As of June 30, 2022, the total unrecognized equity-based compensation expense was $52.5 million, which will be recognized over a weighted-average remaining period of 2.95 years.

12. Derivative Financial Instruments

As of June 30, 2022 and December 31, 2021, the notional amount of the Company’s outstanding foreign exchange options was $26.5 million and $30.4 million, respectively. There were no outstanding forward contracts as of June 30, 2022 and December 31, 2021.

The following table shows the pre-tax effects of the Company’s derivative instruments on its unaudited condensed consolidated statements of operations (in thousands):


		Three months ended June 30,						Six months ended June 30,
	Financial Statement Line Item	2022			2021			2022			2021

Unrealized gains (losses)	Other comprehensive income (loss)	$	13		$	(78	)	$	(149	)	$	(170	)

Losses reclassified from accumulated other	Cost of revenue	$	(32	)	$	(65	)	$	(62	)	$	(138	)
comprehensive loss into net loss	General and administrative		(42	)		(107	)		(81	)		(201	)
Total amounts reclassified		$	(74	)	$	(172	)	$	(143	)	$	(339	)

Gains (losses) recognized on derivatives not designated as hedging instruments	Cost of revenue	$	6		$	(20	)	$	(45	)	$	(41	)

13. Strategic Realignment

In January 2022, the Company commenced a strategic alignment initiative to consolidate its streaming fitness offerings into a single Beachbody platform. The Company recognized restructuring costs of $1.3 million and $8.5 million during the three and six months ended June 30, 2022, respectively, comprised primarily of termination benefits related to headcount reductions, of which $1.3 million is included in accrued expenses in the unaudited condensed consolidated balance sheets. In accordance with GAAP, employee termination benefits were recognized at the date employees were notified and post-employment benefits were accrued as the obligation was probable and estimable. Benefits for employees who provide future service greater than 60 days from the date of notification will be recognized ratably over the future service period.

The following table summarizes activity in the Company’s restructuring-related liability during the three months ended June 30, 2022 (in thousands):


	Balance at		Restructuring		Payments /			Liability at
	March 31, 2022		Charges		Utilizations			June 30, 2022
Employee-related costs	$	4,618	$	1,332	$	(4,630	)	$	1,320
Total costs	$	4,618	$	1,332	$	(4,630	)	$	1,320

The following table summarizes the Company’s restructuring costs activity during the six months ended June 30, 2022 (in thousands):


	Balance at		Restructuring		Payments /			Liability at
	December 31, 2021		Charges		Utilizations			June 30, 2022
Employee-related costs	$	—	$	8,555	$	(7,235	)	$	1,320
Total costs	$	—	$	8,555	$	(7,235	)	$	1,320

During the six months ended June 30, 2022, the Company determined that the useful life of certain computer software and web development assets and content assets would end upon the completion of its platform consolidation. The Company accelerated depreciation of these computer software and web development assets and recorded $1.2 million, or $0.00 per share, and $3.4 million, or $0.01 per share, of additional depreciation expense as a component of digital cost of revenue, and nutrition and other cost of revenue during three and six months ended June 30, 2022, respectively. The Company also accelerated amortization of these content assets and recorded $1.5 million, or $0.00 per share, and $2.6 million, or $0.01 per share, of additional amortization as a component of digital cost of revenue during three and six months ended June 30, 2022, respectively.

14. Income Taxes

The Company recorded a benefit for income taxes of $0.3 million and $1.0 million for the three and six months ended June 30, 2022, respectively, and a benefit for income taxes of $10.9 million and $11.3 million for the three and six months ended June 30, 2021, respectively. The effective benefit tax rate was 0.7% and 0.8% for the three and six months ended June 30, 2022, respectively, and 46.6% and 20.9% for the three and six months ended June 30, 2021, respectively.

The tax provision for interim periods is determined using an estimate of the Company’s annual effective tax rate, adjusted for discrete items arising in that quarter. The Company’s effective tax rate differs from the U.S. statutory tax rate in the three and six months ended June 30, 2022 primarily due to changes in valuation allowances on deferred tax assets as it is more likely than not that some or all of the Company’s deferred tax assets will not be realized.

The Company evaluates its tax positions on a quarterly basis and revises its estimate accordingly. There were no material changes to the Company’s uncertain tax positions, interest, or penalties during the three and six months ended June 30, 2022.

15. Earnings (Loss) per Share

The computation of loss per share of Class A and Class X Common Stock is as follows (in thousands, except share and per share information):


	Three months ended June 30,						Six months ended June 30,
	2022			2021			2022			2021
Numerator:
Net loss	$	(41,867	)	$	(12,440	)	$	(115,400	)	$	(42,498	)

Denominator:
Weighted-average common shares outstanding, basic and diluted		307,204,999			247,062,134			306,786,192			245,048,715

Net loss per common share, basic and diluted	$	(0.14	)	$	(0.05	)	$	(0.38	)	$	(0.17	)

Basic net loss per common share is the same as dilutive net loss per common share for each of the three and six months ended June 30, 2022 and each of the three and six months ended June 30, 2021 as the inclusion of all potential common shares would have been antidilutive.

The following table presents the common shares that are excluded from the computation of diluted net loss per common share as of the periods presented because including them would have been antidilutive:


	June 30,
	2022		2021

Options		49,299,729		34,588,520
RSUs		2,719,185		—
Compensation warrants		3,980,656		3,980,656
Public and private placement warrants		15,333,333		15,333,333
Earn-out shares		3,750,000		3,750,000
		75,082,903		57,652,509

16. Segment Information

The Company applies ASC 280, Segment Reporting, in determining reportable segments for financial statement disclosure. Segment information is presented based on the financial information the Company uses to manage the business which is organized around the Company’s digital platforms. The Company has two operating segments, Beachbody and Other, and one reportable segment, Beachbody. The Beachbody segment primarily derives revenue from BOD and BODi digital subscriptions, nutritional products, connected fitness equipment (bikes and accessories), and other fitness-related products. Other derives revenue primarily from Openfit digital subscriptions, nutritional products, and connected fitness equipment. The Company uses contribution as a measure of profit or loss, defined as revenue less directly attributable cost of revenue and certain selling and marketing expenses including media, Coach and social influencer compensation, royalties, and third-party sales commissions. Contribution does not include allocated costs as described below as the CODM does not include these costs in assessing performance. There are no inter-segment transactions. The Company manages its assets on a consolidated basis, and, as such, does not report asset information by segment.

Summary information by segment is as follows (in thousands):


	Segment
	Beachbody		Other			Consolidated

Three months ended June 30, 2022
Revenue	$	170,222	$	8,914		$	179,136
Contribution		37,607		(451	)		37,156

Three months ended June 30, 2021
Revenue	$	218,607	$	4,501		$	223,108
Contribution		49,545		(6,411	)		43,134

Six months ended June 30, 2022
Revenue	$	356,329	$	21,729		$	378,058
Contribution		65,698		(1,827	)		63,871

Six months ended June 30, 2021
Revenue	$	440,357	$	8,970		$	449,327
Contribution		96,020		(11,547	)		84,473

Reconciliation of consolidated contribution to loss before income taxes (in thousands):


	Three months ended June 30,						Six months ended June 30,
	2022			2021			2022			2021

Consolidated contribution	$	37,156		$	43,134		$	63,871		$	84,473
Amounts not directly related to segments:
Cost of revenue (1)		14,749			8,118			28,572			15,960
Selling and marketing (2)		21,762			20,872			48,081			40,963
Enterprise technology and development		24,133			26,949			57,830			54,038
General and administrative		19,584			17,231			39,657			35,177
Restructuring		1,332			—			8,555			—
Change in fair value of warrant liabilities		(2,070	)		(5,390	)		(2,334	)		(5,390	)
Interest expense		3			305			22			428
Other expense (income), net		(189	)		(1,654	)		(125	)		(2,953	)
Loss before income taxes	$	(42,148	)	$	(23,297	)	$	(116,387	)	$	(53,750	)

(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. 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 and an acquired trade name are also included in this line.

17. Subsequent Events

On August 8, 2022 (the “Closing”), the Company entered into an agreement with a third-party lender for a $50.0 million senior secured term loan (the “Term Loan”) with a four-year maturity. The Term Loan includes an incremental facility of up to an additional $25.0 million subject to certain terms and conditions. The Term Loan was funded at Closing and bears interest at the Company’s option of either (i) the Secured Overnight Financing Rate based upon an interest period of three months plus 7.15%, or (ii) a reference rate as defined in the agreement, plus 6.15%. In addition, borrowings will bear interest at 3.00%, which will be paid in kind by capitalizing such interest and adding it to the outstanding principal, annually. The Company paid an upfront fee of $1.5 million at Closing and is required to pay an annual fee of $0.25 million. The Term Loan requires annual amortization of 2.50% in the first two years and 5.00% in the final two years, paid quarterly, and certain mandatory repayments as defined in the agreement. The Term Loan provides customary restrictions, including prepayment premiums, and requires compliance with certain financial and other covenants. The Company expects to use the proceeds for general corporate purposes and to pay transaction fees and expenses related to the Term Loan.

In connection with the Term Loan, the Company issued warrants for the purchase of 4,716,756 million shares of the Company’s Class A Common Stock at an exercise price of $1.85 per share. The warrants vest on a monthly basis over four years, with 30%, 30%, 20% and 20% vesting in the first, second, third and fourth years, respectively. The warrants have a seven-year term from the date of Closing.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read in conjunction with our financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q (this “Report”) and the section entitled “Risk Factors.” Unless otherwise indicated, the terms “Beachbody,” “we,” “us,” or “our” refer to The Beachbody Company, Inc., a Delaware corporation, together with its consolidated subsidiaries.

Forward-Looking Statements

This Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (“Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (“Exchange Act”), including statements about and the financial condition, results of operations, earnings outlook and prospects of the Company. Forward-looking statements are typically identified by words such as “plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” “forecast,” “project,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “should,” “would” and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements are based on our current expectations as applicable and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date of such statement. There can be no assurance that future developments will be those that have been anticipated. These forward-looking statements involve a number of risks, uncertainties or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to the following:

•

our future financial performance, including our expectations regarding our revenue, cost of revenue, gross profit, operating expenses including changes in selling and marketing, general and administrative, and enterprise technology and development expenses (including any components of the foregoing), Adjusted EBITDA (as defined below) and our ability to achieve and maintain future profitability;

•

our anticipated growth rate and market opportunity;

•

our liquidity and ability to raise financing;

•

our success in retaining or recruiting, or changes required in, officers, key employees or directors;

•

our warrants are accounted for as liabilities and changes in the value of such warrants could have a material effect on our financial results;

•

our ability to effectively compete in the fitness and nutrition industries;

•

our ability to successfully acquire and integrate new operations;

•

our reliance on a few key products;

•

market conditions and global and economic factors beyond our control;

•

intense competition and competitive pressures from other companies worldwide in the industries in which we will operate;

•

litigation and the ability to adequately protect our intellectual property rights;

•

other risk and uncertainties set forth in this Report under the heading “Risk Factors.”

Should one or more of these risks or uncertainties materialize or should any of the assumptions made by management prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.

Except to the extent required by applicable law or regulation, we undertake no obligation to update these forward-looking statements to reflect events or circumstances after the date of this Report or to reflect the occurrence of unanticipated events.

Overview

Beachbody is a leading subscription health and wellness company. We focus primarily on digital content, supplements, connected fitness, and consumer health and wellness. Our goal is to continue to provide holistic health and wellness content and subscription-based solutions. We are the creator of some of the world’s most popular fitness programs, including P90X, Insanity, and 21 Day Fix, which transformed the at-home fitness market and disrupted the global fitness industry by making it accessible for people to get results—anytime, anywhere. Our comprehensive nutrition-first programs, Portion Fix and 2B Mindset, teach healthy eating habits and promote healthy, sustainable weight loss. These fitness and nutrition programs are available through our Beachbody On Demand and Beachbody On Demand Interactive streaming services, and in January 2022, we began the process of consolidating our Openfit streaming fitness offerings onto a single Beachbody platform.

We offer nutritional products such as Shakeology nutrition shakes, BEACHBAR snack bars, and Ladder premium supplements as well a professional-grade stationary cycle with a 360-degree touch screen tablet and connected fitness software. Leveraging our history of fitness content creation, nutrition innovation, and our network of micro-influencers, whom we call Coaches, we plan to continue market penetration into connected fitness to reach a wider health, wellness and fitness audience.

Historically, our revenue has been generated primarily through our network of micro-influencers, social media marketing channels, and direct response advertising. Components of revenue include recurring digital subscription revenue, connected fitness revenue, and revenue from the sale of nutritional and other products. In addition to selling individual products on a one-time basis, we bundle digital and nutritional products together at discounted prices.

For the three months ended June 30, 2022, as compared to the three months ended June 30, 2021:

•

Total revenue was $179.1 million, a 20% decrease;

•

Digital revenue was $78.0 million, a 17% decrease;

•

Connected fitness revenue was $10.6 million;

•

Nutrition and other revenue was $90.5 million, a 30% decrease;

•

Net loss was $41.9 million, compared to net loss of $12.4 million; and

•

Adjusted EBITDA was ($1.5) million, compared to ($4.4) million.

For the six months ended June 30, 2022, as compared to the six months ended June 30, 2021:

•

Total revenue was $378.1 million a 16% decrease;

•

Digital revenue was $159.8 million, a 16% decrease;

•

Connected fitness revenue was $30.1 million;

•

Nutrition and other revenue was $188.2 million, a 28% decrease;

•

Net loss was $115.4 million, compared to net loss of $42.5 million; and

•

Adjusted EBITDA was ($20.6) million, compared to ($16.1) million.

See “Non-GAAP Information” below for information regarding our use of Adjusted EBITDA and a reconciliation of net loss to Adjusted EBITDA.

Recent Developments

We believe post-pandemic consumer behavior, the general slowdown of the global economy, and rising prices for consumer products and services have adversely impacted demand for at-home fitness solutions. These adverse conditions combined with unprecedented supply chain surcharges and disruptions have contributed to declines in our gross margins. Given the uncertainty for how long these macroeconomic factors will continue, we currently anticipate the negative impact to our gross margins to continue through the remainder of fiscal year 2022. We plan to mitigate the challenging macroeconomic factor with strategies that we expect will drive our future success and growth.

Digital Gross Margin

We believe our “One Brand” strategy, which will consolidate our streaming content into a single Beachbody platform and which we expect to be fully implemented by the middle of the third quarter of 2022, will simplify our product offerings for customers and lead to an increase in customer acquisition. We believe that strengthening our Coach network will generate additional digital revenue from our Coach business management online platform as well as drive growth in digital and nutritional subscriptions. During the second quarter and for the remainder of 2022, we began testing new incentives and training programs for our Coach network to improve Coach recruitment and retention and their ability to reach more customers.

Nutrition and Other Gross Margin

Our nutritional products are often bundled with digital content offerings, and we are in the process of developing enhancements to our upsell and cross-sell capabilities. We are also currently reviewing our nutritional product portfolio and may reduce our offerings to only those nutritional products that meet our profitability requirements and/or reflect market demand. This rationalization strategy could result in future one-time charges to write down the carrying value of certain nutritional inventory. We also intend to test price increases to counteract rising supply chain costs.

Connected Fitness Gross Margin

We anticipate that our connected fitness gross margin will remain negative until we sell through our current inventory on hand. As a result of supply chain constraints, the costs to manufacture, transport, fulfill, and ship a Beachbody Bike have led to an unprofitable margin. As the connected fitness market is highly competitive, we have been limited in our ability to sufficiently increase pricing to mitigate costs. For the remainder of 2022, we will explore different strategies such as pricing and bundling to accelerate demand for our current inventory. Consumer response to these strategies is uncertain, and we may be required to continue to reduce the carrying value of connected fitness inventory through the remainder of the year. See “Risk Factors - Risks Related to Our Business and Industry - Our operating results could be adversely affected if we are unable to accurately forecast consumer demand for our products and services and adequately manage our inventory” in our Annual Report on Form 10-K.

Key Operational and Business Metrics

We use the following key operational and business metrics to evaluate our business, measure our performance, develop financial forecasts, and make strategic decisions.


	As of June 30,
	2022		2021

Digital subscriptions (millions)		2.28		2.72
Nutritional subscriptions (millions)		0.28		0.42


	Three months ended June 30,						Six months ended June 30,
	2022			2021			2022			2021

Average digital retention		95.6	%		94.9	%		95.6	%		95.4	%
Total streams (millions)		31.0			44.5			69.2			100.4
DAU/MAU		30.0	%		31.9	%		31.6	%		33.5	%

Revenue (millions)	$	179.1		$	223.1		$	378.1		$	449.3
Gross profit (millions)	$	87.3		$	154.3		$	180.3		$	312.4
Gross margin		49	%		69	%		48	%		70	%

Net loss (millions)	$	(41.9	)	$	(12.4	)	$	(115.4	)	$	(42.5	)
Adjusted EBITDA (millions)	$	(1.5	)	$	(4.4	)	$	(20.6	)	$	(16.1	)

Please see “Non-GAAP Information” below 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.

Digital Subscriptions

Our ability to expand the number of digital subscriptions is an indicator of our market penetration and growth. Digital subscriptions include BOD, BODi, and Openfit subscriptions. Digital subscriptions include paid and free-to-pay subscriptions, with free-to-pay subscriptions representing approximately 1% of total digital subscriptions on average. Digital subscriptions are inclusive of all billing plans, currently for annual, semi-annual, quarterly and monthly billing intervals.

Nutritional Subscriptions

Nutritional subscriptions include monthly subscriptions for nutritional products such as Shakeology, Beachbody Performance, BEACHBAR, Bevvy and Ladder Supplements. We also package and bundle the content experience of digital subscriptions with nutritional subscriptions to optimize customer results.

Average Digital Retention

We use month-over-month digital subscription retention, which we define as the average rate at which a subscription renews for a new billing cycle, to measure customer retention.

Total Streams

We use total streams to quantify the number of fitness or nutrition programs viewed per subscription, which is a leading indicator of customer engagement and retention. While the measure of a digital stream may vary across companies, to qualify as a stream on any of our digital platforms, a program must be viewed for a minimum of 25% of the total running time.

Daily Active Users to Monthly Active Users (DAU/MAU)

We use the ratio of daily active users to monthly active users to measure how frequently digital subscribers are utilizing our service in a given month. We define a daily active user as a unique user streaming content on our platform in a given day. We define a monthly active user as a unique user streaming content on our platform in that same month.

Non-GAAP Information

We use Adjusted EBITDA, which is a non-GAAP performance measure, to supplement our results presented in accordance with GAAP. We believe Adjusted EBITDA is useful in evaluating our operating performance, as it is similar to measures reported by our public competitors and is regularly used by security analysts, institutional investors, and other interested parties in analyzing operating performance and prospects. Adjusted EBITDA is not intended to be a substitute for any GAAP financial measure and, as calculated, may not be comparable to other similarly titled measures of performance of other companies in other industries or within the same industry.

We define and calculate Adjusted EBITDA as net income (loss) adjusted for depreciation and amortization, amortization of capitalized cloud computing implementation costs, amortization of content assets, interest expense, income tax provision (benefit), equity-based compensation, inventory net realizable value adjustment, and other items that are not normal, recurring, operating expenses necessary to operate the Company’s business as described in the reconciliation below.

We include this non-GAAP financial measure because it is used by management to evaluate Beachbody’s core operating performance and trends and to make strategic decisions regarding the allocation of capital and new investments. Adjusted EBITDA excludes certain expenses that are required in accordance with GAAP because they are non-cash (for example, in the case of depreciation and amortization, equity-based compensation, and net realizable value adjustment) or are not related to our underlying business performance (for example, in the case of interest income and expense).

The table below presents our Adjusted EBITDA reconciled to our net loss, the closest GAAP measure, for the periods indicated:


	Three months ended June 30,						Six months ended June 30,
(in thousands)	2022			2021			2022			2021

Net loss	$	(41,867	)	$	(12,440	)	$	(115,400	)	$	(42,498	)
Adjusted for:
Depreciation and amortization		19,965			12,215			41,552			25,941
Amortization of capitalized cloud computing implementation costs		168			168			336			336
Amortization of content assets		7,016			3,302			13,180			6,119
Interest expense		3			305			22			428
Income tax benefit		(281	)		(10,857	)		(987	)		(11,252	)
Equity-based compensation		3,001			2,522			7,565			5,095
Inventory net realizable value adjustment (1)		10,502			—			25,436			—
Transaction costs		—			1,509			2			2,142
Restructuring and platform consolidation costs (2)		2,086			—			9,973			—
Change in fair value of warrant liabilities		(2,070	)		(5,390	)		(2,334	)		(5,390	)
Other adjustment items (3)		—			6,038			—			6,038
Non-operating (4)		5			(1,757	)		76			(3,088	)
Adjusted EBITDA	$	(1,472	)	$	(4,385	)	$	(20,579	)	$	(16,129	)

(1)

Represents a non-cash expense to reduce the carrying value of our connected fitness inventory and related future commitments. This adjustment is included because of its unusual magnitude due to disruptions in the connected fitness market.

(2)

Includes restructuring expense and non-recurring personnel costs associated with the consolidation of our digital platforms.

(3)

Incremental costs associated with COVID-19.

(4)

Includes interest income, and during the three and six months ended June 30, 2021, also includes the gain on investment on the Myx convertible instrument.

Results of Operations

We operate and manage our business in two operating segments, Beachbody and Other. For financial reporting purposes, we have one reportable segment, Beachbody. We identified the reportable segment based on the information used by management to monitor performance and make operating decisions. See Note 16, Segment Information, to our unaudited condensed consolidated financial statements included elsewhere in this Report for additional information regarding our reportable segment. The following discussion of our results and operations is on a consolidated basis as the Other non-reportable operating segment is not material to the understanding of our business taken as a whole.


(in thousands)	Three months ended June 30,						Six months ended June 30,
	2022			2021			2022			2021

Revenue:
Digital	$	78,015		$	94,325		$	159,760		$	189,475
Connected fitness		10,605			10			30,118			10
Nutrition and other		90,516			128,773			188,180			259,842
Total revenue		179,136			223,108			378,058			449,327
Cost of revenue:
Digital		18,406			11,612			34,831			22,734
Connected fitness		31,459			156			76,165			156
Nutrition and other		42,002			57,002			86,776			113,997
Total cost of revenue		91,867			68,770			197,772			136,887
Gross profit		87,269			154,338			180,286			312,440
Operating expenses:
Selling and marketing		86,624			140,194			193,068			284,890
Enterprise technology and development		24,133			26,949			57,830			54,038
General and administrative		19,584			17,231			39,657			35,177
Restructuring		1,332			—			8,555			—
Total operating expenses		131,673			184,374			299,110			374,105
Operating loss		(44,404	)		(30,036	)		(118,824	)		(61,665	)
Other income (expense)
Change in fair value of warrant liabilities		2,070			5,390			2,334			5,390
Interest expense		(3	)		(305	)		(22	)		(428	)
Other income, net		189			1,654			125			2,953
Loss before income taxes		(42,148	)		(23,297	)		(116,387	)		(53,750	)
Income tax benefit		281			10,857			987			11,252
Net loss	$	(41,867	)	$	(12,440	)	$	(115,400	)	$	(42,498	)

Revenue

Revenue includes digital subscriptions, nutritional supplement subscriptions, one-time nutritional sales, connected fitness products, access to our online Coach business management platform, preferred customer program memberships, and other fitness-related products. Digital subscription revenue is recognized ratably over the subscription period of up to 12 months. We often sell bundled products that combine digital subscriptions, nutritional products, and/or other fitness products. We consider these sales to be revenue arrangements with multiple performance obligations and allocate the transaction price to each performance obligation based on its relative stand-alone selling price. We defer revenue when we receive payments in advance of delivery of products or the performance of services.


	Three months ended June 30,
	2022		2021		$ Change			% Change
	(dollars in thousands)
Revenue
Digital	$	78,015	$	94,325	$	(16,310	)		(17	%)
Connected fitness		10,605		10		10,595		NM
Nutrition and other		90,516		128,773		(38,257	)		(30	%)
Total revenue	$	179,136	$	223,108	$	(43,972	)		(20	%)

NM = not meaningful

The decrease in digital revenue for the three months ended June 30, 2022, as compared to the three months ended June 30, 2021, was primarily due to a $12.6 million decrease in revenue generated from our online Coach business management platform as a result of fewer Coaches. The decrease in Coaches was primarily attributable to our preferred customer membership program, which launched at the end of Q3 2021, as certain Coaches elected to become preferred customers rather than remain in our Coach network. The change in digital revenue was also due to a $3.9 million decrease in revenue from our digital streaming services due to 16% fewer subscriptions.

The increase in connected fitness revenue was primarily due to the acquisition of Myx on June 25, 2021; there was minimal connected fitness revenue for the three months ended June 30, 2021.

The decrease in nutrition and other revenue for the three months ended June 30, 2022, as compared to the three months ended June 30, 2021, was primarily due to a $42.4 million decrease in revenue from nutritional products and a $3.1 million decrease in associated shipping revenue as we ended Q2 2022 with 33% fewer nutritional subscriptions compared to Q2 2021. These decreases were partially offset by $8.5 million of revenue associated with our preferred customer membership program, which launched at the end of Q3 2021.


	Six months ended June 30,
	2022		2021		$ Change			% Change
	(dollars in thousands)
Revenue
Digital	$	159,760	$	189,475	$	(29,715	)		(16	%)
Connected fitness		30,118		10		30,108		NM
Nutrition and other		188,180		259,842		(71,662	)		(28	%)
Total revenue	$	378,058	$	449,327	$	(71,269	)		(16	%)

The decrease in digital revenue for the six months ended June 30, 2022, as compared to the six months ended June 30, 2021, was primarily due to a $24.4 million decrease in revenue generated from our online Coach business management platform as a result of fewer Coaches. The decrease in Coaches was primarily attributable to our preferred customer membership program, which launched at the end of Q3 2021, as certain Coaches elected to become preferred customers rather than remain in our Coach network. The change in digital revenue was also due to a $5.1 million decrease in revenue from our digital streaming services due to 16% fewer subscriptions.

The increase in connected fitness revenue was primarily due to the acquisition of Myx on June 25, 2021; there was minimal connected fitness revenue for the six months ended June 30, 2021.

The decrease in nutrition and other revenue for the six months ended June 30, 2022, as compared to the six months ended June 30, 2021, was primarily due to a $76.3 million decrease in revenue from nutritional products and a $7.6 million decrease in associated shipping revenue as we ended Q2 2022 with 33% fewer nutritional subscriptions compared to Q2 2021. These decreases were partially offset by $17.3 million of revenue associated with our preferred customer membership program, which launched at the end of Q3 2021, and $2.3 million of revenue from Coach events, which were not held in 2021 due to the COVID-19 pandemic.

Cost of Revenue

Digital Cost of Revenue

Digital cost of revenue includes costs associated with digital content creation including amortization and revision of content assets, depreciation of streaming platforms, digital streaming costs, and amortization of acquired digital platform intangible assets. It also includes customer service costs, payment processing fees, depreciation of production equipment, live trainer costs, facilities, and related personnel expenses.

Connected Fitness Cost of Revenue

Connected fitness cost of revenue consists of product costs, including bike and tablet hardware costs, duties and other applicable importing costs, shipping and handling costs, warehousing and logistics costs, costs associated with service calls and repairs of products under warranty, payment processing and financing fees, customer service expenses, and personnel-related expenses associated with supply chain and logistics.

Nutrition and Other Cost of Revenue

Nutrition and other cost of revenue includes product costs, shipping and handling, fulfillment and warehousing, customer service, and payment processing fees. It also includes depreciation of nutrition-related e-commerce websites and social commerce platforms, amortization of acquired formulae intangible assets, facilities, and related personnel expenses.


	Three months ended June 30,
	2022			2021			$ Change			% Change
	(dollars in thousands)
Cost of revenue
Digital	$	18,406		$	11,612		$	6,794			59	%
Connected fitness		31,459			156			31,303		NM
Nutrition and other		42,002			57,002			(15,000	)		(26	%)
Total cost of revenue	$	91,867		$	68,770		$	23,097			34	%

Gross profit
Digital	$	59,609		$	82,713		$	(23,104	)		(28	%)
Connected fitness		(20,854	)		(146	)		(20,708	)	NM
Nutrition and other		48,514			71,771			(23,257	)		(32	%)
Total gross profit	$	87,269		$	154,338		$	(67,069	)		(43	%)

Gross margin
Digital		76	%		88	%
Connected fitness		(197	%)	NM
Nutrition and other		54	%		56	%

The increase in digital cost of revenue for the three months ended June 30, 2022, as compared to the three months ended June 30, 2021, was driven, in part, by a $3.7 million increase in the amortization of content assets related to BODi which launched in the fourth quarter of 2021 and content acquired from Myx in June 2021. The change in digital cost of revenue was also due to $2.4 million increase in depreciation expense primarily related to a change in useful life of certain assets in connection with our digital platform consolidation, and a $1.5 million increase in personnel-related expenses as a result of additional headcount focused on our digital streaming services. These increases were partially offset by a $0.8 million decrease in intangible assets amortization as certain assets reached the end of their useful life prior to Q2 2022. The decrease in digital gross margin for the three months ended June 30, 2022 compared to the three months ended June 30, 2021 was primarily the result of the higher fixed expenses - content assets amortization, depreciation, and personnel-related expenses - on lower digital revenue.

The increase in connected fitness cost of revenue was primarily due to the acquisition of Myx on June 25, 2021; there was no connected fitness cost of revenue for periods prior to the acquisition. The negative connected fitness gross margin for the three months ended June 30, 2022 was primarily due to $15.0 million in adjustments for excess and obsolete inventory and to reduce the carrying value of connected fitness inventory to its net realizable value as well as high product, freight, fulfillment, and shipping costs due to supply chain surcharges and constraints and lower pricing in line with a highly-competitive connected fitness market.

The decrease in nutrition and other cost of revenue for the three months ended June 30, 2022, as compared to the three months ended June 30, 2021, was primarily due to a $13.0 million decrease in product costs, freight, and shipping expense as the result of the decrease in nutrition and other revenue and a $2.5 million decrease in customer service as nutrition and other comprises less of our total revenue. These were partially offset by a $1.2 million increase in depreciation expense. Despite a favorable impact from the preferred customer membership program, nutrition and other gross margin decreased primarily as a result of higher fixed expenses such as depreciation and personnel-related expenses on lower nutrition and other revenue.


	Six months ended June 30,
	2022			2021			$ Change			% Change
	(dollars in thousands)
Cost of revenue
Digital	$	34,831		$	22,734		$	12,097			53	%
Connected fitness		76,165			156			76,009		NM
Nutrition and other		86,776			113,997			(27,221	)		(24	%)
Total cost of revenue	$	197,772		$	136,887		$	60,885			44	%

Gross profit
Digital	$	124,929		$	166,741		$	(41,812	)		(25	%)
Connected fitness		(46,047	)		(146	)		(45,901	)	NM
Nutrition and other		101,404			145,845			(44,441	)		(30	%)
Total gross profit	$	180,286		$	312,440		$	(132,154	)		(42	%)

Gross margin
Digital		78	%		88	%
Connected fitness		(153	%)	NM
Nutrition and other		54	%		56	%

The increase in digital cost of revenue for the six months ended June 30, 2022, as compared to the six months ended June 30, 2021, was primarily driven by a $7.1 million increase in the amortization of content assets related to BODi which launched in the fourth quarter of 2021 and content acquired from Myx in June 2021. The change in digital cost of revenue was also due to a $5.6 million increase in depreciation expense primarily related to a change in useful life of certain assets in connection with our digital platform consolidation. These increases were partially offset by a decrease in variable costs of digital revenue as a result of the decrease in digital revenue. The decrease in digital gross margin for the six months ended June 30, 2022 compared to the six months ended June 30, 2021 was primarily the result of higher fixed content assets amortization and depreciation on lower digital revenue.

The increase in connected fitness cost of revenue was primarily due to the acquisition of Myx on June 25, 2021; there was no connected fitness cost of revenue for periods prior to the acquisition. The negative connected fitness gross margin for the six months ended June 30, 2022 was primarily due to $30.5 million in adjustments for excess and obsolete inventory and to reduce the carrying value of connected fitness inventory to its net realizable value in addition to higher product, freight, and shipping costs due to supply chain surcharges and constraints and lower pricing in line with a highly-competitive connected fitness market.

The decrease in nutrition and other cost of revenue for the six months ended June 30, 2022, as compared to the six months ended June 30, 2021, was primarily due to a $25.1 million decrease in product, freight, fulfillment, and shipping expense as the result of the decrease in nutrition and other revenue and a $5.0 million decrease in customer service as nutrition and other comprises less of our total revenue. These were partially offset by a $3.4 million increase in depreciation expense. Nutrition and other gross margin decreased primarily as a result of higher fixed depreciation and personnel-related expenses on lower nutrition and other revenue.

Operating Expenses

Selling and Marketing

Selling and marketing expenses primarily include the cost of Coach compensation, advertising, royalties, promotions and events, and third-party sales commissions as well as the personnel expenses for employees and consultants who support these areas. Selling and marketing expense as a percentage of total revenue may fluctuate from period to period based on total revenue, timing of new content and nutritional product launches, and the timing of our media investments to build awareness around launch activity.


	Three months ended June 30,
	2022			2021			$ Change			% Change
	(dollars in thousands)

Selling and marketing	$	86,624		$	140,194		$	(53,570	)		(38	%)
As a percentage of total revenue		48.4	%		62.8	%

The decrease in selling and marketing expense for the three months ended June 30, 2022, as compared to the three months ended June 30, 2021, was primarily due to a $35.8 million decrease in online and television media expense and a $19.0 million decrease in Coach compensation, which was in line with the decrease in commissionable revenue. These decreases were partially offset by a $2.8 million increase in amortization of intangible assets due to the acquisition of Myx in June 2021.

Selling and marketing expense as a percentage of total revenue decreased by 1,440 basis points primarily due to the decrease in media investments compared to the three months ended June 30, 2021. We have reduced our media spend as part of our strategic realignment and in an effort to use our cash in the manner that has the highest probability of return on investment.


	Six months ended June 30,
	2022			2021			$ Change			% Change
	(dollars in thousands)

Selling and marketing	$	193,068		$	284,890		$	(91,822	)		(32	%)
As a percentage of total revenue		51.1	%		63.4	%

The decrease in selling and marketing expense for the six months ended June 30, 2022, as compared to the six months ended June 30, 2021, was primarily due to a $65.5 million decrease in television media and online advertising expense and a $36.2 million decrease in Coach compensation, which was in line with the decrease in commissionable revenue. These decreases were partially offset by a $4.8 million increase in personnel-related expenses, a $5.7 million increase in amortization of intangible assets due to the acquisition of Myx in June 2021, and a $3.4 million increase in expenses from Coach events.

Selling and marketing expense as a percentage of total revenue decreased by 1,230 basis points primarily due to the decrease in media investments compared to the six months ended June 30, 2021. We have reduced our media spend as part of our strategic realignment and in an effort to use our cash in the manner that has the highest probability of return on investment.

Enterprise Technology and Development

Enterprise technology and development expenses relate primarily to enterprise systems applications, hardware, and software that serve as the technology infrastructure for the Company and are not directly related to services provided or tangible goods sold. This includes maintenance and enhancements of the Company’s enterprise resource planning system, which is the core of our accounting, procurement, supply chain and other business support systems. Enterprise technology and development also includes reporting and business analytics tools, security systems such as identity management and payment card industry compliance, office productivity software, research and development tracking tools, and other non-customer facing applications. Enterprise technology and development expenses include personnel-related expenses for employees and consultants who create improvements to and maintain technology

systems and are involved in the research and development of new and existing nutritional products, depreciation of enterprise technology-related assets, software licenses, hosting expenses, and technology equipment leases.


	Three months ended June 30,
	2022			2021			$ Change			% Change
	(dollars in thousands)

Enterprise technology and development	$	24,133		$	26,949		$	(2,816	)		(10	%)
As a percentage of total revenue		13.5	%		12.1	%

The decrease in enterprise technology and development expense for the three months ended June 30, 2022, as compared to the three months ended June 30, 2021, was primarily due to a $4.9 million decrease in personnel-related expenses related to lower headcount and the completion of certain technology initiatives by Q2 2022. This decrease was partially offset by a $2.1 million increase in depreciation expense.

Enterprise technology and development expense as a percentage of total revenue increased by 140 basis points due to higher fixed depreciation expense on lower total revenue.


	Six months ended June 30,
	2022			2021			$ Change		% Change
	(dollars in thousands)

Enterprise technology and development	$	57,830		$	54,038		$	3,792		7	%
As a percentage of total revenue		15.3	%		12.0	%

The increase in enterprise technology and development expense for the six months ended June 30, 2022, as compared to the six months ended June 30, 2021, was primarily due to a $2.3 million increase in depreciation expense and a $1.9 million increase in personnel-related expenses related to certain technology initiatives.

Enterprise technology and development expense as a percentage of total revenue increased by 330 basis points due to higher fixed depreciation and personnel-related costs on lower total revenue.

General and Administrative

General and administrative expense includes personnel-related expenses and facilities-related costs primarily for our executive, finance, accounting, legal and human resources functions. General and administrative expense also includes fees for professional services principally comprised of legal, audit, tax, and insurance.


	Three months ended June 30,
	2022			2021			$ Change		% Change
	(dollars in thousands)

General and administrative	$	19,584		$	17,231		$	2,353		14	%
As a percentage of total revenue		10.9	%		7.7	%

The increase in general and administrative expense for the three months ended June 30, 2022, as compared to the three months ended June 30, 2021, was primarily due to a $3.2 million increase in personnel-related expenses ($2.0 million in incentive compensation and $1.2 million in equity-based compensation) and a $2.6 million increase in insurance expense and accounting fees as a result of operating as a public company. These increases were partially offset by a $1.8 million decrease in rent expense due to our Santa Monica lease

assignment, $1.5 million decrease in transaction costs as there was no acquisition activity in Q2 2022, and a $0.5 million decrease in recruiting expense due to fewer headcount additions in Q2 2022.

General and administrative expense as a percentage of total revenue increased by 320 basis points due to higher fixed costs on lower total revenue.


	Six months ended June 30,
	2022			2021			$ Change		% Change
	(dollars in thousands)

General and administrative	$	39,657		$	35,177		$	4,480		13	%
As a percentage of total revenue		10.5	%		7.8	%

The increase in general and administrative expense for the six months ended June 30, 2022, as compared to the six months ended June 30, 2021, was primarily due to a $5.1 million increase in personnel-related expenses ($2.7 million in incentive compensation and $2.4 million in equity-based compensation) and a $6.2 million increase in insurance expense and accounting, legal, and other professional service fees as a result of operating as a public company. These increases were partially offset by a $3.3 million decrease in rent expense due to our Santa Monica lease assignment, $2.1 million decrease in transaction costs as there was no acquisition activity in 2022, and a $1.0 million decrease in recruiting expenses due to fewer headcount additions in 2022.

General and administrative expense as a percentage of total revenue increased by 270 basis points due to higher fixed costs on lower total revenue.

Restructuring

Restructuring charges relate to our 2022 strategic alignment initiative to consolidate our streaming fitness and nutrition offerings into a single Beachbody platform. The charges incurred primarily relate to employee termination costs.


	Three months ended June 30,
	2022		2021		$ Change		% Change
	(dollars in thousands)

Restructuring	$	1,332	$	—	$	1,332	NM


	Six months ended June 30,
	2022		2021		$ Change		% Change
	(dollars in thousands)

Restructuring	$	8,555	$	—	$	8,555	NM

Other Income (Expense)

The change in fair value of warrant liabilities consists of the fair value changes of the public and private placement warrants. Interest expense primarily consists of interest expense associated with our borrowings and amortization of debt issuance costs for our Credit Facility in 2021. Other income, net, consists of interest income earned on investments and gains (losses) on foreign currency.


	Three months ended June 30,
	2022			2021			$ Change			% Change
	(dollars in thousands)

Change in fair value of warrant liabilities	$	2,070		$	5,390		$	(3,320	)		(62	%)
Interest expense		(3	)		(305	)		302			(99	%)
Other income, net		189			1,654			(1,465	)		(89	%)

The change in fair value of warrant liabilities during the three months ended June 30, 2022 primarily resulted from a decline in our stock price during the quarter. The decrease in interest expense was due to no borrowings outstanding during the three months ended June 30,

2022 compared to $22.0 million during the three months ended June 30, 2021. The decrease in other income was primarily due to the gain on the investment in the convertible instrument from Myx prior to June 25, 2021; there was no similar investment in 2022.


	Six months ended June 30,
	2022			2021			$ Change			% Change
	(dollars in thousands)

Change in fair value of warrant liabilities	$	2,334		$	5,390		$	(3,056	)		(57	%)
Interest expense		(22	)		(428	)		406			(95	%)
Other income, net		125			2,953			(2,828	)		(96	%)

The change in fair value of warrant liabilities during the six months ended June 30, 2022 primarily resulted from a decline in our stock price during 2022. The decrease in interest expense was due to no borrowings outstanding during the six months ended June 30, 2022 compared to $42.0 million during the six months ended June 30, 2021. The decrease in other income was primarily due to the gain on the investment in the convertible instrument from Myx prior to June 25, 2021; there was no similar investment in 2022.

Income Tax Benefit

Income tax benefit consists of income taxes related to U.S. federal and state jurisdictions as well as those foreign jurisdictions where we have business operations.


	Three months ended June 30,
	2022		2021		$ Change			% Change
	(dollars in thousands)

Income tax benefit	$	281	$	10,857	$	(10,576	)		(97	%)

The income tax benefit decrease for the three months ended June 30, 2022, as compared to the three months ended June 30, 2021, was primarily driven by a reduction in our valuation allowance in Q2 2021. We recorded significant deferred tax liabilities in connection with the acquisition of Myx, which was a discrete Q2 2021 event, for which we will not incur future taxable income. This partially reduced our need for a valuation allowance, resulting in income tax benefit recorded during the three months ended June 30, 2021; there was no similar benefit recorded during the three months ended June 30, 2022.


	Six months ended June 30,
	2022		2021		$ Change			% Change
	(dollars in thousands)

Income tax benefit	$	987	$	11,252	$	(10,265	)		(91	%)

The income tax benefit decrease for the six months ended June 30, 2022, as compared to the six months ended June 30, 2021, was primarily driven by a reduction in our valuation allowance in Q2 2021. We recorded significant deferred tax liabilities in connection with the acquisition of Myx, which was a discrete Q2 2021 event, for which we will not incur future taxable income. This partially reduced our need for a valuation allowance, resulting in income tax benefit recorded during the six months ended June 30, 2021; there was no similar benefit recorded during the six months ended June 30, 2022.

Liquidity and Capital Resources


	Six months ended June 30,
	2022			2021
	(dollars in thousands)

Net cash used in operating activities	$	(33,256	)	$	(25,487	)
Net cash used in investing activities		(19,222	)		(74,480	)
Net cash provided by financing activities		2,660			389,775

As of June 30, 2022, we had cash and cash equivalents totaling $57.1 million.

Net cash used in operating activities was $33.3 million for the six months ended June 30, 2022 compared to net cash used in operating activities of $25.5 million for the six months ended June 30, 2021. The increase in cash used in operating activities during the six months ended June 30, 2022, compared to the prior year quarter, was primarily due to the following:

•

an increase in net loss;

•

payments for 2021 payables, including connected fitness inventory, freight and duties, and media;

•

a decrease in subscription revenue receipts from customers in advance of service or product delivery; partially offset by

•

an increase in cash received from inventory sold.

We expect to reduce our cash used in operating activities over the next year, primarily through reduced inventory purchases and investment in media. As of June 30, 2022, our purchases of bike inventory were substantially completed as our inventory level is sufficient to meet expected connected fitness demand over the next year. Also, during the six months ended June 30, 2022, we returned to a performance marketing model which drives in-quarter or next-quarter payback and which reduced media spend by approximately $50.2 million compared to the prior year period.

Net cash used in investing activities was $19.2 million and $74.5 million for the six months ended June 30, 2022 and 2021, respectively. The decrease in net cash used in investing activities was primarily due to a $8.0 million decrease in capital expenditures and $47.3 million for certain investing activities which occurred during the six months ended June 30, 2021, but not during the six months ended June 30, 2022. These investing activities include cash paid for the Myx acquisition, investment in the convertible instrument in Myx, and another investment. We expect lower capital expenditures in 2022 compared to prior year due to the completion of significant projects at the end of 2021.

Net cash provided by financing activities was $2.7 million and $389.8 million for the six months ended June 30, 2022 and 2021, respectively. The decrease in net cash provided by financing activities was primarily due to the completion of the Business Combination during the six months ended June 30, 2021; we had no similar financing during the six months ended June 30, 2022.

We have $45.3 million of lease obligations and purchase commitments associated with contracts that are enforceable and legally binding and that specify all significant terms, including fixed or minimum services to be used, fixed, minimum or variable price provisions, and the approximate timing of the actions under the contracts. See Note 8, Commitments and Contingencies, for discussion of our contractual commitments that are primarily due in the next year. Our future capital requirements may vary materially from those currently planned and will depend on many factors, including our rate of revenue growth and overall economic conditions. We continue to assess and efficiently manage our working capital, and expect to generate additional liquidity through continued cost control initiatives. We believe that existing cash and cash equivalents and cost control initiatives will provide the Company with sufficient liquidity to meet our anticipated cash needs for the next twelve months.

On August 8, 2022 (the “Closing”), we entered into an agreement with a third-party lender for a $50.0 million senior secured term loan (the “Term Loan”) with a four-year maturity. The Term Loan includes an incremental facility of up to an additional $25.0 million subject to certain terms and conditions. The Term Loan was funded at Closing and bears interest at our option of either (i) the Secured Overnight Financing Rate based upon an interest period of three months plus 7.15%, or (ii) a reference rate as defined in the agreement, plus 6.15%. In addition, borrowings will bear interest at 3.00%, which will be paid in kind by capitalizing such interest and adding it to the outstanding principal, annually. We paid an upfront fee of $1.5 million at Closing and are required to pay an annual fee of $0.25 million. The Term Loan requires annual amortization of 2.50% in the first two years and 5.00% in the final two years, paid quarterly, and certain mandatory repayments as defined in the agreement. The Term Loan provides customary restrictions, including prepayment premiums, and requires compliance with certain financial and other covenants.

In connection with the Term Loan, we issued warrants for the purchase of 4,716,756 million shares of the Company’s Class A Common Stock at an exercise price of $1.85 per share. The warrants vest on a monthly basis over four years, with 30%, 30%, 20% and 20% vesting in the first, second, third and fourth years, respectively. The warrants have a seven-year term from the date of Closing.

We expect to use the proceeds for general corporate purposes and to pay transaction fees and expenses related to the Term Loan. We may explore additional equity or debt financing to supplement our anticipated working capital balances and further strengthen our financial position, but do not at this time know which form it will take or what the terms will be. The incurrence of debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financing covenants that would restrict our operations. The sale of additional equity would result in additional dilution to our shareholders. There can be no assurances that we will be able to raise additional capital in amounts or on terms acceptable to us.

Critical Accounting Policies and Estimates

Goodwill and Intangible Assets Impairment

Goodwill and intangible assets deemed to have an indefinite life are not amortized, but instead are assessed for impairment annually at October 1 and between annual tests if an event or change in circumstances occurs that would more likely than not reduce the fair value of a reporting unit below its carrying value or indicate that it is more likely than not that an indefinite-lived intangible asset is impaired. We carry our definite-lived intangible assets at cost less accumulated amortization. If an event or change in circumstances occurs that indicates the carrying value may not be recoverable, we would evaluate our definite-lived intangible assets for impairment at that time. Due to the sustained decline in our market capitalization and macroeconomic factors observed during the three months ended June 30, 2022, we performed an interim test for impairment of our Beachbody reporting unit goodwill and tested our definite-lived intangible assets for recoverability as of June 30, 2022. In performing the interim impairment test for goodwill we elected to bypass the qualitative assessment and proceed to performing the quantitative test.

In testing for impairment of our definite-lived intangible assets, we compared the carrying value of each asset group to its forecasted undiscounted cash flows to determine whether it was recoverable. The carrying values of each of our asset groups exceed their future undiscounted cash flows and are therefore recoverable.

We test goodwill for impairment at a level within the Company referred to as the reporting unit. We have determined that our reporting units are our operating segments, Beachbody and Other, because none of the components of either operating segment constitutes a business for which discrete financial information is available or has operating results which are regularly reviewed by segment management. There is no goodwill held by the Other reporting unit.

In testing for goodwill impairment, we compared the carrying value of the Beachbody reporting unit to its estimated fair value. Fair value was estimated using a combination of a market approach and an income approach, with significant assumptions related to guideline company financial multiples used in the market approach and significant assumptions about revenue growth, long-term growth rates, and discount rates used in a discounted cash flow model in the income approach. As of June 30, 2022, the Beachbody reporting unit’s fair value exceeded the carrying value by approximately 60%. We will continue to monitor changes that would impact the significant assumptions used in the valuation.

Management will continue to monitor its reporting units for changes in the business environment that could impact their fair value. Examples of events or circumstances that could result in changes to the underlying key assumptions and judgments used in our goodwill impairment tests, and ultimately impact the estimated fair value of our reporting unit may include the duration of the COVID-19 global pandemic, its impact on the global economy, supply chain disruptions and demand for at-home fitness solutions; adverse macroeconomic conditions; volatility in the equity and debt markets which could result in higher weighted-average cost of capital and our subscriber growth rates. Changes in any of the assumptions used in the valuation of the reporting unit, or changes in the business environment could materially affect the expected cash flows, and such impacts could potentially result in a material non-cash impairment charge.

Recent Accounting Pronouncements

See Note 1, Description of Business and Summary of Significant Accounting Policies, of the notes to our unaudited condensed consolidated financial statements included elsewhere in this Report for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

Foreign Currency Risk

We are exposed to foreign currency exchange risk related to transactions in currencies other than the U.S. Dollar, which is our functional currency. Our foreign subsidiaries, sales, certain inventory purchases and operating expenses expose us to foreign currency exchange risk. For three months ended June 30, 2022 and 2021, approximately 11% of our revenue was in foreign currencies. These sales were primarily denominated in Canadian dollars and British pounds.

We use derivative instruments to manage the effects of fluctuations in foreign currency exchange rates on our net cash flows. We primarily enter into option contracts to hedge forecasted payments, typically for up to 12 months, for cost of revenue, selling and marketing expenses, general and administrative expenses and intercompany transactions not denominated in the local currencies of our foreign operations. We designate some of these instruments as cash flow hedges and record them at fair value as either assets or liabilities within the consolidated balance sheets. Some of these instruments are freestanding derivatives for which hedge accounting does not apply.

Changes in the fair value of cash flow hedges are recorded in accumulated other comprehensive income (loss) until the hedged forecasted transaction affects earnings. Deferred gains and losses associated with cash flow hedges of third-party payments are recognized in cost of revenue, selling and marketing or general and administrative expenses, as applicable, during the period when the hedged underlying transaction affects earnings. Changes in the fair value of certain derivatives for which hedge accounting does not apply are immediately recognized directly in earnings to cost of revenue.

A hypothetical 10% change in exchange rates, with the U.S. dollar as the functional and reporting currency, would not result in a material increase or decrease in cost of revenue and operating expenses due to the derivative instruments we use to hedge any foreign currency exposure.

The aggregate notional amount of foreign exchange derivative instruments at June 30, 2022 and December 31, 2021 was $26.5 million and $30.4 million, respectively.

Item 4. Controls and Procedures.

Management’s Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of June 30, 2022. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective as of the end of the period covered by this Report.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their objectives, as specified above. Our management recognizes that any control system, no matter how well designed and operated, is based upon certain judgements and assumptions and cannot provide absolute assurance that its objectives will be met.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

We are and, from time to time, we may become, involved in legal proceedings or be subject to claims arising in the ordinary course of our business. There have been no material changes from the information previously reported under Part I, Item 3 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

Item 1A. Risk Factors.

There have been no material developments with respect to the information previously reported under Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

Unregistered Sales of Equity Securities and Use of Proceeds.

None.

Issuer Repurchase of Equity Securities.

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosure.

None.

Item 5. Other Information.

Financing Agreement

On August 8, 2022 (the “Effective Date”),The Beachbody Company, Inc., a Delaware corporation (the “Parent” or the “Company”), Beachbody, LLC, a Delaware limited liability company and wholly-owned direct subsidiary of the Company (the “Borrower”), and certain subsidiaries of the Company (together with the Company and the Borrower, each, a “Loan Party”, and collectively, the “Loan Parties”), entered into a senior secured term loan facility (the “Credit Facility”).

The loan documents for the Credit Facility (the “Loan Documents”) include a Financing Agreement (the “Financing Agreement”) entered into by the Company, the other Loan Parties, the lenders party thereto, and Blue Torch Finance, LLC, as administrative agent and collateral agent (the “Term Loan Agent”) for such lenders.

The Financing Agreement provides for senior secured term loans on the Effective Date in an aggregate principal amount of $50.0 million (the “Term Loan”) which was drawn on the Effective Date. The proceeds of the Credit Facility will be used for general business purposes and to pay transaction fees and expenses related to the Credit Facility. In addition, the Credit Facility contains an incremental facility feature which permits the Borrower to borrow up to an additional $25.0 million, subject to the terms and conditions set forth in the Financing Agreement. The Credit Facility matures on August 8, 2026.

The Borrower’s obligations under the Financing Agreement are guaranteed by the other Loan Parties, including the Company. Pursuant to the Financing Agreement and the other Loan documents, the Company and the other Loan Parties granted a lien to the Term Loan Agent in substantially all of the assets now owned or hereafter acquired by any Loan Party, including, without limitation: accounts, cash and cash equivalents, chattel paper, deposit accounts, documents, equipment, fixtures, general intangibles, instruments, intellectual property and intellectual property licenses, inventory, investment property, letter of credit rights, supporting obligations, insurance policies, goods, books and records, commercial tort claims, and the proceeds and products of each of the foregoing, in each case, subject to certain customary exceptions.

The Term Loan borrowings under the Credit Facility may take the form of base rate (“Reference Rate”) loans or Secured Overnight Financing Rate (“SOFR”) loans. Reference Rate loans will bear interest at a rate per annum equal to the sum of an applicable margin of 6.15% per annum, plus the greatest of (a) 2.00% per annum, (b) the Federal Funds Rate plus 0.50% per annum, (c) the “SOFR Rate” (based upon an interest period of 1 month) plus 1.00% per annum, and (d) the rate last quoted by The Wall Street Journal. SOFR loans will bear interest at a rate per annum equal to the sum of an applicable margin of 7.15% and the “SOFR Rate” (based upon an interest period of 3 months). The “SOFR Rate” is subject to a floor of 1.00%. In addition, the Term Loan borrowings under the Credit Facility will bear interest at a rate per annum equal to 3.00%, which interest will be paid in kind by capitalizing such interest and adding such capitalized interest to the then outstanding principal amount of the loans annually on each anniversary of the Effective Date.

The Financing Agreement contains certain customary covenants, including requirements to prepay the loans in an amount equal to (i) 100% of the net cash proceeds from certain asset dispositions, extraordinary receipts and debt issuances, subject to certain reinvestment rights and other exceptions and (ii) 50% of excess cash flow of the Company and its subsidiaries, subject to certain exceptions. The Credit Facility will amortize at 2.50% per year from the Effective Date to the date that is the second anniversary of the Effective Date, payable on a quarterly basis, and thereafter, at 5.00% per year, payable on a quarterly basis.

Amounts outstanding under the Term Loan Credit Agreement may become due and payable upon the occurrence of specified events of default, which among other things include (subject to certain exceptions and cure periods): failure to pay principal, interest, or any fees or certain other amounts when due; breach of any representation or warranty, covenant, or other agreement in the Financing Agreement and other related loan documents; the occurrence of a bankruptcy or insolvency proceeding with respect to any Loan Party; any failure by a Loan Party to make a payment with respect to indebtedness having an aggregate principal amount in excess of a specified threshold; and certain other customary events of default.

The Financing Agreement contains financial covenants whereby the Loan Parties are required to (a) maintain certain minimum revenue levels, to be tested on a quarterly basis, beginning on the fiscal quarter ending September 30, 2022, and (b) maintain minimum Liquidity (as defined in the Financing Agreement) of (i) $10.0 million at all times from the Effective Date through December 31, 2022, (ii) $12.5 million at all times thereafter through June 30, 2023, and (iii) $15.0 million at all times thereafter through the maturity of the Credit Facility. The Financing Agreement also contains customary representations, warranties, and covenants, which include, but are not limited to, restrictions on indebtedness, liens, fundamental changes, restricted payments, asset sales, affiliate transactions, line of business, investments, negative pledges and amendments to organizational documents and material contracts.

Any amounts voluntarily or mandatorily prepaid under the Credit Facility are subject to a prepayment penalty, subject to certain exceptions, equal to (i) 5.00% of the principal amount prepaid if the prepayment occurs on or prior to the first anniversary of the Effective Date, (ii) 3.00% of the principal amount prepaid if the prepayment occurs after the first anniversary and on or prior to the second anniversary of the Effective Date, (iii) 2.00% of the principal amount prepaid if the prepayment occurs after the second anniversary and on or prior to the third anniversary of the Effective Date, and (iv) 0.00% thereafter.

The foregoing summary does not purport to be complete and is qualified in its entirety by reference to the Financing Agreement which is attached hereto as Exhibit 10.2 and is incorporated by reference herein.

Warrant

Pursuant to the Financing Agreement, on August 8, 2022, the Company issued to certain holders affiliated with Blue Torch Finance, LLC warrants (each, a “Warrant” and, collectively, the “Warrants”) to purchase, in the aggregate, 4,716,756 shares of Class A common stock of the Company, $0.0001 par value per share (the “Common Stock”) at an exercise price of $1.85 per share. The shares of Common Stock underlying the Warrants shall vest in accordance with the schedule set forth in the Warrants (the “Vested Shares”). The Warrants are exercisable for all or part of the unexercised Vested Shares from time to time on or after the Effective Date.

The foregoing summary of the Warrant is qualified in its entirety by reference to the full text of the form of Warrant, a copy of which is attached hereto as Exhibit 10.3 and incorporated herein by reference.

Item 6. Exhibits.


Exhibit		Incorporated by Reference				Filed or Furnished herewith
Exhibit			Form	Exhibit	Filing Date	Filed or Furnished herewith	File No.

2.1	Agreement and Plan of Merger, dated as of February 9, 2021, by and among Forest Road Acquisition Corp., BB Merger Sub, Inc., Myx Merger Sub, LLC, The Beachbody Company Group, LLC, And Myx Fitness Holdings, LLC.	8-K/A	2.1	2/16/2021	001-39735
3.1	Amended and Restated Certificate of Incorporation of The Beachbody Company, Inc.	8-K	3.1	7/1/2021	001-39735
3.2	Amended and Restated Bylaws of The Beachbody Company, Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed July 1, 2021).	8-K	3.2	7/1/2021	001-39735
10.1	Revised Offer of Employment Letter, dated as of May 10, 2022, as amended, by and between Beachbody, LLC and Kathy Vrabeck					*
10.2	Financing Agreement, dated August 8, 2022, by and among Beachbody, LLC, a Delaware limited liability company, The Beachbody Company, Inc., a Delaware corporation (the “Parent”), each subsidiary of the Parent from time to time party thereto, the lenders from time to time party hereto (each a “Lender” and collectively, the “Lenders”), and Blue Torch Finance, LLC, as collateral agent and as administrative agent for the Lenders.					*
10.3	Form of Warrant.					*
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and 15d-14(a)					*

31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and 15d-14(a)					*

32.1	Certification of Chief Executive Officer and Chief Financial Officer of Periodic Report Pursuant to 18 U.S.C. Section 1350					**

101.INS	Inline XBRL Instance Document					*

101.SCH	Inline XBRL Taxonomy Extension Schema Document					*

101.CAL	Inline XBRL Taxonomy Calculation Linkbase Document					*

101.DEF	Inline XBRL Taxonomy Definition Linkbase Document					*

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document					*

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document					*
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith

** Furnished herewith.

^ Indicates management contract or compensatory plan.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



	The Beachbody Company, Inc.

Date: August 8, 2022	By:	/s/ Carl Daikeler
		Carl Daikeler
		Chief Executive Officer
		(Principal Executive Officer)

Date: August 8, 2022	By:	/s/ Marc Suidan
		Marc Suidan
		Chief Financial Officer
		(Principal Financial Officer)