Beachbody Company, Inc. current report, 02 July 2021

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Beachbody Company, Inc. — Form 8-K Summary

Business Context and Reporting Period

The filing reports corporate actions following the closing of Beachbody’s business combination with Forest Road Acquisition Corp. The report is dated July 2, 2021, with the filing signed July 9, 2021. The filing does not provide operating results for a quarterly or annual reporting period.

Key Financial Metrics and Capital Structure

The filing does not provide clear values for revenue, profit, cash flow, margins, debt, liquidity, or other operating or financial performance metrics.

  • Beachbody’s Class A common stock trades on the NYSE under the symbol BODY.
  • Redeemable warrants trade under BODY WS and are exercisable at $11.50 per share.

Material Changes and Corporate Actions

  • The Board approved a form of indemnification agreement for directors and executive officers. The agreement provides for indemnification and advancement of certain expenses and costs to the maximum extent permitted by law.
  • The audit committee approved the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm, subject to completion of EY’s client acceptance procedures.
  • WithumSmith+Brown, PC, formerly Forest Road’s auditor, was dismissed.
  • Withum’s report on Forest Road’s 2020 financial statements contained no adverse opinion or disclaimer and was not qualified or modified for uncertainty, audit scope, or accounting principles, other than relating to a restatement of the financial statements for the period ended December 31, 2020.
  • The filing states that there were no reportable disagreements or reportable events involving Withum through June 25, 2021. Withum provided a letter to the SEC agreeing with these disclosures.

Compensation Plans, Outlook, and Risks

  • The Board ratified the 2021 Incentive Award Plan, which initially reserves 30,442,594 Class A shares for awards and permits annual increases beginning January 1, 2022, generally capped at the lesser of 5% of outstanding Class A and Class X shares or a smaller Board-determined amount.
  • The plan permits cash and equity awards to employees, consultants, and directors. The maximum number of shares issuable pursuant to incentive stock options is 200,000,000.
  • Named executive officers received options for an aggregate of 2,015,803 shares. The awards vest 25% on each of the first four anniversaries, subject to continued employment.
  • The Company ratified the 2021 Employee Stock Purchase Plan, initially reserving 3,044,259 Class A shares. Annual increases beginning January 1, 2022 are generally capped at the lesser of 1% of outstanding Class A and Class X shares or a smaller Board-determined amount. The maximum issuance under the plan is 100,000,000 shares.
  • The amended and restated 2020 Equity Compensation Plan was terminated, but outstanding awards remain subject to the prior plan and applicable award agreements.
  • The filing provides no management revenue or earnings guidance. Investors should consider potential dilution from equity awards, employee stock purchases, and annual share-reserve increases.

Most Important Facts to Verify

  1. Confirm completion of EY’s client acceptance procedures and its appointment as the Company’s independent auditor.
  2. Review the Withum letter and the referenced 2020 financial-statement restatement.
  3. Assess the potential dilution from the 2021 Incentive Award Plan, executive option grants, and the ESPP.
  4. Review the full indemnification agreement and the terms of outstanding awards under the terminated 2020 plan.
  5. Obtain subsequent periodic filings for actual revenue, profitability, cash flow, debt, liquidity, and guidance information, which are not included in this 8-K.