Beachbody Company, Inc. current report, 24 July 2023

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Beachbody Company, Inc. — Form 8-K Summary

Business context and reporting period

The filing reports material financing amendments executed on July 24, 2023. It does not present quarterly or annual operating results.

Financing and key financial metrics

  • The Company’s senior secured term loan facility had an original aggregate principal amount of $50.0 million.
  • Beachbody, LLC made a partial term-loan prepayment of $15.0 million, plus accrued interest and a $0.75 million prepayment premium.
  • The amended minimum revenue covenant requires standalone quarterly revenue of $100.0 million for quarters ending from June 30, 2023 through March 31, 2024, and $120.0 million for subsequent quarters through December 31, 2025.
  • The amended minimum liquidity covenant requires at least $20.0 million from July 24, 2023 through March 31, 2024, increasing to $25.0 million thereafter through loan maturity.
  • The filing does not provide current revenue, profit, cash flow, margins, remaining debt balance, or actual liquidity after the prepayment.

Material changes versus prior terms

  • The minimum revenue covenant was changed to test each fiscal quarter on a standalone basis, with revised thresholds.
  • The minimum liquidity requirements were revised to $20.0 million initially and $25.0 million thereafter.
  • The Credit Facility maturity date was accelerated from August 8, 2026 to February 8, 2026.
  • Various financial definitions, reporting covenants, and other covenants were amended.
  • An aggregate of 4,716,756 Blue Torch Warrants was amended and restated. The exercise price was reduced from $1.85 to $0.41 per Class A common share, increasing potential dilution if exercised.

Outlook, risks, contingencies, and unusual items

  • The revised covenants impose specified revenue and liquidity requirements through the shortened maturity date.
  • Failure to meet the revised revenue or liquidity covenants could create financing-related risk; the filing does not state whether the Company was compliant as of the filing date.
  • The $15.0 million prepayment and $0.75 million premium are material cash uses.
  • The lower warrant exercise price may result in additional Class A common stock issuance and dilution.
  • The filing provides no management forecast or operating outlook.

Facts investors should verify

  • Remaining principal balance and interest terms of the Credit Facility after the $15.0 million prepayment.
  • Actual liquidity and compliance with the $20.0 million minimum liquidity covenant.
  • Quarterly revenue relative to the applicable $100.0 million or $120.0 million covenant threshold.
  • Whether any covenant waivers, defaults, amendments, or additional financing actions occurred after July 24, 2023.
  • Potential dilution from the 4,716,756 amended warrants at the $0.41 exercise price.