Business Context and Reporting Period
Beachbody Company, Inc. was not yet the registrant at the time of this filing. The filing was made by Forest Road Acquisition Corp., a special purpose acquisition company (SPAC), in connection with its initial public offering and related transactions. The report was dated December 1, 2020, with the earliest reported events beginning November 24, 2020.
Key Financial and Capitalization Metrics
| Item | Reported amount or terms |
|---|---|
| IPO units issued | 30,000,000 units, including 3,900,000 units from a partial underwriter over-allotment exercise |
| IPO price and gross proceeds | $10.00 per unit; $300.0 million gross proceeds |
| Public warrants | One-third warrant per unit; each whole warrant is exercisable for one Class A share at $11.50 |
| Private placement warrants | 5,333,333 warrants sold to the sponsor at $1.50 each; $8.0 million gross proceeds |
| Trust account | $300.0 million deposited, consisting of $292.0 million of IPO proceeds and $8.0 million of private placement proceeds |
| Deferred underwriting discount | $10.5 million included in the IPO proceeds placed in trust |
| Founder shares | 3,750 founder shares forfeited and cancelled after the partial exercise of the over-allotment option |
The filing does not provide operating revenue, profit, cash flow, margins, or conventional debt and liquidity metrics. The company’s principal liquidity resource was the trust account, subject to the restrictions described below.
Material Changes and Transaction Terms
- The IPO closed on November 30, 2020.
- The company entered into underwriting, warrant, trust, registration rights, sponsor, administrative support, and related agreements dated November 24, 2020.
- The company issued 5,333,333 private placement warrants to its sponsor in an unregistered transaction under Section 4(a)(2) of the Securities Act.
- An amended and restated certificate of incorporation became effective on November 24, 2020.
Outlook, Risks, Contingencies, and Unusual Items
- The trust funds generally cannot be released until the earliest of an initial business combination, required redemption if no business combination is completed within 24 months after the IPO closing, or certain stockholder-approved amendments affecting redemption rights or other material provisions.
- Interest earned on the trust account may be released for taxes, less up to $100,000 of interest for dissolution expenses.
- The filing does not identify a target business, provide operating guidance, or state a forecast for revenue or earnings.
- Completion of a business combination was contingent on identifying and consummating a transaction within the applicable 24-month period and subject to shareholder redemption rights.
- The sponsor’s private placement warrants and founder shares create potential dilution to public shareholders. The sponsor’s founder share forfeiture was limited to 3,750 shares because substantially all of the underwriter’s over-allotment option was exercised.
Important Facts for Investors to Verify
- Confirm the subsequent business combination that resulted in the Beachbody Company, Inc. entity and the terms provided to Forest Road shareholders.
- Review the trust-account restrictions, redemption mechanics, and the deadline for completing the initial business combination.
- Verify the final number of public shares, founder shares, warrants, and private placement warrants outstanding after the over-allotment adjustment.
- Review the underwriting agreement for the $10.5 million deferred discount and any other offering expenses or indemnification provisions.
- Assess the dilution implications of the $11.50 public warrants, sponsor warrants, and founder shares.