Beachbody Company, Inc. Form 8-K Summary
Business context and reporting period
The filing reports changes to the Company’s independent registered public accounting firm. The Audit Committee acted on April 11, 2023; the Form 8-K was signed and filed on April 14, 2023. The change applies to the fiscal year ending December 31, 2023.
Key financial and control information
- The filing does not provide revenue, profit, cash flow, margin, debt, liquidity, or other operating financial metrics.
- Ernst & Young LLP’s audit reports for the years ended December 31, 2022 and 2021 did not contain an adverse opinion, disclaimer, or qualification, other than the disclosed material weaknesses in internal control over financial reporting.
- Material weaknesses existed as of December 31, 2022 involving information technology general controls, including user access and segregation of duties, program change management, related business-process controls, and documentation of review controls over goodwill and long-lived-asset impairment analyses.
Material changes versus the prior comparable period
- Effective April 11, 2023, the Audit Committee dismissed Ernst & Young LLP following a competitive selection process.
- Effective the same day, the Audit Committee approved Deloitte & Touche LLP as the Company’s independent registered public accounting firm for 2023.
- The Company reported no disagreements with EY during the fiscal years ended December 31, 2022 or 2021, or the subsequent interim period through April 11, 2023.
- The Company reported no reportable events other than the material weaknesses previously disclosed in its 2022 Form 10-K.
Guidance, outlook, risks, contingencies, and unusual items
- No financial guidance or operating outlook is provided.
- The material weaknesses create continuing financial-reporting and internal-control risks, including risks related to unauthorized system access, inadequate change controls, reliance on affected systems, and support for impairment estimates.
- The filing states that neither the Company nor anyone acting on its behalf consulted Deloitte during the relevant periods regarding accounting principles, potential audit opinions, disagreements, reportable events, or other accounting or financial-reporting matters that influenced the auditor-selection decision.
- EY was asked to provide a letter to the SEC regarding the Company’s disclosures. The filing includes EY’s April 14, 2023 letter as Exhibit 16.1.
Important facts for investors to verify
- Whether Deloitte’s engagement remains in effect and whether any subsequent auditor communications identify additional issues.
- The Company’s remediation progress for the disclosed IT general-control and impairment-analysis weaknesses.
- Whether the weaknesses affect the reliability or timeliness of future financial reporting.
- The Company’s next periodic filing for updated financial results, liquidity, debt, guidance, and internal-control disclosures.