1. Description of Business and Summary of Significant Accounting Policies

Business

The Beachbody Company, Inc. (“Beachbody” or the “Company”) is a ~~Delaware limited liability~~leading subscription health and wellness company and ~~Myx Fitness Holdings, LLC, a Delaware limited liability company.~~

On February 9, 2021, Forest Road and certain investors entered into subscription agreements (the “Subscription Agreements”) pursuant to which such investors have agreed to purchase in connection with the ~~Closing an aggregate~~creator of 22.5 million shares of Class A common stock for a purchase price of $10.00 per share, for an aggregate purchase price of $225 million (the “PIPE Investment”). The obligations of each party to consummate the PIPE Investment are conditioned upon, among other things, customary closing conditions and the consummationsome of the ~~transactions contemplated by the Merger Agreement.~~

~~As of March 31, 2021 and December 31, 2020, the Company had not yet commenced any operations. All activity~~world’s most popular fitness programs. The Company’s fitness programs are available for streaming through ~~March 31, 2021, relates~~subscription to the ~~Company’s formation~~Beachbody On Demand (“BOD”) or Openfit digital platform, and, the initial public offering (“IPO”) described below. The Company will not generate any operating revenues until after the completion of its initial business combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the IPO.

The Company’s sponsor is Forest Road Acquisition Sponsor LLC, a Delaware limited liability company (the “Sponsor”). The registration statement for the Company’s IPO was declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on November 24, 2020 (the “Effective Date”). On November 30, 2020, the Company consummated the IPO of 30,000,000 units (the “Units” and, with respect to the shares of Class A common stock included in the Units sold, the “Public Shares”), including the issuance of 3,900,000 Units as a result of the underwriters’ partial exercise of their over-allotment option. Each Unit consists of one share of Class A common stock, $0.0001 par value, and one-third of one redeemable warrant entitling its holder to purchase one share of Class A common stock at a price of $11.50 per share. The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $300,000,000 (Note 3).

Simultaneously with the closing of the IPO, the Company consummated the private placement (“Private Placement”) with the Sponsor of an aggregate of 5,333,333 warrants (“Private Placement Warrants”) to purchase Class A common stock, each at a price of $1.50 per Private Placement Warrant, generating total proceeds of $8,000,000 (Note 4).

~~Transaction costs amounted to $16,979,438, consisting of $6,000,000 of underwriting discount, $10,500,000 of deferred underwriters’ fee and $479,438 of other offering costs.~~

~~Trust Account~~

Following the closing of the IPO on November 30, 2020, an amount of $300,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants was placed in a trust account (“Trust Account”) which was invested in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act, which invest only in direct U.S. government treasury obligations, until the earlier of (a) the completion of the Company’s initial Business Combination, (b) the redemption of any public shares properly submitted in connection with a stockholder vote to amend the Company’s certificate of incorporation, or (c) the redemption of the Company’s public shares if the Company is unable to complete the initial Business Combination within 24 months from the closing of the IPO, or November 30, 2022 (the “Combination Period”).

5

~~FOREST ROAD ACQUISITION CORP.~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

~~Initial Business Combination~~

The Company’s management has broad discretion with respect to the specific application of the net proceeds of the IPO and the sale of the Private Placement Warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance that the Company will be able to complete a Business Combination successfully. The Company must complete a Business Combination with one or more operating businesses or assets that together have an aggregate fair market value equal to at least 80% of the net assets held in the Trust Account (net of amounts disbursed to management for working capital purposes, if permitted, and excluding the amount of any deferred underwriting commissions) at the time of the Company’s signing a definitive agreement in connection with its initial Business Combination. However, the Company will only complete a Business Combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires an interest in the target business or assets sufficient for it not to be required to register as an investment company under the Investment Company Act of 1940, as amended (the “Investment Company Act”).

The Company will provide its holders of the outstanding Public Shares (the “public stockholders”) with the opportunity to redeem all or a portion of their Public Shares upon the completion of a Business Combination either (i) in connection with a stockholder meeting called to approve the Business Combination or (ii) by means of a tender offer. The decision as to whether the Company will seek stockholder approval of a Business Combination or conduct a tender offer will be made by the Company. The public stockholders will be entitled to redeem their Public Shares for a pro rata portion of the amount then in the Trust Account (initially anticipated to be $10.00 per Public Share, plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). There will be no redemption rights upon the completion of a Business Combination with respect to the Company’s warrants.

The Company will only proceed with a Business Combination if the Company has net tangible assets of at least $5,000,001 either prior to or upon such consummation of a Business Combination and, if the Company seeks stockholder approval, a majority of the shares voted are voted in favor of the Business Combination. If a stockholder vote is not required by applicable law or stock exchange rules and the Company does not decide to hold a stockholder vote for business or other reasons, the Company will, pursuant to its Amended and Restated Certificate of Incorporation (the “Amended and Restated Certificate of Incorporation”), conduct the redemptions pursuant to the tender offer rules of the SEC and file tender offer documents with the SEC prior to completing a Business Combination.

If, however, stockholder approval of the transaction is required by applicable law or stock exchange rules, or the Company decides to obtain stockholder approval for business or other reasons, the Company will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and not pursuant to the tender offer rules. If the Company seeks stockholder approval in connection with a Business Combination, the Sponsor has agreed to vote its Founder Shares (as defined in Note 5), and any Public Shares purchased during or after the IPO in favor of approving a Business Combination. Additionally, each public stockholder may elect to redeem their Public Shares irrespective of whether they vote for or against the proposed transaction or do not vote at all.

6

~~FOREST ROAD ACQUISITION CORP.~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

Notwithstanding the above, if the Company seeks stockholder approval of a Business Combination and it does not conduct redemptions pursuant to the tender offer rules, the Amended and Restated Certificate of Incorporation provides that a public stockholder, together with any affiliate of such stockholder or any other person with whom such stockholder is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), will be restricted from redeeming its shares with respect to more than an aggregate of 15% or more of the Public Shares, without the prior consent of the Company. The Sponsor has agreed (a) to waive its redemption rights with respect to its Founder Shares and Public Shares held by it in connection with the completion of a Business Combination and (b) not to propose an amendment to the Amended and Restated Certificate of Incorporation (i) to modify the substance or timing of the Company’s obligation to allow redemption in connection with the Company’s ~~initial Business Combination or~~live fitness and comprehensive nutrition programs, through subscription to ~~redeem 100%~~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 ~~its Public Shares if~~micro-influencers (“Coaches”), social media marketing channels, and direct response advertising. During the six months ended June 30, 2022, the Company ~~does not complete~~commenced a Business Combination or (ii) with respect to any other provision relating to stockholders’ rights (including redemption rights) or pre-initial business combination activity, unless the Company provides the public stockholders with the opportunity to redeem their Public Shares in conjunction with any such amendment.

~~There will be no redemption rights or liquidating distributions with respect to the Company’s warrants, which will expire worthless if the Company fails to complete~~process of consolidating its Openfit streaming fitness offering onto a Business Combination within the Combination Period. The Sponsor has agreed to waive its liquidation rights with respect to the Founder Shares if the Company fails to complete a Business Combination within the Combination Period. However, if the Sponsor acquires Public Shares in or after the IPO, such Public Shares will be entitled to liquidating distributions from the Trust Account if the Company fails to complete a Business Combination within the Combination Period.

In order to protect the amounts held in the Trust Account, the Sponsor has agreed to be liable to the Company if and to the extent any claims by a third party for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (1) $10.00 per Public Share and (2) the actual amount per Public Share held in the Trust Account as of the date of the liquidation of the Trust Account due to reductions in the value of the trust assets, less taxes payable, provided that such liability will not apply to claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account nor will it apply to any claims under the Company’s indemnity of the underwriters of the IPO against certain liabilities, including liabilities under the Securities Act of 1933, as amended (the “Securities Act”). Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, the Sponsor will not be responsible to the extent of any liability for such third-party claims. The Company will seek to reduce the possibility that the Sponsor will have to indemnify the Trust Account due to claims of creditors by endeavoring to have all vendors, service providers (except the Company’s independent registered public accounting firm), prospective target businesses and other entities with which the Company does business, execute agreements with the Company waiving any right, title, interest or claim of any kind in or to monies held in the Trust Account.

~~FOREST ROAD ACQUISITION CORP.~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

~~Liquidity~~

As of March 31, 2021, the Company had cash outside the Trust Account of $730,435 available for working capital needs. All remaining cash held in the Trust Account is generally unavailable for the Company’s use, prior to an initial Business Combination, and is restricted for use either in a Business Combination or to redeem common stock. As of March 31, 2021, none of the amount in the Trust Account was available to be withdrawn as described above.

Through March 31, 2021, the Company’s liquidity needs were satisfied through receipt of $25,000 from the sale of the founder shares, advances from the Sponsor in an aggregate amount of $141,881 and the remaining net proceeds from the IPO and the sale of Private Placement Warrants.

The Company anticipates that the $730,435 outside of the Trust Account as of March 31, 2021 will be sufficient to allow the Company to operate for at least the next 12 months from the issuance of the unaudited condensed financial statements, assuming that a Business Combination is not consummated during that time. Until consummation of its Business Combination, the Company will be using the funds not held in the Trust Account, and any additional Working Capital Loans (as defined insingle Beachbody digital platform. See Note ~~5) from the initial stockholders, the Company’s officers and directors, or their respective affiliates (which is described in Note 5)~~13, Strategic Realignment, for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the Business Combination.

~~The Company does not believe it will need to raise~~ additional funds in order to meet the expenditures required for operating its business. However, if the Company’s estimates of the costs of undertaking in-depth due diligence and negotiating business combination is less than the actual amount necessary to do so, the Company may have insufficient funds available to operate its business prior to the business combination. Moreover, the Company will need to raise additional capital through loans from its Sponsor, officers, directors, or third parties. None of the Sponsor, officers or directors is under any obligation to advance funds to, or to invest in, the Company. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of its business plan, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all.

information regarding our strategic realignment initiative.

8

~~FOREST ROAD ACQUISITION CORP.~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

~~Risks and Uncertainties~~

On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus (the “COVID-19 outbreak”). In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve. The impact of the COVID-19 outbreak on the Company’s financial position will depend on future developments, including the duration and spread of the outbreak and related advisories and restrictions. These developments and the impact of the COVID-19 outbreak on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period, the Company’s financial position may be materially adversely affected. Additionally, the Company’s ability to complete an initial Business Combination may be materially adversely affected due to significant governmental measures being implemented to contain the COVID-19 outbreak or treat its impact, including travel restrictions, the shutdown of businesses and quarantines, among others, which may limit the Company’s ability to have meetings with potential investors or affect the ability of a potential target company’s personnel, vendors and service providers to negotiate and consummate an initial Business Combination in a timely manner. The Company’s ability to consummate an initial business combination may also be dependent on the ability to raise additional equity and debt financing, which may be impacted by the COVID-19 outbreak and the resulting market downturn.

~~Note 2 — Significant Accounting Policies~~

Basis of Presentation and Principles of Consolidation

The ~~accompanying unaudited condensed~~Company prepares its consolidated financial statements ~~have been prepared~~ in ~~accordance~~conformity with accounting principles generally accepted in the United States of America (“GAAP”) ~~for interim financial information~~as determined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and in accordance with the instructions to Form 10-Q and Regulation S-X of the SEC. Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the ~~rules and~~ regulations of the ~~SEC for interim financial reporting. Accordingly, they do not include all the information~~U.S. Securities and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.Exchange Commission (“SEC”).

The accompanying unaudited condensed financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K, as amended, as of December 31, 2020 and for the period from September 24, 2020 (inception) through December 31, 2020 as filed with the SEC on May 3, 2021, which contains the audited financial statements and notes thereto. The interim results for the three months ended March 31, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future interim periods.

~~Emerging Growth Company Status~~

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

9

~~FOREST ROAD ACQUISITION CORP.~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

~~Use of Estimates~~

The preparation of unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that ~~affect~~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 and disclosure of contingent assets and liabilities at the date of the unaudited condensed financial statements and the reported amounts of expenses during the reporting period.~~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.

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

10


	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 ~~did not withdraw any interest income~~recognized $23.6 million and $79.2 million of revenue that was included in the deferred revenue balance as of December 31, 2020.

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

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 0 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 ~~March 31,~~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 ~~December 31, 2020, 23,718,818 and 25,377,874~~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	)

12. Derivative Financial Instruments

As of June 30, 2022 and December 31, 2021, the notional amount of the Company’s ~~condensed balance sheet.~~

outstanding foreign exchange options was $26.5 million and $30.4 million, respectively. There were 0 outstanding forward contracts as of June 30, 2022 and December 31, 2021.

10

~~FOREST ROAD ACQUISITION CORP.~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

~~Net Income (Loss) per Common Stock~~

~~Net income (loss) per share of common stock is computed by dividing net income (loss) by~~The following table shows the weighted average number of common stock outstanding for the period. The Company has not considered the effect of warrants sold in the IPO and private placement to purchase 15,333,333 of Class A common stock in the calculation of diluted income (loss) per share, since the exercisepre-tax effects of the ~~warrants are contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive.~~

~~The Company complies with accounting and disclosure requirements ASC Topic 260, “Earnings Per Share.” The~~ Company’s derivative instruments on its unaudited condensed consolidated statements of operations ~~include~~(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 ~~presentation~~strategic alignment initiative to consolidate its streaming fitness offerings into a single Beachbody platform. The Company recognized restructuring costs of ~~income (loss) per share~~$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 ~~common stock subject to possible redemption~~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 ~~a manner similar to~~ the two-class method of income (loss) per share. Net income per share of common stock, basic and diluted for Class A redeemable common stock is calculated by dividing the interest income earned on the Trust Account (totaling $4,432 forCompany’s restructuring-related liability during the three months ended ~~March 31, 2021) by~~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

18

The following table summarizes the ~~weighted average number~~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 ~~Class A redeemable common stock outstanding since original issuance. Net~~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.

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 ~~classification~~Term Loan includes an incremental facility of ~~derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed~~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 ~~end~~Company’s option of ~~each reporting period.~~

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 ~~accounts for its 15,333,333 common stock warrants issued in connection with its IPO (10,000,000)~~paid an upfront fee of $1.5 million at Closing and Private Placement (5,333,333) as derivative warrant liabilities in accordance with ASC 815-40. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjusts the instrumentsis required to ~~fair value at each reporting period.~~pay an annual fee of $0.25 million. The ~~liabilities are subject to remeasurement at each balance sheet date until exercised, and any change in fair value is recognized~~Term Loan requires annual amortization of 2.50% in the ~~Company’s statement of operations.~~first two years and 5.00% in the final two years, paid quarterly, and certain mandatory repayments as defined in the agreement. The ~~fair value of warrants issued by~~Term Loan provides customary restrictions, including prepayment premiums, and requires compliance with certain financial and other covenants. The Company expects to use the ~~Company in~~proceeds for general corporate purposes and to pay transaction fees and expenses related to the Term Loan.

In connection with the ~~IPO and Private Placement has been estimated using Monte Carlo simulations at each measurement date.~~

11

~~FOREST ROAD ACQUISITION CORP.~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

~~Fair Value of Financial Instruments~~

~~The fair value of~~Term Loan, the Company’s assets and liabilities, which qualify as financial instruments under the Financial Accounting Standards Board (“FASB”) ASC 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented in the balance sheet.

~~Income Taxes~~

~~The~~ Company ~~follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized~~issued warrants for the ~~estimated future tax consequences attributable to differences between the financial statements carrying amounts~~purchase of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.

12

~~FOREST ROAD ACQUISITION CORP.~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

~~Recent Accounting Standards~~

Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed financial statements.

~~Note 3 — Initial Public Offering~~

On November 30, 2020, the Company sold 30,000,000 Units at a price of $10.00 per Unit, including the issuance of 3,900,000 Units as a result of the underwriters’ partial exercise of their over-allotment option. Each Unit consists of one share of Class A common stock, par value $0.0001 per share and one-third of one redeemable warrant (each, a “Public Warrant”). Each whole Public Warrant entitles the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment (see Note 8).

~~Note 4 — Private Placement~~

Simultaneously with the closing of the IPO, the Sponsor purchased an aggregate of 5,333,333 Private Placement Warrants, at a price of $1.50 per unit, for an aggregate purchase price of $8,000,000. A portion of the proceeds from the Private Placement Warrants was added to the net proceeds from the IPO held in the Trust Account. Each Private Placement Warrant is exercisable to purchase one share of Class A common stock at $11.50 per share. A portion of the proceeds from the Private Placement Warrants will be added to the proceeds from the IPO to be held in the Trust Account. If the Company does not complete a Business Combination within the Combination Period, the proceeds from the sale of the Private Placement Warrants held in the Trust Account will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law), and the Private Placement Warrants will expire worthless.

13

~~FOREST ROAD ACQUISITION CORP.~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

~~Note 5 — Related Party Transactions~~

~~Founder Shares~~

~~On September 29, 2020, the Sponsor paid $25,000 to cover certain offering costs of the Company in consideration of 7,187,500~~4,716,756 million shares of the Company’s Class B common stock (the “Founder Shares”). The Founder Shares included an aggregate of up to 937,500 shares subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment option was not exercised in full. On November 24, 2020, as part of an upsizing of the IPO, the Sponsor was issued an additional 316,250 Founder Shares by the Company, resulting in a increase in the total number of shares of Class B common stock outstanding from 7,187,500 to 7,503,750 (of which 978,750 were subject to surrender for no consideration depending on the extent to which the underwriters exercised their over-allotment option). On November 30, 2020, the underwriters partially exercised their over-allotment option and forfeited the remaining over-allotment option, hence, 975,000 Founder Shares were no longer subject to forfeiture and 3,750 Founder Shares were forfeited, resulting in an aggregate of 7,500,000 Founder Shares outstanding at March 31, 2021 and December 31, 2020.

~~Promissory Note — Related Party~~

The Sponsor had agreed to loan the Company an aggregate of up to $300,000 to be used for the payment of costs related to the IPO. The promissory note was non-interest bearing, unsecured and was due on the earlier of June 30, 2021 and the closing of the IPO. The promissory note was paid in full out of the IPO proceeds on November 30, 2020, As of March 31, 2021 and December 31, 2020, there was no balance outstanding under the promissory note.

~~Administrative Service Fee~~

The Company has agreed, commencing on the effective date of the IPO through the earlier of the Company’s consummation of a Business Combination or its liquidation, to pay an affiliate of the Sponsor a monthly fee of $10,000 for office space, administrative and support services. Upon completion of the initial Business Combination or the Company’s liquidation, the Company will cease paying these monthly fees. For the three months ended March 31, 2020, the Company has paid $30,000 of administrative fees.

~~Related Party Loans~~

In addition, in order to finance transaction costs in connection with a Business Combination, the Sponsor may, but is not obligated to, loan the Company funds as may be required (“Working Capital Loans”). If the Company completes a Business Combination, the Company may repay the Working Capital Loans out of the proceeds of the Trust Account released to the Company. Otherwise, the Working Capital Loans may be repaid only out of funds held outside the Trust Account. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans, but no proceeds held in the Trust Account would be used to repay the Working Capital Loans, other than the interest on such proceeds that may be released for working capital purposes. Except for the foregoing, the terms of such Working Capital Loans, if any, have not been determined and no written agreements exist with respect to such loans. The Working Capital Loans would either be repaid upon consummation of a Business Combination, without interest, or, at the lender’s discretion, up to $1,500,000 of such Working Capital Loans may be convertible into warrants of the post Business Combination entity at a price of $1.50 per warrant. The warrants would be identical to the Private Placement Warrants. As of March 31, 2021 and December 31, 2020, no Working Capital Loans were outstanding.

14

~~FOREST ROAD ACQUISITION CORP.~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

~~Note 6 — Commitments & Contingencies~~

~~Registration Rights~~

The holders of the Founder Shares, Private Placement Warrants, and warrants that may be issued upon conversion of Working Capital Loans (and any shares of common stock issuable upon the exercise of the Private Placement Warrants or warrants issued upon conversion of the Working Capital Loans and upon conversion of the Founder Shares) are entitled to registration rights pursuant to a registration rights agreement signed on the effective date of the IPO requiring the Company to register such securities for resale (in the case of the Founder Shares, only after conversion to shares of Class A common stock). The holders of these securities will be entitled to make up to three demands, excluding short-form registration demands, that the Company register such securities. In addition, the holders will have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

~~Underwriters Agreement~~

On November 30, 2020, the underwriters were paid a cash underwriting fee of 2% of the gross proceeds of the IPO, totaling $6,000,000. In addition, $0.35 per unit, or approximately $10,500,000 in the aggregate, will be payable to the underwriters for deferred underwriting commissions. The deferred fee will become payable to the underwriters from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement.

~~Note 7 — Warrants~~

Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. The Public Warrants will become exercisable on the later of (a) 12 months from the closing of the IPO and (b) 30 days after the completion of a Business Combination. The Company will not be obligated to deliver any shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect to the Class A common stock underlying the warrants is then effective and a prospectus relating thereto is current, subject to the Company satisfying its obligations with respect to registration. No warrant will be exercisable and the Company will not be obligated to issue any shares of Class A common stock upon exercise of a warrant unless the share of Class A common stock issuable upon such warrant exercise has been registered, qualified or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing of a Business Combination, it will use its best efforts to file with the SEC a registration statement registering the registration, under the Securities Act, of the Class A common stock issuable upon exercise of the warrants. The Company will use its best efforts to cause the same to become effective and to maintain the effectiveness of such registration statement, and a current prospectus relating thereto, until the expiration of the warrants in accordance with the provisions of the warrant agreement. If a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective by the 60th business day after the closing of a Business Combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company will have failed to maintain an effective registration statement, exercise warrants on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act or another exemption. Notwithstanding the above, if the Class A common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it satisfies the definition of a “covered security” under Section 18(b)(1) of the Securities Act, the Company may, at its option, require holders of public warrants who exercise their warrants to do so on a “cashless basis” in accordance with Section 3(a)(9) of the Securities Act and, in the event the Company so elects, the Company will not be required to file or maintain in effect a registration statement, but will use its best efforts to qualify the shares under applicable blue sky laws to the extent an exemption is not available.

15

~~FOREST ROAD ACQUISITION CORP.~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

~~Redemption of warrants for cash. Once the warrants become exercisable, the Company may call the warrants for redemption:~~

●

~~in whole and not in part;~~

●

~~at a price of $0.01 per warrant;~~

●

~~upon not less than 30 days’ prior written notice of redemption to each warrant holder; and~~

●

if, and only if, the closing price of the common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock capitalizations, reorganizations, recapitalizations and the like and for certain issuances of Class A common stock and equity-linked securities for capital raising purposes in connection with the closing of our initial business combination) for any 20 trading days within a 30-trading day period ending three business days before we send to the notice of redemption to the warrant holders.

If and when the warrants become redeemable by the Company, it may exercise its redemption right even if the Company is unable to register or qualify the underlying securities for sale under all applicable state securities laws.

If the Company has not completed the initial Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds ~~with respect to~~ ~~their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.~~

~~Note 8 — Stockholder’s Equity~~

~~Preferred Stock~~ — The Company is authorized to issue a total of 1,000,000 shares of preferred stock at par value of $0.0001 each. At March 31, 2021 and December 31, 2020, there were no shares of preferred stock issued or outstanding.

~~Class~~ A Common Stock —at an exercise price of $1.85 per share. The Company is authorized to issue a total of 300,000,000 shares of Class A common stock at par value of $0.0001 each. At March 31, 2021 and December 31, 2020, there were 6,281,182 and 4,622,126 shares issued and outstanding, respectively (excluding 23,718,818 and 25,377,874 shares, respectively on such dates, subject to possible redemption).

~~Class B Common Stock~~ — The Company is authorized to issue a total of 20,000,000 shares of Class B common stock at par value of $0.0001 each. At March 31, 2021 and December 31, 2020, there were 7,500,000 shares of Class B common stock issued or outstanding.

Holders of Class A common stock and Class B common stock will vote together as a single class on all matters submitted to a vote of stockholders except as required by law. The shares of Class B common stock will automatically convert into shares of Class A common stock at the time of a Business Combinationwarrants vest on a ~~one-for-one~~monthly basis ~~subject to adjustment. In the case that additional shares of Class A common stock or equity-linked securities are issued or deemed issued in connection~~over four years, with ~~a Business Combination, the number of shares of Class A common stock issuable upon conversion of all Founder Shares will equal,~~30%, 30%, 20% and 20% vesting in the aggregate, on an as-converted basis, 20% of the total number of shares of Class A common stock outstanding after such conversion (after giving effect to any redemptions of shares of Class A common stock by public stockholders), including the total number of shares of Class A common stock issued, or deemed issued or issuable upon conversion or exercise of any equity-linked securities or rights issued or deemed issued, by the Company in connection with or in relation to the consummation offirst, second, third and fourth years, respectively. The warrants have a Business Combination, excluding any shares of Class A common stock or equity-linked securities or rights exercisable for or convertible into shares of Class A common stock issued, or to be issued, to any seller in a Business Combination and any Private Placement Warrants issued to the Sponsor, officers or directors upon conversion of Working Capital Loans, provided that such conversion of Founder Shares will never occur on a less than one-for-one basis.

~~FOREST ROAD ACQUISITION CORP.~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

~~Note 9 — Fair Value Measurements~~

Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:

	●	~~Level 1 - defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;~~

	●	Level 2 - defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

	●	~~Level 3 - defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived~~seven-year term from ~~valuation techniques in which one or more significant inputs or significant value drivers are unobservable.~~

~~At March 31, 2021, there were 10,000,000 Public Warrants and 5,333,333 Private Placement Warrants outstanding.~~

The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at March 31, 2021 and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

March 31, Quoted
Prices In
Active
Markets Significant
Other
Observable
Inputs Significant
Other
Unobservable
Inputs
2021 (Level 1) (Level 2) (Level 3)
Description
Warrant Liability – Public Warrants $ 26,900,000 $ 26,900,000 $ - $ -
Warrant Liability – Private Warrants $ 18,705,664 $ - $ - $ 18,705,664
$ 45,605,664 $ 26,900,000 $ - $ 18,705,664

17

~~FOREST ROAD ACQUISITION CORP.~~

~~NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS~~

The Company utilizes a Monte Carlo simulation model to value the warrants at each reporting period, with changes in fair value recognized in the statement of operations. The estimated fair value of the warrant liability is determined using Level 3 inputs. Inherent in a binomial options pricing model are assumptions related to expected share-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its shares of common stock based on historical volatility that matches the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates to remain at zero. ~~As of March 31, 2021, the public warrants were valued using the actual closing trading price on March 31, 2021.~~

~~The aforementioned warrant liabilities are not subject to qualified hedge accounting.~~

Transfers to/from Levels 1, 2 and 3 are recognized at the end of the reporting period. There were no transfers between levels for the three months ended March 31, 2021, other than the transfer of the Public Warrants from Level 3 to Level 1.

~~The following table provides quantitative information regarding Level 3 fair value measurements:~~

As of March 31,
2020 As of
December 31,
2020
Stock price $ 10.12 $ 10.50
Strike price $ 11.50 $ 11.50
Term (in years) 5.0 5.0
Volatility 43.3 % 31.3 %
Risk-free rate 0.92 % 0.44 %
Dividend yield 0.0 % 0.0 %

~~Note 10 — Subsequent Events~~

~~The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to~~ the date that the unaudited condensed financial statements were issued. Based upon this review, the Company did not identify any subsequent events that would have required adjustment or disclosure in the financial statements.of Closing.

21

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

~~References to the “Company,” “us,” “our” or “we” refer Forest Road Acquisition Corp.~~ The following discussion and analysis ~~of our financial condition and results of operations~~ should be read in conjunction with our ~~audited~~ financial statements and related notes included ~~herein.~~

~~Cautionary Note Regarding Forward-Looking Statements~~

~~All statements other than statements of historical fact included~~elsewhere in this report including, without limitation, statements under “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategyQuarterly Report on Form 10-Q (this “Report”) and the ~~plans~~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 ~~objectives~~Section 21E of ~~management for future~~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 ~~forward-looking statements. When used in this report,~~typically identified by words such as ~~“anticipate,~~“plan,” “believe,” “expect,” “anticipate,” “intend,” “outlook,” “estimate,” ~~“expect,~~“forecast,” ~~“intend”~~“project,” “continue,” “could,” “may,” “might,” “possible,” “potential,” “predict,” “should,” “would” and other similar words and expressions, ~~as they relate to us or~~but the ~~Company’s management, identify forward-looking statements. Such~~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 ~~beliefs~~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.

22

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.

23

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 ~~assumptions made~~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.

24

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).

25

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.

26

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 ~~currently available~~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 ~~Company’s management. Actual results could differ materially~~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	)

27

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 ~~those contemplated by the forward- looking statements~~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 ~~factors detailed~~Coaches elected to become preferred customers rather than remain in our ~~filings~~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 ~~SEC. All subsequent written or oral forward-looking statements~~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 ~~us or persons acting~~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 ~~Company’s behalf are qualified~~six months ended June 30, 2021.

The decrease in ~~their entirety~~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 ~~this paragraph.~~$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.

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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 ~~following discussion and analysis~~increase in digital cost of ~~our financial condition and results of operations should be read~~revenue for the three months ended June 30, 2022, as compared to the three months ended June 30, 2021, was driven, in ~~conjunction with the financial statements and the notes thereto contained elsewhere in this report. Certain information contained~~part, by a $3.7 million increase in the ~~discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.~~

~~Results~~amortization of ~~Operations and Known Trends or Future Events~~

~~We have neither engaged in any operations nor generated any revenues~~content assets related to date. Our only activities since inception have been organizational activities, those necessary to prepare for our initial public offering and identifying a target company for our initial business combination. We do not expect to generate any operating revenues until after completion of our initial business combination. We generate non-operating incomeBODi which launched in the ~~form~~fourth quarter of ~~interest income on cash~~2021 and ~~cash equivalents held~~content acquired from Myx in ~~the trust account. We incur~~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 ~~being~~additional headcount focused on our digital streaming services. These increases were partially offset by a ~~public company (for legal, financial reporting, accounting~~$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 ~~auditing compliance),~~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.

29

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 ~~diligence expenses.~~

~~We have neither engaged~~to a $13.0 million decrease in ~~any operations nor generated any revenues to date. Our only activities since inception have been organizational activities, those necessary to prepare for our initial public offering~~product costs, freight, and ~~identifying~~shipping expense as the result of the decrease in nutrition and other revenue and a ~~target company for our initial business combination. We do not expect to generate any operating revenues until after completion~~$2.5 million decrease in customer service as nutrition and other comprises less of our ~~initial business combination. We generate non-operating income~~total revenue. These were partially offset by a $1.2 million increase in depreciation expense. Despite a favorable impact from the ~~form of interest income on cash~~preferred customer membership program, nutrition and ~~cash equivalents held in the trust account. We incur expenses~~other gross margin decreased primarily as a result of ~~being~~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 ~~public company (for legal, financial reporting, accounting~~$7.1 million increase in the amortization of content assets related to BODi which launched in the fourth quarter of 2021 and ~~auditing compliance),~~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.

30

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 ~~we conduct due diligence~~a percentage of total revenue may fluctuate from period to period based on ~~prospective business combination candidates.~~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	%

~~For~~

The decrease in selling and marketing expense for the three months ended ~~March 31, 2021, we had a net loss of $16,590,561. We incurred $2,724,770 of operating costs, consisting of public company operating expenses and costs related~~June 30, 2022, as compared to ~~preparing for the initial business combination. We had interest income of $20 of interest on the bank account and investment income of $4,432 from marketable securities held in trust account. For~~ the three months ended ~~March 31,~~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

31

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

32

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 ~~warrants~~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 ~~an increase~~our stock price during the quarter. The decrease in interest expense was due to no borrowings outstanding during the three months ended June 30,

33

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 ~~liability~~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 ~~approximately $13,870,243.~~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.

34

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 ~~March 31, 2021,~~June 30, 2022, we had cash ~~outside~~and cash equivalents totaling $57.1 million.

Net cash used in operating activities was $33.3 million for the ~~trust account~~six months ended June 30, 2022 compared to net cash used in operating activities of ~~$730,435 available~~$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 millionand $389.8 millionfor 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, ~~needs. All remaining~~and expect to generate additional liquidity through continued cost control initiatives. We believe that existing cash ~~held~~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 ~~trust account~~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 ~~generally unavailable~~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.

35

In connection with the Term Loan, we issued warrants for the ~~Company’s use, prior to an initial business combination, and is restricted for use either in a business combination or to redeem common stock.~~

~~Through March 31, 2021,~~purchase of 4,716,756 million shares of the Company’s ~~liquidity needs were satisfied through receipt~~Class A Common Stock at an exercise price of ~~$25,000~~$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 ~~the founder shares, advances from the sponsor~~additional equity would result in ~~an aggregate amount of $141,881 and the remaining net proceeds from the initial public offering and the sale of private placement warrants.~~

~~The Company anticipates~~additional dilution to our shareholders. There can be no assurances that ~~the $730,735 of cash held outside of the trust account as of March 31, 2021,~~we will be sufficient to allow the Company to operate for at least the next 12 months, assuming that a business combination is not consummated during that time. Until consummation of our business combination, the Company will be using the funds not held in the trust account, and any additional Working Capital Loans (as defined in Note 5 to our financial statements) from the initial stockholders, the Company’s officers and directors, or their respective affiliates (which is described in Note 5 to our financial statements), for identifying and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the business combination.

The Company does not believe it will need to raise additional funds in order to meet the expenditures required for operating its business. However, if the Company’s estimates of the costs of undertaking in-depth due diligence and negotiating business combination is less than the actual amount necessary to do so, the Company may have insufficient funds available to operate its business prior to the business combination. Moreover, the Company will needable to raise additional capital ~~through loans from its sponsor, officers, directors,~~in amounts or ~~third parties. None of the sponsor, officers~~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 directors are under any obligation to advance funds to, or to invest in, the Company. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of its business plan, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all.

~~Derivative Warrant Liabilities~~

We do not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. We evaluate all of our financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480 and ASC 815-15. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is reassessed at the end of each reporting period.

We issued an aggregate of 15,333,333 warrants in connection with our initial public offering and private placement, which are recognized as derivative liabilities in accordance with ASC 815-40. Accordingly, we recognize the warrants as liabilities at fair value and adjust the instruments to fair value at each reporting period. The liabilities are subject to remeasurement at each balance sheet date until exercised, and any change in ~~fair value is recognized in~~circumstances occurs that would more likely than not reduce the ~~Company’s statement of operations. The~~ fair value of ~~warrants issued~~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 ~~connection with~~circumstances occurs that indicates the carrying value may not be recoverable, we would evaluate our ~~initial public offering~~definite-lived intangible assets for impairment at that time. Due to the sustained decline in our market capitalization and ~~private placement~~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 ~~been~~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 ~~Monte Carlo simulations at each measurement date.~~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.

36

Item 3. Quantitative and Qualitative Disclosures About Market ~~Risk~~Risk.

Foreign Currency Risk

~~Not required~~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 ~~smaller~~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 ~~companies.~~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~~Procedures.

Management’s Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Under the supervision and with the participation of our management, including our ~~principal executive officer~~Chief Executive Officer and ~~principal financial and accounting officer,~~Chief Financial Officer, we ~~conducted an evaluation of~~evaluated the effectiveness of our disclosure controls and procedures ~~as of the end of the fiscal quarter ended March 31, 2021, as such term is~~(as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange ~~Act.~~Act of 1934, as amended (the “Exchange Act”)) as of June 30, 2022. Based upon that evaluation, our ~~principal executive officer~~Chief Executive Officer and ~~principal financial and accounting officer~~Chief Financial Officer concluded that ~~solely due to the Company’s restatement of its financial statements to reclassify the Company’s warrants as described in the Form 10-K/A filed May 3, 2021, a material weakness existed and~~ our disclosure controls and procedures were ~~not~~ effective as of ~~March 31, 2021.~~

~~To remediate~~ the ~~material weakness pertaining to the presentation~~end of the ~~Company’s warrants as equity instead of liability, as disclosed in the Company’s Annual Report on Form 10-K, as amended on May 5, 2021, for the~~ period ~~ended December 31, 2021, the Company has reviewed its internal controls and enhanced the supervisory review of accounting procedures in~~covered by this ~~financial reporting area.~~Report.

Changes in Internal Control ~~over~~Over Financial Reporting

~~During the most recently completed fiscal quarter ended March 31, 2021, there was~~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.

37

PART ~~II -~~ II—OTHER INFORMATION

Item 1. Legal Proceedings.

~~None.~~

~~Item 1A. Risk Factors.~~

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 ~~risk factors~~information previously ~~disclosed in~~reported under Part I, Item 3 of our ~~Amendment No. 1~~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 ~~annual report~~information previously reported under Part I, Item 1A of our Annual Report on Form ~~10-K/A filed with~~10-K for the ~~SEC on May 3, 2021 and in our Form S-4, initially filed on February 16, 2021, as amended.~~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~~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 ~~November 30, 2020, we consummated our initial public offering~~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 ~~30,000,000 units,~~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 ~~included 3,900,000 units issued pursuant~~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 ~~partial exercise~~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 ~~underwriters~~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 ~~their over-allotment option. Each unit consists~~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 ~~one share~~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.

38

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 ~~$0.0001~~ per share ~~and one-third~~(the “Common Stock”) at an exercise price of ~~one redeemable warrant, with each whole warrant entitling the holder thereof to purchase one share of Class A common stock for $11.50~~$1.85 per share. The ~~units were sold at a price~~shares of ~~$10.00 per unit, generating gross proceeds to us of $300,000,000.~~

~~Simultaneously~~Common Stock underlying the Warrants shall vest in accordance with the ~~closing~~schedule set forth in the Warrants (the “Vested Shares”). The Warrants are exercisable for all or part of ~~our initial public offering, we completed~~ the ~~private sale~~unexercised Vested Shares from time to time on or after the Effective Date.

The foregoing summary of an aggregate of 5,333,333 private placement warrants to Forest Road Acquisition Sponsor LLC, our sponsor, at a purchase price of $1.50 per private placement warrant, generating gross proceeds to us of $8,000,000. This issuance of private placement warrants was be made pursuantthe Warrant is qualified in its entirety by reference to the ~~exemption from registration contained in Section 4(a)(2)~~full text of the ~~Securities Act.~~form of Warrant, a copy of which is attached hereto as Exhibit 10.3 and incorporated herein by reference.

A total of $300,000,000, comprised of $292,000,000 of the proceeds from our initial public offering (which amount includes $10,500,000 of the underwriters’ deferred discount) and $8,000,000 of the proceeds of the sale of the private placement warrants, was placed in a U.S.-based trust account maintained by Continental Stock Transfer & Trust Company, acting as trustee. The proceeds held in the trust account are invested only in U.S. government treasury obligations with a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act which invest only in direct U.S. government treasury obligations.39

There has been no material change in the planned use of the proceeds from the Initial Public Offering and Private Placement as is described in the Company’s final prospectus related to the Initial Public Offering.

~~Item 3. Defaults Upon Senior Securities.~~

~~None.~~

~~Item 4. Mine Safety Disclosures.~~

~~Not Applicable.~~

~~Item 5. Other Information.~~

~~None.~~

Item 6. ~~Exhibits~~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)

~~The following exhibits are filed as part of,~~

* Filed herewith

** Furnished herewith.

^ Indicates management contract or ~~incorporated by reference into, this Quarterly Report on Form 10-Q.~~compensatory plan.

40

~~No.~~		~~Description of Exhibit~~
~~2.1~~		~~Agreement and Plan of Merger, dated as of February 9, 2021, by and among the Company, Beachbody Merger Sub, Myx Merger Sub, Beachbody and Myx. (1)~~
~~10.1~~		~~Form of Subscription Agreement. (1)~~
~~10.2~~		~~Sponsor Agreement, dated as of February 9, 2021, by and among the Company, Forest Road Acquisition Sponsor LLC and Beachbody. (1)~~
~~10.3~~		~~Member Support Agreement, dated as of February 9, 2021, by and among the Company, Beachbody, and certain equityholders of Beachbody set forth therein. (1)~~
~~10.4~~		~~Myx Support Agreement, dated as of February 9, 2021, by and among the Company, Myx, Beachbody, and certain equityholders of Myx set forth therein. (1)~~
31.1*		~~Certification of Principal Executive Officer~~ SIGNATURES Pursuant to ~~Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~
31.2*		~~Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~
32.1**		~~Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~
32.2**		~~Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002~~
101.INS*		~~XBRL Instance Document~~
101.CAL*		~~XBRL Taxonomy Extension Calculation Linkbase Document~~
101.SCH*		~~XBRL Taxonomy Extension Schema Document~~
101.DEF*		~~XBRL Taxonomy Extension Definition Linkbase Document~~
101.LAB*		~~XBRL Taxonomy Extension Labels Linkbase Document~~
101.PRE*		~~XBRL Taxonomy Extension Presentation Linkbase Document~~

*	~~Filed herewith.~~
**	~~Furnished herewith.~~

~~(1)~~

~~Incorporated by reference to the Company’s Form 8-K/A, filed with the SEC on February 16, 2021.~~

~~SIGNATURES~~

~~In accordance with~~ 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.

	~~FOREST ROAD ACQUISITION CORP.~~

~~Date: May 17, 2021~~	~~By:~~	~~/s/ Keith L. Horn~~ The Beachbody Company, Inc.
	~~Name:~~	~~Keith L. Horn~~
Date: August 8, 2022	~~Title:~~	By:	/s/ Carl Daikeler
			Carl Daikeler
			Chief Executive Officer ~~and Secretary~~
			(Principal Executive Officer)

Date: ~~May 17, 2021~~August 8, 2022	~~By:~~	By:	/s/ ~~Salil Mehta~~Marc Suidan
	~~Name:~~	~~Salil Mehta~~	Marc Suidan
	~~Title:~~		Chief Financial Officer
			(Principal Financial ~~and Accounting~~ Officer)

41

23

~~Delaware~~		~~85-3222090~~
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)


Title of each class	Trading Symbol(s)	~~Trading Symbol(s)~~	Name of each exchange on which registered
~~Units, each consisting of one share of Class A Common Stock and one-third of one Redeemable Warrant~~		~~FRX.U~~	~~The New York Stock Exchange~~
Class A Common Stock, par value $0.0001 per share	BODY	~~FRX~~	The New York Stock Exchange
Redeemable ~~Warrants,~~warrants, each whole warrant exercisable for one ~~share of~~ Class A ~~Common Stock~~common stock at an exercise price of $11.50	BODY WS	~~FRXWS~~	The New York Stock Exchange

	~~☐ Large accelerated filer~~	~~☐ Accelerated filer~~
Large Accelerated Filer ☐	Accelerated Filer☒ ~~Non-accelerated filer~~	☒ Non-Accelerated Filer ☐	Smaller ~~reporting company~~
Reporting Company ☐		☒ Emerging ~~growth company~~Growth Company ☐

		~~Page~~
~~PART 1 – FINANCIAL INFORMATION~~ Part I.	Financial Information	3
Item 1.	Financial Statements	3
~~Item 1.~~	~~Financial Statements~~Condensed Consolidated Balance Sheets	3
	Unaudited Condensed Consolidated Statements of Operations	4
	Unaudited Condensed ~~Balance Sheet (unaudited)~~Consolidated Statements of Comprehensive Loss	1 5
	Unaudited Condensed Consolidated Statements of Stockholders’ Equity	6
	Unaudited Condensed ~~Statement of Operations (unaudited)~~	2

	~~Condensed Statement of Changes in Stockholders’ Equity (unaudited)~~	3

	~~Condensed Statement~~Consolidated Statements of Cash Flows ~~(unaudited)~~	4 7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
	~~Notes to Condensed Financial Statements (unaudited)~~	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and ~~Results of~~ Operations	19 22

Item 3.	Quantitative and Qualitative Disclosures ~~about~~About Market Risk	20 37
Item 4.	Controls and Procedures	37
~~Item 4.~~ Part II.	~~Control and Procedures~~Other Information	20 38
Item 1.	Legal Proceedings	38
~~PART II – OTHER INFORMATION~~

~~Item 1.~~	~~Legal Proceedings~~	21

~~Item 1A.~~	~~Risk Factors~~	21

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	21 38

Item 3.	Defaults Upon Senior Securities	21 38

Item 4.	Mine Safety Disclosures	21 38
Item 5.	Other Information	38
Item 5.6.	~~Other Information~~Exhibits	21 40
Signatures
~~Item 6.~~	~~Exhibits~~	22

~~SIGNATURES~~		23 41

	March 31, 2021 (Unaudited)			December 31, 2020
Assets
Current assets:
Cash	$	730,435		$	1,183,830
Prepaid expenses		254,931			294,383
Total current assets		985,366			1,478,213
Marketable Securities Held in Trust account		300,004,432			300,000,000
Total assets	$	300,989,798		$	301,478,213

Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued expenses	$	2,675,348		$	409,896
Due to related party		20,600			—
Franchise tax payable		—			54,149
Total current liabilities		2,695,948			464,045
Warrant Liabilities		45,605,664			31,735,421
Deferred underwriters’ discount payable		10,500,000			10,500,000
Total liabilities		58,801,612			42,699,466

Commitments
Class A common stock subject to possible redemption, 23,718,818 and 25,377,874 shares at redemption value at March 31, 2021 and December 31, 2020, respectively		237,188,180			253,778,740

Stockholders’ equity:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued or outstanding		—			—
Class A common stock, $0.0001 par value; 300,000,000 shares authorized; 6,281,182 shares and 4,622,126 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively (excluding 23,718,818 and 25,377,874 shares subject to possible redemption, respectively)		628			462
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 7,500,000 shares issued and outstanding at March 31, 2021 and December 31, 2020		750			750
Additional paid-in capital		29,506,028			12,915,634
Accumulated deficit		(24,507,400	)		(7,916,839	)
Total stockholders’ equity		5,000,006			5,000,007
Total liabilities and stockholders’ equity	$	300,989,798		$	301,478,213


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


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


	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, NaN 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: 0 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


Operating costs	$	2,724,770
Loss from operations		(2,724,770	)

Other Income (Expense)
Interest income		20
Change in fair value of warrant liabilities		(13,870,243	)
Interest income on marketable securities held in Trust account		4,432
Total other income (expense)		(13,865,791	)

Net loss	$	(16,590,561	)

Weighted average shares outstanding - Class A common stock		30,000,000
Basic and diluted net income per share of common stock – Class A common stock	$	0.00
Weighted average shares outstanding - Class B common stock		7,500,000
Basic and diluted net income per share of common stock – Class B common stock	$	(2.21	)

	Common Stock								Additional					Total
	Class A				Class B				Paid-In		Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Capital		Deficit			Equity
Balance as of December 31, 2020		4,622,126	$	462		7,500,000	$	750	$	12,915,634	$	(7,916,839	)	$	5,000,007
Change in Class A common stock subject to possible redemption		1,659,056		166		—		—		16,590,394		—			16,590,560
Net loss		—		—		—		—		—		(16,590,561	)		(16,590,561	)
Balance as of March 31, 2021		6,281,182	$	628		7,500,000	$	750	$	29,506,028	$	(24,507,400	)	$	5,000,006

Cash Flows from Operating Activities:
Net loss	$	(16,509,561	)
Adjustments to reconcile net loss to net cash used in operating activities:
Change in fair value of warrant liabilities		13,870,243
Interest income on trust account		(4,432	)
Changes in current assets and current liabilities:
Prepaid assets		39,452
Accounts payable and accrued expenses		2,265,452
Due to related party		20,600
Franchise tax payable		(54,149	)
Net cash used in operating activities		(453,395	)

Net Change in Cash		(453,395	)
Cash - Beginning		1,183,830
Cash - Ending	$	730,435

Supplemental Disclosure of Non-cash Financing Activities:
Change in value of Class A common stock subject to possible redemption	$	(16,590,560	)



							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


	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



	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


	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


	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	$	—


	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


	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



	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


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

	March 31,		Quoted Prices In Active Markets		Significant Other Observable Inputs		Significant Other Unobservable Inputs
	2021		(Level 1)		(Level 2)		(Level 3)
Description
Warrant Liability – Public Warrants	$	26,900,000	$	26,900,000	$	-	$	-
Warrant Liability – Private Warrants	$	18,705,664	$	-	$	-	$	18,705,664
	$	45,605,664	$	26,900,000	$	-	$	18,705,664

	As of March 31, 2020			As of December 31, 2020
Stock price	$	10.12		$	10.50
Strike price	$	11.50		$	11.50
Term (in years)		5.0			5.0
Volatility		43.3	%		31.3	%
Risk-free rate		0.92	%		0.44	%
Dividend yield		0.0	%		0.0	%