Beachbody Company, Inc.

We intend to minimize our need to procure additional space as we add employees and expand geographically due to our emphasis on remote-first capabilities for our corporate workforce. We believe that our facilities are adequate to meet our needs for the immediate future and that suitable additional space will be available to accommodate any expansion of our operations as needed.

• We rely on consumer discretionary spending, which may be adversely affected by economic downturns and other macroeconomic conditions or trends.
• Adverse publicity associated with our products or ingredients, or those of similar companies, could adversely affect our business.
• We may not successfully execute or achieve the expected benefits of our strategic initiatives, including the Pivot, and other cost-saving measures we may take in the future, and our efforts may result in further actions and/or additional asset impairment charges and adversely affect our business.
• Our marketing strategy relies on the use of social media platforms and any negative publicity on such social media platforms may adversely affect the public perception of our brand, and changing terms or conditions or ways in which advertisers use their platforms may adversely affect our ability to engage with customers, both of which in turn could have a material and adverse effect on our business, results of operations and financial condition. In addition, our use of social media could subject us to fines or other penalties.
• We may be unable to attract and retain customers, which would materially and adversely affect our business, results of operations and financial condition.
• Our customers use their connected fitness products and fitness accessories to track and record their workouts. If our products fail to provide accurate metrics and data to our customers, our brand and reputation could be harmed, and we may be unable to retain our customers.
• Our business relies on sales of a few key products.
• We operate in highly competitive markets and we may be unable to compete successfully against existing and future competitors.
• We have limited control over our suppliers, manufacturers, and logistics providers, which may subject us to significant risks, including the potential inability to produce or obtain quality products on a timely basis or in sufficient quantity in order to meet demand.
• The failure or inability of our contract manufacturers to comply with the specifications and requirements of our products could result in a product recall, which could adversely affect our reputation and subject us to significant liability should the consumption of any of our products cause or be claimed to cause illness or physical harm.
• If any of our products are unacceptable to us or our customers, our business could be harmed.
• Our products and services may be affected from time to time by design and manufacturing defects that could adversely affect our business and result in harm to our reputation.
• We may incur material product liability claims, which could increase our costs and adversely affect our revenues and operating income.
• Our business model relies on high quality customer service, and any negative impressions of our customer service experience may adversely affect our business and result in harm to our reputation.
• The seasonal nature of our business could cause operating results to fluctuate.
• If we fail to obtain and retain high-profile strategic relationships, or if the reputation of any of these parties is impaired, our business may suffer.
• 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.
• Our co-founder has control over all stockholder decisions because he controls a substantial majority of our voting power through our Class X common stock, or “super” voting stock.
• The concentration of our stock ownership limits our stockholders’ ability to influence corporate matters.
• Because the Company is a “controlled company” within the meaning of The Nasdaq Stock market LLC ("Nasdaq") rules, our stockholders may not have certain corporate governance protections that are available to stockholders of companies that are not controlled companies.
• We track certain operational and business metrics with internal methods that are subject to inherent challenges in measurement, and real or perceived inaccuracies in such metrics may harm our reputation and negatively affect our business.
• Risks Related to our Indebtedness
• Our Credit Agreement restricts our current and future operations and our ability, and the ability of our future subsidiaries, to engage in certain business and financial transactions, and, as a result, may adversely affect our business, financial position, results of operations and cash flows.
• Covenant restrictions may limit our operations and impact our ability to make payments to our investors.
• Our ability to generate the significant amount of cash needed to pay interest and principal on our indebtedness and our ability to refinance all or a portion of our indebtedness or obtain additional financing depends on many factors beyond our control.
• There can be no assurance that we can further penetrate existing markets or that we can successfully expand our business into new markets.
• We may expand into international markets, which would expose us to significant risks.
• We may engage in merger and acquisition activities, which could require significant management attention, disrupt our business, dilute stockholder value, and adversely affect our operating results.
• We may pursue new initiatives which could disrupt and adversely affect our operating results.
• Increases in labor costs, including wages, could adversely affect our business, financial condition and results of operations.
• If we cannot maintain our culture, we could lose the innovation, teamwork, and passion that we believe contribute to our success and our business may be harmed.
• We depend on our senior management team and other key employees, and the loss of one or more key personnel or an inability to attract, hire, integrate and retain highly skilled personnel could have an adverse effect on our business, financial condition and results of operations.
• We collect, store, process, and use personal information and other customer data, which subjects us to legal obligations and laws and regulations related to data security and privacy, and any actual or perceived failure to meet those obligations could harm our business.
• Any major disruption or failure of our information technology systems or websites, or our failure to successfully implement upgrades and new technology effectively, could adversely affect our business and operations.
• If we are unable to maintain a good relationship with Apple, our business will suffer.
• If we suffer a security breach or otherwise fail to properly maintain the confidentiality and integrity of our data, including customer credit card, debit card and bank account information, our reputation and business could be materially and adversely affected.
• We rely heavily on information systems, and any material failure, interruption or weakness may prevent us from effectively operating our business and damage our reputation.
• Our use of emerging technologies (including artificial intelligence) and reliance on third-party service providers could expose us to operational, regulatory, intellectual property, and reputational risks.
• We face risks, such as unforeseen costs and potential liability in connection with content we produce, license and distribute through our content delivery platform.
• Increasing attention to, and evolving expectations regarding ESG matters may impact our business and reputation.
• Our nutritional products must comply with regulations of the FDA, as well as state, local and applicable international regulations. Any non-compliance with the FDA or other applicable regulations could harm our business.
• Changes in the legal and regulatory environment could limit our business activities, increase our operating costs, reduce demand for our products or result in litigation.
• Our products or services offered as part of automatically renewing subscriptions or memberships could be found not to be in compliance with laws or regulations in one or more markets, which could have a material adverse effect on our business.
• Changes in legislation or requirements related to electronic funds transfer ("EFT"), or our failure to comply with existing or future regulations, may materially and adversely impact our business.
• We are subject to a number of risks related to the ACH, credit card and debit card payments we accept.
• We are subject to the risk of payment processors changing or divesting their relationships with us.
• We are subject to governmental export and import controls and economic sanctions laws that could subject us to liability and impair our ability to compete in international markets.
• Failure to comply with anti-corruption and anti-money laundering laws, including the FCPA and similar laws associated with our activities outside of the United States, could subject us to penalties and other adverse consequences.
• Our intellectual property rights are valuable, and any inability to protect them could reduce the value of our products, services, and brand.
• We have been, and may in the future be, subject to claims that we infringed certain intellectual property rights of third parties, and such claims could result in costly litigation expenses or the loss of significant rights related to, among other things, our products and marketing activities, including as it relates to our BODi Bikes stationary bike products.
• Our subscriber engagement on mobile devices depends upon effective operation with mobile operating systems, networks, and standards that we do not control.
• Changes in tax laws and unanticipated tax liabilities could adversely affect our financial results.
• We may be subject to obligations to collect and remit sales tax and other taxes, and we may be subject to tax liability for past sales, which could adversely harm our business.
• The price of shares of our Class A common stock may experience volatility.
• You may experience future dilution as a result of future equity offerings or other equity issuances.
• The number of shares of our Class A common stock available for future issuance or resale could adversely affect the market price of our Class A common stock.
• Because we do not expect to declare cash dividends on our Class A common stock in the foreseeable future, shareholders must rely on appreciation of the value of our Class A common stock for any return on their investment.
• Declines in our financial performance have resulted in and could result in future impairment charges.
• Our business and operations could be negatively affected if we become subject to any securities litigation or stockholder activism, which could cause us to incur significant expense, hinder execution of business and growth strategy, and impact our stock price.
• Our internal controls over financial reporting may not be effective and our independent registered public accounting firm may not be able to certify as to their effectiveness, which could have a significant and adverse effect on our business and reputation.
• If we identify material weaknesses in our internal control over financial reporting which, if not remediated appropriately or timely, could result in the loss of investor confidence and adversely impact our business operations and our stock price.
• If securities or industry analysts do not publish research or reports about our business, if they adversely change their recommendations regarding our shares or if our results of operations do not meet their expectations, our share price and trading volume could decline.
• As a public company, we are subject to laws, regulations and stock exchange listing standards, which impose additional costs on us and may strain our resources and divert our management’s attention.
• Our Second Amended and Restated Certificate of Incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.
• Our ability to raise capital in the future may be limited.
• General Risk Factors
• Our quarterly operating results and other operating metrics may fluctuate from quarter to quarter, which makes these metrics difficult to predict.
• Our ability to use our net operating loss carryforwards (NOLs) to offset future taxable net income may be subject to limitations.