Beachbody Company, Inc.

Item 1A. Risk Factors.

There have been no material developments with respect to the information previously reported under Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 other than as noted below. These risk factors describe some of the assumptions, risks, uncertainties and other factors that could adversely affect our business or that could otherwise result in changes that differ materially from our expectations. We may disclose changes to such risk factors or disclose additional risk factors from time to time in our future filings with the SEC.

 On September 30, 2024, we announced strategic initiatives to transition from our Multi-Level Marketing ("MLM") model to a single level affiliate model (the "Pivot"). As part of the Pivot, we will continue to execute an omni channel selling strategy including direct response marketing, retail partnerships and transition our direct selling channel from our current MLM model to a new business model focused on a single level affiliate model. 

The announced Pivot involves numerous risks, including, but not limited to:

our current Partners may not choose to continue to partner with us as affiliates, or, if they do continue to partner with the Company, may not sell as much of our products;

we may be unable to recruit new affiliates or be able to offer a competitive compensation plan for our affiliates;

changes to our business model may be disruptive to our operations and may cause our revenues to decline or result in lower decreases to our expenses than expected;

change to our business model may result in increased churn of the Company's subscriber base;

the impact on our revenues as a result of the reduction or elimination of preferred customer membership fees and fees paid to the Company by its direct selling Partners;

changes to commission rates in connection with the Pivot may result in unexpected fluctuations in our expenses;

changes in our results of operations and financial position may result in our failure to comply with financial and other covenants contained in our existing and/or future debt agreements and may result in a default under our debt agreements;

exposure to unknown, contingent or other liabilities, including litigation arising in connection with the Pivot;

negative impacts on our business relationships, including relationships with our customers, suppliers, vendors, Partners and employees;

difficulty retaining or recruiting officers, key employees or directors;

material weaknesses in our internal controls over financial reporting resulting from a reduced workforce, including members of our accounting and/or internal audit staff; and

unintended negative consequences from changes to our business profile.

If any of these or other factors impair our ability to successfully implement the Pivot, we may not be able to realize other business opportunities as we may be required to spend additional time and incur additional expenses related to the Pivot that otherwise would be used on the development and expansion of our business.