Interactive Strength, Inc.
For the period ended Jun 30, 2025. Filed Aug 14, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2025 · Filed Aug 14, 2025
TRNR$1.22+2.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2025-03-31; filed 2025-05-19.
0000950170-25-074458
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationCurrent report: 10-Q
Period ended 2025-06-30; filed 2025-08-14.
0000950170-25-108949
Item 2. Management's Discussion and Analysis of Financial Condition and Results of OperationThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 158 previous paragraphs and 164 current paragraphs.
115 unchanged; 35 reworded; 13 added; 6 removed; 2 previous and 1 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (13)
Current report
Digital Asset Treasury Strategy
Current report
On June 10, 2025, the Company and the Treasury Subsidiary sold and, on the June 13 th closing date, issued, for $50 million, the June 2025 Convertible Exchangeable Notes which are both (a) convertible into shares of Common Stock and (b) exchangeable into the utility tokens and key medium of exchange on the Fetch.ai network (“FET”). As of June 30, 2025, the Company had used approximately $20 million of the proceeds from the sale of the June 2025 Convertible Exchangeable Notes to purchase FET, $25.0 million of the proceeds to purchase Tether, a stablecoin, and $2.25 million remained in restricted cash, which must be used to purchase FET in the future, for the benefit of the Treasury Subsidiary. In addition, each investor in the Notes transaction has the right to require the Company and the
Current report
Treasury Subsidiary to issue additional senior secured convertible exchangeable notes, up to an aggregate principal amount of an additional $444.4 million. Asset appreciation of the FET could be a future source of Company revenue.
Current report
If the FET does not rise in value, it would materially and negatively affect our results of operations.
Current report
Change in fair value of digital assets consists of the subsequent remeasurement of our digital assets measured at fair value based on quoted prices on active exchanges pursuant to ASC 350-60.
Current report
Membership revenue decreased $0.04 million or 21% and $0.02 million or 6% for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024, respectively. The decrease is a result of acquisition of the CLMBR business and the evolution of the FORME business where they Company is now primarily selling to commercial customers ("B2B") through Woodway.
Current report
Other Income (Expense), net
Current report
Other Income (Expense), net
Current report
Other income (expense), net consists of unrealized currency gains and losses and issuance costs related to the June 2025 Convertible Exchangeable Notes for the three and six months ended June 30, 2025 and fair value of warrants issued in connection with Registered Direct Offering for the three and six months ended June 30, 2024.
Current report
Change in Fair Value of Digital Assets
Current report
Change in fair value of digital assets consists of the subsequent remeasurement of the Company's digital assets measured at fair value based on quoted prices on active exchanges pursuant to ASC 350-60. For the three and six months ended June 30, 2025, we recognized a $0.1 million gain related to the change in fair value.
Current report
A potential source of non-dilutive funding resides in our investment in digital assets, subject to market conditions. Based on quoted market prices, the market value of our ownership in digital assets was $45.1 million as of June 30, 2025.
Current report
Comparison of the six months ended June 30, 2025 and 2024
Removed paragraphs (6)
Previous report
Target Sport Specific Markets
Previous report
We intend to reach sport specific markets, specifically golf, tennis and pickleball, which have historically been underserved by the fitness market. Golf is one of the fastest growing sports in the United States. According to the National Golf Foundation, golf participation grew 10% year-over-year surpassing 41.1 million in 2022. In 2023, on-course golfers rose for the fifth consecutive year. Similarly for tennis, according to data from the United States Tennis Association, and the Tennis Industry Association Participation and Engagement Study, in 2022 there were 23.6 million players, a 33% increase since the beginning of 2020. Pickleball has solidified its status as America's fastest-growing sport for the third consecutive year. According to the 2023 Sports & Fitness Industry Association's (SFIA) Topline Participation Report, participation in pickleball almost doubled in 2022, showing an 85.7 percent increase year-over-year and a staggering 158.6 percent increase over the past three years. Each of these sports, as well as others, benefit greatly from high quality strength and conditioning as well as the style of training that can be provided by both a cable-based system and vertical climbing. Providing greater access to quality training is a high value service in both commercial and direct to consumer markets.
Previous report
For the three months ended March 31, 2025, the Company reported total Membership revenue of $0.2 million, compared to $0.2 million for the comparable prior year period, representing an increase of $0.02 million, or 14%. The increase in Membership revenue was the result of the acquisition of CLMBR, Inc. in February 2024.
Previous report
Other (Expense) Income, net
Previous report
Other (Expense) Income, net
Previous report
Other (expense) income increased $0.3 million for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024 driven by loss on issuance of warrants for convertible notes of $0.1 million for the three months ended March 31, 2025 offset by issuance of common stock to lender in connection with entering Equity Line of Credit Agreement of $0.4 million for the three months ended March 31, 2024, with the remaining immaterial differences attributable to foreign currency adjustments.
Reworded paragraphs (35)
Previous wording
During the three months ended March 31, 2025 and 2024, we generated total revenue of $1.4 million and $0.4 million, respectively, and incurred net losses of $(6.6) million and $(11.4) million, respectively. As we generated recurring net losses and negative operating cash flow during the research and development stage of the FORME Studio and FORME Studio Lift products, we have funded our operations primarily with gross proceeds from the sales of our redeemable convertible preferred stock, the sale of our SAFE notes, the issuance of convertible notes, the issuance of promissory notes, and the issuance of common stock.
Current wording
During the three and six months ended June 30, 2025 and 2024, we generated total revenue of $1.2 million and $0.6 million and $2.6 million and $1.0 million, respectively, and incurred net losses of $(2.18) million and $(10.6) million and $(8.8) million and $(22.0) million, respectively. As we generated recurring net losses and negative operating cash flow during the research and development stage of the FORME Studio and FORME Studio Lift products, we have funded our operations primarily with gross proceeds from the sales of our redeemable convertible preferred stock, the sale of our SAFE notes, the issuance of convertible notes, the issuance of promissory notes, and the issuance of common stock.
Previous wording
We acquired CLMBR, Inc. in February 2024 and believe that there are other compelling businesses to be acquired. We expect that we will be able to acquire revenue-generating businesses, which would generate higher earnings and cashflow through synergies with our existing business. Our team has significant experience in M&A and we are one of the few companies in our industry with a public currency, which we believe makes us an attractive acquiror.
Current wording
We acquired CLMBR, Inc. in February 2024 and Wattbike (Holdings) Limited (“Wattbike”), a UK-based indoor-performance bike business, on July 1, 2025 (See FN 23. Subsequent Events) and we believe that there are other compelling businesses to be acquired. We expect that we will be able to acquire revenue-generating businesses, which would generate higher earnings and cashflow through synergies with our existing business. Our team has significant experience in M&A and we are one of the few companies in our industry with a public currency, which we believe makes us an attractive acquiror.
Previous wording
We intend to expand the international reach of our product and service offerings. With more than 180 million people belonging to gyms globally in 2019, according to IHRSA, we believe there is significant opportunity to grow internationally. For example, we are currently evaluating potential international expansion in the United Kingdom and Canada, although we have not yet made any definitive plans regarding such expansion or the potential timing thereof. We plan to continue to pursue disciplined international expansion by targeting countries with high fitness penetration and spend, as well as the presence of boutique fitness, where we believe both CLMBR and FORME’s value propositions will resonate.
Current wording
We intend to expand the international reach of our product and service offerings. We are currently working with Sportstech Brands Holding GmbH, a direct-to-consumer fitness brand in Germany and across Europe, towards a possible acquisition or a partnership. We plan to continue to pursue disciplined international expansion by targeting countries with high fitness penetration and spend, as well as the presence of boutique fitness, and where we believe both CLMBR, FORME and Wattbike’s value propositions will resonate.
Previous wording
Connected Fitness Product revenue consists of sales of our connected fitness products and related accessories, delivery and installation services, and extended warranty agreements offered through a third-party. Fitness Product revenue is recognized at the time of delivery, except for extended warranty revenue which is recognized over the warranty period. For the third-party extended warranty service sold along with the connected fitness products, we do not obtain control of the warranty before transferring it to the customers. Therefore, we account for revenue related to the fees paid to the third-party extended warranty provider on a net basis, by recognizing only the net commission we retain. Connected fitness product revenue represented 77% and 15% of total revenue for the three months ended March 31, 2025 and 2024, respectively.
Current wording
Connected Fitness Product revenue consists of sales of our connected fitness products and related accessories, delivery and installation services, and extended warranty agreements offered through a third-party. Fitness Product revenue is recognized at the time of delivery, except for extended warranty revenue which is recognized over the warranty period. For the third-party extended warranty service sold along with the connected fitness products, we do not obtain control of the warranty before transferring it to the customers. Therefore, we account for revenue related to the fees paid to the third-party extended warranty provider on a net basis, by recognizing only the net commission we retain. Connected fitness product revenue represented 77% and 77% and 42% and 32% of total revenue for the three and six months ended June 30, 2025 and 2024, respectively.
Previous wording
Membership revenue consists of revenue generated from our monthly Connected Fitness membership. Membership revenue represented 13% and 43% of total revenue for the three months ended March 31, 2025 and 2024, respectively.
Current wording
Membership revenue consists of revenue generated from our monthly Connected Fitness membership. Membership revenue represented 13% and 13% and 33% and 37% of total revenue for the three and six months ended June 30, 2025 and 2024, respectively.
Previous wording
Training revenue consists of sales of our personal training services delivered through our connected fitness products and third-party mobile devices. Training revenue is recognized at the time of delivery. Training revenue represented 10% and 43% of total revenue for the three months ended March 31, 2025 and 2024, respectively.
Current wording
Training revenue consists of sales of our personal training services delivered through our connected fitness products and third-party mobile devices. Training revenue is recognized at the time of delivery. Training revenue represented 10% and 10% and 25% and 32% of total revenue for the three and six months ended June 30, 2025 and 2024, respectively.
Previous wording
General and administrative expense includes personnel-related expenses and facilities-related costs primarily for our executive, finance, accounting, legal, human resources, and IT functions. General and administrative expense also includes fees for professional services principally comprised of legal, audit, tax and accounting services, and insurance.
Current wording
General and administrative expenses include personnel-related expenses and facilities-related costs primarily for our executive, finance, accounting, legal, human resources, and IT functions. General and administrative expenses also include fees for professional services principally comprised of legal, audit, tax and accounting services, and insurance.
Previous wording
The change in fair value of convertible notes consists of the change in the fair value of the outstanding convertible notes since the previous reporting period
Current wording
The change in fair value of convertible notes consists of the change in the fair value of the outstanding convertible notes since issuance date and the previous reporting period.
Previous wording
For the three months ended March 31, 2025 and 2024, $0.3 million and $0.2 million of stock-based compensation was capitalized as software costs, respectively.
Current wording
For the three and six months ended June 30, 2025 and 2024, $0.1 million and $(0.07) million and $0.5 million and $0.2 million of stock-based compensation was capitalized as software costs, respectively.
Previous wording
Comparison of the three months ended March 31, 2025 and 2024
Current wording
Comparison of the three and six months ended June 30, 2025 and 2024
Previous wording
For the three months ended March 31, 2025, the Company reported total Fitness product revenue of $1.1 million, compared to $0.05 million for the comparable prior year period, representing an increase of $1.0 million, or 1881%. The increase in Fitness Product revenue was the result of the acquisition of CLMBR, Inc. in February 2024 and increased units sold through distribution agreement signed with Woodway in February 2024.
Current wording
Fitness product revenue increased $0.7 million or 263% and $1.7 million or 539% for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024, respectively. The increase in Fitness Product revenue was the result of the acquisition of CLMBR, Inc. in February 2024 and increased units sold through distribution agreement signed with Woodway in February 2024.
Previous wording
For the three months ended March 31, 2025, the Company reported total Training revenue of $0.1 million, compared to $0.2 million for the comparable prior year period, representing an decrease of $0.03 million, or 16%. The decrease was a result of a decrease in Live 1:1 training sessions.
Current wording
Training revenue decreased $0.04 million or 24% and $0.06 million or 20% for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024, respectively. The decrease was a result of a decrease in Live 1:1 training sessions.
Previous wording
For the three months ended March 31, 2025, the Company reported total Fitness product cost of revenue of $0.9 million, compared to $0.4 million for the comparable prior year period, representing an increase of $0.5 million, or 142%. The increase is mostly due to the increase in sales related to the acquisition of CLMBR, Inc. in February 2024 and increase in units sold through distribution agreement signed with Woodway in February 2024.
Current wording
Fitness product cost of revenue increased $0.3 million or 101% and $0.9 million or 122% for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024, respectively. The increase is mostly due to the increase in sales related to the acquisition of CLMBR, Inc. in February 2024 and increase in units sold through distribution agreement signed with Woodway in February 2024.
Previous wording
For the three months ended March 31, 2025, the Company reported total Membership cost of revenue of $0.4 million, compared to $1.0 million for the comparable prior year period, representing a decrease of $0.6 million, or 58%. The decrease is primarily related to the decrease in content amortization offset by increase in amortization of intangible assets from the acquisition of CLMBR, Inc.
Current wording
Membership cost of revenue decreased $0.6 million or 57% and $1.2 million or 58% for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024, respectively. The decrease is primarily related to the decrease in content amortization offset by increase in amortization of intangible assets from the acquisition of CLMBR, Inc.
Previous wording
For the three months ended March 31, 2025, the Company reported total Training cost of revenue of $0.3 million, compared to $0.2 million for the comparable prior year period, representing an increase of $0.2 million, or 94%. The increase is primarily attributable to the acquisition of CLMBR, Inc. with addition of in-training studio expenses including rent of $0.1 million.
Current wording
Training cost of revenue increased $0.1 million or 73% and $0.3 million or 83% for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024, respectively. The increase is primarily attributable to the acquisition of CLMBR, Inc. with addition of in-training studio expenses including rent expense million
Previous wording
Our gross loss decreased by $0.9 million or 75% for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, mostly due the increase in fitness product sales from the acquisition of CLMBR, Inc. and increase in units sold through distribution agreement signed with Woodway in February 2024.
Current wording
Our gross loss decreased by $0.7 million or 78% and $1.6 million or 76% for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024, respectively, mostlydue the increase in fitness product sales from the acquisition of CLMBR, Inc. and increase in units sold through distribution agreement signed with Woodway in February 2024 and decrease in content amortization.
Previous wording
Research and development expense decreased $0.8 million or 37% for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024 due to a decrease in personnel-related costs of $0.1 million, a decrease in stock-based compensation expense of $0.5 million, and a decrease of $0.2 million in software and subscriptions.
Current wording
Research and development decreased $1.7 million or 69% and decreased $2.5 million or 54% for the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, respectively, primarily due to a decrease in personnel-related costs of $0.6 million and $0.7 million, a decrease in stock-based compensation expense of $0.7 million and $1.3 million, and a decrease of $0.3 million and $0.6 million in software and subscriptions, respectively.
Previous wording
Sales and marketing expense was flat for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024 driven by increase in demo units of $0.04 million and content amortization of $0.04 million offset by decrease in stock-based compensation of $0.1 million.
Current wording
Sales and marketing expense increased $0.1 million or 88% and $0.09 million or 25% for the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, respectively, driven by increase in demo units of $0.02 million and $0.1 million, and increase in stock-based compensation of $0.1 million and $0.01 million with the remaining difference due to change in other miscellaneous expenses.
Previous wording
General and administrative expense decreased $1.5 million or 25% for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The decrease was driven by decrease of $0.7 million in stock-based compensation expense, a decrease of $0.4 million in consulting, a decrease of $0.4 million in depreciation and amortization, and decease in personal related expenses of $0.5 million, offset by increase in vendor settlements of $0.5 million, with the remaining difference due to change in other miscellaneous expenses.
Current wording
General and administrative expense increased $0.2 million or 5% and decreased $1.3 million or 12% for the three and six months ended June 30, 2025, as compared to the three and six months ended June 30, 2024, respectively. The changes were driven by an increase of $0.1 million and a decrease of $0.4 million in consulting, a decrease of $0.5 million and $0.9 million in depreciation and amortization, and decrease in personnel related expenses of $0.03 million and $0.6 million, offset by increase in software and subscriptions of $0.2 million and of $0.4 million, and increase of $0.5 million and decrease of $0.2 million in stock-based compensation expense with the remaining difference due to change in other miscellaneous expenses.
Previous wording
Interest expense decreased $0.2 million for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024. The decrease in interest expense was attributable to decrease in interest from December 2023 convertible note of $0.4 million, decrease in interest from Term Loan of $0.3 million, decrease in interest from February 2024 convertible note of $0.9 million, and decrease in interest expense attributable to Equity Line of Credit of $0.2 million, offset by an increase of $1.1 million in amortization and interest expense from the January 2025 and March 2025 convertible notes and interest portion of vendor settlement of $0.6 million
Current wording
Interest expense increased $1.6 million and $1.3 million for the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024. The increase in interest expense was attributable to an increase of $4.0 million and $5.1 million in amortization and interest expense from the January 2025 and March 2025 convertible notes and interest on vendor settlements of $0.1 million and $0.7 million, offset by decrease in interest from December 2023 convertible note of $1.0 million and $1.4 million, decrease in interest from Term Loan of $0.1 million and $0.5 million, decrease in interest from February 2024 convertible note of $1.4 million and $2.2 million, and decrease in interest expense attributable to Equity Line of Credit of $0.0 million and $0.2 million.
Previous wording
Interest income increased $0.2 million for the three months ended March 31, 2025, as compared to the three months ended March 31, 2024 as a result of loan agreement entered into with Sportstech in January 2025.
Current wording
Interest income increased $0.2 million and $0.4 million for the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024, as a result of loan agreement entered into with Sportstech in January 2025.
Previous wording
Gain (loss) on extinguishment of debt and accounts payable was a result of gain on conversion of convertible notes of $2.8 million for the three months ended March 31, 2025 and gain on settlement of loss restoration agreement of $0.2 million compared to a loss of $1.1 million from conversion of debt and accounts payable to Series A Preferred Stock for the three months ended March 31, 2024.
Current wording
Gain (loss) on extinguishment of debt and accounts payable was a result of gain on conversion of convertible notes of $1.4 million and $4.5 million and gain on settlement of loss restoration agreement of $0.0 million and $0.2 million for the three and six months ended June 30, 2025 compared to a loss of $0.7 million and $1.7 million from conversion of debt and accounts payable to Series A Preferred Stock for the three and six months ended June 30, 2024.
Previous wording
Change in fair value of derivatives was a result of change in fair value of loss restoration agreements of $2.6 million offset by change in fair value of derivatives from the January 2025 and March 2025 convertible notes.
Current wording
Change in fair value of derivatives for the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024, was a result of change in fair value of loss restoration agreements of $0.2 million and $2.8 million offset by change in fair value of derivatives from the January 2025, March 2025 and June 2025 convertible notes of $0.6 million and $1.7 million.
Previous wording
Change in fair value of convertible notes and warrants for the three months ended March 31, 2025 and 2024 were due to change in fair value of these financial instruments.
Current wording
Change in fair value of convertible notes and warrants for the three and six months ended June 30, 2025 as compared to the three and six months ended June 30, 2024 were due to change in fair value of these financial instruments.
Previous wording
The Company has incurred significant operating losses and used net cash flows in its operations since its inception. In this regard, the Company incurred a net operating loss of $6.3 million and used net cash in its operations of $3.5 million during the three months ended March 31, 2025, and had an accumulated deficit of $209.4 million as of March 31, 2025.
Current wording
The Company has incurred significant operating losses and used net cash flows in its operations since its inception. In this regard, the Company incurred a net operating loss of $12.1 million and used net cash in its operations of $5.7 million during the six months ended June 30, 2025, and had an accumulated deficit of $212.0 million as of June 30, 2025.
Previous wording
The Company’s available liquidity to fund its operations over the next twelve months beyond the issuance date was limited to approximately $0.5 million of unrestricted cash and cash equivalents. However, based on the Company’s anticipated liquidity needs, the foregoing available liquidity will not be sufficient to fund the Company’s obligations as they become over the next year beyond the issuance date due absent management’s ability to secure additional outside capital.
Current wording
The Company’s available liquidity to fund its operations over the next twelve months beyond the issuance date was limited to approximately $0.1 million of unrestricted cash and cash equivalents. However, based on the Company’s anticipated liquidity needs, the foregoing available liquidity will not be sufficient to fund the Company’s obligations as they become over the next year beyond the issuance date due absent management’s ability to secure additional outside capital.
Previous wording
Included in the Company’s anticipated liquidity needs is a substantial amount of outstanding debt that is scheduled to mature over the next twelve months beyond the issuance date. As of disclosed in Notes 11 and 21, the Company had total outstanding debt, including convertible notes, of approximately $10.9 million as of the issuance date, of which approximately $9.0 million is scheduled to mature over the next twelve months beyond the issuance date, for which the Company does not have sufficient liquidity to repay if a cash settlement is required. In the event the Company is unable to refinance its outstanding debt, settle some or all of the debt with shares of the Company’s common or preferred stock, secure additional outside capital, and/or secure amendments or waivers from its lenders to defer or modify the repayment terms, management will be required to seek other strategic alternatives to settle this indebtedness, which may include, among others, a significant curtailment of the Company’s operations, a sale of certain of the Company’s assets, a sale of the entire Company to strategic or financial investors, and/or allowing the Company to become insolvent by filing for bankruptcy protection under the provisions of the U.S. Bankruptcy Code.
Current wording
Included in the Company’s anticipated liquidity needs is a substantial amount of outstanding debt that is scheduled to mature over the next twelve months beyond the issuance date. As disclosed in Notes 11 and 21, the Company had total outstanding debt, including convertible notes, of approximately $55.1 million as of the issuance date, of which approximately $10.0 million is scheduled to mature over the next twelve months beyond the issuance date, for which the Company does not have sufficient liquidity to repay if a cash settlement is required. In the event the Company is unable to refinance its outstanding debt, settle some or all of the debt with shares of the Company’s common or preferred stock, secure additional outside capital, and/or secure amendments or waivers from its lenders to defer or modify the repayment terms, management will be required to seek other strategic alternatives to settle this indebtedness, which may include, among others, a significant curtailment of the Company’s operations, a sale of certain of the Company’s assets, a sale of the entire Company to strategic or financial investors, and/or allowing the Company to become insolvent by filing for bankruptcy protection under the provisions of the U.S. Bankruptcy Code.
Previous wording
The second notice dated November 13, 2024 notified the Company that it did not comply with the minimum 500,000 publicly held shares requirement for continued listing set forth in Nasdaq Listing Rule 5550(a)(4) (“Rule 2”) but was granted a period of time to regain compliance. On December 23, 2024, the Company received a letter from the Staff confirming that the Company has demonstrated compliance with Rule 2. The letter also stated that the Company will be subject to a Mandatory Panel Monitor for a period of one year from the date of the letter in accordance with the requirements of Nasdaq Listing Rule 5815(d)(4)(B). If, within that one-year monitoring period, the Staff finds that the Company failed to remain in compliance with Rule 2, the Company will not be permitted to provide the Staff with a plan of compliance with respect to that deficiency, the Staff will not be permitted to grant additional time for the Company to regain compliance with respect to that deficiency, and the Company will not be afforded an applicable cure or compliance period. Instead, the Staff will issue a Delist Determination Letter and the Company will have an opportunity to request a new hearing with the Panel. While the Company will have the opportunity to present to the Panel, no assurance can be provided that the Staff will grant the Company a compliance plan and allow the Company’s securities to remain listed on the Nasdaq.
Current wording
The second notice dated November 13, 2024 notified the Company that it did not comply with the minimum 500,000 publicly held shares requirement for continued listing set forth in Nasdaq Listing Rule 5550(a)(4) (“Rule 2”) but was granted a period of time to regain compliance. On December 23, 2024, the Company received a letter from the Staff confirming that the Company has demonstrated compliance with Rule 2. The letter also stated that the Company will be subject to a Mandatory Panel Monitor for a period of one year from the date of the letter in accordance with the requirements of Nasdaq Listing Rule 5815(d)(4)(B). If, within that one-year monitoring period, the Staff finds that the Company failed to remain in compliance with Rule 2, the Company will not be permitted to provide the Staff with a plan of compliance with respect to that deficiency, the Staff will not be permitted to grant additional time for the Company to regain compliance with respect to that deficiency, and the Company will not be afforded an applicable cure or compliance period. Instead, the Staff will issue a Delist Determination Letter and the Company will have an opportunity to request a new hearing with the Panel.
Previous wording
Net cash used in operating activities of $3.5 million for the three months ended March 31, 2025, was primarily due to a net loss of $6.6 million, gain on extinguishment of debt and accounts payable of $3.0 million, decrease in operating assets and liabilities of $0.7 million, interest income on loan receivable of $0.2 million, and change in the fair value of warrants of $0.4 million offset by depreciation and amortization of $0.9 million, stock-based compensation of $2.1 million, amortization of debt discount and non cash interest of $1.7 million, change in fair value of derivatives of $1.5 million, loss on settlement of accounts payable of $0.6 million and change in fair value of convertible notes of $0.6 million.
Current wording
Net cash used in operating activities of $5.7 million for the six months ended June 30, 2025, was primarily due to a net loss of $8.8 million, gain on extinguishment of debt and accounts payable of $4.5 million, interest income on loan receivable of $0.4 million, change in the fair value of warrants of $1.0 million and change in fair value of convertible notes of $6.6 million offset by depreciation and amortization of $1.7 million, inventory step up amortization of $0.2 million, stock-based compensation of $4.9 million, amortization of debt discount and non cash interest of $6.2 million, change in fair value of derivatives of $1.9 million, loss on settlement of accounts payable of $0.6 million.
Previous wording
Net cash used in operating activities of $2.9 million for the three months ended March 31, 2024, was primarily due to a net loss of $11.4 million, change in fair value of warrants of $1.8 million, offset by depreciation and amortization of $1.9 million, stock-based compensation of $3.4 million, partially offset by loss on debt extinguishment of $1.1 million, amortization of debt discount of $1.3 million, interest of $0.7 million, $0.3 million of warrants issued to service providers, $0.3 million common stock issued to lender, $0.3 million change in fair value of convertible notes, and an increase in operating assets and liabilities of $0.9 million due to a increase in accrued and other current liabilities.
Current wording
Net cash used in operating activities of $5.1 million for the six months ended June 30, 2024, was primarily due to a net loss of $22.0 million offset by depreciation and amortization of $3.7 million, stock-based compensation of $6.3 million, amortization of debt discount and interest of $4.9 million, change in fair value of convertible notes of $0.3 million, loss on extinguishment of debt of $1.7 million, common stock issued to lender in connection with equity line of credit $0.4 million, warrants issued to service providers $1.1 million, change in fair value of derivatives of $0.8 million, non cash lease expense of $0.1 million, loss on exchange of warrants for equity of $0.4 million, an increase in operating assets and liabilities of $1.8 million due to an increase in accrued expenses and other current liabilities partially offset by change in the fair value of warrants of $3.2 million and change in fair value of earn out of $1.3 million.
Previous wording
Net cash used in investing activities of $2.2 million for the three months ended March 31, 2025 related to acquisition of software and content of $0.2 million and loan agreement entered into with Sportstech of $2.0 million.
Current wording
Net cash used in investing activities of $51.0 million for the six months ended June 30, 2025 related to acquisition of digital assets of $45.0 million, software and content of $0.4 million and loan with Sportstech of $4.3 million and Wattbike of $1.2 million.
Previous wording
Net cash used in investing activities of $1.7 million for the three months ended March 31, 2024 related to acquisition of software and content offset by the acquisition of CLMBR, Inc. net of cash acquired.
Current wording
Net cash used in investing activities of $1.4 million for the six months ended June 30, 2024 related to acquisition of software and content offset by the acquisition of CLMBR, Inc. net of cash acquired.
Previous wording
Net cash provided by financing activities of $7.8 million for the three months ended March 31, 2025 was primarily from the issuance of convertible notes of $6.2 million and At the Market Offering proceeds of $1.6 million.
Current wording
Net cash provided by financing activities of $59.3 million for the six months ended June 30, 2025 was primarily from proceeds from the exercise of incremental warrants and issuance of convertible notes, net of issuance and offering costs of $55.9 million, proceeds from issuance of promissory notes of $1.8 million, and At the Market Offering proceeds of $1.6 million.
Previous wording
Net cash provided by financing activities of $4.6 million for the three months ended March 31, 2024 was primarily from the issuance of convertible notes of $4.8 million offset by the payment of related party loans of $0.2 million.
Current wording
Net cash provided by financing activities of $6.6 million for the six months ended June 30, 2024 was primarily from the issuance of convertible notes of $4.8 million, proceeds from loans and related party loans of $1.7 million, proceeds from issuance of common stock from equity line of credit $0.4 million, proceeds from common stock offering net of issuance costs of $0.7 million, At the Market Offering proceeds of $0.4 million offset by the payment of loans and related party loans of $1.2 million.
Previous wording
The Notes were in the aggregate amount of $154,875 and 24 shares as of March 31, 2025 and December 31, 2024. The Notes are secured by a pledge of collateral, representing the shares of stock sold. Interest is charged at the mid-term Applicable Federal Rate as of the date of the Note and compounded annually. Per the terms of the Notes, 51% of the initial amounts of the outstanding principal balances plus any accrued and unpaid interest, represent a full recourse note, and 49% of the initial amounts represent a nonrecourse note. The
Current wording
The Notes were in the aggregate amount of $154,875 and 2 shares as of June 30, 2025 and December 31, 2024. The Notes are secured by a pledge of collateral, representing the shares of stock sold. Interest is charged at the mid-term Applicable Federal Rate as of the date of the Note and compounded annually. Per the terms of the Notes, 51% of the initial amounts of the outstanding principal balances plus any accrued and unpaid interest, represent a full recourse note, and 49% of the initial amounts represent a nonrecourse note. The Company analyzed the terms of the Notes and concluded that the recourse portion of the notes are nonrecourse in nature as the Company does not have intention to seek repayment beyond the shares issued despite the recourse legal terms, and thus will be treated the same as the nonrecourse portion of the Notes. All Notes are outstanding as of June 30, 2025, and are not recorded on the condensed consolidated balance sheet.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
While the Company will have the opportunity to present to the Panel, no assurance can be provided that the Staff will grant the Company a compliance plan and allow the Company’s securities to remain listed on the Nasdaq.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Comparison of the three months ended March 31, 2025 and 2024
Previous report — wording carried elsewhere
Company analyzed the terms of the Notes and concluded that the recourse portion of the notes are nonrecourse in nature as the Company does not have intention to seek repayment beyond the shares issued despite the recourse legal terms, and thus will be treated the same as the nonrecourse portion of the Notes. All Notes are outstanding as of March 31, 2025, and are not recorded on the condensed consolidated balance sheet.