Interactive Strength, Inc.

Previous wording

The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes and other financial information included in Part I, Item 1. of this Form 10-Q, and together with our audited condensed consolidated financial statements and the related notes and other information for the year ended December 31, 2024. Historic results are not necessarily indicative of future results.

Current wording

The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes and other financial information included in Part I, Item 1. of this Form 10-Q, and together with our audited consolidated financial statements, the related notes thereto and other information set forth in our Annual Report on Form 10-K for the year ended December 31, 2024 filed with the SEC on March 31, 2025 (the "2024 10-K"). Historic results are not necessarily indicative of future results.

Previous wording

our future financial performance, including our expectations regarding our revenue, cost of revenue, gross profit, operating expenses including changes in research and development, sales and marketing, and general and administrative expenses (including any components of the foregoing), and our ability to achieve and maintain future profitability;

Current wording

our future financial performance, including our expectations regarding our revenue, cost of revenue, gross profit and operating expenses, including changes in research and development, sales and marketing, and general and administrative expenses (including any components of the foregoing), and our ability to achieve and maintain future profitability;

Previous wording

our market opportunity, including our potential or anticipated growth of the fitness and wellness industry, including the smart home gym and connected fitness sector of this industry;

Current wording

our market opportunity, including potential or anticipated growth of the fitness and wellness industry, including the smart home gym and connected fitness sector of this industry;

Previous wording

our ability to maintain and increase sales of our CLMBR and FORME Studio equipment, increase memberships to the CLMBR and Forme platform, and expand our product and service offerings;

Current wording

our ability to maintain and increase sales of our CLMBR and FORME Studio equipment and recently acquired Wattbike fitness products, increase memberships to the CLMBR and Forme platform, and expand our product and service offerings;

Previous wording

our ability to develop new content, features, equipment, and other services to integrate with or complement the CLMBR and FORME platform and bring them to market in a timely manner;

Current wording

our ability to develop new content, features, equipment, and other services to integrate with or complement the CLMBR, FORME and Wattbike platforms and bring them to market in a timely manner;

Previous wording

our ability to stay in compliance with laws and regulations that currently apply or become applicable to our business both in the United States and internationally;

Current wording

our ability to stay in compliance with laws and regulations that currently apply or may become applicable to our business both in the United States and internationally;

Previous wording

Interactive Strength Inc. is the parent company of two leading brands serving the commercial and at-home markets with specialty fitness equipment and virtual training: CLMBR and FORME. CLMBR manufactures vertical climbing equipment and provides a unique digital and on-demand training platform. FORME is a hardware manufacturer and digital fitness service provider that combines award-winning smart gyms with live 1:1 personal training (from real humans) to deliver an immersive experience. The combination of technology with expert training leads to better outcomes for both consumers and trainers alike. CLMBR and FORME offer unique fitness solutions for both the commercial and at-home markets

Current wording

Interactive Strength Inc. is the parent company of three leading brands serving the commercial and at-home markets with specialty fitness equipment and virtual training: CLMBR, FORME and Wattbike. CLMBR manufactures vertical climbing equipment and provides a unique digital and on-demand training platform. FORME is a hardware manufacturer and digital fitness service provider that combines award-winning smart gyms with live 1:1 personal training (from real humans) to deliver an immersive experience. Wattbike is a UK-based indoor-performance bike business. The combination of technology with expert training leads to better outcomes for both consumers and trainers alike. CLMBR, FORME and Wattbike offer unique fitness solutions for both the commercial and at-home markets.

Previous wording

April 2023 – Interactive Strength went public on NASDAQ with ticker TRNR

Current wording

April 2023 – Interactive Strength went public on NASDAQ with ticker symbol "TRNR"

Previous 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.

Current wording

During the three and nine months ended September 30, 2025 and 2024, we generated total revenue of $4.8 million and $2.0 million and $7.4 million and $3.0 million, respectively, and incurred net losses of $(5.2) million and $(7.1) million and $(14.0) million and $(29.2) million, respectively. As we generated recurring net losses and negative operating cash flow since inception, we have funded our operations primarily with gross proceeds from the sales of our redeemable convertible preferred stock, 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 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.

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 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 cashflows through synergies with our existing business. Our team has significant experience with M&A transactions and we are one of the few companies in our industry with a public currency, which we believe makes us an attractive acquirer.

Previous wording

We have high value partnerships with distributors, including Woodway, to sell CLMBR and FORME products into a variety of commercial environments. These relationships allow us to leverage the sales knowledge, relationships and specialization of third parties to accelerate our sales initiatives. Importantly, this construct allows us to make the vast majority of our sales related expenses variable, as we typically pay commissions only when units are sold.

Current wording

We have high value partnerships with distributors, including Woodway, to sell CLMBR, FORME and Wattbike products into a variety of commercial environments. These relationships allow us to leverage the sales knowledge, relationships and specialization of third parties to accelerate our sales initiatives. Importantly, this construct allows us to make the vast majority of our sales related expenses variable, as we typically pay commissions only when units are sold.

Previous 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.

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 CLMBR, FORME and Wattbike’s value propositions will resonate.

Previous wording

We intend to expand our recently launched corporate wellness initiative. Historically, corporate wellness programs were generally one-size-fits-all solutions for employees, such as corporate gyms. The rise of the hybrid workforce has made robust corporate wellness both an imperative and a challenge for many companies. We believe our comprehensive product portfolio makes us a better fit for modern corporate wellness programs than many existing alternatives. Our solution enables corporations to provide all of their employees with a coaching platform regardless of whether they work from home, in the office, or both. Our multi-pronged service offering also provides a new level of customization that can be adapted to employees at virtually all levels of tenure.

Current wording

We intend to expand our recently launched corporate wellness initiative. Historically, corporate wellness programs were generally one-size-fits-all solutions for employees, such as corporate gyms. The rise of the hybrid workforce has made robust corporate wellness both an imperative and a challenge for many companies. We believe our comprehensive product portfolio makes us a better fit for modern corporate wellness programs than many existing alternatives. Our solution enables employers to provide all of their employees with a coaching platform regardless of whether they work from home, in the office, or both. Our multi-pronged service offering also provides a new level of customization that can be adapted to employees at virtually all levels of tenure.

Previous wording

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 wording

On June 10, 2025, the Company and the Treasury Subsidiary sold and, on June 13, 2025, the 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 September 30, 2025, the Company had used approximately $47.3 million of the proceeds from the sale of the June 2025 Convertible Exchangeable Notes to purchase FET. In addition, each investor in the transaction has the right to require the Company and the 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 income to the Company.

Previous wording

We derive a significant majority of our revenue from sales of our CLMBR, FORME Studio and FORME Studio Lift equipment and if sales of our CLMBR, FORME Studio and FORME Studio Lift equipment decline, it would materially and negatively affect our future revenue and results of operations.

Current wording

We derive a significant majority of our revenue from sales of our CLMBR, FORME Studio, FORME Studio Lift and Wattbike equipment and if sales of our CLMBR, FORME Studio, FORME Studio Lift and Wattbike equipment decline, it would materially and negatively affect our future revenue and results of operations.

Previous wording

We have experienced, and expect to continue to experience, some disruptions to parts of our supply chain, including procuring necessary components or parts in a timely fashion, with suppliers increasing lead times or placing products on allocation and raising prices. In addition, disruptions to commercial transportation infrastructure have increased delivery times for materials and components or parts of our fitness equipment, and has impacted, and could in the future impact, our ability to timely deliver our products to customers. These supply chain disruptions have not materially affected our business outlook and goals or our operating results, including our sales, revenue, or liquidity or capital resources, and we have not implemented any mitigation efforts to date as a result. However, we cannot predict the impact to us of any future or prolonged supply chain disruptions or any mitigation efforts we may take going forward. For example, as a result of these supply chain disruptions, we may be required to increase customer order lead times and place some products on allocation. In addition, we may consider additional or alternative third-party manufacturing and logistics providers or suppliers. Such mitigation efforts may result in cost increases and any attempts to offset such increases with price increases may result in reduced sales, increased customer dissatisfaction, or otherwise harm our reputation. Further, if we were to elect to transition or add manufacturing or logistics providers or suppliers, it may result in temporary or additional delays in product delivery or risks related to consistent product quality or reliability. This in turn may limit our ability to fulfill customer orders and we may be unable to satisfy all of the demand for our products. We may in the future also purchase components further in advance, which in return can result in less capital being allocated to other activities such as marketing and other business needs. We cannot quantify the impact of such disruptions at this time or predict the impact of any mitigation efforts we may take in response to supply chain disruptions on our business, financial condition, and results of operations.

Current wording

We have experienced, and expect to continue to experience, some disruptions to parts of our supply chain, including procuring necessary components or parts in a timely fashion, with suppliers increasing lead times or placing products on allocation and raising prices. In addition, disruptions to commercial transportation infrastructure have increased delivery times for materials and components or parts of our fitness equipment, and has impacted, and could in the future impact, our ability to timely deliver our products to customers. These supply chain disruptions have not materially affected our business outlook and goals or our operating results, including our revenues or liquidity or capital resources, and we have not implemented any mitigation efforts to date as a result. However, we cannot predict the impact to us of any future or prolonged supply chain disruptions or any mitigation efforts we may take going forward. For example, as a result of these supply chain disruptions, we may be required to increase customer order lead times and place some products on allocation. In addition, we may consider additional or alternative third-party manufacturing and logistics providers or suppliers. Such mitigation efforts may result in cost increases and any attempts to offset such increases with price increases may result in reduced sales, increased customer dissatisfaction, or otherwise harm our reputation. Further, if we were to elect to transition or add manufacturing or logistics providers or suppliers, it may result in temporary or additional delays in product delivery or risks related to consistent product quality or reliability. This in turn may limit our ability to fulfill customer orders and we may be unable to satisfy all of the demand for our products. We may in the future also purchase components further in advance, which in return can result in less capital being allocated to other activities such as marketing and other business needs. We cannot quantify the impact of such disruptions at this time or predict the impact of any mitigation efforts we may take in response to supply chain disruptions on our business, financial condition, and results of operations.

Previous wording

We generate revenue from sales of our connected fitness products, membership revenue, and personal training revenue. We identify our reportable segment based on the information used by management to monitor performance and make operating decisions. See Note 2. of the notes to our condensed consolidated financial statements included elsewhere in this report for additional information regarding our reportable segment.

Current wording

We generate revenue from sales of our connected fitness products, membership revenue, and personal training revenue. We identify our reportable segment based on the information used by management to monitor performance and make operating decisions. See Note 2 to our condensed consolidated financial statements included elsewhere in this report for additional information regarding our reportable segment.

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 77% and 42% and 32% of total revenue for the three and six months ended June 30, 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 95%, 88%, 80% and 64% of total revenue for the three and nine months ended September 30, 2025 and 2024, respectively.

Previous 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.

Current wording

Membership revenue consists of revenue generated from our monthly Connected Fitness membership. Membership revenue represented 3%, 7%, 11% and 20% of total revenue for the three and nine months ended September 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 10% and 25% and 32% of total revenue for the three and six months ended June 30, 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 2%, 5%, 9% and 16% of total revenue for the three and nine months ended September 30, 2025 and 2024, respectively.

Previous wording

Connected Fitness Product cost of revenue consists of CLMBR and Studio and Studio Lift and accessories product costs, including manufacturing costs, duties and other applicable importing costs, shipping and handling costs, packaging, warranty replacement costs, fulfillment costs, warehousing costs, and certain allocated costs related to management and facilities expenses associated with supply chain logistics.

Current wording

Connected Fitness Product cost of revenue consists of CLMBR, Studio, Studio Lift, Wattbike and accessories product costs, including manufacturing costs, duties and other applicable importing costs, shipping and handling costs, packaging, warranty replacement costs, fulfillment costs, warehousing costs, and certain allocated costs related to management and facilities expenses associated with supply chain logistics.

Previous wording

Sales and marketing expense consists of performance marketing media spend, asset creation, and other brand creative, all showroom expenses and related lease payments, payment processing fees incurred in connection with the sale of our connected fitness products, and sales and marketing personnel-related expenses.

Current wording

Sales and marketing expense consists of performance marketing media spend, asset creation, and other brand creative expenses, all showroom expenses and related lease payments and sales and marketing personnel-related expenses.

Previous 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.

Current wording

For the three and nine months ended September 30, 2025 and 2024, $0.1 million and $- 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 and six months ended June 30, 2025 and 2024

Current wording

Comparison of the three and nine months ended September 30, 2025 and 2024

Previous 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.

Current wording

Fitness product revenue increased by $2.9 million, or 182%, and $4.6 million, or 239%, for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024, respectively. The increase in Fitness Product revenue was mainly the result of the acquisition of Wattbike on July 1, 2025.

Previous wording

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 wording

Membership revenue decreased $0.1 million, or 33%, and $0.1 million, or 17%, for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024, respectively. The decrease is a result of the acquisition of the CLMBR business and the evolution of the FORME business where the Company is now primarily selling to commercial customers ("B2B") through Woodway.

Previous 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.

Current wording

Training revenue decreased $0.06 million, or 35%, and $0.1 million, or 25%, for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024, respectively. The decrease was a result of a decrease in Live 1:1 training sessions.

Previous wording

Cost of Revenue and Gross Loss

Current wording

Cost of Revenue and Gross Profit (Loss)

Previous 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.

Current wording

Membership cost of revenue decreased by $0.4 million, or 53%, and $1.6 million, or 57% for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024, respectively. The decrease is primarily related to the decrease in software amortization expense.

Previous 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

Current wording

Training cost of revenue increased $0.1 million, or 72%, and $0.4 million, or 79%, for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 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

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.

Current wording

Research and development expense decreased by $1.8 million, or 82%, and $4.3 million, or 63%, for the three and nine months ended September 30, 2025, as compared to the three and nine months ended September 30, 2024, respectively, primarily due to decreases in personnel-related costs of $0.2 million and $0.9 million, a decrease in stock-based compensation expense of $1.1 million and $2.4 million, and a decrease of $0.3 million and $0.9 million in software and subscriptions, respectively.

Previous wording

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 wording

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 nine months ended September 30, 2025 and fair value of warrants issued in connection with Registered Direct Offering for the three and nine months ended September 30, 2024.

Previous 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.

Current wording

Interest expense increased $2.2 million and $3.5 million for the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024, respectively. The increase in interest expense for the three months ended September 30, 2025 was mainly attributable to an increase of $3.0 million in interest and debt discount in connection with the January 2025, March 2025 and June 2025 convertible notes and $0.4 million of interest expense attributable to Wattbike, partially offset by a $1.3 decrease in interest from the February 2024 Treadway convertible note (see Note 11 to the condensed consolidated financial statements). The increase for the nine months ended September 30, 2025 was primarily attributable to an $8.1 million increase in interest and discount amortization related to the January 2025, March 2025 and June 2025 convertible notes and $0.4 million of interest expense attributable to Wattbike, partially offset by a decrease in interest expense from the February 2024 Treadway convertible note in the amount of $3.6 million and a $1.5 million decrease in interest on the December 2023 convertible note.

Previous 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.

Current wording

Interest income increased $0.7 million and $1.1 million for the three and nine months ended September 30, 2025 as compared to the three and nine months ended September 30, 2024, respectively, as a result of loan agreement entered into with Sportstech in January 2025.

Previous wording

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 wording

Change in fair value of digital assets consists of the subsequent remeasurement of the Company's digital assets acquired in June of 2025 measured at fair value based on quoted prices on active exchanges pursuant to ASC 350-60. For the three and nine months ended September 30, 2025, we recognized losses of $10.6 million and $10.5 million, respectively, related to the change in fair value.

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 $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.

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 $18.2 million and used net cash in its operations of $8.2 million during the nine months ended September 30, 2025, and had an accumulated deficit of $217.2 million as of September 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 $0.1 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.

Current wording

The Company’s available liquidity to fund its operations over the next twelve months beyond the issuance date was limited to approximately $0.6 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 due over the next year beyond the issuance date absent management’s ability to secure additional outside capital.

Previous wording

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 wording

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 $36.8 million as of September 30, 2025.

Previous wording

While the Company is actively seeking to secure additional outside capital (and has historically been able to successfully secure such capital), no additional outside capital has been secured or was deemed probable of being secured as of the issuance date. In addition, management can provide no assurance the Company will be able to secure additional outside capital or on acceptable terms.

Current wording

While the Company is actively seeking to secure additional outside capital (and has historically been able to successfully secure such capital), no additional outside capital has been secured or was deemed probable of being secured as of the issuance date. In addition, management can provide no assurance that the Company will be able to secure additional outside capital or on acceptable terms.

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 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.

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 $46.4 million as of the issuance date, of which approximately $12.4 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 its 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 their 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.