Interactive Strength, Inc.

Note 1. Description of Business and Basis of Presentation

Description and Organization

Interactive Strength Inc. (the "Company") is an acquisition-focused company seeking to accelerate growth via acquisitions and deploy capital into sectors that are considered undervalued due to temporary factors, operational or misunderstood industry trends. The Company's current portfolio consists 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, acquired on July 1, 2025, has built a reputation as the training tool trusted by the world's top athletes, teams and military programs. 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.

Reverse Stock Splits

On February 23, 2026, the Company filed a Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a reverse stock split of the Company’s common stock, $0.0001 par value per share (the "Common Stock"), at a rate of 1-for-10 (the “February 2026 Reverse Stock Split”), effective on February 24, 2026.

As a result of the February 2026 Reverse Stock Split, every ten pre-split shares of Common Stock were combined into one share of Common Stock, resulting in a reduction in the number of shares of the Company's outstanding Common Stock from 17,984,137 shares to 1,798,406 shares. Proportionate adjustments were made to the number of shares of Common Stock underlying the Company's outstanding equity awards, and warrants, and the number of shares issuable under the Company's equity incentive plans, convertible notes and other existing agreements, as well as their corresponding exercise or conversion price, as applicable. There was no change to the number of authorized shares or the par value per share of the Company's common stock.

On June 26, 2025, the Company filed a Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a reverse stock split of the Company’s Common Stock, at a rate of 1-for-10 (the “June 2025 Reverse Stock Split”), effective on June 26, 2025.

The June 2025 Reverse Stock Split decreased the number of shares of Common Stock issued and outstanding from 14,091,197 shares to 1,409,047 shares. Accordingly, each holder of Common Stock now owns fewer shares of Common Stock as a result of the June 2025 Reverse Stock Split, which affected all holders of Common Stock uniformly and did not affect any stockholder’s percentage ownership interest in the Company. Therefore, voting rights and other rights and preferences of the holders of Common Stock were not affected by the June 2025 Reverse Stock Split. Common stock issued pursuant to the June 2025 Reverse Stock Split remains fully paid and nonassessable, without any change in the par value per share. Pursuant to the Charter Amendment, no fractional shares were issued in connection with the Reverse Stock Split. Stockholders who otherwise would be entitled to receive fractional shares received cash for each fraction of a share held.

The Common Stock began trading on a Reverse Stock Split-adjusted basis on The Nasdaq Capital Market on June 27, 2025.

On November 8, 2024, the Company filed a Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a reverse stock split of the Company’s Common Stock at a rate of 1-for-100 (the “November 2024 Reverse Stock Split”), effective as of 9:00 a.m. Eastern Time on November 11, 2024.

The effect on shares from the November 2024 Reverse Stock Split on November 11, 2024 decreased the number of shares of Common Stock issued and outstanding from 41,787,040 shares to 417,870 shares, subject to adjustment for the rounding up of fractional shares. Accordingly, each holder of Common Stock owned fewer shares of Common

Stockas a result of the November 2024 Reverse Stock Split, which affected all holders of Common Stock uniformly and did not affect any stockholder’s percentage ownership interest in the Company, except to the extent that the Reverse Stock Split resulted in an adjustment to a stockholder’s ownership of Common Stock due to the treatment of fractional shares. Therefore, voting rights and other rights and preferences of the holders of Common Stock were not affected by the November 2024 Reverse Stock Split (other than as a result of the treatment of fractional shares). Common stock issued pursuant to the November 2024 Reverse Stock Split remains fully paid and nonassessable, without any change in the par value per share.

On June 13, 2024, the Company filed a Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a reverse stock split of the Company’s Common Stock at a rate of 1-for-40 (the “June 2024 Reverse Stock Split”), effective as of 9:00 a.m. Eastern Time on June 14, 2024.

The effect on shares from the June 2024 Reverse Stock Split on June 14, 2024 decreased the number of shares of Common Stock issued and outstanding from 26,581,056 shares to 664,526 shares, subject to adjustment for the rounding up of fractional shares. Accordingly, each holder of Common Stock owned fewer shares of Common Stock as a result of the June 2024 Reverse Stock Split, which affected all holders of Common Stock uniformly and did not affect any stockholder’s percentage ownership interest in the Company, except to the extent that the Reverse Stock Split resulted in an adjustment to a stockholder’s ownership of Common Stock due to the treatment of fractional shares. Therefore, voting rights and other rights and preferences of the holders of Common Stock were not affected by the June 2024 Reverse Stock Split (other than as a result of the treatment of fractional shares). Common stock issued pursuant to the June 2024 Reverse Stock Split remains fully paid and nonassessable, without any change in the par value per share.

All share and per share information, including earnings per share, in this Form 10-K have been retroactively adjusted to reflect the February 2026, June 2025, November 2024 and June 2024 Reverse Stock Splits and certain items in prior period financial statements have been revised to conform to the current presentation.

Acquisition of Wattbike Holdings Limited

On April 8, 2025, the Company entered into an Agreement for the Sale and Purchase of the Entire Issued Share Capital and Loan Notes of Wattbike (Holdings) Limited (“Wattbike”) (the “Purchase Agreement”) with the shareholders of Wattbike (the “Shareholders”) and holders of certain promissory notes (the “Notes") issued by Wattbike (the “Noteholders,” and together with the Shareholders, the “Sellers”) to acquire the entire issued share capital and Notes of Wattbike. On July 1, 2025, pursuant to the Purchase Agreement, the Company completed the acquisition for a total purchase price of approximately $3.7 million, consisting of (i) all of the issued and outstanding shares of Wattbike held by the Shareholders in exchange for £1.00, (ii) contingent consideration with a fair value of $0.2 million, (iii)1,300,000 shares of the Company's non-voting Series E preferred stock with a fair value of $2.3 million, and (iv) effective settlement of certain preexisting relationships and bridge financing previously recorded as a loan receivable by the Company of $1.2 million (the "Wattbike Acquisition").

The Wattbike Acquisition was accounted for under the acquisition method of accounting under Accounting Standards Codification ("ASC") 805, Business Combinations. Assets acquired and liabilities assumed were recorded in the condensed consolidated balance sheet at their estimated fair values as of July 1, 2025, with the remaining unallocated purchase price recorded as goodwill (see Note 23).

Acquisition of CLMBR, Inc.

On October 6, 2023, the Company entered into an asset purchase agreement (the “Asset Purchase Agreement”) with CLMBR and CLMBR1, LLC (collectively, the “Sellers”) to purchase and acquire substantially all of the assets and assume certain liabilities of the Sellers. On January 22, 2024, the Company and the Sellers entered into an amended and restated Asset Purchase Agreement (the “Amended Agreement”). On February 2, 2024, pursuant to the Amended Agreement, the Company completed the acquisition for a total purchase price of approximately $16.1 million, consisting of (i) cash of $30,000, (ii)3 shares of the Company’s common stock with a fair value in the aggregate of $1.0 million, (iii)1,500,000 shares of the Company’s non-voting Series B preferred stock with a fair value in the aggregate of $3.0 million, (iv) contingent consideration with a fair value of $1.3 million, and (v) the retirement of $9.4 million of senior debt and $1.4 million in related fees, such retirement to be in the form of a $1.4 million cash payment tothe lender of the senior debt and the issuance of an $8.0 million promissory note to such lender (the “CLMBR Acquisition”).

The CLMBR Acquisition was accounted for under the acquisition method of accounting under ASC 805, Business Combinations. Assets acquired and liabilities assumed were recorded in the condensed consolidated balance sheet at their estimated fair values as of February 2, 2024, with the remaining unallocated purchase price recorded as goodwill (see Note 23).

Basis of Presentation and Consolidation

The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and the applicable rules and regulations of the U.S. Securities and Exchange Commission (“SEC”). The consolidated financial statements include the accounts of Interactive Strength Inc. and its subsidiaries in which the Company has a controlling financial interest. All intercompany balances and transactions have been eliminated.

Liquidity and Going Concern

In accordance with Accounting Standards Update ASU No. 2014-15, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern (Subtopic 205-40), or ASU 205-40, management evaluated whether there are certain conditions and events, considered in the aggregate, that raise substantial doubt about the Company’s ability to continue as a going concern within one year after the issuance date of the accompanying financial statements.

As an emerging growth company, the Company is subject to certain inherent risks and uncertainties associated with the development of an enterprise. In this regard, since the Company’s inception, substantially all of management’s efforts have been devoted towards the development of its brands and services, their penetration in the marketplace, and the development of a commercial organization, all at the expense of short-term profitability.

As of the date the accompanying consolidated financial statements were issued (the “issuance date”), management evaluated the following adverse conditions and events present at the Company in accordance with ASU 205-40:

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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 loss from operations of$19.9 million and used net cash in its operations of$10.4 million during the year ended December 31, 2025, and had an accumulated deficit of$227.5 million as of December 31, 2025.

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In order to execute its emerging growth strategy, the Company has been heavily dependent on financing from lenders and capital from private and public investors (collectively “outside capital”) since its inception and expects to remain heavily dependent on outside capital for the foreseeable future until such time that the Company’s operations reach a scale of profitability that allows it to fund its obligations primarily with cash inflows from operations. However, management can provide no assurance the Company will ever be able to generate sufficient cash inflows to reduce or eliminate its reliance on outside capital.

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The Company’s available liquidity to fund its operations over the next twelve months beyond the issuance date was limited to approximately $4.4 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.

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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, even though management has been successful in securing additional capital there is no assurance that the Company will be able to secure additional outside capital or on acceptable terms especially because of the non-compliances discussed here.

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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, 22, and Note 25, the Company had total outstanding debt and accrued interest, including convertible notes, of approximately $18.0 million as of the issuance date, of which approximately $14.8 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.

These uncertainties raise substantial doubt about our ability to continue as a going concern. The accompanying consolidated financial statements have been prepared on the basis that the Company will continue to operate as a going concern, which contemplates that the Company will be able to realize assets and settle liabilities and commitments in the normal course of business for the foreseeable future. Accordingly, the accompanying consolidated financial statements do not include any adjustments that may result from the outcome of these uncertainties.

Note 2. Summary of Significant Accounting Policies

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires the Company to make estimates and judgments that affect the reported amounts of assets, liabilities, revenue, expenses, and related disclosures. On an ongoing basis, the Company evaluates its estimates, including, among others, those related to the realizability of inventory, fair value measurements, useful lives of long lived assets, including property and equipment and finite lived intangible assets, product warranty, stock-based compensation expense, warrant liabilities, accrual of acquisition earn-outs, valuation of deferred taxes, valuation of derivatives, fair value of goodwill and other intangible assets, fair value of preferred stock in connection with acquisitions and debt extinguishments, and commitments and contingencies. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable. Actual results may differ from these estimates.

Segment Information

Operating segments are defined as components of an enterprise for which separate and discrete information is available for evaluation by the chief operating decision-maker (“CODM”) in deciding how to allocate resources and assess performance. The Company has one operating segment, the development and sale of its at-home fitness technology platform. The Company’s CODM is its chief executive officer, who manages the Company’s operations on a consolidated basis for the purpose of allocating resources. As the Company has one reportable segment, all required segment financial information is presented in the consolidated financial statements (See Note 3). The Company currently operates in the United States, the United Kingdom, and Taiwan. As of December 31, 2025 and December 31, 2024, substantially all of the Company's long-lived assets were held in the United States.

Cash

Cash consists of cash on deposit in banks.

Accounts Receivable

Accounts receivable represents the amounts that the Company has an unconditional right to receive, and is carried net of allowance for credit losses, in accordance with the Current Expected Credit Loss ("CECL") model under ASC 326. The Company estimates expected credit losses based on a combination of historical loss experience, customer creditworthiness, current economic conditions, and reasonable and supportable forward-looking information. The allowance for credit losses is updated at each reporting period to reflect changes in credit risk. The allowance for credit losses is recorded against accounts receivable balances, with a corresponding charge to expense in the consolidated statements of operations. Receivables are written off when management determines their collection is unlikely. The allowance is maintained at a level considered adequate to provide for potential credit losses based on management’s evaluation of the anticipated impact on the balance of current economic conditions, changes in character and size of balance, past and expected future loss experience, reasonable and supportable forecasts and other pertinent factors. As of December 31, 2025 and 2024, the allowance for credit losses was $0.1 million and $0, respectively.

Property and Equipment

Property and equipment purchased by the Company are stated at cost less accumulated depreciation. Major updates and improvements are capitalized, while charges for repairs and maintenance which do not improve or extend the lives of the respective asset are expensed as incurred. The Company capitalizes the cost of pre-production tooling which it owns under a supply arrangement. Pre-production tooling, including the related engineering costs, that the Company will not own or will not use in producing products under long-term supply arrangements, are expensed as incurred.

Depreciation and amortization is computed on a straight-line basis over the following estimated useful lives:

Inventories, net

Inventories, which are comprised of finished goods, are stated at the lower of cost or net realizable value. Cost is determined using first-in, first-out basis. Adjustments to reduce inventories to their estimated net realizable value are reflected in cost of revenues in the consolidated statement of operations. The Company assesses its allowance for inventory obsolescence by evaluating factors such as inventory levels, historical sales, and the remaining life of its products. Inventory losses are written-off against the allowance. Inventory not expected to be sold in the next twelve months is classified as long-term in the accompanying consolidated balance sheets.

Vendor Deposits

Vendor deposits represent prepayments made to the third-party manufacturers of the Company’s inventory. In general, the Company’s contract manufacturers require that the Company pay a portion of the costs for a manufacturing-related purchase order in advance, with the remaining cost being invoiced upon delivery of the products. Prior to receipt of the goods, any costs associated with the prepayments made by the Company are reflected as vendor deposits on the Company’s consolidated balance sheet. Vendor deposits where the Company will not receive goods within one year have been classified as long-term in the Company's consolidated balance sheet.

Capitalized Studio Content

Capitalized Studio content costs include certain expenditures to develop video and live content for the Company’s customers. The Company capitalizes production costs for recorded content in accordance with ASC 926-20, Entertainment-Films - Other Assets - Film Costs. The Company recognizes capitalized content, net of accumulated amortization, within other non-current assets in the consolidated balance sheets and recognizes the related amortization expense as a component of cost of membership revenue in the consolidated statements of operations and comprehensive loss. Costs which qualify for capitalization include production costs, development costs, direct costs, labor costs, and production overhead. Expenditures for capitalized content are included within investing activities in the consolidated statements of cash flows. Based on certain factors, including historical and estimated user viewing patterns, the Company amortizes individual titles within the Studio content library on a straight-line basis over a three-year useful life. The Company reviews factors impacting the amortization of the capitalized Studio content on an ongoing basis. Estimates related to these factors require considerable management judgment.

The Company considered certain factors in determining the useful life of the content, including expected periods over which the content will be made available through the platform and related viewership, the lack of “obsolescence” of such content over such period given the nature of its videos (i.e., exercise classes which are not significantly impacted by changes in markets or customer preferences, and/or for which the content is expected to significantly change or evolve over time), and the expected significant growth of its subscriber base which will contribute to substantial increases in viewership over time given the recent launch of its product and membership offerings. Based on these factors, the Company has determined that a three-year (3-year) amortization period is reasonable for the content. The Company will continue to review factors impacting the amortization of the capitalized content on an ongoing basis.

The Company’s business model is membership-based as opposed to generating revenues at a specific title level. Therefore, all content assets are monetized as part of a single asset group. The content is assessed at the group level when an event or change in circumstances indicates a change in the expected usefulness of the content or that fair value may be less than unamortized cost. Unamortized costs are assessed for impairment regardless of whether the produced content is completed. To date, the Company has recognized one impairment with regards to the carrying value of its content portfolio. If circumstances in the future suggest that an impairment may exist, these aggregated content assets will be stated at the lower of unamortized cost or fair value. In addition, unamortized costs for assets that have been, or are expected to be, abandoned are written off. The unamortized cost of content is approximately $0.4 million and$0.8 million as of December 31, 2025 and December 31, 2024, respectively.

Capitalized Software Costs

The Company capitalizes certain eligible software development costs incurred in connection with its internal use software in accordance with ASC 350-40, Internal-use Software and ASC 985, Software. These capitalized costs also relate to the Company’s Studio software that is accessed by its customers on a membership basis as well as certain costs associated with its information systems. Capitalized software costs are amortized over the estimated useful life of three years. Capitalization begins once the application development stage begins, management has authorized and committed to funding the project, it is probable the project will be completed, and the software will be used to perform the function intended. Internal and external costs, if direct and incremental, are capitalized until the software is substantially complete and ready for its intended use. The Company expenses all costs incurred that relate to planning and post-implementation phases of development. Intangible assets are assessed for impairment when events or circumstances indicate the existence of a possible impairment, andnone were identified in the years ended December 31, 2025 and December 31, 2024.

During the years ended December 31, 2025 and December 31, 2024, the Company capitalized $0.2 million and $0.0 million, respectively, under ASC 350 included in intangible assets.

During the years ended December 31, 2025 and December 31, 2024, the Company capitalized $1.2 million and $0.8 million, respectively, under ASC 985 included in other assets.

Amortization for capitalized software and internal-use software is computed on a straight-line basis over a three-year estimated useful life.



Goodwill

Goodwill consists of the excess of cost over the fair value of net assets acquired in business combinations. The Company follows the provisions of ASC Topic 350, “Intangibles —Goodwill and Other”, which requires an annual impairment test for goodwill. The Company may first choose to perform a qualitative evaluation of the likelihood of goodwill and intangible assets impairment. If the Company determines a quantitative evaluation is necessary, then it must perform a goodwill impairment test by comparing the fair value of the reporting unit to its carrying value. An impairment charge is recorded to the extent the reporting unit’s carrying value exceeds its fair value, not to exceed the total amount of goodwill allocated to that reporting unit.

Identifiable Intangible Assets

The Company follows the provisions of ASC Topic 350, “Intangibles - Goodwill and Other”, which establishes accounting standards for the impairment of long-lived assets such as intangible assets subject to amortization. The Company reviews long-lived assets to be held and-used for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. If the sum of the undiscounted expected future cash flows over the remaining useful life of a long-lived asset group is less than its carrying amount, the asset is considered to be impaired. Impairment losses are measured as the amount by which the carrying amount of the asset group exceeds the fair value of the asset. The Company estimates fair value using the expected future cash flows discounted at a rate commensurate with the risks associated with the recovery of the asset. During the years ended December 31, 2025 and 2024, there wasno impairment of the identified intangible assets.

The Company’s intangible assets subject to amortization consist of developed technology, customer related intangibles, trademark and tradenames, and content that are amortized on a straight-line basis over the estimated useful lives of the related intangible asset. The estimated useful lives of the respective intangible assets range from 3 years to 13 years.

The Company estimates the fair value of intangible assets based on an income approach using the relief-from-royalty method. This methodology assumes that, in lieu of ownership, a third party would be willing to pay a royalty in order to exploit the related benefits of these types of assets. This approach is dependent on a number of factors, including estimates of future growth and trends, royalty rates for this category of intellectual property, discount rates and other variables. The Company bases its fair value estimates on assumptions it believes to be reasonable, but which are unpredictable and inherently uncertain. Actual future results may differ from those estimates. The Company recognizes an impairment loss when the estimated fair value of the intangible asset is less than the carrying value. For the periods presented, the Company did not recognize any impairment of intangible assets.

Business Combinations

The Company accounts for business combinations under the provisions of ASC 805, Business Combinations, which requires that the acquisition method of accounting be used for all business combinations. Assets acquired and liabilities assumed are recorded at the date of acquisition at their respective fair values. ASC 805 also specifies criteria that intangible assets acquired in a business combination must be recognized and reported apart from goodwill. Goodwill represents the excess purchase price over the fair value of the tangible net assets and intangible assets acquired in a business combination. Acquisition-related expenses are recognized separately from the business combinations and are expensed as incurred. If the business combination provides for contingent consideration, the Company records the contingent consideration at fair value at the acquisition date with changes in the fair value recorded through earnings.

Fair Value Measurements

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Subsequent changes in fair value of these financial assets and liabilities are recognized in earnings when they occur. When determining the fair value measurements for assets and liabilities which are required to be recorded at fair value, the Company considers the principal or most advantageous market in which the Company would transact and the market-based risk measurement or assumptions that market participants would use in pricing the assets or liabilities, such as inherent risk, transfer restrictions, and credit risk.

The Company applies the following fair value hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement:

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Level 1 inputs are based on quoted prices in active markets for identical assets or liabilities.

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Level 2 inputs are based on observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

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Level 3 inputs are based on unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities, and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability.

The Company’s material financial instruments consist primarily of cash and cash equivalents, accounts payable, accrued expenses, bridge notes, convertible notes, contingent consideration, embedded derivatives and warrants. The carrying amounts of current financial instruments, which include cash, accounts receivable, accounts payable and accrued expenses, approximate their fair values due to the short-term nature of these instruments.

Impairment of Long-Lived Assets

The Company evaluates long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by acomparison of the carrying amount of an asset (or asset group) to the future undiscounted cash flows expected to be generated by the assets (or asset group). If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds their fair value. There wasno charge to impairment for the years ended December 31, 2025 and December 31, 2024.

Leases

The Company adopted the Accounting Standards Update (“ASU”) 2016-02, Leases (Topic 842) (“ASU 2016-02” or “ASC 842”) as of January 1, 2022, using the modified retrospective method and utilized the effective date as its date of initial application, with prior periods presented in accordance with previous guidance under ASC 840, Leases. At the inception of an arrangement, the Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present in the arrangement. Leases with a term greater than one year are recognized on the balance sheet as right-of-use assets and current and non-current lease liabilities, as applicable.

As permitted under ASC Topic 825, Financial Instruments, the Company has elected the fair value option to account for some of its convertible notes. In accordance with ASC Topic 825, the Company records these convertible notes at fair value with changes in fair value recorded as a component of other income (expense), net in the consolidated statement of operations and comprehensive loss. As a result of applying the fair value option, direct costs and fees related to the convertible notes were expensed as incurred and were not deferred. In addition, the convertible notes meet other applicable criteria for electing fair value option under ASC Topic 825.

In connection with the Company’s issuance of the December 2023 Convertible Notes and some of the convertible notes issued during the year ended December 31, 2025, the Company bifurcated the embedded conversion option and recorded the embedded conversion option as a short-term derivative liability in the Company’s balance sheet in accordance with FASB ASC 815, Derivatives and Hedging. The convertible debt is carried at amortized cost. The derivative liability is remeasured at each reporting period with changes in fair value recorded in the consolidated statements of operations in other expense (income). See Note 11 for further details.

As permitted under ASC Topic 825, Financial Instruments, the Company has elected the fair value option to account for its February 2024 Convertible Notes upon amendment entered into in November 2024. In accordance with ASC Topic 825, the Company records these convertible notes at fair value with changes in fair value recorded as a component of other income (expense), net in the consolidated statement of operations and comprehensive loss.

Warrants

The Company accounts for common stock warrants as either equity-classified instruments or liability-classified instruments based on an assessment of the warrant terms. The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all the requirements for equity classification under ASC 815, including whether the warrants are indexed to our Common Stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance, and, for liability-classified warrants, at each reporting period end date while the warrants are outstanding. The warrants are revalued on each subsequent balance sheet date until such instruments are exercised or expire, with any changes in the fair value between reporting periods recorded in the consolidated statements of operations and comprehensive loss.

Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment can be reasonably estimated. If a loss is reasonably possible and the loss or range of loss can be reasonably estimated, the Company discloses the possible loss or states that such an estimate cannot be made.

Revenue Recognition

Revenue is recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Refer to Note 4 for additional information.

Cost of Fitness Product Revenue

Cost of fitness product revenue relates to the Fitness Product costs, including manufacturing costs, duties and other applicable import costs, shipping and handling costs, packaging, warranty replacement costs, fulfillment costs, warehousing costs, and certain allocated costs related to management, facilities, and personnel-related expenses associated with supply chain logistics. Cost of fitness product revenue also contains valuation losses related to the Company’s inventory lower of cost or net realizable value reserve.

Cost of Membership

Membership cost of revenue includes costs associated with personnel-related expenses, filming and production costs, hosting fees, music royalties, and amortization of capitalized software development costs.

Cost of Training

Training cost of revenue includes costs associated with personnel-related expenses and rent expense.

Research and Development Costs

Research and development expenses consist primarily of personnel and facilities-related expenses, engineering costs, consulting and contractor expenses, tooling and prototype materials, software platform expenses and depreciation of property and equipment. Substantially all of the Company’s research and development expenses are related to developing new products and services and improving existing products and services. Research and development expenses are expensed as incurred.

Stock-Based Compensation

In December 2020, the Company's Board of Directors (the "Board") adopted the 2020 Equity Incentive Plan (“the 2020 Plan”) and in April 2023, Board adopted the 2023 Equity Incentive Plan (the “2023 Plan”). Stock-based awards are measured at the grant date based on the fair value of the award and are recognized as expense, net of actual forfeitures, on a straight-line basis over the requisite service period, which is generally the vesting period of the respective award. The Company estimates the fair value of stock options using the Black-Scholes option pricing model. The determination of the grant date fair value of stock awards issued is affected by a number of variables, including the fair value of the Company’s Common Stock, the expected Common Stock price volatility over the expected life of the awards, the expected term of the stock option, risk-free interest rates, and the expected dividend yield of the Company’s Common Stock. The Company derives its volatility from the average historical stock volatilities of several peer public companies over a period equivalent to the expected term of the awards. The Company estimates the expected term based on the simplified method for employee stock options considered to be “plain vanilla” options, as the Company’s historical share option exercise experience does not provide a reasonable basis upon which to estimate the expected term. The risk-free interest rate is based on the United States Treasury yield curve in effect at the time of grant. Expected dividend yield is 0.0% as the Company has not paid and does not currently anticipate paying dividends on its common stock.

In June 2023, the Company granted options to non-employee directors, selected executives and other key employees where vesting is contingent on the Company's share price meeting certain targets. The fair value of each option granted was estimated on the date of grant using the Monte Carlo valuation model and assumes that share price targets are achieved. The awards are expensed on a straight-line basis over the requisite service period.

Stock-based compensation expense is classified in the accompanying consolidated statement of operations in the same manner in which the award recipient’s payroll costs are classified or in which the award recipient’s service payments are classified.

Foreign Currency Transactions

The functional currency for the Company’s wholly-owned foreign subsidiaries, Interactive Strength UK and Interactive Strength Taiwan, is the United States dollar. All foreign currency transaction gains and losses are recognized in the consolidated statements of operations and comprehensive loss through other income (expense).

Comprehensive Loss

Comprehensive loss includes net loss as well as other changes in stockholders’ deficit that result from transactions and economic events other than those with stockholders. For the years ended December 31, 2025 and 2024, comprehensive (loss) income included $0.1 million of foreign currency translation losses and $0.1 million of foreign currency translation gains, respectively.

Loss Per Share

The Company computes loss per share using the two-class method required for participating securities. The two-class method requires income available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. The Company’s redeemable convertible preferred stock and common stock issued upon early exercise of stock options are participating securities. The Company considers any shares issued upon early exercise of stock options, subject to repurchase, to be participating securities because holders of such shares have non-forfeitable dividend rights in the event a cash dividend is declared on common stock. These participating securities do not contractually require the holders of such shares to participate in the Company’s losses. As such, net losses for the periods presented were not allocated to the Company’s participating securities.

Basic loss per share is computed using the weighted-average number of outstanding shares of common stock during the period. Diluted earnings (loss) per share is computed using the weighted-average number of outstanding shares of common stock and, when dilutive, potential shares of common stock outstanding during the period. Potential shares of common stock consist of incremental shares issuable upon the assumed exercise of stock options, conversion of convertible notes payable, exercise of warrants, employee stock purchase plan shares to be issued, and vesting of restricted stock awards.

Income Taxes

The Company utilizes the asset and liability method for computing its income tax provision. Deferred tax assets and liabilities reflect the expected future consequences of temporary differences between the financial reporting and tax bases of assets and liabilities as well as operating loss, capital loss, and tax credit carryforwards, using enacted tax rates. Management makes estimates, assumptions, and judgments to determine the Company’s provision for income taxes, deferred tax assets and liabilities, and any valuation allowance recorded against deferred tax assets. The Company assesses the likelihood that its deferred tax assets will be recovered from future taxable income and, to the extent the Company believes recovery is not likely, establishes a valuation allowance.

The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not the tax position will be sustained on examination by the taxing authorities based on the technical merits of the position. The tax benefits recognized from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. Interest and penalties related to unrecognized tax benefits, which to date have not been material, are recognized within income tax expense.

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”), or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s consolidated financial statements upon adoption. The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and has elected not to “opt out” of the extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company will adopt the new or revised standard at the time private companies adopt the new or revised standard and will do so until such time that the Company either (i)

irrevocably elects to “opt out” of such extended transition period or (ii) no longer qualifies as an emerging growth company. As noted below, certain new or revised accounting standards were early adopted.

Accounting Pronouncements Recently Adopted

ASU 2016-13

On January 1, 2025, the Company adopted ASU 2016-13, “Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASC 326”). ASC 326 replaced the incurred loss methodology with an expected loss methodology that is referred to as the current expected credit loss (“CECL”) methodology. CECL requires an estimate of credit losses for the remaining estimated life of the financial asset using historical experience, current conditions, and reasonable and supportable forecasts and generally applies to financial assets measured at amortized cost, including loan receivables and held-to-maturity debt securities, as well as some off-balance sheet credit exposures such as unfunded commitments to extend credit. Financial assets measured at amortized cost are to be presented at the net amount expected to be collected by using an allowance for credit losses. Adoption of this update did not have a material impact on the Company's consolidated financial statements.

ASU 2023-07

In November 2023, the FASB issued ASU 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.” The amendments in this ASU improve reportable segment disclosure requirements primarily through enhanced disclosures about significant segment expenses. In addition, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit and loss, and provide new segment disclosure requirements for entities with a single reportable segment, among other disclosure requirements. The Company adopted this standard on a retrospective basis for the 2024 annual period, and for interim periods beginning January 1, 2025. The impact is limited to financial statement disclosures. See Note 3 - Segment Reporting.

ASU 2020-04 and ASU 2022-06

In March 2020, the FASB issued ASU 2020-04, “Reference rate reform (Topic 848): Facilitation of the effects of reference rate reform on financial reporting.” The ASU provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform. The amendments apply only to contracts and hedging relationships that reference the London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued due to reference rate reform. The amendments are elective and are effective upon issuance. In December 2022, the FASB issued ASU 2022-06, “Reference rate reform (Topic 848): Deferral of the sunset date of Topic 848” which defers the expiration date for Topic 848 from December 31, 2022 until December 31, 2024. The Company adopted this ASU effective January 1, 2025, which did not have a material impact on its consolidated financial statements.

ASU 2023-09

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures.” The ASU modifies income tax disclosures by requiring (i) consistent categories and greater disaggregation of information in the rate reconciliations and (ii) the disclosure of income taxes paid disaggregated by jurisdiction, among other requirements. This ASU is effective for fiscal years beginning after December 31, 2024 and should be applied on a prospective basis, with the option to apply the standard retrospectively. The Company adopted this ASU effective January 1, 2025, which did not have a material impact on its consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

ASU 2024-03

In November 2024, the FASB issued ASU 2024-03, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses". The amendments in ASU 2024-03 address investor requests for more detailed expense information and require additional disaggregated disclosures in the notes to financial statements for certain categories of expenses that are included on the face of the income statement. This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating this guidance to determine the impact it may have on its consolidated financial statements.

3. Segment Reporting

The Company is organized intoone operating andone reportable segment that engages in the development and sales of specialty fitness equipment and virtual training and is managed on a consolidated basis. The CODM regularly reviews financial information at the operating segment level to allocate resources and to assess performance. The CODM evaluates segment profit (loss) based on net loss, which is reported in the condensed consolidated statements of operations and comprehensive loss. The measure of segment assets is reported on the condensed consolidated balance sheets as total assets. The CODM uses net loss to allocate resources, including property and equipment and financial or capital resources, and to assess performance by monitoring budget-to-actual and year-over-year variances.

The following tables present revenue and significant segment expenses that are included within net loss:

(1)Transaction costs related to acquisition of Wattbike, CLMBR, Inc and Best Efforts Offering.

(2)Other segment items included in consolidated net loss includes sales and marketing (excluding stock based compensation, depreciation and amortization), other expense and initial recognition of fair value of convertible notes.

The following tables present a summary of revenues by geographic area.

Note 4. Revenue Recognition

The Company’s primary source of revenue is comprised of sales of its Connected Fitness Products and related accessories in Europe and the United States and, to a lesser extent, Membership revenue and sales of personal training services recorded within Training revenue.

The Company determines revenue recognition through the following steps:

•

Identification of the contract, or contracts, with a customer;

•

Identification of the performance obligations in the contract;

•

Determination of the transaction price;

•

Allocation of the transaction price to the performance obligations in the contract; and

•

Recognition of revenue when, or as, the Company satisfies a performance obligation.

Revenue is recognized when control of the promised goods or services is transferred to the Company’s customers, in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services. The Company’s revenue is reported net of sales returns, discounts and incentives as a reduction of the transaction price.

The Company applies the practical expedient as per ASC 606-10-50-14 and does not disclose information related to remaining performance obligations due to their original expected terms being one year or less.

Connected Fitness Products

Connected Fitness Products include the Company’s portfolio of Connected Fitness Products and related accessories, delivery and installation services, and extended warranty agreements. The Company recognizes Connected Fitness Product revenue net of sales returns and discounts on the date the product has been delivered to the customer or at shipping point if the customer is responsible for shipping, except for extended warranty revenue which is recognized over the warranty period. The Company allows customers to return products within thirty days of purchase, as stated in its return policy.

Amounts paid for credit card processing fees for sales of Connected Fitness Products are included as a reduction to fitness product revenue in the Company’s consolidated statements of operations and comprehensive loss.

Membership

The Company’s memberships provide unlimited access to content in its library of on-demand fitness classes. The Company’s memberships are offered on a month-to-month basis. Amounts paid for membership fees are included within deferred revenue on the Company’s consolidated balance sheets and recognized ratably over the membership term. The Company records payment processing fees for its monthly membership charges within cost of membership in the Company’s consolidated statements of operations and comprehensive loss.

Training

The Company’s training services consist of personal training services delivered through its Connected Fitness Products, third-party mobile devices and in-studio classes. Training revenue is recognized at the time the services are delivered.

Standard Product Warranty

The Company offers a standard product warranty that its Connected Fitness Products and related accessories will operate under normal, non-commercial use for a period of one year which covers the touchscreen, frame and all incorporated elements, and related accessories from the date of original delivery. The Company has the obligation, at its option, to either repair or replace the defective product. At the time revenue is recognized, an estimate of future warranty costs are recorded as a component of cost of revenue. Factors that affect the warranty obligation include historical as well as current product failure rates, service delivery costs incurred in correcting product failures, and warranty policies and business practices.

The Company also offers the option for customers in some markets to purchase a third-party extended warranty and service contract that extends or enhances the technical support, parts, and labor coverage offered as part of the base warranty included with the Connected Fitness Product for an additional period of 24 to 48 months.

For third-party extended warranty service sold along with the Company’s Connected Fitness Products, the Company does not obtain control of the warranty before transferring it to the customers. Therefore, the Company accounts for revenue related to the fees paid to the third-party extended warranty provider on a net basis, by recognizing only the net commission it retains. The Company considers multiple factors when determining whether it obtains control of third-party products including, but not limited to, evaluating whether it can establish the price of the product, retains inventory risk for tangible products or has the responsibility for ensuring acceptability of the product.

The Company sells connected fitness equipment and digital fitness services across Business to Business ("B2B") and Business to Customer ("B2C") channels in the United States, Europe and Asia.

The following table presents a summary of total revenues by product:

Note 5. Inventories, net

Inventories, net consisted of the following:

Finished products - Long Term represents inventory not expected to be sold in the next twelve months. Raw materials - Long Term represents the components and parts currently being stored in our Taiwan facility that will be shipped to our manufacturing partners and will not be used within one year.

Note 6. Property and Equipment, net

Property and equipment, net consisted of the following:

Depreciation expense amounted to $0.2 million and $0.5 million for the years ended December 31, 2025 and 2024, respectively.

Note 7. Goodwill, Intangible Assets, net and Digital Assets

Goodwill

Goodwill and intangible assets of $2.3 million and $3.2 million, respectively, were acquired in the Wattbike Acquisition and were recorded at fair value on the acquisition date. Goodwill and intangible assets of $13.2 million and $6.2 million, respectively, were recorded in the CLMBR Acquisition (see Note 23). As of December 31, 2025, and 2024, there wasno goodwill impairment.

Changes in goodwill for the years ended December 31, 2025 are as follows:

Intangible Assets, Net

Identifiable intangible assets, net consisted of the following:

Amortization expense amounted to $1.4 million and$2.3 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, there wasno intangible asset impairment.

As of December 31, 2025, estimated annual amortization expense for each of the next five fiscal years is as follows:

Digital Assets

In June 2025, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with an entity affiliated with ATW Partners (“ATW”) and an entity affiliated with DWF Labs (“DWF”), pursuant to which the Company agreed to sell for $50 million, senior secured convertible exchangeable notes issued by the Company in the aggregate principal amount of $55.6 million, (the “June 2025 Convertible Exchangeable Notes”), which were both (a) convertible into shares of the Company’s Common Stock and (b) exchangeable into the utility tokens and key medium of exchange on the Fetch.ai network (“FET”) (see Note 11). In connection with the Purchase Agreement, the Company also entered into the following agreements: (a) a master netting agreement (the “Master Netting Agreement”); (b) a security and pledge agreement (with such agreement being entered into by the Treasury Subsidiary and acknowledged by the Company) (“Security and Pledge Agreement”); and (c) a backstop agreement (the “Backstop Agreement”).

In October 2025, due to a decrease in FET price, the collateral value was less than 150% of the Backstop Amount (as defined in the Backstop Agreement), and on October 10, 2025, the Company received, pursuant to the Security and Pledge Agreement, a "Top Off" notice from ATW related to the decrease in collateral value. In accordance with the terms of the Master Netting Agreement, ATW proceeded to sell the Company's tokens and then a portion of the collateral tokens until it had generated approximately $18.9 million. This amount satisfied the $22.2 million principal andaccrued interest of the June 2025 Convertible Exchangeable notes held by ATW as of September 30, 2025. An unsecured Remainder Note (as defined in the Master Netting Agreement) in the amount of $3.0 million was issued to ATW to account for the reduction in principal amount as a result of the Netting provisions.

In connection with the decrease in FET price, an event of default occurred under the June 2025 Convertible Exchangeable Notes held by DWF. On December 9, 2025, the Company entered into a Final Netting Agreement (the “Final Netting Agreement”) with DWF and the entity affiliated with FET (“FET Entity”), pursuant to which DWF accelerated its June 2025 Convertible Exchangeable Notes in the amount of $33.3 million, triggered a Liquidation Event (as defined in the Master Netting Agreement) and conducted Liquidation Netting (as defined in the Master Netting Agreement), in accordance with the terms of the Master Netting Agreement.

Pursuant to the Final Netting Agreement, the Company caused the Custodian (as defined in the Master Netting Agreement) to deliver to DWF 82,972,910 Tokens securing the June 2025 Convertible Exchangeable Notes held by DWF. In addition, the Company issued to DWF a Remainder Note in the amount of $4.5 million as payment in full of the remaining principal amount as a result of the Final Netting Agreement.

The Company recognized changes in the fair value of its digital assets as gains and losses or losses in Change in fair value of digital assets on the Company's consolidated statement of operations during the period in which they occurred. As of December 31, 2025, the Companyno longer held any digital assets. The details of the activity related to the Company's digital assets as of December 31, 2025 and 2024 are as follows:

Note 8. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

Note 9. Other Assets, net

Other assets, net consisted of the following:

Amortization expense amounted to $1.5 million and $3.3 million for the years ended December 31, 2025 and 2024, respectively.

Note 10. Accrued Expenses and Other Current Liabilities

Accrued expenses consisted of the following:

Accrued legal settlement of $2.0 million represents the payments due following settlement of a lawsuit which was an assumed liability as part of the CLMBR Acquisition (see Note 15).

Note 11. Debt

As of December 31, 2025 and 2024, debt consisted of the following:

Senior Secured Convertible Notes

On January 28, 2025, the Company entered into a Securities Purchase Agreement (the "January 2025 SPA") with an accredited investor (the "Investor"). Pursuant to the January 2025 SPA, the Company sold and the Investor purchased, (a) a senior secured convertible note (the "January 2025 Convertible Note") in the amount of $3.3 million and warrants to purchase 6,742 shares of the Company's common stock, (b) Class A Incremental Warrants to purchase up to $13.0 million in senior secured convertible notes ("Class A Incremental Notes), and (c) Class B Incremental Warrants to purchase up to $20.0 million in senior secured convertible notes ("Class B Incremental Notes").

The January 2025 Convertible Note and the Class A Incremental Notes carry a 10.0% original issue discount and accrue interest at a rate of 12.0% per annum, subject to adjustment from time to time as set forth in the respective notes. The January 2025 Convertible Note was convertible (in whole or in part) at any time prior to the Maturity Date into the number of shares of Common Stock equal to (x)110% of the sum of (i) the portion of the principal amount of the January 2025 Convertible Notes to be converted or redeemed, (ii) accrued and unpaid Interest with respect to such principal amount of the January 2025 Convertible Notes, (iii) the Make-Whole Amount, (iv) accrued and unpaid Late Charges with respect to such principal amount of the Note, Make-Whole Amount and Interest, and (v) any other unpaid amounts pursuant to the Transaction Documents, if any, divided by (y) an initial conversion price of $313.30 per share, subject to adjustment as provided in the January 2025 Convertible Notes agreement.

During the year ended December 31, 2025, the Company issued additional Class A Incremental Notes with substantially the same terms as the January 2025 Convertible Note as follows:

•

On March 11, 2025, a Class A Incremental Note in the principal amount of $4.0 million, an initial conversion price of $198.90 per share, which has been subsequently amended to $54.20 per share, a maturity date of March 11, 2028 and warrants to purchase shares 8,298 shares of Common Stock with an initial exercise price of $306.00 per share.

•

On July 25, 2025, a Class A Incremental Note in the principal amount of $3.0 million, with an initial conversion price of $54.20 per share, a maturity date of July 25, 2028 and warrants to purchase 30,442 shares of Common Stock at an initial exercise price of $124.60 per share.

•

On August 26, 2025, a Class A Incremental Note in the principal amount of $0.3 million, with an initial conversion price of $51.35 per share, a maturity date of August 26, 2028 and warrants to purchase 3,106 shares of Common Stock at an initial exercise price of $78.90 per share.

•

On September 18, 2025, a Class A Incremental Note in the principal amount of $2.0 million, an initial conversion price of $38.50 per share, a maturity date of September 18, 2026 and warrants to purchase 28,571 shares of Common Stock with an initial exercise price of $59.16 per share.

•

On October 3, 2025, a Class A Incremental Note in the principal amount of $1.0 million, an initial conversion price of $38.50 per share, a maturity date of October 3, 2026 and warrants to purchase 14,285 shares of Common Stock at an initial exercise price of $59.16 per share.

•

On December 4, 2025, a Class A Incremental Note in the principal amount of $0.4 million, an initial conversion price of $19.14 per share, a maturity date of December 4, 2026 and warrants to purchase 11,063 shares of Common Stock at an initial exercise price of $29.41 per share.

•

On December 17, 2025, a Class A Incremental Note in the principal amount of $0.3 million, an initial conversion price of $17.93 per share, a maturity date of December 17, 2026 and warrants to purchase 7,975 shares of Common Stock at an initial exercise price of $27.55 per share.

•

On December 30, 2025, a Class A Incremental Note of $0.2 million, an initial conversion price of $13.09 per share, a maturity date of December 30, 2026 and warrants to purchase 9,327 shares of Common Stock at an initial exercise price of $20.11 per share.

The conversion prices and exercise prices for the foregoing notes and warrants are subject to adjustments for stock dividends, stock splits and issuances of additional shares of Common Stock and, under certain circumstances, a floor price. Aggregate principal received for the January 2025 Convertible Note and Class A Incremental Notes (collectively, the "Senior Secured Convertible Notes") were allocated at issuance date to the issuance date fair value of the embedded derivatives and warrants issued in connection with the notes. The embedded derivatives, warrants and issuance costs were recorded as a direct reduction to the face value of the notes and are amortized over the life of the notes as a component of interest expense.

In connection with the convertibility features contained in and warrants issued in connection with the issuance of the Senior Secured Notes, the Company recognized aggregate derivative and warrant liabilities in the amount of $4.4 million and $2.9 million, respectively. During the year ended December 31, 2025, the January 2025 Convertible Note and one Class A Incremental Note, in the aggregate amount of $10.8 million, including accrued interest, were converted into 124,361 shares of Common Stock. The Company recognized an aggregate gain on extinguishment of $2.7 million in connection with these conversions. Interest recognized on the Senior Secured Convertible Notes during the year ended December 31, 2025 was as follows:

June 2025 Convertible Preferred Note

On June 4, 2025, the Company issued a convertible promissory note in the principal amount of $0.7 million with an original issue discount of 10.0% to an accredited investor (the “June 2025 Convertible Preferred Note”). The June 2025 Convertible Preferred Note has a maturity date of June 4, 2027 and accrues interest at a rate of 15.0% per annum.

The Company may prepay the outstanding principal balance of the June 2025 Convertible Preferred Note prior to the Maturity Date, provided that, if upon a prepayment in full prior to the Maturity Date, the aggregate amount of interest accrued on the June 2025 Convertible Preferred Note is less than $0.2 million, the Company shall pay an amount equal to the difference between the amount of interest actually paid by the Company and $0.2 million. At any time prior to the Maturity Date, the accredited investor may convert any outstanding and unpaid principal and accrued interest into shares of the Company’s Series A Preferred Stock. The Note has a conversion price of $125.00 per share.

Upon an Event of Default (as defined in the June 2025 Convertible Preferred Note), all outstanding principal and accrued but unpaid interest and expenses will become immediately due and payable.

The carrying value of the June 2025 Convertible Preferred Note as of December 31, 2025 was $0.7 million. Interest expense recognized on the June 2025 Convertible Preferred Note was $0.1 million for the year ended December 31, 2025.

Remainder Notes

In June 2025, the Company entered into the Purchase Agreement with ATW Partners and DWF (see Note 7), whereby the Company issued June 2025 Convertible Exchangeable Notes in the aggregate principal amount of $55.6 million, which were both (a) convertible into shares of the Company’s Common Stock and (b) exchangeable into FET. The June 2025 Convertible Exchangeable Notes carried an original issue discount of 10.0% and accrued interest at a rate of 12% per annum, subject to adjustment from time to time as set forth in the agreement with a maturity date of December 13, 2026.

The June 2025 Convertible Exchangeable Notes were convertible (in whole or in part) at any time prior to the Maturity Date into the number of shares of Common Stock equal to (x) (i) the portion of the principal amount of the June 2025 Convertible Exchangeable Notes to be converted or redeemed, (ii) accrued and unpaid interest with respect to such principal amount of the June 2025 Convertible Exchangeable Notes, (iii) accrued and unpaid Late Charges with respect to such principal amount of the Convertible Exchangeable Note and interest, and (iv) any other unpaid amounts pursuant to the transaction documents divided by (y) a conversion price of $94.57, subject to adjustment as provided in the June 2025 Convertible Exchangeable Notes.

As further described in Note 7, as a result of the decrease in FET, ATW and DWF sold the Company's FET and other collateral tokens provided to them under the terms of the Purchase Agreement, and the Company issued Remainder Notes to ATW and DWF in the principal amount of $3.0 million and $4.5 million, respectively. Under the terms of the Purchase Agreement and related netting agreements that were part of the Purchase Agreement, the sale of the FET and collateral tokens, along with the issuance of the Remainder Notes, fully satisfied the Company's obligations under the June 2025 Convertible Exchangeable Notes.

The Company had elected the fair value option for the June 2025 Convertible Exchangeable Notes under ASC 825, Financial Instruments, with changes in fair value recorded in earnings each reporting period to simplify the accounting. Accordingly, when the fair value option was applied, the Company did not separately evaluate the June 2025 Convertible Exchangeable Notes for the existence of embedded features that would require bifurcation as embedded derivatives under other accounting guidance. Debt issuance costs incurred in connection with June 2025 Convertible Exchangeable Notes of approximately $0.9 million were expensed as incurred. The fair value of the June 2025 Convertible Exchangeable Notes of $50.0 million was determined based on net proceeds received, and was recorded as a long term liability upon fair value election. During the year ended December 31, 2025, the Company recognized gains on changes in fair value of the June 2025 Convertible Exchange Notes in the amount of $28.6 million. The Company also recognized a loss on extinguishment of debt in the amount of $3.1 million in connection with foregoing retirement of the June 2025 Convertible Exchangeable Notes.

The Remainder Notes issued to ATW and DWF have maturity dates of one year beyond their date of issuance and accrue interest at a rate of 12% per annum and are convertible into shares of Common Stock at initial conversion prices of $35.40 and $25.30 per share, respectively, subject to adjustment as provided under the terms of the notes. The Company also elected the fair value option for the Remainder Notes, and the aggregate fair value initially recognized for these notes was $5.0 million. The Company subsequently recognized a gain on the change in fair value of these notes in the amount of $0.7 million as of December 31, 2025.

Related Party Convertible Notes

On February 18, 2020, the Company entered into a $0.1 million note with interest at the rate of 12.0% per annum and a maturity date of February 18, 2021. The note was amended in January 2024 to include a conversion provision whereby at any time while outstanding the lender has the right to convert any outstanding and unpaid principal and accrued interest of the note into shares of the Company's Series A Preferred Stock at a conversion price of $38.50 per share. The total outstanding balance, including accrued interest, at December 31, 2025 and 2024, was $0.2 million.

Other Convertible Notes

On February 1, 2024, the Company entered into a Senior Secured Convertible Promissory Note (the "February 2024 Convertible Note") with Treadway Holdings LLC ("Treadway"), a lender, in the aggregate principal amount of $6.0 million, which is convertible into shares of Common Stock. The Note accrues interest at a rate of 2.0% per month.

The original maturity date of the February 2024 Convertible Note was December 15, 2024. Interest payments are guaranteed through the Maturity date regardless of whether the February 2024 Convertible Note is earlier converted or redeemed. The February 2024 Convertible Note is convertible (in whole or in part) at any time prior to the Maturity Date into the number of shares of Common Stock equal to the quotient resulting by dividing the outstanding principal balance of the February 2024 Convertible Note to be converted by an initial conversion price of $800,000.00 per share. The February 2024 Convertible Note sets forth certain standard events of default upon the occurrence of which the Company is required to deliver written notice to the Treadway within two (2) business days. At any time after the earlier of (a) Treadway’s receipt of a notice of default and (b) Treadway becoming aware of the event of default, the Treadway may require the Company to redeem all or any portion of the February 2024 Convertible Note. Upon an event of default, the February 2024 Convertible Note shall bear interest at a rate of 4.0% per month.

In November 2024, the Company and Treadway entered into an Amended and Restated Senior Secured Convertible Promissory Note (the “Amended and Restated Note”) that amended and restated the February 2024 Convertible Note in its entirety. The Amended and Restated Note has a principal amount of $4.0 million. Pursuant to the Amended and Restated Note, the conversion price of the February 2024 Convertible Note was changed to $479.00 pershare (the Common Stock’s Nasdaq Official Closing Price (as reflected on Nasdaq.com) on November 11, 2024. The amendment to the Note represents the addition of a substantive conversion feature and as a result the Company recorded a loss on extinguishment upon issuance and the remaining unamortized discount was written off upon extinguishment. The Company elected the fair value option for the February 2024 Convertible Notes under ASC 825, Financial Instruments, with changes in fair value recorded in earnings each reporting period. The fair value of the February 2024 Convertible Notes and change to were determined using a discounted cash flow analysis at a discount rate of 16.3%. The fair value of the February 2024 Convertible Notes of $4.0 million was recorded as a current liability upon fair value election.

Total payments for the year ended December 31, 2024 was $3.6 million. The Company entered into a deposit account control agreement (the “DACA”), with Treadway whereby cash received from CLMBR sales are automatically transferred to Treadway until the February 2024 Convertible Note is paid off. From November 11, 2024 to December 31, 2024, in the aggregate, Treadway converted $0.8 million of the Principal Amount into 1,607 shares of Common Stock (the “Note Conversion Shares”).

On December 13, 2024, the Company and Treadway entered into a Letter Agreement (the “Letter Agreement”) that amends the Note Purchase Agreement. Pursuant to the Letter Agreement, Section 3.2(a) of the Note Purchase Agreement was amended to allow the Company to extend the maturity date of the Amended and Restated Note (the “Maturity Date”) upon written notice to Treadway and payment of the Extension Fee (as defined below) to extend the Maturity Date for an additional thirty-day period (each an “Extension”). The Company shall be entitled to up to three Extensions.

Pursuant to the Letter Agreement, each “Extension Fee” shall be an amount in cash, calculated as of the Maturity Date prior to giving effect to such Extension, equal to five percent (5%) of the sum of (A) the outstanding principal balance of the Amended and Restated Note plus (B) the principal amount of converted Amended and Restated Note for which Treadway is still holding the resulting conversion shares. For each Extension period, if the principal amount of the Amended and Restated Note converted by Treadway during such Extension period is less than the purchase price received by Treadway upon the sale of the resulting conversion shares (such difference, the “Conversion Profit”), then the Extension Fee for the following Extension shall be reduced by an amount equal to such Conversion Profit (but not less than zero).

In connection with the Letter Agreement, the Company exercised its option for the first Extension on December 13, 2024, and paid the applicable Extension Fee of $0.2 million and reimbursed the Purchaser’s accrued but unpaid legal fees of $0.02 million. As of December 31, 2024, the Maturity Date was extended to January 14, 2025.

On January 14, 2025, Treadway sold the Amended and Restated Note to Woodway USA, Inc. (the “Woodway”). Woodway was the guarantor of the Note Purchase Agreement and is currently the largest customer of the Company, pursuant to the Exclusive Distribution Agreement, by and between the Company and Woodway dated as of February 20, 2024. On March 3, 2025, Woodway sold the Amended and Restated Note to TR Opportunities II LLC (the “Current Holder”). The transfer of the Amended and Restated Note on January 14, 2025 and March 3, 2025 were both exchanges between creditors without any involvement of the Company, therefore on either exchange date there was no accounting impact to the Company.

On April 18, 2025, the Company and the Current Holder entered into a Letter Agreement to lower the conversion price to $110.00 (a premium to the closing price of the Common Stock on April 17, 2025). On August 8, 2025, the Company and the Current Holder entered into a Letter Agreement to lower the conversion price to $55.00 (a premium to the closing price of the Common Stock on August 7, 2025).

On September 26, 2025, the Company entered into an exchange agreement (the “Exchange Agreement”) with the Current Holder, pursuant to which the Current Holder and the Company exchanged the February 2024 Convertible Notes for a Class B Incremental Note in an aggregate principal amount of $2.2 million (the “September 2025 Exchange Note”).

The September 2025 Exchange Note accrues interest at a rate of 12% per annum, subject to adjustment from time to time as set forth in the September Exchange Note. The maturity date of the September Exchange Note was January 30, 2026. On November 24, 2025, the Company and the Current Holder amended the September 2025 Exchange Note to extend the maturity date to September 26, 2027.

The September 2025 Exchange Note is convertible (in whole or in part) at any time prior to the Maturity Date into the numberof shares of Common Stock equal to (x)110% of the sum of (i) the portion of the principal amount of the September 2025 Exchange Note to be converted or redeemed, (ii) accrued and unpaid Interest with respect to such principal amount of the September Exchange Note, (iii) the Make-Whole Amount (as defined in the September 2025 Exchange Note), (iv) accrued and unpaid Late Charges (as defined in the September Exchange Note) with respect to such principal amount of the September Exchange Note, Make-Whole Amount and Interest, and (v) any other unpaid amounts pursuant to the transaction documents, if any (the “Conversion Amount”), divided by (y) the conversion price of $55.00, subject to adjustment as provided in the September Exchange Note.

The September 2025 Exchange Note is also convertible (each, an “Alternate Conversion”) into shares of Common Stock at a conversion rate equal to the quotient of (x) the Conversion Amount, divided by (y) the Alternate Conversion Price (as defined below); provided, that if an event of default has occurred and is continuing, the September 2025 Exchange Note is convertible at a conversion rate equal to the quotient of (x)120% of the Conversion Amount, divided by (y) the Alternate Conversion Price. The “Alternate Conversion Price” means the lower of (i) the applicable conversion price as in effect on the date of the Alternate Conversion, and (ii) the greater of (A)118%, or, if an event of default has occurred and is continuing,85%, of the lowest VWAP of the Common Stock during the ten consecutive trading day period ending and including the trading day immediately preceding the delivery of the applicable conversion notice, and (B) the Floor Price (as defined in the September Exchange Note).

For the year ended December 31, 2025, the Current Holder converted a total of $1.9 million owed pursuant to the Amended and Restated Note into a total of 33,886 shares of Common Stock.

The fair value of this note was $0.9 million and $2.6 million as of December 31, 2025 and 2024, respectively. The Company recognized a loss on change in fair value of this note of $0.4 million for the year ended December 31, 2025 (see Note 13).

Principal Stockholder Promissory Notes

Prior to December 31, 2023, the Company entered into promissory notes with a then-principal stockholder (the "former principal stockholder”) of the Company. See Note 22. Related Party Transactions.

Promissory Notes - Related Parties

On March 5, 2025, the Company entered into an agreement to settle outstanding liabilities with its former legal counsel by issuing to them an unsecured promissory note in the principal amount of $3.9 million which had a maturity date of October 15, 2025 and accrued interest at a rate of 12% per annum. The note was not repaid on its scheduled maturity date. Total interest expense of $0.4 million was recorded in the consolidated statement of operations through November 7, 2025 and the total outstanding principal balance including accrued interest as of that date was $4.3 million.

On November 7, 2025, the Company's former legal counsel sold 50% of this note, including accrued interest, to Woodway, an unrelated party (the "New Woodway Note"). On December 29, 2025, the Company's former legal counsel sold the remaining 50% of this note in the amount of $2.2 million, including accrued interest, to two related parties of the Company, and this amount was outstanding as of December 31, 2025.

During 2019, 2020, 2021, 2022, and 2023, the Company entered into certain promissory notes with other related parties, all of which were repaid or otherwise settled in full during year ended December 31, 2024 (see Note 22).

Term Loan

On February 1, 2024, the Company entered into a Credit Agreement (the "Term Loan") with Vertical Investors LLC, (the “Lender”) pursuant to which the Company agreed to borrow from the Lender a term loan in the aggregate principal amount of approximately $8.0 million. The term loan bears interest at Daily Simple Secured Overnight Financing Rate ("SOFR-Based Rate"), and the Company has a guarantee fee of $2.3 million due on the maturity date. The guarantee fee was treated as a debt discount and accreted through interest expense through the revised maturity date of December 31, 2025. On March 29, 2024, the Company issued 1,500,000 shares of the Company’s Series A Convertible Preferred Stock to the Lender in exchange for reduction of outstanding debt of $3.0 million.

On April 24, 2024, (the “Effective Date”) the Company entered into a Loan Modification Agreement (the “Modification Agreement”) with the Lender reducing the outstanding debt by $3.0 million and extending the maturity date to December 31, 2024, which was subsequently extended to December 31, 2025. The Loan Modification Agreement was evaluated and determined to be a modification as the effective borrowing rate was not reduced therefore no concession were made at the time of the modification.

Pursuant to the Modification Agreement, the Company agreed to make monthly payments of interest in the amount of $60,000 to the Lender. In addition, the Company agreed to make mandatory principal payments simultaneously with the closing of all future capital raises by the Company or any affiliate of the Company. The first principal payment was to be the greater of (i) $3.0 million (the “Minimum Payment”) or (ii)20% of the net amount raised from any source of debt, equity, synthetic equity instruments or otherwise less any reasonable expenses paid to third parties (the “Net Capital Raise”). At each capital raise thereafter, the Company was to make a mandatory principal payment to the Lender of 20% of the Net Capital Raise. As of the Effective Date, the outstanding principal amount of the Loan was approximately $5.0 million.

On April 24, 2024, the Company entered into a Loan Restoration Agreement with the Lender (the “Restoration Agreement”). Pursuant to the Restoration Agreement, in the event the aggregate amount of funds received by the Lender (net of all commissions, transfer fees or other transaction fees of any kind and taxes paid or payable as a result thereof) arising out of the disposition of the Preferred Stock, shares of the Company’s Common Stock issuable upon conversion of the Preferred Stock, if converted by the Lender, or any other securities of the Company issued to the Lender as a result of its holding the Preferred Stock (the aggregate amount of funds, the “Net Trade Value”) received by the Lender on or before December 31, 2024 is less than $3.0 million within ten (10) business days of written demand therefor, the Company shall pay the Lender the amount that is equal to $3.0 million less the Net Trade Value. In the event the Net Trade Value is greater than $3.1 million, any amount in excess of $3.1 million being the “Excess Amount”, the Excess Amount shall be applied by the Lender in accordance with the formulas and schedule as set forth in the Restoration Agreement.

The Restoration Agreement was accounted for a derivative in the Company’s consolidated balance sheet in accordance with FASB ASC 815, Derivatives and Hedging. The derivative liability or asset is remeasured at each reporting period using a Monte Carlo simulation with changes in fair value recorded in the consolidated statements of operations in change in fair value of derivatives (see Note 13).

On September 30, 2024, the Lender was issued 59,668 shares of Series A Preferred Stock as a dividend in kind on the shares of Series A Preferred Stock owned by the Lender (the 59,668 shares of Series A Preferred Stock combined with the 1,500,000 shares of Series A Preferred Stock already owned by the Lender is referred to herein as the “Series A Preferred Shares”). As of September 30, 2024, the outstanding principal amount of the Loan was $4,309,186 (the “Loan Amount”). On September 30, 2024, the Company and the Lender entered into an Exchange and Settlement Agreement (the “Exchange Agreement”). Pursuant to the Exchange Agreement, the Company and Lender agreed to exchange (a) the Series A Preferred Shares and (b) the Loan Amount (minus $2 million) for a total of 2,861,128 shares of the Company’s Series C Preferred Stock (“Series C Preferred Shares”). In connection with the Exchange Agreement, on September 30, 2024, the Company and the Lender reduced the principal amount of the Note Purchase Agreement previously entered into by the Company and the Lender to $2.0 million. The Company evaluated and determined the Exchange Agreement should be accounted for as an extinguishment. The Series C Preferred stock shares was consideration paid to settle a portion of the Loan Amount and was recognized at fair value as of the date of issuance per ASC 470. The difference between the portion of the Loan Amount settled and the fair value of Series C Preferred stock on settlement date was recognized in earnings in loss upon extinguishment of debt in the consolidated statements of operations.

On September 30, 2024, the Company and the Lender entered into an amendment (the “Amendment”) to the previously disclosed Loss Restoration Agreement, dated as of April 24, 2024. The Amendment revised the definition of Preferred Stock to “2,861,128 shares of Series C Preferred Stock”. Prior to the Amendment, the definition of Preferred Stock read “1,500,000 shares of Series A Preferred Stock”. The definition of Net Trade Value was amended and restated in its entirety to include the disposition of the shares of Common Stock issued pursuant to the exchange agreements entered into by and between the Borrower and the Lender and the Net Trade Value shall be determined by Lender. Furthermore, the Amendment revised the date on which the Net Trade Value received will be calculated from December 31, 2024 to December 31, 2025.

For the year ended December 31, 2024, the Company and Lender agreed to reduce the Loan Amount by $1.6 million in exchange for the issuance of 7,440 shares of the Company’s Common Stock.

On January 23, 2025, the Company and the Lender entered into a Settlement Agreement, pursuant to which the Company issued 496,246 shares of the Company’s Series C Preferred Stock, par value $0.0001 per share, to the Lender as payment of the $1.0 million Net Trade Value as of the settlement date pursuant to the Loss Restoration Agreement.

On March 31, 2025, the Company and the Lender entered into a Settlement Agreement, pursuant to which the Company issued 1,188,571 shares of the Company’s Series C Preferred Stock, par value $0.0001 per share, to the Lender as payment of the $2.4 million Net Trade Value as of the settlement date pursuant to the Loss Restoration Agreement.

On August 5, 2025, the Company and the Lender entered into a Settlement Agreement, pursuant to which the Company made a payment of $0.6 million and issued 195,732 shares of the Company’s Series C Preferred Stock, par value $0.0001 per share, to the Lender as payment of the $1.0 million Net Trade Value as of the settlement date pursuant to the Loss Restoration Agreement.

On August 8, 2025, the Company and the Lender entered into an Exchange Agreement and agreed to reduce the Term Loan by $0.3 million in exchange for the issuance of 6,000 shares of Common Stock at a price of $55.00.

On December of 2025, the Company and the Lender entered into two Exchange agreements, pursuant to which the Company issued an aggregate of 60,107 shares of Series C Preferred Stock in settlement of an aggregate Net Trade Value of $0.1 million. Also in December of 2025, the Company and the Lender entered into Exchange agreements to reduce the principal balance of the Term Loan by an aggregate of $0.8 million in exchange for 14,340 shares of Common Stock.

The carrying value of the Term Loan is as follows:

Interest expense recognized on the Term Loan is as follows:

Working Capital Facility

In connection with the acquisition of Wattbike, the Company assumed the obligations under a working capital facility for a total of $2.1 million in principal and accrued interest as of the date of acquisition. The interest rate under the facility is 1,100 basis points above the Bank of England Base Rate. On July 1, 2025, the Company extended the facility to June 30, 2026, and the total commitment under the facility was reduced to $2.7 million. For the year ended December 31, 2025, the Company incurred interest and fees totaling $0.5 million, all of all of which were paid-in-kind. The outstanding balance on this facility as of December 31, 2025 was $1.7 million.

Other Notes Payable

As previously discussed, on November 7, 2025, Woodway purchased the New Woodway Note from the Company's former legal counsel in the principal amount of $2.1 million. The New Woodway Note accrues interest at a rate of 12% per annum and has a maturity date of November 6, 2026. On December 29, 2025, Woodway exchanged $0.2 millionof principal on this note for 15,000 shares of Common Stock, and the recorded a gain on the extinguishment of debt in the amount of $45,000. The outstanding balance on the New Woodway Note, including accrued interest, as of December 31, 2025 was $2.0 million.

On May 21, 2025, the Company issued an unsecured promissory note in the principal amount of $2.0 million to Woodway (the "May 2025 Woodway Note"). The May 2025 Woodway Note carries an original issue discount of 10.0% and accrues interest at a rate of 15% per annum, with a maturity date of May 21, 2027. At the date of issuance, $0.4 million of the proceeds was allocated to the fair value of the warrants issued in connection with the issuance of the note (see Note 13), resulting in a debt discount of $0.6 million. The Company recorded the debt discount as a direct reduction to the face value of the note and amortizes this amount over the life of the note as a component of interest expense. The carrying value of May 2025 Woodway Note as of December 31, 2025 was $1.8 million, which is reflected in loan payable- non-current on the consolidated balance sheet.

On May 1, 2025, the Company entered into an agreement to settle outstanding liabilities with a third-party by issuing to the third-party an unsecured promissory note in the principal amount of $0.5 million which has a maturity date of May 1, 2026 and accrues interest at a rate of 5% per annum. On December 17, 2025 the holder of the note exchanged $0.2 million of principal for 11,904 shares of Common Stock, and the total outstanding principal balance including accrued interest as of December 31, 2025 was $0.3 million.

In June 2023, the Company entered into a note purchase agreement (the "June 2023 Notes") pursuant to which the Company agreed to issue up to $15.8 million in aggregate principal amount of 10% senior secured notes due June 25, 2025 at their sole discretion. The June 2023 Notes are the senior secured obligations of the Company, bear interest at a rate of 10.0% per annum, and contain customary events of default. The maturity date was June 25, 2025, subject to earlier repurchase by the Company. The Company may redeem the June 2023 Notes, in whole or in part, at a redemption price equal to 100% of the principal amount of the June 2023 Notes to be redeemed, plus any accrued and unpaid interest to (including any additional interest), but excluding, the redemption date. Additional senior secured notes may become available at the sole discretion of the lender. As of September 30, 2023, the Company defaulted on the payment of interest due on the June 2023 Notes. On November 3, 2023, the Lender waived their rights to seek remedies resulting from an event of default. The note was amended in January 2024, and subsequently amended in February 2024, to include a conversion provision whereby at any time prior to maturity date the lender has the right to convert any outstanding and unpaid principal and accrued interest of the note into shares of the Company's Series A Preferred Stock at a conversion price of $1.82 per share. In February 2024, the June 2023 Notes were converted into 769,567 shares of Series A Preferred Stock. The Company recognized a loss equal to $0.4 million on the extinguishment of debt upon conversion to Series A Preferred Stock for the year ended December 31, 2024. There wasno outstanding balance on the June 2023 Notes as of December 31, 2024.

On November 10, 2023, the Company issued secured promissory notes (the "November 2023 Bridge Notes") in the aggregate principal amount of approximately $1.9 million, of which approximately $0.8 million was with a related party, with an original issuance discount of 15%, due November 10, 2024. Interest on the outstanding principal of the notes accrues initially at a rate of 3% per annum, with a step-up interest rate of 8% per annum after January 31, 2024 until maturity. The Company elected the fair value option for the notes under ASC Topic 825, Financial Instruments, with changes in fair value recorded in earnings each reporting period.

The November 2023 Bridge Notes were amended in January 2024, and subsequently amended in February 2024, to include a conversion provision whereby at any time prior to maturity date the lender has the right to convert any outstanding and unpaid principal and accrued interest of the note into shares of the Company's Series A Preferred Stock at a conversion price of $1.82 per share. In February 2024, a portion of the convertible notes were converted into 673,562 shares of Series A Preferred Stock. In March 2024, the notes were amended to a conversion price of $1.50. In March 2024, the remaining portion of the convertible notes were converted into 538,039 shares of Series A Preferred Stock. The Company recognized a loss equal to $0.2 million on the extinguishment of debt and loss on change in fair value of $0.3 million upon conversion to Series A Preferred Stock for the year ended December 31, 2024. There was no outstanding balance on the November 2023 Bridge Notes as of December 31, 2024.

In April and May 2024, the Company issued senior secured convertible preferred notes (the "Q2 2024 Convertible Notes"), in the aggregate principal amount of approximately $1.7 million, due April and May 2025. Interest on the outstanding principal of the notes accrued initially at a rate of 12%per annum. In April and May 2024, approximately

$1.4 million of the Q2 2024 Convertible Notes were converted into 1,407,186 shares of the Company's Series A Preferred Stock at a blended conversion price of $1.03 per share and the Company recognized a loss on the extinguishment of debt of $0.9 million in connection with this transaction. The remaining portion of the Q2 2024 Convertible Notes of approximately $0.3 million was paid in June 2024, and there wasno outstanding balance on these notes as of December 31, 2024.

The change in the balance of other notes payable issued in 2023 and 2024 is as follows:

In August 2023, CLMBR, Inc. issued secured promissory notes in the aggregate principal amount and accrued interest of approximately $0.7 million, due August 31, 2026. Interest on the outstanding principal of the notes accrues initially at a rate of 15% per annum. The note was assumed by the Company in January 2024. The note was amended in January 2024, and subsequently amended in February 2024, to include a conversion provision whereby at any time prior to maturity date the lender has the right to convert any outstanding and unpaid principal and accrued interest of the note into shares of the Company's Series A Preferred Stock at a conversion price of $1.82 per share. In February 2024, the convertible note was converted into 398,352 shares of Series A Preferred Stock. The Company recognized a loss equal to $0.2 million on the extinguishment of debt upon conversion to Series A Preferred Stock for the year ended December 31, 2024, and there wasno balance outstanding on this note as of December 31, 2024.

In October 2023, CLMBR, Inc. issued secured promissory notes in the aggregate principal amount and accrued interest of approximately $0.5 million, due October 15, 2026. Interest on the outstanding principal of the notes accrues initially at a rate of 15% per annum. The note was assumed by the Company in January 2024. The note was amended in January 2024, and subsequently amended in February 2024, to include a conversion provision whereby at any time prior to maturity date the lender has the right to convert any outstanding and unpaid principal and accrued interest of the note into shares of the Company's Series A Preferred Stock at a conversion price of $1.82 per share. In February 2024, the convertible note was converted into 258,929 shares of Series A Preferred Stock. The Company recognized a loss equal to $0.1 million on the extinguishment of debt upon conversion to Series A Preferred Stock for the year ended December 31, 2024, and there wasno balance outstanding on this note as of December 31, 2024.

In November 2023, CLMBR, Inc. issued secured promissory notes in the aggregate principal amount and accrued interest of approximately $0.7 million, due January 31, 2025. Interest on the outstanding principal of the notes accrues initially at a rate of 12% per annum. The note was assumed by the Company in February 2024 in connection with the acquisition of CLMBR, Inc. The note was amended in February 2024, to include a conversion provision whereby at any time prior to maturity date the lender has the right to convert any outstanding and unpaid principal and accrued interest of the note into shares of the Company's Series A Preferred Stock at a conversion price of $1.80 per share. The promissory note was repaid in October 2024, and there wasno balance outstanding on this note as of December 31, 2024.

Thechange in the balance of the promissory notes assumed in connection with the CLMBR Acquisition is as follows:

On December 7, 2023, the Company issued a convertible note (the "December 2023 Note") to an accredited investor (the "Note Investor") with an aggregate principal amount of $2.2 million. The December 2023 Note carries an original issue discount of 8.0% and accrues interest at a rate of 7.0% per annum. The maturity date of the December 2023 Note was December 7, 2024 (the “Maturity Date”). Interest payments are guaranteed through the Maturity Date regardless of whether the December 2023 Note is earlier converted or redeemed. The December Note was paid off in July 2024 for $0.2 million and the outstanding balance is $0 as of December 31, 2024. The Company recognized a total of $1.4 million of interest on the December 2023 during the year ended December 31, 2024, including amortization of debt discount and issuance costs totaling $1.3 million.

Scheduled maturities of the Company's outstanding debt as of December 31, 2025 is as follows:

Note 12. Warrants

The following is a schedule of changes in stock purchase warrants issued and outstanding from December 31, 2024 to December 31, 2025;

Thewarrants are carried at fair value and classified as long-term liabilities within the Company's consolidated balance sheets as of December 31, 2025 and 2024. Changes in their fair value are recognized in earnings at each reporting period. Warrant liabilities were $0.4 million and $4,000 as of December 31, 2025 and 2024, respectively.

January 2025 Warrants

In connection with the issuance of the January 2025 Convertible Note (see Note 7), the Company issued warrants to purchase 6,742 shares of common stock with an initial exercise price of $94.57 per share. The warrant exercise price is subject to customary adjustments for stock dividends, stock splits, issuances of additional shares of common stock. On July 7, 2025, the Company entered into an inducement offer letter agreement and agreed to exercise part of the January 2025 Warrants of 1,845 shares at an exercise price of $54.20 per share. The Company recognized a gain of $0.7 million for changes in fair value of these warrants for the year ended December 31, 2025.

Woodway May 2025 Warrants

On May 21, 2025, the Company issued warrants to purchase 4,000 shares of common stock. The warrants are exercisable for shares of common stock at a price of $125.00 per share. The warrants may be exercised during the period commencing May 21, 2025 and ending May 21, 2035. The Company recognized a gain of $0.4 million for changes in fair value for the year ended December 31, 2025.

Class A Incremental Notes Warrants

During the year ended December 31, 2025, the Company issued an aggregate of 113,072 warrants in connection with the issuance of Class A Incremental Notes (see Note 7) with initial exercise prices ranging from $20.11 to $306.00 per share. The Company recognized a gain of $1.8 million for changes in fair value for the year ended December 31, 2025.

November 2023 Bridge Warrants

In connection with the November Bridge Notes discussed further in Note 11, the Company entered into a warrant agreement whereby the holders are eligible to receive warrants based on the occurrence of future events as defined in the agreement. No warrants have been issued as of December 31, 2025.

December 2023 Warrants

On December 7, 2023, the Company issued an aggregate 2 warrants to purchase shares of common stock to an accredited investor in conjunction with the issuance of its December 2023 Note. Each warrant has a strike price of $500,000.00 per share. The warrant may be exercised during the period commencing December 7, 2023 and ending June 7, 2029. The Company recognized a gain equal to $0 and $0.3 million for the years ended December 31, 2025 and 2024, respectively, related to the change in fair value of the warrants issued in December 2023.

Pursuant to the warrant agreement entered into with an accredited investor in December 2023, the number of shares of common stock issuable under the warrants increased to 7 following dilutive issuances in May 2024 whereas the exercise price was reduced to an amount equal to the new issuance price. In June 2024, the exercise price was reduced to $40,000.00 and the number of shares of common stock issuable increased to 28. In June 2024, 3i exercised 2 warrant shares for $90,000. The remaining 26 warrants were exchanged for 375,000 shares of Series A Preferred Stock in June 2024 and the Company recognized a loss equal to $0.4 million for the years ended December 31, 2024.

February 2024 Warrants

On February 1, 2024, the Company issued an aggregate 7 warrants to purchase shares of common stock to an accredited investor in conjunction with the issuance of its $6.0 million February 2024 Note. The Warrants are exercisable for 3 shares of Common Stock, at a price of $500,000.00 per share (“Warrant 1”) and $700,000.00 per share (“Warrant 2” and, together with Warrant 1, the “Warrants”) (the “Exercise Prices”). The Warrants may be exercised during the period commencing February 1, 2024 and ending on February 1, 2034. The Exercise Prices are subject to voluntary adjustments and adjustments upon subdivision or combinations of shares of Common Stock. The Company recognized a gain equal to $0 and $1.8 million for the years ended December 31, 2025 and 2024, respectively, related to the change in fair value of the warrants issued in February 2024.

Woodway Warrants

On February 20, 2024, the Company issued 2 warrants in connection with an Exclusive Distribution Agreement with WOODWAY USA, INC ("Woodway"). Each warrant has a strike price of $500,000.00 per share. The warrants may be exercised during the period commencing February 20, 2024 and ending February 20, 2034. The Company recognized a gain equal to $51,000 and $0.3 million for the years ended December 31, 2025 and 2024, respectively, related to the change in fair value of the warrants issued in February 2024.

Registered Direct Placement Agent Warrants

On May 8, 2024, the Company entered into an engagement agreement with H.C. Wainwright & Co., LLC (the "Placement Agent"), pursuant to which the Placement Agent agreed to act as the exclusive placement agent in connection with the Registered Offering. The Company has agreed to issue the Placement Agent or its designees as compensation in connection with the Offering, warrants to purchase up to an aggregate of 1 share of Common Stock (equal to 7.5% of the aggregate number of Shares sold in the Registered Offering) and will have a term of five years from the commencement of sales in the Registered Offering and an exercise price of $88,000.00 per share. The Company recognized a gain equal to $1,000 and $50,000 for the years ended December 31, 2025 and 2024, respectively, related to the change in fair value of these warrants.

Registered Direct Offering Warrants

Pursuant to the securities purchase agreement, in a concurrent private placement (together with the Registered Offering, the “Offering”), the Company has also agreed to issue to the Investors unregistered warrants to purchase up to an aggregate of 14 shares of Common Stock, which represent 100% of the shares of Common Stock to be issued and sold in the Registered Offering. The Warrants have an exercise price of $70,400.00 per share, and will expire on the five and one-half (5.5) year anniversary from the Stockholder Approval Date on May 31, 2024. The Company recognized a gain equal to $22,000 and $0.7 million for the years ended December 31, 2025 and 2024, respectively, related to the change in fair value of the warrants issued in May 2024.

Best Efforts Offering Pre-Funded Warrants

On July 1, 2024, the Company issued pre-funded warrants to purchase up to an aggregate of 262 shares of common stock. The public offering price for each Pre-Funded Warrant and was $14,090.00. The Pre-Funded Warrants were exercised in full in July 2024. The fair value of the warrants of $3.7 million was recorded as a long-term liability upon issuance. The Company recorded a change in fair value of warrants of $1.1 million for the year ended December 31, 2024.

Best Efforts Offering A-1 and A-2 Warrants

On July 1, 2024, the Company issued Series A-1 warrants to purchase up to an aggregate of 284 shares of common stock and Series A-2 warrants to purchase up to an aggregate of 284 shares of common stock. The public offering price for each Share and accompanying Warrants was $14,100.00 (which is the last reported sale price of the Common Stock on The Nasdaq Capital Market on June 28, 2024). Each Warrant has an exercise price of $14,100.00 per share and is exercisable beginning on the effective date of stockholder approval on August 30, 2024. The Series A-1 Warrant will expire on the five-year anniversary of the initial issuance date. The Series A-2 Warrant will expire on the eighteen-month anniversary of the initial issuance date. The Company recognized a gain equal to $3.6 million and $4.6 million for the years ended December 31, 2025 and 2024, respectively, related to the change in fair value of the A-1 and A-2 Warrants issued in July 2024.

Best Efforts Placement Agent Warrants

The Company entered into an engagement agreement with H.C. Wainwright & Co., LLC (the "Placement Agent"), pursuant to which the Placement Agent agreed to act as the exclusive placement agent in connection with the Best Efforts Offering. The Company has agreed to issue the Placement Agent or its designees as compensation in connection with the Offering, warrants to purchase up to an aggregate of 21 shares of Common Stock (equal to 7.5% of the aggregate number of Shares sold in the Best Efforts Offering) and will have a term of five years from the commencement of sales in the Best Efforts Offering and an exercise price of $17,630.00 per share. The Company recognized a gain equal to $0.2 million for each of the years ended December 31, 2025 and 2024 related to the change in fair value of the warrants issued in July 2024.

Note 13. Fair Value Measurements

The Company’s financial instruments consist of derivatives, convertible notes held at fair value and warrants. Assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 and 2024 were as follows:

During the years ended December 31, 2025 and 2024, there wereno transfers between Level 1 and Level 2, nor into and out of Level 3. The carrying values of the Company’s prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities

.

The following summarizes the activity for the Company Level 3 assets and liabilities measured at fair value on a recurring basis for years ended December 31, 2025 and 2024.

Derivatives

The Company recorded the derivatives as a derivative asset or liability in the Company’s condensed consolidated balance sheet in accordance with FASB ASC 815, Derivatives and Hedging. For the outstanding derivatives as of December 31, 2025 and December 31, 2024, the fair value of the derivatives were determined using a Monte Carlo simulation. The Monte Carlo Simulation valuation model incorporates assumptions as to stock price volatility, discount rate, dividend rate and risk-free interest rate.

The following table outlines the key inputs for the Monte Carlo Simulation models:

September 2025 Exchange Note

The Company entered into convertible note arrangement in February 2024. The amendment to the Note represents the addition of a substantive conversion feature and as a result the Company recorded a loss on extinguishment upon issuance and the remaining unamortized discount was written off upon extinguishment. The Company elected the fair value option for the February 2024 Convertible Notes under ASC 825, Financial Instruments, with changes in fair value recorded in earnings each reporting period. The fair value of the February 2024 Convertible Notes were determined using a discounted cash flow analysis at a discount rate of 31% and 16.3% as of December 31, 2025 and 2024, respectively. The fair value of the February 2024 Convertible Notes of $4.0 million was recorded as a current liability upon issuance. The Company recorded a loss on extinguishment of debt of $0.5 million and change in fair value adjustment of $0.2 million for the year ended December 31, 2024. On January 14, 2025, Treadway sold the Amended and Restated Note to Woodway USA, Inc. On September 26, 2025, the Company entered into an exchange agreement (the “Exchange Agreement”) with the Current Holder, pursuant to which the Current Holder and the Company exchanged the February 2024 Convertible Notes for a Class B Incremental Note in an aggregate principal amount of $2.2 million (the “September 2025 Exchange Note”) (see Note 11). The company recorded a change in fair value adjustment of $0.4M for the year ended December 31, 2025.

January 2025 Exchange Notes

See Note 22, Related Party Transactions.

June 2025 Convertible Exchangeable Notes

The Company elected the fair value option for the June 2025 Convertible Exchangeable Notes. As further described in Note 7, these notes were retired in October and December of 2025. The fair value of the June 2025 Convertible Exchangeable Notes was determined at issuance based on net proceeds of $50.0 million, and using a discounted cash flow analysis at a discount rate of 3.56% and 3.60% as of October 13, 2025 and December 9, 2025, respectively.

Remainder Notes

The Company also elected the fair value option for the Remainder Notes issued upon the settlement of the June 2025 Convertible Exchangeable Notes (see Note 7). These notes were valued using a Monte Carlo Simulation model using a discount rate of 31%, volatility of 95% and a risk free rate of 3.5% as of December 31, 2025.

November 2023 Bridge Notes

On November 10, 2023, the Company issued the November Bridge Notes. The fair value of the bridge notes was determined using a discounted cash flow analysis at a discount rate of 21.0%. The fair value of the bridge notes of $1.7 million was recorded as a current liability upon issuance.

The Company amended the Bridge notes into convertible notes in January 2024 and subsequently converted the notes into Preferred Stock Series A in February 2024 and March 2024. In February 2024 and March 2024, the Company recognized a loss equal to $0.2 million on the extinguishment of debt and loss on change in fair value of $0.3 million upon conversion to Series A Preferred Stock.

Accrued Earn Out

At December 31, 2025, the Company assessed the fair value of the contingent consideration recognized in the Wattbike acquisition (see Note 23) based on projected revenue and determined the likelihood of achieving the sales target that would generate the contingent payment was remote. As a result, the Company derecognized that liability at December 31, 2025 and recorded again on the change in fair value of $0.2 million.

As part of the Acquisition of CLMBR, Inc., the Sellers were entitled to receive a contingent payment in the form of shares of Common Stock (collectively, the “Earn-Out Shares”) calculated in the manner set forth in the Asset Purchase Agreement based on the 2024 Unit Sales (as defined in the Asset Purchase Agreement) and the volume-weighted average price (“VWAP”) for the Company’s common stock based on the 10 consecutive trading days ending on (and including) December 31, 2024, subject to the VWAP Collar. In addition, there were 2 contingent payments (1) based on total CLMBR sales in 2024 (5,000 units sold in 2024) and (2) based on CLMBR sales through B2B channel in 2024 (2,400 in B2B channel in 2024). Contingent payment (1) was determined at inception to be remote and therefore, $0 was recognized for the earn out as of the acquisition date. Contingent payment (2) was probable and a contingent liability of $1.3 million was recorded based on in the event the 2024 Unit Sales include at least 2,400 Units sold in the business-to-business channel, the Sellers would be entitled to an additional number of Earn-Out Shares calculated in the manner set forth in the Asset Purchase Agreement subject to total maximum number of 56 Earn-Out Shares. The Company assessed the fair value as of September 30, 2024 and it was determined based on current sales that achieving the projection and likelihood of contingent payment (2) was deemed remote and as a result the Company marked the contingent liability to $0. The Company recognized a gain equal to $1.3 million for the year ended December 31, 2024 related to change in fair value of the earn out recorded in the consolidated statements of operations in change in fair value of earnout.

Warrants

The following table summarizes the activity for the Company Level 3 warrant liabilities measured at fair value on a recurring basis for the year ended December 31, 2025:

(1) -Includes February 2024 Warrants, Woodway February 2024 Warrants, Registered Direct Placement Agent Warrants, Registered Direct Offering Warrants, Best Efforts Offering A-1 Warrants, Best Efforts Offering A-2 Warrants, Best Efforts Placement Agent Warrants. The fair value of the warrants was determined using a Black-Scholes-Merton model.

(2) -Includes warrants issued in connection with the January 2025 Convertible Note and the Class A Incremental Notes. The fair value of the warrants was determined using a Black-Scholes-Merton model.

The following table outlines the key inputs for the Black-Scholes option-pricing models:

The following table summarizes the activity for the Company Level 3 warrant liabilities measured at fair value on a recurring basis for the year ended December 31, 2024:

November 2023 Warrants

On November 10, 2023, the Company issued warrants to two accredited investors to purchase shares of Common Stock. The fair value of the warrants was determined using the Monte Carlo Simulation, given the variable number of shares issuable upon exercise of the warrant. For the outstanding warrants as of December 31, 2024 and December 31, 2023, management determined the fair value of the warrants using the following significant unobservable inputs: (1) probability and timing of events, (2) expected future equity value of the underlying shares at the time of conversion, (3) dividend yield and (4) and risk free rate. The assumptions used to estimate the fair value of the November 2023 Warrants are as follows:

December 2023 Warrants

On December 7, 2023, the Company issued warrants in connection with the issuance of the December 2023 Convertible Notes. The fair value of the warrants was determined using a Black-Scholes-Merton model, in which the probability and timing of potential future events is considered in order to estimate the fair value of the warrants as of each valuation date. For the outstanding warrants as of December 31, 2024 and December 31, 2023, management determined the fair value of the warrants using the following significant unobservable inputs: (1) probability and timing of events, (2) expected future equity value of the underlying shares at the time of conversion, (3) dividend yield and (4) a risk free rate. The warrants were no longer outstanding at December 31, 2024. The assumptions used to estimate the fair value of the December 2023 Warrants are as follows:

Pursuant to the warrant agreement entered into with an accredited investor in December 2023, the warrant to purchase shares of common stock increased to 8 following dilutive issuances in May 2024 whereas the exercise price was reduced to an amount equal to the new issuance price. In June 2024, the exercise price was reduced to $40,000.00 and the warrant shares increased to 28. In June 2024, 3i exercised 2 warrant shares for $0.09 million. The remaining 26 warrants were exchanged for 3,750 shares of Series A Preferred Stock in June 2024 and the Company recognized a loss equal to $0.4 million and $0.0 million for the years ended December 31, 2024 and 2023, respectively.

February 2024 Warrants

On February 1, 2024, the Company issued an aggregate 7 warrants to purchase shares of common stock to an accredited investor in conjunction with the issuance of its $6.0 million February 2024 Note. The fair value of the warrants was determined using a Black-Scholes-Merton model, in which the probability and timing of potential future events is considered in order to estimate the fair value of the warrants as of each valuation date. For the outstanding warrants as of December 31, 2024 and December 31, 2023, management determined the fair value of the warrants using the following significant unobservable inputs: (1) probability and timing of events, (2) expected future equity value of the underlying shares at the time of conversion, (3) dividend yield and (4) a risk free rate. The assumptions used to estimate the fair value of the February 2024 Warrants are as follows:

Woodway Warrants

On February 20, 2024, the Company issued warrants in connection with an Exclusive Distribution Agreement with WOODWAY USA, INC. The fair value of the warrants was determined using a Black-Scholes-Merton model, in which the probability and timing of potential future events is considered in order to estimate the fair value of the warrants as of each valuation date. For the outstanding warrants as December 31, 2024 and December 31, 2023, management determined the fair value of the warrants using the following significant unobservable inputs: (1) probability and timing of events, (2) expected future equity value of the underlying shares at the time of conversion, (3) dividend yield and (4) a risk free rate. The assumptions used to estimate the fair value of the Woodway Warrants are as follows:

Registered Direct Placement Agent Warrants

On May 8, 2024, the Company issued warrants in connection with an agreement with the Placement Agent, pursuant to which the Placement Agent agreed to act as the exclusive placement agent in connection with the Registered Offering. The fair value of the warrants was determined using a Black-Scholes-Merton model, in which the probability and timing of potential future events is considered in order to estimate the fair value of the warrants as of each valuation date. For the outstanding warrants as December 31, 2024, management determined the fair value of the warrants using the following significant unobservable inputs: (1) probability and timing of events, (2) expected future equity value of the underlying shares at the time of conversion, and (3) dividend yield and (4) a risk free rate. The assumptions used to estimate the fair value of the Placement Agent Warrants are as follows:

Registered Direct Offering Warrants

On May 20, 2024, the Company issued warrants in connection with a securities purchase agreement with certain institutional investors. The fair value of the warrants was determined using a Black-Scholes-Merton model, in which the probability and timing of potential future events is considered in order to estimate the fair value of the warrants as of each valuation date. For the outstanding warrants as December 31, 2024 and December 31, 2023, management determined the fair value of the warrants using the following significant unobservable inputs: (1) probability and timing of events, (2) expected future equity value of the underlying shares at the time of conversion, (3) dividend yield and (4) a risk free rate. The assumptions used to estimate the fair value of the Registered Offering Warrants are as follows:

Best Efforts Offering Pre-Funded Warrants

On July 1, 2024, the Company issued warrants in connection with a securities purchase agreement with certain institutional investors. The fair value of the warrants was determined using a Black-Scholes-Merton model, in which the probability and timing of potential future events is considered in order to estimate the fair value of the warrants as of each valuation date. For the outstanding warrants as December 31, 2024 and December 31, 2023, management determined the fair value of the warrants using the following significant unobservable inputs: (1) probability and timing of events, (2) expected future equity value of the underlying shares at the time of conversion, (3) dividend yield and (4) a risk free rate. The warrants were exercised in full in July 2024.

Best Efforts A-1 Warrants

On July 1, 2024, the Company issued warrants in connection with a securities purchase agreement with certain institutional investors. The fair value of the warrants was determined using a Black-Scholes-Merton model, in which the probability and timing of potential future events is considered in order to estimate the fair value of the warrants as of each valuation date. For the outstanding warrants as December 31, 2024 and December 31, 2023, management determined the fair value of the warrants using the following significant unobservable inputs: (1) probability and timing of events, (2) expected future equity value of the underlying shares at the time of conversion, (3) dividend yield and (4) a risk free rate. The assumptions used to estimate the fair value of the Best Efforts A-1 Warrants are as follows:

Best Efforts A-2 Warrants

On July 1, 2024, the Company issued warrants in connection with a securities purchase agreement with certain institutional investors. The fair value of the warrants was determined using a Black-Scholes-Merton model, in which the probability and timing of potential future events is considered in order to estimate the fair value of the warrants as of each valuation date. For the outstanding warrants as December 31, 2024 and December 31, 2023, management determined the fair value of the warrants using the following significant unobservable inputs: (1) probability and timing of events, (2) expected future equity value of the underlying shares at the time of conversion, (3) dividend yield and (4) a risk free rate. The assumptions used to estimate the fair value of the Best Efforts A-2 Warrants are as follows:

Best Efforts Placement Agent Warrants

On July 1, 2024, the Company issued warrants in connection with a securities purchase agreement with certain institutional investors. The fair value of the warrants was determined using a Black-Scholes-Merton model, in which the probability and timing of potential future events is considered in order to estimate the fair value of the warrants as of each valuation date. For the outstanding warrants as December 31, 2024 and December 31, 2023, management determinedthe fair value of the warrants using the following significant unobservable inputs: (1) probability and timing of events, (2) expected future equity value of the underlying shares at the time of conversion, (3) dividend yield and (4) a risk free rate. The assumptions used to estimate the fair value of the Best Efforts Placement Agent Warrants are as follows:

Note 14. Leases

The Company adopted ASC 842 on January 1, 2022, using the effective date transition method, which requires a cumulative-effect adjustment to the opening balance of retained earnings on the effective date.

The Company has made certain assumptions and judgments when applying ASC 842 including the adoption of the package of practical expedients available for transition. The practical expedients allowed the Company to not reassess (i) whether expired or existing contracts contained leases, (ii) lease classification for expired or existing leases and (iii) previously capitalized initial direct costs. The Company also elected not to recognize right-of-use assets and lease liabilities for short-term leases (leases with a term of twelve months or less).

Operating lease arrangements primarily consist of office and warehouse leases expiring at various years through 2028. The facility leases have original lease terms of two to seven years and contain options to extend the lease up to 5 years or terminate the lease. Options to extend are included in leased right-of-use assets and lease liabilities in the consolidated balance sheet when the Company is reasonably certain it will renew the underlying leases. Since the implicit rate of such leases is unknown and the Company is not reasonably certain to renew its leases, the Company has elected to apply a collateralized incremental borrowing rate to facility leases on the original lease term in calculating the present value of future lease payments.

As of December 31, 2025 and 2024, the weighted average discount rate for operating leases was 6.42% and 6.89%, respectively, and the weighted average remaining lease term for operating leases as of December 31, 2025 and 2024 was 2.4 and 2.3 years, respectively.

The Company has entered into various short-term operating leases for office and warehouse space, with an initial term of twelve months or less. These short-term leases are not recorded on the Company’s consolidated balance sheets. The components of lease expense and other information for the years ended December 31, 2025 and 2024 were as follows.

No new right-of-use assets obtained in exchange for lease liabilities for the years ended December 31, 2025 and 2024.

Total right-of-use assets and operating lease liabilities of $0.2 million were acquired in the Wattbike Acquisition in 2025, and total right-of-use assets and operating lease liabilities of $0.4 million were acquired in the CLMBR Acquisition in 2024, and were recorded at fair value on the acquisition date.

The following represents the Company’s minimum annual rental payments under operating leases for each of the next five years and thereafter:

Note 15. Commitments and Contingencies

Royalty Agreement

In 2017, the Company entered into a royalty agreement with Fuseproject and agreed to pay 3% of cumulative FORME net sales up to $5.0 million and 1% of cumulative FORME net sales above $5.0 million, up to a maximum total royalty of $1.0 million. Regardless of the level of cumulative net sales, a guaranteed minimum payment of $0.2 million was to be paid in the first 12 months after the product's initial retail release as an advance towards the royalty payments which was accrued as of December 31, 2025 and 2024. The Company recorded royalty expense of approximately $20,000 for the years ended December 31, 2025 and 2024.

On March 7, 2024, a petition was filed by Tung Keng Enterprise Co., Ltd. d/b/a DK City Co., Ltd. (“DK City”) against CLMBR, Inc. and the Company in the United States District Court for the District of Colorado to enforce a monetary arbitration award of approximately $2.25 million against CLMBR, Inc. (the “Petition”). The Company was not involved in that prior arbitration, which involved alleged breaches of an equipment manufacturing agreement between CLMBR, Inc. and DK City. On June 25, 2024, CLMBR, Inc. and the Company collectively resolved the dispute via a Confidential Settlement Agreement and Mutual Release with DK City. Pursuant to that agreement, the Company was required to make certain payments to DK City, CLMBR, Inc. and the Company would be released from liability, and the Petition would be voluntarily dismissed without prejudice. The Company subsequently defaulted on this agreement due to not complying with the payment plan, and on September 22, 2025 a new petition was filed alleging breach of the negotiated settlement. The complaint seeks damages in the amount of $2.0 million, plus statutory interest and attorneys' fees. The Company has admitted liability, and the parties have requested a Magistrate Judge settlement conference. The plaintiff has filed a motion for summary judgment, but the parties are engaged in settlement discussions.

Total remaining payments as of December 31, 2025 and 2024 of $2.1 million, including default interest of $0.1 million, are reflected in Accrued Expenses and other current liabilities in the accompanying consolidated balance sheet.

On or about February 20, 2025, the Company was sued in the Superior Court of Massachusetts, Suffolk County, by one of its former financial services consultants (“the Plaintiff”), alleging a breach of an agreement between the parties for financial services Plaintiff allegedly provided to the Company. The dispute was fully and amicably resolved and on June 12, 2025, the parties filed a joint stipulation of dismissal with prejudice and settlement amount was $2.2 million. The current portion of the total remaining payments as of December 31, 2025 of $0.3 million is included in accrued expenses and other current liabilities and the non-current portion of $1.8 million is included in other long term liabilities in the condensed consolidated balance sheet.

The Company is involved in legal proceedings in the normal course of business. The Company currently believes that any ultimate liability arising out of such proceedings will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.

Note 16. Stockholders’ Equity

Common Stock

The Company’s authorized Common Stock consisted of 900,000,000 shares at $0.0001 par value, as of December 31, 2025 and 2024. The issued and outstanding common stock was 307,516 and 14,021 shares as of December 31, 2025 and 2024, respectively.

During the year ended December 31, 2025, the Company issued an aggregate of 184,677 shares of Common Stock upon the conversion of convertible notes payable. Also during the year ended December 31, 2025, the Company issued an aggregate of 49,730 shares of Common Stock in connection with the settlement of other indebtedness and accounts payable.

During the year ended December 31, 2025, the Company issued an aggregate of 49,038 shares of Common Stock in exchange for 1,091,225 shares and 3,530,616, shares of Series A Preferred Stock and Series C Preferred Stock, respectively.

On October 10, 2025, the Company issued 2,485 shares of Common Stock to settle an outstanding balance of $0.1 million with a vendor.

In July 2025, the Company entered into an inducement offer letter agreement with the holder of the January 2025 Convertible Note to exercise their January 2025 Warrants for 1,845 shares of Common Stock at an exercise price of $54.20 per share.

In February 2025, the Company issued 8,215 shares of Common Stock from an At the Market offering and received proceeds of $1.6 million.

On February 2, 2024, the Company issued 3 shares of Common Stock in connection with acquisition of CLMBR, Inc. as part of the purchase price.

From January 2024 through June 2024, the Company issued 28 shares of Common Stock upon conversions of $1.9 million from the December 2023 Convertible Note.

On February 1, 2024, the Company issued 1 shares of Common Stock to the February 2024 Convertible Note holder, pursuant to a securities purchase agreement.

On February 1, 2024, the Company issued 0 shares of Common Stock to the December 2023 Convertible Note holder and the Equity Line Investor for granting a waiver to the Company to allow the Company to issue the February 2024 Convertible Note and to enter into the Term Loan.

In January 2024 through May 2024, the Company issued 4 shares of Common Stock from an equity line of credit.

In May 2024, the Company entered into a securities purchase agreement with certain institutional investors, pursuant to which the Company agreed to issue and sell, in a registered direct offering priced at-the-market under the rules of The Nasdaq Stock Market an aggregate of 14 shares of Common Stock at an offering price of $70,400.00 per share.

In June 2024, the Company issued 2 shares of Common Stock upon the exercise of warrants associated with the December 2023 Convertible Note.

In July 2024, the Company commenced a best efforts public offering of an aggregate of 21 shares of Common Stock of the Company, at an offering price of $14,100.00 and issued 262 shares of Common Stock from the exercise of pre-funded warrants of Common Stock at an offering price of $14,090.00 per share.

In June 2024 through December 2024, the Company issued 6,487 shares of Common Stock from an At the Market offering.

From September 2024 through November 2024, the Company issued 2,351 shares of Common Stock upon conversion of $2.4 million of debt.

From November 2024 through December 2024, the Company issued 2,620 shares of Common Stock upon conversion of 919,794 shares of Series A Preferred Stock.

Preferred Stock

In January 2024, the Board authorized the proposed issuance of shares of non-voting Series A and Series B convertible preferred stock. The Company's authorized preferred stock consists of 200,000,000 shares at $0.0001 par value as of December 31, 2024. The Series A Certificate designated 10,000,000 shares of the Company’s preferred stock as Series A Preferred Stock. The Series B Certificate designated 1,500,000 shares of the Company’s preferred stock as Series B Preferred Stock. In September 2024, our board authorized the proposed issuance of shares of non-voting Series C convertible preferred stock. The Series C Certificate designated 5,000,000 shares of the Company’s preferred stock as Series C Preferred Stock. The remaining unissued shares of our authorized preferred stock are undesignated. On April 18, 2024, the Series A Certificate was amended increasing designated shares from 5,000,000 to 7,000,000. On June 28, 2024 the Series A Certificate was amended increasing designated shares from 7,000,000 to 10,000,000. In June 2025, the Board authorized the proposed issuance of shares of non-voting Series LTI convertible preferred stock. The Series LTI Convertible Preferred Stock Certificate of Designation designated 5,000,000 shares of the Company’s preferred stock as Series LTI Convertible Preferred Stock. On June 26, 2025, the Board approved the Certificate of Designations of Series E Convertible Preferred Stock. The Series E Certificate designated 1,300,000 shares of the Company’s authorized preferred stock as Series E Convertible Preferred Stock.

The Series A convertible preferred stock is subject to certain rights, preferences, privileges, and obligations, including voluntary and mandatory conversion provisions, as well as beneficial ownership restrictions and share issuance caps, as described below and as set forth in the Series A Certificate. The Series A convertible preferred stock can be issued at any time and any subsequent mandatory or voluntary conversion into common stock shall be at a conversion price at least equal to or above the closing price per share of the Common Stock as reported on Nasdaq on the last trading day immediately preceding the date that the Series A Certificate was approved by our board of directors, subject to customary adjustments for stock splits and combinations.

The Series A convertible preferred stock includes the following:

•

Subject to certain restrictions specified in the Series A Certificate, and applicable legal and regulatory requirements, including without limitation, the listing requirements of the Nasdaq Stock Market, (i) each share of Series A convertible preferred stock is convertible, at the option of the holder, at any time, provided that such conversion occurs at least 12 months following the Original Issuance Date (as defined in the Series A Certificate), into such whole number of fully paid and non-assessable shares of common stock as is determined by dividing the Original Issue Price (as defined in the Series A Certificate) by the Conversion Price (as defined in the Series A Certificate) in effect at the time of conversion, and (ii) upon the earliest Mandatory Conversion Time (as defined in the Series A Certificate) all outstanding shares of Series A convertible preferred stock shall automatically be converted into shares of common stock;

•

In no event shall any share of Series A convertible preferred stock convert into shares of common stock if the total number of shares of common stock issued would exceed 19.99% of the total number of our shares of common stock outstanding as of immediately prior to the adoption of the Series A Certificate;

•

Dividends accrue on each share of Series A convertible preferred stock at the rate per annum of 8% of the Original Issue Price of such share, plus the amount of previously accrued dividends, compounded annually, subject to certain restrictions and provisions as set forth in the Series A Certificate; and

•

The Series A convertible preferred stock does not have any voting rights, other than any vote required by law or our certificate of incorporation (which does not currently provide for any such voting rights).

Pursuant to the Certificate of Designations of Series A Preferred Stock, on September 30, 2024, the Board declared a dividend on the shares of Series A Preferred Stock issued and outstanding as of the record date for such dividend, as a dividend in kind, in the form of 269,334 shares of Series A Preferred Stock. The Company issued 59,668 Dividend Shares on September 30, 2024 and 209,666 Dividend Shares on October 1, 2024.

During the year ended December 31, 2025, the Board declared dividends on the Series A Preferred Stock as dividends in kind, and the Company issued a total of 369,319 shares of Series A Preferred Stock. Also during the year ended December 31, 2025,613,311 shares of Series A Preferred Stock were converted into 27,304 shares of Common Stock.

There are no circumstances outside the Company's control other than final liquidation that would require the Company to settle the Series A Preferred Stock in cash, therefore the Series A Preferred Stock is classified as permanent equity on the Company's consolidated balance sheets as of December 31, 2025 and 2024.

The Series B convertible preferred stock includes the following:

•

Subject to certain restrictions specified in the Series B Certificate, and applicable legal and regulatory requirements, including without limitation, the listing requirements of the Nasdaq Stock Market, (i) each share of Series B convertible preferred stock is convertible, at the option of the holder, at any time, into such whole number of fully paid and non-assessable shares of common stock as is determined by dividing the Original Issue Price (as defined in the Series B Certificate) by the Conversion Price (as defined in the Series B Certificate) in effect at the time of conversion.

•

In the event that stockholder approval is not obtained, the holders of the Series B Preferred Stock may voluntarily convert the Series B Preferred Stock into Common Stock, provided that in no event shall the number of shares of Common Stock issued upon such voluntary conversion exceed 19.99% of the total number of shares of Common Stock outstanding as of immediately prior to the execution of the CLMBR Asset Purchase Agreement.

•

The Series B Preferred Stock does not have any voting rights, other than any vote required by law or the Company’s certificate of incorporation (which does not currently provide for any such voting rights) and is not entitled to any dividends.

During the year ended December 31, 2025,1,091,225 shares of Series B Preferred Stock were converted into 6 shares of Common Stock.

The Company classifies Series B Preferred Stock in accordance with ASC 480, Distinguishing Liabilities from Equity, as there are conversion features that are subject to shareholder approval which is outside of the Company's control and therefore the securities should be classified outside of permanent stockholders’ equity (deficit). Upon receiving shareholder approval on May 31, 2024, the Company classified the Series B Preferred Stock as permanent equity as of December 31, 2025 and 2024.

The Series C convertible preferred stock includes the following:

•

Subject to certain restrictions specified in the Series C Certificate, and applicable legal and regulatory requirements, including without limitation, the listing requirements of the Nasdaq Stock Market, (i) each share of Series C convertible preferred stock is convertible, at the option of the holder, at any time, provided that such conversion occurs at least 18 months following the Original Issuance Date (as defined in the Series C Certificate), into such whole number of fully paid and non-assessable shares of common stock as is determined by dividing the Original Issue Price (as defined in the Series C Certificate) by the Conversion Price (as defined in the Series C Certificate) in effect at the time of conversion, and (ii) upon the earliest Mandatory Conversion Time (as defined in the Series C Certificate) all outstanding shares of Series C convertible preferred stock shall automatically be converted into shares of common stock;

•

In the event that stockholder approval is not obtained, the holders of the Series C convertible preferred stock may voluntarily convert the Series C convertible preferred stock, provided that in no event shall the number of shares of Common Stock issued upon such voluntary conversion exceed 19.99% of the total number of shares of Common Stock outstanding as of immediately prior to the Effective Date (as defined in the Series C Certificate);

•

Dividends accrue on each share of Series C convertible preferred stock at the rate per annum of 15% of the Original Issue Price of such share, plus the amount of previously accrued dividends, compounded annually, subject to certain restrictions and provisions as set forth in the Series C Certificate; and

•

The Series C convertible preferred stock does not have any voting rights, other than any vote required by law or our certificate of incorporation (which does not currently provide for any such voting rights).

During the year ended December 31, 2025, the Board declared dividends on the Series C Preferred Stock as dividends in kind, and the Company issued a total of 263,753 shares of Series C Preferred Stock. No dividends were declared on the Series C Preferred Stock during the year ended December 31, 2024. Also during the year ended December 31, 2025,3,530,616 shares of Series C Preferred Stock were converted into 49,037 shares of Common Stock.

There are no circumstances outside the Company's control other than final liquidation that would require the Company to settle the Series C Preferred Stock in cash, therefore the Company classified the Series C Preferred Stock as permanent equity as of December 31, 2025 and 2024.

The Series E Preferred Stock includes the following:

•

Subject to certain restrictions specified in the Series E Certificate, and applicable legal and regulatory requirements, including without limitation, the listing requirements of the Nasdaq Stock Market, on June 15, 2026 (the “Mandatory Conversion Date”), all outstanding shares of Series E Preferred Stock shall automatically be converted into such whole number of fully paid and non-assessable shares of Common Stock as is determined by dividing the Original Issue Price (as defined in the Series E Certificate) by the Conversion Price (as defined in the Series E Certificate).

•

Pursuant to the Series E Certificate, without stockholder approval at a meeting to take place before the Mandatory Conversion Date, no holder of Series E Preferred Stock shall have the right to convert any shares of Series E Preferred Stock, if (A) (i) such shares of Series E Preferred Stock were issued in connection with the Company’s acquisition of the stock or assets of another company (an “Acquisition”), and (ii) such conversion would result in the total number of shares of Common Stock issued in connection with such Acquisition (including any shares of Common Stock previously issued in connection with the Acquisition, whether in connection with a prior conversion of shares of Series E Preferred Stock or otherwise) exceeding the lesser of (i)19.99% of the number of shares of Common Stock outstanding or (ii)19.99% of the voting power outstanding, before the closing date of the Acquisition (the “Nasdaq Percentage Limitation”); (B) the number of shares of Common Stock issued or to be issued is or will result in a change of control of the Company under the Nasdaq listing requirements; or (C) such conversion would otherwise require stockholder approval under the Nasdaq listing requirements, including Nasdaq Listing Rule 5635. If the requisite stockholder approval is not obtained, the number of shares of Series E Preferred Stock equal, upon conversion into shares of Common Stock, to the Nasdaq Percentage Limitation, shall, on the Mandatory Conversion Date, be automatically converted into such number of shares of Common Stock.

•

The Series E Preferred Stock does not have any voting rights other than those required by law or the Company’s Certificate of Incorporation, as amended.

All of the 1.3 million designated shares of Series E Preferred Stock were issued on July 1, 2025 in connection with the closing of the Wattbike Acquisition. Because the conversion features within the Series E Preferred Stock are subject to shareholder approval which is outside the Company's control, the Series E Preferred Stock is classified outside of permanent equity on the Company's consolidated balance sheet as of December 31, 2025.

Note 17. Equity-Based Compensation

On June 14, 2025, the Company issued a total of 1,250,000 shares of the Company’s Series LTI Convertible Preferred Stock (the "LTI Preferred Stock") to the Company’s executive officers and members of the Board that vested 100% upon the grant date. No holder of LTI Preferred Stock had the right to convert any shares of LTI Preferred Stock, without shareholder approval. If such shareholder approval was not obtained on or before June 6, 2026, the Company would have redeemed each share of the LTI Preferred Stock for cash at a redemption price equal to the Original Issue Price of $2.0. The Company classified the Series LTI Preferred Stock in accordance with ASC 718 as a liability award andwas initially included in Accrued expenses and other current liabilities, measured at the full redemption value, as there were conversion features that were subject to shareholder approval which is outside of the control of the Company. The Company recognized $2.5 million of compensation expense related to the LTI Preferred Stock in June of 2025.

On December 31, 2025, the Board approved the cancellation and retirement of all of the shares of LTI Preferred Stock previously issued. In connection with the Board’s approval of the cancellation of the shares of LTI Preferred Stock, on December 31, 2025, each holder of LTI Preferred Stock entered into a letter agreement with the Company pursuant to which the holders of LTI Preferred Stock agreed to surrender all shares of LTI Preferred Stock held for cancellation, for no consideration.

Following the surrender of the shares pursuant to the letter agreements, the Company cancelled and rescinded the shares, and such shares were restored to the status of authorized but unissued shares of Series LTI Preferred Stock. As a result, the Company reversed all of the compensation expense previously recognized with respect to the LTI Preferred Stock, and there wasno compensation expense recognized for the LTI Preferred Stock for the year ended December 31, 2025.

Stock Options - 2023 and 2020 Equity Incentive Plans

Presented below is a summary of the compensation cost recognized in the consolidated statements of operations and comprehensive loss for the years ended December 31, 2025 and 2024:

For the years ended December 31, 2025 and 2024,$0.4 and$0.6 million, respectively, of stock-based compensation was capitalized as software costs.

During the years ended December 31, 2025 and 2024, the Company didnot grant any shares under the 2023 Plan or the 2020 Plan. The Company hasnot granted any restricted stock or stock appreciation rights. The following summary sets forth the stock option activity under the 2023 Plan and 2020 Plan:

The Company recognized stock-based compensation expense of $3.5 million and$10.9 million for the years ended December 31, 2025 and 2024, respectively, of which $0.4 million and$0.6 millionwas capitalized as software costs for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, the Company had unrecognized compensation expense of $0.9 million and $4.4 million, respectively, that is expected to be recognized over a weighted-average period of 0.2 and 0.7 years, respectively.

Note 18. Concentration of Credit Risk and Major Customers and Vendors

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist principally of cash and cash equivalents. The Company’s cash and cash equivalents are maintained with high-quality financial institutions, the compositions and maturities of which are regularly monitored by management.

For the years ended December 31, 2025 and 2024, Woodway, our exclusive distributor, represented 18% and 63%, respectively, of the Company’s total revenue.

The Company hadno vendors representing greater than 10% of total finished goods purchases for the years ended December 31, 2025 and 2024.

Note 19. Benefit Plans

The Company established a defined contribution savings plan under Section 401(k) of the Internal Revenue Code. This plan covers all employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. Matching contributions to the plan may be made at the discretion of the Company’s board of directors. During the years ended December 31, 2025 and 2024, the Company didnot make any contributions to the plan.

Note 20. Income Taxes

The components of loss before income taxes are as follows:

The components of income tax expense (benefit) are as follows:

The following table is a reconciliation of the U.S. federal statutory rate to the Company’s effective rate for the years ended December 31, 2025 and 2024 in accordance with the guidance in ASU No. 2023-09:

The primary differences from the U.S. statutory rate and the Company’s effective tax rate for the year ended December 31, 2025 are due to the change in valuation allowance and State taxes, net of Federal benefit, partially offset by nontaxable changes in the fair value of convertible notes. The primary differences from the U.S. statutory rate and the Company’s effective tax rate for the year ended December 31, 2024 were are due to the change in valuation allowance, State taxes, net of Federal benefit and stock-based compensation including excess tax benefits.

On July 4, 2025, the One, Big, Beautiful Bill Acct (the "OBBA") was signed into law in the United States. The OBBA and relate notices include several significant provisions. The most significant impact is the reversal of capitalization of domestic research and development ("R&D") expenditures that was required under the Tax Cuts and Jobs Act that was enacted in 2017. For the year ended December 31, 2025, the Company was able to take a tax deduction for the unamortized balance of R&D costs and didnot capitalize any domestic R&D expenditures. During the year ended December 31, 2024, the Company capitalized $2.6 million of domestic R&D expenses.

On August 16, 2022, the Inflation Reduction Act was signed into law in the United States. Among other provisions, the Inflation Reduction Act includes a 15% minimum tax rate applied to corporations with profits in excess of $1 billion and also includes an excise tax on the repurchase of corporate stock. The Company has reviewed the provisions of the law and does not believe that any of the provisions will have a material impact on the Company's liquidity or results of operations.

On March 11, 2021, the American Rescue Plan was enacted, which extends the period companies can claim an Employee Retention Credit, expands the IRC Section 162(m) limit on deductions for publicly traded companies, and repeals the election that allows U.S. affiliate groups to allocate interest expense on a worldwide basis, among other provisions. The Company reviewed the provisions of the law and determined it had no material impact for the year ended December 31, 2025.

On December 21, 2020, Congress passed the Consolidated Appropriations Act, 2021. The act includes the Taxpayer Certainty and Disaster Tax Relief Act of 2020 and the COVID-related Tax Relief Act of 2020, both of which extend many credits and other COVID-19 relief, among other extensions. The Company evaluated the provisions of the Consolidated Appropriations Act, including but not limited to the Employee Retention Credit extension, the extension for the IRC Section 45S credit for paid family and medical leave, and the provision allowing a full deduction for certain business meals, and determined that there was no material impact for the year ended December 31, 2025.

As of December 31, 2025 and December 31, 2024, the Company’s deferred tax assets were primarily comprised of U.S. federal, U.S. state and foreign net operating losses (“NOLs”). A valuation allowance was maintained and/or established on the Company’s gross deferred tax asset balances in substantially all jurisdictions as of December 31, 2025 and 2024. As of each reporting date, the Company’s management considers new evidence, both positive and negative, that could impact management’s view with regard to future realization of deferred tax assets. The realization of deferred tax assets was based on the evaluation of current and estimated future profitability of the operations, reversal of deferred tax liabilities and the likelihood of utilizing tax credits and/or loss carryforwards. As of December 31, 2025 and 2024, the Company determined that it has not reached the more likely than not standard wherein deferred taxes will be realized due to the recent history of losses and management’s expectation of continued tax losses.

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets (liabilities) are as follows:

As of December 31, 2025 and 2024, the Company had federal NOLs of approximately $160.7 million and $127.4 million, respectively, substantially all of which will be carried forward indefinitely. As of December 31, 2025 and 2024, the Company had state NOLs of approximately $94.6 million and $95.0 million, respectively, which will begin to expire in 2029. As of December 31, 2025 and 2024, the Company had foreign NOLs of approximately $32.3 million and $10.2 million, respectively, generated primarily from its operations in the United Kingdom, which will be carried forward indefinitely.

As of December 31, 2025, the Company also had federal and state tax credits of $2.3 million and $3.3 million, respectively, which being to expire in 2040 for the federal tax credit and 2035 for the state tax credits.

As of December 31, 2025, the Company didnot have material undistributed foreign earnings.

Section 382 of the Internal Revenue Code and similar provisions under state law limit the utilization of federal NOL carryforwards, state NOL carryforwards, and Research and Development (R&D) credits following certain cumulative changes in the ownership interest of significant stockholders over a three-year period in excess of 50%. Based on the Company’s analysis under Section 382, the Company believes that its federal NOL carryforwards, its state NOL carryforwards, and R&D credits are limited by Section 382 and similar provisions under state law as of December 31, 2025. The portion of federal NOL carryforwards, state NOL carryforwards, and R&D credits that were determined to be limited have been written off as of December 31, 2025. The remaining unused carryforwards and credits remain available for future periods. Due to the Company’s full valuation allowance, the write off of NOL carryforwards and R&D did not have any impact to the statements of operation and comprehensive loss.

The Company is subject to taxation in the United States, various state and local jurisdictions, as well as foreign jurisdictions where the Company conducts business. Accordingly, on a continuing basis, the Company cooperates with taxing authorities for the various jurisdictions in which it conducts business to comply with audits and inquiries fortax periods that are open to examination. The tax years ended from December 31, 2023 and 2022 and later remain open to examination by tax authorities in the United States and United Kingdom, respectively.

Note 21. Loss Per Share

The computation of loss per share is as follows:

The following potentially dilutive shares were not included in the calculation of diluted shares outstanding as the effect would have been anti-dilutive:

Note 22. Related Party Transactions

In the ordinary course of business, we may enter into transactions with directors, principal officers, their immediate families, and affiliated companies in which they are principal stockholders (commonly referred to as “related parties”).

Principal Stockholder Promissory Notes

During 2019, 2020, and 2021 the Company entered into the following promissory notes with a then-principal stockholder (the ”former principal stockholder”) of the Company:

•

On May 17, 2019, a $2.0 million note with interest at the rate of 2.5% per annum and maturity date of May 17, 2021. The note includes additional interest and fees associated with it upon the occurrence of default for late payment. Upon default, the Company shall pay a fee of 5% of the outstanding principal balance and accrued interest and from that point further interest shall accrue at an additional rate of 7.5%. This note was secured by a lien on and security interest in all right, title and interest of the Company’s assets. The security interest continued until all obligations under the note were satisfied. The total outstanding principal balance including accrued interest as of December 31, 2025 and December 31, 2024 was $0 and $2.8 million, respectively.

•

On August 28, 2019, a $1.0 million note with interest at the rate of 5.0% per annum and a maturity date of August 28, 2021. The note includes additional interest and fees associated with it upon the occurrence of default for late payment. Upon default, the Company shall pay a fee of 5.0% of the outstanding principal balance and accrued interest and from that point further interest shall accrue at an additional rate of 10.0%. This note was secured by a lien on and security interest in all right, title and interest of the Company’s assets. The security interest continued until all obligations under the note were satisfied. The total outstanding principal balance including accrued interest as of December 31, 2025 and December 31, 2024 was $0 and $1.5 million, respectively.

•

On November 28, 2019, a $0.3 million note with interest at the rate of 5.0% per annum and a maturity date of August 28, 2021. The note includes additional interest and fees associated with it upon the occurrence of default for late payment. Upon default, the Company shall pay a fee of 5% of the outstanding principal balance and accrued interest and from that point further interest shall accrue at an additional rate of 10.0%. This note was secured by a lien on and security interest in all right, title and interest of the Company’s assets. The security interest continued until all obligations under the note were satisfied. The total outstanding principal balance including accrued interest as of December 31, 2025 and December 31, 2024 was $0 and $0.3 million, respectively.

•

On March 20, 2020, a $0.3 million note with interest at the rate of 5.0% per annum and a maturity date of March 20, 2022. The note includes additional interest and fees associated with it upon the occurrence of default for late payment. Upon default, the Company shall pay a fee of 5% of the outstanding principal balance and accrued interest and from that point further interest shall accrue at an additional rate of 10.0%. This note was secured by a lien on and security interest in all right, title and interest of the Company’s assets. The security interest continued until all obligations under the note were satisfied. The total outstanding principal balance including accrued interest as of December 31, 2025 and December 31, 2024 was $0 and $0.4 million, respectively.

•

On February 12, 2021, a $0.6 million note with interest at the rate of 5.0% per annum and a maturity date of June 12, 2022. The note includes additional interest and fees associated with it upon the occurrence of default for late payment. Upon default, the Company shall pay a fee of 5% of the outstanding principal balance and accrued interest and from that point further interest shall accrue at an additional rate of 10.0%. This note was secured by a lien on and security interest in all right, title and interest of the Company’s assets. The security interest continued until all obligations under the note were satisfied. The total outstanding principal balance including accrued interest as of December 31, 2025 and December 31, 2024 was $0 and $0.4 million, respectively.

As of December 31, 2024, all outstanding promissory notes with respect to the former principal stockholder are included within the loan payable on the consolidated balance sheet for a total of$5.3 million, including accrued interest and default interest of $1.8 million. As the 2019, 2020 and 2021 notes were not paid upon maturity, these loans were in default as of December 31, 2024, and on August 4, 2023, the Company received a notice of default from the principal stockholder. The Company accrued for the default fee on the date of default and the additional default interest following that date. Interest expense, including default interest, recorded in the consolidated statement of operations was $0.4 million for the year ended December 31, 2024. As of December 31, 2022, the former principal stockholder and certain related parties waived their rights to seek remedies resulting from an event of default due to a failure to make payments of principal or interest at the stated maturity or due date, respectively. On October 30, 2023, the Company entered into an agreement with the former principal stockholder regarding a mutually agreed upon repayment schedule with respect to the outstanding promissory notes issued to such former principal stockholder.

On January 29, 2025, the former principal stockholder assigned the outstanding notes as of December 31, 2024 to an accredited investor. On February 4, 2025, the Company and the accredited investor entered into an exchange agreement pursuant to which the Company issued (the “Exchange”) five new secured convertible promissory notes (the “January 2025 Exchange Notes”). At the time of the Exchange, (1) the Company has negative cash flows from operations, history of losses, and significant accumulated deficit that raise substantial doubt about our ability to continue as a going concern and (2) the accredited investor accepted an interest rate of 5.0% on the January 2025 Exchange Notes, which is significantly lower than the default rates on the promissory notes at the time of the Exchange and therefore indicative of a concession. As a result, the Company accounted for the Exchange as a troubled debt restructuring in accordance with ASC 470-60 Troubled Debt Restructurings by Debtors. The fair value of the January 2025 Exchange Notes on February 4, 2025 was $5.1 million and the carrying value of the Former Principal Stockholder Notes was $5.4 million resulting in a gain on extinguishment of $0.3 million which was recorded in the condensed consolidated statement of stockholders equity.

The January 2025 Exchange Notes were convertible (in whole or in part) at any time prior to the maturity date into the number of shares of Common Stock equal to (x) the sum of (A) the portion of the principal of the January 2025 Exchange Notes to be converted, redeemed or otherwise with respect to which this determination is being made, (B) accrued and unpaid interest with respect to the principal of the Exchange Note, (C) accrued and unpaid late charges with respect to the principal of the Exchange Note and interest, and (D) any other unpaid amounts pursuant to the Exchange Agreement, if any, divided by (y) a conversion price of $204.00 per share, subject to adjustment as provided in the Exchange Notes (such shares, the “Exchange Agreement Note Conversion Shares”). The Company elected the fair value option to account for the January 2025 Exchange Notes upon issuance in February 2025. The fair value of the January 2025 Exchange Notes was determined using a discounted cash flow analysis at a discount rate of 16.3% of February 4, 2025. The January 2025 Exchange Notes, in the aggregate principal amount of $5.4 million, were fully converted into 26,428 shares of Common Stock in February 2025 and the Company recorded a gain on extinguishment of debt in the amount of $2.1 million. The change in fair value of the January 2025 Exchange Notes is as follows:

Other Related Party Promissory Notes

See Note 7, for promissory notes issued to related parties during the year ended December 31, 2025.

During 2019, 2020, 2021, and 2022, the Company entered into the following promissory notes with other related parties:

•

On September 30, 2019, a $0.2 million note with interest at the rate of 12.0% per annum and a maturity date of September 30, 2021. The note includes additional interest and fees associated with it upon the occurrence of default for late payment. This loan was made from a company owned by the current CEO. Total payments made to this loan equate to $0.2 million. Upon default, on the December 31, 2019, loan the Company shall pay a fee of 5% of the outstanding principal balance and accrued interest and from that point further interest shall accrue at an additional rate of 17.0%. The holder of this note waived their rights to remedy in the event of default, which in effect releases the lender from their lien on and security interest in the Company’s assets. The principal and interest of this loan has been paid as of December 31, 2024.

•

On January 12, 2021, a $0.3 million note with interest at the rate of 12.0% per annum and a maturity date of June 12, 2022. The note includes additional interest and fees associated with it upon the occurrence of default for late payment. Upon default, the Company shall pay a fee of 5% of the outstanding principal balance and accrued interest and from that point further interest shall accrue at an additional rate of 17.0%. This note is secured by a lien on and security interest in all right, title and interest of the Company’s assets. The security interest will continue until all obligations under the note are satisfied. The note was amended in January 2024, and subsequently amended in February 2024, to include a conversion provision whereby at any time priorto maturity date the lender has the right to convert any outstanding and unpaid principal and accrued interest of the note into shares of the Company's Series A Preferred Stock at a conversion price of $1.82 per share. In February 2024, the note of $0.3 million and accrued interest of $0.1 million was converted into 242,602 shares of the Company's Series A Preferred Stock. A loss on extinguishment of debt of $0.1 million was recorded in the consolidated statement of operations in other income (expense). There was no outstanding principal or accrued interest on this note as of December 31, 2024.

•

On February 22, 2021, a $40,000 note with interest at the rate of 12.0% per annum and a maturity date of June 22, 2022. The note includes additional interest and fees associated with it upon the occurrence of default for late payment. Upon default, the Company shall pay a fee of 5% of the outstanding principal balance and accrued interest and from that point further interest shall accrue at an additional rate of 17.0%. This note is secured by a lien on and security interest in all right, title and interest of the Company’s assets. The security interest will continue until all obligations under the note are satisfied. The note was amended in January 2024, and subsequently amended in February 2024, to include a conversion provision whereby at any time prior to maturity date the lender has the right to convert any outstanding and unpaid principal and accrued interest of the note into shares of the Company's Series A Preferred Stock at a conversion price of $1.82 per share. In February 2024, the note of $0.04 million and accrued interest of $0.02 million was converted into 34,246 shares of the Company's Series A Preferred Stock. A loss on extinguishment of debt of $0.02 million was recorded in the consolidated statement of operations in other income (expense). There was no outstanding principal or accrued interest on this note as of December 31, 2024.

•

On October 27, 2022, a $0.4 million note with interest at the rate of 12.0% per annum and a maturity date of January 27, 2023. The note includes additional interest and fees associated with it upon the occurrence of default for late payment. Upon default, the Company shall pay a fee of 5% of the outstanding principal balance and accrued interest and from that point further interest shall accrue at an additional rate of 17.0%. The holder of this note waived their rights to remedy in the event of default, which in effect releases the lender from their lien on and security interest in the Company’s assets. The principal and interest of this loan has been paid as of December 31, 2024.

•

In August 2024, the Company borrowed $0.2 million. The balance of this loan has been paid as of December 31, 2024.

Other Related Party Transactions

In 2017, the Company entered into a royalty agreement with Fuseproject and agreed to pay 3% of cumulative net FORME fitness product sales up to $5.0 million and 1% of cumulative net FORME fitness product sales above $5.0 million, up to a maximum total royalty of $1.0 million. Regardless of the level of cumulative net sales, a guaranteed minimum payment of $0.2 million was to be paid in the first 12 months after the products initial retail release as an advance towards the royalty payments which was accrued as of December 31, 2025 and 2024. The Company recorded royalty expense of approximately $20,000 for each of the years ended December 31, 2025 and 2024.

As discussed further in Note 11, in November 2023, the Company issued secured promissory notes of approximately $0.8 million with a related party. As discussed further in Note 12, in connection with issued secured promissory notes the Company entered into warrant agreements whereby the holders are eligible to receive warrants based on the occurrence of future events as defined in the agreement. No warrants were issued as of December 31, 2025 and 2024.

The Company assumed secured promissory notes in connection with the acquisition of CLMBR, Inc. of approximately $0.5 million with a related party. The secured promissory notes were converted to Series A Preferred Stock in February 2024.

In April and May 2024, the Company issued promissory notes of approximately $0.4 million with a related party. In May 2024, the Company converted $0.2 million into Series A Preferred Stock. In June 2024, the Company repaid the $0.2 million in promissory notes to the related party.

In August 2024, the Company borrowed $0.2 million from a related party. The balance of this loan has been paid as of December 31, 2024.

Note 23. Acqui sitions

Wattbike Acquisition

On July 1, 2025, Company completed the Wattbike Acquisition (see Note 1) for a total purchase price of approximately $3.7 million, consisting of (i) all of the issued and outstanding shares of Wattbike held by the Shareholders in exchange for £1.00, (ii) contingent consideration with a fair value of $0.2 million, (iii)1,300,000 shares of the Company's non-voting Series E preferred stock with a fair value of $2.3 million, and (iv) effective settlement of bridge financing previously recorded as a loan receivable by the Company of $1.2 million (the "Wattbike Acquisition").

The Wattbike Acquisition was a strategic acquisition intended to help accelerate the Company’s commercialization path and achieve immediate scale, resulting in a high growth, profitable platform that sells connected fitness equipment and digital fitness services across B2B and B2C channels.

The Wattbike Acquisition was accounted for as a purchase business combination in accordance with ASC 805 “Business Combinations.” Assets acquired and liabilities assumed were recorded in the consolidated balance sheet at their estimated fair values as of July 1, 2025, with the remaining unallocated purchase price recorded as goodwill. Acquisition-related costs of $0.6 million were included in general and administrative expenses in the Company's statement of operations for the year ended December 31, 2025.

During the year ended December 31, 2025, adjustments were made to the preliminary purchase price recorded at July 1, 2025, and are reflected as “Measurement Period Adjustments” in the table below. The U.S. GAAP purchase price was $3.7 million. The purchase price allocation is preliminary and subject to change, including the valuation of intangible assets. The amounts recognized will be finalized as the information necessary to complete the analysis is obtained, but no later than one year after the acquisition date. The allocation of the purchase price to the assets acquired and liabilities assumed for Wattbike is as follows:

(a) As previously reported in the Company’s Quarterly Report on Form 10-Q for the three and nine months ended September 30, 2025.

(b) The measurement period adjustments were recorded in the fourth quarter of 2025 and are related to finalization of the valuation of the Series E Preferred Stock of $0.3 million, reclassification from accounts receivable to deferred revenue of $0.8 million, other current assets of $0.7 million, reclassification from accrued expenses and other current liabilities to accounts payable of $0.8 million and loan payable adjustment of $0.2 million. These adjustments resulted in corresponding increase to goodwill of $0.4 million for the year ended December 31, 2025.

The changes in Wattbike intangible assets from the date of acquisition to December 31, 2025 was as follows:

The Company recorded a step-up in the fair value of inventory of approximately $0.1 million and is being amortized through Cost of Fitness product as the underlying product is sold.

The identified intangible assets of $3.2 million are comprised of (i) hardware developed technology of $1.0 million that has an estimated useful life of 7 years, (ii) software developed technology of $0.3 million that has an estimated useful life of 5 years, (iii) business-to-business customer-related intangible of $1.4 million that has an estimated useful life of 7 years, (iv) direct-to-customer subscription of $0.1 million having an estimated useful live of 3 years, and (v) trademarks and trade name of $0.4 million with an estimated useful life of 8 years. Significant assumptions utilized in the valuation of identified intangible assets were based on company specific information and projections which are not observable in the market and are thus considered Level 3 measurements as defined by U.S. GAAP. Estimated annual amortization expense related to these intangible assets for each of the next five fiscal years is included in Note 7.

As part of the Wattbike Acquisition, the Sellers are entitled to receive a contingent payment in the form of shares of Common Stock subject to the satisfaction of applicable milestones as described below:

•

If the revenues of Wattbike for the period from October 1, 2025 to September 30, 2026 (“FY26”) (“FY26 Revenues”) exceed £17,500,000, the additional consideration for FY26 shall be an amount equal to 50% of the amount by which FY26 revenues exceeded £17,500,000, subject to a cap of £1,500,000. If FY26 Revenues did not exceed £17,500,000, there shall be no additional consideration paid for FY26.

•

If the revenues of Wattbike for the period from October 1, 2026 to September 30, 2027 (“FY27”) (“FY27 Revenues”) exceed £20,000,000, the additional consideration for FY27 shall be an amount equal to 50% of the amount by which FY26 revenues exceeded £20,000,000, subject to a cap of £1,500,000. If FY27 Revenues did not exceed £20,000,000, there shall be no additional consideration paid for FY27.

At December 31, 2025, the Company determined that the likelihood of Wattbike achieving the foregoing milestones was remote. As a result, the Company derecognized the aggregate accrued liability related to the contingent consideration and recorded a gain on the change in fair value of earnout in the accompanying consolidated statement of operations for the year ended December 31, 2025.

The following unaudited pro forma summary presents consolidated information of the Company, including Wattbike and CLMBR, as if the Wattbike Acquisition and the CLMBR Acquisition (discussed below) had occurred as of January 1, 2024, the earliest year presented herein:

The unaudited pro forma consolidated results were prepared using the acquisition method of accounting and are based on the historical financial information of Wattbike, CLMBR and the Company. The unaudited pro forma consolidated results incorporate historical financial information for all significant acquisitions pursuant to SEC regulations since January 1, 2024. The historical financial information has been adjusted to give effect to pro forma adjustments that are: (i) directly attributable to the acquisition, (ii) factually supportable and (iii) expected to have a continuing impact on the combined results. The unaudited pro forma consolidated results are not necessarily indicative of what the Company’s consolidated results of operations actually would have been had it completed these acquisitions on January 1, 2024.

CLMBR Acquisition

On October 6, 2023, the Company entered into an asset purchase agreement (the “Asset Purchase Agreement”) with CLMBR and CLMBR1, LLC (collectively, the “Sellers”) to purchase and acquire substantially all of the assets and assume certain liabilities of the Sellers. On January 22, 2024, the Company and the Sellers entered into an amended and restated Asset Purchase Agreement (the “Amended Agreement”). On February 2, 2024, pursuant to the Amended Agreement, the Company completed the acquisition for a total purchase price of approximately $16.1 million, consisting of (i) cash of $30,000, (ii)3 shares of the Company’s common stock with an aggregate fair value of $1.0 million, (iii)1,500,000 shares of the Company’s non-voting Series B preferred stock with an aggregate fair value of $3.0 million, (iv) contingent consideration with a fair value of $1.3 million (as further described below), and (v) the retirement of $9.4 million of senior debt and $1.4 million in related fees, such retirement to be in the form of a $1.4 million cash payment to the lender of the senior debt and the issuance of an $8.0 million promissory note to such lender (the “Acquisition”).

The CLMBR acquisition was a strategic acquisition that helped accelerate the Company’s commercialization path and help achieve immediate scale, resulting in a high growth, profitable platform that sells connected fitness equipment and digital fitness services across B2B and B2C channels.

The CLMBR acquisition was accounted for as a purchase business combination in accordance with ASC 805 “Business Combinations.” Assets acquired and liabilities assumed were recorded in the accompanying consolidated balance sheet at their estimated fair values as of February 2, 2024, with the remaining unallocated purchase price recorded as goodwill. Acquisition-related costs of$1.1 million were included in general and administrative expenses in the Company's statement of operations for the year ended December 31, 2024, respectively.

During the year ended December 31, 2024, adjustments were made to the preliminary purchase price recorded at February 2, 2024, and are reflected as “Measurement Period Adjustments” in the table below. The U.S. GAAP purchase price was $16.1 million, net of cash acquired. The purchase price allocation period is closed as of December 31, 2024. The allocation of the purchase price to the assets acquired and liabilities assumed for CLMBR, Inc is as follows:

(a) As previously reported in the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2024.

(b) The measurement period adjustments were recorded in the second, third and fourth quarter of 2024 and are related to finalization of valuation of intangible assets and other assets of $0.7 million and $0.2 million, respectively, accounts payable adjustment of $0.3 million, adjustment for unrecorded liabilities of $0.2 million, deferred revenue adjustment of $0.2 million, finalization of fair valueof Series B Preferred Stock issued and other immaterial adjustments of $0.1 million. These adjustments resulted in corresponding increase to goodwill of $0.1 million for the year ended December 31, 2024.

The Company recorded a step-up in the fair value of inventory of approximately $0.6 million, of which $0.4 million was amortized during the year ended December 31, 2024 and is included in Cost of fitness product revenue in the consolidated statement of operations.

The changes in intangible assets related to the CLMBR Acquisition for the years ended December 31, 2025 and 2024 was as follows:

The identified intangible assets of $6.2 million are comprised of hardware developed technology of $1.1 million that have an estimated useful life of 7 years, software developed technology of $0.3 million that have an estimated useful life of 4 years, hardware distribution of $3.7 million that have an estimated useful life of 13 years, direct-to-customer subscription of $0.3 million that have an estimated useful live of 9 years, and trademarks and trade name of $0.8 million that have an estimated useful life of 9 years. Significant assumptions utilized in the valuation of identified intangible assets were based on company specific information and projections which are not observable in the market and are thus considered Level 3 measurements as defined by U.S. GAAP. Estimated annual amortization expense for each of the next five fiscal years is included in Note 7.

Compensation Arrangements

In connection with the acquisition CLMBR, Inc. the Company has agreed to pay additional consideration in future periods. Certain employees of CLMBR, Inc. will be paid a total of $0.5 million, all of which was paid as of December 31, 2025. These payments are accounted for as transactions separate from the business combination as the payments are contingent upon continued employment and were recorded as post-combination compensation expense in the Company's financial statements during the service period in general and administrative expenses for years ended December 31, 2025 and 2024.

Accrued Earn Out

As part of the Acquisition of CLMBR, Inc., the Sellers shall be entitled to receive a contingent payment in the form of shares of Common Stock (collectively, the “Earn-Out Shares”) calculated in the manner set forth in the Asset Purchase Agreement based on the 2024 Unit Sales (as defined in the Asset Purchase Agreement) and the volume-weighted average price (“VWAP”) for the Company’s common stock based on the 10 consecutive trading days ending on (and including) December 31, 2024, subject to the VWAP Collar. In addition, there were 2 contingent payments (1) based on total CLMBR sales in 2024 (5,000 units sold in 2024) and (2) based on CLMBR sales through B2B channel in 2024 (2,400 in B2B channel in 2024). Contingent payment (1) was determined at inception to be remote and therefore, $0 was recognized for the earn out as of the acquisition date. Contingent payment (2) was probable and a contingent liability of $1.3 million was recorded based on in the event the 2024 Unit Sales include at least 2,400 Units sold in the business-to-business channel, the Sellers shall be entitled to an additional number of Earn-Out Shares calculated in the manner set forth in the Asset Purchase Agreement subject to total maximum number of 56 Earn-Out Shares. The Company assessed the fair value as of December 31, 2024 and it was determined based on current sales that achieving the projection and likelihood of contingent payment (2) was deemed remote and as a result the Company marked the contingent liability to $0. The Company recognized a gain equal to $1.3 million for year ended December 31, 2024 related to change in fair value of the earn out recorded in the consolidated statements of operations in change in fair value of earnout.

24. Supplemental Disclosure of Cash Flow Information

Supplemental cash flow information for the years ended December 31, 2025 and 2024 is as follows:

Note 25. Subsequent Events

Sportstech Loan Receivable

On February 10, 2025, the Company, Sportstech Brands Holding GmBH ("Sportstech") and Mr. Ali Ahmad, the sole shareholder of Sportstech, entered into a Binding Transaction Agreement (the “Agreement”), pursuant to which the Company was to acquire Sportstech in a transaction (the “Transaction”) comprised of an initial investment and three optional investment tranches.

In anticipation of a Transaction closing during fiscal year 2025, the Company made a series of disbursements totaling $5.0 million under a term loan facility to Sportstech during the year ended December 31, 2025 to support its working capital needs and growth plans. The loan was secured by 100% of the equity interests in Sportstech and personally guaranteed by Mr. Ahmad, and was due to be paid back to the Company if the Transaction did not close by December 30, 2025. The Transaction did not close as the Company and Sportstech were unable to come to terms on a final subscription and shareholders' agreement, and the loan was not paid back at the maturity date. The balance on the loan receivable from Sportstech as of December 31, 2025, including accrued interest and fees, was $6.6 million, which is recorded on the Company's balance sheet as of December 31, 2025

The Company pursued several legal options available to it in order to recover the loan receivable, including enforcement of the personal guarantee by Mr. Ahmad, and forcing a public auction of the equity interests in Sportstech in accordance with German law. On March 4, 2026, the Company and Sportstech settled the outstanding balance and the Company received$6.4 million in cash. As a result, the Company will record a loss on the settlement of the loan receivable in the amount of$0.2 million in the first quarter of 2026.

Conversion of Convertible Notes and Loans Payable

On February 27, 2026, Woodway exchanged $0.4 million of principal on the May 2025 Woodway Note for 88,000 shares of Common Stock.

On February 26, 2026, a related party noteholder of the Company exchanged $0.2 million of principal for 44,000 shares of Common Stock. Also on February 26, 2026, another related party noteholder of the Company exchanged $0.2 million of principal for 44,000 shares of Common Stock.

Between February 17, 2026 and February 26, 2026 Vertical Investors, LLC exchanged $0.8 million of note principal and accrued interest for 156,118 shares of Common Stock.

In January of 2026, the Current Holder of the September 2025 Exchange Note converted $1.6 million of principal into 217,791 shares of Common Stock.

In February of 2026, the holder of one of the Company's senior secured convertible notes converted an aggregate of$2.7 million of note principal into 886,991 shares of Common Stock in accordance with the terms of the senior secured convertible notes.

Acquisition

On February 18, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Ergatta, Inc., a Delaware corporation ("Ergatta"), Ergatta Acquisition Corp., a Delaware corporation and wholly owned subsidiary of the Company ("Merger Sub"), and Tom Aulet, solely in his capacity as the securityholders’ representative (the “Securityholders’ Representative”), pursuant to which Merger Sub will merge with and into Ergatta (the “Merger”), with Ergatta surviving as a wholly owned subsidiary of the Company. At the effective time of the Merger, each issued and outstanding share of preferred stock of Ergatta (other than excluded and dissenting shares) will be cancelled and converted into the right to receive, subject to the terms of the Merger Agreement, (i) cash consideration of up to $7,000,000 paid to Ergatta's stockholders, consisting of: (a) $1,750,000 to be paid at the closing of the Merger (the “Closing”); (b) $1,750,000 in deferred cash evidenced by a senior secured promissory note to be delivered at the Closing and maturing on April 30, 2027; and (c) up to $3,500,000 to be payable on April 30, 2027, as provided by the calculations, formulas, and other procedures set forth in the Merger Agreement; and (ii) up to $9,500,000 worth of shares of Series D-1 Preferred Stock (as defined below) to be issued to Ergatta's stockholders. Additionally, the Company will issue equity incentives to certain members of Ergatta's senior management, consisting of (i) up to $2,000,000 worth of shares of Series D-2 Preferred Stock (as defined below); and (ii) up to $1,000,000 worth of shares of Series D-3 Preferred Stock (as defined below). The Merger closed on March 11, 2026.

Upon closing, the Company fileda certificate of designation with the Secretary of State of the State of Delaware, creating three new series of preferred stock designated as (i) Series D-1 Convertible Preferred Stock, par value $0.0001 per share (“Series D-1 Preferred Stock”) and designating 4,750,000 shares thereof, (ii) Series D-2 Convertible Preferred Stock, par value $0.0001 per share (“Series D-2 Preferred Stock”) and designating 1,000,000 shares thereof, and (iii) Series D-3 Convertible Preferred Stock, par value $0.0001 per share (“Series D-3 Preferred Stock,” collectively with Series D-1 Preferred Stock and Series D-2 Preferred Stock, “Series D Preferred Stock”) and designating 500,000 shares thereof. Series D Preferred Stock shall have no voting rights, other than any vote required by law or the Company’s Certificate of Incorporation. Series D-1 Preferred Stock and Series D-2 Preferred Stock shall convert into shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”) on May 3, 2027. Series D-3 Preferred Stock shall convert to shares of Common Stock on May 1, 2028.

At the closing, the Company entered into a registration rights agreement with the Securityholders' Representative, on behalf of the parties entitled to receive equity consideration under the Merger Agreement, pursuant to which the Company granted customary registration rights with respect to equity consideration issuable under the Merger Agreement.

Issuance of Common Stock

In February 2026, the Company issued 290,000 shares of Common Stock under an At the Marketing Offering Agreement dated May 17, 2024 and received proceeds of approximately $1.6 million.

Issuance of Additional Debt

During the three months ended March 31, 2026, the Company issued additional Class A Incremental Notes with substantially the same terms as the January 2025 Convertible Note (see Note 11) as follows:

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On January 6, 2026, a Class A Incremental Note in the principal amount of $1.2 million, an initial conversion price of $10.254 per share, a maturity date of January 6, 2027, and warrants to purchase shares 61,844 shares of Common Stock with an initial exercise price of $15.76 per share.

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On February 5, 2026, a Class A Incremental Note in the principal amount of $0.6 million, with an initial conversion price of $4.51 per share, a maturity date of February 5, 2027, and warrants to purchase 68,116 shares of Common Stock at an initial exercise price of $6.9316 per share.

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On February 9, 2026, a Class A Incremental Note in the principal amount of $0.1 million, with an initial conversion price of $4.51 per share, a maturity date of February 9, 2027, and warrants to purchase 16,009 shares of Common Stock at an initial exercise price of $6.9316 per share.