Interactive Strength, Inc.

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 four leading brands serving the commercial and at-home markets with specialty fitness equipment and virtual training: Wattbike, Ergatta, CLMBR and FORME. Wattbike, acquired on July 1, 2025, offers a range of high-performance indoor bikes and has built a reputation as the training tool trusted by the world's top athletes, teams and military programs. CLMBR manufactures vertical climbing equipment and provides a unique digital and on-demand training platform. FORME is a hardware manufacturer and digital fitness service provider that combines award-winning smart gyms with live 1:1 personal training (from real humans) to deliver an immersive experience. The combination of technology with expert training leads to better outcomes for both consumers and trainers alike. Wattbike, CLMBR and FORME offer unique fitness solutions for both the commercial and at-home markets.

Reverse Stock Split

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.

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, $0.0001 par value per share, 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.

The February 2026 Reverse Stock Split and the June 2025 Reverse Stock Split (collectively, the "Reverse Stock Splits") both resulted in each holder of Common Stock owning fewer shares of Common Stock. However, the Reverse Stock Splits 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 Reverse Stock Splits. Common stock issued pursuant to the Reverse Stock Splits 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 Splits. Stockholders who otherwise would be entitled to receive fractional shares received cash for each fraction of a share held. 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.

All share and per share information, including earnings per share, in this Form 10-Q have been retroactively adjusted to reflect the Reverse Stock Splits, and certain items in prior period financial statements have been revised to conform to the current presentation (see Note 2).

Acquisition of Ergatta, Inc.

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 merged with and into Ergatta (the “Merger”), with Ergatta surviving as a wholly owned subsidiary of the Company (the "Ergatta Acquisition"). At the effective time of the Merger, each issued and outstanding share of preferred stock and common stock of Ergatta (other than excluded and dissenting shares) was cancelled and, in the case of the preferred stock, converted into the right to receive, subject to the terms of the Merger Agreement, the merger consideration more fully described in Note 23. The Merger closed on March 11, 2026, and the accompanying condensed consolidated financial statements reflect the operations of Ergatta subsequent to that date (see Note 23 for further information).

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.

Liquidity and Capital Resources

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 net operating loss of$4.0 million and used net cash in its operations of$2.6 million during the three months ended March 31, 2026, and had an accumulated deficit of$238.3 million as of March 31, 2026.

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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$1.3 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, management can provide no assurance that the Company will be able to secure additional outside capital on acceptable terms, or at all.

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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 and 24, the Company had total outstanding debt, including convertible notes, of approximately$20.3 million as of the issuance date, of which approximately $18.2 million is scheduled to mature over the next twelve months beyond the issuance date, for which the Company does not have sufficient liquidity to repay if a cash settlement is required. In the event the Company is unable to refinance its outstanding debt, settle some or all of its debt with shares of the Company’s common or preferred stock, secure additional outside capital, and/or secure amendments or waivers from its lenders to defer or modify their repayment terms, management will be required to seek other strategic alternatives to settle this indebtedness, which may include, among others, a significant curtailment of the Company’s operations, a sale of certain of the Company’s assets, a sale of the entire Company to strategic or financial investors, and/or allowing the Company to become insolvent by filing for bankruptcy protection under the provisions of the U.S. Bankruptcy Code.

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.

2. Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Any reference in these notes to applicable guidance is meant to refer to U.S. GAAP as found in the Accounting Standards Codification (“ASC”) and Accounting Standards Updates (“ASU”) of the Financial Accounting Standards Board (the “FASB”).

The accompanying unaudited condensed consolidated financial statements include the accounts of Interactive Strength Inc. and its subsidiaries in which the Company has a controlling financial interest, andshould be read in conjunction with the annual audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 31, 2026. The accompanying consolidated balance sheet as of December 31, 2025 was derived from the audited financial statements as of and for the year ended December 31, 2025. These condensed consolidated interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X, and therefore omit or condense certain footnotes and other information normally included in complete consolidated financial statements prepared in accordance with U.S. GAAP. All intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all normal and recurring adjustments (which consist primarily of accruals, estimates and assumptions that impact the financial statements) considered necessary to present fairly the Company’s financial position as of March 31, 2026 and its results of operations, comprehensive loss, changes in stockholders’ equity and cash flows for the three months ended March 31, 2026 and 2025. In addition, certain prior year balances have been reclassified to conform to the current presentation. Specifically, Income tax payable as of December 31, 2025 in the amount of $7,000 has been reclassified to Accrued expenses and other current liabilities in the accompanying condensed consolidated balance sheet and Proceeds from exercise of incremental warrants and issuance of convertible notes, net of issuance costs for the three months ended March 31, 2025 in the amount of $3.5 million has been reclassified to Proceeds from issuance of convertible notes, net of issuance costs, in the accompanying condensed consolidated statement of cash flows.

The financial data and other information disclosed in these notes related to the three months ended March 31, 2026 and 2025 are unaudited. The results for the three months ended March 31, 2026 and 2025 , are not necessarily indicative of results to be expected for the year ending December 31, 2026 , any other interim periods, or any future year or period.

Use of Estimates

The preparation of the condensed 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 March 31, 2026 and December 31, 2025, substantially all of the Company's long-lived assets were held in the United States.

Significant Accounting Policies

During the three months ended March 31, 2026, there were no significant changes to the Company’s significant accounting policies as described in the Company’s audited consolidated financial statements as of and for the year ended December 31, 2025, except as described below.

Loan Receivable

Loan receivable as of December 31, 2025 consisted of a loan agreement entered into with Sportstech Brands Holding GmbH ("Sportstech") and Mr. Ali Ahmad, the sole shareholder of Sportstech, which was intended as a form of bridge financing until a pending acquisition transaction could be closed. 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 of December 30, 2025. The balance on the loan receivable from Sportstech as of December 31, 2025, including accrued interest and fees, was $6.6 million, which was recorded on the Company's balance sheet as of December 31, 2025. 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 recorded a credit loss on the settlement of the loan receivable in the amount of $0.2 million in the first quarter of 2026, which is reflected in Other expense in the accompanying condensed consolidated statement of operations.

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 condensed 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 has the option to adopt the new or revised standard at the time private companies adopt the new or revised standard and may 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 2025-05

In July 2025, the FASB issued ASU 2025-05, “Financial Instruments – Credit Losses (Topic 326).” In developing forecasts as part of estimating expected credit losses, the ASU allows entities to elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. This ASU is effective for annual and interim periods beginning in 2026. The Company adopted ASU 2025-05 effective January 1, 2026. Adoption of the new standard did not have a material impact on the Company's consolidated financial statements.

Accounting Pronouncements Not Yet Adopted

ASU 2024-03

In November 2024, the FASB issued ASU 2024-03, as amended by ASU 2025-01, "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 condensed consolidated financial statements.

ASU 2025-06

In September 2025, the FASB issued ASU 2025-06, “Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40).” The ASU updates the guidance on accounting for internal-use software costs by (i) removing all references to software development stages, and (ii) requiring that an entity capitalize software costs when both management has authorized and committed to funding the software project, and it is probable that the project will be completed and the software will be used to perform the function intended. This ASU is effective for annual and interim periods beginning in 2028. Early adoption is permitted. The Company is currently evaluating the impact of the new standard.

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 table presents revenue and significant segment expenses that are included within net loss:

(1)Transaction costs related to acquisition of Ergatta, Wattbike and Sportstech.

(2)Other segment items included in consolidated net loss includes sales and marketing (excluding stock based compensation, depreciation and amortization) and other expense, net.

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

4. Revenue Recognition

The Company’s revenue is mainly derived from the sales of its Connected Fitness Products in Europe and the United States and associated recurring Membership revenue, along with sales of personal training services and license revenue recorded within Training and other revenue.

The Company determines revenue recognition through the following steps:

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

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Identification of the performance obligations in the contract;

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Determination of the transaction price;

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

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

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 condensed 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 condensed consolidated statements of operations and comprehensive loss.

Training and other

The Company’s training services are personal training services delivered through its Connected Fitness Products and third-party mobile devices. Training revenue is recognized at the time the services are delivered. Other revenue mainly includes third-party license revenue for Ergatta.

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 if 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 revenue by product:

5. Inventories, net

Inventories consist of the following:

Manufactured components and accessories generally represent purchased components that later get integrated into a finished rower by the Company's contract manufacturer.

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 the Company's Taiwan facility that will be shipped to the Company's manufacturing partners and will not be used within one year.

6. Property and Equipment, net

Property and equipment consisted of the following:

Depreciation expense amounted to approximately $36,000 for the three months ended March 31, 2026 and 2025.

7. Goodwill, Intangible Assets, net and Digital Assets

Goodwill

Goodwill and intangible assets of $5.1 million and $9.8 million, respectively, were acquired in the Ergatta Acquisition and were recorded at fair value on the acquisition date. As of March 31, 2026, there wasno goodwill impairment. Refer to Note 23. Acquisitions for more information.

Changes in goodwill for thethree months ended March 31, 2026 are as follows:

Intangible Assets, Net

Identifiable intangible assets, net consist of the following:

Amortization expense amounted to $0.5 million for the three months ended March 31, 2026 and 2025. As of March 31, 2026 and December 31, 2025, there wasno intangible asset impairment.

As of March 31, 2026, estimated annual amortization expense for each of the next five fiscal years is as follows:

8. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

9. Other Assets, net

Other assets, net consisted of the following:

Amortization expense amounted to $0.3 million and $0.4 million for the three months ended March 31, 2026 and 2025, respectively.

10. Accrued Expenses and Other Current Liabilities

Accrued expenses consisted of the following:

Accrued legal settlement of $2.1 million represents the payments due following settlement of a lawsuit which was an assumed liability as part of a 2024 acquisition transaction and is further discussed in Note 15. Commitments and Contingencies.

11. Debt

At March 31, 2026 and December 31, 2025, debt consisted of the following:

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 rateof 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 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 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 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 $4.5 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.

In connection with the Ergatta Acquisition, the Investor agreed to subordinate its security interest in the Company's assets to that of the holders of the Ergatta Note, as defined below. During the three months ended March 31, 2026, the Investor converted previously issued Class A Incremental Notes with an aggregate principal balance, including accrued interest, in the amount of $2.9 million into 909,625 shares of common stock, and the Company recorded a loss on extinguishment of debt of $2.8 million. 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 liabilities in the amount of $0.4 million and aggregate warrant liabilities in the amount of $0.4 million.

During the three months ended March 31, 2025, the Investor converted a total of $2.0 million owed pursuant to the January 2025 Convertible Notes into a total of 8,269 shares of Common Stock and the Company recorded a gain on extinguishment of debt of $0.7 million. During the three months ended March 31, 2025 the Company issued an additional Class A Incremental Note in the principal amount of $4.0 million and between March 31, 2025 and December 31, 2025 the Company issued additional Class A Incremental Notes with an aggregate principal amount of $7.2 million.

Interest recognized on the Secured Convertible Notes is 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 carrying value of the June 2025 Convertible Preferred Note as of March 31, 2026 and December 31, 2025 was $0.8 million and $0.7 million, respectively. Interest expense recognized on the June 2025 Convertible Preferred Note was approximately $26,000 for the three months ended March 31, 2026.

Remainder Notes

In connection with the sale of the Company's FET and other collateral tokens in October and December of 2025, the Company issued the Remainder Notes to ATW Partners and DWF Labs in the principal amount of $3.0 million and $4.5 million, respectively. 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 pershare, respectively, subject to adjustment as provided under the terms of the notes. The Company elected the fair value option for the Remainder

Notes, and the aggregate fair value for these notes as of March 31, 2026 and December 31, 2025 was $4.5 million and $4.3 million, respectively. As a result, the Company recognized a loss on the change in fair value of these notes in the amount of $0.2 million for the three months ended March 31, 2026.

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 March 31, 2026 and December 31, 2025 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. 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. 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 had 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 per share (the Common Stock’s Nasdaq Official Closing Price (as reflected on Nasdaq.com) on November 11, 2024. 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.

On December 13, 2024, the Company and Treadway entered into a Letter Agreement (the “Letter Agreement”) that, among other things, extended the Maturity Date to January 14, 2025. On January 14, 2025, Treadway sold the Amended and Restated Note to Woodway USA, Inc. (“Woodway”), a customer of the Company. On March 3, 2025, Woodway sold the Amended and Restated Note to TR Opportunities II LLC (the “Current Holder”). 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 Note 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 accrued 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 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 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).

The fair value of this note was $0.9 million as of December 31, 2025. In January of 2026, the note was converted into 217,791 shares ofcommon stock, and the Company recognized a loss on change in fair value of this note of $1.1 million for the three months ended March 31, 2026.

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. In February of 2026, one of these related parties transferred their note to two other related parties in equal amounts of $0.6 million. On February 26, 2026, these two related parties each exchanged $0.2 million of principal for 44,000 shares of common stock, for a total of exchange of $0.4 million of principal for 88,000 shares of common stock, and the Company recognized an aggregate gain on extinguishment of debt in the amount of $0.2 million.

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. As of the Effective Date, the outstanding principal amount of the Loan was approximately $5.0 million.

The carrying value of 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 three months ended March 31, 2026, the Company incurred interest and fees totaling $0.1 million, all of which were paid-in-kind. The outstanding balance on this facility as of March 31, 2026 and December 31, 2025 was $1.4 million and $1.7 million, respectively.

Other Notes Payable

As part of the purchase price for the Ergatta Acquisition, the Company issued a senior secured note (the "Ergatta Note") to the sellers in the principal amount of $1.9 million. The principal balance includes a working capital adjustment under the terms set forth in the Merger Agreement. The Ergatta note accrues interest at a rate of 5% per annum, has a maturity date of April 30, 2027, and is secured by substantially all of the assets of the Company.

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. The outstanding balance on the New Woodway Note, including accrued interest, as of March 31, 2026 and 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"). On February 27, 2026, Woodway exchanged $0.4 million of principal on this note for 88,000 shares of Common Stock, and the Company recorded a gain on the extinguishment of debt in the amount of $0.2 million. The carrying value of the May 2025 Woodway Note as of March 31, 2026 and December 31, 2025 was $1.6 million and $1.8 million, respectively.

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. The total outstanding principal balance including accrued interest as of March 31, 2026 and December 31, 2025 was $0.3 million.

Scheduled maturities on the Company's outstanding indebtedness as of March 31, 2026 is as follows:

12. Warrants

The following is a schedule of changes in warrants issued and outstanding from December 31, 2025 to March 31, 2026:

The warrants are classified as other long-term liabilities within the condensed consolidated balance sheets and are carried at fair value, with changes in fair value recorded in earnings.

Class A Incremental Notes Warrants

In connection with the January 28, 2025 Securities Purchase Agreement (see Note 11), the Company issued warrants to purchase an aggregate of 145,969 shares of Common Stock during the three months ended March 31, 2026 with initial exercise prices ranging from $4.51 per share to $10.254 per share. The warrants are exercisable for seven years after the issuance date and are subject to customary adjustments for stock dividends, stock splits, issuances of additional shares of common stock.

January 2025 Warrants

On January 28, 2025, the Company issued warrants to purchase 6,742 shares of common stock with an initial exercise price of $94.57 per share. The warrants may be exercised during the period commencing January 28, 2025 and ending January 28, 2032. 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.

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 March 31, 2026 and December 31, 2025 were as follows:

During the three months ended March 31, 2026, 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 the three months ended March 31, 2026.

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 March 31, 2026 and December 31, 2025, 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:

Convertible Notes

September 2025 Exchange Note

The Company entered into a convertible note arrangement in February 2024. The Company elected the fair value option for this note under ASC 825, Financial Instruments, with changes in fair value recorded in earnings each reporting period. During the three months ended March 31, 2026, the entire remaining principal and interest balance was converted into shares of Common Stock and the Company recorded a change in fair value for the difference between the $0.9 million fair value as of December 31, 2025 and the fair value of the Common Stock issued.

Remainder Notes

The Company also elected the fair value option for the Remainder Notes (see Note 11). These notes were valued using a Monte Carlo Simulation model using a discount rate of 32%, volatility of 70% and a risk free rate of 3.68% as of March 31, 2026.

January 2025 Exchange Notes

On February 4, 2025, the Company and the Exchange Agreement Investor entered into an Exchange Agreement (the “Exchange Agreement”), pursuant to which the Company and the Exchange Agreement Investor exchanged the Former Principal Stockholder Notes for five new secured promissory notes of the Company secured by the Company’s assets (the “January 2025 Exchange Notes”). The amendment to the Note represents the addition of a substantive conversion feature and as a result the Company recorded a gain on extinguishment included in condensed consolidated statement of stockholders' equity. The Company elected the fair value option for the January 2025 Exchange Notes under ASC 825, Financial Instruments, with changes in fair value recorded in earnings each reporting period. The fair value of the January 2025 Exchange Notes was determined using a discounted cash flow analysis at a discount rate of 16.3% on 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.

Warrants

The following table summarizes the activity for the Company Level 3 warrant liabilities measured at fair value on a recurring basis for the three months ended March 31, 2026:

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

Series D Convertible Preferred Stock

In connection with the acquisition of Ergatta (see Note 23) on March 11, 2026, the Company issued the Series D Convertible Preferred Stock, which was initially valued $7.7 million. The fair value was estimated using a Monte-Carlo simulation model with a risk-free rate of 3.64% and an annual equity volatility of 100%. The following table summarizes the activity for preferred stock measured at fair value on a recurring basis for the three months ended March 31, 2026:

Accrued Earnout

The Merger Agreement with Ergatta provides for additional cash consideration payable to the sellers on April 30, 2027 of up to $3.5 million based on the excess of 2026 Free Cash Flow (see Note 23) over $1.75 million, multiplied by 2. The fair value of the contingent consideration as of March 31, 2026 was estimated using a Monte-Carlo simulation model under a risk-neutral basis. The following table summarizes the activity for the contingent consideration measured at fair value on a recurring basis for the three months ended March 31, 2026:

14. Leases

Lease Obligations

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 condensed consolidated balance sheet when the Company is reasonably certain it will renew the underlying 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 March 31, 2026 and December 31, 2025, the weighted average discount rate for operating leases was 6.42% and the weighted average remaining lease term for operating leases was 2.2 and 2.4 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 condensed consolidated balance sheets. The components of lease expense and other information for three months ended March 31, 2026 and 2025 were as follows.

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

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 shall 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 March 31, 2026 and December 31, 2025. The Company recorded royalty expense of $0 and $5,000 for the three months ended March 31, 2026 and 2025, respectively.

Legal Proceedings

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.

The total amount outstanding as of March 31, 2026 and December 31, 2025 was $2.1 million, including default interest of $0.1 million, and is 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 resolved and on June 12, 2025, the parties filed a joint stipulation of dismissal with prejudice and the settlement amount was $2.2 million. The current portion of the total remaining payments as of March 31, 2026 and December 31, 2025 of $0.3 millionis included in accrued expenses and other current liabilities and the non-current portionas of March 31, 2026 and December 31, 2025 of $1.7 million and $1.8 million, respectively, 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.

16. Stockholders’ Equity (Deficit)

Common Stock

The Company’s authorized Common Stock consisted of 900,000,000 shares at $0.0001 par value, as of March 31, 2026 and December 31, 2025. The issued and outstanding common stock was 2,057,018 shares and 307,516 shares as of March 31, 2026 and December 31, 2025, respectively.

During the three months ended March 31, 2026, the Company issued 290,000 shares of Common Stock from an At the Market offering, and received net proceeds of approximately $1.5 million.

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 the remaining $1.6 million of principal into 217,791 shares of Common Stock.

During the three months ended March 31, 2026, the holder of the Company's secured convertible notes converted an aggregate of $2.9 million of note principal into 909,625 shares of Common Stock in accordance with the terms of the secured convertible notes.

In February 2025, the Company issued 8,215 shares of Common Stock, par value $0.0001, from At the Market offering.

From January 2025 through March 2025, the Company issued 39,416 shares of Common Stock upon conversion of $8.6 million of convertible notes.

From January 2025 through March 2025, the Company issued 17,883 shares of Common Stock upon conversion of 100,000 shares of Series A Preferred Stock,1,060,118 shares of Series B Preferred Stock and 2,801,250 shares of Series C Preferred Stock.

On March 20, 2026, the Company announced that its Board of Directors (the "Board") approved a stock repurchase program of up to $0.5 million, whereby the Company may repurchase shares of its Common Stock in the open market subject to market conditions, applicable securities laws, and the Company's policies governing insider transactions. As of March 31, 2026, no shares have been repurchased under this program.

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, 2025, 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, the Series C Certificate designated 5,000,000 shares of the Company’s preferred stock as Series C Preferred Stock and the Series E Certificate designated 1,300,000 shares of the Company’s authorized preferred stock as Series E Convertible Preferred Stock.

On March 31, 2026, the Company entered into a settlement agreement with the Lender under the Term Loan (see Note 11) valued at $2.2 million, which the Company settled through the issuance of 1,088,255 shares of Series C Preferred Stock. The shares of preferred stock were valued at $1.8 million and the Company recognized a gain on extinguishment of this liability in the amount of $0.4 million.

Uponthe closing of the Ergatta Acquisition (see Note 23), the Company filed a 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 has 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. Conversion of the Series D Preferred Stock is subject to stockholder approval, and if such approval is not obtained, the Series D Preferred Stock will be redeemed for cash. As a result, and due to the variability in the number of shares of Common Stock that the Series D Preferred Stock is convertible into that is not based on the value of the Common Stock, the Series D Preferred Stock is reflected as a liability in the Company's condensed consolidated balance sheet as of March 31, 2026.

The remaining unissued shares of the Company's authorized preferred stock are undesignated.

On January 23, 2025 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 112,334 shares of Series A Preferred Stock. The Company issued 112,334 Dividend Shares on January 23, 2025.

On March 31, 2025, the Company issued 1,188,571 shares of the Company’s Series C Preferred Stock as payment of the $2.4 million Net Trade Value as of that date pursuant to a Loss Restoration Agreement.

On January 23, 2025, the Board declared a dividend on the shares of Series C Preferred Stock issued and outstanding as of the record date for such dividend, as a dividend in kind, in the form of 126,515 shares of Series C Preferred Stock. The Company issued 126,515 Dividend Shares on January 23, 2025.

17. Equity-Based Compensation

2023 and 2020 Equity Incentive Plan

Presented below is a summary of the compensation cost recognized in the condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2026 and 2025.

The table above includes approximately $0.1 million of compensation expense related to the Series D-2 and D-3 Preferred Stock issued in connection with the Ergatta Acquisition (see Note 23), and is reflected in General and administrative expense. For the three months ended March 31, 2026 and 2025, the Company recognized stock-based compensation expense of $0.4 million and $2.4 million, respectively, of which $0.0 million and $0.3 million, respectively, was capitalized as software costs.

During the three months ended March 31, 2026, the Company didnot grant any shares under the 2023 and 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 and 2020 Plan:

As of March 31, 2026 and December 31, 2025, the Company had $0.7 million and $0.9 million of unrecognized stock-based compensation expense that is expected to be recognized over a weighted-average period of 0.2 years and 0.2 years, respectively.

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 three months ended March 31, 2026, there wereno customers representing greater than 10% of the Company's consolidated revenue. For the three months ended March 31, 2025, Woodway represented 71% of the Company’s consolidated revenue.

At March 31, 2026, one customer represented 48% of the Company's consolidated accounts receivable. At December 31, 2025, this customer represented 47% of the Company's consolidated accounts receivable.

The Company hadno vendors representing greater than 10% of total finished goods purchases for the three months ended March 31, 2026 andone vendor representing more than 10% of finished goods for the three months ended March 31, 2025.

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 Board. During the three months ended March 31, 2026 and 2025, the Company didnot make any contributions to the plan.

The Company contributes up to 5% of an employee’s salary into personal pension funds held by individual employees under the laws of the United Kingdom. These personal pension funds are the responsibility of the individual employees. The Company's contribution to employee pension funds for the three months ended March 31, 2026 was approximately $27,000.

20. 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:

The Company's Series D Convertible Preferred Stock and Series E Convertible Preferred Stock are also potentially convertible into Common Stock, however the conversion price is unknown as of March 31, 2026.

21. 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”).

Related Party Convertible Notes

See Note 11 for discussion.

Principal Stockholder Promissory Notes

As further discussed in Note 11, On January 29, 2025, the Former Principal Stockholder assigned the Former Principal Stockholder Notes of $5.4 million to an accredited investor that is managed by an ATW Partners related entity (the “Exchange Agreement Investor”) and the outstanding principal balance was $0 as of March 31, 2025.

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 shall 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 March 31, 2026. As of March 31, 2026 the Company has accrued $0.3 million in royalty payments. The Company recorded royalty expense of $0 and $5,000 for the three months ended March 31, 2026 and 2025, respectively.

22. Supplemental Disclosure of Cash Flow Information

Supplemental cash flow information for the three months ended March 31, 2026 and 2025 is as follows:

23. Acquisitions

Ergatta Acquisition

On March 11, 2026, the Company completed the Ergatta Acquisition (see Note 1) for a total purchase price of approximately $13.4 million, consisting of (i) cash paid at closing of $2.1 million; (ii) a senior secured promissory note delivered at the Closing and maturing on April 30, 2027 in the amount of $1.9 million (which includes a working capital adjustment in accordance with the terms of the Merger Agreement); (iii) contingent consideration initially valued at $1.6 million payable on April 30, 2027, as provided by the calculations, formulas, and other procedures set forth in the Merger Agreement; (iv) assumption of post-closing Ergatta liabilities of $0.2 million; and (v)4,749,974 shares of the Company's Series D-1 Preferred Stock (see Note 16).

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.

The 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 March 11, 2026, with the remaining unallocated purchase price recorded as goodwill. The table below summarizes the consideration transferred to Ergatta shareholders on March 11, 2026:

Ergatta is a connected fitness company with an emphasis on game-based fitness content. The Ergatta 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 Series D-1 preferred stock was recorded at its estimated fair value and recognized as a long-term liability in the accompanying condensed consolidated balance sheet. Settlement of this liability is based on Ergatta's free cash flow, as defined below, and the settlement value will be a minimum of $5.25 million and a maximum of $9.5 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 identified intangible assets of $9.8 million are comprised of (i) software developed technology of $2.4 million that has an estimated useful life of 5 years, (ii) direct-to-consumer subscription of $5.3 million that has an estimated useful life of 2 years, (iii) license agreement of $1.3 million having an estimated useful life of 6 years; and (iv) trademarks and trade name of $0.8 million with 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 related to these intangible assets for each of the next five fiscal years is included in Note 7.

Earn Out

As part of the Ergatta Acquisition, the sellers are entitled to receive a cash contingent payment on April 30, 2027 that is secured by the $1.9 million senior note previously discussed. The amount of the contingent payment is based on Ergatta's 2026 Free Cash Flow less $1.75 million multiplied by 2.0, with a maximum payment of $3.5 million. The fair value of this payment as of March 11, and March 31, 2026 is estimated to be $1.6 million. Additionally, the ultimate settlement of the Series D-1 Preferred Stock is contingent upon on Ergatta's 2026 Free Cash Flow, which is defined as earnings before interest, taxes, deprecation and amortization, stock-based compensation, other income/expense and certain mutually agreed-upon non-recurring charges, less capitalized software development expenses and other capital expenditures incurred in the ordinary course of business. The amount of the settlement associated with the Series D-1 Preferred Stock is expected to be between a minimum of $5.25 million and a maximum of $9.5 M. “

The following unaudited pro forma summary presents condensed consolidated information of the Company including Ergatta and Wattbike, acquired on July 1, 2025, as if these acquisitions had occurred as of January 1, 2025, the earliest year presented herein:

The unaudited pro forma consolidated results for the three months ended March 31, 2026 and 2025 were prepared using the acquisition method of accounting and are based on the historical financial information of Ergatta and the Company. The unaudited pro forma consolidated results incorporate historical financial information for all significant acquisitions pursuant to SEC regulations since January 1, 2025. 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, 2025.

The following unaudited condensed consolidated results of operations for Ergatta are included in the condensed consolidated statements of loss for the three months ended March 31, 2026.

24. Subsequent Events

Share Repurchases

Between May 5, 2026 and May 15, 2026, the Company repurchased 88,568 shares of its Common Stock on the open market (see Note 16) for an aggregate purchase price of approximately $82,000.

Conversion of Convertible Notes and Loans Payable

On April 7, 2026, the Lender under the Company's term loan dated February 1, 2024 (see Note 11) converted $0.3 million of debt principal into 59,782 shares of Common Stock.

In April of 2026, the holder of one of the Company's senior convertible notes (see Note 11) converted approximately $0.2 million of principal and accrued interest into 214,136 shares of Common Stock.