PELOTON INTERACTIVE, INC.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our interim condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, filed with the SEC on August 7, 2025 (“Form 10-K”). As discussed in the section titled "Special Note Regarding Forward-Looking Statements," the following discussion and analysis contains forward looking statements that involve risks, uncertainties, assumptions, and other important factors that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those identified below and those discussed in the section titled "Risk Factors" in Part II, Item 1A of this Quarterly Report on Form 10-Q and in Part I, Item 1A of our Form 10-K.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our interim condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended June 30, 2025, filed with the SEC on August 7, 2025 (“Form 10-K”). As discussed in the section titled "Special Note Regarding Forward-Looking Statements," the following discussion and analysis contains forward looking statements that involve risks, uncertainties, assumptions, and other important factors that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those identified below and those discussed in the section titled "Risk Factors" in Part II, Item 1A of this Quarterly Report on Form 10-Q and in Part I, Item 1A of the Form 10-K.

Previous wording

Peloton is a leading global fitness and wellness company that empowers its Members to live fit, strong, long, and happy by providing fitness and wellness products and services they can use anytime, anywhere. We have a highly engaged community of nearly 6 million Members as of September 30, 2025, across the United States, United Kingdom, Canada, Germany, Australia, and Austria. As a category innovator at the nexus of fitness and wellness, technology, and media, we deliver experiences through our world-renowned Instructors, premium hardware and innovative software, personalization, and extensive modalities and content formats. Founded in 2012 and headquartered in New York City, Peloton aims to scale across the markets in which it operates.

Current wording

Peloton is a leading global fitness and wellness company that empowers its Members (as defined below) to live fit, strong, long, and happy by providing fitness and wellness products and services they can use anytime, anywhere. We have a highly engaged community of nearly 5.8 million Members as of December 31, 2025, across the United States, United Kingdom, Canada, Germany, Australia, and Austria. As a category innovator at the nexus of fitness and wellness, technology, and media, we deliver experiences through our world-renowned Instructors, premium hardware and innovative software, personalization, and extensive modalities and content formats. Founded in 2012 and headquartered in New York City, Peloton aims to scale across the markets in which it operates.

Previous wording

During the three months ended September 30, 2025, our Connected Fitness Products portfolio included our Original Series Peloton Bike, Bike+, Tread, Tread+, Row, Guide (discontinued as of July 2025), and various Precor products. In October 2025, we launched a refreshed portfolio of Connected Fitness Products called the Cross Training Series, including the Cross Training Bike, Bike+, Tread, Tread+, and Row+. We continue to sell our refurbished Original Series Peloton Bike and Bike+. Additionally, we launched the Peloton Pro Series, a refresh of our portfolio of commercial-certified Peloton-branded products, which now include the Bike+ Pro, Tread+ Pro, and Row+ Pro.

Current wording

In October 2025, we launched the Cross Training Series, a refreshed portfolio of Connected Fitness Products, which includes the Cross Training Bike, Bike+, Tread, Tread+, and Row+. We also launched the Peloton Pro Series, a refresh of our portfolio of commercial-certified Peloton-branded products, which now includes the Bike+ Pro, Tread+ Pro, and Row+ Pro. In connection with the Cross Training Series launch, we discontinued the sale of our original series (the “Original Series”) Tread, Tread+, and Row; however we continue to sell the refurbished Original Series Bike and Bike+, as well as our Precor products (collectively, the "Connected Fitness Products").

Previous wording

In August 2025, the Company announced a new restructuring plan (the “2025 Restructuring Plan”), which includes a reduction in global headcount and is intended to continue to improve the Company’s cost structure, operating efficiency, and profitability, while providing us the opportunity to return to growth by reinvesting expected savings into our differentiating capabilities. The Company expects the 2025 Restructuring Plan to be substantially implemented by the end of fiscal year 2026, which is subject to change.

Current wording

In August 2025, we announced a restructuring plan (the “2025 Restructuring Plan”), which includes a reduction in global headcount and is intended to continue to improve our cost structure, operating efficiency, and profitability, while providing us the opportunity to return to growth by reinvesting expected savings into our differentiating capabilities. We expect the 2025 Restructuring Plan to be substantially implemented by the end of fiscal year 2026, which is subject to change.

Previous wording

In connection with the 2025 Restructuring Plan, we estimate that we will incur additional cash restructuring charges of approximately $40.0 million, primarily comprised of location strategy costs, lease termination costs, and other exit costs. Additionally, we expect to recognize additional non-cash restructuring charges of approximately $5.0 million, primarily comprised of asset write-downs and write-offs, in connection with the continued exit of the Company’s retail and other leased locations. We expect these charges to be substantially incurred by the end of fiscal year 2026, which is subject to change.

Current wording

In connection with the 2025 Restructuring Plan, we estimate that we will incur additional cash restructuring charges of approximately $25.0 million, primarily comprising location strategy costs, lease termination costs, and other exit costs. Additionally, we expect to recognize additional non-cash restructuring charges of approximately $5.0 million, primarily comprising asset write-downs and write-offs in connection with the continued exit of our retail and other leased locations. We expect these charges to be substantially incurred by the end of fiscal year 2026, which is subject to change.

Previous wording

Upon full implementation, we expect the 2025 Restructuring Plan to achieve at least $100 million of run-rate savings by the end of fiscal year 2026.

Current wording

Upon full implementation, we expect the 2025 Restructuring Plan to achieve at least $100.0 million of run-rate savings by the end of fiscal year 2026.

Previous wording

We may not be able to realize the cost savings and benefits initially anticipated as a result of the Restructuring Plans, and implementation and transition costs may be greater than expected. See“Risk Factors—Risks Related to Our Business—We may not successfully execute or achieve the expected benefits of our restructuring initiatives and other cost-saving measures we may take in the future, and our efforts may result in further actions and/or additional asset impairment charges and adversely affect our business” in our Form 10-K.

Current wording

We may not be able to realize the cost savings and benefits initially anticipated as a result of the Restructuring Plans, and implementation and transition costs may be greater than expected. See “Risk Factors — Risks Related to Our Business — We may not successfully execute or achieve the expected benefits of our restructuring initiatives and other cost-saving measures we may take in the future, and our efforts may result in further actions and/or additional asset impairment charges and adversely affect our business” in the Form 10-K.

Previous wording

On November 6, 2025, in collaboration with the U.S. Consumer Product Safety Commission and Health Canada, we announced a voluntary recall of about 833,000 units in the U.S. and 44,800 units in Canada of the Original Series Bike+ (not Cross-Training Bike+) – manufactured from December 2019 to July 2022 and sold beginning in 2020 to April 2025. As previously disclosed, we have received a small number of reports that an Original Series Bike+ seat post broke during use. Specifically, as of today, November 6, 2025, the Company is aware of three reports each from users weighing more than 250 lbs in which the seat post has broken during use. Of these reports, two included reports of injuries, including a sprained knee and head bruise. It is possible that additional reports, including those involving users with different characteristics or injuries, may be made in the future. We are offering Members a free replacement seat post as the approved remedy.

Current wording

As previously disclosed, on November 6, 2025, in collaboration with the U.S. Consumer Product Safety Commission and Health Canada, we announced a voluntary recall of about 833,000 units in the U.S. and 44,800 units in Canada of the Original Series Bike+ (not Cross Training Bike+). We are offering Members a free replacement seat post as the approved remedy.

Previous wording

As of September 30, 2025, we have accrued $16.5 million for the cost to replace the Original Series Bike+ seat posts, of which $13.5 million was accrued for in the fiscal quarter ended September 30, 2025. This accrual is based on an amount that we deem probable and estimable and is reflected in Connected Fitness Products Cost of revenue in our Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). We previously accrued for and recognized a $3 million charge in the fiscal quarter ended June 30, 2025.

Current wording

As of December 31, 2025, we have accrued $7.5 million to replace Original Series Bike+ seat posts, which is a reduction from our accrual of $16.5 million as of September 30, 2025. This reduction is primarily driven by the utilization of our previously established accrual. This accrual is based on an amount that we deem probable and estimable and is reflected in Connected Fitness Products Cost of revenue in our Condensed Consolidated Statements of Operations and Comprehensive Loss.

Previous wording

We may continue to incur additional costs beyond what we have currently estimated to be probable and reasonably estimable, including in connection with the voluntary recall and if the number of reported incidents materially increases, and such additional costs may be material. See“Risk Factors — Risks Related to Our Connected Fitness Products and Members — Our products and services may be affected from time to time by design and manufacturing defects or product safety issues, real or perceived, that could adversely affect our business and result in harm to our reputation” in our Form 10-K.

Current wording

We may continue to incur additional costs beyond what we have currently estimated to be probable and reasonably estimable, including in connection with the voluntary recall, and if the number of reported incidents involving the Original Series Bike+ seat post materially increases, such additional costs may be material. See“Risk Factors — Risks Related to Our Connected Fitness Products and Members — Our products and services may be affected from time to time by design and manufacturing defects or product safety issues, real or perceived, that could adversely affect our business and result in harm to our reputation” in the Form 10-K.

Previous wording

(1) Beginning January 1, 2025, the Company migrated its subscription data model for reporting Ending Paid Connected Fitness Subscriptions, Average Net Monthly Paid Connected Fitness Subscription Churn, and Ending Paid App Subscriptions to a new data model that provides greater visibility to changes to a subscription's payment status when they occur. The new model gives the Company more precise and timely data on subscription pause and churn behavior. Prior period information has been revised to conform with current period presentation. The impact of this change in the model on Ending Paid Connected Fitness Subscriptions, Average Net Monthly Paid Connected Fitness Subscription Churn, and Ending Paid App Subscriptions for the three months ended September 30, 2025 and 2024 is immaterial. Starting in fiscal 2026, we no longer report on Average Monthly Paid App Subscription Churn.

Current wording

(1) Beginning January 1, 2025, we migrated our subscription data model for reporting Ending Paid Connected Fitness Subscriptions, Average Net Monthly Paid Connected Fitness Subscription Churn, and Ending Paid App Subscriptions to a new data model that provides greater visibility to changes to a subscription's payment status when they occur. The new model gives us more precise and timely data on subscription pause and churn behavior. Prior period information has been revised to conform with current period presentation. The impact of this change in the model on Ending Paid Connected Fitness Subscriptions, Average Net Monthly Paid Connected Fitness Subscription Churn, and Ending Paid App Subscriptions for the three months ended December 31, 2025 and 2024 is immaterial. Starting in fiscal 2026, we no longer report on Average Monthly Paid App Subscription Churn.

Previous wording

(3) Please see the section titled “Non-GAAP Financial Measures—Adjusted EBITDA” for a reconciliation of Net income (loss) to Adjusted EBITDA and an explanation of why we consider Adjusted EBITDA to be a helpful measure for investors.

Current wording

(3) Please see the section titled “Non-GAAP Financial Measures—Adjusted EBITDA” for a reconciliation of Net loss to Adjusted EBITDA and an explanation of why we consider Adjusted EBITDA to be a helpful measure for investors.

Previous wording

Subscription Revenue primarily consists of revenue generated from our Paid Connected Fitness Subscriptions and Paid Peloton App Subscriptions, inclusive of the Strength+ App, which are offered on a month-to-month or prepaid basis.

Current wording

Subscription Revenue primarily consists of revenue generated from our Paid Connected Fitness Subscriptions and Paid Peloton App Subscriptions, which are offered on a month-to-month or prepaid basis, and revenue generated from content licensing arrangements.

Previous wording

As of September 30, 2025, 99% and 81% of our Connected Fitness Subscription and Paid App Subscription bases, respectively, were paying month-to-month.

Current wording

As of December 31, 2025, 99% and 76% of our Connected Fitness Subscription and Paid App Subscription bases, respectively, were paying month-to-month.

Previous wording

A single Connected Fitness Subscription provides access to multiple, different Peloton Connected Fitness Products (such as a Peloton Bike and Peloton Tread) in the same household. As of September 30, 2025, approximately 13% of our Connected Fitness Subscriptions owned multiple, different Connected Fitness Products.

Current wording

A single Connected Fitness Subscription provides access to multiple, different Peloton Connected Fitness Products (such as a Peloton Bike and Peloton Tread) in the same household. As of December 31, 2025, approximately 11% of our Connected Fitness Subscriptions owned multiple, different Connected Fitness Products.

Previous wording

Sales and marketing expense primarily consists of performance marketing media spend, asset creation, and other brand creative, sales and marketing personnel-related expenses, including stock-based compensation expense, costs to operate our retail showrooms including rent and occupancy charges, payment processing fees incurred in connection with the sale of our Connected Fitness Products, expenses related to the Peloton Apps, and depreciation of property and equipment.

Current wording

Sales and marketing expense primarily consists of performance marketing media spend, asset creation, and other brand creative, sales and marketing personnel-related expenses, including stock-based compensation expense, costs to operate our retail locations, including rent and occupancy charges, payment processing fees incurred in connection with the sale of our Connected Fitness Products, expenses related to the Peloton Apps, and depreciation of property and equipment.

Previous wording

Comparison of the Three Months Ended September 30, 2025 and 2024

Current wording

Comparison of the Three and Six Months Ended December 31, 2025 and 2024

Previous wording

Connected Fitness Products Revenue decreased $7.2 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. This decrease was primarily attributable to fewer Connected Fitness product deliveries driven by lower demand, partially offset by improvements in Precor revenue, for the three months ended September 30, 2025.

Current wording

Connected Fitness Products Revenue decreased $9.4 million and $16.6 million for the three and six months ended December 31, 2025, respectively, compared to the three and six months ended December 31, 2024. This decrease was primarily attributable to fewer Connected Fitness product deliveries driven by lower sales, partially offset by improvements in Precor revenue and higher average selling prices for products in our Cross Training Series, which launched in October 2025.

Previous wording

Subscription Revenue decreased $28.0 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to decreases in Paid Connected Fitness and App Subscriptions.

Current wording

Subscription Revenue decreased $8.0 million and $35.9 million for the three and six months ended December 31, 2025, respectively, compared to the three and six months ended December 31, 2024, primarily due to decreases in Paid Connected Fitness and App Subscriptions and decreases in content licensing revenue, partially offset by the subscription price increases during the three months ended December 31, 2025.

Previous wording

Connected Fitness Products Cost of revenue decreased $3.1 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. This decrease was primarily driven by fewer Connected Fitness product deliveries, resulting from lower demand, partially offset by the expense incurred related to the Bike+ Seat Post Recall, and higher Precor sales.

Current wording

Connected Fitness Products Cost of revenue decreased $13.7 million for the six months ended December 31, 2025, compared to the six months ended December 31, 2024. This decrease was primarily driven by fewer Connected Fitness Product deliveries, resulting from lower sales, and lower warranty costs, partially offset by the $13.5 million expense incurred related to the Original Series Bike+ seat post recall, higher Precor sales, and an increase in import tariff charges.

Previous wording

Our Connected Fitness Products Gross margin decreased to 6.9% for the three months ended September 30, 2025 compared to 9.2% for the three months ended September 30, 2024. This decrease was primarily driven by the $13.5 million expense incurred related to the Bike+ Seat Post Recall, which was partially offset by a mix shift towards higher margin products, lower warranty costs, and a decrease in inventory reserves.

Current wording

Our Connected Fitness Products Gross margin decreased to 11.2% for the six months ended December 31, 2025, compared to 11.5% for the six months ended December 31, 2024. This decrease was primarily driven by the $13.5 million expense incurred related to the Original Series Bike+ seat post recall and an increase in import tariff charges, partially offset by a mix shift towards higher margin products and lower warranty costs.

Previous wording

Impairment expense increased $3.4 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to asset write-downs and write-offs in connection with the exit of our retail showroom locations.

Current wording

Sales and marketing expense decreased $0.6 million for the three months ended December 31, 2025, compared to the three months ended December 31, 2024, primarily driven by a decrease in rent and occupancy charges due to the exit of certain retail showroom locations.

Previous wording

Sales and marketing expense decreased $15.1 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily driven by a $15.2 million decrease in acquisition, brand, and creative marketing charges.

Current wording

Sales and marketing expense decreased $15.7 million for the six months ended December 31, 2025, compared to the six months ended December 31, 2024, primarily driven by a decrease in acquisition and brand marketing charges.

Previous wording

General and administrative expense decreased $18.7 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease was mainly driven by an $8.7 million decrease in personnel-related expenses, inclusive of stock-based compensation expense, and a $3.8 million decrease in rent and occupancy charges, both primarily due to the assignment of executive compensation and other corporate overhead costs to the various expense captions those costs relate to beginning in fiscal 2026, and a $2.9 million decrease in professional services fees.

Current wording

General and administrative expense decreased $28.4 million and $47.1 million for the three and six months ended December 31, 2025, respectively, compared to the three and six months ended December 31, 2024. The decrease was mainly driven by a decrease of $20.0 million and $28.6 million in personnel-related expenses, inclusive of stock-based compensation expense, respectively, primarily due to decreased average headcount and the assignment of executive compensation to the various expense captions beginning in fiscal 2026, a decrease of $4.4 million and $8.2 million in rent and occupancy charges, respectively, primarily due to the assignment of other corporate overhead costs to the various expense captions beginning in fiscal 2026, and a decrease of $3.2 million and $6.8 million in professional services fees, respectively.

Previous wording

Research and development expense increased $3.6 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, mainly driven by a $3.7 million increase in personnel-related expenses, inclusive of stock-based compensation expense, and a $1.7 million increase in rent and occupancy charges, both primarily due to the assignment of executive compensation and other corporate overhead costs, discussed above, partially offset by a $2.0 million decrease in product development costs, primarily due to a reduction in contractor spend.

Current wording

Research and development expense increased $4.7 million and $8.3 million for the three and six months ended December 31, 2025, respectively, compared to the three and six months ended December 31, 2024, mainly driven by an increase of $3.8 million and $7.4 million in personnel-related expenses, inclusive of stock-based compensation expense, respectively, and an increase of $1.4 million and $3.0 million in rent and occupancy charges, respectively, both primarily due to the assignment of executive compensation and other corporate overhead costs, discussed above.

Previous wording

Restructuring expense increased $1.5 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024, primarily due to an increase in exit and disposal costs and professional fees in connection with the Restructuring Plans.

Current wording

Restructuring expense increased $0.9 million for the six months ended December 31, 2025, compared to the six months ended December 31, 2024, primarily due to an increase in stock-based compensation expense in connection with the Restructuring Plans.

Previous wording

Supplier settlements decreased $23.5 million for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 due to accruals for the three months ended September 30, 2024 related to the settlement of disputes with a third-party supplier about certain alleged past and future commitments.

Current wording

Supplier settlements decreased $23.5 million for the six months ended December 31, 2025, compared to the six months ended December 31, 2024, due to accruals for the six months ended December 31, 2024 related to the settlement of disputes with a third-party supplier about certain alleged past and future commitments.

Previous wording

Total other expense, net and Income tax expense

Current wording

Total other expense, net and Income tax (benefit) expense

Previous wording

Total other expense, net was comprised of the following for the three months ended September 30, 2025:

Current wording

Total other expense, net comprised the following for the three and six months ended December 31, 2025:

Previous wording

•Interest expense primarily related to our Term Loan, convertible notes, and deferred financing costs of $32.3 million;

Current wording

•Interest expense primarily related to our Term Loan and convertible notes of $31.5 million and $63.8 million, respectively;

Previous wording

•Interest income from cash, cash equivalents, and short-term investments of $9.8 million;

Current wording

•Interest income from cash, cash equivalents, and short-term investments of $9.2 million and $18.9 million, respectively;

Previous wording

•Other expense, net of $0.1 million.

Current wording

•Other income (expense), net of $0.1 million and $(0.3) million, respectively.

Previous wording

Total other expense, net was comprised of the following for the three months ended September 30, 2024:

Current wording

Total other expense, net comprised the following for the three and six months ended December 31, 2024:

Previous wording

•Interest expense primarily related to our Term Loan, convertible notes, and deferred financing costs of $35.4 million;

Current wording

•Interest expense primarily related to our Term Loan and convertible notes of $34.6 million and $70.0 million, respectively;

Previous wording

•Interest income from cash, cash equivalents, and short-term investments of $8.1 million;

Current wording

•Interest income from cash, cash equivalents, and short-term investments of $7.7 million and $15.8 million, respectively;

Previous wording

Income tax expense for the three months ended September 30, 2025 and 2024 of $0.7 million and $0.8 million, respectively, was primarily due to state and international taxes.

Current wording

Income tax (benefit) expense for the three and six months ended December 31, 2025 of $(0.2) million and $0.5 million, respectively, was primarily due to state and international taxes. Income tax expense for the three and six months ended December 31, 2024 of $0.7 million and $1.6 million, respectively, was primarily due to state and international taxes.

Previous wording

The following table presents a reconciliation of Adjusted EBITDA to Net income (loss), the most directly comparable financial measure prepared in accordance with GAAP, for each of the periods indicated:

Current wording

The following table presents a reconciliation of Adjusted EBITDA to Net loss, the most directly comparable financial measure prepared in accordance with GAAP, for each of the periods indicated:

Previous wording

(3)Represents accrual for the three months ended September 30, 2024 related to settlement of disputes with a third-party supplier about certain alleged past and future commitments, which occurred due to part of an unusual, one-time effort to adjust the Company’s forecasted inventory during its fiscal years 2022 and 2023. With this settlement, we have substantially settled our purchase commitments related disputes with our suppliers that were linked to our one-time effort to evaluate and adjust the Company’s forecasted inventory needs with its suppliers during fiscal years 2022 and 2023. As such, we currently do not expect to add-back in the future any additional supplier settlements related to that effort.

Current wording

(3)Represents accrual for the six months ended December 31, 2024 related to settlement of disputes with a third-party supplier about certain alleged past and future commitments, which occurred due to part of an unusual, one-time effort to adjust our forecasted inventory during its fiscal years 2022 and 2023. With this settlement, we have substantially settled our purchase commitments related disputes with our suppliers that were linked to our one-time effort to evaluate and adjust our forecasted inventory needs with our suppliers during fiscal years 2022 and 2023. As such, we currently do not expect to add back any additional supplier settlements related to that effort.

Previous wording

Our operations have been funded primarily through net proceeds from the sales of our equity and convertible debt securities, and our Term Loan, as well as cash flows from operating activities. As of September 30, 2025, we had Cash and cash equivalents of approximately $1,103.6 million.

Current wording

Our operations have been funded primarily through net proceeds from the sales of our equity and convertible debt securities, our Term Loan, as well as cash flows from operating activities. As of December 31, 2025, we had Cash and cash equivalents of approximately $1,179.6 million.

Previous wording

We believe our existing cash and cash equivalent balances and cash flow from operations will be sufficient to meet our working capital and capital expenditure needs for the next 12 months and beyond. Our future capital requirements may vary materially from those currently planned and will depend on many factors, including our rate of revenue growth, timing to adjust our supply chain and cost structures in response to material fluctuations in product demand, timing and amount of spending related to acquisitions, the timing and amount of spending on research and development and manufacturing initiatives, the timing and financial impact of product recalls, sales and marketing activities, the timing of new product introductions, market acceptance of our Connected Fitness Products, timing and investments needed for international expansion, and overall economic conditions. To the extent that current and anticipated future sources of liquidity are insufficient to fund our future business activities and requirements, we may be required to seek additional equity or debt financing. The sale of additional equity would result in further dilution to our stockholders. The incurrence of debt financing would result in increased debt service obligations and the instruments governing such debt could provide for operating and financing covenants that would restrict our operations. There can be no assurances that we will be able to raise additional capital. The inability to raise capital would adversely affect our ability to achieve our business objectives.

Current wording

We believe our existing cash and cash equivalents and cash flow from operations will be sufficient to meet our working capital and capital expenditure needs for the next 12 months and beyond. Our future capital requirements could vary materially from those currently planned and will depend on many factors and their timing, including: