TRNR 10-K & 10-Q changes, risk factors and insider trading

We have incurred operating and net losses in the past, expect to incur operating and net losses in the future, and may not achieve profitability, or, if we achieve profitability, be able to maintain it in the future.

We have incurred operating losses each year since our inception, including a net loss of $29.2$24.0 million for the year ended December 31, 2024,2025, and expect to continue to incur net losses for the foreseeable future. We had an accumulated deficit of $202.6$227.5 million at December 31, 2024.2025. We expect our operating expenses to increase in the future as we increase our sales and marketing efforts, continue to invest in technology and engineering, expand our operating and retail infrastructure, add training and fitness programs, classes, content, and software features to our streaming platform, expand into new geographies, and invest in new or complementary products, equipment, accessories, content, and services for our immersive, customizable, and digital fitness platform, which include the Wattbike, CLMBR, FORME Studio, FORME Studio Lift, accompanying accessories, and our coaching services which we collectively refer to as the “FORME platform.” Further, as a public company,company we have incurred, and will continue to incurincur, substantial additional legal, accounting, and other expenses that we did not incur as a private company. These efforts and additional expenses may be more costly than we expect, and we may not be able to increase our revenue to offset any increase in our expenses. If our revenue does not grow at a greater rate than our operating expenses, we will not be able to achieve or maintain profitability.

We commenced operations in May 2017, launchedopened our first FORME-focused retail storeslocations in late 2020, commenced delivery of our first FORME Studio in July 2021, commenced delivery our first FORME Studio Lift in August 2022, conducted our first live personal training session in July 2022 and2022, completed our acquisition of CLMBR's assets in February 2024.2024 and completed the acquisition of Wattbike in July 2025. We have a limited history of generating revenue. As a result of our brief operating history, we have limited financial data that can be used to evaluate our current business, including our ability to successfully establish our product and service offerings in the marketplace. Furthermore, while our business has grown and much of that growth has occurred in recent periods, the smart home gym and connected fitness industry, including the market for connected fitness hardware, may not develop or continue to develop in a manner that we expect or that otherwise would be favorable to our business. As a result of our limited operating history and ongoing changes in our new and evolving industry, our historical revenue growth should not be considered indicative of our future performance, and estimates of future revenue growth are subject to many risks and uncertainties and our future revenue may differ materially from our projections. Our revenue growth, if any, may slow or our revenue may decline for a number of other reasons, including reduced demand for our products and services, the impacts to our business from inflation and rising interest rates, which in turn could, among other things, increase financing costs and thus reduce sales of our products, a decrease in the growth or reduction in size of our overall market, a reduction in discretionary spending by consumers, or if we cannot capitalize on growth opportunities. We have encountered, and will continue to encounter, risks and difficulties frequently experienced by emerging companies in rapidly changing industries, including market acceptance of our products and services, attracting and retaining members, and increasing competition and expenses as we expand our business. We cannot be sure that we will be successful in addressing these and other challenges we may face in the future, and our business may be adversely affected if we do not manage these risks successfully. In addition, we may not achieve sufficient revenue to attain or maintain positive cash flows from operations or profitability in any given period, or at all.

We face risks associated with rising interest rates, which could, among other things, negatively impact sales of, and demand for, our products, the ability of customers to make timely payments, and our ability to obtain debt financing on terms acceptable to us, if at all. Historically, a significant percentage of our members have financed their purchase of Wattbike equipment, and to a lesser extent our CLMBR and FORME Studio equipmentequipment, through third-party credit providers with whom we have existing relationships. If our third-party credit providers were to increase interest rates, it could negatively impact potential customers’ ability to finance purchases of our products, which in turn would negatively impact our revenue. In addition, general reductions in consumer lending and the availability of consumer credit as a result of higher interest rates could limit the number of customers with the financial means to purchase our products and could reduce demand for our products and services. Higher interest rates could also increase our costs or the monthly payments for our products financed through other sources of consumer financing, or negatively impact the ability of our customers to make timely payments for our products and services. Third-party financing providers may not continue to provide consumers with access to credit or may reduce available credit limits. Restrictions or reductions in the availability of consumer credit, the loss or deterioration of our relationships with our current financing partners or changes in the terms such entities may provide to our potential customers could have an adverse effect on our business, financial condition, and results of operations. In addition, we will need to raise additional financing to support our operations, which could include equity or debt financing, in the immediate and near term. Rising interest rates would negatively impact our ability to obtain such financing on commercially reasonable terms or at all. Further, to the extent we are required to obtain financing at higher borrowing costs to support our operations, we may be unable to offset such costs through price increases, other cost control measures, or other means. Any attempts to offset cost increases with price increases may result in reduced sales, increased customer dissatisfaction, or otherwise harm our reputation.

We began selling memberships to our VOD platform in 2021 with the delivery of our first FORME Studio, and launched our Live 1:1 personal training service in July 2022. In addition, we began selling theacquired CLMBR in February 2024.2024 and acquired Wattbike in 2025. Accordingly, we have a limited operating history with which to evaluate our subscription model. For example, allmany of our members are on month-to-month membership terms and may cancel their memberships at any time. We have limited historical data with respect to rates of membership renewals, so we may be unable to accurately predict member renewal or retention rates. We measure our membership retention rate by the number of members as of the beginning of the month who have a paid membership with a successful credit card billing of at least three months. Additionally, prior renewal rates may not accurately predict future member renewal rates for a variety of reasons, such as members’ dissatisfaction with our offerings and the cost of our memberships, macroeconomic conditions, or new offering introductions by us or our competitors. If our members do not renew their memberships, our revenue may decline and our business will suffer.

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 netan operating loss of $29.2$19.9 million and used net cash in its operations of $14.8$10.4 million during the year ended December 31, 2024,2025, and had an accumulated deficit of $202.6$227.5 million as of December 31, 2024.2025.

The Company’s available liquidity to fund its operations over the next twelve months beyond the issuance date was limited to approximately $2.3$4.4 million of unrestricted cash and cash equivalents. However, based on the Company’s anticipated liquidity needs, the foregoing available liquidity will not be sufficient to fund the Company’s obligations as they become due over the next year beyond the issuance date due absent management’s ability to secure additional outside capital.

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

Included in the Company’s anticipated liquidity needs is a substantial amount of outstanding debt that is scheduled to mature over the next twelve months beyond the issuance date. As of disclosed in Notes 11, 22, and Note 25, the Company had total outstanding debt, including convertible notes, of approximately $11.1$18.0 million as of the issuance date, of which approximately $7.6$14.8 million is scheduled to mature over the next twelve months beyond the issuance date, for which the Company does not have sufficient liquidity to repay if a cash settlement is required. In the event the Company is unable to refinance its outstanding debt, settle some or all of the debt with shares of the Company’s common or preferred stock, secure additional outside capital, and/or secure amendments or waivers from its lenders to defer or modify the repayment terms, management will be required to seek other strategic alternatives to settle this indebtedness, which may include, among others, a significant curtailment of the Company’s operations, a sale of certain of the Company’s assets, a sale of the entire Company to strategic or financial investors, and/or allowing the Company to become insolvent by filing for bankruptcy protection under the provisions of the U.S. Bankruptcy Code.

changes in our relationship with our third-party financing partner who provides financing assistance to our members for the purchase of our Wattbike, CLMBR and FORME Studio equipment;

constraints on the availability of consumer financing or increased down payment requirements to finance purchases of our Ergatta, Wattbike, CLMBR and FORME Studio equipment;

the continued maintenance and expansion of our delivery, installation, and maintenance services and network for our Wattbike, CLMBR and FORME Studio equipment;

changes in the legislative or regulatory environment, including with respect to cybersecurity, climate change, privacy, consumer product safety, advertising, and employment matters, or enforcement by government regulators, including fines, orders, or consent decrees;

changes in accounting standards, policies, guidance, interpretations, or principles; and changes in business or macroeconomic conditions, including lower consumer confidence, recessionary conditions, increased unemployment rates, or stagnant or declining wages As a result of these and other factors, our results of operations and revenue may vary significantly from period to period. Accordingly, you should not rely on the results of any prior quarterly or annual periods, or any historical trends reflected in such results, as indications of our future revenue or operating performance.

We derive a significant majorityportion of our revenue from sales of ourWattbike CLMBR and FORME Studio equipmentproducts, and if sales of ourthese CLMBR and FORME Studio equipmentproducts decline, it could materially and negatively affect our future revenue and results of operations.

Our CLMBRWattbike andproducts FORME Studio equipment isare sold in highly competitive markets with limited barriers to entry. Introduction by competitors of comparable products at lower price points, a maturing product lifecycle, a decline in consumer spending, or other factors could result in a decline in our revenue derived from our CLMBRWattbike and FORME Studio equipment,products, which maycould have a material adverse effect on our business, financial condition, and results of operations. SalesDespite having been acquired on July 1, 2025, sales of our CLMBRWattbike and FORME Studio equipmentproducts accounted for approximately 78% of revenue in 2022, 60%71% of revenue for the year ended December 31, 2023 and 74% of revenue for the year ended December 31, 2024.2025. As a result, any meaningful decline in sales of our CLMBRWattbike and FORME Studio equipment,products, would materially and adversely affect our business, financial condition, and results of operations. Factors that could adversely affect Wattbike's business include, among others:

Our membership revenue is largely dependent on our ability to sellmaintain ourand grow the Wattbike, CLMBR and FORME Studiosubscriber equipment.bases.

Our customermembership acquisition modelrevenue is generally initiateddependent upon theour saleability to customersretain andsubscribers installation ofto our paid digital platforms at Wattbike, CLMBR and FORME Studio or FORME Studioand Lift,to withgenerate additional revenue generated from sales of new memberships and health coaching services.services, Whilepredominantly membersto new hardware customers. The majority of our memberships are invitedon toa gainmonth-to-month access to our basic VOD membership upon purchase of the CLMBRbasis and FORME Studio or FORME Studio Lift through an account creation process, theymembers can cancel their membership at any time. As a result, our membership and health coaching revenue is largely dependent on our ability to sell our Wattbike, CLMBR and FORME Studio equipment and to engage and retain members to usewith our digital experience and services on an ongoing basis thereafter. If we are unable to expand equipment sales across all of our CLMBRproduct and FORME Studio equipment or tolines, engage new members or to maintain and expand our member base, our business, financial condition, and results of operations may suffer.

If we are unable to sustain competitive pricing levels for our connected fitness hardware products and memberships to the Ergatta, Wattbike, CLMBR and FORME platform,platforms, our business could be adversely affected.

We compete with products and services that are generally sold at lower prices. If we are unable to sustain competitive pricing levels for our connected hardware products, including CLMBR, FORME Studio and FORME Studio Lift,products and our membership and health coaching services, whether due to consumer sentiment and spending power, competitive pressure or otherwise, our financial results and cash flow could be significantly reduced. Further, our decisions around the development of new products and services are partly based on assumptions about pricing levels. If there is price compression in the market after these decisions are made, it could have a negative effect on our business. In addition, while we believe we offer high-quality, differentiated products and services, our pricing levels may be higher than those of our competitors. Our ability to maintain our pricing levels depends on several factors, including our brand recognition, product design and technology features and quality, innovative content, and public perception of our company. If we are unable to sustain our pricing levels due to these or other factors, our ability to attract new members and our business, financial condition, and results of operations could be harmed.

The smart home gym and connected fitness market is relatively new, rapidly growing,growing and largely unproven, and it is uncertain whether this market will achieve or sustain high levels of demand and achieve wide market acceptance. In addition, while we experienced some positive impact on demand for our product, as a result of the COVID-19 pandemic, we cannot predict the potential impact on our business if the pandemic continues to evolve. Our success depends substantially on the willingness of consumers to widely adopt our products and services. To be successful, we will have to make significant investments in the education of consumers about our products and services and provide quality products, content,content and member experienceexperiences that isare superior to the products, content, and experiences provided by our competitors. Additionally, the fitness and wellness market is heavily saturated, and the demand for and market acceptance of new products and services in the market is uncertain. We cannot assure you that the connected fitness market will continue to develop, that the public’s interest in smart home gym and connected fitness will continue, or that our products and services will be widely adopted.

If we fail to cost-effectively attract new members, or to increase utilization of the Ergatta, Wattbike, CLMBR and FORME platform from existing members, our business, financial condition, and results of operations could be harmed.

Our success depends in part on our ability to cost-effectively attract new members, retain existing members and increase membership rates across all of theour CLMBR and FORME platform.platforms. Members have a wide variety of fitness options, including at-home fitness equipment and content, fitness clubs, in-studio fitness classes, in-person personal training, and health and wellness apps. To expand our member base, we must have the ability to appeal to individuals who have historically used other methods of personal fitness and training or who have not previously used personal fitness and training or regularly exercised. Our reputation, brand,brands, and ability to build trust with existing and new members may be adversely affected by complaints and negative publicity about us, our offerings, our pricing and policies, trainers and fitness instructors on theour CLMBR and FORME platform,platforms, or our competitors, even if factually incorrect or based on isolated incidents. Further, if existing and new members do not perceive the services provided by trainers and fitness instructors on the CLMBR and FORME platform to be helpful, effective, engaging, or affordable, or if we fail to offer compelling offerings, services, content, and features on theour FORME platform,platforms, we may not be able to attract or retain members or to increase their utilization of the CLMBR and FORME platform.utilization. If we fail to continue to grow our member base, retain existing members, or increase the overall utilization of theour FORME platformplatforms by existing members, our business, financial condition, and results of operations could be adversely affected.

Our success depends on our ability to develop and maintain the value and reputation of the Ergatta, Wattbike, CLMBR and FORME brands.

We also sell Wattbike and CLMBR equipment and the FORME platform to commercial and wellness customers, which exposes us to additional business and financial risks. In addition, if we fail to successfully expand our commercial and corporate wellness business, it could negatively impact our ability to grow our business and gain market share.

We also sell Wattbike and CLMBR equipment and the FORME platform to commercial and wellness customers. For example, we are actively installing our products in hotels, resorts, and other commercial environments such as boutique hotels, luxury apartments, and private condominiums, as well businesses with which we establish corporate wellness partnerships for the benefit of their employees. For commercial customers, we typically sell our connected hardware products with a three-year content membership paid up front, plus we offer an extended warranty program. In addition, many of the risks associated with our individual members are often exacerbated or heightened in the commercial or corporate environment. For example, the equipment we install at these locations may be used more frequently and by a larger group of users, which may increase the rate of wear and tear or the risk of product malfunction or injury in connection with the use of our equipment. This in turn could expose us to liability claims, warranty expense, and damage to our brand and reputation, among other risks, any of which could harm our reputation, business, financial condition, and results of operations. If we fail to successfully expand our commercial and corporate wellness business, it could harm our ability to grow our business, gain market share, and expand our brand.

We have expanded our operations rapidly and have limited operating experience at our current scale of operations. For example, we commenced commercial delivery of the FORME Studio in July 2021, launched our Live 1:1 personal training service in July 2022, delivered our FORME Studio Lift in August 2022 and2022, completed the acquisition of CLMBR's assets in February 2024.2024 and completed the Wattbike acquisition in July 2025. As we continue our transition from initial product development to mass production and commercial shipment of our products, we have experienced, and may in the future experience, adjustments in our business operations and headcount. For example, as a result of completing development and commencing mass production of the FORME Studio Lift and in response to economic headwinds, we reduced the size of our engineering team in 2022 and expect to continue to reallocate our personnel resources to support our ongoing product development efforts while also increasing our focus on marketing and sales and building our brand. Our headcount reduction in July of 2022 comprised approximately 26% of our full-time employee base at the time of such reduction. We had a subsequent headcount reduction in December of 2022, comprising approximately 50% of our full-time employee base at the time of such reduction. We expect our headcount to fluctuate in the near term but to grow over the longer term as we continue to grow our business and expand our target markets. Further, we expect that our business and operations will become increasingly complex as we grow our business. To effectively manage and capitalize on our growth, we must continue to expand our sales and marketing, focus on innovative product and content development, and upgrade our management information systems and other processes. Our continued growth could strain our existing resources, and we could experience ongoing operating difficulties in managing our business, including difficulties in hiring, training, and managing a diffuse and growing employee base. Failure to scale and preserve our company culture with growth could harm our future success, including our ability to retain and recruit personnel and to effectively focus on and pursue our corporate objectives. Moreover, the vertically integrated nature of our business, where we design and develop our own CLMBR and FORME Studio equipment and accessories, and software, produce original fitness and wellness programming, recruit, train, and educate personal trainers, sell our products exclusively through our own sales teams and e-commerce site, and coordinate the delivery, installation, and service of our CLMBR and FORME Studio equipment with our third-party logistics providers, exposes us to risk and disruption at many points that are critical to successfully operating our business and may make it more difficult for us to scale our business. For example, we utilize both air and ocean shipment for our CLMBR and FORME Studio equipment and our limited history with commercial shipment of our products has in the past, and may in the future, result in delays in delivery and installation. If we do not adapt to meet these evolving challenges, or if our management team does not effectively scale with our growth, we may experience erosion to our brand, the quality of our products and services may suffer, and our company culture may be harmed.

Maintaining and promoting awareness of the Ergatta, Wattbike, CLMBR and FORME platformplatforms is important to our ability to retain existing,existing customers and to attract new,new customers.ones. To facilitate our future growth and profitability, we are investing in our advertising, promotion, public relations, and marketing programs. These brand promotion activities may not yield increased revenue and the efficacy of these activities will depend on a number of factors, including our ability to do the following:

Implementing new marketing and advertising strategies also could increase the risk of devoting significant capital and other resources to endeavors that do not prove to be cost effective or provide a meaningful return on investment. We also may incur marketing and advertising expenses significantly in advance of recognizing revenue associated with such expenses and our marketing and advertising expenditures may not generate sufficient levels of brand awareness or result in increased revenue. Even if our marketing and advertising expenses result in increased sales, the increase might not offset our related expenditures. If we are unable to maintain our marketing and advertising channels on cost-effective terms or replace or supplement existing marketing and advertising channels with similarly or more effective channels, our marketing and advertising expenses could increase substantially,substantially and our brand, business, financial condition, and results of operations could suffer.

All of our products are manufactured by independent third-party contract manufacturers. We do not have long-term contracts with our third-party contract manufacturers, and instead,instead order from these manufacturers on a purchase order basis. Under certain circumstances, we may be required to, or may voluntarily, recall or withdraw products.

A widespread recall or withdrawal of any of our products may negatively and significantly impact our sales and profitability for a period of time and could result in significant losses depending on the costs of the recall, destruction of product inventory, reduction in product availability, and reaction of competitors and consumers. We may also be subject to claims or lawsuits, including class actions lawsuits (which could significantly increase any adverse settlements or rulings), resulting in liability for actual or claimed injuries or death. Any of these events could adversely affect our business, financial condition and results of operations. Even if a product liability claim or lawsuit is unsuccessful or is not fully pursued, the negative publicity surrounding any assertion that our products caused physical harm could adversely affect our reputation with existing and potential consumers and itsour corporate and brand image. Moreover, claims or liabilities of this sort might not be covered by insurance or by any rights of indemnity or contribution that we may have against others. A product liability judgment against us or a product recall could adversely affect our business, financial condition and results of operations.

We currently work with third-party logistics providers to handle shipment and delivery of our connected fitness hardware products, including theWattbike, CLMBR, FORME Studio and FORME Studio Lift. Our third-party logistics providers also facilitate white glovewhite-glove installation services of our products. Our in-house field operations team is responsible for training our third-party logistics providers on how to safely and correctly install our products, coordinating shipment and delivery matters, and communicating with our members throughout the entire pre-installation process. We do not have any minimum or long-term binding commitments with our third-party logistics providers and are generally billed upon shipment of the freight and believe alternative third-party logistics services would be available if needed. Our members also rely on our member support services to resolve any issues related to the use of our CLMBR and CLMBR platform and FORME Studio equipment and FORME platform.platforms. Providing a high-quality member experience is vital to our success in generating word-of-mouth referrals to drive sales and for retaining existing members. The importance of high-quality support will increase as we expand our business and introduce new products and services. If we do not help our members quickly resolve issues and provide effective ongoing support, our reputation may suffer and our ability to retain and attract members, or to sell additional products and services to existing members, could be harmed.

As a creator and distributor of fitness and wellness content, we face potential liability for negligence, copyright and trademark infringement, or other claims based on the nature and content of materials that we acquire, produce, license and/or distribute. We also may face potential liability for content used in promoting our service, including marketing materials. We are devoting more resources toward the development, production, marketing and distribution of our fitness and wellness content. We believe that original content can help differentiate our service from other offerings, enhance our brand and otherwise attract and retain members. To the extent our fitness and wellness content does not meet our expectations, in particular, in terms of costs, usage, and popularity, our business, including our brand and results of operationsoperations, may be adversely impacted. As we expand our fitness and wellness content, we continue to be responsible for production costs and other expenses. We also take on risks associated with production, such as completion and key talent risk with respect to our trainers and fitness instructors. We also contract with third parties related to the development, production, marketing and distribution of our fitness and wellness content. We may face potential liability or may suffer significant losses in connection with such arrangements, including, but not limited to, if such third parties violate applicable law, become insolvent or engage in fraudulent behavior. To the extent we license rights of our fitness and wellness content to third parties, we could become subject to product liability, intellectual property or other claims related to such merchandise. We may decide to remove content from our service, not to place licensed or produced content on our service, or discontinue or alter production of our original content if we believe such content might not be well received by our members, or could be damaging to our brand or business. To the extent we, in the future, do not accurately anticipate costs or mitigate risks, including for content that we produce but ultimately does not appear on or is removed from our service, or if we incur liability for content we acquire, produce, license and/or distribute, our business may suffer. Litigation to defend these claims could be costly and the expenses and damages arising from any liability or unforeseen production risks could harm our results of operations. We may not be indemnified against claims or costs of these types and we may not have insurance coverage for these types of claims.

We rely on a limited number of suppliers to manufacture, transport, and install our Wattbike, CLMBR and FORME Studio equipment, which exposes us to supply chain and other risks. We have previously experienced, and may experience in the future, production, shipping, or logistical constraints that cause delays. Although we believe we have redundancy and alternatives for the manufacturers and suppliers for the key components of our products, our reliance on a limited number of manufacturers for the components and parts for our Wattbike, CLMBR and FORME Studio equipment and the geographic concentration among our suppliers increase our supply chain risk. In addition, we do not have long-term binding commitments with any of our manufacturers and suppliers and instead operate on a purchase order basis. Therefore, we have no guarantee that they will continue to manufacture or supply products or components for us on an ongoing basis. In the event of interruption from any of our manufacturers, we may not be able to replace or increase capacity from other sources or develop alternate or secondary sources without incurring material additional costs and substantial delays. Furthermore, our manufacturing partners’ primary facilities are located in Taiwan. Thus, our business could be adversely affected if one or more of our suppliers is impacted by a natural disaster or other interruption at a particular location.

inability to satisfy demand for our Wattbike, CLMBR and FORME Studio equipment;

limited ability to monitor the manufacturing process and components or parts used in our Wattbike, CLMBR and FORME Studio equipment;

shortages of materials or components or parts included in our Wattbike, CLMBR and FORME Studio equipment;

In addition, we do not have long-term binding commitments with any manufacturers and suppliers and instead operate on a purchase order basis. We also rely on our logistics partners, including our warehouse and delivery partners, to complete a substantial percentage of our deliveries to members, with the rest of the deliveries handled by our own white glovewhite-glove delivery and installation team. Our primary delivery and installation partner relies on a network of independent contractors to perform delivery and installation services for us in many markets. If any of these independent contractors, or the delivery and installation partner as a whole, do not perform their obligations or meet the expectations of us or our members, our reputation and business could suffer.

Our ability to maintain and expand our business depends on our ability to obtain timely and adequate delivery of components and parts for our Wattbike, CLMBR and FORME Studio equipment. The majority of the components and parts that go into the manufacturing of our CLMBR and FORME Studiothis equipment are sourced from a limited number of third-party suppliers, and some of these components or parts are provided by a single supplier based in Taiwan. In addition, the global semiconductor supply shortage is having wide-ranging effects across multiple industries. We have experienced, and may continue to experience, direct and indirect adverse impacts on our business, including delays in securing certain components, including semiconductors, offor our Wattbike, CLMBR and FORME Studio equipment. Our manufacturers generally purchase these components or parts on our behalf, subject to certain approved supplier lists, and we do not have long-term arrangements with most of our component or parts suppliers. We are therefore subject to the risk of shortages and long lead times in the supply of these components or parts and the risk that our suppliers discontinue or modify components or parts used in our Wattbike, CLMBR and FORME Studio equipment. In addition, the lead times associated with certain components or parts are lengthy and preclude rapid changes in design, quantities, and delivery schedules. We may in the future experience component shortages, and the predictability of the availability of these components or parts may be limited. In the event of a component shortage or supply interruption from suppliers of these components or parts, we may not be able to develop alternate sources in a timely manner. While we believe we can obtain alternative sources of supply on commercially reasonable terms if needed, developing alternate sources of supply for these components or parts may be time-consuming, difficult, and costly and there can be no assurance that we will be able to source these components or parts on terms that are acceptable to us, or at all, which may undermine our ability to fill our orders in a timely manner. Any interruption or delay in the supply of any of these components or parts, or the inability to obtain these components or parts from alternate sources at acceptable prices and within a reasonable amount of time, would harm our ability to meet our scheduled deliveries to our members.

Moreover, volatile global economic conditions may make it more likely that our suppliers may be unable to timely deliver supplies, or at all, and there is no guarantee that we will be able to timely locate alternative suppliers of comparable quality at an acceptable price. Several of the components or parts that go into the manufacturing of our Wattbike, CLMBR and FORME Studio equipment are sourced internationally, including from China, where the United States has imposed tariffs on specified products imported therefrom following the U.S. Trade Representative Section 301 Investigation. These tariffs have an impact on our component costs and have the potential to have an even greater impact depending on the outcome of the current trade negotiations, which have been protracted and recently resulted in increases in U.S. tariff rates on specified products from China. Increases in our component costs could have a material effect on our gross margins. The loss of a significant supplier, an increase in component costs, or delays or disruptions in the delivery of components or parts, could adversely impact our ability to generate future revenue and earnings and have an adverse effect on our business, financial condition, and results of operations.

The following discussion of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and the related notes and other informationthereto for the yearyears ended December 31, 20242025 and 20232024 included elsewhere in this annual report on Form 10-K. Historic results are not necessarily indicative of future results. Some of the information contained in this discussion and analysis or set forth elsewhere in this annual report on Form 10-K, including information with respect to our plans and strategy for our business, includes forward-looking statements based upon current plans, expectations and beliefs that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of this annual report on Form 10-K, our actual results could differ materially from the results described in or implied by these forward-looking statements. You should carefully read the “Risk Factors” section to gain an understanding of the important factors that could cause actual results to differ materially from our forward-looking statements. Please also see the section of this annual report on Form 10-K titled “Special Note Regarding Forward-Looking Statements.”

Interactive Strength Inc. is the parent company of twothree leading brands serving the commercial and at-home markets with specialty fitness equipment and virtual training:; Wattbike, CLMBR and FORME. Wattbike, acquired in July of 2025, offers a range of high-performance indoor bikes that set the global standard in cycling. Known for unmatched accuracy, realistic ride feel, and advanced performance tracking, Wattbike is trusted by elite athletes, national teams, and fitness enthusiasts around the world. CLMBR manufacturesoffers a premium vertical climbing equipmentexperience through its patented open-frame design and providesimmersive touchscreen, delivering a uniquehigh-intensity, digitallow-impact workout that’s both efficient and on-demandeffective. FORME delivers strength, mobility, and recovery training platform.through FORMEimmersive iscontent, performance-grade hardware, and expert coaching. Its wall-mounted systems include the Studio, a hardware manufacturer and digitalsmart fitness servicemirror providerfor thatguided combinesprogramming award-winning smart gyms withand live 1:1 personal training, and the Lift, which adds smart resistance cable training—ideal (fromfor realhigh-performance humans)environments toand deliversport-specific an immersive experience.development. The combination of technology with expert training leads to better outcomes for both consumers and trainers alike. Wattbike, CLMBR and FORME each offer unique fitness solutions for both the commercial and at-home markets.

May 2017 – FORMEInteractive Strength Inc. founded

July 2021 – Commenced commercial delivery of FORME Studio (fitness mirror), our first connected fitness hardware product July 2022 – Live 1:1 personal training service launched August 2022 – Commenced commercial delivery of FORME Studio Lift (fitness mirror and cable-based digital resistance) April 2023 – Interactive Strength went public on NASDAQ with ticker symbol "TRNR" February 2024 – Acquired substantially all of the assets of CLMBR, Inc.

March 2026 - Acquired all of the outstanding equity interests of Ergatta, Inc. ("Ergatta") Our revenue is primarily generated from the sale of our connected fitness hardware products and associated recurring membership revenue. As we launched our first connected fitness hardware product in July 2021, we began generating revenue from sales of our products starting in the second half of 2021.

During the years ended December 31, 20242025 and 2023,2024, we generated total revenue of $5.4$11.5 million and $1.0$5.4 million, respectively, and incurred net losses of $(34.9)$24.0 million and $(51.4)$34.9 million, respectively. As we generated recurring net losses and negative operating cash flow duringsince the research and development stage of the FORME Studio and FORME Studio Lift products,inception, we have funded our operations primarily with gross proceeds from the sales of our redeemable convertible preferred stock, the sale of our SAFE notes, the issuance of convertible notes, the issuance of promissory notes,notes to unrelated and related parties, and the issuance of common stock.

We acquired CLMBR, Inc. in February 2024 and Wattbike on July 1, 2025. In addition, on March 11, 2026, we completed the acquisition of Ergatta, a connected fitness company that is considered a pioneer in game-based connected fitness. We expect that we will be able to acquire additional revenue-generating businesses, which would generate higher earnings and cashflowcashflows through synergies with our existing business. Our team hasbrings significant experience inwith M&A transactions and we are one of the few companies in our industry with apublicly publictraded currency,equity securities, which we believe makes us an attractive acquiror.acquirer.

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

We intend to expand the international reach of our productexisting brands by leveraging in-market relationships and servicesales offerings.infrastructure Withacross morethe than 180 million people belonging to gyms globallybrands in 2019,our according to IHRSA, we believe there is significant opportunity to grow internationally.portfolio. For example, with Wattbike, which is based in the United Kingdom, we are currently evaluating potential internationalexpansion expansionof that brand in the UnitedUS, Kingdomwhere FORME, CLMBR and Canada,Ergatta have well established routes to market in both commercial and residential markets, although we have not yet made any definitive plans regarding such expansion or the potential timing thereof. We plan to continue to pursue disciplined international expansion by targeting countries with highsound fitnessmacroeconomic penetrationconditions, favorable growth trends and spend,stable asregulatory wellenvironments, asand theimportantly, presence of boutique fitness,those where we believehave both CLMBRfootholds and FORME’slow valuerisk propositionsroutes willto resonate.market through our existing brand relationships and in market presence.

Expand corporateB2B wellnessChannel

Our membership revenue is largely dependent on our ability to sell our CLMBR,Ergatta, Wattbike, CLMBR and FORME Studio equipment and if sales of our FORME Studiosuch equipment decline, our membership revenue would decline, and it would materially and negatively affect our future revenue and results of operations. Similarly, we may be unable to attract and retain members, which could have an adverse effect on our business and rate of growth.

We have experienced, and expect to continue to experience, some disruptions to parts of our supply chain, including procuring necessary components or parts in a timely fashion, with suppliers increasing lead times or placing products on allocation and raising prices. In addition, disruptions to commercial transportation infrastructure have increased delivery times for materials and components or parts offor our fitness equipment, and has impacted, and could in the future impact, our ability to timely deliver our products to customers. TheseWhile these supply chain disruptions have resulted in operational challenges, including extended customer order lead times and periodic product allocation, they have not materiallyhad affecteda material adverse effect on our business outlook and goals or our operating results, including our sales, revenue,revenue or liquidity or capital resources,resources for the year ended December 31, 2025, and we have not implemented any significant mitigation efforts to date as a result. However, we cannot predict the impact to us of any future or prolonged supply chain disruptions or any mitigation efforts we may take going forward. For example, as a result of these supply chain disruptions, we may be required to increase customer order lead times and place some products on allocation. In addition, we may consider additional or alternative third-party manufacturing and logistics providers or suppliers. Such mitigation efforts may result in cost increases and any attempts to offset such increases with price increases may result in reduced sales, increased customer dissatisfaction, or otherwise harm our reputation. Further, if we were to elect to transition or add manufacturing or logistics providers or suppliers, it may result in temporary or additional delays in product delivery or risks related to consistent product quality or reliability. This in turn may limit our ability to fulfill customer orders and we may be unable to satisfy all of the demand for our products. We may in the future also purchase components further in advance, which in return can result in less capital being allocated to other activities such as marketing and other business needs. We cannot quantify the impact of such disruptions at this time or predict the impact of any mitigation efforts we may take in response to supply chain disruptions on our business, financial condition, and results of operations.

Connected Fitness ProductProducts

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

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

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

General and administrative expenseexpenses includesinclude personnel-related expenses and facilities-related costs primarily for our executive, finance, accounting, legal, human resources, and IT functions. General and administrative expenseexpenses also includes amortization of capitalized internal use software costs andinclude fees for professional services principally comprised of legal, audit, tax and accounting services, and insurance.

We expect to incur additional general and administrative expenses as a result of operating as aan acquisition-focused public company, including expenses related to compliance and reporting obligations required of public companies, and increased costs for insurance, investor relations expenses, and professional services. As a result, we expect that our general and administrative expenses will increase in absolute dollars in future periods and vary from period to period as a percentage of revenue, but we expect to leverage these expenses over time as we grow our revenue and member base.

Other (expense) income, net consists of expenses associated with the issuance of convertible notes that were recognized at fair value, unrealized currency gains and losses, loss on exchange of warrants for equity, and fair value of issuance of Loss Restoration Agreement derivative.

Interest expense consists of interest associated with the related party loans, term loans,our convertible notes, senior secured notes and waiverloans consideration granted to December 2023 Notes and Equity Line of Credit.payable.

The change in fair value of earn out consists of the change in the fair value of the outstanding contingent considerationsconsideration liabilities since the previous reporting period.

The following tables set forth our consolidated results of operations in dollars and as a percentage of total revenue for the periods presented. The period-to-period comparison of our historical results are not necessarily indicative of the results that may be expected in the future.

For the years ended December 31, 20242025 and 2023,2024, $0.6$0.4 million and $0.9$0.6 millionmillion, respectively, of stock-based compensation was capitalized as internally developed software costs, respectively.costs.

Our acquisition of ErgattaErgatta, or other potential acquisitions, does not provide assurance that the operations of Ergatta or other acquired businesses will be accretive to our earnings or otherwise improve our results of operations.

Interactive Strength Inc. ("we", "us" or the "Company") is the parent company 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 in July of 2025, offers a range of high-performance indoor bikes that set the global standard in cycling. Known for unmatched accuracy, realistic ride feel, and advanced performance tracking, Wattbike is trusted by elite athletes, national teams, and fitness enthusiasts around the world. Ergatta, acquired in March 2026, is a game-based connected fitness company. CLMBR offers a premium vertical climbing experience through its patented open-frame design and immersive touchscreen, delivering a high-intensity, low-impact workout that’s both efficient and effective. FORME delivers strength, mobility, and recovery training through immersive content, performance-grade hardware, and expert coaching. Its wall-mounted systems include the Studio, a smart fitness mirror for guided programming and live 1:1 personal training, and the Lift, which adds smart resistance cable training—ideal for high-performance environments and sport-specific development. The combination of technology with expert training leads to better outcomes for both consumers and trainers alike. Wattbike, Ergatta, CLMBR and FORME each offer unique fitness solutions for both the commercial and at-home markets.

March 2026 - Acquired all of the outstanding equity interests of Ergatta, Inc. ("Ergatta") OurJuly revenue2026 - Executed a purchase agreement to acquire all of the outstanding shares of STEPR Inc. ("STEPR"), which is primarilyexpected generatedto fromclose late in the salethird quarter of our connected fitness hardware products and associated recurring membership revenue.2026.

During the threesix months ended MarchJune 31,30, 2026 and 2025, we generated total revenue of $5.1$11.8 million and $1.4$2.6 million, respectively, and incurred net losses of $10.7$17.8 million and $6.6$8.8 million, respectively. As we generated recurring net losses and negative operating cash flow since inception, we have funded our operations primarily with gross proceeds from the issuance of convertible notes, the issuance of promissory notes to unrelated and related parties, and the issuance of common stock.

We acquired CLMBR, Inc. in February 2024 and Wattbike on July 1, 2025. In addition, on March 11, 2026, we completed the acquisition of Ergatta, a connected fitness company that is considered a pioneer in game-based connected fitness. We expect that we will be able to acquire additional revenue-generating businesses, such as STEPR, which would generate higher earnings and cashflows through synergies with our existing business. Our team brings significant experience with M&A transactions and we are one of the few companies in our industry with publicly traded equity securities, which we believe makes us an attractive acquirer.

We have experienced, and expect to continue to experience, some disruptions to parts of our supply chain, including procuring necessary components or parts in a timely fashion, with suppliers increasing lead times or placing products on allocation and raising prices. In addition, disruptions to commercial transportation infrastructure have increased delivery times for materials and components or parts for our fitness equipment, and has impacted, and could in the future impact, our ability to timely deliver our products to customers. While these supply chain disruptions have resulted in operational challenges, including extended customer order lead times and periodic product allocation, they have not had a material adverse effect on our revenue or liquidity or capital resources for the threesix months ended MarchJune 31,30, 2026, and we have not implemented any significant mitigation efforts to date as a result. However, we cannot predict the impact to us of any future or prolonged supply chain disruptions or any mitigation efforts we may take going forward. For example, as a result of these supply chain disruptions, we may be required to increase customer order lead times and place some products on allocation. In addition, we may consider additional or alternative third-party manufacturing and logistics providers or suppliers. Such mitigation efforts may result in cost increases and any attempts to offset such increases with price increases may result in reduced sales, increased customer dissatisfaction, or otherwise harm our reputation. Further, if we were to elect to transition or add manufacturing or logistics providers or suppliers, it may result in temporary or additional delays in product delivery or risks related to consistent product quality or reliability. This in turn may limit our ability to fulfill customer orders and we may be unable to satisfy all of the demand for our products. We may in the future also purchase components further in advance, which in return can result in less capital being allocated to other activities such as marketing and other business needs. We cannot quantify the impact of such disruptions at this time or predict the impact of any mitigation efforts we may take in response to supply chain disruptions on our business, financial condition, and results of operations.

Some of the estimates and assumptions we have to make under U.S. GAAP require very difficult, subjective and/or complex judgments about matters that are inherently uncertain and, as a result, we have identified those as critical accounting estimates, which are considered critical to an understanding of our historical financial condition and results of operations and are reasonably likely to have a material impact on our future results of operations and financial condition. Critical accounting estimates include those used in estimating the fair value of our convertible notes, preferred stock recognized as liabilities, warrants issued in conjunction with the issuance of such convertible notes, assumptions used in determining the valuation allowance for our deferred tax assets and the impairment of goodwill and intangible assets and estimates and assumptions used in determining the fair value of consideration paid and liabilities assumed in business combinations. For a description of our significant accounting policies, see Note 2 to the Consolidated Financial Statements.

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Subsequent changes in fair value of these financial assets and liabilities are recognized in earnings when they occur. Our financial instruments that are carried at fair value in our consolidated financial statements consist of convertible notes, warrants and embedded derivative liabilities associated with the issuance of convertible notesnotes, preferred stock accounted for as liabilities and contingent consideration related to acquisition transactions. The fair value of these instruments that are measured at each accounting period are generally determined using Monte Carlo simulations or discounted cash flow analyses and are largely based on unobservable inputs to the valuation methodology (Level 3 inputs - see Note 13 to the Consolidated Financial Statements).

Our annual goodwill impairment assessment at October 1, 2025 was performed based on our determination that Wattbike, CLMBR and FORME comprise a single reporting unit based on the guidance provided in Accounting Standards Codification ("ASC") 350, and we performed a quantitative analysis using a combination of income and market approaches. Our reporting unit had fair values in excess of their carrying values, resulting in no impairment of goodwill. We have also determined, with respect to future assessments of goodwill impairment, that Ergatta will also be included in a single reporting unit.

In accordance with ASC 805, Business Combinations, liabilities for contingent consideration assumed in business acquisitions are recorded at fair value at the date of acquisition, with changes in the fair value recorded through earnings at each reporting period. We assess the fair value of this liability based on our estimate of the likelihood that sales projections or forecasted free cash flow, as defined, will be achieved and that the contingent payment will be earned. For the threesix months ended MarchJune 31,30, 2026 and 2025, we recorded losses on changes in fair value of contingent consideration of $26,000$0.5 andmillion $0, respectively, and for the years ended December 31, 2025 and 2024, we recorded gains on changes in fair value of contingent consideration of $0.2 million and $1.3 million, respectively.

As permitted under ASC Topic 825, Financial Instruments, we have elected the fair value option to account for some of our convertible notes that were issued in 2025 and 2024 (see Note 11 to the Consolidated Financial Statements). In accordance with ASC Topic 825, we record these convertible notes at fair value with changes in fair value recorded as a component of other income (expense), net in the accompanying consolidated statements of operations and comprehensive loss. The convertible notes for which we elected the fair value option are valued using a discounted cash flow analysis or Monte Carlo Simulation model, and the assumptions used therein are discussed in Note 13 to the Consolidated Financial Statements. For the threesix months ended MarchJune 31,30, 2026 and 2025, we recorded lossesa (loss) gain on the change in fair value of convertible notes of $1.4($1.6) million and $0.6$6.6 million, respectively, and for the years ended December 31, 2025 and 2024, we recognized a gain (loss) on changes in fair value of convertible notes of $28.6 million and ($0.1 million), respectively.

In connection with convertible notes that we issued in 2026 and 2025 for which we did not elect the fair value option, we issued warrants to purchase our Common Stock which did not meet the requirements for equity classification, and are therefore classified as long-term liabilities in the accompanying consolidated balance sheets with changes in fair value recognized in earnings at each reporting period. We generally utilize a Black-Scholes option pricing model to determine the fair value of these liabilities. For the threesix months ended MarchJune 31,30, 2026 and 2025 we recognized gains on changes in the fair values of warrants of $0.7$0.8 million and $0.4$1.0 million, respectively, and for the years ended December 31, 2025 and 2024, we recognized gains on changes in fair value of warrants of $2.8 million and $9.3 million, respectively.

We also recognized derivative liabilities related to these convertible notes for the embedded conversion options contained in the notes, which are also measured at fair value with changes in fair value recorded in earnings in each reporting period. The fair value of these liabilities are generally determined using a Monte Carlo Simulation model, and the key inputs into the model are disclosed in Note 13 to the consolidated financial statements. For the threesix months ended MarchJune 31,30, 2026 and 2025, we recognized a gain and loss on the changes in fair values of derivatives of $0.3$0.2 million and $1.5$1.9 million, respectively, and for the years ended December 31, 2025 and 2024, we recognized a gain and loss on changes in fair value of derivatives of $0.5 million and $0.5 million, respectively.

We maintain a full valuation allowance against all of our net deferred tax assets, and as a result we have historically not recorded an income tax benefit in the accompanying consolidated financial statements despite continued losses since inception. This valuation allowance reflects our assessment of whether it is more likely than not that we will generate sufficient taxable income in the future to be able to utilize our deferred tax assets. In determining whether a valuation allowance is warranted, we evaluate factors such as prior earnings history, expected future earnings, carryback and carryforward periods and tax strategies. Evaluation of these factors requires our management to make certain estimates, assumptions and judgments. We consider all positive and negative evidence to estimate if sufficient future taxable income will be generated to realize our deferred tax assets, and we consider cumulative losses in recent years to be a significant type of negative evidence. As of MarchJune 31,30, 2026 and 2025, we determined that it is more-likely-than-not that our federal and state deferred tax assets will not be realized.

Under Section 107(b) of the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, an “emerging growth company” can delay the adoption of new or revised accounting standards until such time as those standards would apply to private companies. We have elected this exemption to delay adopting new or revised accounting standards until such time as those standards apply to private companies. Where allowable, we have early adopted certain standards as described in Note 2 to our consolidated financial statements included in the 2025 10-K. As a result, our consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates. We will continue to remain an “emerging growth company” until the earliest of the following: (i) the last day of the fiscal year following the fifth anniversary of the date of the completion of our initial public offering; (ii) the last day of the fiscal year in which our total annual gross revenue is equal to or more than $1.235 billion; (iii) the date on which we have issued more than $1 billion in nonconvertible debt during the previous three years; or (iv) the date on which we are deemed to be a large accelerated filer under the rules of the SEC. We are also a “smaller reporting company,” meaning that the market value of our stock held by non-affiliates is less than $700.0 million and our annual revenue is less than $100.0 million during the most recently completed fiscal year. We may continue to be a smaller reporting company if either (i) the market value of our stock held by non-affiliates is less than $250.0 million or (ii) our annual revenue is less than $100.0 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700.0 million. If we are a smaller reporting company at the time we cease to be an emerging growth company, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

Connected Fitness Product revenue consists of sales of our connected fitness products and related accessories, delivery and installation services, and extended warranty agreements offered through a third-party. Fitness Product revenue is recognized at the time of delivery, except for extended warranty revenue which is recognized over the warranty period. For the third-party extended warranty service sold along with the connected fitness products, we do not obtain control of the warranty before transferring it to the customers. Therefore, we account for revenue related to the fees paid to the third-party extended warranty provider on a net basis, by recognizing only the net commission we retain. Connected fitness product revenue represented 87% and 77% of total revenue for the three months ended March 31, 2026 and 2025, respectively.

Membership revenue consists of revenue generated from our monthly Connected Fitness membership. Membership revenue represented 12% and 13% of total revenue for the three months ended March 31, 2026 and 2025, respectively. With the recent acquisition of Ergatta, we expect our membership revenue to increase overall and as a percentage of total revenue during the remainder of 2026.

Training and other revenue consists of sales of our personal training services delivered through our connected fitness products and third-party mobile devices, and also includes license revenue generated by Ergatta. Training revenue is recognized at the time of delivery. Training and other revenue represented 2% and 10% of total revenue for the three months ended March 31, 2026 and 2025, respectively.

Research and development expense primarily consists of personnel and facilities-related expenses, engineering costs, consulting and contractor expenses, tooling and prototype materials, and software platform expenses. We capitalize certain qualified costs incurred in connection with the development of internal-use software and software to be sold or marketed which may also cause research and development expenses to vary from period to period.

(Loss) gain upon extinguishment of debt and accounts payable (Loss) gain on debt extinguishment and accounts payable is primarily the result of gains or losses incurred upon conversion of convertible notes and loans payable into equity, or an exchange of debt instruments.

Results of Operations for the Three and Six Months Ended MarchJune 31,30, 2026 and 2025 The following tables set forth our condensed consolidated results of operations for the periodsthree presented.months Theended period-to-periodJune comparisons30, 2026 and 2025, which we sometimes refer to as our second fiscal quarter, and for the six months ended June 30, 2026 and 2025. Due to the acquisitions of Wattbike and Ergatta during the past 12 months, our historicalresults resultsof operations are not necessarilycomparable indicativeyear ofover the results that may be expected in the future.year.

For the three and six months ended MarchJune 31,30, 20262025, $0.1 million and 2025, $0 and $0.3$0.5 million, respectively, of stock-based compensation was capitalized as software costs. No stock-based compensation was capitalized for the three and six months ended June 30, 2026.

ComparisonThe following table shows the components of our consolidated revenue for the three and six months ended MarchJune 31,30, 2026 and 2025:

Fitness product revenue increased by $3.4 million,million orto 324%,$4.4 million for the three months ended MarchJune 31,30, 20262026, as compared to $0.9 million for the three months ended MarchJune 31,30, 2025. The increase inwas Fitness Product revenue wasmainly the result of $4.2$3.7 million of revenuerevenues associated with Wattbike, which was acquired on July 1, 2025, and $0.6 million of revenues associated with Ergatta, acquired on March 11, 2026, partially offset by a decreasedecreases in Forme and CLMBR revenue in 2026.

Fitness product cost of revenue increased by $2.1$6.8 million,million orto 232%,$8.8 million for the threesix months ended MarchJune 31,30, 20262026, as compared to $2.0 million for the three6 months ended MarchJune 31,30, 2025. The increase iswas primarily due to the cost of revenuerevenues associated with Wattbike,Wattbike whichand wasErgatta acquiredof on$7.9 Julymillion 1,and 2025.$0.7 million, respectively, in 2026, partially offset by decreases in Forme and CLMBR revenue.

Training and other cost of revenue decreasedwas $0.2 million, or 61%,million for the three months ended MarchJune 31,30, 2026 as compared to $0.1 million for the three months ended MarchJune 31,30, 2025, and $0.3 million for the six months ended June 30, 2026 as compared to $0.2 million for the six months ended June 30, 2025. The decreaseincrease is mainly due to thedigital declinegame content license revenue earned by Ergatta in 2026, partially offset by a decrease in Live 1:1 training sessions.

OurFor the second quarter of 2026, our gross profit/loss improved to $3.2 million from a gross loss of $0.3$0.2 million for the threesecond monthsquarter endedof March2025, 31,resulting 2025in a gross margin of 48% in the second quarter of 2026 as compared to gross(16)% profitin the second quarter of $1.6 million for the three months ended March 31, 2026.2025. The improvement is mainly due to the Wattbike acquisition.and Ergatta acquisitions.

Research and development expense decreasedwas by$0.4 $0.8 million, or 66%,million for the threesecond monthsquarter endedof March 31, 20262026, as compared to $0.8 million for the threesecond monthsquarter endedof March2025. 31,The 2025,decrease is primarily due to decreasesreductions in stock-based compensation and other personnel-related costs of $0.6$0.5 million, partially offset by $0.1 million of research and $0.2development million,expenses respectively.at Wattbike and Ergatta not present in 2025.

General and administrative expense decreasedwas by$4.0 $0.4 million, or 8%,million for the three months ended MarchJune 31,30, 2026 as compared to $4.6 million for the three months ended MarchJune 31,30, 2025.2025, Theas decreasethe wasabsence mainlyof due$2.1 tomillion decreases inof stock-based compensation expense ofassociated $1.1with millionthe andLTI vendorPreferred settlementsStock ofin $0.32026 million,was largely offset by Wattbikegeneral and Ergattaadministrative expenses associated with Ergatta and Wattbike not present in 2025 of $0.8approximately $1.6 million, including $0.6 million andof $0.1stock-based million,compensation respectively,expense related to equity grants issued in 2026the withErgatta no comparable amount for 2025.transaction.

Other expense, net for the three months ended MarchJune 31,30, 2026 of $1.5 million is mainly comprised of the change in fair value of convertible preferred stock of $1.1 million and expense recognized under a settlement agreement in the amount of $2.2$0.5 millionmillion. and the credit loss of $0.2 million recognized upon the settlement of the Sportstech loan receivable. Other expense, net forFor the three months ended MarchJune 31,30, 20252025, other expense of $0.9 million is mainly comprised of lossesexpense onassociated with the settlementconvertible ofnotes aissued Lossin Restoration2025 Agreement.for which we elected the fair value option.

Interest expense decreased by $0.2$3.0 million for the three months ended MarchJune 31,30, 2026 as compared to the three months ended MarchJune 31,30, 2025, and by $3.3 million for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025. The decreasedecreases are mainly attributable to a lower average debt balance for the conversionfirst six months of certain2026 as compared to 2025 and to the higher interest debt intodiscount equity,amortization partiallyon offsetour byconvertible an increasenotes in amortization of debt discount.2025.

Interest income decreased by $0.2 million for the threesecond quarter of 2026 as compared to the second quarter of 2025, and by $0.4 million for the six months ended MarchJune 31,30, 2026 as compared to the same period of a year ago due to the repayment of the loan receivable from Sportstech in early 2026.

(Loss) Gain on extinguishment of debt and accounts payable

The loss on extinguishment of debt and accounts payable for the three and six months ended MarchJune 31,30, 2026 of $0.6 million and $2.3 million, respectively, was mainly the result of the conversion of Class A Incremental Notes into equity (see Note 11 to the Consolidated Financial Statements) resulting in a loss on extinguishment of $2.8 million,, partially offset by gains on extinguishment of $1.1 million resulting from other indebtedness that was converted to equity. For the three months ended March 31, 2025, we recorded a gain on extinguishment of $3.0 million in connection with the conversion of debt to equity.indebtedness.

WeThe recorded lossesloss on the change in fair value of convertibleearnout notesof $0.5 million for the three and six months ended MarchJune 31,30, 2026 andwas 2025the result of $1.4 million and $0.6 million due to the increase in fair value of thesethe notes.contingent consideration related to the Ergatta acquisition.