Item 1. Financial Statements

INTERACTIVE STRENGTH INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

(In thousands, except share amounts)


	June 30,			December 31,
	2026			2025
Assets
Current assets:
Cash and cash equivalents	$	959		$	512
Accounts receivable, net		3,196			2,614
Inventories, net		4,151			3,748
Vendor deposits		1,070			377
Loan receivable		—			6,592
Prepaid expenses and other current assets		833			860
Total current assets		10,209			14,703
Property and equipment, net		625			379
Right-of-use-assets		254			317
Intangible assets, net		15,950			7,863
Long-term inventories, net		4,055			3,583
Vendor deposits long term		1,825			1,825
Goodwill		20,639			15,545
Other assets		2,961			2,628
Total assets	$	56,518		$	46,843
Liabilities and stockholders' equity
Current liabilities:
Accounts payable	$	8,190		$	8,981
Accrued expenses and other current liabilities		4,955			4,849
Operating lease liability, current portion		130			159
Deferred revenue		4,444			1,317
Loans payable		11,325			8,823
Derivatives		519			243
Mandatorily redeemable Series D convertible preferred stock		9,543			—
Convertible notes payable, net		10,035			6,913
Total current liabilities		49,141			31,285
Operating lease liability, net of current portion		134			171
Other long term liabilities		3,870			1,753
Warrant liabilities		29			408
Loans payable non current, net		—			1,794
Convertible notes payable non current, net		—			2,738
Total liabilities	$	53,174		$	38,149
Commitments and contingencies (Note 15)
Series E convertible preferred stock, par value $0.0001; 1,300,000 shares authorized, issued and outstanding as of December 31, 2025.		—			2,304
Stockholders' equity
Series A convertible preferred stock, par value $0.0001; 10,000,000 shares authorized; 4,414,745 shares issued and outstanding as of June 30, 2026 and December 31, 2025.		1			1
Series B convertible preferred stock, par value $0.0001; 1,500,000 shares authorized; 408,775 shares issued and outstanding as of June 30, 2026 and December 31, 2025.		—			—
Series C convertible preferred stock, par value $0.0001; 5,000,000 shares authorized; 2,848,857 and 1,534,921 shares issued and outstanding as of June 30, 2026 and December 31, 2025.		2			1
Series E convertible preferred stock, par value $0.0001; 1,300,000 shares authorized, issued and outstanding as of June 30, 2026.		2,304			—
Common stock, par value $0.0001; 900,000,000 shares authorized; 514,467 and 43,930 shares issued and outstanding as of June 30, 2026 and December 31, 2025.		2			—
Additional paid-in capital		246,625			233,817
Treasury stock, at cost		(199	)		—
Accumulated other comprehensive (loss) income		(2	)		113
Accumulated deficit		(245,389	)		(227,542	)
Total stockholders' equity		3,344			6,390
Total liabilities, preferred stock and stockholders' equity	$	56,518		$	46,843

The accompanying notes are an integral part of these consolidated financial statements.

INTERACTIVE STRENGTH INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(unaudited)

(In thousands, except share and per share amounts)


	Three Months Ended June 30,						Six Months Ended June 30,
	2026			2025			2026			2025
Revenue	$	6,647		$	1,219		$	11,788		$	2,576
Cost of revenue		3,432			1,413			6,964			3,073
Gross profit (loss)		3,215			(194	)		4,824			(497	)
Operating expenses:
Research and development		415			779			853			2,050
Sales and marketing		2,184			211			3,218			461
General and administrative		3,988			4,640			8,115			9,126
Total operating expenses		6,587			5,630			12,186			11,637
Loss from operations		(3,372	)		(5,824	)		(7,362	)		(12,134	)
Other income (expense), net:
Other expense, net		(1,544	)		(927	)		(4,021	)		(1,038	)
Interest expense		(1,450	)		(4,490	)		(2,980	)		(6,254	)
Interest income		1			229			1			387
(Loss) gain upon extinguishment of debt		(601	)		1,423			(2,311	)		4,459
Change in fair value of convertible notes		(278	)		7,202			(1,628	)		6,629
Change in fair value of earnout		(491	)		—			(517	)		—
Change in fair value of derivatives		491			(462	)		164			(1,949	)
Change in fair value of digital assets		—			125			—			125
Change in fair value of warrants		140			544			807			993
Total other (expense), net		(3,732	)		3,644			(10,485	)		3,352
Net loss attributable to common stockholders	$	(7,104	)	$	(2,180	)	$	(17,847	)	$	(8,782	)
Net loss per share - basic and diluted	$	(17.37	)	$	(149.29	)	$	(63.93	)	$	(874.39	)
Weighted average common stock outstanding—basic and diluted		408,871			14,602			279,176			10,044


	Three Months Ended June 30,						Six Months Ended June 30,
	2026			2025			2026			2025
Net loss	$	(7,104	)	$	(2,180	)	$	(17,847	)	$	(8,782	)
Other comprehensive (loss) gain:
Foreign currency translation (loss) gain		22			23			(115	)		44
Total comprehensive loss	$	(7,082	)	$	(2,157	)	$	(17,962	)	$	(8,738	)

The accompanying notes are an integral part of these consolidated financial statements.

INTERACTIVE STRENGTH INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

(unaudited)

(In thousands, except share amounts)


	Convertible Preferred Stock Series A					Convertible Preferred Stock Series B					Convertible Preferred Stock Series C					Common Stock					Additional Paid-In Capital		Accumulated Other Comprehensive Income		Accumulated Deficit			Total Stockholders' Equity
	Shares			Amount		Shares			Amount		Shares			Amount		Shares			Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Income		Accumulated Deficit			Total Stockholders' Equity
Balance at December 31, 2024		4,658,737		$	1		1,500,000		$	-		2,861,128		$	-		2,003		$	8	$	209,509	$	183	$	(202,586	)	$	7,115
Series A Preferred dividends declared and paid in kind		112,334			—		—			—		—			—		—			—		225		—		(225	)		—
Series C Preferred dividends declared and paid in kind		—			—		—			—		126,515			—		—			—		253		—		(253	)		—
Issuance of Common stock from At the Market offering		—			—		—			—		—			—		1,174			—		1,594		—		—			1,594
Issuance of Common stock upon conversion of convertible notes		—			—		—			—		—			—		5,631			1		5,798		—		—			5,799
Issuance of Common stock upon conversion of preferred stock		(100,000	)		—		(1,060,118	)		—		(2,801,250	)		—		2,555			—		—		—		—			—
Issuance of Series C Preferred stock upon settlement of loss restoration agreement		—			—		—			—		1,684,817			1		—			—		3,127		—		—			3,128
Gain on extinguishment of related party promissory notes		—			—		—			—		—			—		—			—		—		—		279			279
Stock-based compensation		—			—		—			—		—			—		—			—		2,423		—		—			2,423
Foreign currency translation gain		—			—		—			—		—			—		—			—		—		21		—			21
Net loss		—			—		—			—		—			—		—			—		—		—		(6,603	)		(6,603	)
Balance at March 31, 2025		4,671,071			1		439,882			-		1,871,210			1		11,362			9		222,929		204		(209,388	)		13,756
Series A Preferred dividends declared and paid in kind		128,796			—		—			—		—			—		—			—		258		—		(258	)		—
Series C Preferred dividends declared and paid in kind		—			—		—			—		68,311			—		—			—		137		—		(137	)		—
Issuance of Common stock upon conversion of convertible notes		—			—		—			—		—			—		8,127			1		4,224		—		—			4,225
Issuance of Common stock upon conversion of preferred stock		—			—		(31,107	)		—		(729,366	)		—		641			—		—		—		—			—
Reverse stock split settlement of fractional shares		—			—		—			—		—			—		(1	)		—		—		—		—			—
Stock-based compensation		—			—		—			—		—			—		—			—		450		-		-			450
Foreign currency translation gain		—			—		—			—		—			—		—			—		-		23		-			23
Net loss		—			—		—			—		—			—		—			—		-		-		(2,180	)		(2,180	)
Balance at June 30, 2025		4,799,867		$	1		408,775		$	-		1,210,155		$	1		20,129		$	10	$	227,998	$	227	$	(211,963	)	$	16,274

The accompanying notes are an integral part of these consolidated financial statements.

INTERACTIVE STRENGTH INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED STOCK AND STOCKHOLDERS’ EQUITY

(unaudited)

(In thousands, except share amounts)


	Convertible Preferred Stock Series E						Convertible Preferred Stock Series E				Convertible Preferred Stock Series A				Convertible Preferred Stock Series B				Convertible Preferred Stock Series C				Common Stock					Additional Paid-In Capital		Accumulated Other Comprehensive Income (loss)			Accumulated Deficit			Treasury Stock			Total Stockholders' Equity
	Shares			Amount			Shares		Amount		Shares		Amount		Shares		Amount		Shares		Amount		Shares			Amount		Additional Paid-In Capital		Accumulated Other Comprehensive Income (loss)			Accumulated Deficit			Treasury Stock			Total Stockholders' Equity
Balance at December 31, 2025		1,300,000		$	2,304			—	$	-		4,414,745	$	1		408,775	$	-		1,534,921	$	1		43,930		$	-	$	233,817	$	113		$	(227,542	)	$	-		$	6,390
Issuance of Common stock from At the Market offering		—			—			—		—		—		—		—		—		—		—		41,428			—		1,463		—			—			—			1,463
Issuance of Common stock upon conversion of convertible notes		—			—			—		—		—		—		—		—		—		—		161,059			1		5,867		—			—			—			5,868
Issuance of Series C Preferred stock under settlement agreement		—			—			—		—		—		—		—		—		1,088,255		1		—			—		1,750		—			—			—			1,751
Reverse stock split retirement of fractional shares		—			—			—		—		—		—		—		—		—		—		(4	)		—		—		—			—			—			—
Issuance of Common stock upon settlement of debt		—			—			—		—		—		—		—		—		—		—		47,445			1		831		—			—			—			832
Stock-based compensation		—			—			—		—		—		—		—		—		—		—		—			—		248		—			—			—			248
Foreign currency translation loss		—			—			—		—		—		—		—		—		—		—		—			—		—		(137	)		—			—			(137	)
Net loss		—			—			—		—		—		—		—		—		—		—		—			—		—		—			(10,743	)		—			(10,743	)
Balance at March 31, 2026		1,300,000			2,304			-		-		4,414,745		1		408,775		-		2,623,176		2		293,858			2		243,976		(24	)		(238,285	)		-			5,672
Issuance of Common stock upon conversion of convertible notes		—			—			—		—		—		—		—		—		—		—		246,951			—		1,939		—			—			—			1,939
Issuance of Series C Preferred stock under settlement agreement		—			—			—		—		—		—		—		—		225,681		—		—			—		408		—			—			—			408
Reclassification of preferred stock into permanent equity		(1,300,000	)	$	(2,304	)		1,300,000		2,304		—		—		—		—		—		—		—			—		—		—			—			—			2,304
Repurchase and retirement of common stock		—			—			—		—		—		—		—		—		—		—		(34,882	)		—		—		—			—			(199	)		(199	)
Issuance of Common stock upon settlement of debt		—			—			—		—		—		—		—		—		—		—		8,540			—		79		—			—			—			79
Stock-based compensation		—			—			—		—		—		—		—		—		—		—		—			—		223		—			—			—			223
Foreign currency translation gain		—			—			—		—																					22									22
Net loss		—			—			—		—																								(7,104	)					(7,104	)
Balance at June 30, 2026		—		$	-			1,300,000	$	2,304		4,414,745	$	1		408,775	$	-		2,848,857	$	2		514,467		$	2		246,625	$	(2	)	$	(245,389	)	$	(199	)	$	3,344

The accompanying notes are an integral part of these consolidated financial statements.

INTERACTIVE STRENGTH INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited)

(In thousands)


	Six Months Ended June 30,
	2026			2025
Cash Flows From Operating Activities:
Net loss	$	(17,847	)	$	(8,782	)
Adjustments to reconcile net loss to net cash used in operating activities:
Foreign currency		6			(16	)
Depreciation		84			51
Amortization		2,288			1,671
Non-cash lease expense		63			155
Inventory step up amortization		2			179
Stock-based compensation		1,220			4,892
Loss on disposal of assets		1			—
Loss (gain) on extinguishment of debt		2,311			(4,459	)
Loss on settlement of accounts payable		—			551
Change in fair value of preferred stock		1,118			—
Non-cash interest income		—			(387	)
Interest paid in kind and non-cash interest expense		1,184			3,663
Amortization of debt discount		1,778			2,503
Credit loss on loan receivable		242			—
Change in fair value of convertible notes		1,628			(6,629	)
Change in fair value of digital assets		—			(125	)
Non-cash charge from settlement agreement		2,628			—
Change in fair value of earnout		517			—
Change in fair value of derivatives		(164	)		1,949
Change in fair value of warrants		(807	)		(993	)
Changes in operating assets and liabilities
Accounts receivable		(437	)		(335	)
Inventories		(214	)		763
Prepaid expenses and other current assets		365			47
Vendor deposits		47			(37	)
Other assets		(9	)		—
Accounts payable		(1,007	)		(310	)
Accrued expenses and other current liabilities		(361	)		87
Deferred revenue		(206	)		(15	)
Operating lease liabilities		(66	)		(166	)
Net cash used in operating activities		(5,636	)		(5,743	)
Cash Flows From Investing Activities:
Repayment from (advances to) Sportstech		6,350			(4,325	)
Purchase of property and equipment		(334	)		—
Proceeds from the sale of property and equipment		9			—
Acquisition of internal use software		(29	)		—
Loan to Wattbike		—			(1,200	)
Acquisition of digital assets		—			(45,000	)
Acquisition of business, cash paid, net of cash acquired		(1,711	)		—
Acquisition of software and content		(876	)		(442	)
Net cash provided by (used) in investing activities		3,409			(50,967	)
Cash Flows From Financing Activities:
Payments of loans		(484	)		—
Proceeds from loans		282			1,800
Repurchases of common stock		(199	)		—
Payments of offering costs		—			(225	)
Proceeds from issuance of convertible notes, net of issuance costs		1,595			56,135
Proceeds from issuance of common stock from At the Market Offering, net of issuance costs		1,508			1,594
Net cash provided by financing activities		2,702			59,304
Effect of exchange rate on cash		(28	)		100
Net Change In Cash and Cash Equivalents		447			2,694
Cash at beginning of the period		512			138
Cash at end of period	$	959		$	2,832

The accompanying notes are an integral part of these consolidated financial statements.

INTERACTIVE STRENGTH INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Description of Business and Basis of Presentation

Description and Organization

Interactive Strength Inc. (the "Company") is an acquisition-focused company seeking to accelerate growth via acquisitions and deploy capital into sectors that are considered undervalued due to temporary factors, operational or misunderstood industry trends. The Company's current portfolio consists of four leading brands serving the commercial and at-home markets with specialty fitness equipment, game-based fitness content and virtual training: Wattbike, Ergatta, CLMBR and FORME. Wattbike, acquired on July 1, 2025, offers a range of high-performance indoor bikes and has built a reputation as the training tool trusted by the world's top athletes, teams and military programs. Ergatta, acquired on March 11, 2026 is a game-based connected fitness company with industry leading retention rates. CLMBR manufactures vertical climbing equipment and provides a unique digital and on-demand training platform. FORME is a hardware manufacturer and digital fitness service provider that combines award-winning smart gyms with live 1:1 personal training (from real humans) to deliver an immersive experience. The combination of technology with expert training leads to better outcomes for both consumers and trainers alike. Wattbike, Ergatta, CLMBR and FORME offer unique fitness solutions for both the commercial and at-home markets.

Reverse Stock Splits

On June 29, 2026, the Company filed a Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a reverse stock split of the Company’s common stock, $0.0001 par value per share (the "Common Stock"), at a rate of 1-for-7 (the “June 2026 Reverse Stock Split”), effective on June 30, 2026. As a result of the June 2026 Reverse Stock Split, every seven pre-split shares of Common Stock were combined into one share of Common Stock, resulting in a reduction in the number of shares of the Company's outstanding Common Stock from 3,601,274 shares to 514,467 shares.

On February 23, 2026, the Company filed a Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a reverse stock split of the Company’s Common Stock at a rate of 1-for-10 (the “February 2026 Reverse Stock Split”), effective on February 24, 2026. As a result of the February 2026 Reverse Stock Split, every ten pre-split shares of Common Stock were combined into one share of Common Stock, resulting in a reduction in the number of shares of the Company's outstanding Common Stock from 17,984,137 shares to 1,798,406 shares.

On June 26, 2025, the Company filed a Certificate of Amendment to the Company’s Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a reverse stock split of the Company’s Common Stock at a rate of 1-for-10 (the “June 2025 Reverse Stock Split”), effective on June 26, 2025. The June 2025 Reverse Stock Split decreased the number of shares of Common Stock issued and outstanding from 14,091,197 shares to 1,409,047 shares.

The June 2026 Reverse Stock Split, the February 2026 Reverse Stock Split and the June 2025 Reverse Stock Split (collectively, the "Reverse Stock Splits") all resulted in each holder of Common Stock owning fewer shares of Common Stock. However, the Reverse Stock Splits affected all holders of Common Stock uniformly and did not affect any stockholder’s percentage ownership interest in the Company. Therefore, voting rights and other rights and preferences of the holders of Common Stock were not affected by the Reverse Stock Splits. Common stock issued pursuant to the Reverse Stock Splits remains fully paid and nonassessable, without any change in the par value per share. Pursuant to the Charter Amendment, no fractional shares were issued in connection with the Reverse Stock Splits. Stockholders who otherwise would be entitled to receive fractional shares received cash for each fraction of a share held. Proportionate adjustments were made to the number of shares of Common Stock underlying the Company's outstanding equity awards and warrants, and the number of shares issuable under the Company's equity incentive plans, convertible notes and other existing agreements, as well as their corresponding exercise or conversion price, as applicable. There was no change to the number of authorized shares or the par value per share of the Company's common stock.

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

Acquisition of Ergatta, Inc.

On February 18, 2026, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Ergatta, Inc., a Delaware corporation ("Ergatta"), Ergatta Acquisition Corp., a Delaware corporation and wholly owned subsidiary of the Company ("Merger Sub"), and Tom Aulet, solely in his capacity as the securityholders’ representative (the “Securityholders’ Representative”), pursuant to which Merger Sub merged with and into Ergatta (the “Merger”), with Ergatta surviving as a wholly owned subsidiary of the Company (the "Ergatta Acquisition"). At the effective time of the Merger, each issued and outstanding share of preferred stock and common stock of Ergatta (other than excluded and dissenting shares) was cancelled and, in the case of the preferred stock, converted

into the right to receive, subject to the terms of the Merger Agreement, the merger consideration more fully described in Note 23. The Merger closed on March 11, 2026, and the accompanying condensed consolidated financial statements reflect the operations of Ergatta subsequent to that date (see Note 23 for further information).

Acquisition of Wattbike Holdings Limited

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

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

Liquidity and Capital Resources

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

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

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

•

The Company has incurred significant operating losses and used net cash flows in its operations since its inception. In this regard, the Company incurred a net operating loss of $7.4 million and used net cash in its operations of $5.6 million during the six months ended June 30, 2026, and had an accumulated deficit of $245.4 million as of June 30, 2026.

•

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

•

The Company’s available liquidity to fund its operations over the next twelve months beyond the issuance date was limited to approximately $1.7 million of cash and cash equivalents. However, based on the Company’s anticipated liquidity needs, the foregoing available liquidity will not be sufficient to fund the Company’s obligations as they become due over the next year beyond the issuance date absent management’s ability to secure additional outside capital.

•

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

•

Included in the Company’s anticipated liquidity needs is a substantial amount of outstanding debt that is scheduled to mature over the next twelve months beyond the issuance date. As disclosed in Notes 11 and 24, the Company had total outstanding debt, including convertible notes, of approximately $23.1 million as of the issuance date, all of which is scheduled to mature over the next twelve months beyond the issuance date. The Company does not have sufficient liquidity to repay this indebtedness if cash settlement is required. In the event the Company is unable to refinance its outstanding debt, settle some or all of its debt with shares of the Company’s common or preferred stock, secure additional outside capital, and/or secure amendments or waivers from its lenders to defer or modify their repayment terms, management will be required to seek

other alternatives to settle this indebtedness, which may include, among others, a significant curtailment of the Company’s operations, a sale of certain of the Company’s assets, a sale of the entire Company to strategic or financial investors, and/or allowing the Company to become insolvent by filing for bankruptcy protection under the provisions of the U.S. Bankruptcy Code.

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

2. Summary of Significant Accounting Policies

Basis of Presentation and Consolidation

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

The accompanying unaudited condensed consolidated financial statements and related note disclosures include the accounts of Interactive Strength Inc. and its subsidiaries in which the Company has a controlling financial interest, and should be read in conjunction with the annual audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2025 included in the Company’s Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission (the “SEC”) on March 31, 2026. The accompanying consolidated balance sheet as of December 31, 2025 was derived from the audited financial statements as of and for the year ended December 31, 2025. These condensed consolidated interim financial statements have been prepared in accordance with the instructions to Form 10-Q and Article 8 of Regulation S-X, and therefore omit or condense certain footnotes and other information normally included in complete consolidated financial statements prepared in accordance with U.S. GAAP. All intercompany balances and transactions have been eliminated in consolidation. In the opinion of management, the accompanying unaudited condensed consolidated financial statements include all normal and recurring adjustments (which consist primarily of accruals, estimates and assumptions that impact the financial statements) considered necessary to present fairly the Company’s financial position as of June 30, 2026, its results of operations, comprehensive loss and changes in stockholders’ equity for the three and six months ended June 30, 2026 and 2025 and cash flows for the six months ended June 30, 2026 and 2025. In addition, certain prior year balances have been reclassified to conform to the current presentation. Specifically, Proceeds from exercise of incremental warrants and issuance of convertible notes, net of issuance costs for the six months ended June 30, 2025 in the amount of $3.5 million has been reclassified to Proceeds from issuance of convertible notes, net of issuance costs, in the accompanying condensed consolidated statement of cash flows.

The results for interim periods are not necessarily indicative of results that may be expected for the full fiscal year.

Use of Estimates

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

Segment Information

Operating segments are defined as components of an enterprise for which separate and discrete information is available for evaluation by the chief operating decision-maker (“CODM”) in deciding how to allocate resources and assess performance. The Company has one operating segment, the development and sale of its at-home fitness technology platform. The Company’s CODM is its chief executive officer, who manages the Company’s operations on a consolidated basis for the purpose of allocating resources. As the Company has one reportable segment, all required segment financial information is presented in the consolidated financial statements (See Note 3). The Company currently operates in the United States, the United Kingdom, and Taiwan. As of June 30, 2026 and December 31, 2025, substantially all of the Company's long-lived assets were held in the United States.

Significant Accounting Policies

During the six months ended June 30, 2026, there were no significant changes to the Company’s significant accounting policies as described in the Company’s audited consolidated financial statements as of and for the year ended December 31, 2025, except as described below.

Loan Receivable

Loan receivable as of December 31, 2025 consisted of a loan agreement entered into with Sportstech Brands Holding GmbH ("Sportstech") and Mr. Ali Ahmad, the sole shareholder of Sportstech, which was intended as a form of bridge financing until a pending acquisition transaction could be closed. The Transaction did not close as the Company and Sportstech were unable to come to terms on a final subscription and shareholders' agreement, and the loan was not paid back at the maturity date of December 30, 2025. The balance on the loan receivable from Sportstech as of December 31, 2025, including accrued interest and fees, was $6.6 million, which was recorded on the Company's balance sheet as of December 31, 2025. On March 4, 2026, the Company and Sportstech settled the outstanding balance and the Company received $6.4 million in cash. As a result, the Company recorded a credit loss on the settlement of the loan receivable in the amount of $0.2 million in the first quarter of 2026, which is reflected in Other expense in the accompanying condensed consolidated statement of operations.

Recently Issued Accounting Pronouncements

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”), or other standard setting bodies and adopted by the Company as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on the Company’s condensed consolidated financial statements upon adoption. The Company qualifies as an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) and has elected not to “opt out” of the extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company has the option to adopt the new or revised standard at the time private companies adopt the new or revised standard and may do so until such time that the Company either (i) irrevocably elects to “opt out” of such extended transition period or (ii) no longer qualifies as an emerging growth company. As noted below, certain new or revised accounting standards were early adopted.

Accounting Pronouncements Recently Adopted

ASU 2025-05

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

Accounting Pronouncements Not Yet Adopted

ASU 2025-11

In December 2025, the FASB issued ASU 2025-11, "Interim Reporting (Topic 270) - Narrow-Scope Improvements." The amendments in ASU 2025-11 result in a comprehensive list of interim disclosures required by U.S. GAAP and also include a disclosure principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. This guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027 for public business entities, and for interim reporting periods within annual reporting periods beginning after December 15, 2028 for entities other than public business entities. The Company is currently evaluating this guidance to determine the impact it may have on its condensed consolidated financial statements.

ASU 2024-03

In November 2024, the FASB issued ASU 2024-03, as amended by ASU 2025-01, "Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses." The amendments in ASU 2024-03 address investor requests for more detailed expense information and require additional disaggregated disclosures in the notes to financial statements for certain categories of expenses that are included on the face of the income statement. This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating this guidance to determine the impact it may have on its condensed consolidated financial statements.

ASU 2025-06

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

3. Segment Reporting

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

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


	Three Months Ended June 30,						Six Months Ended June 30,
(in thousands)	2026			2025			2026			2025
Total Revenues	$	6,647		$	1,219		$	11,788		$	2,576
Less:
Cost of fitness product revenue (excluding depreciation and amortization)		2,812			559			5,709			1,318
Cost of membership (excluding depreciation and amortization)		164			(1	)		201			1
Cost of training		104			297			228			617
Research and development (excluding stock based compensation)		360			406			744			978
General and administrative (excluding stock based compensation, depreciation and amortization)		2,696			1,615			5,510			3,653
Interest expense		1,450			4,490			2,980			6,254
Interest income		(1	)		(229	)		(1	)		(387	)
Change in fair value of earnout		491			—			517
(Gain) loss upon extinguishment of debt and accounts payable		601			(1,423	)		2,311			(4,459	)
Change in fair value of convertible notes		278			(7,202	)		1,628			(6,629	)
Change in fair value of derivatives		(491	)		462			(164	)		1,949
Change in fair value of warrants		(140	)		(544	)		(807	)		(993	)
Change in fair value of digital assets		—			(125	)		—			(125	)
Depreciation and amortization expense		1,520			891			2,374			1,901
Stock-based compensation expense		826			2,804			1,220			4,893
Transaction related expenses (1)		444			434			1,234			733
Vendor Settlements		—			(42	)		115			417
Other segment items (2)		2,637			1,007			5,836			1,237
Net loss	$	(7,104	)	$	(2,180	)	$	(17,847	)	$	(8,782	)

Reconciliation of net loss
Adjustments and reconciling items		—			—			—			—
Consolidated net loss	$	(7,104	)	$	(2,180	)	$	(17,847	)	$	(8,782	)

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

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

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


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2026		2025		2026		2025
United States	$	3,393	$	1,219	$	4,608	$	2,576
Europe		2,587		-		5,716		-
Asia		494		-		855		-
Other		173		-		609		-
Total Revenue	$	6,647	$	1,219	$	11,788	$	2,576

4. Revenue Recognition

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

The Company determines revenue recognition through the following steps:

•

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

•

Identification of the performance obligations in the contract;

•

Determination of the transaction price;

•

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

•

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

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

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

Connected Fitness Products

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

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

Membership

The Company’s memberships provide unlimited access to content in its library of on-demand fitness classes. The Company’s memberships are offered on a month-to-month basis.

Amounts paid for membership fees are included within deferred revenue on the Company’s condensed consolidated balance sheets and recognized ratably over the membership term. The Company records payment processing fees for its monthly membership charges within cost of membership in the Company’s condensed consolidated statements of operations and comprehensive loss.

Training and other

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

Standard Product Warranty

The Company provides a one-year standard product warranty for its Connected Fitness Products and related accessories, which covers the touchscreen, frame and all incorporated elements and related accessories from the date of original delivery. The Company has the obligation, at its option, to either repair or replace the defective product within the warranty period. At the time revenue is recognized, an estimate of future warranty costs are recorded as a component of cost of revenue. Factors that affect the warranty obligation include

historical as well as current product failure rates, service delivery costs incurred in correcting product failures, and warranty policies and business practices.

The Company also offers the option for customers in some markets to purchase a third-party extended warranty and service contract that extends or enhances the technical support, parts, and labor coverage offered as part of the base warranty included with the Connected Fitness Product for an additional period of 24 to 48 months. For third-party extended warranty service sold along with the Company’s Connected Fitness Products, the Company does not obtain control of the warranty before transferring it to the customers. Therefore, the Company accounts for revenue related to the fees paid to the third-party extended warranty provider on a net basis, by recognizing revenue on the net commission it retains.

The Company sells connected fitness equipment and digital fitness services across Business to Business ("B2B") and Business to Customer ("B2C") channels in the United States, Europe and Asia. The following table summarizes the components of the Company's revenues for the three and six months ended June 30, 2026 and 2025:


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in thousands)				(in thousands)
Fitness Product Revenue	$	4,379	$	937	$	8,832	$	1,988
Membership Revenue		2,076		164		2,681		340
Training and other revenue		192		118		275		248
Total Revenue	$	6,647	$	1,219	$	11,788	$	2,576

5. Inventories, net

Inventories consist of the following:


	June 30,		December 31,
(in thousands)	2026		2025
Finished products	$	3,716	$	3,748
Finished products - Long Term		3,478		3,007
Manufactured components and accessories		436		—
Raw materials - Long Term		576		576
Total inventories, net	$	8,206	$	7,331

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

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

6. Property and Equipment, net

Property and equipment consisted of the following:


	June 30,			December 31,
(in thousands)	2026			2025
Pre-production tooling	$	3,429		$	3,325
Machinery and equipment		1,149			967
Leasehold improvements		197			198
Furniture and fixtures		30			23
Exercise equipment		81			60
Total		4,886			4,573
Less: Accumulated depreciation		(4,261	)		(4,194	)
Total property and equipment, net	$	625		$	379

Depreciation expense amounted to approximately $47,000 and $14,000 for the three months ended June 30, 2026 and 2025, respectively, and approximately $0.1 million for the six months ended June 30, 2026 and 2025.

7. Goodwill, Intangible Assets, net and Digital Assets

Goodwill

Goodwill and intangible assets of $5.1 million and $9.8 million, respectively, were acquired in the Ergatta Acquisition and were recorded at fair value on the acquisition date. As of June 30, 2026, there was no goodwill impairment. Refer to Note 23. Acquisitions for more information.

Changes in goodwill for the six months ended June 30, 2026 are as follows:


(in thousands)	Goodwill
Balance as of December 31, 2025	$	15,545
Goodwill acquired		5,145
Foreign currency translation adjustments		(51	)
Balance as of June 30, 2026	$	20,639

Intangible Assets, Net

Identifiable intangible assets, net consists of the following:


	As of June 30,								As of December 31,
	2026								2025
(in thousands)	Cost		Accumulated Amortization				Net Book Value		Cost		Accumulated Amortization			Net Book Value
Internal-use software	$	6,441		$	(6,269	)	$	172	$	6,415	$	(6,171	)	$	244
Developed technology		4,987			(891	)		4,095		2,610		(535	)		2,075
Customer related		12,050			(2,071	)		9,979		5,479		(944	)		4,535
Trademark and trade name		1,996			(291	)		1,704		1,203		(194	)		1,009
Total identifiable intangible assets	$	25,474		$	(9,523	)	$	15,950	$	15,707	$	(7,844	)	$	7,863

Amortization expense amounted to $1.2 million and $0.4 million for the three months ended June 30, 2026 and 2025, respectively, and $1.7 million and $0.8 million for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026 and December 31, 2025, there was no intangible asset impairment.

As of June 30, 2026, estimated annual amortization expense for the remainder of 2026 and each of the next five fiscal years is as follows:


Fiscal Years Ending December 31,
(in thousands)
2026 (remaining)		2,340
2027		4,558
2028		2,406
2029		1,715
2030		1,689
2031		1,158
Total	$	13,866

Digital Assets

During the three and six months ended June 30, 2025, the Company paid approximately $45.0 million in cash in return for approximately 29.6 million FET tokens and 25.0 million Tether stablecoins. As of June 30, 2025, the Company's holdings in digital assets consisted exclusively of FET and Tether. All digital asset investments were liquidated in the fourth quarter of 2025. The Company recognizes changes in the fair value of its digital assets as gains or losses in change in fair value of digital assets on the Company's condensed consolidated statements of operations during the period in which they occur. The details of the activity related to the Company’s digital assets as of June 30, 2025 are as follows:



(in thousands)	Tether Units		Tether Fair Value		FET Units		FET Fair Value		Total Units		Total Fair Value
Digital assets at December 31, 2024		—	$	—		—	$	—		—	$	—
Additions		25,000		25,000		29,609		20,000		54,609		45,000
Change in fair value of digital assets		—		—		—		125		—		125
Digital assets at June 30, 2025		25,000	$	25,000		29,609	$	20,125		54,609	$	45,125

8. Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:


	June 30,		December 31,
(in thousands)	2026		2025
Security deposit		20		50
Prepaid licenses		178		151
Research and development tax credit		194		254
Other receivables		20		20
Insurance		106		86
Other prepaid		315		299
Total prepaid expenses and other current assets	$	833	$	860

9. Other Assets, net

Other assets, net consisted of the following:


	As of June 30,								As of December 31,
	2026								2025
(in thousands)	Cost		Accumulated Amortization				Net Book Value		Cost		Accumulated Amortization				Net Book Value
Capitalized content costs	$	6,824		$	(6,408	)	$	416	$	6,789		$	(6,346	)	$	443
Capitalized software		8,764			(6,239	)		2,525		7,886			(5,701	)		2,185
Security deposits		20			-			20		-			-			-
Total other assets	$	15,608		$	(12,647	)	$	2,961	$	14,675		$	(12,047	)	$	2,628

Amortization expense amounted to $0.3 million and $0.4 million for the three months ended June 30, 2026 and 2025, respectively, and $0.5 million and $0.8 million for the six months ended June 30, 2026 and 2025, respectively.

10. Accrued Expenses and Other Current Liabilities

Accrued expenses consisted of the following:


	June 30,		December 31,
(in thousands)	2026		2025
Accrued bonus	$	110	$	73
Accrued payroll		83		151
Accrued PTO		106		60
Accrued legal settlements		2,054		2,066
Accrued royalties		251		251
Accrued professional fees		704		451
Customer deposits		15		12
Vendor settlements		300		300
Accrued state and local taxes		160		—
Accrued VAT		353		488
Other accrued expenses and current liabilities		819		997
Total accrued expenses and other current liabilities	$	4,955	$	4,849

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

11. Debt

At June 30, 2026 and December 31, 2025, debt consisted of the following:


	June 30,			December 31,
Convertible Notes (in thousands)	2026			2025
Secured convertible notes	$	5,271		$	7,432
Discount on secured convertible notes		(1,087	)		(3,979	)
June 2025 convertible preferred note		842			788
Discount on June 2025 convertible preferred note		(34	)		(52	)
Remainder notes recorded at fair value		4,817			4,314
Related party convertible notes		225			215
Other convertible notes recorded at fair value		-			933
Total convertible notes payable		10,035			9,651
Less: current portion		(10,035	)		(6,913	)
Convertible notes payable - long-term		—		$	2,738

Loans Payable (in thousands)
Promissory notes - related parties		1,905			2,190
Term loan, net of discount		1,717			2,674
Working capital facility		1,658			1,684
Other notes payable		6,247			4,462
Discount on other notes payable		(202	)		(393	)
Total loans payable		11,325			10,617
Less: current portion		(11,325	)		(8,823	)
Loans payable - long-term		—		$	1,794

Secured Convertible Notes

On January 28, 2025, the Company entered into a Securities Purchase Agreement (the "January 2025 SPA") with an accredited investor (the "Investor"). Pursuant to the January 2025 SPA, the Company sold and the Investor purchased, (a) a senior secured convertible note (the "January 2025 Convertible Note") in the amount of $3.3 million and warrants to purchase 963 shares of the Company's common stock, (b) Class A Incremental Warrants to purchase up to $13.0 million in senior secured convertible notes ("Class A Incremental Notes), and (c) Class B Incremental Warrants to purchase up to $20.0 million in senior secured convertible notes ("Class B Incremental Notes").

The January 2025 Convertible Note and the Class A Incremental Notes carry a 10.0% original issue discount and accrue interest at a rate of 12.0% per annum, subject to adjustment from time to time as set forth in the respective notes. The January 2025 Convertible Note was convertible (in whole or in part) at any time prior to the Maturity Date into the number of shares of Common Stock equal to (x) 110% of the sum of (i) the portion of the principal amount of the January 2025 Convertible Notes to be converted or redeemed, (ii) accrued and unpaid Interest with respect to such principal amount of the January 2025 Convertible Notes, (iii) the Make-Whole Amount, (iv) accrued and unpaid Late Charges with respect to such principal amount of the Note, Make-Whole Amount and Interest, and (v) any other unpaid amounts pursuant to the Transaction Documents, if any, divided by (y) an initial conversion price of $2,193.10 per share, subject to adjustment as provided in the January 2025 Convertible Notes agreement.

During the six months ended June 30, 2026, the Company issued additional Class A Incremental Notes with substantially the same terms as the January 2025 Convertible Note as follows:

•

On January 6, 2026, a Class A Incremental Note in the principal amount of $1.2 million, an initial conversion price of $71.778 per share, a maturity date of January 6, 2027 and warrants to purchase 8,834 shares of Common Stock with an initial exercise price of $110.32 per share.

•

On February 5, 2026, a Class A Incremental Note in the principal amount of $0.6 million, with an initial conversion price of $31.58 per share, a maturity date of February 5, 2027 and warrants to purchase 9,730 shares of Common Stock at an initial exercise price of $48.52 per share.

•

On February 9, 2026, a Class A Incremental Note in the principal amount of $0.1 million, with an initial conversion price of $31.58 per share, a maturity date of February 9, 2027 and warrants to purchase 2,287 shares of Common Stock at an initial exercise price of $48.52 per share.

In connection with the Ergatta Acquisition, the Investor agreed to subordinate its security interest in the Company's assets to that of the holders of the Ergatta Note, as defined below. During the six months ended June 30, 2026, the Investor converted previously issued

Class A Incremental Notes with an aggregate principal balance, including accrued interest, in the amount of $4.4 million into 376,897 shares of common stock, and the Company recorded a loss on extinguishment of debt of $3.7 million. In connection with the convertibility features contained in and warrants issued in connection with the issuance of the Class A Incremental Notes, the Company recognized aggregate derivative liabilities in the amount of $0.4 million and aggregate warrant liabilities in the amount of $0.4 million.

During the six months ended June 30, 2025 the Company issued an additional Class A Incremental Note in the principal amount of $4.0 million and between June 30, 2025 and December 31, 2025 the Company issued additional Class A Incremental Notes with an aggregate principal amount of $3.2 million. During the six months ended June 30, 2025, the Investor converted a total of $5.6 million owed pursuant to the January 2025 Convertible Note and the Class A Incremental Notes into a total of 9,307 shares of Common Stock and the Company recorded a gain on extinguishment of debt of $2.1 million.

Interest recognized on the Secured Convertible Notes is as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2026		2025		2026		2025
Contractual interest expense	$	168	$	1,937	$	391	$	2,664
Amortization of debt issuance costs		767		2,071		1,639		2,398
Total	$	935	$	4,008	$	2,030	$	5,062

June 2025 Convertible Preferred Note

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

The carrying value of the June 2025 Convertible Preferred Note as of June 30, 2026 and December 31, 2025 was $0.8 million. Interest expense recognized on the June 2025 Convertible Preferred Note was approximately $0.1 million for the three and six months ended June 30, 2026 and 2025.

Remainder Notes

In connection with the sale of the Company's FET and other collateral tokens in October and December of 2025, the Company issued the Remainder Notes to ATW Partners and DWF Labs in the principal amount of $3.0 million and $4.5 million, respectively. The Remainder Notes issued to ATW and DWF have maturity dates of one year beyond their date of issuance and accrue interest at a rate of 12% per annum and are convertible into shares of Common Stock at initial conversion prices of $247.80 and $177.10 per share, respectively, subject to adjustment as provided under the terms of the notes. The Company elected the fair value option for the Remainder Notes, and the aggregate fair value for these notes as of June 30, 2026 and December 31, 2025 was $4.8 million and $4.3 million, respectively. As a result, the Company recognized a loss on the change in fair value of these notes for the three and six months ended June 30, 2026 in the amount of $0.3 million and $0.5 million, respectively.

Related Party Convertible Notes

On February 18, 2020, the Company entered into a $0.1 million note with interest at the rate of 12.0% per annum and a maturity date of February 18, 2021. The note was amended in January 2024 to include a conversion provision whereby at any time while outstanding the lender has the right to convert any outstanding and unpaid principal and accrued interest of the note into shares of the Company's Series A Preferred Stock at a conversion price of $38.50 per share. The total outstanding balance, including accrued interest, at June 30, 2026 and December 31, 2025 was $0.2 million.

Other Convertible Notes

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

The original maturity date of the February 2024 Convertible Note was December 15, 2024. The February 2024 Convertible Note is convertible (in whole or in part) at any time prior to the Maturity Date into the number of shares of Common Stock equal to the quotient resulting by dividing the outstanding principal balance of the February 2024 Convertible Note to be converted by an initial conversion price of $5.6 million per share. In November 2024, the Company and Treadway entered into an Amended and Restated Senior Secured Convertible Promissory Note (the “Amended and Restated Note”) that amended and restated the February 2024 Convertible Note in its entirety. The Amended and Restated Note had a principal amount of $4.0 million. Pursuant to the Amended and Restated Note, the conversion price of the February 2024 Convertible Note was changed to $3,353.00 per share (the Common Stock’s Nasdaq Official Closing Price (as reflected on Nasdaq.com) on November 11, 2024. The Company elected the fair value option for the February 2024

Convertible Notes under ASC 825, Financial Instruments, with changes in fair value recorded in earnings each reporting period.

On December 13, 2024, the Company and Treadway entered into a Letter Agreement (the “Letter Agreement”) that, among other things, extended the Maturity Date to January 14, 2025. On January 14, 2025, Treadway sold the Amended and Restated Note to Woodway USA, Inc. (“Woodway”), a customer of the Company. On March 3, 2025, Woodway sold the Amended and Restated Note to TR Opportunities II LLC (the “Current Holder”). On April 18, 2025, the Company and the Current Holder entered into a Letter Agreement to lower the conversion price to $770.00 (a premium to the closing price of the Common Stock on April 17, 2025). On August 8, 2025, the Company and the Current Holder entered into a Letter Agreement to lower the conversion price to $385.00 (a premium to the closing price of the Common Stock on August 7, 2025). On September 26, 2025, the Company entered into an exchange agreement (the “Exchange Agreement”) with the Current Holder, pursuant to which the Current Holder and the Company exchanged the February 2024 Convertible Note for a Class B Incremental Note in an aggregate principal amount of $2.2 million (the “September 2025 Exchange Note”).

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

The September 2025 Exchange Note was convertible (in whole or in part) at any time prior to the Maturity Date into the number of shares of Common Stock equal to (x) 110% of the sum of (i) the portion of the principal amount of the September 2025 Exchange Note to be converted or redeemed, (ii) accrued and unpaid Interest with respect to such principal amount of the September Exchange Note, (iii) the Make-Whole Amount (as defined in the September 2025 Exchange Note), (iv) accrued and unpaid Late Charges (as defined in the September Exchange Note) with respect to such principal amount of the September Exchange Note, Make-Whole Amount and Interest, and (v) any other unpaid amounts pursuant to the transaction documents, if any (the “Conversion Amount”), divided by (y) the conversion price of $385.00, subject to adjustment as provided in the September Exchange Note.

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

The fair value of this note was $0.9 million as of December 31, 2025. In January of 2026, the note was converted into 31,113 shares of common stock, and the Company recognized a loss on change in fair value of this note of $1.1 million for the six months ended June 30, 2026.

On June 10, 2025, the Company entered into a securities purchase agreement (the "Purchase Agreement") to sell convertible exchangeable notes to ATW Partners and DWF Labs (together, the “Investors”). Pursuant to the Purchase Agreement, the Company will issue and the Investors will purchase senior secured convertible exchangeable notes in the amount of $55.6 million (the “Initial Notes”) which are convertible into shares of the Company’s common stock at any time at the option of the Investors.

Pursuant to the Purchase Agreement, the Company used approximately $47.3 million of the proceeds from the notes, less a 10% original issue discount to purchase FET digital assets as described in Note 7. The remaining proceeds of $2.0 million was used to pay transaction expenses and for working capital.

On June 13, 2025, the Company sold senior secured convertible notes (the “June 2025 Convertible Exchangeable Notes”) in the aggregate principal amount of $55.6 million, which was both (a) convertible into shares of the Company’s Common Stock and (b) exchangeable into the utility tokens and key medium of exchange on the Fetch.ai network (“FET”). The June 2025 Convertible Exchangeable Notes were issued at an original issue discount of 10.0%, accrued interest at a rate of 12% per annum and had an original maturity date of December 13, 2026.

The Company elected the fair value option for the June 2025 Convertible Exchangeable Notes under ASC 825, Financial Instruments, with changes in fair value recorded in earnings each reporting period to simplify the accounting. Accordingly, when the fair value option was applied, the Company did not separately evaluate the June 2025 Convertible Exchangeable Notes for the existence of embedded features that would require bifurcation as embedded derivatives under other accounting guidance. All debt issuance costs incurred in connection with June 2025 Convertible Exchangeable Notes accounted for pursuant to the fair value option were expensed as incurred. The fair value of the June 2025 Convertible Exchangeable Notes was determined using a discounted cash flow analysis at a discount rate of 3.82%. The fair value of the June 2025 Convertible Exchangeable Notes of $50.0 million was recorded as a long term liability

upon fair value election.



	June 2025
	Convertible
(in thousands)	Exchangeable Notes
Fair value at June 13, 2025	$	50,000
Change in estimated fair value of convertible notes		(7,320	)
Fair value at June 30, 2025	$	42,680

The June 2025 Convertible Exchangeable Notes were secured by the Company's FET and other collateral tokens discussed in Note 7. In the fourth quarter of 2025, these digital assets were liquidated and the proceeds from the sale of those assets, as well as the issuance of the Reminder Notes, satisfied the obligations under the June 2025 Convertible Exchangeable Notes in full.

Promissory Notes - Related Parties

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

On November 7, 2025, the Company's former legal counsel sold 50% of this note, including accrued interest, to Woodway, an unrelated party (the "New Woodway Note"). On December 29, 2025, the Company's former legal counsel sold the remaining 50% of this note in the amount of $2.2 million, including accrued interest, to two related parties of the Company, and this amount was outstanding as of December 31, 2025. In February of 2026, one of these related parties transferred their note to two other related parties in equal amounts of $0.6 million. On February 26, 2026, these two related parties each exchanged $0.2 million of principal for 6,285 shares of common stock, for a total of exchange of $0.4 million of principal for 12,570 shares of common stock, and the Company recognized an aggregate gain on extinguishment of debt in the amount of $0.2 million.

Term Loan

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

On April 24, 2024, (the “Effective Date”) the Company entered into a Loan Modification Agreement (the “Modification Agreement”) with Vertical reducing the outstanding debt by $3.0 million and extending the maturity date to December 31, 2024, which was subsequently extended to December 31, 2025. As of the Effective Date, the outstanding principal amount of the Loan was approximately $5.0 million. During the six months ended June 30, 2026, $1.1 million of principal and accrued interest was converted into 30,844 shares of common stock.

The carrying value of the Term Loan is as follows:


	June 30,		December 31,
(in thousands)	2026		2025
Principal and interest	$	-	$	326
Guarantee fees		1,717		2,348
Aggregate carrying value	$	1,717	$	2,674

Working Capital Facility

In connection with the acquisition of Wattbike, the Company assumed the obligations under a working capital facility for a total of $2.1 million in principal and accrued interest as of the date of acquisition. The interest rate under the facility is 1,100 basis points above the Bank of England Base Rate. On July 1, 2025, the Company extended the facility to June 30, 2026, and the total commitment under the facility was reduced to $2.7 million. For the three and six months ended June 30, 2026, the Company incurred interest and fees totaling $0.1 million and $0.2 million, respectively, all of which were paid-in-kind. The outstanding balance on this facility as of June 30, 2026 and December 31, 2025 was $1.7 million, and the facility has since been extended to August 31, 2026.

Other Notes Payable

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

As previously discussed, on November 7, 2025, Woodway purchased the New Woodway Note from the Company's former legal counsel in the principal amount of $2.1 million. The New Woodway Note accrues interest at a rate of 12% per annum and has a maturity date of November 6, 2026. The outstanding balance on the New Woodway Note, including accrued interest, as of June 30, 2026 and December 31, 2025 was $2.1 million and $2.0 million, respectively.

On May 21, 2025, the Company issued an unsecured promissory note in the principal amount of $2.0 million to Woodway (the "May 2025 Woodway Note"). On February 27, 2026, Woodway exchanged $0.4 million of principal on this note for 12,571 shares of Common Stock, and the Company recorded a gain on the extinguishment of debt in the amount of $0.2 million. The carrying value of the May 2025 Woodway Note as of June 30, 2026 and December 31, 2025 was $1.7 million and $1.8 million, respectively.

On May 1, 2025, the Company entered into an agreement to settle outstanding liabilities with a third-party by issuing to the third-party an unsecured promissory note in the principal amount of $0.5 million which has a maturity date of June 30, 2027 and accrues interest at a rate of 5% per annum. The total outstanding principal balance including accrued interest as of June 30, 2026 and December 31, 2025 was $0.3 million.

Scheduled maturities on the Company's outstanding indebtedness as of June 30, 2026 is as follows:


Fiscal Years Ending December 31,
(in thousands)	Convertible Notes		Loans Payable
2026 (remaining)	$	7,895	$	6,940
2027		2,140		4,385
Total	$	10,035	$	11,325

12. Warrants

The following is a schedule of changes in warrants issued and outstanding from December 31, 2025 to June 30, 2026:


		Outstanding as of								Outstanding as of
	December 31, 2025			Issued		Exercised		Canceled		June 30, 2026
Registered Direct Offering Warrants			2		—		—		—		2
Best Efforts Offering A-1 Warrants			41		—		—		—		41
Best Efforts Offering A-2 Warrants			41		—		—		—		41
Best Efforts Placement Agent Warrants			3		—		—		—		3
January 2025 Warrants			700		—		—		—		700
Woodway May 2025 Warrants			571		—		—		—		571
Class A Incremental Notes Warrants			16,152		20,851		—		—		37,003
Total Common Stock Purchase Warrants			17,510		20,851		—		—		38,360

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

Class A Incremental Notes Warrants

In connection with the January 28, 2025 SPA (see Note 11), the Company issued warrants to purchase an aggregate of 20,851 shares of Common Stock during the six months ended June 30, 2026 with initial exercise prices ranging from $48.52 per share to $110.32 per share. The warrants are exercisable for seven years after the issuance date and are subject to customary adjustments for stock dividends, stock splits, issuances of additional shares of common stock.

January 2025 and March 2025 Warrants

On January 28, 2025, the Company issued warrants to purchase 963 shares of common stock with an initial exercise price of $7,403.99 per share. The warrants may be exercised during the period commencing January 28, 2025 and ending January 28, 2032. The warrant exercise price is subject to customary adjustments for stock dividends, stock splits, issuances of additional shares of common stock. On

July 7, 2025, the Company entered into an inducement offer letter agreement and agreed to exercise part of the January 2025 Warrants of 263 shares at an exercise price of $379.40 per share.

On March 11, 2025, pursuant to the January 2025 SPA, the Company issued warrants to purchase 1,185 shares of Common Stock with an exercise price of $214.20 per share, which expire on March 11, 2032.

13. Fair Value Measurements

The Company’s financial instruments consist of derivatives, convertible notes held at fair value, and warrants. Liabilities measured at fair value on a recurring basis as of June 30, 2026 and December 31, 2025 were as follows:


	June 30, 2026						December 31, 2025
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
	(in thousands)						(in thousands)
Liabilities
Derivatives	$	—	$	—	$	519	$	—	$	—	$	243
Series D convertible preferred stock		—		—		9,543		—		—		—
Contingent consideration		—		—		2,104		—		—		—
Convertible notes		—		—		4,817		—		—		5,247
Warrants		—		—		29		—		—		408
Total	$	—	$	—	$	17,012	$	—	$	—	$	5,898

During the six months ended June 30, 2026 and 2025, there were no transfers between Level 1 and Level 2, nor into and out of Level 3. The carrying values of the Company’s prepaid expenses and other current assets, accounts payable and accrued expenses approximate their fair values due to the short-term nature of these assets and liabilities.

The following summarizes the activity for the Company Level 3 assets and liabilities measured at fair value on a recurring basis for the six months ended June 30, 2026.

Derivatives


(in thousands)	Class A Incremental Notes Derivatives
Fair value at December 31, 2025	$	243
Issuance of derivatives		440
Change in estimated fair value of derivatives		(164	)
Fair value at June 30, 2026	$	519

The Company recorded the derivatives as a derivative asset or liability in the Company’s condensed consolidated balance sheet in accordance with FASB ASC 815, Derivatives and Hedging. For the outstanding derivatives as of June 30, 2026 and December 31, 2025, the fair value of the derivatives were determined using a Monte Carlo simulation. The Monte Carlo Simulation valuation model incorporates assumptions as to stock price volatility, discount rate, dividend rate and risk-free interest rate.

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


	June 30,			December 31,
	2026			2025
Weighted-average risk-free interest rate	3.8-3.97%			3.45% - 3.51%
Weighted-average expected term (in years)	0.22-0.61			0.72 - 2.65
Weighted-average expected volatility		95.0	%		95.0	%
Expected dividend yield		—	%		—	%

Convertible Notes

September 2025 Exchange Note

The Company entered into a convertible note arrangement in February 2024. The Company elected the fair value option for this note under ASC 825, Financial Instruments, with changes in fair value recorded in earnings each reporting period. During the six months ended June 30, 2026, the entire remaining principal and interest balance was converted into shares of Common Stock and the Company recorded a change in fair value for the difference between the $0.9 million fair value as of December 31, 2025 and the fair value of the Common Stock issued.


	Sep-25
(in thousands)	Exchange Note
Fair value at December 31, 2025	$	933
Conversion to common stock		(2,059	)
Change in estimated fair value of convertible notes		1,126
Fair value at June 30, 2026	$	-

Remainder Notes

The Company also elected the fair value option for the Remainder Notes (see Note 11). These notes were valued using a Monte Carlo Simulation model using a discount rate of 32%, volatility of 70% and a risk free rates ranging from 3.68% to 3.94% as of June 30, 2026.


(in thousands)	Remainder Notes
Fair value at December 31, 2025	$	4,314
Change in estimated fair value of convertible notes		503
Fair value at June 30, 2026	$	4,817

January 2025 Exchange Notes

On February 4, 2025, the Company and the Exchange Agreement Investor entered into an Exchange Agreement (the “Exchange Agreement”), pursuant to which the Company and the Exchange Agreement Investor exchanged the Former Principal Stockholder Notes for five new secured promissory notes of the Company secured by the Company’s assets (the “January 2025 Exchange Notes”). The amendment to the Note represents the addition of a substantive conversion feature and as a result the Company recorded a gain on extinguishment included in condensed consolidated statement of stockholders' equity. The Company elected the fair value option for the January 2025 Exchange Notes under ASC 825, Financial Instruments, with changes in fair value recorded in earnings each reporting period. The fair value of the January 2025 Exchange Notes was determined using a discounted cash flow analysis at a discount rate of 16.3% on February 4, 2025. The January 2025 Exchange Notes, in the aggregate principal amount of $5.4 million were fully converted into 26,428 shares of Common Stock in February 2025.


	January 2025
(in thousands)	Exchange Notes
Carrying amount at February 4, 2025	$	5,380
Conversion to common stock		(5,391	)
Gain on extinguishment of debt with related party		(279	)
Change in estimated fair value of convertible notes		290
Fair value at June 30, 2025	$	—

Warrants

The following table summarizes the activity for the Company Level 3 warrant liabilities measured at fair value on a recurring basis for the six months ended June 30, 2026:


(in thousands)	Class A Incremental Notes Warrants
Fair value at December 31, 2025	$	408
Issuance of warrants		428
Change in estimated fair value of warrants		(807	)
Fair value at June 30, 2026	$	29

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


	June 30,			December 31,
	2026			2025
Weighted-average risk-free interest rate	4.0% - 4.23%			3.7% - 4.2%
Weighted-average expected term (in years)	5.58 - 6.86			0.26 - 9.52
Weighted-average expected volatility		100.0	%		150.0	%
Expected dividend yield		—	%		—	%

Series D Convertible Preferred Stock

In connection with the acquisition of Ergatta (see Note 23) on March 11, 2026, the Company issued the Series D Convertible Preferred Stock, which was initially valued $7.7 million. The fair value as of June 30, 2026 was estimated using a Monte-Carlo simulation model with a risk-free rate of 4.11% and an annual equity volatility of 68%. The following table summarizes the activity for preferred stock measured at fair value on a recurring basis for the six months ended June 30, 2026:


(in thousands)	Series D Preferred Stock
Fair value at December 31, 2025	$	—
Ergatta acquisition		7,676
Change in estimated fair value of preferred stock		1,118
Stock-based compensation		749
Fair value at June 30, 2026	$	9,543

Accrued Earnout

The Merger Agreement with Ergatta provides for additional cash consideration payable to the sellers on April 30, 2027 of up to $3.5 million based on the excess of 2026 Free Cash Flow (see Note 23) over $1.75 million, multiplied by 2. The fair value of the contingent consideration as of June 30, 2026 was estimated using a Monte-Carlo simulation model with a risk-free rate of 4.11% and an annual equity volatility of 68%. The following table summarizes the activity for the contingent consideration measured at fair value on a recurring basis for the six months ended June 30, 2026:


(in thousands)	Accrued Earnout
Fair value at December 31, 2025	$	—
Ergatta acquistion on March 11, 2026		1,587
Change in estimated fair value of contingent consideration		517
Fair value at June 30, 2026	$	2,104

14. Leases

Lease Obligations

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

Operating lease arrangements primarily consist of office and warehouse leases expiring at various years through 2028. The facility leases have original lease terms of two to seven years and contain options to extend the lease up to 5 years or terminate the lease. Options to extend are included in leased right-of-use assets and lease liabilities in the condensed consolidated balance sheet when the Company is reasonably certain it will renew the underlying leases. The Company has elected to apply a collateralized incremental borrowing rate to facility leases on the original lease term in calculating the present value of future lease payments.

As of June 30, 2026 and December 31, 2025, the weighted average discount rate for operating leases was 6.33% and the weighted average remaining lease term for operating leases was 2.0 and 2.4 years, respectively.

The Company has entered into various short-term operating leases for office and warehouse space, with an initial term of twelve months or less. These short-term leases are not recorded on the Company’s condensed consolidated balance sheets. The components of lease expense and other information for the three and six months ended June 30, 2026 and 2025 were as follows.


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in thousands)				(in thousands)
Operating lease costs	$	35	$	84	$	72	$	166
Variable lease costs		1		33		13		69
Short-term lease costs		20		10		26		20
Total lease costs		56		127		111		255
Other information:
Cash paid for amounts included in the measurement of operating lease liability	$	36	$	117	$	85	$	235

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


Fiscal Year Ending December 31,	Operating
	(in thousands)
2026 (remaining)		73
2027		147
2028		67
Total future minimum lease payments		287
Less: imputed interest		(23	)
Present value of operating lease liability	$	264

Current portion of lease liability		130
Non-current portion of lease liability		134
Present value of operating lease liability	$	264

15. Commitments and Contingencies

Royalty Agreement

In 2017, the Company entered into a royalty agreement with Fuseproject and agreed to pay 3% of cumulative FORME net sales up to $5.0 million and 1% of cumulative FORME net sales above $5.0 million, up to a maximum total royalty of $1.0 million. Regardless of the level of cumulative net sales, a guaranteed minimum payment of $0.2 million shall be paid in the first 12 months after the product's initial retail release as an advance towards the royalty payments which was accrued as of June 30, 2026 and December 31, 2025. The Company recorded royalty expense of $0 and $5,000 for the three months ended June 30, 2026 and 2025, respectively, and $0 and $10,000 for the six months ended June 30, 2026 and 2025, respectively.

Legal Proceedings

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

The total amount outstanding as of June 30, 2026 and December 31, 2025 was $2.1 million, including default interest of $0.1 million, and is reflected in Accrued Expenses and other current liabilities in the accompanying consolidated balance sheet.

On or about February 20, 2025, the Company was sued in the Superior Court of Massachusetts, Suffolk County, by one of its former financial services consultants (“the Plaintiff”), alleging a breach of an agreement between the parties for financial services Plaintiff allegedly provided to the Company. The dispute was fully resolved and on June 12, 2025, the parties filed a joint stipulation of dismissal with prejudice and the settlement amount was $2.2 million. The current portion of the total remaining payments as of June 30, 2026 and December 31, 2025 of $0.3 million is included in accrued expenses and other current liabilities and the non-current portion as of June 30, 2026 and December 31, 2025 of $1.6 million and $1.8 million, respectively, is included in other long-term liabilities in the condensed consolidated balance sheet.

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

16. Stockholders’ Equity (Deficit)

Common Stock

The Company’s authorized Common Stock consisted of 900,000,000 shares at $0.0001 par value, as of June 30, 2026 and December 31, 2025. The issued and outstanding common stock was 514,467 shares and 43,930 shares as of June 30, 2026 and December 31, 2025, respectively.

On March 20, 2026, the Company announced that its Board of Directors (the "Board") approved a stock repurchase program of up to $0.5 million, whereby the Company may repurchase shares of its Common Stock in the open market subject to market conditions, applicable securities laws, and the Company's policies governing insider transactions. During the six months ended June 30, 2026, the Company repurchased 34,882 shares of Common Stock in the open market at a cost of $0.2 million.

During the six months ended June 30, 2026, the Company issued 41,428 shares of Common Stock from an At the Market offering, and received net proceeds of approximately $1.5 million.

During the six months ended June 30, 2026, the holder of the Company's Class A Incremental Notes converted $4.4 million of principal and accrued interest into 376,897 shares of common stock.

During the six months ended June 30, 2026, Vertical exchanged $1.1 million of note principal and accrued interest for 30,844 shares of Common Stock.

On February 27, 2026, Woodway exchanged $0.4 million of principal on the May 2025 Woodway Note for 12,571 shares of Common Stock.

On February 26, 2026, a related party noteholder of the Company exchanged $0.2 million of principal for 6,285 shares of Common Stock. Also on February 26, 2026, another related party noteholder of the Company exchanged $0.2 million of principal for 6,285 shares of Common Stock.

In January of 2026, the Current Holder of the September 2025 Exchange Note converted the remaining $1.6 million of principal into 31,113 shares of Common Stock.

In February 2025, the Company issued 1,174 shares of Common Stock, par value $0.0001, from At the Market offering.

During the six months ended June 30, 2025, the Company issued 13,758 shares of Common Stock upon conversion of $14.2 million of convertible notes.

During the six months ended June 30, 2025, the Company issued 3,196 shares of Common Stock upon conversion of 100,000 shares of Series A Preferred Stock, 1,091,225 shares of Series B Preferred Stock and 3,530,616 shares of Series C Preferred Stock.

Preferred Stock

In January 2024, the Board authorized the proposed issuance of shares of non-voting Series A and Series B convertible preferred stock. The Company's authorized preferred stock consists of 200,000,000 shares at $0.0001 par value. As of December 31, 2025, the Series A Certificate designated 10,000,000 shares of the Company’s preferred stock as Series A Preferred Stock, the Series B Certificate designated 1,500,000 shares of the Company’s preferred stock as Series B Preferred Stock, the Series C Certificate designated 5,000,000 shares of the Company’s preferred stock as Series C Preferred Stock and the Series E Certificate designated 1,300,000 shares of the Company’s authorized preferred stock as Series E Convertible Preferred Stock.

On June 30, 2026, the Company entered into a settlement agreement with Vertical under the Term Loan (see Note 11) valued at approximately $0.5 million, which the Company settled through the issuance of 225,681 shares of Series C Preferred Stock. The shares of preferred stock were valued at $0.4 million and the Company recognized a gain on extinguishment of this liability in the amount of $43,000.

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

Upon the closing of the Ergatta Acquisition (see Note 23), the Company filed a certificate of designation with the Secretary of State of the State of Delaware, creating three new series of preferred stock designated as (i) Series D-1 Convertible Preferred Stock, par value $0.0001 per share (“Series D-1 Preferred Stock”) and designating 4,750,000 shares thereof, (ii) Series D-2 Convertible Preferred Stock,

par value $0.0001 per share (“Series D-2 Preferred Stock”) and designating 1,000,000 shares thereof, and (iii) Series D-3 Convertible Preferred Stock, par value $0.0001 per share (“Series D-3 Preferred Stock,” collectively with Series D-1 Preferred Stock and Series D-2 Preferred Stock, “Series D Preferred Stock”) and designating 500,000 shares thereof. Series D Preferred Stock has no voting rights, other than any vote required by law or the Company’s Certificate of Incorporation. Series D-1 Preferred Stock and Series D-2 Preferred Stock shall convert into shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”) on May 3, 2027. Series D-3 Preferred Stock shall convert to shares of Common Stock on May 1, 2028. Conversion of the Series D Preferred Stock is subject to stockholder approval, and if such approval is not obtained, the Series D Preferred Stock will be redeemed for cash. As a result, and due to the variability in the number of shares of Common Stock that the Series D Preferred Stock is convertible into that is not based on the value of the Common Stock, the Series D Preferred Stock is reflected as a liability in the Company's condensed consolidated balance sheet as of June 30, 2026.

On July 1, 2025, the Company issued 1,300,000 shares of its Series E Preferred Stock, par value $0.0001 per share, ("Series E Preferred Stock") in connection with the Wattbike Acquisition (see Note 1). Subject to stockholder approval, the Series E Preferred Stock is convertible into shares of Common Stock at an amount per share equal to the greater of (i) the volume weighted average price of the Common Stock for the 20 consecutive trading days immediately preceding and including the Conversion Date, subject to certain standard anti-dilution adjustments and (ii) the Minimum Price (as defined by NASDAQ) on June 12, 2026. The Series E Preferred Stock was redeemable for cash if stockholder approval was not obtained by June 15, 2026. On June 8, 2026, the Company received stockholder approval for the Series E Preferred Stock to be converted into Common Stock, resulting in a fixed conversion ratio for the Series E Preferred Stock of 0.3442, or 444,860 shares of Common Stock.

Prior to receiving stockholder approval for the conversion into Common Stock, the Series E Preferred Stock was classified as temporary equity in the Company's consolidated balance sheet, as the holders of the preferred stock had the option to redeem such Preferred Stock if stockholder approval was not obtained. With the conversion being approved by the Company's stockholders, the Series E Preferred Stock was reclassified into permanent equity as of June 30, 2026.

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

On June 2, 2025 the Board declared a dividend on the shares of Series A Preferred Stock issued and outstanding as of the record date for such dividend, as a dividend in kind, in the form of 47,332 shares of Series A Preferred Stock. The Company issued 47,332 Dividend Shares on June 3, 2025. Also on June 2, 2025, the Board declared a dividend on the shares of Series C Preferred Stock issued and outstanding as of the record date for such dividend, as a dividend in kind, in the form of 21,584 shares of Series C Preferred Stock. The Company issued 21,584 Dividend Shares on June 3, 2025.

On April 17, 2025 the Board declared a dividend on the shares of Series A Preferred Stock issued and outstanding as of the record date for such dividend, as a dividend in kind, in the form of 81,464 shares of Series A Preferred Stock. The Company issued 81,464 Dividend Shares on April 17, 2025. Also on April 17, 2025, the Board declared a dividend on the shares of Series C Preferred Stock issued and outstanding as of the record date for such dividend, as a dividend in kind, in the form of 46,727 shares of Series C Preferred Stock. The Company issued 46,727 Dividend Shares on April 17, 2025.

On January 23, 2025 the Board declared a dividend on the shares of Series A Preferred Stock issued and outstanding as of the record date for such dividend, as a dividend in kind, in the form of 112,334 shares of Series A Preferred Stock. The Company issued 112,334 Dividend Shares on January 23, 2025.

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

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

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

17. Equity-Based Compensation

2023 and 2020 Equity Incentive Plan

Presented below is a summary of the compensation cost recognized in the condensed consolidated statements of operations and comprehensive loss for the three and six months ended June 30, 2026 and 2025.


	Three Months Ended June 30,				Six Months Ended June 30,
(in thousands)	2026		2025		2026		2025
Research and development	$	55	$	373	$	109	$	1,072
General and administrative		771		2,431		1,111		3,821
Total	$	826	$	2,804	$	1,220	$	4,893

The table above includes approximately $0.6 million and $0.7 million of compensation expense for the three and six months ended June 30, 2026 related to the Series D-2 and D-3 Preferred Stock issued in connection with the Ergatta Acquisition (see Note 23), and is reflected in General and administrative expense. For the three and six months ended June 30, 2025, the Company recognized stock-based compensation expense of $0.1 million and $0.5 million, respectively, was capitalized as software development costs. No stock-based compensation was capitalized during the three and six months ended June 30, 2026.

During the six months ended June 30, 2026, the Company did not grant any shares under the 2023 and 2020 Plans, and there were no stock options outstanding as of June 30, 2026 and December 31, 2025. The Company has not granted any restricted stock or stock appreciation rights.

As of June 30, 2026 and December 31, 2025, the Company had $0.2 million and $0.9 million of unrecognized stock-based compensation expense that is expected to be recognized over a weighted-average period of 0.1 years and 0.2 years, respectively.

18. Concentration of Credit Risk and Major Customers and Vendors

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

For the six months ended June 30, 2026, there were no customers representing greater than 10% of the Company's consolidated revenue. For the six months ended June 30, 2025, Woodway represented 67% of the Company’s consolidated revenue.

At June 30, 2026, one customer represented 38% of the Company's consolidated accounts receivable. At December 31, 2025, this customer represented 47% of the Company's consolidated accounts receivable.

The Company had no vendors representing greater than 10% of total finished goods purchases for the six months ended June 30, 2026 and one vendor represented more than 10% of finished goods purchases for the six months ended June 30, 2025.

19. Benefit Plans

The Company established a defined contribution savings plan under Section 401(k) of the Internal Revenue Code. This plan covers all employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. Matching contributions to the plan may be made at the discretion of the Board. During the six months ended June 30, 2026 and 2025, the Company did not make any contributions to the plan.

The Company contributes up to 5% of an employee’s salary into personal pension funds held by individual employees under the laws of the United Kingdom. These personal pension funds are the responsibility of the individual employees. The Company's contribution to employee pension funds for the six months ended June 30, 2026 was approximately $60,000.

20. Loss Per Share

The computation of loss per share is as follows:


	Three Months Ended June 30,						Six Months Ended June 30,
	2026			2025			2026			2025
(in thousands, except share and per share amounts)
Numerator:
Net loss	$	(7,104	)	$	(2,180	)	$	(17,847	)	$	(8,782	)
Net loss attributable to common stockholders	$	(7,104	)	$	(2,180	)	$	(17,847	)	$	(8,782	)
Denominator:
Weighted average common stock outstanding - basic and diluted		408,871			14,602			279,176			10,044
Net loss per share attributable to common stockholders - basic and diluted	$	(17.37	)	$	(149.29	)	$	(63.93	)	$	(874.39	)

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


	June 30,
	2026		2025
Warrants to purchase common stock		38,360		11,403
Series A Convertible Preferred Stock conversion to common stock		102,842		14,501
Series B Convertible Preferred Stock conversion to common stock		0		—
Series C Convertible Preferred Stock conversion to common stock		2,504		1,064
Series E Convertible Preferred Stock conversion to common stock		102,842
LTI Preferred Stock conversion to common stock		—		3,369
Notes payable conversion to common stock		101,864		3,986
Total		348,414		34,323

The Company's Series D Convertible Preferred Stock is also potentially convertible into Common Stock, however the conversion price is unknown as of June 30, 2026.

21. Related Party Transactions

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

Related Party Convertible Notes

See Note 11 for discussion.

Principal Stockholder Promissory Notes

As further discussed in Note 11, On January 29, 2025, the Former Principal Stockholder assigned the Former Principal Stockholder Notes of $5.4 million to an accredited investor that is managed by an ATW Partners related entity (the “Exchange Agreement Investor”) and the outstanding principal balance was $0 as of June 30, 2025.

Other Related Party Transactions

In 2017, the Company entered into a royalty agreement with Fuseproject and agreed to pay 3% of cumulative net FORME fitness product sales up to $5.0 million and 1% of cumulative net FORME fitness product sales above $5.0 million, up to a maximum total royalty of $1.0 million. Regardless of the level of cumulative net sales, a guaranteed minimum payment of $0.2 million shall be paid in the first 12 months after the products initial retail release as an advance towards the royalty payments which was accrued as of June 30, 2026. As of June 30, 2026 the Company has accrued $0.3 million in royalty payments. The Company recorded royalty expense of $0 and $5,000 for the three months ended June 30, 2026 and 2025, respectively, and $0 and $10,000 for the six months ended June 30, 2026 and 2025, respectively.

22. Supplemental Disclosure of Cash Flow Information

Supplemental cash flow information for the six months ended June 30, 2026 and 2025 is as follows:


	Six Months Ended June 30,
	2026		2025
Supplemental Disclosure Of Cash Flow Information:
Cash paid for Interest		—		88
Non-Cash Investing and Financing Information:
Property & equipment in accounts payable		—		18
Inventories in accounts payable and accrued expenses		—		197
Non-cash consideration for acquisition of Ergatta		11,335		—
Issuance and offering costs in accounts payable and accrued expenses		—		43
Gain on extinguishment of debt with related party		—		279
Issuance of common stock upon conversion of convertible notes		7,807		10,022
Issuance of Series C Preferred Stock upon settlement of loss restoration agreement		—		3,127
Issuance of warrants with convertible notes		428		1,580
Issuance of embedded derivatives with convertible notes		441		2,104
Series A Dividends Paid in Kind		—		483
Series C Dividends Paid in Kind		—		390
Non-cash settlement of debt through issuance of common stock		911		—
Stock-based compensation capitalized in intangible asset and other assets		—		481

23. Acquisitions

Ergatta Acquisition

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

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

The Acquisition was accounted for under the acquisition method of accounting under ASC 805, Business Combinations. Assets acquired and liabilities assumed were recorded in the condensed consolidated balance sheet at their estimated fair values as of March 11, 2026, with the remaining unallocated purchase price recorded as goodwill. The table below summarizes the consideration transferred to Ergatta shareholders on March 11, 2026:


(in thousands)	Ergatta
Cash	$	2,075
Senior secured note		1,899
Series D-1 preferred stock		7,676
Contingent consideration		1,587
Other liabilities assumed		173
Total consideration	$	13,410

Ergatta is a connected fitness company with an emphasis on game-based fitness content. The Ergatta Acquisition was a strategic acquisition intended to help accelerate the Company’s commercialization path and achieve immediate scale, resulting in a high growth, profitable platform that sells connected fitness equipment and digital fitness services across B2B and B2C channels.

The Series D-1 preferred stock was recorded at its estimated fair value and recognized as a long-term liability in the accompanying condensed consolidated balance sheet. Settlement of this liability is based on Ergatta's free cash flow, as defined below, and the settlement value will be a minimum of $5.25 million and a maximum of $9.5 million.

The purchase price allocation is preliminary and subject to change, including the valuation of intangible assets. The amounts recognized will be finalized as the information necessary to complete the analysis is obtained, but no later than one year after the acquisition date:


(in thousands)	As of March 11, 2026
Cash	$	363
Accounts receivable		151
Inventories		664
Prepaid expenses and other current assets		338
Vendor deposits		740
Property and equipment		50
Other assets		13
Intangible assets		9,800
Total assets acquired	$	12,119
Accounts payable		(216	)
Accrued expenses and other current liabilities		(305	)
Deferred revenue		(3,333	)
Total identifiable net assets acquired		8,265
Goodwill		5,145
Total identifiable net assets acquired and goodwill		13,410

The identified intangible assets of $9.8 million are comprised of (i) software developed technology of $2.4 million that has an estimated useful life of 5 years, (ii) direct-to-consumer subscription of $5.3 million that has an estimated useful life of 2 years, (iii) license agreement of $1.3 million having an estimated useful life of 6 years; and (iv) trademarks and trade name of $0.8 million with an estimated useful life of 9 years. Significant assumptions utilized in the valuation of identified intangible assets were based on company specific information and projections which are not observable in the market and are thus considered Level 3 measurements as defined by U.S. GAAP. Significant assumptions include an effective tax rate of 25%, as well as technology migration and royalty rates of 12.5% and 15%, respectively, for developed technology, attrition rates and contributory asset charges of 20% and 12%, respectively, for customer related intangibles and a royalty rate of 2% for trademarks and trade names. Estimated annual amortization expense related to these intangible assets for each of the next five fiscal years is included in Note 7.

For the six months ended June 30, 2026, the Company incurred approximately $0.5 million of transaction costs related to this acquisition, which are reflected in General and administrative expense in the accompanying condensed consolidated statements of operations.

Earn Out

As part of the Ergatta Acquisition, the sellers are entitled to receive a cash contingent payment on April 30, 2027 that is secured by the $1.9 million senior secured note previously discussed. The amount of the contingent payment is based on Ergatta's 2026 Free Cash Flow less $1.75 million multiplied by 2.0, with a maximum payment of $3.5 million. The fair value of this payment as of March 11, and June 30, 2026 is estimated to be $1.6 million and $2.1 million, respectively. Additionally, the ultimate settlement of the Series D-1 Preferred Stock is contingent upon on Ergatta's 2026 Free Cash Flow, which is defined as earnings before interest, taxes, deprecation and amortization, stock-based compensation, other income/expense and certain mutually agreed-upon non-recurring charges, less capitalized software development expenses and other capital expenditures incurred in the ordinary course of business. The amount of the settlement associated with the Series D-1 Preferred Stock is expected to be between a minimum of $5.25 million and a maximum of $9.5M.

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


	Proforma						Proforma
	Three Months Ended June 30,						Six Months Ended June 30,
	2026			2025			2026			2025
	(in thousands)						(in thousands)
Revenue	$	6,647		$	7,862		$	14,389		$	16,741
Operating Loss		(3,372	)		(5,892	)		(7,248	)		(12,321	)
Net Loss		(7,104	)		(2,961	)		(17,843	)		(10,413	)
Net loss per share – basic and diluted	$	(17.37	)	$	(202.79	)	$	(63.91	)	$	(1,036.75	)
Weighted average common stock outstanding – basic and diluted		408,871			14,602			279,176			10,044

The unaudited pro forma consolidated results for the three and six months ended June 30, 2026 and 2025 were prepared using the acquisition method of accounting and are based on the historical financial information of Ergatta, Wattbike and the Company. The unaudited pro forma consolidated results incorporate historical financial information for all significant acquisitions pursuant to SEC regulations since January 1, 2025. The historical financial information has been adjusted to give effect to pro forma adjustments that are: (i) directly attributable to the acquisition, (ii) factually supportable and (iii) expected to have a continuing impact on the combined

results. The unaudited pro forma consolidated results are not necessarily indicative of what the Company’s consolidated results of operations actually would have been had it completed these acquisitions on January 1, 2025.

The following unaudited condensed consolidated results of operations for Ergatta are included in the condensed consolidated statements of loss for the three and six months ended June 30, 2026:


	Three Months Ended June 30,			Six Months Ended June 30,
	Three Months Ended June 30,			Six Months Ended June 30,
	2026			2026
Revenue	$	2,643		$	3,196
Operating Loss		(391	)		(504	)
Net Loss		(1,986	)		(2,168	)

24. Subsequent Events

Acquisition

On July 7, 2026, the Company entered into a Stock Purchase Agreement (the “Purchase Agreement”) by and among the Company, STEPR, Inc., a Delaware corporation (“STEPR”), STEPR PTY LTD – ACN 660 939 079, an Australian proprietary limited company (the “Seller”), Hayden Thorneycroft ATF the HG Thorneycroft Family Trust (“TF Trust”), Australian Fitness Supplies Pty Ltd, an Australian proprietary limited company (“AFS,” and together with TF Trust, the “Indirect Equityholders”), Hayden Thorneycroft (“Thorneycroft”) and Daniel Alenaddaf (“Alenaddaf,” and together with Thorneycroft, the “Supporting Parties”), and the Seller, as representative of the Seller Parties (the “Seller Representative”).

Pursuant to the Purchase Agreement, the Company will: (i) acquire all of the issued and outstanding shares of capital stock of STEPR (the “Purchased Shares”) from the Seller in a secondary transaction; and (ii) immediately following such acquisition, will purchase newly issued shares of STEPR (the “Primary Shares”) in a primary transaction, in each case subject to the satisfaction or waiver of customary closing conditions. The total consideration payable by the Company consists of a combination of cash and shares of the Company's newly designated preferred stock, structured as follows:

•

Cash Consideration. At the closing of the purchase and sale of the Purchased Shares (the “Closing”), the Company will (i) pay an initial cash contribution of $1.5 million (net of any advances previously made under the secured note described below) to STEPR for working capital purposes, and (ii) repay up to $1.2 million to AFS to satisfy the outstanding balance of an existing shareholder loan owed by STEPR (the “AFS Loan Repayment Amount”). Following the Closing, the Company will advance up to $2.5 million in incremental cash contributions to STEPR for working capital purposes. In addition, on the first anniversary of the Closing, the Company will pay to the Seller up to $1.0 million in shareholder cash consideration (the “Shareholder Cash Consideration”), of which up to $0.5 million is to be used to repay certain other shareholder loans and $0.5 million is to be distributed to designated parties.

•

Secured Note. In connection with the Purchase Agreement, the Company will execute and deliver a secured promissory note in the maximum principal amount of $1.5 million, under which it may, at its sole discretion, make advances to the Seller from the effective date of the note until the earlier of date of the Closing and the termination of the Purchase Agreement. The secured note will accrue interest at a rate equal to the lesser of (a) the Prime Rate (with a floor of 6.75%) plus 5.00% per annum, or (b) the maximum rate permitted under applicable law, computed on the basis of a 360-day year.

•

Equity Consideration. At the Closing, the Company will issue to the Seller (i) $6.0 million worth of shares of the Company's Series F-1 Non-Voting Convertible Preferred Stock (the “F1 Equity Consideration”), (ii) $10.5 million worth of shares of the Company's Series F-2 Non-Voting Convertible Preferred Stock (the “F2 Equity Consideration”), and (iii) $2.5 million worth of shares of the Company's Series F-3 Non-Voting Convertible Preferred Stock (the “F3 Equity Consideration,” and together with the F1 Equity Consideration and the F2 Equity Consideration, the “Equity Consideration”). Each series of Equity Consideration is convertible into shares of the Company's Common Stock at the applicable conversion price, in accordance with and subject to the terms of the Certificates of Designation of the foregoing preferred stock (the “Certificate of Designation”), that will be filed with the Secretary of State of the State of Delaware prior to the Closing. The Equity Consideration is subject to performance-based scaling factors as described below.

•

Scaling Factors. The value of the Equity Consideration is subject to adjustment based on STEPR's financial performance following the Closing. The F1 Equity Consideration is subject to the F1 Scaling Factor, calculated based on STEPR's EBITDA during the period from July 1, 2026 to June 30, 2027 (“Year 1 EBITDA”), with Year 1 EBITDA capped at $4.0 million for purposes of such calculation. The F2 Equity Consideration is subject to the F2 Scaling Factor, calculated based on STEPR's EBITDA during the period from July 1, 2027 to June 30, 2028 (“Year 2 EBITDA”), with Year 2 EBITDA capped at $7.0 million for purposes of such calculation. The F3 Equity Consideration is subject to the F3 Scaling Factor, which is determined based on aggregate achieved points across synergy categories as set forth in the F3 Framework attached to the Purchase Agreement. Each Scaling Factor may range from 0.000 (or 0.500 in the case of the F1 Scaling Factor) to 1.000.

The Closing is expected to occur in the third quarter of 2026, subject to the satisfaction or waiver (if permitted) of conditions precedent as provided in the Purchase Agreement.

Conversion of Convertible Notes and Exchange of Loans Payable

In July and August of 2026, the holder of Class A Incremental Notes converted $0.3 million of debt principal and accrued interest into 88,103 shares of Common Stock.

In August of 2026, the Company entered into Exchange Agreements with Woodway, pursuant to which Woodway exchanged $0.2 million of principal balance on a promissory note for 65,000 shares of Common Stock.

On August 10, 2026, the Company entered into an Exchange Agreement with one of the holders of the Remainder Notes (see Note 11) whereby the holder exchanged $0.5 million of principal balance for 150,000 shares of Common Stock.

Issuance of Convertible Notes

On July 21, 2026, the Company issued a Class B Incremental Note pursuant to the January 2025 SPA (see Note 11) for a principal amount of $2.0 million and warrants to purchase 305,810 shares of Common Stock at an exercise price of $5.527 per share. The Class B Incremental Note has an initial conversion price of $3.597 per share, subject to adjustment under the terms of the note, and a maturity date of July 21, 2027.

Preferred Stock Dividends

Pursuant to the Certificate of Designations of Series C Preferred Stock, on July 28, 2026, the Board declared a dividend on the shares of Series C Preferred Stock issued and outstanding as of the record date for such dividend, as a dividend in kind, in the form of 338,240 shares of Series C Preferred Stock in the aggregate.

Pursuant to the Certificate of Designations of Series A Preferred Stock, on July 28, 2026, the Board of Directors of the Company declared a dividend on the shares of Series A Preferred Stock issued and outstanding as of the record date for such dividend, as a dividend in kind, in the form of 281,344 shares of Series A Preferred Stock in the aggregate.

The Company issued the Series A Preferred Stock and Series C Preferred Stock dividend shares on July 28, 2026.

Other Exchange Agreements

In August of 2026, the Company entered into Exchange Agreements with Thomas Aulet, pursuant to which Mr. Aulet exchanged an aggregate of 400,000 shares of the Company's Series D-2 Preferred Stock for 251,627 shares of Common Stock.

In August of 2026, the Company entered into an Exchange Agreements with Alessandra Gotbaum, pursuant to which Ms. Gotbaum exchanged an aggregate of 375,000 shares of the Series D-2 Preferred Stock for 237,092 shares of Common Stock.

In August of 2026, the Company entered into Exchange Agreements with a holder of the Company's Series A Preferred Stock pursuant to which the holder exchanged an aggregate of 66,025 shares of Series A Preferred Stock for 40,000 shares of Common Stock.

In August of 2026, the Company entered into Exchange Agreements with THLWY LLC, pursuant to which THLWY LLC exchanged an aggregate of 131,960 shares of Series A Preferred Stock for 80,000 shares of Common Stock.

In August of 2026, the Company entered into Exchange Agreements with a different holder of Series A Preferred Stock, pursuant to which the holder exchanged an aggregate of 66,025 shares of Series A Preferred Stock for 40,000 shares of Common Stock.

On August 4, 2026, the Company entered into an Exchange Agreement with Vertical, pursuant to which Vertical exchanged 144,000 shares of the Company's Series C Preferred Stock for 90,000 shares of Common Stock.

On August 5, 2026, the Company entered into an Exchange Agreement with Piper Nominee IV Limited, pursuant to which Piper Nominee IV Limited exchanged 88,750 shares of the Company's Series E Preferred Stock for 50,000 shares of Common Stock.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes and other financial information included in Part I, Item 1. of this Form 10-Q, and together with our audited consolidated financial statements, the related notes thereto and other information set forth in our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 31, 2026 (the "2025 10-K"). Historic results are not necessarily indicative of future results.

Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. In some cases, forward-looking statements can be identified by the use of forward-looking terms such as “anticipate,” “estimate,” “believe,” “continue,” “could,” “intend,” “may,” “plan,” “potential,” “predict,” “should,” “will,” “expect,” “objective,” “projection,” “forecast,” “goal,” “guidance,” “outlook,” “effort,” “target,” “trajectory” or the negative of these terms or other comparable terms. However, the absence of these words does not mean that the statements are not forward-looking. Forward-looking statements include, but are not limited to, statements regarding:

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

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our business model, growth strategy and our ability to effectively manage our growth, the factors which may affect our performance and the potential impact thereof and the potential significance and impact of our key operational and business metrics;

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anticipated trends, growth rates, and challenges in our business and the markets in which we operate;

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

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our internal estimates as to our market opportunities, including our total addressable market;

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market acceptance of our Connected Fitness hardware and services;

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beliefs and objectives for future operations, products, and services;

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our ability to maintain and increase sales of our Ergatta water rowers, CLMBR vertical climbing machine ("CLMBR") and FORME Studio equipment and Wattbike fitness products, increase memberships to the Ergatta, Wattbike, CLMBR and FORME platforms, and expand our product and service offerings;

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our ability to attract and retain qualified trainers, including personal trainers, and to contract with fitness instructors and other content production personnel;

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our expectations regarding potential changes to our membership or pricing models or to our products and services;

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our plans to expand our commercial and corporate wellness customer base;

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

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our expectations regarding content costs included in our products and services;

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the effects of seasonal trends on our results of operations;

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our expectations concerning relationships with third-party manufacturers, suppliers, content providers, ecosystem partners, and other third parties, as well as current and potential strategic relationships;

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our expectations regarding our manufacturing and supply chain, including any defects or warranty claims;

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our ability to maintain, protect, and enhance our intellectual property;

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our international expansion plans and ability to continue to expand internationally;

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the effects of increased competition in our markets and our ability to compete effectively;

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

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economic and industry trends, projected growth, or trend analysis;

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our liquidity position, capital requirements and need for additional financing;

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our expectations regarding the impact of general economic conditions and geopolitical events;

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our expectations regarding the period during which we qualify as an emerging growth company under the JOBS Act and as a smaller reporting company; and

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the imposition of new tariffs or changes in existing tariff rates.

These forward-looking statements are based on certain assumptions and analyses made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors it believes are appropriate in the circumstances. These forward-looking statements are subject to known and unknown risks, uncertainties and assumptions that may cause actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by such forward-looking statements. Factors that might cause or contribute to a material difference include those discussed below and under Item 1A. Risk Factors, as well as the risks discussed in the Company’s other filings with the Securities and Exchange Commission (the “SEC”). All forward-looking statements set forth in this Quarterly Report are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations. Forward-looking statements set forth in this Quarterly Report speak only as of the date hereof, and we do not undertake any obligation to update forward-looking statements to reflect subsequent events or circumstances, changes in expectations or the occurrence of unanticipated events, except to the extent required by law. 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.

Overview

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.

Key milestones in our growth history include:

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May 2017 – Interactive Strength Inc. founded

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July 2021 – Commenced commercial delivery of FORME Studio (fitness mirror), our first connected fitness hardware product

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July 2022 – Live 1:1 personal training service launched

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August 2022 – Commenced commercial delivery of FORME Studio Lift (fitness mirror and cable-based digital resistance)

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

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February 2024 – Acquired substantially all of the assets of CLMBR, Inc.

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July 2025 - Acquired all of the outstanding equity interests of Wattbike (Holdings) Limited ("Wattbike").

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March 2026 - Acquired all of the outstanding equity interests of Ergatta, Inc. ("Ergatta")

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July 2026 - Executed a purchase agreement to acquire all of the outstanding shares of STEPR Inc. ("STEPR"), which is expected to close late in the third quarter of 2026.

Our revenue is primarily generated from the sale of our connected fitness hardware products and associated recurring membership revenue.

During the six months ended June 30, 2026 and 2025, we generated total revenue of $11.8 million and $2.6 million, respectively, and incurred net losses of $17.8 million and $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.

Business Model and Growth Strategy

Acquire complementary businesses that generate attractive synergies

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.

Leverage well established equipment distributors to scale in commercial channels

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

Expand into new geographies

We intend to expand the international reach of our existing brands by leveraging in-market relationships and sales infrastructure across the brands in our portfolio. For example, with Wattbike, which is based in the United Kingdom, we are currently evaluating potential expansion of that brand in the US, where FORME, CLMBR and 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 pursue disciplined international expansion by targeting countries with sound macroeconomic conditions, favorable growth trends and stable regulatory environments, and importantly, those where we have footholds and low risk routes to market through our existing brand relationships and in market presence.

Build out partnership ecosystem

We intend to continue to build our strategic partner ecosystem with a focus on relationships that enable us to extend our platform to new audiences. We are pursuing opportunities in a number of attractive verticals, including sports, physical therapy and rehabilitation, and telemedicine. We are continuously identifying and evaluating opportunities to apply our coaching know-how in new and innovative ways to expand our reach and impact.

Expand B2B Channel

We intend to expand our sales and marketing efforts into a variety of light commercial settings, including multifamily buildings, hotels, country clubs, universities and performance centers.

Factors Affecting Our Performance

Our financial condition and results of operations have been, and will continue to be, affected by a number of factors, including the following:

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We have a limited operating history, and our past financial results may not be a reliable indicator of our ability to successfully establish our product and service offerings in the marketplace, or of our future performance, and our revenue growth rate is likely to slow as our business matures.

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Our membership revenue is largely dependent on our ability to sell our Ergatta, Wattbike, CLMBR and FORME Studio equipment and if sales of such 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.

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If we fail to compete successfully against existing and future competitors, we may fail to obtain a meaningful market share, which in turn would harm our business, financial condition, and results of operations.

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Increases in component and equipment costs, long lead times, supply shortages, and supply changes could disrupt our supply chain and negatively impact our business, financial condition, and results of operations.

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The sufficiency of our liquidity and capital resources, and our ability to obtain additional funding as needed for our operations and to execute on our strategy.

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Our ability to execute or realize the anticipated benefits of any strategic acquisition or transaction.

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 six months ended June 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.

In addition, customer demand for our products may be impacted by weak economic conditions, inflation, weak growth, recession, equity market volatility, or other negative economic factors in the United States or other nations. The United States has recently experienced historically high levels of inflation. If the inflation rate continues to increase, it will likely affect our expenses, including, but not limited to, employee compensation expenses, increased manufacturing and supplier costs, and increasing market prices of certain components, parts, supplies, and commodity raw materials, which are incorporated into our products or used by our suppliers to manufacture our products. These components, parts, supplies, and commodities may from time to time become restricted, or general market factors and conditions may affect pricing of such components, parts, supplies and commodities, such as inflation or supply chain constraints. Given our limited operating history, we cannot predict how ongoing or increasing recessionary or inflationary pressures may impact our business, financial condition, and results of operations in the future.

Our products are manufactured primarily in foreign countries, including countries in Asia and sourced from international suppliers. Changes in U.S. trade policy, including the imposition of new tariffs or increases in existing tariff rates on imported goods, could increase our costs and the prices we charge for our products. For example, tariffs on goods imported from countries where our products are manufactured or where we source components could materially increase our cost of revenue. We may not be able to pass increased costs on to our customers, and any price increases we implement may result in reduced demand for our products. We are actively monitoring developments in U.S. trade policy and evaluating potential mitigation strategies, including diversifying our supply chain; however, we cannot predict the ultimate impact of current or future tariffs on our business, financial condition, and results of operations.

RESULTS OF OPERATIONS

Critical Accounting Policies and Estimates

This Management’s Discussion and Analysis of Financial Condition and Results of Operations is based on our consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses. On an ongoing basis, we evaluate these estimates and assumptions, including those described below. We base our estimates on our historical experience and on various other assumptions that we believe to be reasonable under the circumstances. These estimates and assumptions form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Because of the uncertainty inherent in these matters, actual results may differ from these estimates and could differ based upon other assumptions or conditions.

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.

The critical accounting policies that reflect our more significant judgments and estimates used in the preparation of our consolidated financial statements include those noted below.

Fair Value Measurements

Fair value is the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Subsequent changes in fair value of these financial assets and liabilities are recognized in earnings when they occur. 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 notes, 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).

Goodwill and Intangible Assets

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.

We estimate the fair value of intangible assets acquired in business combinations based on an income approach. Where applicable, we utilize the relief-from-royalty method, which assumes that, in lieu of ownership, a third party would be willing to pay a royalty in order to exploit the related benefits of these types of assets. This approach is dependent on a number of factors, including estimates of future growth and trends, royalty rates for this category of intellectual property, discount rates and other variables. For the periods presented, we did not recognize any impairment of intangible assets.

Contingent Consideration

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 six months ended June 30, 2026 and 2025, we recorded losses on changes in fair value of contingent consideration of $0.5 million $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.

Convertible Notes

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 six months ended June 30, 2026 and 2025, we recorded a (loss) gain on the change in fair value of convertible notes of ($1.6) million and $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.

Warrants and Derivative Liabilities

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 six months ended June 30, 2026 and 2025 we recognized gains on changes in the fair values of warrants of $0.8 million and $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 six months ended June 30, 2026 and 2025, we recognized a gain and loss on the changes in fair values of derivatives of $0.2 million and $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.

Income Taxes

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 June 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.

Recent Accounting Pronouncements

See Note 2, Summary of Significant Accounting Policies, of the notes to our consolidated financial statements included in the 2025 10-K for recently adopted accounting pronouncements and recently issued accounting pronouncements not yet adopted as of the dates of the statement of financial position included in this quarterly report on Form 10-Q.

Emerging Growth Company and Smaller Reporting Company Status

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. 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.

Components of Our Operating Results

Revenue

Connected Fitness Products

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.

Membership

Membership revenue consists of revenue generated from our monthly Connected Fitness membership. 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

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.

Cost of Revenue

Connected Fitness Product

Connected Fitness Product cost of revenue consists of Wattbike, Ergatta, CLMBR, 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

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

Training and Other

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

Operating Expenses

Research and Development

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.

Sales and Marketing

Sales and marketing expense consists of performance marketing media spend, brand creative expenses, amortization of customer-related and trademark intangible assets, all showroom expenses and related lease payments and sales and marketing personnel-related expenses.

General and Administrative

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

We expect to incur additional general and administrative expenses as a result of operating as an 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

Other (expense) income, net mainly consists of expenses recognized in connection with settlement agreements with a certain lender, changes in fair value of preferred stock, foreign currency gains and losses and, in 2025, charges associated with the convertible notes that were recognized at fair value.

Interest Expense

Interest expense consists of interest associated with our convertible notes and loans payable.

Interest Income

Interest income in 2025 consists of interest associated with the loan receivable.

(Loss) gain upon extinguishment of debt

(Loss) gain on debt extinguishment 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.

Change in Fair Value of Convertible Notes

The change in fair value of convertible notes consists of the change in the fair value of the outstanding convertible notes since the previous reporting period.

Change in Fair Value of Earn Out

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

Change in Fair Value of Derivatives

The change in fair value of derivatives consists of the change in the fair value of the outstanding derivatives since the previous reporting period.

Change in Fair Value of Warrants

The change in fair value of warrants consists of the change in the fair value of the outstanding warrants since the previous reporting period.

Results of Operations for the Three and Six Months Ended June 30, 2026 and 2025

The following tables set forth our condensed consolidated results of operations for the three months ended June 30, 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 results of operations are not comparable year over year.


	Three Months Ended June 30,									Six Months Ended June 30,
(in thousands)	2026			2025			Change			2026			2025			Change
Revenue	$	6,647		$	1,219		$	5,428		$	11,788		$	2,576		$	9,212
Cost of revenue (2)		3,432			1,413			2,019			6,964			3,073			3,891
Gross profit (loss)		3,215			(194	)		3,409			4,824			(497	)		5,321
Operating expenses:
Research and development (1)		415			779			(364	)		853			2,050			(1,197	)
Sales and marketing (2)		2,184			211			1,973			3,218			461			2,757
General and administrative (1) (2)		3,988			4,640			(652	)		8,115			9,126			(1,011	)
Total operating expenses		6,587			5,630			957			12,186			11,637			549
Loss from operations		(3,372	)		(5,824	)		2,452			(7,362	)		(12,134	)		4,772
Other income (expense), net:
Other expense, net:		(1,544	)		(927	)		(617	)		(4,021	)		(1,038	)		(2,983	)
Interest expense		(1,450	)		(4,490	)		3,040			(2,980	)		(6,254	)		3,274
Interest income		1			229			(228	)		1			387			(386	)
Gain (loss) upon extinguishment of debt		(601	)		1,423			(2,024	)		(2,311	)		4,459			(6,770	)
Change in fair value of convertible notes		(278	)		7,202			(7,480	)		(1,628	)		6,629			(8,257	)
Change in fair value of earn out		(491	)		—			(491	)		(517	)		—			(517	)
Change in fair value of derivatives		491			(462	)		953			164			(1,949	)		2,113
Change in fair value of warrants		140			544			(404	)		807			993			(186	)
Total other income (expense), net		(3,732	)		3,644			(7,376	)		(10,485	)		3,352			(13,837	)
Loss before provision for income taxes		(7,104	)		(2,180	)		(4,924	)		(17,847	)		(8,782	)		(9,065	)
Income tax benefit (expense)		—			—			—			—			—			—
Net loss	$	(7,104	)	$	(2,180	)	$	(4,924	)	$	(17,847	)	$	(8,782	)	$	(9,065	)

(1)

Includes stock-based compensation expense as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
	(in thousands)				(in thousands)
Research and development	$	55	$	373	$	109	$	1,072
General and administrative		771		2,431		1,111		3,821
Total stock-based compensation expense	$	826	$	2,804	$	1,220	$	4,893

For the three and six months ended June 30, 2025, $0.1 million and $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.

(2)

Includes depreciation and amortization expense as follows:


	Three Months Ended June 30,					Six Months Ended June 30,
	2026			2025		2026		2025
	(in thousands)					(in thousands)
Cost of membership	$	377		$	421	$	705	$	842
Cost of fitness product revenue		(25	)		137		121		295
General and administrative		77			202		145		502
Sales and marketing		1,091			131		1,403		262
Total depreciation and amortization expense	$	1,520		$	891	$	2,374	$	1,901

Revenue

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


	Three Months Ended June 30,								Six Months Ended June 30,
	2026			2025			Change		2026			2025			Change
Fitness product	$	4,379		$	937		$	3,442	$	8,832		$	1,988		$	6,844
Membership		2,076			164			1,912		2,681			340			2,341
Training and other		192			118			74		275			248			27
Consolidated revenue	$	6,647		$	1,219		$	5,428	$	11,788		$	2,576		$	9,212
Percentage of revenue
Fitness product		66	%		77	%				75	%		77	%
Membership		31	%		13	%				23	%		13	%
Training and other		3	%		10	%				2	%		10	%
Total		100	%		100	%				100	%		100	%

Fitness product revenue increased by $3.4 million to $4.4 million for the three months ended June 30, 2026, as compared to $0.9 million for the three months ended June 30, 2025. The increase was mainly the result of $3.7 million of revenues 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 decreases in Forme and CLMBR revenue in 2026.

Fitness product revenue increased by $6.8 million to $8.8 million for the six months ended June 30, 2026, as compared to $2.0 million for the 6 months ended June 30, 2025. The increase was primarily due to revenues associated with Wattbike and Ergatta of $7.9 million and $0.7 million, respectively, in 2026, partially offset by decreases in Forme and CLMBR revenue.

Membership revenue was $2.1 million for the three months ended June 30, 2026, as compared to $0.2 million for the three months ended June 30, 2025, and $2.7 million for the six months ended June 30, 2026 as compared to $0.3 million for the six months ended June 30, 2025. Substantially all of our Membership revenue in 2026 is associated with Ergatta.

Training and other revenue was $0.2 million for the three months ended June 30, 2026 as compared to $0.1 million for the three months ended June 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 increase is mainly due to digital game content license revenue earned by Ergatta in 2026, partially offset by a decrease in Live 1:1 training sessions.

Cost of Revenue and Gross Margin

The following table shows the components of our cost of revenue and gross margin for the three and six months ended June 30, 2026 and 2025:


	Three Months Ended June 30,									Six Months Ended June 30,
(in thousands)	2026			2025			Change			2026			2025			Change
Fitness product	$	2,787		$	696		$	2,091		$	5,830		$	1,613		$	4,217
Membership		541			420			121			906			843			63
Training and other		104			297			(193	)		228			617			(389	)
Consolidated cost of revenue		3,432			1,413			2,019			6,964			3,073			3,891
Gross Profit (Loss):
Fitness product		1,592			241			1,351			3,002			375			2,627
Membership		1,535			(256	)		1,791			1,775			(503	)		2,278
Training and other		88			(179	)		267			47			(369	)		416
Consolidated gross profit (loss)		3,215			(194	)		3,409			4,824			(497	)		5,321
Gross Margin:
Fitness product		36	%		26	%					34	%		19	%
Membership		74	%		(156	%)					66	%		(148	%)
Training and other		46	%		(152	%)					17	%		(149	%)
Consolidated		48	%		(16	%)					41	%		(19	%)

Consolidated cost of revenue for the three months ended June 30, 2026 was $3.4 million, as compared to $1.4 million for the three months ended June 30, 2025. Consolidated cost of revenue for the six months ended June 30, 2026 was $7.0 million, as compared to $3.1 million for the six months ended June 30, 2025. The increases are mainly due to higher cost of fitness product revenue in 2026 resulting from the Wattbike acquisition on July 1, 2025.

For the second quarter of 2026, our gross profit improved to $3.2 million from a gross loss of $0.2 million for the second quarter of 2025, resulting in a gross margin of 48% in the second quarter of 2026 as compared to (16)% in the second quarter of 2025. The improvement is due to the Wattbike and Ergatta acquisitions.

For the six months ended June 30, 2026, our gross profit improved to $4.8 million from a gross loss of $0.5 million for the six months ended June 30, 2025, resulting in a gross margin of 41% in the six months ended June 30, 2026 as compared to (19)% for the six months ended June 30, 2025. We expect further margin improvements in the second half of the year and beyond as we continue to realize synergies from the Wattbike and Ergatta acquisitions, as well as other potential acquisitions which we expect will be accretive to earnings. There can be no assurance, however, that we will achieve anticipated synergies or that future acquisitions will be consummated or accretive to earnings. See “Cautionary Statement Regarding Forward-Looking Statements” above and “Risk Factors” in Part II, Item 1A of this Quarterly Report for a discussion of risks that could cause actual results to differ materially from our expectations.

Operating Expenses

In the second quarter of 2025, we recognized a total of $2.4 million of compensation expense related to the full redemption value of Series LTI Preferred Stock that was issued to our executive officers and members of our Board of Directors on June 14, 2025. Approximately $2.1 million of this expense was recorded as general and administrative expense, and $0.3 million was recorded as research and development expense. The preferred stock was canceled and the corresponding liability was derecognized in the fourth quarter of 2025, however the issuance of the preferred stock resulted in significant operating expense for the three and six months ended June 30, 2025 with no comparable amount for the corresponding periods in fiscal 2026.

Research and Development

Research and development expense was $0.4 million for the second quarter of 2026, as compared to $0.8 million for the second quarter of 2025. The decrease is primarily due to reductions in stock-based compensation and other personnel-related costs of $0.5 million, partially offset by $0.1 million of research and development expenses at Wattbike and Ergatta not present in 2025.

For the six months ended June 30, 2026, research and development expense was $0.9 million, as compared to $2.1 million for the six months ended June 30, 2025. The decrease was due to lower stock-based compensation and other personnel-related costs of $1.3 million and lower engineering costs of $0.2 million, partially offset by $0.3 million of expenses associated with Wattbike and Ergatta not present in 2025.

Sales and Marketing

Sales and marketing expense was $2.2 million for the second quarter of 2026, as compared to $0.2 million for the second quarter of 2025. The increase was largely due to amortization expense for intangible assets acquired in the Ergatta and Wattbike transactions of $0.8 million and $0.2 million, respectively, as well as $1.0 million of other sales and marketing expenses associated with Wattbike and Ergatta, mainly for personnel, digital media and advertising expenses, not present in 2025.

Sales and marketing expense was $3.2 million for the six months ended June 30, 2026, as compared to $0.5 million for the six months ended June 30, 2025. The increase was largely due to amortization expense for intangible assets acquired in the Ergatta and Wattbike transactions of $0.9 million and $0.3 million, respectively, as well as approximately $1.6 million of other sales and marketing expenses associated with Wattbike and Ergatta, mainly for personnel, digital media and advertising expenses, not present in 2025.

General and Administrative

General and administrative expense was $4.0 million for the three months ended June 30, 2026 as compared to $4.6 million for the three months ended June 30, 2025, as the absence of $2.1 million of stock-based compensation expense associated with the LTI Preferred Stock in 2026 was largely offset by general and administrative expenses associated with Ergatta and Wattbike not present in 2025 of approximately $1.6 million, including $0.6 million of stock-based compensation expense related to equity grants issued in the Ergatta transaction.

General and administrative expense was $8.1 million for the six months ended June 30, 2026, as compared to $9.1 million for the six months ended June 30, 2025. The decrease reflects a $4.4 million total reduction in stock-based compensation in 2026 related to our legacy business, largely offset by general and administrative expenses associated with Ergatta and Wattbike of approximately $2.7 million (which includes $0.7 million of compensation expense related to the equity grants issued in the Ergatta transaction) and $0.6 million of increased acquisition transaction costs.

Other Income (Expense), net


	Three Months Ended June 30,						Six Months Ended June 30,
	2026			2025			2026			2025
Other income (expense), net	(in thousands)						(in thousands)
Other expense, net:	$	(1,544	)	$	(927	)	$	(4,021	)	$	(1,038	)
Interest expense		(1,450	)		(4,490	)		(2,980	)		(6,254	)
Interest income		1			229			1			387
(Loss) gain upon extinguishment of debt and accounts payable		(601	)		1,423			(2,311	)		4,459
Change in fair value of convertible notes		(278	)		7,202			(1,628	)		6,629
Change in fair value of earn out		(491	)		—			(517	)		—
Change in fair value of derivatives		491			(462	)		164			(1,949	)
Change in fair value of warrants		140			544			807			993
Total other income (expense), net	$	(3,732	)	$	3,644		$	(10,485	)	$	3,352

Other Expense, net

Other expense, net for the three months ended June 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 $0.5 million. For the three months ended June 30, 2025, other expense of $0.9 million is mainly comprised of expense associated with the convertible notes issued in 2025 for which we elected the fair value option.

Other expense, net for the six months ended June 30, 2026 of $4.0 million consists of $2.6 million of expense recognized under settlement agreements, $1.1 million for the change in fair value of convertible preferred stock and a credit loss of $0.2 million recognized upon the settlement of the Sportstech loan receivable.

Interest Expense

Interest expense decreased by $3.0 million for the three months ended June 30, 2026 as compared to the three months ended June 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 decreases are mainly attributable to a lower average debt balance for the first six months of 2026 as compared to 2025 and to the higher debt discount amortization on our convertible notes in 2025.

Interest Income

Interest income decreased by $0.2 million for the second quarter of 2026 as compared to the second quarter of 2025, and by $0.4 million for the six months ended June 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

The loss on extinguishment of debt for the three and six months ended June 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), partially offset by gains on extinguishment of other indebtedness.

The gain on extinguishment of debt for the three and six months ended June 30, 2025 of $1.4 million and $4.5 million, respectively, was mainly the result of the conversion of notes formerly held by principal stockholders and certain other indebtedness into equity.

Change in Fair Value of Convertible Notes

We recorded losses on the change in fair value of convertible notes for the three and six months ended June 30, 2026 of $0.3 million and $1.6 million, respectively, and we recorded gains on the change in fair value of convertible notes for the three and six months ended June 30, 2025 of $7.2 million and $6.6 million, respectively. The gains for the three and six months ended June 30, 2025 are mainly due to the decrease in fair value of the convertible notes issued in connection with the Company's acquisition of digital assets in June of 2025 (see Note 11 to the Consolidated Financial Statements).

Change in Fair Value of Earnout

The loss on change in fair value of earnout of $0.5 million for the three and six months ended June 30, 2026 was the result of the increase in fair value of the contingent consideration related to the Ergatta acquisition.

Change in Fair Value of Derivatives


Delaware	82-1432916
( State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
1005 Congress Ave, Suite 925 Austin, Texas	78701
(Address of principal executive offices)	(Zip Code)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, $0.0001 par value per share	TRNR	The Nasdaq Stock Market LLC


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒


Part I. Financial Information

Item 1 Financial Statements	1

Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations	32

Item 3 Quantitative and Qualitative Disclosures About Market Risk	46

Item 4 Controls and Procedures	46

Part II. Other Information

Item 1 Legal Proceedings	49

Item 1A Risk Factors	49

Item 5 Other Information	50

Item 6 Exhibits	51

Item 1. Financial Statements

INTERACTIVE STRENGTH INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(unaudited)

INTERACTIVE STRENGTH INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

INTERACTIVE STRENGTH INC. AND SUBSIDIARIES

INTERACTIVE STRENGTH INC. AND SUBSIDIARIES

INTERACTIVE STRENGTH INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(unaudited)

INTERACTIVE STRENGTH INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Overview

Results of Operations for the Three and Six Months Ended June 30, 2026 and 2025

Cash Flows

Item 4. Controls and Procedures.

Part II - Other Information

Item 1. Legal Proceedings

Item 1A. Risk Factors


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


	●	Diversion of management time and attention from daily operations;


	●	Difficulties integrating the acquired business, technologies and personnel into our business;


	●	Potential loss of key employees, key contractual relationships or key customers of the acquired business; and


	●	Assumption of the liabilities and exposure to unforeseen liabilities of the acquired business.


Exhibit No.		Description


3.1		Certificate of Amendment to the Certificate of Incorporation of Interactive Strength Inc. (incorporated by reference from Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed June 30, 2026).

10.1		Settlement Agreement, dated as of March 31, 2026, by and between Interactive Strength Inc. and Vertical Investors, LLC (incorporated by reference from Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed April 3, 2026).

31.1		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.


101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.

101.SCH		Inline XBRL Taxonomy Extension Schema with Embedded Linkbase Documents.

104		Cover Page Formatted as Inline XBRL and Contained in Exhibit 101.


	INTERACTIVE STRENGTH INC.

Date: August 14, 2026	By:	/s/ Trent A. Ward
		Trent A. Ward
		Chief Executive Officer
		(Principal Executive Officer and Duly Authorized Officer)

Date: August 14, 2026	By:	/s/ Caleb Morgret
		Caleb Morgret
		Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)