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Interactive Strength, Inc.

Interactive Strength, Inc.TRNR決算レポート

Nasdaq · 非必須消費財 · 電子及びその他の電気機器（コンピュータ機器を除く）

Peloton Interactive, Inc. is an American exercise equipment and media company based in New York City. The company's products include stationary bicycles, treadmills, and indoor rowers equipped with Internet-connected touch screens that stream live and on-demand fitness classes through a subscription service. The equipment includes built-in sensors that track metrics such as power output, providing users with real-time feedback on their performance and leaderboard rankings to compete with othe...

What changed in Interactive Strength, Inc.'s 10-K — 2024 vs 2025

Top changes in Interactive Strength, Inc.'s 2025 10-K

512 paragraphs added · 797 removed · 361 edited across 3 sections

Item 1. Business

Business — how the company describes what it does

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Through the CLMBR brand, we offer a vertical climbing machine that delivers a proven full-body cardio and strength workout, but with a design and content platform that makes the workout mass appealing and accessible to all fitness levels. A workout that has long been exclusive to celebrities and professional athletes with personal trainers can now be accessed by anyone.
CLMBR Through the CLMBR brand, we offer a vertical climbing machine that delivers a proven full-body cardio and strength workout, but with a design and content platform that makes the workout mass appealing and accessible to all fitness levels. A workout that has long been exclusive to celebrities and professional athletes with personal trainers can now be accessed by anyone.
The patented open central design and content platform provides a vertical climbing experience that is unlike any other. CLMBR offers two display options: a 21” touch screen and a 10” touch screen – making it suitable for any commercial fitness application, both self-directed to instructor-directed environments, from large health clubs to boutique training studios.
The patented open central design and content platform provides a vertical climbing experience that is unlike any other. CLMBR offers two display options: a 21” touch screen and a 10” touch screen – making it suitable for any commercial fitness application, both self-directed and instructor-directed environments, from large health clubs to boutique training studios.
We face significant competition from multiple industries and exercise verticals, including at-home fitness equipment and content, fitness clubs, in-studio fitness classes, in-person personal training, and health and wellness apps. We expect 34 the competition in our industry to intensify in the future as new and existing competitors introduce new or enhanced products and services that compete with ours.
We face significant competition from multiple industries and exercise verticals, including at-home fitness equipment and content, fitness clubs, in-studio fitness classes, in-person personal training, and health and wellness apps. We expect the competition in our industry to intensify in the future as new and existing competitors introduce new or enhanced products and services that compete with ours.
In addition, our competitors may have significantly greater resources than us, allowing them to identify and capitalize more efficiently upon opportunities in new markets and consumer preferences and trends, quickly transition and adapt their products and services, devote greater resources to marketing and advertising, or be better positioned to withstand substantial price competition.
In addition, our competitors may have significantly greater resources than us, allowing them to identify and capitalize more efficiently upon opportunities in new markets and consumer preferences and trends, quickly transition and adapt their products and services, devote 11 greater resources to marketing and advertising, or be better positioned to withstand substantial price competition.
Privacy We are, and could become, subject to a variety of local, state, national and international laws, directives, and regulations that apply to the collection, use, retention, protection, disclosure, transfer, and other processing of personal data in the different jurisdictions, and which sometimes conflict among the various jurisdictions and countries in which we operate.
Privacy 13 We are, and could become, subject to a variety of local, state, national and international laws, directives, and regulations that apply to the collection, use, retention, protection, disclosure, transfer, and other processing of personal data in the different jurisdictions, and which sometimes conflict among the various jurisdictions and countries in which we operate.
Cybersecurity We are in the process of designing and implementing a security program consisting of policies, procedures, and technology intended to maintain the security and integrity of our information, systems and networks. Among other things, the program includes controls designed to limit access to systems, networks, and data, prevent unauthorized access or modification, and monitor for threats.
Cybersecurity We are in the process of designing and implementing a security program consisting of policies, procedures, and technology intended to maintain the security and integrity of our information, systems and networks. Among other 14 things, the program includes controls designed to limit access to systems, networks, and data, prevent unauthorized access or modification, and monitor for threats.
In addition, it is possible that certain governments may seek to block or limit our products and services or otherwise 36 impose other restrictions that may affect the accessibility or usability of any or all of our products and services for an extended period of time or indefinitely.
In addition, it is possible that certain governments may seek to block or limit our products and services or otherwise impose other restrictions that may affect the accessibility or usability of any or all of our products and services for an extended period of time or indefinitely.
Connected Hardware Platform: Through the FORME brand, we offer two connected hardware products, the FORME Studio (fitness mirror) and the FORME Studio Lift (fitness mirror and cable-based digital resistance). The FORME products are designed to provide a more integrated and immersive experience than similar products currently on the market.
FORME Through the FORME brand, we offer two connected hardware products, the FORME Studio (fitness mirror) and the FORME Studio Lift (fitness mirror and cable-based digital resistance). The FORME products are designed to provide a more integrated and immersive experience than similar products currently on the market.
We also offer add-on accessories, including our barre, a unique accessory that attaches to the FORME Studio 10 or FORME Studio Lift and enables members to incorporate a wooden ballet barre into their barre routines.
We also offer add-on accessories, including our barre, a unique accessory that attaches to the FORME Studio or FORME Studio Lift and enables members to incorporate a wooden ballet barre into their barre routines.
We expect to continue to file patent applications in the United States and abroad covering technologies and productions considered to be important to our business. We seek to protect proprietary technology related know-how that is not covered by our patent portfolio as trade secrets through contracts and policies to the extent that we believe it to be beneficial and cost-effective.
We expect to continue to file patent applications in the United States and abroad covering technologies and products considered to be important to our business. We seek to protect proprietary technology related know-how that is not covered by our patent portfolio as trade secrets through contracts and policies to the extent that we believe it to be beneficial and cost-effective.
In addition, we may be subject to other new data privacy laws, such as the Virginia Consumer Data Protection Act, the Colorado Privacy Act, the Connecticut Data Privacy Act and the Utah Consumer Privacy Act in the United States (all of which go into effect in 2023) as well as the European Union Regulation on Privacy and Electronic Communications (or ePrivacy Regulation).
In addition, we may be subject to other new data privacy laws, such as the Virginia Consumer Data Protection Act, the Colorado Privacy Act, the Connecticut Data Privacy Act and the Utah Consumer Privacy Act in the United States (all of which went into effect in 2023) as well as the European Union Regulation on Privacy and Electronic Communications (or ePrivacy Regulation).
Our employee base reflects diversity in backgrounds and experiences and each employee contributes different perspectives, ideas, strengths, and abilities to our business. Our training and development program focuses on a harassment-free workplace and diversity topics, as well as ethics and compliance. We consider our global employee relations to be good.
Diversity is both a priority and strength of our company. Our employee base reflects diversity in backgrounds and experiences and each employee contributes different perspectives, ideas, strengths, and abilities to our business. Our training and development program focuses on a harassment-free workplace and diversity topics, as well as ethics and compliance. We consider our global employee relations to be good.
Our success has been built on attracting, motivating, and retaining a talented and driven workforce, particularly on our research and development teams, but also our senior management and support personnel. We have a diverse workforce that represents many cultures and we celebrate our diversity by fostering inclusion across our organization. Diversity is both a priority and strength of our company.
Our success has been built on attracting, motivating, and retaining a talented and driven workforce, particularly on our research and development teams, but also our senior management and 12 support personnel. We have a diverse workforce that represents many cultures and we celebrate our diversity by fostering inclusion across our organization.
Current and potential competitors have established or may establish financial and strategic relationships between themselves or with our existing or potential customers, manufacturing partners, or other third parties. Any of the foregoing may enable our current and future competitors to better withstand adverse economic or market conditions, such as those caused by the current COVID-19 pandemic.
Current and potential competitors have established or may establish financial and strategic relationships between themselves or with our existing or potential customers, manufacturing partners, or other third parties. Any of the foregoing may enable our current and future competitors to better withstand adverse economic or market conditions.
We also comply with applicable laws and regulations regarding workplace safety and are subject to audits by entities such as OSHA in the United States. We rely on third parties to manufacture our products and require our suppliers to maintain a safe work environment.
For more details regarding our executive compensation, see “Item 11. Executive Compensation.” We comply with applicable laws and regulations regarding workplace safety and are subject to audits by entities such as OSHA in the United States. We rely on third parties to manufacture our products and require our suppliers to maintain a safe work environment.
We cannot predict how the GDPR, the UK GDPR, or other UK or international data protection laws or regulations may develop or impact our business if and when we become subject to such laws and regulations, nor can we predict the effects of divergent laws and related guidance. 37 We strive to comply with all applicable laws and regulations relating to privacy, data security, and data protection.
We cannot predict how the GDPR, the UK GDPR, or other UK or international data protection laws or regulations may develop or impact our business if and when we become subject to such laws and regulations, nor can we predict the effects of divergent laws and related guidance.
However, governments are continuing to focus on privacy and data security, and it is possible that new privacy or data security laws will be passed, or existing laws will be amended in a way that is material to our business.
We strive to comply with all applicable laws and regulations relating to privacy, data security, and data protection. However, governments are continuing to focus on privacy and data security, and it is possible that new privacy or data security laws will be passed, or existing laws will be amended in a way that is material to our business.
See “Risk Factors – Risks Related to Privacy, Cybersecurity, and Infrastructure” and “Risks Related to Regulatory Matters – Our business is subject to a wide range of laws and regulations, many of which are evolving, and failure to comply with such laws and regulations could harm our business, financial condition, and results of operations” and “– We and our third-party manufacturers and suppliers are, or could become, subject to environmental, health, and safety laws, which could increase our costs, restrict our operations and require expenditures that could have a material adverse effect on our business, financial condition, and results of operations.” 38 Facilities Our corporate headquarters are located in Austin, Texas, where we hold a lease that has a monthly fee of $99 and variable cost based on usage.
See “Risk Factors – Risks Related to Privacy, Cybersecurity, and Infrastructure” and “Risks Related to Regulatory Matters – Our business is subject to a wide range of laws and regulations, many of which are evolving, and failure to comply with such laws and regulations could harm our business, financial condition, and results of operations” and “– We and our third-party manufacturers and suppliers are, or could become, subject to environmental, health, and safety laws, which could increase our costs, restrict our operations and require expenditures that could have a material adverse effect on our business, financial condition, and results of operations.” 15
With its low impact and ergonomic movement, CLMBR is safe and accessible for most ages and levels of ability and can be found at gyms and fitness studios, hotels, and physical therapy facilities, and residential homes. CLMBR MSRP is $3,995 or less, depending on display option and order quantity.
With its low impact and ergonomic movement, CLMBR is safe and accessible for most ages and levels of ability and can be found at gyms and fitness studios, hotels, physical therapy facilities and residential homes.
We believe we compete favorably among competitors across all of these factors. 35 Human Capital Resources General As of December 31, 2024, we had 19 full-time equivalent employees located in the United States and 7 full-time equivalent employees located in Taiwan across manufacturing and supply chain functions.
We believe we compete favorably among competitors across all of these factors. Human Capital Resources General As of December 31, 2025, we had 72 full-time employees, including 47 employees at our Wattbike subsidiary in the UK and 4 full-time equivalent employees located in Taiwan across manufacturing and supply chain functions.
Data privacy laws and regulations, including, but not limited to, the CPRA and the CCPA, as well as the GDPR and its equivalent in the United Kingdom (to which we may become subject if we expand into those jurisdictions), pose increasingly complex compliance challenges, which may increase compliance costs.
Data privacy laws and regulations, including, but not limited to, the California Privacy Rights Act ("CPRA") and the California Consumer Privacy Act ("CCPA"), as well as the General Data Protection Regulation ("GDPR") and its equivalent in the United Kingdom, pose increasingly complex compliance challenges, which may increase compliance costs.
Ali Ahmad, the sole shareholder of Sportstech, entered into a Binding Transaction Agreement (the “Agreement”), pursuant to which the Company will acquire Sportstech in a transaction (the “Transaction”) comprised of an initial investment (the “Initial Investment”) and three optional investment tranches (each, an “Optional Investment”), which are callable, subject to performance metrics, by Mr.
Ali Ahmad, the sole shareholder of Sportstech, entered into a Binding Transaction Agreement (the “Agreement”), pursuant to which we were to acquire Sportstech in a transaction (the “Transaction”) comprised of an initial investment and three optional investment tranches.
We expect to continue to file trademark applications in the United States and abroad covering trademarks considered to be important to our business.
Trademarks As of December 31, 2025, we owned (i) nine registered trademarks in the United States; (ii) five registered trademarks in various states; and (iii) 84 trademark grants of protection in foreign jurisdictions. We expect to continue to file trademark applications in the United States and abroad covering trademarks considered to be important to our business.
We rely on a combination of patents, copyrights, trademarks, trade secrets, confidentiality procedures, and contractual commitments, to protect our intellectual property and proprietary know-how.
We rely on a combination of patents, copyrights, 10 trademarks, trade secrets, confidentiality procedures, and contractual commitments, to protect our intellectual property and proprietary know-how. Patents As of December 31, 2025, we owned (i) 50 issued patents and/or pending applications in the United States and (ii) 202 issued patents and 9 pending patent applications in foreign jurisdictions.
One relationship that is of 26 particular high value, is our distribution relationship with Woodway USA. They are currently the exclusive commercial distributor of CLMBR and also sell the FORME products to their commercial partners around the world. We have developed, and intend to continue to develop and expand, collaborations with companies across the hospitality, fashion, sports, and design industries.
To date, we focused on building strategic relationships in the fitness space, primarily through brand collaborations. One relationship that is of particular high value, is our distribution relationship with Woodway USA ("Woodway"). Woodway is currently the exclusive commercial distributor of CLMBR and also sells Wattbike and FORME products to their commercial partners around the world.
The gross proceeds to the Company from the Warrant Exercise were approximately $3,600,000, before deducting legal fees and other estimated expenses. 33 Intellectual Property Our success depends in part upon our ability to obtain and maintain patent and other intellectual property protection with respect to our products and the technology we develop.
We have also developed, and intend to continue to develop and expand, relationships with companies across other industries. Intellectual Property Our success depends in part upon our ability to obtain and maintain patent and other intellectual property protection with respect to our products and the technology we develop.
Strategic Relationships A key component of our strategy is to establish and expand strategic partnerships within the fitness and wellness industry to help accelerate expansion of our business and build our brand recognition. To date, we focused on building strategic relationships in the fitness space, primarily through content collaborations.
We have also identified numerous targets within our M&A pipeline that could be attractive acquisition candidates in the future. Strategic relationships A key component of our strategy is to establish and expand strategic partnerships within both the fitness industry as well as other industries to help accelerate the expansion and growth of our business.
With more than 180 million people belonging to gyms globally in 2019, according to IHRSA, we believe there is significant opportunity to grow internationally. For example, we are currently evaluating potential international expansion with the United Kingdom and Canada, although we have not yet made any definitive plans regarding such expansion or the potential timing thereof.
For example, with Wattbike, based in the United Kingdom, we are currently evaluating potential expansion of those products into the US, where FORME, CLMBR and Ergatta have well-established routes to market in both the commercial and residential sectors, although we have not yet made any definitive plans regarding such expansion or the potential timing thereof.
We expect that we will be able to acquire revenue-generating businesses, which would generate higher earnings and cashflow through synergies with our existing business. Our team has significant experience in M&A and we are one of the few companies in our industry with a public currency, which we believe makes us an attractive acquiror.
We expect that we will be able to acquire additional revenue-generating businesses that would generate higher earnings and cashflow through synergies with our existing business. Expand into new geographies We intend to expand the international reach of our existing assets by leveraging in-market relationships and sales infrastructure across the brands in our portfolio.
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Item 1. Overview. Our Purpose We are an innovative specialty fitness equipment company that leverages technology and content to deliver highly engaging and versatile workout experiences. With CLMBR, we provide an unmatched cardio workout that delivers an effective low-impact, full-body workout. With FORME, we make strength training and personal coaching accessible to anyone, anywhere, at any time.
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Item 1. Overview. Our Purpose We are an operationally-focused acquirer targeting businesses with strong underlying fundamentals within industries that benefit from long-term secular growth trends. We pursue asymmetric opportunities where assets are undervalued or where structural changes have created attractive entry points, allowing us to acquire high-quality businesses with stable demand drivers, strong market positioning, and differentiated product offerings.
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We are driven to provide the best in both cardio and strength training. Our products combine industry-leading engineering and design with world-class technology and content. Our company has one reportable segment, the development and sale of its fitness equipment and technology platform.
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Our approach is to provide both long-term financial support and operational expertise to build value at the asset-level and generate attractive returns on invested capital. In addition, our public company structure provides differentiated access to capital markets and flexibility to structure transactions in ways that align purchase consideration to underlying value creation targets.
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Who We Are Interactive Strength Inc. is the parent company of two leading brands serving the commercial and at-home markets with specialty fitness equipment and virtual training: CLMBR and FORME. CLMBR manufactures vertical climbing equipment and provides a unique digital and on-demand training platform.
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To date, we have invested in the fitness equipment sector leveraging hardware, software and content to deliver highly engaging and versatile workout experiences across both commercial and in-home markets. As of December 31, 2025, our portfolio consisted of three premium brands; Wattbike, CLMBR and FORME, each of which combines industry-leading engineering and design with world-class technology and fitness programming.
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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. CLMBR and FORME offer fitness solutions for both the commercial and at-home markets.
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Our company has one reportable business segment, the development and sale of its connected fitness equipment and technology platform. Who We Are Interactive Strength Inc. ("we", "us" or the "Company") is a public company focused on accelerating growth through acquisitions and deploying capital into business sectors that are misunderstood or undervalued.
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Connected Hardware Platform: We offer our vertical climbing machine with two touch screen display options, a 21” and a 10” version. The CLMBR MSRP is $3,995 or less, depending on display option and order quantity. The CLMBR is sold with either a Pure or Connected display, although the displays are interchangeable and can be swapped.
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We look for value creation opportunities via strategic repositioning, margin expansion, sales channel diversification, balance sheet optimization and portfolio enhancement. Assets in unique situations where complexity or volatility exist present an opportunity in which valuations can be well below intrinsic value.
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The CLMBR Connected machine is available to a D2C audience exclusively from CLMBR owned website, CLMBR.com and accounts for the majority of CLMBR sales to date. Both CLMBR Connected and Pure are sold to the commercial fitness market through our exclusive global distribution partner, Woodway.
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At December 31, 2025, our portfolio consisted of three leading brands serving the commercial and at-home markets with specialty fitness equipment and virtual training, Wattbike, CLMBR and FORME: • Wattbike, acquired in July of 2025, offers a range of high-performance indoor bikes that set the global standard in cycling.
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The CLMBR design is patented and has a form-factor that is unlike any other vertical climbing machine. Traditional vertical climbing machines have a central “mono-pole” design that makes it impossible to fit a large, landscape style screen. Furthermore, the design positions the screen only inches away from the user's face, and obstructs any view forward of an in-real-life instructor.
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Known for unmatched accuracy, realistic ride feel, and advanced performance tracking, Wattbike is trusted by elite athletes, national teams, and fitness enthusiasts around the world. • CLMBR 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, commercial-grade hardware, and expert coaching.
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CLMBR's user-friendly design, display options, advanced technology, and on-demand content platform allows for placement into any environment with mass adoption. This is something that other vertical climbers have not been able to achieve in the last 40+ years. 6 Digital Services Platform: The CLMBR software provides a digital experience that is among the best in the industry.
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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.
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The CLMBR Connected display provides a feature-rich experience with hundreds of on-demand classes from world-class trainers. There is a variety of content to suit all ability levels, from first-time users to seasoned climbers. The class and collection library offers something for everyone, ranging from glute focused training, to strength and conditioning.
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Wattbike, FORME and CLMBR each offers unique fitness solutions for both the commercial and at-home markets. WATTBIKE Wattbike is recognized as an indispensable tool across nearly every corner of elite sport.
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Monthly challenges and new weekly content keep users and members engaged, and the results keep them coming back for more. No matter the user's fitness goal, CLMBR Connected allows for the seamless identification of a program or class that will provide the training needed to achieve the desired results.
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Strength and conditioning coaches and performance staff have woven Wattbike into their daily programs because its metrics and reliability consistently meet the demands of professionals operating at the highest level.
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The CLMBR Pure display provides clear and concise metrics and information, which is exactly what is needed in an instructor/trainer led environment. The interface is easy to navigate and users can quickly and easily see the metrics that matter.
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Professional teams that rely on Wattbike technology and data to enhance performance include: • Premier League • NBA • NFL 7 • NHL • Formula One • MLS (Major League Soccer) • UFC • U.S.
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Both the Connected and Pure display connect to the CLMBR Mobile Companion App, allowing users to create an account, keep track of workouts, progress, and milestones, see new content and challenges, connect with other users, and share their achievements.
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BMX National Team • Team USA (Olympic Cycling) • USTA (United States Tennis Association) We believe that Wattbike's continued evolution and recent product launches position us to capture a significantly larger share of the global fitness market.
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The CLMBR Mobile Companion App is available on the Apple and Google Play app stores. 7 Channels: The CLMBR’s full-body, safe, and easy-to-use design allows for placement into virtually any environment. You can find CLMBR everywhere from professional training centers (NBA, UFC, NFL) to thousands of homes across the US.
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Wattbike has built a comprehensive range of indoor performance bikes, and in recent years has expanded beyond elite training environments with new products developed to be used by anyone, anywhere.
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CLMBR has two hardware configurations that are designed to support specific use cases. The 21” touch screen display is termed the “CLMBR Connected” and is intended for any self-directed environment, such as: health clubs, hotels, multi-family residential gyms, community centers, member clubs, rehabilitation/physical therapy centers, corporate gyms, and private residences.
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Whether in a professional strength and conditioning facility, boutique fitness studio, hotel fitness center or home gym, Wattbike delivers the same precision metrics and durability that made it a favorite at the highest levels of sport.
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The 10” touch screen version is termed “CLMBR Pure” and is intended for any instructor/trainer-directed environment, such as: boutique training studios, large group fitness studios, small group fitness studios, professional/collegiate training facilities, and functional training/Crossfit® gyms. 8 Large Group Fitness: Group climbing is one of the hottest new fitness concepts and is popping up across major markets across the globe.
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FORME is predominately focused on the B2B channel where its products serve customers in a variety of settings, including multifamily buildings, hotels, country clubs, universities and performance centers. Recent Developments Sportstech Settlement On February 10, 2025, we, Sportstech Brands Holding GmBH ("Sportstech") and Mr.
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CLMBR is the perfect option for large group climbing concepts, the user-friendly interface and patented open-central design provides a vastly superior experience. CLMBR owns and operates its very own vertical climbing concept (Studio CLMBR) and consults other leading group climbing businesses. Combining CLMBR with weight based strength training provided unmatched workout efficiency and effectiveness.
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In anticipation of a Transaction closing during fiscal year 2025, we made a series of disbursements totaling $5.0 million under a term loan facility to Sportstech during the year ended December 31, 2025 to support its working capital needs and growth plans. The loan was secured by 100% of the equity interests in Sportstech and personally guaranteed by Mr.
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Small Group & Group X : CLMBR’s small footprint and mobility make it the perfect option for any small group or group X training environment. Vertical climbing is an excellent complement for virtually any other workout, from weight training to pilates.
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Ahmad, and was due to be paid back to us if the Transaction did not close by December 30, 2025. The Transaction did not close as the we 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.
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Health Clubs: A dominant force in the fitness industry, health clubs are always on the lookout for new workouts that will provide value to their members while differentiating their business.
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The balance on the loan receivable from 8 Sportstech as of December 31, 2025, including accrued interest and fees, was $6.6 million, which is recorded on our balance sheet as of December 31, 2025. We pursued several legal options available to us in order to recover the loan receivable, including enforcement of the personal guarantee by Mr.
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CLMBR has achieved success with providing health clubs multiple applications, from the cardio floor to underutilized group fitness areas. 9 Professional & Collegiate Training : Professional and collegiate athletes need to take a specialized approach to their training to ensure that they are ready to perform and most importantly to not get injured during training.
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Ahmad, and forcing a public auction of the equity interests in Sportstech in accordance with German law. On March 4, 2026, we and Sportstech settled the outstanding balance and we received $6.4 million in cash.
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CLMBR provides the ultimate high intensity, low impact workout. From the UFC training center to NBA facilities, CLMBR is trusted among the most elite athletes in the world. Community & Rec Centers : CLMBR is engineered for everyone and supports the building of community and strong families.
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Acquisition On February 18, 2026, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Ergatta, Inc., a Delaware corporation ("Ergatta"), Ergatta Acquisition Corp., a Delaware corporation and wholly owned subsidiary of the Company ("Merger Sub"), and Tom Aulet, solely in his capacity as the securityholders’ representative (the “Securityholders’ Representative”), pursuant to which Merger Sub will merge with and into Ergatta (the “Merger”), with Ergatta surviving as a wholly owned subsidiary of the Company.
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Engaging in challenges adds a level of fun for members as they track their progress on the mobile companion app. The user-friendly, intuitive and low-impact workout is accessible to all abilities levels. The design is both durable and approachable while being easy to maintain.
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At the effective time of the Merger, each issued and outstanding share of preferred stock of Ergatta (other than excluded and dissenting shares) will be cancelled and converted into the right to receive, subject to the terms of the Merger Agreement, (i) cash consideration of up to $7,000,000 paid to Ergatta's stockholders, consisting of: (a) $1,750,000 to be paid at the closing of the Merger (the “Closing”); (b) $1,750,000 in deferred cash evidenced by a senior secured promissory note to be delivered at the Closing and maturing on April 30, 2027; and (c) up to $3,500,000 to be payable on April 30, 2027, as provided by the calculations, formulas, and other procedures set forth in the Merger Agreement; and (ii) up to $9,500,000 worth of shares of Series D Preferred Stock (as defined below) to be issued to Ergatta's stockholders.
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Metric led classes are engaging and drive engagement with the work-out results sent directly to email, allowing members to easily share their milestones and climbs. Hospitality & Multi-Family : Designed to elevate the guest and resident fitness experience.
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Additionally, we will issue equity incentives to certain members of Ergatta's senior management, consisting of (i) up to $2,000,000 worth of shares of Series D-2 Preferred Stock (as defined below); and (ii) up to $1,000,000 worth of shares of Series D-3 Preferred Stock (as defined below). The Merger closed on March 11, 2026.
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CLMBR’s modern and sleek design paired with the greatest efficiency full-body workout allows even guests and residents with the tightest schedules to achieve a full-body workout that will leave them energized during their stay.
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Upon closing, we 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.
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With CLMBR Connected, users can choose climbing classes from an extensive on-demand library based on instructor, music genre, and type of workout, creating a fun and customizable experience. CLMBR’s small footprint and low cost of ownership and maintenance make it an affordable and low space addition to any hotel or multi-family fitness center.
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Series D Preferred Stock shall have no voting rights, other than any vote required by law or the Company’s Certificate of Incorporation. Series D-1 Preferred Stock and Series D-2 Preferred Stock shall convert into shares of the Company’s common stock, par value $0.0001 per share (“Common Stock”) on May 3, 2027.
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Rehabilitation & Physical Therapy : Climbing has been a staple for rehabilitation for many years; the low impact nature of climbing is easy on the joints and allows for life-long use without negative effects. With CLMBR, the patient is in a partial weight-bearing position that is conducive to successful rehabilitation and exercise of orthopedically and cardiac impaired patients.
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Series D-3 Preferred Stock shall convert to shares of Common Stock on May 1, 2028.
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CLMBR allows for an ergonomic spinal alignment, helping to strengthen your core, improve posture, and help to prevent further injury. Corporate Gyms : CLMBR provides corporate fitness centers with a solution that is safe, effective, user friendly, and inviting.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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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 over the next year beyond the issuance date due absent management’s ability to secure additional outside capital. • While the Company is actively seeking to secure additional outside capital (and has historically been able to successfully secure such capital), no additional outside capital has been secured or was deemed probable of being secured as of the issuance date.
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.
We depend on sole source and limited source suppliers for certain components and parts used in the manufacture of our products. If we are unable to source these components on a timely basis, we will not be able to deliver our products to our customers.
If we are unable to source these components on a timely basis, we will not be able to deliver our products to our customers. We depend on sole source and limited source suppliers for certain components and parts used in the manufacture of our products.
If we do not remediate the material weaknesses in our internal control over financial reporting, or if we fail to establish and maintain effective internal control, we may not be able to accurately report our financial results or file our periodic reports in a timely manner, which may cause investors to lose confidence in our reported financial information and may lead to a decline in the market price of the Common Stock.
If we do not remediate the material weaknesses in our internal control over financial reporting, or if we fail to establish and maintain effective internal control, we may not be able to accurately report our financial results or file our periodic reports in a timely manner, which may cause investors to lose confidence in our reported financial information and may lead to a decline in the market price of our Common Stock.
Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading price of the Common Stock.
Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading price of our Common Stock.
Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of the Common Stock, fines, sanctions and other regulatory action and potentially civil litigation, any of which could have a material adverse effect on our business, financial condition, and results of operations.
Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to the delisting of our Common Stock, fines, sanctions and other regulatory action and potentially civil litigation, any of which could have a material adverse effect on our business, financial condition, and results of operations.
We are an emerging growth company and a smaller reporting company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies and smaller reporting companies could make the Common Stock less attractive to investors. 64 We are an “emerging growth company,” as defined in the JOBS Act, and, for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to emerging growth companies, including: • not being required to have our independent registered public accounting firm audit our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act; • reduced disclosure obligations regarding executive compensation in our periodic reports and annual report on Form 10-K; and • exemptions from the requirements of holding non-binding advisory votes on executive compensation and stockholder approval of any golden parachute payments not previously approved.
We are an emerging growth company and a smaller reporting company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies and smaller reporting companies could make our Common Stock less attractive to investors. 64 We are an “emerging growth company,” as defined in the JOBS Act, and, for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies but not to emerging growth companies, including: • not being required to have our independent registered public accounting firm audit our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act; • reduced disclosure obligations regarding executive compensation in our periodic reports and annual report on Form 10-K; and • exemptions from the requirements of holding non-binding advisory votes on executive compensation and stockholder approval of any golden parachute payments not previously approved.
If some investors find the Common Stock less attractive because we rely on any of these exemptions, there may be a less active trading market for the Common Stock and the market price of the Common Stock may be more volatile. Our management team has limited experience managing a public company.
If some investors find our Common Stock less attractive because we rely on any of these exemptions, there may be a less active trading market for our Common Stock and the market price of our Common Stock may be more volatile. Our management team has limited experience managing a public company.
Our management team may not successfully or efficiently manage our transition to being a public company subject to 65 significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors.
Our management team may not successfully or efficiently manage our transition to being a public company subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny 65 of securities analysts and investors.
An active trading market for the Common Stock may not develop or be sustained and stockholders may not be able to sell their shares at or above the price paid for such shares, or at all. There was no public market for the Common Stock prior to our initial public offering.
An active trading market for the Common Stock may not develop or be sustained and stockholders may not be able to sell their shares at or above the price paid for such shares, or at all. There was no public market for our Common Stock prior to our initial public offering.
Our share price and trading volume have been, and are likely to continue to be, volatile and an active trading market for the Common Stock may not develop or be sustained and stockholders may not be able to sell their shares at or above the price paid for such shares, or at all.
Our share price and trading volume have been, and are likely to continue to be, volatile and an active trading market for our Common Stock may not develop or be sustained and stockholders may not be able to sell their shares at or above the price paid for such shares, or at all.
The trading price and volume of the Common Stock has been, and will likely continue to be, volatile and has fluctuated, and will likely continue to fluctuate, significantly in response to numerous factors, many of which are beyond our control, including but not limited to: • actual or anticipated fluctuations in our results of operations and financial and non-financial metrics due to, among other things, changes in customer demand, product life cycles, pricing, ordering patterns, and unforeseen operating costs; • the financial projections we may provide to the public, any changes in these projections, our practice of providing projections, if any, or our failure to meet these projections; • our ability to raise additional capital sufficient to fund our operations and to execute our growth strategy; 66 • failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates or ratings by any securities analysts who follow us, or our failure to meet these estimates or the expectations of investors; • announcements related to key management, founders, key management, directors, or key investors; • announcements by us of changes to our product offerings, business plans, or strategies; • announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments; • changes in operating performance and stock market valuations of companies in our industry or our target markets; • negative publicity related to problems in our manufacturing or the real or perceived quality of our products, as well as the failure to timely launch new products or services that gain market acceptance; • rumors and market speculation involving us or other companies in our industry; • developments or disputes concerning our or other parties’ products, services, or intellectual property rights; • timing and seasonality of the end-market demand; • cyclical fluctuations, trends, and changes in the economic conditions in our industry or target markets; • price and volume fluctuations in the overall stock market from time to time, including as a result of trends in the economy as a whole; • actual or anticipated developments in our business or our competitors’ businesses or the competitive landscape generally; • new laws or regulations or new interpretations of existing laws, or regulations applicable to our business; • changes in our management; • lawsuits or investigations threatened, filed, or initiated against us; • the expiration of contractual lock-up or market standoff agreements; • sales of shares of the Common Stock by us or our stockholders, or the perception that such sales may occur; and • other events or factors, including those resulting from macroeconomic conditions, geopolitical crises, outbreak of hostilities or acts of war such as the Russian invasion of Ukraine, and the Israel-Hamas war, incidents of terrorism, global pandemics such as the COVID-19 pandemic, and similar events, as well as responses to these or similar events.
The trading price and volume of our Common Stock has been, and will likely continue to be, volatile and has fluctuated, and will likely continue to fluctuate, significantly in response to numerous factors, many of which are beyond our control, including but not limited to: • actual or anticipated fluctuations in our results of operations and financial and non-financial metrics due to, among other things, changes in customer demand, product life cycles, pricing, ordering patterns, and unforeseen operating costs; • the financial projections we may provide to the public, any changes in these projections, our practice of providing projections, if any, or our failure to meet these projections; • our ability to raise additional capital sufficient to fund our operations and to execute our growth strategy; • failure of securities analysts to initiate or maintain coverage of us, changes in financial estimates or ratings by any securities analysts who follow us, or our failure to meet these estimates or the expectations of investors; 66 • announcements related to key management, founders, key management, directors, or key investors; • announcements by us of changes to our product offerings, business plans, or strategies; • announcements by us or our competitors of significant technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments; • changes in operating performance and stock market valuations of companies in our industry or our target markets; • negative publicity related to problems in our manufacturing or the real or perceived quality of our products, as well as the failure to timely launch new products or services that gain market acceptance; • rumors and market speculation involving us or other companies in our industry; • developments or disputes concerning our or other parties’ products, services, or intellectual property rights; • timing and seasonality of the end-market demand; • cyclical fluctuations, trends, and changes in the economic conditions in our industry or target markets; • price and volume fluctuations in the overall stock market from time to time, including as a result of trends in the economy as a whole; • actual or anticipated developments in our business or our competitors’ businesses or the competitive landscape generally; • new laws or regulations or new interpretations of existing laws, or regulations applicable to our business; • changes in our management; • lawsuits or investigations threatened, filed, or initiated against us; • the expiration of contractual lock-up or market standoff agreements; • sales of shares of our Common Stock by us or our stockholders, or the perception that such sales may occur; and • other events or factors, including those resulting from macroeconomic conditions, geopolitical crises, outbreak of hostilities or acts of war such as the Russian invasion of Ukraine and the Israel-Hamas war, incidents of terrorism, global pandemics such as the COVID-19 pandemic and similar events, as well as responses to these or similar events.
If our net revenue or results of operations fall below the expectations of analysts or investors or below any forecasts we may provide to the market, or if the forecasts we provide to the market are below the expectations of analysts or investors, the price of the Common Stock could decline substantially.
If our net revenue or results of operations fall below the expectations of analysts or investors or below any forecasts we may provide to the market, or if the forecasts we provide to the market are below the expectations of analysts or investors, the price of our Common Stock could decline substantially.
The price of the Common Stock has been volatile and has declined significantly since our initial public offering and has traded at prices as high as $34,000.00 per share to as low as $0.95 per share.
The price of our Common Stock has been volatile and has declined significantly since our initial public offering and has traded at prices as high as $34,000.00 per share to as low as $0.95 per share.
If our actual performance does not meet or exceed our guidance or investor expectations, the trading price of the Common Stock is likely to decline. We do not expect to declare or pay any dividends on the Common Stock for the foreseeable future. We do not intend to pay cash dividends on the Common Stock for the foreseeable future.
If our actual performance does not meet or exceed our guidance or investor expectations, the trading price of the Common Stock is likely to decline. We do not expect to declare or pay any dividends on our Common Stock for the foreseeable future. We do not intend to pay cash dividends on our Common Stock for the foreseeable future.
The loss of one or more of our executive officers or other key employees could have an adverse effect on our business, financial condition, and results of operations. We have not entered into non-competition agreements with our executive officers and other officers and key personnel during the course of their employment with us.
The loss of one or more of our executive officers or other key employees could have an adverse effect on our business, financial condition, and results of operations. We have not entered into non-competition agreements with our executive officers and other key personnel during the course of their employment with us.
As we rely heavily on our computer and communications systems, and the internet to conduct our business and provide high-quality customer service, these disruptions could negatively impact our ability to run our business and either directly or indirectly disrupt suppliers’ and manufacturers’ businesses, which could have an adverse effect on our business, financial condition, and results of operations.
As we rely heavily on our computer and communications systems and the internet to conduct our business and provide high-quality customer service, these disruptions could negatively impact our ability to run our business and either directly or indirectly disrupt our suppliers’ and manufacturers’ businesses, which could have an adverse effect on our business, financial condition, and results of operations.
Our license agreements are complex and impose numerous obligations on us, including obligations to, among other things: • calculate and make payments based on complex royalty structures, which requires tracking usage of content in our service that may have inaccurate or incomplete metadata necessary for such calculation; • provide periodic reports on the exploitation of the content in specified formats; • represent that we will obtain all necessary publishing licenses and consents and pay all associated fees, royalties, and other amounts due for the licensing of musical compositions; • comply with strict technical and content security-related rules and restrictions; • comply with certain marketing and advertising restrictions; 40 • grant the licensor the right to audit our compliance with the terms of such agreements; and • comply with certain security and technical specifications.
Our license agreements are complex and impose numerous obligations on us, including obligations to, among other things: • calculate and make payments based on complex royalty structures, which requires tracking usage of content in our service that may have inaccurate or incomplete metadata necessary for such calculation; • provide periodic reports on the exploitation of the content in specified formats; • represent that we will obtain all necessary publishing licenses and consents and pay all associated fees, royalties, and other amounts due for the licensing of musical compositions; • comply with strict technical and content security-related rules and restrictions; • comply with certain marketing and advertising restrictions; • grant the licensor the right to audit our compliance with the terms of such agreements; and • comply with certain security and technical specifications.
Our amended and restated certificate of incorporation and our amended and restated bylaws provide that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the Court of Chancery of the State of Delaware (or, if that court lacks subject matter jurisdiction, another federal or state court situated in the 70 State of Delaware) shall be the sole and exclusive forum for (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, or other employees to us or our stockholders, (c) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, our certificate of incorporation or our bylaws, or (d) any action asserting a claim against us governed by the internal affairs doctrine (collectively, the “Delaware Forum Provision”).
Our amended and restated certificate of incorporation and our amended and restated bylaws provide that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the Court of Chancery of the State of Delaware (or, if that court lacks subject matter jurisdiction, another federal or state court situated in the State of Delaware) shall be the sole and exclusive forum for (a) any derivative action or proceeding brought on our behalf, (b) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers, or other employees to us or our stockholders, (c) any action asserting a claim arising pursuant to any provision of the Delaware General Corporation Law, our certificate of incorporation or our bylaws, or (d) any action asserting a claim against us governed by the internal affairs doctrine (collectively, the “Delaware Forum Provision”).
We expect our operating expenses to increase in the future as we increase our sales and marketing efforts, continue to invest in technology and engineering, expand our operating and retail infrastructure, add training and fitness programs, classes, content, and software features to our streaming platform, expand into new geographies, and invest in new or complementary products, equipment, accessories, content, and services for our immersive, customizable, and digital fitness platform, which include the CLMBR, FORME Studio, FORME Studio Lift, accompanying accessories, and our coaching services which we collectively refer to as the “FORME platform.” Further, as a public company, we have incurred, and will continue to incur substantial additional legal, accounting, and other expenses that we did not incur as a private company.
We expect our operating expenses to increase in the future as we increase our sales and marketing efforts, continue to invest in technology and engineering, expand our operating and retail infrastructure, add training and fitness programs, classes, content, and software features to our streaming platform, expand into new geographies, and invest in new or complementary products, equipment, accessories, content, and services for our immersive, customizable, and digital fitness platform, which include the Wattbike, CLMBR, FORME Studio, FORME Studio Lift, accompanying accessories, and our coaching services which we collectively refer to as the “FORME platform.” Further, as a public company we have incurred, and will continue to incur, substantial additional legal, accounting, and other expenses that we did not incur as a private company.
We are unable to predict what future tax changes may be proposed or enacted or the potential impact any such changes would have on our business, but any changes, to the extent they are brought into tax legislation, regulations, policies, or practices, could increase our effective tax rates in the United States, as well as in countries in the event we expand our international operations, and have an adverse effect on our overall tax rate, along with increasing the complexity, burden, and cost of tax compliance, all of which could impact our business, financial condition, and results of operations.
We are unable to predict what future tax changes may be proposed or enacted or the potential impact any such changes would have on our business, but any changes, to the extent they are brought into tax legislation, regulations, policies, or practices, could increase 55 our effective tax rates in the United States, as well as in countries in the event we expand our international operations, and have an adverse effect on our overall tax effective rate, along with increasing the complexity, burden, and cost of tax compliance, all of which could impact our business, financial condition, and results of operations.
Our amended and restated certificate of incorporation and bylaws include provisions that: • authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights, and preferences determined by our board of directors that may be senior to the Common Stock, which could be used by our board of directors to implement a stockholder rights plan; • require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent; • specify that special meetings of our stockholders can be called only by our board of directors, the Chairperson of our board of directors (“Chairperson”), or our Chief Executive Officer and eliminating the ability of our stockholders to call special meetings of stockholders; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; • establish that our board of directors is divided into three classes, with each class serving three-year staggered terms; • prohibit cumulative voting in the election of directors; • provide that our directors may be removed “for cause” and only with the approval of at least 66 2/3% of our stockholders; • provide that vacancies on our board of directors may be filled by a majority of directors then in office, even if less than a quorum; • permit our board of directors to establish the number of directors and fill any vacancies and newly created directorships; • provide that our board of directors is expressly authorized to make, alter, or repeal our bylaws; and • require the approval of our board of directors or the holders of at least 66 2/3% of our outstanding shares of capital stock to amend our bylaws and certain provisions of our certificate of incorporation.
Our amended and restated certificate of incorporation and bylaws include provisions that: • authorize our board of directors to issue, without further action by the stockholders, shares of undesignated preferred stock with terms, rights, and preferences determined by our board of directors that may be senior to our Common Stock, which could be used by our board of directors to implement a stockholder rights plan; • require that any action to be taken by our stockholders be effected at a duly called annual or special meeting and not by written consent; • specify that special meetings of our stockholders can be called only by our board of directors, the Chairperson of our board of directors (“Chairperson”), or our Chief Executive Officer and eliminating the ability of our stockholders to call special meetings of stockholders; • establish an advance notice procedure for stockholder proposals to be brought before an annual meeting, including proposed nominations of persons for election to our board of directors; • establish that our board of directors is divided into three classes, with each class serving three-year staggered terms; • prohibit cumulative voting in the election of directors; • provide that our directors may be removed “for cause” and only with the approval of at least 66 2/3% of the voting power of our outstanding shares of capital stock; • provide that vacancies on our board of directors may be filled by a majority of directors then in office, even if less than a quorum; 69 • permit our board of directors to establish the number of directors and fill any vacancies and newly created directorships; • provide that our board of directors is expressly authorized to make, alter, or repeal our bylaws; and • require the approval of our board of directors or the holders of at least 66 2/3% of our outstanding shares of capital stock to amend our bylaws and certain provisions of our certificate of incorporation.
Our trade secrets, know-how, and other proprietary information may be stolen, disclosed to our competitors, used in an unauthorized manner, or compromised through a direct intrusion by private parties or foreign actors, including those affiliated with or controlled by state actors, through cyber intrusions into our computer systems, physical theft through corporate espionage, or other means, or through more indirect routes, including by licensees that do not honor the terms of the license or other parties reverse engineering our products or technologies.
Our trade secrets, know-how, and other proprietary information may be stolen, disclosed to our competitors, used in an unauthorized manner, or compromised through a direct intrusion by private parties or foreign actors, including 44 those affiliated with or controlled by state actors, through cyber intrusions into our computer systems, physical theft through corporate espionage, or other means, or through more indirect routes, including by licensees that do not honor the terms of the license or other parties reverse engineering our products or technologies.
Our competitors may develop, or have already developed, products, features, content, services, or technologies that are similar to ours or that achieve greater acceptance, may offer products at lower price points due to other revenue sources available within such competitors that are unavailable to us, may have better brand recognition, may undertake more successful product development efforts, create more compelling employment opportunities, or marketing campaigns, may be willing to offer products at price points with which we cannot compete, or may adopt more 21 aggressive pricing policies.
Our competitors may develop, or have already developed, products, features, content, services, or technologies that are similar to ours or that achieve greater acceptance, may offer products at lower price points due to other revenue sources available within such competitors that are unavailable to us, may have better brand recognition, may undertake more successful product development efforts, create more compelling employment opportunities, or marketing campaigns, may be willing to offer products at price points with which we cannot compete, or may adopt more aggressive pricing policies.
Delaware law provides that directors of a corporation will not be personally liable for monetary damages for any breach of fiduciary duties as directors, except liability for: • any transaction from which the director derives an improper personal benefit; 76 • any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; • any unlawful payment of dividends or redemption of shares; or • any breach of a director’s duty of loyalty to the corporation or its stockholders.
Delaware law provides that directors of a corporation will not be personally liable for monetary damages for any breach of fiduciary duties as directors, except liability for: • any transaction from which the director derives an improper personal benefit; • any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; • any unlawful payment of dividends or redemption of shares; or • any breach of a director’s duty of loyalty to the corporation or its stockholders.
Alternatively, if a court were to find these provisions of our bylaws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition, and results of operations and result in a diversion of the time and resources of our management and board of directors.
Alternatively, if a court were to find these provisions of our bylaws inapplicable to, or unenforceable in respect of, one or more of the specified types of actions 70 or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could adversely affect our business, financial condition, and results of operations and result in a diversion of the time and resources of our management and board of directors.
These brand promotion activities may not yield increased revenue and the efficacy of these activities will depend on a number of factors, including our ability to do the following: • select the right markets, media, and media vehicles in which to advertise; • identify the most effective and efficient level of spending in each market, media, and media vehicle; and • effectively manage marketing costs, including creative and media expenses, to maintain acceptable customer acquisition costs.
These brand promotion activities may not yield increased revenue and the efficacy of these activities will depend on a number of factors, including our ability to do the following: • select the right markets, media, and media vehicles in which to advertise; • identify the most effective and efficient level of spending in each market, media, and media vehicle; and 29 • effectively manage marketing costs, including creative and media expenses, to maintain acceptable customer acquisition costs.
In addition, any required additional financing may not be available on terms acceptable to us, or at all. If we raise additional funds by issuing equity securities or convertible debt, investors may experience significant dilution of their ownership interest, and the newly issued securities may have rights senior to those of the holders of the Common Stock.
In addition, any required additional financing may not be available on terms acceptable to us, or at all. If we raise additional funds by issuing equity securities or convertible debt, investors may experience significant dilution of their ownership interest, and the newly issued securities may have rights senior to those of the holders of our Common Stock.
For example, a verbal interaction between a member and a personal trainer may be perceived by one party as hostile, unwelcome, or causing emotional harm, unintentionally or otherwise. To the extent an unfortunate incident of this nature occurred, our reputation would be harmed and we could be exposed to liability, including through 39 litigation.
For example, a verbal interaction between a member and a personal trainer may be perceived by one party as hostile, unwelcome, or causing emotional harm, unintentionally or otherwise. To the extent an unfortunate incident of this nature occurred, our reputation would be harmed and we could be exposed to liability, including through litigation.
Third parties also may raise similar validity claims against our patents before the USPTO in post-grant proceedings such as ex parte reexaminations, inter partes review, or post-grant review, or oppositions or similar proceedings outside the United States, in parallel with litigation or even outside the context of litigation. The outcome following legal assertions of invalidity and unenforceability is unpredictable.
Third parties also may raise similar validity claims against our patents before the USPTO in post-grant proceedings such as ex parte reexaminations, inter partes review, or post-grant review, or oppositions or similar proceedings outside the United States, in parallel with litigation or even outside the context of litigation. The outcome following legal assertions of 46 invalidity and unenforceability is unpredictable.
A successful assertion by one or more tax authorities requiring us to collect taxes in jurisdictions in which we do not currently do so or to collect additional taxes in a jurisdiction in which we currently collect taxes, could result in substantial tax liabilities, including taxes on past sales, as well as penalties and interest, or could otherwise harm our business, financial condition, and 56 results of operations.
A successful assertion by one or more tax authorities requiring us to collect taxes in jurisdictions in which we do not currently do so or to collect additional taxes in a jurisdiction in which we currently collect taxes, could result in substantial tax liabilities, including taxes on past sales, as well as penalties and interest, or could otherwise harm our business, financial condition, and results of operations.
We have limited control over our suppliers, manufacturers, and logistics partners, which subjects us to risks, such as the following: • inability to satisfy demand for our CLMBR and FORME Studio equipment; • limited control over delivery timing and product reliability; 34 • limited ability to monitor the manufacturing process and components or parts used in our CLMBR and FORME Studio equipment; • limited ability to develop comprehensive manufacturing specifications that take into account any materials shortages or substitutions; • variance in the manufacturing capability of our third-party manufacturers; • price increases; • failure of a significant supplier, manufacturer, or logistics provider to perform its obligations to us for technical, market, or other reasons; • variance in the quality of the delivery and installation services provided by our third-party logistics providers; • difficulties in establishing additional supplier, manufacturer, or logistics partner relationships if we experience difficulties with our existing suppliers, manufacturers, or logistics providers; • shortages of materials or components or parts included in our CLMBR and FORME Studio equipment; • misappropriation of our intellectual property; • exposure to natural catastrophes, political unrest, terrorism, labor disputes, and economic instability; • changes in local economic conditions in the jurisdictions where our suppliers, manufacturers, and logistics providers are located; • the imposition of new laws and regulations, including those relating to labor conditions, quality and safety standards, imports, duties, tariffs, taxes, and other charges on imports, as well as trade restrictions and restrictions on currency exchange or the transfer of funds; and • insufficient warranties and indemnities on components and parts supplied to or by our manufacturers or in connection with performance by our providers.
We have limited control over our suppliers, manufacturers, and logistics partners, which subjects us to risks, such as the following: • inability to satisfy demand for our Wattbike, CLMBR and FORME Studio equipment; • limited control over delivery timing and product reliability; • limited ability to monitor the manufacturing process and components or parts used in our Wattbike, CLMBR and FORME Studio equipment; • limited ability to develop comprehensive manufacturing specifications that take into account any materials shortages or substitutions; • variance in the manufacturing capability of our third-party manufacturers; • price increases; 33 • failure of a significant supplier, manufacturer, or logistics provider to perform its obligations to us for technical, market, or other reasons; • variance in the quality of the delivery and installation services provided by our third-party logistics providers; • difficulties in establishing additional supplier, manufacturer, or logistics partner relationships if we experience difficulties with our existing suppliers, manufacturers, or logistics providers; • shortages of materials or components or parts included in our Wattbike, CLMBR and FORME Studio equipment; • misappropriation of our intellectual property; • exposure to natural catastrophes, political unrest, terrorism, labor disputes, and economic instability; • changes in local economic conditions in the jurisdictions where our suppliers, manufacturers, and logistics providers are located; • the imposition of new laws and regulations, including those relating to labor conditions, quality and safety standards, imports, duties, tariffs, taxes, and other charges on imports, as well as trade restrictions and restrictions on currency exchange or the transfer of funds; and • insufficient warranties and indemnities on components and parts supplied to or by our manufacturers or in connection with performance by our providers.
Additionally, further expansion into international markets such as Canada, the United Kingdom, and Europe will create new challenges in attracting and retaining members that we may not successfully address. As a result of these 26 factors, we cannot be sure that our member levels will be adequate to maintain or permit the expansion of our operations.
Additionally, further expansion into international markets such as Canada, the United Kingdom, and Europe will create new challenges in attracting and retaining members that we may not successfully address. As a result of these factors, we cannot be sure that our member levels will be adequate to maintain or permit the expansion of our operations.
In addition, we could incur significant costs to correct any defects, warranty claims, or other problems, including costs related to product recalls. Any negative publicity related to the perceived quality and safety of our products could 31 affect our brand image, decrease consumer and member confidence and demand, and adversely affect our business, financial condition, and results of operations.
In addition, we could incur significant costs to correct any defects, warranty claims, or other problems, including costs related to product recalls. Any negative publicity related to the perceived quality and safety of our products could affect our brand image, decrease consumer and member confidence and demand, and adversely affect our business, financial condition, and results of operations.
We are planning on implementing measures designed to improve our internal control over financial reporting to remediate these material weaknesses, including formalizing our processes and internal control documentation and strengthening supervisory reviews by our financial management; hiring additional qualified accounting and finance personnel and engaging financial consultants to enable the implementation of internal control over financial reporting and segregating duties amongst accounting and finance personnel.
We are planning on implementing measures designed to improve our internal control over financial reporting to remediate these material weaknesses, including formalizing our processes and internal control documentation and strengthening supervisory reviews by our financial management; hiring additional qualified accounting and finance 51 personnel and engaging financial consultants to enable the implementation of internal control over financial reporting and segregating duties amongst accounting and finance personnel.
If we do retain a listing on Nasdaq and if the price of the Common Stock is less than $5.00, the Common Stock will be deemed a penny stock. The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information.
If we do retain a listing on Nasdaq and if the price of our Common Stock is less than $5.00, the Common Stock will be deemed a penny stock. The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information.
Further, lower than forecasted demand could also result in excess manufacturing capacity or reduced manufacturing efficiencies, which could result in lower margins. Conversely, if we underestimate 24 consumer demand, our suppliers and manufacturers may not be able to deliver products to meet our requirements or we may be subject to higher costs in order to secure the necessary production capacity.
Further, lower than forecasted demand could also result in excess manufacturing capacity or reduced manufacturing efficiencies, which could result in lower margins. Conversely, if we underestimate consumer demand, our suppliers and manufacturers may not be able to deliver products to meet our requirements or we may be subject to higher costs in order to secure the necessary production capacity.
We also sell CLMBR equipment and the FORME platform to commercial and wellness customers. For example, we are actively installing our products in hotels, resorts, and other commercial environments such as boutique hotels, luxury apartments, and private condominiums, as well businesses with which we establish corporate wellness partnerships for the benefit of their employees.
We also sell Wattbike and CLMBR equipment and the FORME platform to commercial and wellness customers. For example, we are actively installing our products in hotels, resorts, and other commercial environments such as boutique hotels, luxury apartments, and private condominiums, as well businesses with which we establish corporate wellness partnerships for the benefit of their employees.
In addition, there could be potential trade name or trademark infringement claims brought by owners of other trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names. As a means to enforce our trademark rights and prevent infringement, we may be required to file trademark claims against third parties or initiate trademark opposition proceedings.
In addition, there could be potential trade name or trademark infringement claims brought by owners of other trademarks or trademarks that incorporate variations of our registered or unregistered trademarks or trade names. As a means to enforce our trademark rights and prevent infringement, we may be required to file trademark claims against third parties or initiate 43 trademark opposition proceedings.
We cannot guarantee that the technologies we license will not be licensed to our competitors or others in the fitness and wellness sector, including the smart home gym and connected fitness industry. As a result, we may not be able to prevent competitors from developing and commercializing competitive products in territories included in all of our licenses.
We cannot guarantee that the technologies we license will not be licensed to our competitors or others in the fitness and wellness sector, including the smart home gym and connected 45 fitness industry. As a result, we may not be able to prevent competitors from developing and commercializing competitive products in territories included in all of our licenses.
To the extent there are disruptions in our payment processing systems, increases in payment processing fees, material changes in the payment ecosystem, such as large re-issuances of payment cards, delays in receiving payments from payment processors, or changes to rules or regulations concerning payment processing, our revenue, operating expenses and results of operation could be adversely impacted.
To the extent there are disruptions in our payment processing systems, increases in payment processing fees, material changes in the payment ecosystem, 36 such as large re-issuances of payment cards, delays in receiving payments from payment processors, or changes to rules or regulations concerning payment processing, our revenue, operating expenses and results of operation could be adversely impacted.
Further, although we strive to provide engaging mobile experiences for members who visit our mobile website using a browser on their mobile device, we depend on members downloading our mobile apps to provide them the optimal mobile experience. As new mobile devices and mobile platforms are released, we may encounter problems in developing or supporting apps for them.
Further, although we strive to provide engaging mobile experiences for members who visit our mobile website using a browser on their mobile device, we depend on members downloading our mobile apps to provide them with the optimal mobile experience. As new mobile devices and mobile platforms are released, we may encounter problems in developing or supporting apps for them.
For these reasons, we may not be able to realize a tax benefit from the use of our NOLs, whether or not we attain profitability. Fluctuations in exchange rates between and among the currencies of the countries in which we do business could adversely affect our business, financial condition, and results of operations.
For these reasons, we may not be able to realize a tax benefit from the use of our NOLs, whether or not we attain profitability. 53 Fluctuations in exchange rates between and among the currencies of the countries in which we do business could adversely affect our business, financial condition, and results of operations.
Annual or quarterly comparisons of our results of operations may not be useful and our results in any particular period will not necessarily be indicative of the results to be expected for any future period. Seasonality in our business can also be affected by introductions of new or enhanced products and services, including the costs associated with such introductions.
Annual or quarterly comparisons of our results of operations may not be useful and our 21 results in any particular period will not necessarily be indicative of the results to be expected for any future period. Seasonality in our business can also be affected by introductions of new or enhanced products and services, including the costs associated with such introductions.
We rely on a limited number of suppliers to manufacture, transport, and install our CLMBR and FORME Studio equipment, which exposes us to supply chain and other risks. We have previously experienced, and may experience in the future, production, shipping, or logistical constraints that cause delays.
We rely on a limited number of suppliers to manufacture, transport, and install our Wattbike, CLMBR and FORME Studio equipment, which exposes us to supply chain and other risks. We have previously experienced, and may experience in the future, production, shipping, or logistical constraints that cause delays.
Several of the components or parts that go into the manufacturing of our CLMBR and FORME Studio equipment are sourced internationally, including from China, where the United States has imposed tariffs on specified products imported therefrom following the U.S. Trade Representative Section 301 Investigation.
Several of the components or parts that go into the manufacturing of our Wattbike, CLMBR and FORME Studio equipment are sourced internationally, including from China, where the United States has imposed tariffs on specified products imported therefrom following the U.S. Trade Representative Section 301 Investigation.
We include music in the fitness content, including our classes and on-demand and Live 1:1 personal training services, that we make available to our members. To secure the rights to use music in our content, we enter into license agreements with and pay royalties to rights holders such as record labels, music publishers, and performing rights organizations.
We include music in the fitness content, including our classes and on-demand and Live 1:1 personal training services, that we make available to our members. To secure the rights to use music in our content, we enter into license 38 agreements with and pay royalties to rights holders such as record labels, music publishers, and performing rights organizations.
Any failure to comply with data privacy laws and regulations could result in significant penalties. 51 The CCPA requires, among other things, that covered companies provide disclosures to California consumers and affords such consumers with certain rights, including the ability to opt out of certain sales of their personal information.
Any failure to comply with data privacy laws and regulations could result in significant penalties. The CCPA requires, among other things, that covered companies provide disclosures to California consumers and affords such consumers with certain rights, including the ability to opt out of certain sales of their personal information.
Our actual results of operations may not meet our guidance and investor expectations, which would likely cause our share price to decline. From time to time, we may release guidance in our earnings releases, earnings conference calls, or otherwise, regarding our future performance that represent our management’s estimates as of the date of release.
Our actual results of operations may not meet our guidance and investor expectations, which would likely cause our share price to decline. 68 From time to time, we may release guidance in our earnings releases, earnings conference calls, or otherwise, regarding our future performance that represent our management’s estimates as of the date of release.
In the event of any such catastrophic event, we may be unable to continue our operations and may endure system interruptions, reputational harm, delays in our product development, breaches of data security or loss of critical data, 77 any of which could have an adverse effect on our business, financial condition, and results of operations.
In the event of any such catastrophic event, we may be unable to continue our operations and may endure system interruptions, reputational harm, delays in our product development, breaches of data security or loss of critical data, any of which could have an adverse effect on our business, financial condition, and results of operations.
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. Our ability to maintain and expand our business depends on our ability to obtain timely and adequate delivery of components and parts for our CLMBR and FORME Studio equipment.
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. Our ability to maintain and expand our business depends on our ability to obtain timely and adequate delivery of components and parts for our Wattbike, CLMBR and FORME Studio equipment.
Even if we do timely seek patent protection, 44 the coverage claimed in a patent application can be significantly reduced before a patent is issued, and its scope can be reinterpreted after issuance. We also rely on our trademarks to build name recognition and our brand in the markets in which we do business.
Even if we do timely seek patent protection, the coverage claimed in a patent application can be significantly reduced before a patent is issued, and its scope can be reinterpreted after issuance. We also rely on our trademarks to build name recognition and our brand in the markets in which we do business.
Legal fees related to such litigation will increase our operating expenses and may reduce our net income. Protection and pursuit of intellectual property rights and positions often results in protracted and expensive litigation for many companies. In the ordinary course of our business, we may become party to disputes involving intellectual 46 property rights.
Legal fees related to such litigation will increase our operating expenses and may reduce our net income. Protection and pursuit of intellectual property rights and positions often results in protracted and expensive litigation for many companies. In the ordinary course of our business, we may become party to disputes involving intellectual property rights.
The Company was not involved in that prior arbitration, which involved alleged breaches of an equipment manufacturing agreement between CLMBR, Inc. and DK City and was resolved prior to the Company’s purchase of CLMBR, Inc. On June 25, 2024, CLMBR, Inc. and the Company collectively resolved the dispute via a Confidential Settlement Agreement and Mutual Release with DK City.
The Company was not involved in that 78 prior arbitration, which involved alleged breaches of an equipment manufacturing agreement between CLMBR, Inc. and DK City and was resolved prior to the Company’s purchase of CLMBR, Inc. On June 25, 2024, CLMBR, Inc. and the Company collectively resolved the dispute via a Confidential Settlement Agreement and Mutual Release with DK City.
We rely on contractual protections with 45 our members, suppliers, employees, consultants, and contractors, and we implement security measures designed to protect our intellectual property, and proprietary technology. For example, all employees and consultants are generally required to execute confidentiality agreements in connection with their employment and consulting relationships with us.
We rely on contractual protections with our members, suppliers, employees, consultants, and contractors, and we implement security measures designed to protect our intellectual property, and proprietary technology. For example, all employees and consultants are generally required to execute confidentiality agreements in connection with their employment and consulting relationships with us.
We may become subject to claims, lawsuits, arbitration proceedings, administrative actions, government investigations, and other legal and regulatory proceedings at the federal, state and municipal levels challenging the classification of our fitness instructors or other content production providers with whom we work as independent contractors.
We may become subject to claims, lawsuits, arbitration proceedings, administrative actions, government investigations, and other legal and regulatory proceedings at the federal, state and municipal levels challenging the classification of our fitness instructors or other content production providers with whom we work as independent 60 contractors.
Accordingly, their 75 attention to our business may be diverted from time to time or they may encounter conflicts of interest in allocating their time and resources between us and other business endeavors in which they are engaged. In addition, to execute our growth plan, we must attract and retain highly qualified personnel.
Accordingly, their attention to our business may be diverted from time to time or they may encounter conflicts of interest in allocating their time and resources between us and other business endeavors in which they are engaged. In addition, to execute our growth plan, we must attract and retain highly qualified personnel.
In addition, there can be no assurance that the laws or administrative practices relating to taxation (including the current position as to income and withholding taxes), foreign exchange, export controls, economic sanctions, or otherwise in the jurisdictions where we have operations will not change.
In addition, there can be no assurance that the laws or administrative practices relating to taxation (including the current position as to income and withholding taxes), foreign exchange, export controls or economic sanctions in the jurisdictions where we have operations will not change.
Further, compliance with the federal securities laws and the rules and regulations thereunder cannot be waived by investors in the Common Stock. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.
Further, compliance with the federal securities laws and the rules and regulations thereunder cannot be waived by investors in our Common Stock. Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder.
For example, our California locations have historically experienced, and are projected to continue to experience, climate-related events at an increasing frequency, including drought, water scarcity, heat waves, wildfires and resultant air quality impacts, and power shutoffs 73 associated with wildfire prevention.
For example, our California locations have historically experienced, and are projected to continue to experience, climate-related events at an increasing frequency, including drought, water scarcity, heat waves, wildfires and resultant air quality impacts, and power shutoffs associated with wildfire prevention.
Ward is our sole executive officer and is expected to continue to hold for the foreseeable future, primary and ultimate responsibility, authority, and operational decision-making functions over the principal operations, business units, and functions of the Company, including all significant policymaking authority. As a result, the loss of Mr.
Ward is our principal executive officer and is expected to continue to hold for the foreseeable future, primary and ultimate responsibility, authority, and operational decision-making functions over the principal operations, business units, and functions of the Company, including all significant policymaking authority. As a result, the loss of Mr.
Ward’s services for any reason would likely materially and adversely affect or business. We also heavily rely on the continued service and performance of our senior management team, which provides leadership, contributes to the core areas of our business and helps us to efficiently execute our business.
Ward’s services for any reason would likely materially and adversely affect or business. We also heavily rely on the continued service and performance of our senior management team, which provides leadership, contributes to the core areas of our business and helps us to efficiently execute our 74 business.
Litigation is inherently unpredictable and can result in excessive or unanticipated verdicts and/or injunctive relief that affect how we operate our business. We could incur judgments or enter into settlements of claims for monetary damages or for agreements to change the way we operate our business, or both.
Litigation is inherently unpredictable and can result in excessive or unanticipated verdicts and/or injunctive relief that affect how we operate our business. We could incur judgments or 76 enter into settlements of claims for monetary damages or for agreements to change the way we operate our business, or both.
Any acquisition involves a number of risks, many of which could harm our business, or materially impact our stock price, including: • difficulty in integrating the operations, technologies, products, existing contracts, accounting and personnel of the acquired company or business; • not realizing the anticipated benefits of any acquisition; • difficulty in transitioning and supporting customers of the acquired company; • difficulty in transitioning and collaborating with suppliers of the acquired company; • diversion of financial and management resources from existing operations; • the risk that the price we pay, costs we incur, or other resources that we devote to the acquisition may exceed the value we realize, or the value we could have realized if we had allocated the purchase price or other resources to another opportunity; • unanticipated costs and expenses or accounting impacts of an acquisition, licensing arrangement, or other strategic investments; • potential loss of key employees, customers and strategic alliances from either our current business or the acquired company’s business; • inability to successfully bring newly acquired products to market or achieve design wins with such products; • fluctuations in industry trends that change the demand or purchasing volume of newly acquired products; • assumption of unanticipated problems or latent liabilities, such as problems with the quality of the acquired products or technology; • inability to generate sufficient revenue to offset acquisition costs; • market or investor reaction to, or perception of, the anticipated benefits, costs, or other consequences of any proposed or consummated acquisition; • the incurrence of significant costs and diversion of management resources in connection with any potential acquisition, irrespective of whether an acquisition is successfully completed; 74 • the dilutive effect on the Common Stock as a result of any acquisitions financed through the issuance of equity; • inability to successfully complete transactions with a suitable acquisition candidate; and • in the event of international acquisitions, risks associated with accounting and business practices or regulatory requirements that are different from applicable U.S. practices and requirements.
Any acquisition involves a number of risks, many of which could harm our business, or materially impact our stock price, including: • difficulty in integrating the operations, technologies, products, existing contracts, accounting and personnel of the acquired company or business; • not realizing the anticipated benefits of any acquisition; • difficulty in transitioning and supporting customers of the acquired company; • difficulty in transitioning and collaborating with suppliers of the acquired company; • diversion of financial and management resources from existing operations; 73 • the risk that the price we pay, costs we incur, or other resources that we devote to the acquisition may exceed the value we realize, or the value we could have realized if we had allocated the purchase price or other resources to another opportunity; • unanticipated costs and expenses or accounting impacts of an acquisition, licensing arrangement, or other strategic investments; • potential loss of key employees, customers and strategic alliances from either our current business or the acquired company’s business; • inability to successfully bring newly acquired products to market or achieve design wins with such products; • fluctuations in industry trends that change the demand or purchasing volume of newly acquired products; • assumption of unanticipated problems or latent liabilities, such as problems with the quality of the acquired products or technology; • inability to generate sufficient revenue to offset acquisition costs; • market or investor reaction to, or perception of, the anticipated benefits, costs, or other consequences of any proposed or consummated acquisition; • the incurrence of significant costs and diversion of management resources in connection with any potential acquisition, irrespective of whether an acquisition is successfully completed; • the dilutive effect on our Common Stock resulting from any acquisitions financed through the issuance of equity; • inability to successfully complete transactions with a suitable acquisition candidate; and • in the event of international acquisitions, risks associated with accounting and business practices or regulatory requirements that are different from applicable U.S. practices and requirements.
We also sell CLMBR equipment and the FORME platform to commercial and wellness customers, which exposes us to additional business and financial risks. In addition, if we fail to successfully expand our commercial and corporate wellness business, it could negatively impact our ability to grow our business and gain market share.
We also sell Wattbike and CLMBR equipment and the FORME platform to commercial and wellness customers, which exposes us to additional business and financial risks. In addition, if we fail to successfully expand our commercial and corporate wellness business, it could negatively impact our ability to grow our business and gain market share.
Even if a product liability claim or lawsuit is unsuccessful or is not fully pursued, the negative publicity surrounding any assertion that our products caused physical harm could adversely affect our reputation with existing and potential consumers and its corporate and brand image.
Even if a product liability claim or lawsuit is unsuccessful or is not fully pursued, the negative publicity surrounding any assertion that our products caused physical harm could adversely affect our reputation with existing and potential consumers and our corporate and brand image.
To the extent our fitness and wellness content does not meet our expectations, in particular, in terms of costs, usage, and popularity, our business, including our brand and 33 results of operations may be adversely impacted. As we expand our fitness and wellness content, we continue to be responsible for production costs and other expenses.
To the extent our fitness and wellness content does not meet our expectations, in particular, in terms of costs, usage, and popularity, our business, including our brand and results of operations, may be adversely impacted. As we expand our fitness and wellness content, we continue to be responsible for production costs and other expenses.
Litigation or other legal proceedings relating to intellectual property claims, with or without merit, are unpredictable and, even if resolved in our favor, litigation or other legal proceedings relating to 47 intellectual property claims may cause us to incur significant expenses and could distract our scientific and management personnel from their normal responsibilities.
Litigation or other legal proceedings relating to intellectual property claims, with or without merit, are unpredictable and, even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract our scientific and management personnel from their normal responsibilities.
Even if we were to implement hedging strategies, not every exposure can be hedged and, where hedges 54 are put in place based on expected foreign exchange exposure, they are based on forecasts which may vary or which may later prove to have been inaccurate.
Even if we were to implement hedging strategies, not every exposure can be hedged and, where hedges are put in place based on expected foreign exchange exposure, they are based on forecasts which may vary or which may later prove to have been inaccurate.
Although the Common Stock is currently listed on Nasdaq, an active market in the Common Stock may not develop or, if it does develop, it may not be sustainable or liquid enough for stockholders to sell their shares at or above the purchase price paid for such shares, or at all.
Although our Common Stock is currently listed on Nasdaq, an active market in the Common Stock may not develop or, if it does develop, it may not be sustainable or liquid enough for stockholders to sell their shares at or above the purchase price paid for such shares, or at all.
Claims that our products or technologies infringe, misappropriate or otherwise violate third-party intellectual property rights, regardless of their merit or resolution, could be time-consuming or costly to defend or settle and could divert the efforts and attention of our management and technical personnel.
Claims that our products or technologies infringe, misappropriate or otherwise violate third-party intellectual property rights, regardless of their merit or resolution, could be time-consuming or costly to defend or settle and could divert 41 the efforts and attention of our management and technical personnel.
Although the Common Stock is currently listed on Nasdaq, an active market for the Common Stock may not develop or, if it does develop, it may not be sustainable or liquid enough for stockholders to sell their shares at or above the purchase price paid for such shares, or at all.
Although our Common Stock is currently listed on Nasdaq, an active market for our Common Stock may not develop or, if it does develop, it may not be sustainable or liquid enough for stockholders to sell their shares at or above the purchase price paid for such shares, or at all.
If the price of the Common Stock is low or volatile, we may not be able to acquire other companies for equity or equity-linked consideration. In addition, newly issued securities may have rights, preferences or privileges senior to those of existing stockholders.
If the price of our Common Stock is low or volatile, we may not be able to acquire other companies for equity or equity-linked consideration. In addition, newly issued securities may have rights, preferences or privileges senior to those of existing stockholders.
We have encountered, and will continue to encounter, risks and difficulties frequently experienced by emerging companies in rapidly changing industries, including market acceptance of our 18 products and services, attracting and retaining members, and increasing competition and expenses as we expand our business.
We have encountered, and will continue to encounter, risks and difficulties frequently experienced by emerging companies in rapidly changing industries, including market acceptance of our products and services, attracting and retaining members, and increasing competition and expenses as we expand our business.
It is difficult to predict the future growth rates, if any, and size of the smart home gym and connected fitness market, and growth forecasts are subject to significant uncertainty and are based on assumptions and estimates that may not 25 prove to be accurate.
It is difficult to predict the future growth rates, if any, and size of the smart home gym and connected fitness market, and growth forecasts are subject to significant uncertainty and are based on assumptions and estimates that may not prove to be accurate.
For example, we have 28 historically incurred higher levels of sales and marketing expenses accompanying each product and service introduction. Moreover, we must successfully manage introductions of new or enhanced products and services, which could adversely impact the sales of our existing products and services.
For example, we have historically incurred higher levels of sales and marketing expenses accompanying each product and service introduction. Moreover, we must successfully manage introductions of new or enhanced products and services, which could adversely impact the sales of our existing products and services.
Changes in tax laws in some jurisdictions may also have a retroactive effect and we may be found to have paid less tax than required in such regions. Compliance with diverse legal requirements is costly, time consuming, and requires significant resources.
Changes in tax laws in some jurisdictions may also have a 57 retroactive effect and we may be found to have paid less tax than required in such regions. Compliance with diverse legal requirements is costly, time consuming, and requires significant resources.
Factors relating to our business that may contribute to these fluctuations include the following factors, as well as other factors described elsewhere in this annual report on Form 10-K: • our ability to raise additional capital sufficient to fund our operations, meet our obligations as they become due, and execute our growth strategy; • our ability to maintain and attract new members; • membership cancellation and renewal rates; • product returns; • changes in our recurring revenue model or pricing methodologies, or our adoption of any new membership, pricing, or revenue models; • the receipt, reduction or cancellation of, or changes in the forecasts or timing of, memberships by members; • changes in our mix of products and services, such as changes in demand for certain accessories or bundles or our Live 1:1 personal training and health coaching services, fitness programs and classes, or other streaming fitness content on our platform; • the diversification and growth of our revenue sources, including our ability to successfully expand our commercial and corporate wellness channels; • our ability to maintain gross margins and operating margins; 22 • inaccurate forecasting of the demand for our products and services, which could lead to lower revenue or increased costs, or both; • the timing and amount of research, development, and new product expenditures, including resources allocated to the development of new equipment and accessories, programs, classes, and other content, and innovative features and technologies, as well as the continued development and upgrading of our proprietary technology platform; • increases in marketing, sales, and other operating expenses that we may incur to grow and expand our operations and to remain competitive; • changes in our relationship with our third-party financing partner who provides financing assistance to our members for the purchase of our CLMBR and FORME Studio equipment; • constraints on the availability of consumer financing or increased down payment requirements to finance purchases of our CLMBR and FORME Studio equipment; • the continued maintenance and expansion of our delivery, installation, and maintenance services and network for our CLMBR and FORME Studio equipment; • supply chain disruptions, delays, shortages, and capacity limitations; • increases or other changes in our product development and manufacturing costs, or the timing and extent thereof, and our ability to achieve cost reductions in a timely or predictable manner; • changes in market and customer acceptance of and demand for our products, content, and services, including cyclicality and seasonal fluctuations in memberships and usage of the CLMBR and FORME platform by our members, each of which may change as our products and services evolve or mature, or as our business grows; • the continued market acceptance of, and the growth of the smart home gym and connected fitness market; • the emergence of new industry expectations and product obsolescence; • the timing and success of new product, content, and service introductions by us or our competitors; • the competitive landscape and pricing pressure as a result of competition or otherwise; • costs and expenses associated with any potential acquisitions or strategic partnerships or initiatives; • the ability to open new retail locations and studio showrooms; • successful expansion into international markets; • significant warranty claims; • loss of key personnel or the inability to attract qualified personnel, including personal trainers and fitness instructors; • geopolitical events, such as war, regional conflicts, other outbreaks of hostilities, or the escalation or expansion of the same (such as the Russian invasion of Ukraine and the Israel-Hamas war), threat of war or terrorist actions, or the occurrence of pandemics, epidemics, or other outbreaks of disease, or natural disasters, and the impact of these events on the factors set forth above; • changes in business or macroeconomic conditions, including inflation, interest rates, lower consumer confidence, recessionary conditions, increased unemployment rates, or stagnant or declining wages; • system failures or breaches of security or privacy; • adverse litigation judgments, settlements, or other litigation-related costs; • changes in the legislative or regulatory environment, including with respect to cybersecurity, climate change, privacy, consumer product safety, advertising, and employment matters, or enforcement by government regulators, including fines, orders, or consent decrees; 23 • fluctuations in currency exchange rates and changes in the proportion of our revenue and expenses denominated in foreign currencies; • changes in our effective tax rate; • changes in accounting standards, policies, guidance, interpretations, or principles; and • changes in business or macroeconomic conditions, including lower consumer confidence, recessionary conditions, increased unemployment rates, or stagnant or declining wages As a result of these and other factors, our results of operations and revenue may vary significantly from period to period.
Factors relating to our business that may contribute to these fluctuations include the following factors, as well as other factors described elsewhere in this annual report on Form 10-K: • our ability to raise additional capital sufficient to fund our operations, meet our obligations as they become due, and execute our growth strategy; • our ability to maintain and attract new members; • membership cancellation and renewal rates; • product returns; • changes in our recurring revenue model or pricing methodologies, or our adoption of any new membership, pricing, or revenue models; • the receipt, reduction or cancellation of, or changes in the forecasts or timing of, memberships by members; • changes in our mix of products and services, such as changes in demand for certain accessories or bundles or our Live 1:1 personal training and health coaching services, fitness programs and classes, or other streaming fitness content on our platform; • the diversification and growth of our revenue sources, including our ability to successfully expand our commercial and corporate wellness channels; • our ability to maintain gross margins and operating margins; • inaccurate forecasting of the demand for our products and services, which could lead to lower revenue or increased costs, or both; • the timing and amount of research, development, and new product expenditures, including resources allocated to the development of new equipment and accessories, programs, classes, and other content, and innovative features and technologies, as well as the continued development and upgrading of our proprietary technology platform; • increases in marketing, sales, and other operating expenses that we may incur to grow and expand our operations and to remain competitive; • changes in our relationship with our third-party financing partner who provides financing assistance to our members for the purchase of our Wattbike, CLMBR and FORME Studio equipment; • constraints on the availability of consumer financing or increased down payment requirements to finance purchases of our Ergatta, Wattbike, CLMBR and FORME Studio equipment; • the continued maintenance and expansion of our delivery, installation, and maintenance services and network for our Wattbike, CLMBR and FORME Studio equipment; • supply chain disruptions, delays, shortages, and capacity limitations; • increases or other changes in our product development and manufacturing costs, or the timing and extent thereof, and our ability to achieve cost reductions in a timely or predictable manner; 22 • changes in market and customer acceptance of and demand for our products, content, and services, including cyclicality and seasonal fluctuations in memberships and usage of the CLMBR and FORME platform by our members, each of which may change as our products and services evolve or mature, or as our business grows; • the continued market acceptance of, and the growth of the smart home gym and connected fitness market; • the emergence of new industry expectations and product obsolescence; • the timing and success of new product, content, and service introductions by us or our competitors; • the competitive landscape and pricing pressure as a result of competition or otherwise; • costs and expenses associated with any potential acquisitions or strategic partnerships or initiatives; • the ability to open new retail locations and studio showrooms; • successful expansion into international markets; • significant warranty claims; • loss of key personnel or the inability to attract qualified personnel, including personal trainers and fitness instructors; • geopolitical events, such as war, regional conflicts, other outbreaks of hostilities, or the escalation or expansion of the same (such as the Russian invasion of Ukraine and the Israel-Hamas war), threat of war or terrorist actions, or the occurrence of pandemics, epidemics, or other outbreaks of disease, or natural disasters, and the impact of these events on the factors set forth above; • changes in business or macroeconomic conditions, including inflation, interest rates, lower consumer confidence, recessionary conditions, increased unemployment rates, or stagnant or declining wages; • system failures or breaches of security or privacy; • adverse litigation judgments, settlements, or other litigation-related costs; • changes in the legislative or regulatory environment, including with respect to cybersecurity, privacy, consumer product safety, advertising, and employment matters, or enforcement by government regulators, including fines, orders, or consent decrees; • fluctuations in currency exchange rates and changes in the proportion of our revenue and expenses denominated in foreign currencies; • changes in our effective tax rate; and • changes in accounting standards, policies, guidance, interpretations, or principles.
Any interruption or delay in the supply of any of these components or parts, or the inability to obtain these components or parts from alternate sources at acceptable prices and within a reasonable amount of time, would harm our ability to meet our scheduled deliveries to our members.
Any interruption or delay in the supply of any of these components or 34 parts, or the inability to obtain these components or parts from alternate sources at acceptable prices and within a reasonable amount of time, would harm our ability to meet our scheduled deliveries to our members.
If we encounter disputes or other issues related to the intellectual property we license from or that we develop with third parties, it could narrow or restrict our ability to use such intellectual property and adversely impact our ability to develop and market our current or new products and services.
If we encounter disputes or other issues related to the intellectual property we license from or develop with third parties, it could narrow or restrict our ability to use such intellectual property and adversely impact our ability to develop and market our current or new products and services.
If our costs become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition, and operating results.
If our costs become subject to significant inflationary pressures, we may not be able to fully offset such higher costs 71 through price increases. Our inability or failure to do so could harm our business, financial condition, and operating results.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Financing Activities Net cash provided by financing activities of $16.3 million for the year ended December 31, 2024 was primarily from the issuance of convertible notes of $4.8 million, proceeds from loans and related party loans of $1.9 million, proceeds from issuance of common stock from equity line of credit $0.4 million, proceeds from common stock offering net of issuance and offering costs of $4.4 million, At the Market Offering proceeds of $8.4 million offset by the payment of loans and related party loans $3.3 million, payment of extension fee with convertible note holder $0.2 million and redemptions on convertible notes $0.2 million.
Net cash provided by financing activities of $16.3 million for the year ended December 31, 2024 was primarily from the issuance of convertible notes of $4.8 million, proceeds from loans and related party loans of $1.9 million, proceeds from issuance of common stock from equity line of credit $0.4 million, proceeds from common stock offering net of issuance and offering costs of $4.4 million, At the Market Offering proceeds of $8.4 million offset by the payment of loans and related party loans $3.3 million, payment of extension fee with convertible note holder $0.2 million and redemptions on convertible notes $0.2 million.
Similarly, we may be unable to attract and retain members, which could have an adverse effect on our business and rate of growth. • 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. • 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. • 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. • Our ability to execute or realize the anticipated benefits of any strategic acquisition or transaction.
Similarly, we may be unable to attract and retain members, which could have an adverse effect on our business and rate of growth. • 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. 82 • 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. • 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. • Our ability to execute or realize the anticipated benefits of any strategic acquisition or transaction.
Additionally, our independent registered accounting firm will not be required to opine on the effectiveness of our internal control over financial reporting pursuant to Section 404 until we are no longer an “emerging growth company” as defined in the JOBS Act. It em 9B. Other Information. None . It em 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Our independent registered accounting firm will not be required to opine on the effectiveness of our internal control over financial reporting pursuant to Section 404 until we are no longer an “emerging growth company” as defined in the JOBS Act. It em 9B. Other Information. None . It em 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.
Our operating results and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates. However, we believe that the exposure to foreign currency fluctuation from operating expenses is relatively small at this time as the related costs do not constitute a significant portion of our total expenses.
Our operating results and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates. However, we believe that the exposure to foreign currency fluctuation from operating expenses is relatively small at this time as the 94 related costs do not constitute a significant portion of our total expenses.
We are in the process of implementing measures designed to improve our internal control over financial reporting to remediate these material weaknesses, including formalizing our processes and internal control documentation and strengthening supervisory reviews by our financial management; hiring additional qualified accounting and finance personnel and engaging financial consultants to enable the implementation of internal control over financial reporting and segregating duties amongst accounting and 103 finance personnel.
We are in the process of implementing measures designed to improve our internal control over financial reporting to remediate these material weaknesses, including formalizing our processes and internal control documentation and strengthening supervisory reviews by our financial management; hiring additional qualified accounting and finance personnel and engaging financial consultants to enable the implementation of internal control over financial reporting and segregating duties amongst accounting and finance personnel.
This in turn may limit our ability to fulfill customer orders and we may be unable to satisfy all 84 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.
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.
In addition, disruptions to commercial transportation infrastructure have increased delivery times for materials and components or parts of our fitness equipment, and has impacted, and could in the future impact, our ability to timely deliver our products to customers.
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.
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.
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 85 reporting companies.
Evaluation of Disclosure Controls and Procedures Under the supervision, and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), in connection with the period ending December 31, 2024.
Evaluation of Disclosure Controls and Procedures Under the supervision, and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), in connection with the period ending December 31, 2025.
The financial statements required to be filed pursuant to this Item 8 are appended to this Annual Report on Form 10-K. An index of those financial statements is found in Item 15 of Part IV of this Annual Report on Form 10-K. 101 It em 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. None.
The financial statements required to be filed pursuant to this Item 8 are appended to this Annual Report on Form 10-K. An index of those financial statements is found in Item 15 of Part IV of this Annual Report on Form 10-K. 95 It em 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure. None.
Based on this evaluation, our management concluded that our internal control over financial reporting was not effective as of December 31, 2024, because of the material weaknesses described below. This annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting.
Based on this evaluation, our management concluded that our internal control over financial reporting was not effective as of December 31, 2025, because of the material weaknesses described below. This annual report does not include an attestation report of the Company’s independent registered public accounting firm regarding internal control over financial reporting.
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.
The accompanying consolidated financial statements have been prepared on the basis that we will continue to operate as a going concern, which contemplates that we will be able to realize assets and settle liabilities and commitments in the normal course of business for the foreseeable future.
Management’s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act for the Company. Management assessed the effectiveness of internal control over financial reporting as of the year ended December 31, 2024.
Management’s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act for the Company. Management assessed the effectiveness of internal control over financial reporting as of the year ended December 31, 2025.
In the event the Company is unable to refinance its outstanding debt, settle some or all of the debt with shares of the Company’s common or preferred stock, secure additional outside capital, and/or secure amendments or waivers from its lenders to defer or modify the repayment terms, management will be required to seek other strategic alternatives to settle this indebtedness, which may include, among others, a significant curtailment of the Company’s operations, a sale of certain of the Company’s assets, a sale of the entire Company to strategic or financial investors, and/or allowing the Company to become insolvent by filing for bankruptcy protection under the provisions of the U.S.
In the event we are unable to refinance our outstanding debt, settle some or all of the debt with shares of our common or preferred stock, secure additional outside capital, and/or secure amendments or waivers from its lenders to defer or modify the repayment terms, management will be required to seek other strategic alternatives to settle this indebtedness, which may include, among others, a significant curtailment of the Company’s operations, a sale of certain of the Company’s assets, a sale of the entire Company to strategic or financial investors, and/or allowing the Company to become insolvent by filing for bankruptcy protection under the provisions of the U.S.
This was further impacted by the lack of sufficient complement of qualified technical accounting and financial reporting personnel.
This was further impacted by the lack of a sufficient complement of qualified technical accounting and financial reporting personnel.
This material weakness contributed to additional material weaknesses further described below. • Risk Assessment: The Company did not have a formal process to identify, update, and assess risks, including risks around the accounting for complex transactions, that could significantly impact the design and operation of the Company’s control activities. • Control Activities: The Company did not design and implement effective control activities and identified the following material weaknesses: 102 o The lack of a sufficient number of trained professional with the expertise to design, implement, and execute a formal risk assessment process and formal accounting policies, procedures, and control over accounting and financial reporting to ensure the timely and accurate recording of financial transactions while maintaining a segregation of duties.
This material weakness contributed to additional material weaknesses further described below. • Risk Assessment: The Company did not have a formal process to identify, update, and assess risks, including risks around the accounting for complex transactions, that could significantly impact the design and operation of the Company’s control activities. • Control Activities: The Company did not design and implement effective control activities and identified the following material weaknesses: 96 o The lack of a sufficient number of trained professionals with the expertise to design, implement, and execute a formal risk assessment process and formal accounting policies, procedures, and control over accounting and financial reporting to ensure the timely and accurate recording of financial transactions while maintaining a segregation of duties.
In particular, our material weakness related to our accounting software was not fully remediated for the fiscal year ended December 31, 2024 or the fiscal year ended December 31, 2023, as we expect to implement new software in 2025.
In particular, our material weakness related to our accounting software was not fully remediated for the fiscal year ended December 31, 2025 or the fiscal year ended December 31, 2024, as we expect to implement new software in 2026.
Changes in Internal Control Over Financial Reporting There has been no change in our internal control over financial reporting during the period ended December 31, 2024, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Changes in Internal Control Over Financial Reporting There has been no change in our internal control over financial reporting during the period ended December 31, 2025, that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
Revenue Connected Fitness Product 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.
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.
Training Training revenue consists of sales of our personal training services delivered through our connected fitness products, in-person classes and third-party mobile devices. Training revenue is recognized at the time of delivery. Training revenue represented 12% and 26% of total revenue for the years ended December 31, 2024 and 2023, respectively.
Training Training revenue consists of sales of our personal training services delivered through our connected fitness products, in-person classes and third-party mobile devices. Training revenue is recognized at the time of delivery. Training revenue represented 4% and 12% of total revenue for the years ended December 31, 2025 and 2024, respectively.
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: • 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. • We derive a significant majority of our revenue from sales of our CLMBR, FORME Studio and FORME Studio Lift equipment and if sales of our CLMBR, FORME Studio and FORME Studio Lift equipment decline, it would materially and negatively affect our future revenue and results of operations. • Our membership revenue is largely dependent on our ability to sell our CLMBR, FORME Studio equipment and if sales of our FORME Studio equipment decline, our membership revenue would decline, and it would materially and negatively affect our future revenue and results of operations.
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: • 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. • 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.
We have elected this exemption to delay adopting new or revised accounting standards until such time as those standards apply to private companies. Where allowable we have early adopted certain standards as described in Note 2 of our audited financial statements and the notes to our consolidated financial statements included elsewhere in this annual report on Form 10-K.
We have elected this exemption to delay adopting new or revised accounting standards until such time as those standards apply to private companies. Where allowable, we have early adopted certain standards as described in Note 2 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Leverage well established equipment distributors to scale in commercial channels We have high value partnerships with distributors, including Woodway, to sell CLMBR and FORME 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.
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.
If our costs become subject to significant inflationary pressures, we may not be able to fully offset such higher costs through price increases. Our inability or failure to do so could harm our business, financial condition, and operating results. Ite m 8. Financial Statements and Supplementary Data.
However, if our costs become subject to more significant or sustained inflationary pressures, we may not be able to fully offset such higher costs through price increases or other measures. Our inability or failure to do so could harm our business, financial condition, and operating results. Ite m 8. Financial Statements and Supplementary Data.
This, coupled with management’s accounting software system has certain system limitations that do not allow for an effective control environment and the absence of sufficient other mitigating controls, created segregation of duties deficiencies. o The lack of a sufficient number of trained professionals with the appropriate U.S.
This, coupled with management’s accounting software and related ancillary systems having certain system limitations that do not allow for an effective control environment and the absence of sufficient other mitigating controls, created segregation of duties deficiencies. o The lack of a sufficient number of trained professionals with the appropriate U.S.
Item 6. [ Reserved] 81 It em 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Item 6. [ Reserved] 80 It em 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
We expect to incur additional general and administrative expenses as a result of operating as a public company, including expenses related to compliance and reporting obligations of public companies, and increased costs for insurance, investor relations expenses, and professional services.
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.
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.
Since our 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.
In addition, we are planning on implementing an accounting software system with the design and functionality to segregate incompatible accounting duties, which we currently expect will be fully implemented in our 2025 fiscal year.
In addition, we are planning on implementing an accounting software system with the design and 97 functionality to segregate incompatible accounting duties, which we currently expect will be implemented in our 2026 fiscal year.
These uncertainties raise substantial doubt about our ability to continue as a going concern.
Bankruptcy Code. These uncertainties raise substantial doubt about our ability to continue as a going concern.
Management concluded that material weaknesses existed as of the year ended December 31, 2024.
Management concluded that material weaknesses existed as of the year ended December 31, 2025.
Key milestones in our growth history include: • May 2017 – FORME founded • July 2021 – Commenced commercial delivery of FORME Studio (fitness mirror), our first connected fitness hardware product • July 2022 – Live 1:1 personal training service launched • August 2022 – Commenced commercial delivery of FORME Studio Lift (fitness mirror and cable-based digital resistance) • April 2023 – Interactive Strength went public on NASDAQ with ticker TRNR • February 2024 – Acquired substantially all of the assets of CLMBR, Inc.
Key milestones in our growth history include: • May 2017 – Interactive Strength Inc. founded • July 2021 – Commenced commercial delivery of FORME Studio (fitness mirror), our first connected fitness hardware product • July 2022 – Live 1:1 personal training service launched • August 2022 – Commenced commercial delivery of FORME Studio Lift (fitness mirror and cable-based digital resistance) • April 2023 – Interactive Strength went public on NASDAQ with ticker symbol "TRNR" • February 2024 – Acquired substantially all of the assets of CLMBR, Inc. • July 2025 - Acquired all of the outstanding equity interests of Wattbike (Holdings) Limited ("Wattbike"). • March 2026 - Acquired all of the outstanding equity interests of Ergatta, Inc.
Change in Fair Value of Earn Out The change in fair value of earn out consists of the change in the fair value of the outstanding contingent considerations 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 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. 87 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 notes since the previous reporting period.
Connected fitness product revenue represented 74% and 59% of total revenue for the years ended December 31, 2024 and 2023, respectively. Membership Membership revenue consists of revenue generated from our monthly Connected Fitness membership. Membership revenue represented 14% and 15% of total revenue for the years ended December 31, 2024 and 2023, respectively.
Connected fitness product revenue represented 90% and 74% of total revenue for the years ended December 31, 2025 and 2024, respectively. Membership Membership revenue consists of revenue generated from our monthly Connected Fitness membership. Membership revenue represented 6% and 15% of total revenue for the years ended December 31, 2025 and 2024, respectively.
In accordance with ASC Topic 825, the Company records these convertible notes at fair value with changes in fair value recorded as a component of other income (expense), net in the consolidated statement of operations and comprehensive loss.
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 following discussion of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and the related notes and other information for the year ended December 31, 2024 and 2023 in this annual report on Form 10-K. Historic results are not necessarily indicative of future results.
The following discussion of our financial condition and results of operations should be read in conjunction with our audited consolidated financial statements and notes thereto for the years ended December 31, 2025 and 2024 included elsewhere in this annual report on Form 10-K. Historic results are not necessarily indicative of future results.
The remaining difference of $0.9 million was related to foreign currency and interest expense. Investing Activities Net cash used in investing activities of $1.7 million for the year ended December 31, 2024 related to the acquisition of CLMBR, Inc. net of cash paid and cash acquired of $1.5 million and acquisition of software and content of $0.2 million.
Cash used in investing activities of $1.7 million for the year ended December 31, 2024 related to the acquisition of CLMBR, Inc. net of cash paid and cash acquired of $1.5 million and acquisition of software and content of $0.2 million.
Please also see the section of this annual report on Form 10-K titled “Special Note Regarding Forward-Looking Statements.” Overview Interactive Strength Inc. is the parent company of two leading brands serving the commercial and at-home markets with specialty fitness equipment and virtual training: CLMBR and FORME. CLMBR manufactures vertical climbing equipment and provides a unique digital and on-demand training platform.
Please also see the section of this annual report on Form 10-K titled “Special Note Regarding Forward-Looking Statements.” Overview Interactive Strength Inc. is the parent company of three leading brands serving the commercial and at-home markets with specialty fitness equipment and virtual training; Wattbike, CLMBR and FORME.
General and Administrative General and administrative expense includes personnel-related expenses and facilities-related costs primarily for our executive, finance, accounting, legal, human resources, and IT functions. General and administrative expense also includes amortization of capitalized internal use software costs and fees for professional services principally comprised of legal, audit, tax and accounting services, and insurance.
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, and insurance.
Training Training 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.
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.
Interest (Expense) Interest expense increased $6.1 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023.
Interest (Expense) Interest expense increased by $4.1 million for the year ended December 31, 2025 as compared to the year ended December 31, 2024.
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 product and service offerings.
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.
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. Components of Our Operating Results We generate revenue from sales of our connected fitness products, membership revenue, and personal training revenue.
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.
Cost of Revenue Connected Fitness Product Connected Fitness Product cost of revenue consists of CLMBR and 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. 85 Membership Membership cost of revenue includes costs associated with personnel related expenses, filming and production costs, hosting fees, music royalties, and amortization of capitalized content and amortization of capitalized software development costs.
Cost of Revenue Connected Fitness Product Connected Fitness Product cost of revenue consists of Wattbike, 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.
Other (Expense) Income, Net Other (expense) income, net consists of unrealized currency gains and losses, loss on exchange of warrants for equity, and fair value of issuance of Loss Restoration Agreement derivative.
Other (Expense) Income, Net Other (expense) income, net consists of expenses associated with the issuance of convertible notes that were recognized at fair value, unrealized currency gains and losses, loss on exchange of warrants for equity, and fair value of issuance of Loss Restoration Agreement derivative.
Our team has significant experience in M&A and we are one of the few companies in our industry with a public currency, which we believe makes us an attractive acquiror.
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.
General and Administrative General and administrative expense decreased $18.9 million, or 51%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023, respectively.
General and Administrative General and administrative expense decreased $2.8 million, or 15%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024.
We capitalize certain qualified costs incurred in connection with the development of internal-use software and software to be sold or marketed which may also cause research and development expenses to vary from period to period.
We capitalize certain qualified costs incurred in connection with the development of internal-use software and software to be sold or marketed which may also cause research and development expenses to vary from period to period. 86 Sales and Marketing Sales and marketing expense consists of performance marketing media spend, asset creation, other brand creative expenses, all showroom expenses and related lease payments and sales and marketing personnel-related expenses.
The decrease was primarily due to a decrease in personnel-related expenses from a reduction in headcount of $0.1 million, and a decrease in software and subscriptions of $0.6 million, a decrease of $2.7 million in stock-based compensation expenses, offset by increase in 3rd party engineering services of $0.3 million.
The decrease was primarily due to decreases in stock-based compensation expense of $2.9 million, other personnel-related expenses of $1.1 million and a $0.2 million decrease in third-party engineering services, partially offset by Wattbike R&D expenses of $0.2 million.
Sales and Marketing Sales and marketing expense decreased $0.6 million, or 34%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023, respectively.
Sales and Marketing 90 Sales and marketing expense increased by $1.2 million, or 110%, for the year ended December 31, 2025, as compared to the year ended December 31, 2024.
During the years ended December 31, 2024 and 2023, we generated total revenue of $5.4 million and $1.0 million, respectively, and incurred net losses of $(34.9) million and $(51.4) million, respectively.
("Ergatta") Our revenue is primarily generated from the sale of our connected fitness hardware products and associated recurring membership revenue. During the years ended December 31, 2025 and 2024, we generated total revenue of $11.5 million and $5.4 million, respectively, and incurred net losses of $24.0 million and $34.9 million, respectively.
In this regard, the Company incurred a net operating loss of $29.2 million and used net cash in its operations of $14.8 million during the year ended December 31, 2024, and had an accumulated deficit of $202.6 million as of December 31, 2024. • In order to execute its emerging growth strategy, the Company has been heavily dependent on financing from lenders and capital from private and public investors (collectively “outside capital”) since its inception and expects to remain heavily dependent on outside capital for the foreseeable future until such time that the Company’s operations reach a scale of profitability that allows it to fund its obligations primarily with cash inflows from operations.
In order to execute our growth strategy, we have been heavily dependent on financing from lenders and capital from private and public investors (collectively “outside capital”) since our inception and we expect to remain heavily dependent on outside capital for the foreseeable future until such time that our operations reach a scale of profitability that allows us to fund our obligations 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 $2.3 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 over the next year beyond the issuance date due absent management’s ability to secure additional outside capital. • While the Company is actively seeking to secure additional outside capital (and has historically been able to successfully secure such capital), no additional outside capital has been secured or was deemed probable of being secured as of the issuance date.
Our available liquidity to fund our operations over the next twelve months beyond the issuance date was limited to approximately $4.4 million of cash and cash equivalents However, based on our anticipated liquidity needs, the foregoing available liquidity will not be sufficient to meet our obligations as they become due over the next year beyond the issuance date absent management’s ability to secure additional outside capital, which may not be available on commercially acceptable terms, or at all.
Loss on issuance of warrants Loss on issuance of warrants consists of fair value of issuance of warrants issued in connection with Registered 86 Direct Offering and Best Efforts Offering. Loss upon extinguishment of debt and accounts payable Loss on debt extinguishment was a result of conversion of promissory loans and senior secured debt into convertible notes.
Loss on issuance of warrants Loss on issuance of warrants consists of fair value of issuance of warrants issued in connection with Registered Direct Offering and Best Efforts Offering.
Operating Expenses Year Ended December 31, Change 2024 2023 Amount % Operating Expenses: (in thousands) Research and development $ 6,988 $ 10,044 $ (3,056 ) (30%) Sales and marketing 1,080 1,631 (551 ) (34%) General and administrative 18,339 37,277 (18,938 ) (51%) Total operating expenses $ 26,407 $ 48,952 $ (22,545 ) (46%) Research and Development Research and development expense which includes engineering expenses decreased $3.1 million, or 30%, for the year ended December 31, 2024, as compared to the year ended December 31, 2023, respectively.
Operating Expenses Year Ended December 31, Change 2025 2024 Amount % Operating Expenses: (in thousands) Research and development $ 2,918 $ 6,988 $ (4,070 ) (58%) Sales and marketing 2,268 1,080 1,188 110% General and administrative 15,585 18,339 (2,754 ) (15%) Total operating expenses $ 20,771 $ 26,407 $ (5,636 ) (21%) Research and Development Research and development expense which includes engineering expenses, decreased by $4.1 million, or 58%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024.
The decrease is primarily related to the decrease in amortization of content costs of $0.4 million and decrease in personnel-related expenses from a reduction in headcount of $0.1 million. Training cost of revenue for the year ended December 31, 2024 increased $0.6 million, or 163%, compared to the year ended December 31, 2023.
The increase is due to the acquisition of Wattbike. Membership cost of revenue for the year ended December 31, 2025 decreased by $1.8 million, or 54%, compared to the year ended December 31, 2024. The decrease is primarily related to the reduction in amortization of content costs and capitalized software.
A hypothetical 10% change in interest rates would not result in a material change for the years ended December 31, 2024 and 2023. Inflation Risk We do not believe that inflation has had a material effect on our business, financial condition or results of operations.
Inflation Risk While inflation has contributed to increased manufacturing and supplier costs, higher component prices and elevated employee compensation expenses for the years ended December 31, 2025 and 2024, we do not believe that these inflationary pressures have had a material effect on our business, financial condition or results of operations.
The adjustment resulted in additional expense of $0.5 million. 88 (2) Includes depreciation and amortization expense as follows: Year Ended December 31, Change 2024 2023 Amount % (in thousands) (in thousands) Cost of membership $ 3,311 $ 3,644 $ (333 ) (9 %) Cost of fitness product revenue 567 — 567 100 % General and administrative 2,122 2,883 (761 ) (26 %) Sales and marketing 480 — 480 100 % Total depreciation and amortization expense $ 6,480 $ 6,527 $ (47 ) (1 %) Revenue Year Ended December 31, Change 2024 2023 Amount % Revenue: (in thousands) Fitness product $ 3,973 $ 574 $ 3,399 592% Membership 783 142 641 451% Training 624 246 378 154% Total revenue 5,380 962 4,418 459% Percentage of revenue Fitness product 74 % 59 % Membership 15 % 15 % Training 11 % 26 % Total 100 % 100 % Fitness product revenue increased $3.4 million, or 592%, for the year ended December 31, 2024 compared to the year ended December 31, 2023.
(2) Includes depreciation and amortization expense as follows: Year Ended December 31, Change 2025 2024 Amount % (in thousands) (in thousands) Cost of membership $ 1,517 $ 3,311 $ (1,794 ) (54 %) Cost of fitness product revenue 599 567 32 6 % General and administrative 646 2,122 (1,476 ) (70 %) Sales and marketing 655 480 175 36 % Total depreciation and amortization expense $ 3,417 $ 6,480 $ (3,063 ) (47 %) Revenue Year Ended December 31, 2025 2024 Amount % Change Revenue: (in thousands) Fitness product $ 10,338 $ 3,973 $ 6,365 160% Membership 731 783 (52 ) (7%) Training 461 624 (163 ) (26%) Total revenue 11,530 5,380 6,150 114% Percentage of revenue Fitness product 90 % 74 % Membership 6 % 15 % Training 4 % 12 % Total 100 % 100 % Our consolidated revenue increased by $6.2 million, or 114%, for the year ended December 31, 2025 as compared to the year ended December 31, 2024.
A portion of our operating expenses are incurred outside the United States and are denominated in foreign currencies, which are also subject to fluctuations due to changes in foreign currency exchange rates. In addition, our suppliers incur many costs, including labor and supply costs, in other currencies.
Ite m 7A. Quantitative and Qualitative Disclosures About Market Risk. Foreign Currency Risk To date, most of our inventory purchases have been denominated in U.S. dollars. A portion of our operating expenses are incurred outside the United States and are denominated in foreign currencies, which are also subject to fluctuations due to changes in foreign currency exchange rates.
Attestation Report of the Independent Registered Public Accounting Firm This Annual Report on Form 10-K does not include a report of management’s assessment regarding our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) or an attestation report of our independent registered accounting firm due to a transition period established by rules of the SEC for newly public companies.
Attestation Report of the Independent Registered Public Accounting Firm This Annual Report on Form 10-K does not include an attestation report of our independent registered accounting firm regarding internal control over financial reporting.
Because of the uncertainty inherent in these matters, actual results may differ from these estimates and could differ based upon other assumptions or conditions. 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.
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.
Training revenue increased $0.4 million, or 154%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase was primarily attributable to the acquisition of CLMBR, Inc.
Training cost of revenue for the year ended December 31, 2025 increased by $0.2 million, or 15%, compared to the year ended December 31, 2024. The increase is primarily attributable to increased compensation expense for our trainers and higher rent expense.
This methodology assumes that, in lieu of ownership, a third party would be willing to pay a royalty in order to exploit the related benefits of these types of assets. This approach is dependent on a number of factors, including estimates of future growth and trends, royalty rates for this category of intellectual property, discount rates and other variables.
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.
Our reporting unit had fair values in excess of their carrying values, resulting in no impairment of goodwill. As of December 31, 2024 there was no goodwill impairment. For additional information refer to Note 7.—Goodwill and Intangible Assets. The Company estimates the fair value of intangible assets based on an income approach using the relief-from-royalty method.
Our reporting unit had fair values in excess of their carrying values, resulting in no impairment of goodwill. We estimate the fair value of intangible assets acquired in business combinations based on an income approach.
As of disclosed in Notes 11, 22, and Note 25, the Company had total outstanding debt of approximately $11.1 million, as of the issuance date. All of the outstanding debt is scheduled to mature over the next twelve months beyond the issuance date, for which the Company does not have sufficient liquidity to repay if a cash settlement is required.
We currently have no firm commitments in place for securing additional outside capital. Included in our anticipated liquidity needs is approximately $14.8 million of outstanding debt that is scheduled to mature over the next twelve months beyond the issuance date, and we do not have sufficient liquidity to repay such debt if a cash settlement is required.
All Notes were outstanding as of December 31, 2024 and December 31, 2023, and are not recorded on the balance sheet. 95 Critical Accounting Policies and Estimates Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements, which have been prepared in accordance with GAAP.
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 period-to-period comparison of our historical results are not necessarily indicative of the results that may be expected in the future. 87 Results of Operations for the Years Ended December 31, 2024 and 2023 Year Ended December 31, Change 2024 2023 Amount % Revenue: (in thousands) (in thousands) Fitness product revenue $ 3,973 $ 574 $ 3,399 592 % Membership revenue 783 142 641 451 % Training revenue 624 246 378 154 % Total revenue 5,380 962 4,418 459 % Cost of revenue: Cost of fitness product revenue (2) (3,798 ) (2,287 ) (1,511 ) 66 % Cost of membership (2) (3,318 ) (3,807 ) 489 (13 %) Cost of training (1,042 ) (396 ) (646 ) 163 % Total cost of revenue (8,158 ) (6,490 ) (1,668 ) 26 % Gross loss (2,778 ) (5,528 ) 2,750 (50 %) Operating expenses: Research and development (1) 6,988 10,044 (3,056 ) (30 %) Sales and marketing (1) (2) 1,080 1,631 (551 ) (34 %) General and administrative (1) (2) 18,339 37,277 (18,938 ) (51 %) Total operating expenses 26,407 48,952 (22,545 ) (46 %) Loss from operations (29,185 ) (54,480 ) 25,295 (46 %) Other (expense) income, net: Other (expense) income, net: (956 ) 1 (957 ) (95,700 %) Interest expense (7,727 ) (1,588 ) (6,139 ) 387 % Gain upon debt forgiveness — 2,595 (2,595 ) (100 %) Loss on issuance of warrants (5,551 ) — (5,551 ) 100 % Loss upon extinguishment of debt and accounts payable (1,527 ) — (1,527 ) 100 % Change in fair value of convertible notes (128 ) (306 ) 178 (58 %) Change in fair value of earn out 1,300 — 1,300 100 % Change in fair value of derivatives (460 ) — (460 ) 100 % Change in fair value of warrants 9,300 2,405 6,895 287 % Total other (expense) income, net (5,749 ) 3,107 (8,856 ) (285 %) Loss before provision for income taxes (34,934 ) (51,373 ) 16,439 (32 %) Income tax benefit (expense) — — — - Net loss $ (34,934 ) $ (51,373 ) $ 16,439 (32 %) (1) Includes stock-based compensation expense as follows: Year Ended December 31, Change 2024 2023 Amount % (in thousands) (in thousands) Research and development $ 3,805 $ 6,505 $ (2,700 ) (42 %) Sales and marketing 26 507 (481 ) (95 %) General and administrative 6,421 22,932 (16,511 ) (72 %) Total stock-based compensation expense $ 10,252 $ 29,944 $ (19,692 ) (66 %) For the years ended December 31, 2024 and 2023, $0.6 million and $0.9 million of stock-based compensation was capitalized as software costs, respectively.
Results of Operations for the Years Ended December 31, 2025 and 2024 Year Ended December 31, Change 2025 2024 Amount % Revenue: (in thousands) (in thousands) Fitness product revenue $ 10,338 $ 3,973 $ 6,365 160 % Membership revenue 731 783 (52 ) (7 %) Training revenue 461 624 (163 ) (26 %) Total revenue 11,530 5,380 6,150 114 % Cost of revenue: Cost of fitness product revenue (2) (7,898 ) (3,798 ) (4,100 ) 108 % Cost of membership (2) (1,517 ) (3,318 ) 1,801 (54 %) Cost of training (1,202 ) (1,042 ) (160 ) 15 % Total cost of revenue (10,617 ) (8,158 ) (2,459 ) 30 % Gross profit (loss) 913 (2,778 ) 3,691 (133 %) Operating expenses: Research and development (1) 2,918 6,988 (4,070 ) (58 %) Sales and marketing (1) (2) 2,268 1,080 1,188 110 % General and administrative (1) (2) 15,585 18,339 (2,754 ) (15 %) Total operating expenses 20,771 26,407 (5,636 ) (21 %) Loss from operations (19,858 ) (29,185 ) 9,327 (32 %) Other income (expense), net: Other expense, net: (1,004 ) (956 ) (48 ) 5 % Interest expense (11,781 ) (7,727 ) (4,054 ) 52 % Interest income 1,552 — 1,552 100 % Loss on issuance of warrants — (5,551 ) 5,551 (100 %) Gain (loss) upon extinguishment of debt and accounts payable 2,702 (1,527 ) 4,229 (277 %) Change in fair value of convertible notes 28,628 (128 ) 28,756 (22,466 %) Change in fair value of earn out 241 1,300 (1,059 ) (81 %) Change in fair value of derivatives 482 (460 ) 942 (205 %) Change in fair value of digital assets (27,743 ) — (27,743 ) (100 %) Change in fair value of warrants 2,813 9,300 (6,487 ) (70 %) Total other income (expense), net (4,110 ) (5,749 ) 1,639 (29 %) Loss before provision for income taxes (23,968 ) (34,934 ) 10,966 (31 %) Income tax benefit (expense) — — — - Net loss $ (23,968 ) $ (34,934 ) $ 10,966 (31 %) (1) Includes stock-based compensation expense as follows: 88 Year Ended December 31, Change 2025 2024 Amount % (in thousands) (in thousands) Research and development $ 894 $ 3,805 $ (2,911 ) (77 %) Sales and marketing — 26 (26 ) (100 %) General and administrative 2,185 6,421 (4,236 ) (66 %) Total stock-based compensation expense $ 3,079 $ 10,252 $ (7,173 ) (70 %) For the years ended December 31, 2025 and 2024, $0.4 million and $0.6 million, respectively, of stock-based compensation was capitalized as internally developed software costs.
As permitted under ASC Topic 825, Financial Instruments, the Company has elected the fair value option to account for its February 2024 Convertible Notes upon amendment entered into in November 2024.
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).
The decrease was primarily due to a decrease in personnel-related expenses from a reduction in headcount of $0.1 million, a decrease of $0.3 million in advertising and marketing, a decrease in consulting expenses of $0.4 million, and a decrease of $0.5 million in stock based compensation expense, partially offset by an increase of $0.5 million in amortization of intangibles from CLMBR, Inc. acquisition and $0.2 million increase in demo units sent to customers.
The decrease was due primarily to a decrease of $4.2 million in stock-based compensation expense and decreases in amortization expense of $1.5 million due to assets becoming fully depreciated, partially offset by expenses associated with Wattbike of approximately $2.2 million and increased transaction fees, largely due to the Wattbike acquisition, of $0.9 million.
With more than 180 million people belonging to gyms globally in 2019, according to IHRSA, we believe there is significant opportunity to grow internationally. For example, we are currently evaluating potential international expansion in the United Kingdom and Canada, although we have not yet made any definitive plans regarding such expansion or the potential timing thereof.
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.
Subsequent changes in fair value of these financial assets and liabilities are recognized in earnings when they occur.
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 and contingent consideration related to acquisition transactions.
In preparing the consolidated financial statements, we make estimates and judgments that affect the reported amounts of assets, liabilities, stockholders’ equity/deficit, revenue, expenses, and related disclosures. We re-evaluate our estimates on an on-going basis. Our estimates are based on historical experience and on various other assumptions that we believe to be reasonable under the circumstances.
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.
Loss on extinguishment of debt and accounts payable Loss on extinguishment of debt and accounts payable was a result of conversion of promissory loans and senior secured debt into convertible notes and amendment of February 2024 Convertible Note.
Loss on extinguishment of debt and accounts payable for the year ended December 31, 2024 of $1.5 million was a result of the conversion of promissory notes and other debt issued in fiscal 2023 and 2024 into preferred stock.
The increase is primarily due to increase in sales from the acquisition of CLMBR, Inc. Membership cost of revenue for the year ended December 31, 2024 decreased $0.5 million, or 13%, compared to the year ended December 31, 2023.
We expect significant increases in membership revenue in 2026 as a result of the Ergatta acquisition. Training revenue decreased by $0.2 million, or 26%, for the year ended December 31, 2025 compared to the year ended December 31, 2024.
These supply chain disruptions have not materially affected our business outlook and goals or our operating results, including our sales, revenue, or liquidity or capital resources, and we have not implemented any mitigation efforts to date as a result.
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 year ended December 31, 2025, and we have not implemented any significant mitigation efforts to date as a result.
As we generated recurring net losses and negative operating cash flow during the research and development stage of the FORME Studio and FORME Studio Lift products, we have funded our operations primarily with gross proceeds from the sales of our redeemable convertible preferred stock, the sale of our SAFE notes, the issuance of convertible notes, the issuance of promissory notes, and the issuance of common stock.
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. 81 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.
The increase was primarily attributable to the acquisition of CLMBR, Inc. Membership revenue increased $0.6 million, or 451%, for the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase was primarily attributable to the acquisition of CLMBR, Inc.
The increase was primarily attributable to the acquisition of Wattbike. Membership revenue decreased by $0.1 million, or 7%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease was primarily attributable to a focus on connected hardware product sales in the commercial channel where subscription attach rates tend to be lower.
Cost of Revenue and Gross Loss Year Ended December 31, Change 2024 2023 Amount % Cost of Revenue: (in thousands) Fitness product $ 3,798 $ 2,287 $ 1,511 66% Membership 3,318 3,807 (489 ) (13%) Training 1,042 396 646 163% Total cost of revenue 8,158 6,490 1,668 26% Gross Loss: Fitness product 175 (1,713 ) 1,888 (110%) Membership (2,535 ) (3,665 ) 1,130 (31%) Training (418 ) (150 ) (268 ) 179% Total gross loss (2,778 ) (5,528 ) 2,750 (50%) Gross Margin: Fitness product 4 % (298 %) Membership (324 %) (2,581 %) Training (67 %) (61 %) Total (52 %) (575 %) 89 Fitness product cost of revenue for the year ended December 31, 2024 increased $1.5 million, or 66%, compared to the year ended December 31, 2023.
The decrease was primarily attributable to declines training revenue associated with Forme Connected Fitness products. 89 Cost of Revenue and Gross Profit (Loss) Year Ended December 31, 2025 2024 Amount % Change Cost of Revenue: (in thousands) Fitness product $ 7,898 $ 3,798 $ 4,100 108% Membership 1,517 3,318 (1,801 ) (54%) Training 1,202 1,042 160 15% Total cost of revenue 10,617 8,158 2,459 30% Gross Profit (Loss): Fitness product 2,440 175 2,265 1294% Membership (786 ) (2,535 ) 1,749 (69%) Training (741 ) (418 ) (323 ) 77% Total gross profit (loss) 913 (2,778 ) 3,691 (133%) Gross Margin: Fitness product 24 % 4 % Membership (108 %) (324 %) Training (161 %) (67 %) Total 8 % (52 %) Fitness product cost of revenue for the year ended December 31, 2025 increased by $4.1 million, or 108%, compared to the year ended December 31, 2024.
Net cash used in investing activities of $1.4 million for the year ended December 31, 2023 was primarily related to the development of internal-use software, software to be sold and markets and content.
Investing Activities Net cash used in investing activities of $53.7 million for the year ended December 31, 2025 was mainly comprised of the acquisition digital assets in the net amount of $47.3 million, the loan to Sportstech of $5.0 million, acquisition of software and content of $0.9 million and cash paid, net of cash acquired, for Wattbike of $0.5 million.

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