Interactive Strength Inc. (Nasdaq: TRNR) Reports Second Quarter 2024 Results

Rhea-AI Summary

Interactive Strength Inc. (Nasdaq: TRNR), maker of CLMBR and FORME fitness equipment, reported Q2 2024 results. Key points:

• Net loss of $10.6 million or $17.48 per diluted share
• Adjusted EBITDA loss of $2.9 million, a $2.8 million improvement from Q2 2023
• Expected Q3 2024 revenue between $2.0-$2.5 million
• Delayed run-rate adjusted EBITDA profitability to 2025
• Successful pilots with Crunch Fitness and Gold's Gym
• International expansion in Germany and Gulf region
• Nasdaq listing compliance achieved

TRNR faces challenges in revenue ramp-up but shows progress in strategic partnerships and market expansion.

Positive

• Adjusted EBITDA loss improved by $2.8 million compared to Q2 2023
• Successful pilots and orders from major fitness chains Crunch Fitness and Gold's Gym
• Expansion into international markets, including Germany and Gulf region
• Nasdaq listing compliance achieved after winning appeal
• Stockholder's Equity reported at $0.4 million, with additional $4.0 million equity offering closed on July 2

Negative

• Net loss of $10.6 million in Q2 2024
• Delayed run-rate adjusted EBITDA profitability until 2025
• Lower than expected revenue ramp for CLMBR after acquisition
• Q3 2024 revenue guidance of only $2.0-$2.5 million
• Previous revenue and profitability guidance unlikely to be met until 2025
• Earn-out agreed with sellers unlikely to be earned, resulting in liability write-down

Financial Analyst

Interactive Strength's Q2 2024 results show mixed signals. The company reported a net loss of $10.6 million, or $17.48 per diluted share, which is an improvement from the $13.6 million loss in Q2 2023. The Adjusted EBITDA loss of $2.9 million represents a $2.8 million improvement year-over-year.

However, the company's revenue outlook for Q3 2024 of $2.0-$2.5 million is concerning, as it suggests a slow ramp-up in sales. The delay in achieving run-rate adjusted EBITDA profitability until 2025 is a significant setback from previous expectations. The write-down of the earn-out liability indicates challenges in meeting initial performance targets.

On a positive note, the $4.0 million equity offering in July and expected debt-to-equity conversions should help address Nasdaq compliance issues. Investors should closely monitor the company's progress in scaling revenues and achieving profitability milestones.

Market Research Analyst

TRNR's market positioning shows promise despite financial challenges. The successful pilots with major fitness chains like Crunch Fitness and Gold's Gym demonstrate market acceptance of CLMBR products. Crunch's Approved Vendor Partner status and Gold's Gym's multi-location order signal potential for significant future growth.

The international expansion, particularly in Germany and the Gulf region, opens up new revenue streams. Europe's fitness market presents a substantial opportunity, pending certification approvals. However, the slower-than-expected ramp-up in CLMBR sales is a concern.

The company's focus on product reliability and component upgrades, while causing short-term delays, may lead to stronger long-term customer satisfaction and retention. Investors should watch for the impact of these improvements on sales growth and market penetration in the coming quarters.

Tech Expert

TRNR's decision to upgrade CLMBR components demonstrates a commitment to product quality, but it has come at the cost of delayed shipments and revenue generation. This trade-off between immediate sales and long-term product reliability is important in the competitive fitness equipment market.

The partnership with WOODWAY for meeting commercial user specifications is a strategic move, potentially opening doors to more lucrative B2B sales. The successful pilots with major gym chains validate the product's appeal in professional settings.

However, the slower revenue ramp indicates challenges in scaling production or market adoption. The company needs to balance product improvements with efficient manufacturing and distribution to capitalize on the market interest generated through pilots and international expansions. Investors should monitor how quickly TRNR can translate product enhancements into accelerated sales growth.

Net Loss and Earnings per Diluted Share of $10.6 million and $17.48

Adjusted EBITDA was a $2.9 million loss, a $2.8 million improvement versus second quarter of 2023

The Company expects to generate between $2.0 million and $2.5 million in revenue in the third quarter of 2024

AUSTIN, TX / ACCESSWIRE / August 14, 2024 / Interactive Strength Inc. (Nasdaq:TRNR) ("TRNR" or the "Company"), maker of innovative specialty fitness equipment under the CLMBR and FORME brands, today announced its financial results for the second quarter of 2024.

The Company incurred a net loss of $10.6 million for the second quarter of 2024, or a loss of $17.48 per diluted share, as compared with a net loss of $13.6 million, or a loss of $40.78 per diluted share for the same period in 2023.

Adjusted EBITDA, a non-GAAP financial measure, was a $2.9 million loss for the quarter. Adjusted EBITDA for the second quarter reflects $2.9 million of non-cash stock-based compensation. For more information regarding the non-GAAP financial measures discussed in this press release, please see "Non-GAAP Financial Measures" and "Reconciliation of GAAP to Non-GAAP Financial Measures" below.

Trent Ward, Co-Founder and CEO of TRNR, said: "We have made progress towards our highest priority of achieving run-rate adjusted EBITDA profitability, with an improvement of $0.6 million as compared to the first quarter. We believe that we will be able to achieve this milestone in the near-term, though we do not expect to be able to accomplish this until 2025 due to a slower ramp in revenue for CLMBR. We had previously hoped that we might be able to achieve this as early as the fourth quarter of this year."

"The second quarter was our first full quarter with CLMBR and we were able to more fully immerse ourselves in the business," Mr. Ward continued. "As a result of thorough reliability testing, we determined that the longevity of a few CLMBR components would benefit from being upgraded and we experienced delays in shipping product, and therefore generating revenue, to customers as the improved components were designed and produced. We have been very pleased with the durability and performance of the new components and have seen great results in the lab and in the field. The specifications of commercial users are more stringent than consumers and our partnership with WOODWAY has enabled us to ensure that CLMBR exceeds those expectations."

Pilots and Flagship Orders
During the quarter, the Company announced successful pilots with two major fitness center operators, which are both expected to lead to additional orders in the future. Crunch Fitness successfully completed a multi-month group fitness pilot in its West Hollywood location and purchased 13 CLMBRs. CLMBR has earned Approved Vendor Partner status from Crunch Fitness and was invited to exhibit at the Crunch Franchise Convention in July. Crunch Fitness is considering additional locations for future CLMBR group fitness pilots in advance of potentially rolling out across the Crunch Fitness network. Crunch Fitness is expected to have 500 locations by the end of 2024 and 600 locations by the end of 2025.

Gold's Gym SoCal successfully completed a multi-location CLMBR pilot and placed an order to install two CLMBRs in each of the group's 23 locations. It is expected that these installations will occur during the third quarter. Following that success, Gold's Gym purchased six CLMBRs to install in three of the brand's 58 locations in Texas. Gold's Gym has more than 600 locations and the Company is focused on further penetrating the Gold's Gym network.

International Opportunity
The Company has announced significant initial orders with distributors in Germany, the world's largest fitness market outside the United States, and in the Gulf-region, one of the world's fastest growing economic regions. The Company has shared previously that it expects to sell to at least ten international distributors or key accounts this year, and that the international sales opportunity is expected to be similar in size to the opportunity in the United States.

The Company expects to receive the required certifications to deliver to European countries in the third quarter and believes that achieving that certification will allow distributors to fulfill the demand indications that were received at IHRSA and FIBO, the two largest fitness equipment shows in the world, earlier this year. Europe has some of the largest fitness markets in the world after the United States and it is expected that there will be strong demand for CLMBRs.

Outlook
Based on deliveries in the quarter so far and the current order book, the Company expects to generate between $2.0 million and $2.5 million in revenue during the third quarter. The major driver of the range in expected revenue is whether orders to customers in Europe are delivered in the third quarter or fourth quarter as determined by the timing of receiving the required certifications.

Given the slower ramp for CLMBR after the February acquisition of the business, the Company does not expect to achieve its previous revenue and profitability guidance until 2025 and will provide updated guidance when the timing is more certain. Consequently, the earn-out that was agreed with the sellers is unlikely to be earned and the liability has been written down.

Nasdaq Compliance
As shared on August 12^th, the Company won its appeal regarding deficiency with Listing Rule 5550(b)(1) (the "Equity Rule"), and the Nasdaq Hearings Panel has granted the Company's request for continued listing on the Nasdaq Stock Market.

The Stockholder's Equity for the period ended June 30 was reported as $0.4 million. The Company closed an equity offering of $4.0 million on July 2, which indicates that the Stockholder's Equity would have been in excess of the required $2.5 million on a pro forma basis. The Company expects to be in compliance with the Equity Rule when its third quarter earnings are reported in November, driven by expected further conversions of debt to equity. These conversions are in progress and are expected to be similar to the conversions that were agreed between the Company and its lenders in the second quarter.

TRNR Investor Contact
ir@interactivestrength.com
TRNR Media Contact
forme@jacktaylorpr.com

About Interactive Strength Inc.

Interactive Strength Inc. produces innovative specialty fitness equipment and digital fitness services under two main brands: 1) CLMBR and 2) FORME. Interactive Strength Inc. is listed on NASDAQ (symbol: TRNR).

CLMBR is a vertical climbing machine that offers an efficient and effective full-body strength and cardio workout. CLMBR's design is compact and easy to move - making it perfect for commercial or in-home use. With its low impact and ergonomic movement, CLMBR is safe for most ages and levels of ability and can be found at gyms and fitness studios, hotels, and physical therapy facilities, as well as available for consumers at home. www.clmbr.com.

FORME is a digital fitness platform that combines premium smart home gyms with live virtual personal training and coaching to deliver an immersive experience and better outcomes for both consumers and trainers. FORME delivers an immersive and dynamic at-home fitness experience through two connected hardware products: 1. The FORME Studio (fitness mirror) and 2. The FORME Studio Lift (fitness mirror and cable-based digital resistance). In addition to the company's connected fitness hardware products, FORME offers expert personal training and health coaching in different formats and price points through Video On-Demand, Custom Training, and Live 1:1 virtual personal training. www.formelife.com.

Channels for Disclosure of Information

In compliance with disclosure obligations under Regulation FD, we announce material information to the public through a variety of means, including filings with the Securities and Exchange Commission ("SEC"), press releases, company blog posts, public conference calls, and webcasts, as well as via our investor relations website. Any updates to the list of disclosure channels through which we may announce information will be posted on the investor relations page on our website. The inclusion of our website address or the address of any third-party sites in this press release are intended as inactive textual references only.

Non-GAAP Financial Measures

In addition to our results determined in accordance with accounting principles generally accepted in the United States, or GAAP, we believe the following non-GAAP financial measures are useful in evaluating our operating performance.

The Company's non-GAAP financial measure in this press release consist of Adjusted EBITDA, which we define as net (loss) income, adjusted to exclude: other expense (income), net; income tax expense (benefit); depreciation and amortization expense; stock-based compensation expense; loss on debt extinguishment; vendor settlements; transaction related expenses; and IPO readiness costs and expenses.

The Company believes the above adjusted financial measures help facilitate analysis of operating performance and the operating leverage in our business. We believe that these non-GAAP financial measures are useful to investors for period-to-period comparisons of our business and in understanding and evaluating our operating results for the following reasons:

• Adjusted EBITDA is widely used by investors and securities analysts to measure a company's operating performance without regard to items such as stock-based compensation expense, depreciation and amortization expense, other expense (income), net, and provision for income taxes that can vary substantially from company to company depending upon their financing, capital structures, and the method by which assets were acquired;

• Our management uses Adjusted EBITDA in conjunction with financial measures prepared in accordance with GAAP for planning purposes, including the preparation of our annual operating budget, as a measure of our core operating results and the effectiveness of our business strategy, and in evaluating our financial performance; and

• Adjusted EBITDA provides consistency and comparability with our past financial performance, facilitate period-to-period comparisons of our core operating results, and may also facilitate comparisons with other peer companies, many of which use similar non-GAAP financial measures to supplement their GAAP results.

Our use of Adjusted EBITDA, or any other non-GAAP financial measures we may use in the future, is presented for supplemental informational purposes only and should not be considered as a substitute for, or in isolation from, our financial results presented in accordance with GAAP. Further, these non-GAAP financial measures have limitations as analytical tools. Some of these limitations are, or may in the future be, as follows:

• Although depreciation and amortization expense are non-cash charges, the assets being depreciated and amortized may have to be replaced in the future, and Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

• Adjusted EBITDA excludes stock-based compensation expense, which has recently been, and will continue to be for the foreseeable future, a significant recurring expense for our business and an important part of our compensation strategy;

• Adjusted EBITDA does not reflect: (1) changes in, or cash requirements for, our working capital needs; (2) interest expense, or the cash requirements necessary to service interest or principal payments on our debt, which reduces cash available to us; or (3) tax payments that may represent a reduction in cash available to us;

• Adjusted EBITDA does not reflect impairment charges for fixed assets and capitalized content, and gains (losses) on disposals for fixed assets;

• Adjusted EBITDA does not reflect gains associated with debt extinguishments.

• Adjusted EBITDA does not reflect gains associated with vendor settlements.

• Adjusted EBITDA does not reflect IPO readiness costs and expenses that do not qualify as equity issuance costs.

• Adjusted EBITDA does not reflect transaction related expenses from CLMBR acquisition.

• Adjusted EBITDA does not reflect non cash fair value gains (losses) on convertible notes, warrants and unrealized currency gains (losses).

• Adjusted EBITDA does not reflect expenses related to the Asset Purchase Agreement and potential acquisition;

Further, the non-GAAP financial measures presented may not be comparable to similarly titled measures reported by other companies due to differences in the way that these measures are calculated. For example, the expenses and other items that we exclude in our calculation of Adjusted EBITDA may differ from the expenses and other items, if any, that other companies may exclude from Adjusted EBITDA when they report their operating results. Because companies in our industry may calculate such measures differently than we do, their usefulness as comparative measures is limited. Because of these limitations, Adjusted EBITDA should be considered along with other operating and financial performance measures presented in accordance with GAAP.

Cautionary Statement Regarding Forward-Looking Statements

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. In some cases, forward-looking statements can be identified by the use of forward-looking terms such as "anticipate," "estimate," "believe," "continue," "could," "intend," "may," "plan," "potential," "predict," "should," "will," "expect," "objective," "projection," "forecast," "goal," "guidance," "outlook," "effort," "target," "trajectory" or the negative of these terms or other comparable terms. However, the absence of these words does not mean that the statements are not forward-looking. Forward-looking statements include, but are not limited to, statements regarding: the expectations to receive the required certifications to deliver to European countries and that achieving that certification will allow distributors to fulfill the demand indications, statements regarding that Europe has some of the largest fitness markets in the world after the United States and the expectation that there will be strong demand for CLMBRs, the expectations to generate revenue projections during the third quarter based on expected deliveries, the Company's expectations and its belief that the Company to will potentially reach profitability in 2025, the Company's belief that the conversion of liabilities to equity will improve the financial position and belief the Company will be in compliance with the Equity Rule when its third quarter earnings are reported in November, the utility of non-GAAP financial measures; and the anticipated features and benefits of our product and service offerings. These forward-looking statements are subject to risks and uncertainties which may cause actual results to differ materially from those expressed or implied in such forward-looking statements. These risk and uncertainties include, but are not limited to, the following: our ability to achieve or maintain profitability; our future capital needs and ability to obtain additional financing to fund our operations; our ability to continue as a "going concern"; the growth rate, if any, of our business and revenue and our ability to manage any such growth; risks related to our subscription or any future revenue model; our limited operating history; our ability to compete successfully; fluctuations in our operating results and factors affecting the same; our reliance on sales of our Forme Studio equipment and CLMBR equipment; our ability to sustain competitive pricing levels; the growth rate, if any, of our target markets and our industry; the ability of our customers to obtain financing to purchase our products; our ability to forecast demand for our products and services, anticipate consumer preferences, and manage our inventory; our ability to attract and retain members, personal trainers, health coaches, and fitness instructors; our ability to expand our commercial and corporate wellness business; unforeseen costs and potential liability in connection with our products and services; our dependence on third-party systems and services; and risks related to potential acquisitions, intellectual property, litigation, dependence on key personnel, privacy, cybersecurity, and other regulatory, tax, and accounting matters, and international operations (including the impact of any geopolitical risks such as regional unrest or outbreak of hostilities or war), as well as the risks and uncertainties discussed in our most recently filed periodic reports on Form 10-Q and subsequent filings and as detailed from time to time in our SEC filings. Given these risks and uncertainties, you should not place undue reliance on these forward-looking statements. All forward-looking statements set forth in this release are qualified by these cautionary statements, and there can be no assurance that the actual results or developments anticipated by the Company will be realized or, even if substantially realized, that they will have the expected consequence to or effects on the Company or its business or operations. These forward-looking statements reflect our management's beliefs and views with respect to future events and are based on estimates and assumptions as of the date of this press release. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performance, or events and circumstances reflected in the forward-looking statements will be achieved or occur. Accordingly, you should not rely upon forward-looking statements as predictions of future events. Forward-looking statements set forth in this release speak only as of the date hereof, and we do not undertake any obligation to update forward-looking statements to reflect subsequent events or circumstances, changes in expectations or the occurrence of unanticipated events, except to the extent required by law.

INTERACTIVE STRENGTH INC. AND SUBSIDIARIES
KEY PERFORMANCE AND BUSINESS METRICS
(unaudited)
(In thousands)

		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Net Loss (in thousands)		$	(10,637	)		$	(13,602	)		$	(22,031	)		$	(29,563	)
Adjusted EBITDA (in thousands)		$	(2,894	)		$	(5,731	)		$	(6,342	)		$	(10,157	)

Adjusted EBTIDA - Please refer to the reconciliation table titled "Reconciliation of Non-GAAP Financial Measures"

With the acquisition of CLMBR, Inc., and the evolution of the FORME business, the Company is now primarily selling to commercial customers ("B2B") and therefore the previously reported Key Operational and Business Metrics associated with a direct to consumer business model ("DTC") are not indicative of the performance of the business. Therefore, the Company will no longer report the following Key Operational and Business Metrics: Households, Members, Annual Recurring Revenue, Average Annualized Recurring Revenue per Household, and Net Dollar Retention Rate.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
INTERACTIVE STRENGTH INC. AND SUBSIDIARIES
CONSOLIDATED RECONCILIATION OF ADJUSTED EBITDA TO NET LOSS
(unaudited)
(In thousands)

		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
		(in thousands)
Net Loss		$	(10,637	)		$	(13,602	)		$	(22,031	)		$	(29,563	)
Adjusted to exclude the following:
Total other expense (income), net			3,421				1,664				6,441				(990	)
Income tax benefit (expense)			-				-				-				-
Depreciation and amortization expense			1,853				1,636				3,715				3,236
Stock-based compensation expense (1)			2,925				4,299				6,291				18,938
Loss on extinguishment of debt (2)			(666	)			-				(1,732	)			-
Vendor settlements (3)			-				-				-				(2,595	)
IPO readiness costs and expenses (4)			-				272				-				817
Transaction related expenses (5)			210				-				974				-
Adjusted EBITDA (6)		$	(2,894	)		$	(5,731	)		$	(6,342	)		$	(10,157	)

(1) Stock-based compensation expense.
(2) Loss on debt extinguishment related to the conversion of promissory notes and senior secured notes to convertible notes.
(3) Gain on forgiveness of debt related to the third-party Content Provider.
(4) Adjusts for IPO- readiness costs and expenses that do not qualify as equity issuance costs.
(5) Transaction costs related to acquisition of CLMBR, Inc.
(6) Please refer to the "Non-GAAP Financial Measures" section.

INTERACTIVE STRENGTH INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(In thousands, except share and per share amounts)

		Three Months Ended June 30,								Six Months Ended June 30,
		2024				2023				2024				2023
Revenue:
Fitness product revenue		$	258			$	224			$	311			$	296
Membership revenue			207				32				362				56
Training revenue			156				60				311				121
Total revenue			621				316				984				473
Cost of revenue:
Cost of fitness product revenue			(347	)			(427	)			(726	)			(1,169	)
Cost of membership			(982	)			(939	)			(2,000	)			(1,901	)
Cost of training			(172	)			(88	)			(337	)			(191	)
Total cost of revenue			(1,501	)			(1,454	)			(3,063	)			(3,261	)
Gross loss			(880	)			(1,138	)			(2,079	)			(2,788	)
Operating expenses:
Research and development			2,474				2,326				4,497				5,439
Sales and marketing			112				591				368				1,191
General and administrative			4,416				7,883				10,378				23,730
Total operating expenses			7,002				10,800				15,243				30,360
Loss from operations			(7,882	)			(11,938	)			(17,322	)			(33,148	)
Other income (expense), net:
Other (expense) income, net			(1,109	)			87				(1,533	)			204
Interest expense			(2,919	)			(1,436	)			(4,919	)			(1,228	)
Gain upon debt forgiveness			-				-				-				2,595
Loss upon extinguishment of debt and accounts payable			(666	)			-				(1,732	)			-
Change in fair value of convertible notes			-				(171	)			(316	)			(252	)
Change in fair value of earnout			1,300				-				1,300				-
Change in fair value of derivatives			(809	)			-				(755	)			-
Change in fair value of warrants			1,448				(144	)			3,246				2,266
Total other income (expense), net			(2,755	)			(1,664	)			(4,709	)			3,585
Loss before provision for income taxes			(10,637	)			(13,602	)			(22,031	)			(29,563	)
Income tax expense			-				-				-				-
Net loss attributable to common stockholders		$	(10,637	)		$	(13,602	)		$	(22,031	)		$	(29,563	)
Net loss per share - basic and diluted		$	(17.48	)		$	(40.78	)		$	(42.89	)		$	(112.48	)
Weighted average common stock outstanding-basic and diluted			608,655				333,519				513,674				262,827

INTERACTIVE STRENGTH INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)
(In thousands, except share and per share amounts)

		June 30,				December 31,
		2024				2023
Assets
Current assets:
Cash and cash equivalents		$	156			$	-
Accounts receivable, net of allowances			259				1
Inventories, net			5,373				2,607
Vendor deposits			1,830				1,815
Prepaid expenses and other current assets			652				933
Total current assets			8,270				5,356
Property and equipment, net			237				444
Right-of-use-assets			567				283
Intangible assets, net			7,750				2,254
Long-term inventories, net			3,384				2,908
Vendor deposits long term			310				309
Deferred offering costs			299				-
Goodwill			13,551				-
Other assets			3,397				5,248
Total Assets		$	37,765			$	16,802
Liabilities, preferred stock and stockholders' deficit
Current liabilities:
Accounts payable		$	13,604			$	10,562
Accrued expenses and other current liabilities			3,323				906
Operating lease liability, current portion			327				54
Deferred revenue			207				77
Loan payable			12,177				5,806
Senior secured notes			-				3,096
Income tax payable			7				7
Derivatives			938				122
Convertible note payable			5,016				904
Total current liabilities			35,599				21,534
Operating lease liability, net of current portion			265				229
Other long term liabilities			1,350				-
Warrant liabilities			138				591
Total liabilities		$	37,352			$	22,354
Commitments and contingencies (Note 14)
Stockholders' equity (deficit)
Series A preferred stock, par value $0.0001; 10,000,000 and 0 shares authorized as of June 30, 2024 and December 31, 2023, respectively; 6,868,865 and 0 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively.			1				-
Series B preferred stock, par value $0.0001; 1,500,000 and 0 shares authorized as of June 30, 2024 and December 31, 2023, respectively; 1,500,000 and 0 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively.			-				-
Common stock, par value $0.0001; 900,000,000 shares authorized as of June 30, 2024 and December 31, 2023, respectively; 1,172,777 and 354,802 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively.			7				7
Additional paid-in capital			189,210				161,252
Accumulated other comprehensive income			137				100
Accumulated deficit			(188,942	)			(166,911	)
Total stockholders' equity (deficit)			413				(5,552	)
Total liabilities, preferred stock and stockholders' equity (deficit)		$	37,765			$	16,802

INTERACTIVE STRENGTH INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
(In thousands)

		Six Months Ended June 30,
		2024				2023
Cash Flows From Operating Activities:
Net loss		$	(22,031	)		$	(29,563	)
Adjustments to reconcile net loss to net cash used in operating activities:
Foreign currency			(36	)			228
Depreciation			346				516
Amortization			3,370				2,719
Non-cash lease expense			128				53
Inventory valuation loss			-				261
Stock-based compensation			6,291				18,938
Loss on extinguishment of debt and accounts payable			1,732				-
Gain upon debt forgiveness			-				(2,595	)
Interest expense (income)			1,561				(77	)
Amortization of debt discount			3,358				1,305
Common stock issued to lender in connection with entering Equity Line of Credit Agreement			368				-
Change in fair value of convertible notes			316				252
Warrants issued to service providers and warrant issuance expense			1,116				442
Loss on exchange of warrants for equity			358				-
Change in fair value of earnout			(1,300	)			-
Change in fair value of derivatives			755				-
Change in fair value of warrants			(3,246	)			(2,266	)
Changes in operating assets and liabilities
Accounts receivable			(124	)			(14	)
Inventories			173				(662	)
Prepaid expenses and other current assets			374				(62	)
Vendor deposits			46				323
Deferred offering costs			(11	)			-
Other assets			-				(17	)
Accounts payable			298				(178	)
Accrued expenses and other current liabilities			1,263				(773	)
Deferred revenue			(131	)			29
Operating lease liabilities			(134	)			(59	)
Net cash used in operating activities			(5,160	)			(11,200	)
Cash Flows From Investing Activities:
Acquisition of internal use software			-				(343	)
Acquisition of business, cash paid, net of cash acquired			(1,447	)			-
Acquisition of software and content			40				(525	)
Net cash used in investing activities			(1,407	)			(868	)
Cash Flows From Financing Activities:
Payments of loans			(745	)			-
Proceeds from loans			1,280				-
Proceeds from issuance of related party loans			400				275
Payments of related party loans			(427	)			(377	)
Proceeds from issuance of common stock upon offering, net of offering costs			809				10,820
Payments of offering costs			(74	)			(1,308	)
Proceeds from senior secured notes			-				2,000
Payments from senior secured notes			-				(2,000	)
Redemption on convertible notes			(212	)			-
Proceeds from issuance of convertible notes, net of issuance costs			4,756				-
Proceeds from the issuance of common stock A			-				4,247
Proceeds from issuance of common stock from At the Market Offering, net of issuance costs			405				-
Proceeds from the exercise of common stock options and warrants			92				30
Proceeds from the issuance of common stock from equity line of credit			389				-
Net cash provided by financing activities			6,673				13,687
Effect of exchange rate on cash			50				(442	)
Net Change In Cash and Cash Equivalents			156				1,177
Cash and restricted cash at beginning of year			-				226
Cash and restricted cash at end of year		$	156			$	1,403
Supplemental Disclosure Of Cash Flow Information:
Property & equipment in accounts payable			18				18
Inventories in accounts payable and accrued expenses			739				815
Issuance of common stock and series B preferred stock for the acquisition of business			3,969				-
Offering costs in accounts payable and accrued expenses			407				3,299
Issuance of series A preferred stock through conversion of debt			12,453				-
Exercise and exchange of stock warrants			480				2,468
Conversion of convertible notes into common stock			1,949				4,521
Right-of-use assets obtained in exchange for new operating lease liabilities			-				313
Decrease in right-of-use asset and operating lease liabilities due to lease termination			-				61
Issuance of common stock from convertible notes			547				-
Issuance of common stock from rights offering			-				202
Net exercise of options			-				323
Stock-based compensation capitalized in software			155				-

SOURCE: Interactive Strength Inc.

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FAQ

What was TRNR's net loss for Q2 2024?

TRNR reported a net loss of $10.6 million, or $17.48 per diluted share, for Q2 2024.

How much revenue does TRNR expect in Q3 2024?

TRNR expects to generate between $2.0 million and $2.5 million in revenue during Q3 2024.

When does TRNR expect to achieve run-rate adjusted EBITDA profitability?

TRNR now expects to achieve run-rate adjusted EBITDA profitability in 2025, delayed from the previous target of Q4 2024.

Which major fitness chains have placed orders for TRNR's CLMBR equipment?

Crunch Fitness and Gold's Gym have both placed orders for CLMBR equipment following successful pilot programs.

Has TRNR resolved its Nasdaq listing compliance issues?

Yes, TRNR won its appeal regarding deficiency with the Equity Rule and has been granted continued listing on the Nasdaq Stock Market.