Business Context and Reporting Period
Company: Interactive Strength, Inc. (TRNR)
Filing Type: Form 10-Q (Unaudited)
Period Ended: June 30, 2026
Business Overview: An acquisition-focused company operating four connected fitness brands: Wattbike, Ergatta, CLMBR, and FORME. The company recently completed the acquisition of Ergatta (March 2026) and Wattbike (July 2025) and has entered into an agreement to acquire STEPR (expected Q3 2026).
Capital Structure Note: All share data reflects three reverse stock splits (1-for-10 in June 2025, 1-for-10 in Feb 2026, and 1-for-7 in June 2026).
Key Financial Metrics
| Metric | Three Months Ended June 30, 2026 | Six Months Ended June 30, 2026 |
|---|---|---|
| Revenue | $6.65 million | $11.79 million |
| Gross Profit | $3.22 million (48% margin) | $4.82 million (41% margin) |
| Net Loss | $(7.10) million | $(17.85) million |
| Operating Cash Flow | N/A | $(5.64) million |
| Cash and Equivalents | $0.96 million (as of June 30, 2026) | N/A |
| Total Debt (Current + Long Term) | $21.36 million | N/A |
| Working Capital | $(38.93) million deficit | N/A |
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 445% year-over-year for the three months ended June 30, 2026 ($6.65M vs. $1.22M), driven primarily by the inclusion of Wattbike and Ergatta.
- Profitability: The company moved from a gross loss of $(0.19) million in Q2 2025 to a gross profit of $3.22 million in Q2 2026. However, Net Loss widened to $(7.10) million from $(2.18) million due to increased operating expenses and non-cash fair value adjustments.
- Debt Structure: Significant debt conversions occurred in the first half of 2026, including the conversion of $4.4 million of Class A Incremental Notes into common stock. Total debt outstanding is approximately $23.1 million, all scheduled to mature within the next 12 months.
- Acquisitions: The Ergatta acquisition added $3.20 million in revenue for the six months ended June 30, 2026, and contributed to a $5.1 million increase in goodwill.
Outlook, Risks, and Contingencies
- Going Concern Warning: Management has raised substantial doubt about the company's ability to continue as a going concern. With only ~$1.7 million in available liquidity and $23.1 million in debt maturing within 12 months, the company is heavily dependent on securing additional outside capital, refinancing debt, or converting debt to equity.
- Internal Controls: The company disclosed material weaknesses in internal control over financial reporting, citing a lack of qualified personnel, inadequate risk assessment processes, and deficiencies in accounting for complex transactions and stock-based compensation.
- Legal Proceedings: The company is involved in a legal dispute with DK City regarding a settlement default, with an outstanding liability of approximately $2.1 million. The company has admitted liability.
- Future Acquisitions: The company is pursuing the acquisition of STEPR, with closing expected in Q3 2026. Consideration includes cash, secured notes, and performance-based preferred stock.
- Delisting Risk: The company faces potential suspension or delisting from Nasdaq if it fails to maintain a minimum Market Value of Listed Securities (MVLS) of $5 million.
Investor Verification Checklist
- Liquidity Runway: Verify the status of ongoing financing efforts to cover the $23.1 million debt maturity wall within 12 months.
- Debt Conversion Terms: Review the specific conversion prices and dilution impact of the outstanding convertible notes and preferred stock (Series D, E, and F).
- Internal Control Remediation: Assess the timeline and progress of hiring qualified accounting personnel and implementing new software to address material weaknesses.
- STEPR Acquisition: Monitor the closing conditions and performance-based scaling factors for the pending STEPR acquisition.
- Legal Settlements: Track the resolution of the DK City litigation and the impact of the $2.1 million accrued liability on cash flow.