Business Context and Reporting Period
Interactive Strength, Inc. (TRNR) filed a Form 8-K on July 7, 2026, reporting the entry into a Material Definitive Agreement. The Company entered into a Stock Purchase Agreement to acquire STEPR, Inc., a Delaware corporation, through a combination of a secondary transaction (purchasing existing shares) and a primary transaction (purchasing newly issued shares). The transaction is expected to close in the fourth quarter of 2026, subject to customary conditions.
Key Financial Metrics and Transaction Structure
The total consideration for the acquisition of STEPR is structured as a mix of cash, debt, and equity, with significant portions contingent on future performance.
- Cash Consideration:
- Initial contribution at closing: $1,500,000 (net of prior advances) for working capital.
- Repayment of existing shareholder loan (AFS Loan): Up to $1,200,000.
- Post-closing incremental cash contributions: Up to $2,500,000 for working capital.
- Shareholder cash consideration (payable on first anniversary): Up to $1,000,000 (split between loan repayment and distribution).
- Debt Instrument:
- Secured promissory note with a maximum principal amount of $1,500,000.
- Interest rate: Prime Rate (floor 6.75%) + 5.00% per annum, or the maximum permitted by law.
- Equity Consideration (Total Face Value: $19,000,000):
- Series F-1 Non-Voting Convertible Preferred Stock: $6,000,000.
- Series F-2 Non-Voting Convertible Preferred Stock: $10,500,000.
- Series F-3 Non-Voting Convertible Preferred Stock: $2,500,000.
Material Changes and Performance Contingencies
The equity portion of the deal is subject to performance-based scaling factors that can adjust the final value of the shares issued to the Seller.
- F1 Scaling Factor: Based on STEPR's EBITDA for Year 1 (July 1, 2026 – June 30, 2027), capped at $4,000,000 for calculation purposes. The factor ranges from 0.500 to 1.000.
- F2 Scaling Factor: Based on STEPR's EBITDA for Year 2 (July 1, 2027 – June 30, 2028), capped at $7,000,000 for calculation purposes. The factor ranges from 0.000 to 1.000.
- F3 Scaling Factor: Determined by aggregate achieved points across synergy categories defined in the F3 Framework. The factor ranges from 0.000 to 1.000.
The filing does not provide historical revenue, profit, or cash flow metrics for Interactive Strength, Inc. or STEPR, Inc., as this is a transaction announcement rather than a periodic financial report.
Outlook, Risks, and Contingencies
Management Commentary and Outlook: The Company anticipates closing the transaction in Q4 2026. The deal includes covenants for exclusivity, non-competition, and non-solicitation by the Supporting Parties.
Risks and Contingencies:
- Closing Conditions: The transaction is subject to the satisfaction or waiver of customary closing conditions.
- Indemnification: Seller Parties must indemnify the Company for breaches of representations and warranties. There is a deductible of $189,000 for general breaches. The aggregate cap on indemnification equals the total value of the AFS Loan Repayment, Shareholder Cash Consideration, and Equity Consideration actually received.
- Termination: The agreement may be terminated by mutual agreement, material uncured breach by either party, or if the transaction violates applicable law.
Key Facts for Investor Verification
- Verify the specific terms of the Certificate of Designation for Series F-1, F-2, and F-3 Preferred Stock to understand conversion mechanics and voting rights.
- Confirm the exact EBITDA definitions and synergy metrics used to calculate the scaling factors, as these directly impact the final equity dilution.
- Monitor the status of the closing conditions to determine if the Q4 2026 closing timeline is achievable.
- Review the full text of the Stock Purchase Agreement (Exhibit 10.1) for detailed representations, warranties, and the specific "F3 Framework" for synergy points.
- Assess the impact of the $1,500,000 secured note on the Company's future interest expense and liquidity.