Interactive Strength, Inc. (NASDAQ:TRNR), a manufacturer of electronic equipment with a market capitalization of $2.71 million, has announced an extension to the maturity date of its outstanding debt and conversion of equity securities.
According to InvestingPro data, the company faces significant financial challenges with a current ratio of 0.39, indicating short-term obligations exceed liquid assets. The company, based in Austin, Texas, entered into a Letter Agreement on December 13, 2024, which allows for up to three 30-day extensions to the maturity date of its Amended and Restated Senior Secured Convertible Promissory Note.
The original note, with a principal amount of $6 million, was sold to Treadway Holdings LLC and is convertible into common stock. As of December 13, the principal amount stood at $3 million, with Treadway Holdings also holding conversion shares from $170,000 of the note. InvestingPro analysis reveals the company's overall financial health score stands at 1.49, labeled as 'WEAK', with 15 additional key insights available to subscribers.
In connection with the Letter Agreement, Interactive Strength exercised its first extension option, paying an extension fee of $160,000 and reimbursing $17,000 for accrued legal fees. The new maturity date is now January 14, 2025.
Additionally, from November 21st through December 13th, Treadway Holdings converted an additional $170,000 of the principal amount into 35,491 shares of common stock. During the same period, holders of the company's Series A Convertible Preferred Stock converted 137,656 shares of Series A into 39,218 shares of common stock.
These transactions followed a reverse stock split of the common stock at a rate of 1-for-100, effective as of November 11, 2024. Due to the rounding up of fractional shares, a total of 217,396 shares of common stock were issued to certain shareholders.
Following these conversions and issuances, Interactive Strength reported that as of December 17, 2024, there were 1,377,873 shares of common stock outstanding. Despite challenging market conditions, analysts forecast revenue growth of 15.11% for FY2024, though the company's gross profit margin remains concerning at -125.31%
In other recent news, Interactive Strength Inc. has made significant strides in restructuring its financial position and expanding its market presence. The company has amended the terms of its Series B Convertible Preferred Stock, removing the mandatory conversion clause and introducing a voluntary conversion option. This amendment set the conversion price at $32.827 per share. Additionally, Interactive Strength has adjusted a convertible promissory note's terms, reducing it from $6 million to $4 million.
The company also entered into equity sales and unregistered securities transactions with Vertical Investors LLC and Treadway Holdings LLC, reducing its outstanding loan balance and converting preferred stock into common stock shares. In terms of market expansion, Interactive Strength has partnered with Armah Sports Group to install their CLMBR vertical climbing machines in B_FIT gym locations across Saudi Arabia.
Furthermore, Interactive Strength has secured exclusive distribution agreements for the CLMBR machines in international markets including Germany, Switzerland, Austria, the Gulf Cooperation Council countries, and Indonesia.
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