04/26/2024 | Press release | Distributed by Public on 04/26/2024 15:27
Filed pursuant to Rule 424(b)(3)
Registration No. 333-269246
PROSPECTUS SUPPLEMENT NO. 18
(to Prospectus dated April 27, 2023)
(Interactive Strength Inc.)
Up to 1,773,937 shares of common stock
This prospectus supplement supplements the prospectus dated April 27, 2023 (the "Prospectus"), which forms a part of our registration statement on Form S-1 (No. 333-269246). This prospectus supplement is being filed to update and supplement the information in the Prospectus with the information contained in our Current Report on Form 8-K, filed with the Securities and Exchange Commission on April 26, 2024 (the "Current Report"). Accordingly, we have attached the Current Report to this prospectus supplement.
The Prospectus and this prospectus supplement relate to the offer and sale from time to time by the selling stockholders named in the Prospectus or their permitted transferees of up to 1,773,937 shares of our common stock, par value $0.0001 per share (the "common stock"). Our registration of the shares covered by the Prospectus does not mean that the selling stockholders will offer or sell any of the shares. The selling stockholders may sell the shares of common stock covered by the Prospectus in a number of different ways and at varying prices. We provide more information about how the selling stockholders may sell the shares in the section entitled "Plan of Distribution" in the Prospectus.
Our shares of common stock are listed on Nasdaq under the symbol "TRNR". On April 25, 2024, the closing price of our shares of common stock was $0.21 per share. We are an "emerging growth company" and a "smaller reporting company" as those terms are defined under the federal securities laws and, as such, have elected to comply with certain reduced public company disclosure and reporting requirements.
This prospectus supplement updates and supplements the information in the Prospectus and is not complete without, and may not be delivered or utilized except in combination with, the Prospectus, including any amendments or supplements thereto. This prospectus supplement should be read in conjunction with the Prospectus and if there is any inconsistency between the information in the Prospectus and this prospectus supplement, you should rely on the information in this prospectus supplement.
See the section entitled "Risk Factors" beginning on page 15 of the Prospectus and in the documents incorporated by reference in the Prospectus to read about factors you should consider before buying our securities.
Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus supplement or the Prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus supplement is April 26, 2024.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 24, 2024 |
INTERACTIVE STRENGTH INC.
(Exact name of Registrant as Specified in Its Charter)
Delaware |
001-41610 |
82-1432916 |
||
(State or Other Jurisdiction |
(Commission File Number) |
(IRS Employer |
||
1005 Congress Avenue, Suite 925 |
||||
Austin, Texas |
78701 |
|||
(Address of Principal Executive Offices) |
(Zip Code) |
Registrant's Telephone Number, Including Area Code:310697-8655 |
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
|
Trading |
|
||
Common stock, $0.0001 par value per share |
TRNR |
The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒
Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed, on February 1, 2024, Interactive Strength Inc. (the "Company") entered into a Credit Agreement (the "Credit Agreement") with Vertical Investors, LLC (the "Lender"), pursuant to which the Company received a term loan from the Lender in the original principal amount of $7,968,977.74 (the "Loan"). As previously disclosed, on March 29, 2024, the Company issued to the Lender 1,500,000 shares of the Company's Series A Preferred Stock, par value $0.0001 per share (collectively, the "Preferred Stock"), upon the conversion of $3.0 million of the Loan.
On April 24, 2024 (the "Effective Date"), the Company entered into a Loan Modification Agreement with the Lender (the "Modification Agreement"). Pursuant to the Modification Agreement, the Company agreed to make monthly payments of interest in the amount of $60,000 to the Lender. In addition, the Company agreed to make mandatory principal payments simultaneously with the closing of all future capital raises by the Company or any affiliate of the Company. The first principal payment will be the greater of (i) $3,000,000 (the "Minimum Payment") or (ii) 20% of the net amount raised from any source of debt, equity, synthetic equity instruments or otherwise less any reasonable expenses paid to third parties (the "Net Capital Raise"). At each capital raise thereafter, the Company shall make a mandatory principal payment to the Lender of 20% of the Net Capital Raise. As of the Effective Date, the outstanding principal amount of the Loan was $4,957,863.06.
On April 24, 2024, the Company entered into a Loan Restoration Agreement with the Lender (the "Restoration Agreement"). Pursuant to the Restoration Agreement, in the event the aggregate amount of funds received by the Lender (net of all commissions, transfer fees or other transaction fees of any kind and taxes paid or payable as a result thereof) arising out of the disposition of the Preferred Stock, shares of the Company's Common Stock issuable upon conversion of the Preferred Stock, if converted by the Lender, or any other securities of the Company issued to the Lender as a result of its holding the Preferred Stock (the aggregate amount of funds, the "Net Trade Value") received by the Lender on or before December 31, 2024 is less than $3,000,000, within ten (10) business days of written demand therefor, the Company shall pay the Lender the amount that is equal to $3,000,000 less the Net Trade Value. In the event the Net Trade Value is greater than $3,100,000, any amount in excess of $3,100,000 being the "Excess Amount", the Excess Amount shall be applied by the Lender as follows:
($2,400,000 / $3,000,000) x 50% = 40% (being the Discount Percentage)
$3,000,000 x 60% (being 1 - 0.40) = $1,800,000 (being the Minimum Payment)
The foregoing descriptions of the Modification Agreement and Restoration Agreement do not purport to be complete and are subject to, and qualified in their entirety by, the full texts of the Modification Agreement and Restoration Agreement, copies of which are filed as Exhibits 10.1 and 10.2, respectively, to this Current Report on Form 8-K and are incorporated herein by reference.
A copy of a press release issued by the Company with respect to the Modification Agreement and Restoration Agreement is filed as Exhibit 99.1 hereto and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. |
Description |
|
10.1* |
Loan Modification Agreement, by and between Interactive Strength Inc. and Vertical Investors, LLC, dated April 24, 2024. |
|
10.2 |
Loan Restoration Agreement, by and between Interactive Strength Inc. and Vertical Investors, LLC, dated April 24, 2024. |
|
99.1 |
Press Release, dated April 26, 2024. |
|
104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* Certain schedules and similar attachments have been omitted in reliance on Item 601(a)(5) of Regulation S-K. The Company will provide, on a supplemental basis, a copy of any omitted schedule or attachment to the SEC or its staff upon request.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Interactive Strength Inc. |
|||
Date: |
April 26, 2024 |
By: |
/s/ Michael J. Madigan |
Michael J. Madigan |
|||
Chief Financial Officer |
Exhibit 10.2
LOAN MODIFICATION AGREEMENT
THIS LOAN MODIFICATION aGREEMENT (this "Agreement") is being entered into effective as of April 24, 2024 (the "Effective Date"), by and between INTERACTIVE STRENGTH, INC., a Delaware corporation (the "Borrower"), and VERTICAL INVESTORS, LLC, a Mississippi limited liability company (together with its successors or assigns, the "Lender").
RECITALS
WHEREAS,Borrower and Lender are parties to that certain Credit Agreement dated as of February 1, 2024 (as amended heretofore, herein and hereafter, collectively, the "Credit Agreement"; capitalized terms used herein and not otherwise defined shall have the meanings ascribed in the Credit Agreement; together with any and all other documents and agreements evidencing, governing, securing or guaranteeing the Loan (as defined below), the "Loan Documents"), pursuant to which, among other things Lender made available to Borrower a term loan in the original principal amount of $7,968,977.74 (as amended, extended, modified, restated, renewed or otherwise changed, the "Loan");
WHEREAS, as set forth in that certain Notice of Reservation of Rights letter dated as of February 28, 2024, certain non-compliances have occurred and exist under the Credit Agreement, to include, without limitation, the failure by Borrower to make the payments required on or about February 23, 2024 (collectively, the "Non-Compliances");
WHEREAS, as of the Effective Date, the balance owed under the Loan is $8,066,472.62, made up of a principal balance of $7,957,863.06, accrued interest of $105,550.00, and late charges and fees of $250.00 (together with the Costs (as defined below) collectively, the "Loan Indebtedness");
WHEREAS, pursuant to the Credit Agreement and the Loan Documents, Borrower is also responsible for paying Lender's costs and expenses related to collection of the Loan, including without limitation, Lender's attorneys' fees (collectively, "Costs");
WHEREAS, based on the Non-Compliances, Lender has the immediate right and ability to declare an Event of Default and exercise all rights and remedies available under the Loan Documents and applicable law to recover the Loan Indebtedness in full; and
WHEREAS, although Lender had no obligation to delay declaring an Event of Default and pursuing its remedies, as of the Effective Date, Lender has not declared an Event of Default under the Loan Documents, but has expressly reserved all rights and remedies available to Lender under the Credit Agreement the Loan Documents or otherwise, and Lender is willing to continue to act in accordance therewith and allow Borrower to continue its business operations and capital raising opportunities, provided that all parties hereto execute and deliver this Agreement and agree to be bound thereby.
NOW, THEREFORE, in consideration of these premises, the mutual agreements of the parties set forth herein and other good and valuable consideration, the receipt and sufficiency of
1
which are hereby acknowledged and accepted, the parties, intending to be legally bound hereby, agree as follows:
AGREEMENT
(a) Borrower reaffirms and ratifies all Loan Documents and affirms that the Loan Documents are strictly enforceable in accordance with their terms.
(b) Borrower acknowledges and agrees that it is indebted to Lender for repayment of the Loan Indebtedness. Borrower hereby reaffirms and ratifies the terms of the Loan Documents, as amended herein, and acknowledges that the Loan Documents constitute the legal, valid and binding obligation of Borrower in accordance with their respective terms. Borrower acknowledges that as of the date hereof it has no defense, counterclaim, offset, cross complaint, claim or demand of any kind or nature whatsoever (collectively, "Defensive Claims") that can be asserted to reduce or eliminate all or any part of its liability to repay any Loan Indebtedness or other indebtedness of any kind to Lender or seek affirmative relief for damages of any kind or nature from Lender, which Defensive Claims arise out of or are related to the Loan Documents or Borrower's relationship with Lender. To the extent that Borrower alleges that it holds any such Defensive Claims as of the Effective Date, Borrower acknowledges and agrees that Borrower fully, forever and irrevocably releases any such Defensive Claims against Lender. Borrower understands, acknowledges and agrees that the release set forth above may be pleaded as a full and complete defense and may be used as a basis for an injunction against any action, suit or other proceeding which may be instituted, prosecuted or attempted in breach of the provisions of such release.
(c) Borrower acknowledges that the Non-Compliances exist and are continuing, and that the Loan Indebtedness are presently due and owing in full.
[Signature pages follow.]
IN WITNESS WHEREOF, the undersigned have caused this Loan Modification Agreement to be duly executed effective as of the date first set forth above, even if actually executed on the date or dates indicated below.
BORROWER:
INTERACTIVE STRENGTH, INC., a Delaware corporation
By: /s/ Trent A. Ward
Trent A. Ward
Its: Chief Executive Officer
STATE OF __________________ )
COUNTY OF )
I, the undersigned Notary Public in and for said County in said State, hereby certify that Trent A. Ward, whose name as Chief Executive Officer of INTERACTIVE STRENGTH, INC., a Delaware corporation, is signed to the foregoing instrument and who is known to me, acknowledged before me on this day that, being informed of the contents of such instrument, he, as such officer and with full authority, executed the same voluntarily for and as the act of said corporation.
Given under my hand and official seal this the ____ day of April, 2024.
Notary Public
[NOTARIAL SEAL] My commission expires:
LENDER:
VERTICAL INVESTORS, LLC, a Mississippi limited liability company
By: Addicus Private Equity, LLC
Its: Manager
By: /s/ Stephen D. Miles
Stephen D. Miles
Its: Manager
Exhibit 10.2
EXHIBIT A
FIRST AMENDMENT TO AGREEMENT REGARDING LETTER OF CREDIT
(Attached hereto)
Exhibit 10.2
EXHIBIT B
LOSS RESTORATIONAGREEMENT
(Attached hereto)
Exhibit 10.2
LOSS RESTORATION AGREEMENT
THIS LOSS RESTORATION AGREEMENT (the "Agreement") is made and entered into as of April 24, 2024, by and between INTERACTIVE STRENGTH, INC., a Delaware corporation (the "Borrower"), and VERTICAL INVESTORS, LLC, a Mississippi limited liability company (together with its successors or assigns, the "Lender").
WHEREAS,Borrower and Lender are parties to that certain Credit Agreement dated as of February 1, 2024 (as amended heretofore, herein and hereafter, collectively, the "Credit Agreement"; capitalized terms used herein and not otherwise defined shall have the meanings ascribed in the Credit Agreement; together with any and all other documents and agreements evidencing, governing, securing or guaranteeing the Loan (as defined therein), the "Loan Documents"), pursuant to which, among other things Lender made available to Borrower a term loan in the original principal amount of $7,968,977.74 (as amended, extended, modified, restated, renewed or otherwise changed, the "Loan");
WHEREAS, in accordance with that certain Loan Modification Agreement dated as of even date herewith by and between Borrower and Lender (the "Modification Agreement"), and as a condition precedent thereto, Borrower issued to Lender 1,500,000 shares of Series A Preferred Stock of the Borrower (collectively, the "Preferred Stock") in exchange for a reduction in the principal amount of the Loan; and
WHEREAS, as a condition precedent to the Modification Agreement, Borrower and Lender desire to enter into this Agreement to establish certain agreements with respect to the Preferred Stock.
NOW THEREFORE, for and in consideration of the foregoing premises and the mutual covenants set forth herein, and other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties hereto do hereby agree as follows:
"Base Trade Value" means a figure that is equal to (i) the Net Trade Value, less (ii) the Excess Amount. For the avoidance of doubt, such figure shall only be applicable if such figure is positive.
"Common Stock" means the common stock, par value per share $0.0001, of the Borrower.
"Discount Percentage" has the meaning set forth in Section 3 below.
"Excess Amount" has the meaning set forth in Section 3 below.
"Minimum Payment" has the meaning set forth in the Modification Agreement.
"Net Trade Value" means the aggregate amount of funds received by Lender (net of all commissions, transfer fees or other transaction fees of any kind and taxes paid or payable as a
result thereof) arising out of the disposition of the Preferred Stock, shares of Common Stock issuable upon conversion of the Preferred Stock, if such Preferred Stock is converted to Common Stock by Lender, or any other securities of the Borrower issued to the Lender as a result of its holding the Preferred Stock. For the avoidance of doubt, that Net Trade Value shall be determined by Lender.
Discount Percentage = (Base Trade Value / $3,000,000) multiplied by 50%;
Minimum Payment = $3,000,000 multiplied by (1 - the Discount Percentage as calculated hereby).
Base Trade Value |
Applicable Discount Percentage |
Resulting Minimum Payment |
$3,000,000 |
50% |
$1,500,000 |
$2,500,000 |
42% |
$1,740,000 |
$2,000,000 |
33% |
$2,000,000 |
2
$1,000,000 |
17% |
$2,490,000 |
$500,000 |
8% |
$2,760,000 |
$-0- |
0% |
$3,000,000 |
By way of example only, if Lender realizes a Base Trade Value of $2,400,000 prior to receipt of the Minimum Payment, then a Discount Percentage of 40% would apply, resulting in a reduction of the Minimum Payment to $1,800,000, calculated as follows:
($2,400,000 / $3,000,000) x 50% = 40% (being the Discount Percentage)
$3,000,000 x 60% (being 1 - 0.40) = $1,800,000.00 (being the Minimum Payment)
(a)Governing Law; Jurisdiction. EACH PARTY HERETO AGREES THAT THE VALIDITY, INTERPRETATION, ENFORCEMENT AND EFFECT OF THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF MISSISSIPPI AND EACH PARTY HERETO SUBMITS (AND WAIVES ALL RIGHTS TO OBJECT) TO THE EXCLUSIVE PERSONAL JURISDICTION OF THE COURTS OF THE STATE OF MISSISSIPPI IN LAFAYETTE COUNTY, MISSISSIPPI FOR THE ENFORCEMENT OF ANY AND ALL OBLIGATIONS UNDER THIS AGREEMENT EXCEPT THAT IF ANY SUCH ACTION OR PROCEEDING ARISES UNDER THE CONSTITUTION, LAWS OR TREATIES OF
3
THE UNITED STATES OF AMERICA, OR IF THERE IS A DIVERSITY OF CITIZENSHIP BETWEEN THE PARTIES THERETO, SO THAT IT IS TO BE BROUGHT IN A UNITED STATES DISTRICT COURT, IT SHALL BE BROUGHT IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF MISSISSIPPI OR ANY SUCCESSOR FEDERAL COURT HAVING ORIGINAL JURISDICTION.
(b)Assignment & Binding Effect. This Agreement and the rights of the parties hereunder may not be assigned, in whole or in part, without the express written consent of all of the parties hereto. The provisions hereof shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors and assigns.
(c)Headings, Etc. All personal pronouns used in this Agreement, whether used in the masculine, feminine or neuter gender, shall include all other genders; the singular shall include the plural, and the plural shall include the singular. Titles of Sections in this Agreement are for convenience only, and neither limit nor amplify the provisions of this Agreement, and all references in this Agreement to Sections shall refer to the corresponding Section of this Agreement, unless specific reference is made to the sections or other subdivisions of, or exhibits to another document or instrument. All references to any instrument, document or agreement shall, unless the context otherwise requires, refer to such instrument, document or agreement as the same may be, from time to time, amended, modified, supplemented, renewed, extended, replaced or restated.
(d)Multiple Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same agreement, and any of the parties hereto may execute this Agreement by signing any such counterpart.
(e)Delay or Omission Not a Waiver. No delay in the exercise of, or failure to exercise, any right, remedy or power accruing upon any default or failure in the performance of any obligation under this Agreement shall impair any such right, remedy or power or shall be construed to be a waiver thereof, but any such right, remedy or power may be exercised from time to time and as often as may be deemed expedient. If any party should default in the performance of any obligation under this Agreement and such default should thereafter be waived by the other parties, such waiver shall be limited to the particular default so waived. No waiver, amendment, release or modification of this Agreement shall be established by conduct, custom or course of dealing, but solely by an instrument in writing duly executed by each party hereto.
(f) Entirety and Amendments. This Agreement embodies the entire agreement between the parties and supersedes all prior agreements and understandings, if any, relating to the subject matter hereof, and this Agreement may be amended only by an instrument in writing executed by the party against whom such amendment is sought to be enforced.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
4
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first above written.
BORROWER:
INTERACTIVE STRENGTH, INC., a Delaware corporation
By: /s/ Trent A. Ward
Trent A. Ward
Its: Chief Executive Officer
LENDER:
VERTICAL INVESTORS, LLC, a Mississippi limited liability company
By: Addicus Private Equity, LLC
Its: Manager
By: ____/s/ Stephen D. Miles________
Name: Stephen D. Miles
Its: Manager
5
Exhibit 99.1
Interactive Strength Inc. (Nasdaq: TRNR) Strengthens Balance Sheet by Partially Converting Senior Loan to Equity and Extending the Maturity
Austin, TX - April 26, 2024 - Interactive Strength Inc. (Nasdaq: TRNR) ("TRNR" or "the Company"), maker of innovative specialty fitness equipment under the CLMBR and FORME brands, today announced that it had converted $3.0 million of the Company's $8.0 million senior loan to equity and extended the maturity of the remaining loan balance to December 2024.
Trent Ward, Co-Founder and CEO of TRNR, said: "We continue to make progress towards financial stability with the reduction of liabilities and the extension of maturity of our senior loan. We expect to be approaching profitability as early as the fourth quarter of this year based on the performance of the CLMBR business that we acquired in February. As part of that transaction, we assumed some of the liabilities of CLMBR, including this senior loan, and we expect that the Company will be able to re-finance the loan as it matures."
TRNR Investor Contact
TRNR Media Contact
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 gyms with live virtual personal training and coaching to deliver an immersive experience and better outcomes for both consumers
1
Exhibit 99.1
and trainers. FORME delivers an immersive and dynamic fitness experience through two connected hardware products: 1) The FORME Studio Lift (fitness mirror and cable-based digital resistance) and 2) The FORME Studio (fitness mirror). 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.
Forward Looking Statements:
This press release includes certain statements that are "forward-looking statements" for purposes of the safe harbor provisions under the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements do not relate strictly to historical or current facts and reflect management's assumptions, views, plans, objectives and projections about the future. Forward-looking statements generally are accompanied by words such as "believe", "project", "expect", "anticipate", "estimate", "intend", "strategy", "future", "opportunity", "plan", "may", "should", "will", "would", "will be", "will continue", "will likely result" or similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding timing of profitability and our ability to re-finance our loan. The reader is cautioned not to rely on these forward-looking statements. These statements are based on current expectations of future events. If underlying assumptions prove inaccurate or known or unknown risks or uncertainties materialize, actual results could vary materially from the expectations and projections of the Company. Risks and uncertainties include but are not limited to: demand for our products; competition, including technological advances made by and new products released by our competitors; our ability to accurately forecast consumer demand for our products and adequately maintain our inventory; and our reliance on a limited number of suppliers and distributors for our products. A further list and descriptions of these risks, uncertainties and other factors can be found in filings with the Securities and Exchange Commission. To the extent permitted under applicable law, the Company assumes no obligation to update any forward-looking statements.
2