AUSTIN, TX - Interactive Strength Inc. (NASDAQ:TRNR), known for its specialty fitness equipment under the CLMBR and FORME brands, has announced a reverse stock split of its common stock at a 1-for-100 ratio, effective Monday (NASDAQ:MNDY), November 11, 2024. The reverse stock split is aimed at regaining compliance with Nasdaq's minimum bid price requirement.
The decision, which reduces the number of outstanding shares to approximately 313,235 from about 31 million, was approved by shareholders on August 30, 2024, and by the Board of Directors on October 31, 2024. As a result, the company's common stock will trade on a post-split basis starting November 11, 2024, under the unchanged ticker symbol "TRNR" and a new CUSIP number.
Proportionate adjustments will be made to the shares underlying the company's outstanding preferred stock, equity awards, warrants, and shares issuable under equity incentive plans, along with the conversion or exercise prices. The authorized shares and par value per share will remain unchanged.
Stockholders need not take action if their shares are held electronically in book-entry form or in brokerage accounts. Those holding stock certificates will see their holdings automatically adjusted to reflect the reverse stock split. No fractional shares will be issued; stockholders will receive one whole share for each fraction of a share held.
This financial maneuver is part of Interactive Strength's efforts to maintain its listing on The Nasdaq Capital Market. The company's products include the CLMBR vertical climbing machine and the FORME digital fitness platform, which offers a combination of hardware and virtual personal training services.
The information in this article is based on a press release statement from Interactive Strength Inc.
In other recent news, Interactive Strength Inc. has been making significant strides in financial restructuring and market expansion. The company entered into a debt-equity swap agreement with Vertical Investors LLC, reducing its outstanding loan by $243,750 in exchange for 1,500,000 shares of common stock. In addition, Interactive Strength issued 586,957 shares of common stock to Vertical Investors, reducing the principal amount owed under a term loan by $270,000.
The company also showcased its FORME Lift product at the Titleist Performance Institute (TPI) Summit, targeting the golf performance market. Additionally, Interactive Strength announced a partnership with Chuze Fitness, placing multiple CLMBR vertical climbing machines in select locations.
Interactive Strength has secured exclusive distribution agreements for its CLMBR vertical climbing machines in several international markets, including Germany, Switzerland, Austria, the Gulf Cooperation Council countries, and Indonesia. This strategic expansion is expected to significantly boost the company's revenue.
The company has also converted a substantial portion of its outstanding loan and Series A Preferred Stock into Series C Preferred Stock, issuing 2,861,128 shares to Vertical Investors. Furthermore, Interactive Strength's Board of Directors approved the Certificate of Designations of Series C Convertible Preferred Stock, designating 5,000,000 shares of authorized preferred stock as Series C Convertible Preferred Stock. These recent developments reflect the company's ongoing efforts to optimize its balance sheet and financial flexibility.
InvestingPro Insights
Interactive Strength Inc.'s decision to implement a reverse stock split comes amid significant financial challenges, as revealed by recent InvestingPro data. The company's market capitalization stands at a modest $0.54 million, reflecting its current struggles in the competitive fitness equipment market.
InvestingPro Tips highlight that TRNR "suffers from weak gross profit margins" and "short term obligations exceed liquid assets," which may have contributed to the need for this strategic move. The company's financial health is further underscored by its negative gross profit of $4.82 million in the last twelve months, with a concerning gross profit margin of -327.16%.
Despite these challenges, there are some positive indicators. The company has shown substantial revenue growth, with a 69.7% increase in the last twelve months and a notable 96.52% quarterly growth. An InvestingPro Tip also notes that "analysts anticipate sales growth in the current year," suggesting potential for improvement.
However, investors should be aware that TRNR's stock "has fared poorly over the last month" and has "fallen significantly over the last year," according to InvestingPro Tips. The 1-year price total return stands at a staggering -99.8%, indicating the severe market challenges the company has faced.
For those seeking a more comprehensive analysis, InvestingPro offers 14 additional tips for TRNR, providing deeper insights into the company's financial situation and market position.
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