Financial Performance - Total revenue for the years ended December 31, 2024 and 2023 was 1.0 million, respectively, with net losses of (51.4) million[516]. - Total revenue for the year ended December 31, 2024, was 962,000 in 2023[555]. - The company reported a net loss of 51,373,000 in 2023[555]. - Total operating expenses decreased by 26,407,000 in 2024, compared to 18.9 million, or 51%, for the year ended December 31, 2024, compared to 2023, primarily due to a 29.2 million and used net cash in operations of 202.6 million as of the same date[579]. Revenue Breakdown - Connected fitness product revenue represented 74% of total revenue in 2024, up from 59% in 2023[532]. - Membership revenue accounted for 14% of total revenue in 2024, slightly down from 15% in 2023[533]. - Training revenue represented 12% of total revenue in 2024, a decrease from 26% in 2023[534]. - Fitness product revenue increased by 3,973,000 in 2024, primarily due to the acquisition of CLMBR, Inc.[558]. - Membership revenue rose by 783,000 in 2024, also attributed to the CLMBR acquisition[559]. Acquisitions and Expansion - The company acquired CLMBR, Inc. in February 2024, aiming to generate higher earnings and cash flow through synergies[517]. - The company plans to expand internationally, targeting markets with high fitness penetration, such as the UK and Canada[521]. - The corporate wellness initiative is set to expand, providing customized solutions for hybrid workforces[525]. - The company aims to reduce personal training costs while maintaining quality, expanding the addressable market for coaching services[523]. Cash Flow and Financing - Net cash used in operating activities was 34.9 million[584]. - Net cash provided by financing activities was 11.1 million as of the issuance date, all scheduled to mature over the next twelve months[579]. - Net cash provided by financing activities for the year ended December 31, 2023 was 4.3 million in common stock issuance and 1.7 million for the year ended December 31, 2024, related to the acquisition of CLMBR, Inc.[586]. Expenses and Losses - The cost of fitness product revenue increased by 3,798,000 in 2024, driven by increased sales from the CLMBR acquisition[561]. - Total cost of revenue increased by 8,158,000 in 2024, compared to 6.1 million for the year ended December 31, 2024, driven by various debt-related costs, including 5.7 million for the year ended December 31, 2024, a significant decrease from $3.1 million in 2023[569]. Compliance and Internal Controls - The company received three notices from Nasdaq regarding noncompliance with listing requirements, but demonstrated compliance with the minimum stockholders' equity and publicly held shares requirements as of December 31, 2024[580]. - The company has identified material weaknesses in internal control over financial reporting related to insufficient trained professionals and inadequate controls over stock-based compensation[618]. - Measures are being implemented to improve internal control, including hiring qualified personnel and engaging financial consultants, with an accounting software system expected to be fully implemented in the 2025 fiscal year[619]. - Management cannot assure that efforts to remediate material weaknesses will be successful or timely, which could adversely affect financial reporting accuracy[620]. Market and Economic Conditions - Participation in golf grew 10% year-over-year to over 41.1 million in 2022, while pickleball saw an 85.7% increase in participation in 2022[526]. - Inflation has not had a material effect on the company's business, but significant inflationary pressures could harm financial condition and operating results[625]. - A hypothetical 10% change in interest rates would not result in a material change for the years ended December 31, 2024 and 2023[624]. - The company has not entered into derivatives or hedging transactions for foreign currency exposure, which is currently considered relatively small[624].
Interactive Strength (TRNR) - 2024 Q4 - Annual Report