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Interactive Strength Inc., a manufacturer of electronic and electrical equipment with a market capitalization of $3.6 million, has entered into an agreement with Woodway USA, Inc. to amend the terms of a significant debt instrument. According to InvestingPro data, the company’s current ratio of 0.39 indicates its short-term obligations exceed liquid assets, making this debt restructuring particularly significant. On Monday, the company disclosed the adjustment of the conversion price for a Senior Secured Convertible Promissory Note held by Woodway, a major customer and now creditor, following a series of previous amendments.
Interactive Strength Inc. initially issued a $6 million convertible note to Treadway Holdings LLC on February 1, 2024. This note was later amended on November 11, 2024, and the principal was reduced to $4 million. On December 13, 2024, further modifications were made through a letter agreement. Despite these financial challenges, InvestingPro analysts forecast revenue growth of 15.11% for the current year, suggesting potential operational improvements.
On January 14, 2025, Treadway sold the note to Woodway, who then entered into another letter agreement with Interactive Strength Inc. and CLMBR Holdings LLC, amending the note purchase agreement. As of March 3, 2025, the note’s principal amount stands at $3.1 million.
The latest amendment, dated March 3, 2025, revises the conversion price of the note to the Nasdaq Official Closing Price as of February 28, 2025, potentially affecting the number of common shares, known as Conversion Shares, that Woodway could receive upon conversion.
This transaction is set to occur without registration under the Securities Act of 1933, pursuant to an exemption provided by Section 3(a)(9) of the Act. The specific details of the agreement are outlined in Exhibit 10.1 of the Current Report on Form 8-K filed by Interactive Strength Inc.
The amendment of the convertible note terms reflects ongoing financial adjustments within Interactive Strength Inc., which could influence the company’s equity structure depending on future conversions of the note by Woodway. This information is based on the press release statement filed with the Securities and Exchange Commission.
In other recent news, Interactive Strength Inc. has announced a significant acquisition agreement to acquire Sportstech Brands Holding GmbH, with an initial investment of $15 million and additional potential earnouts totaling $40 million, contingent on future EBITDA performance. This acquisition is expected to close by April 1, 2025, and is projected to be immediately beneficial to Interactive Strength’s financial results, potentially generating over $50 million in revenue for 2025. In a strategic financial maneuver, Interactive Strength has also restructured its outstanding debt by issuing new secured promissory notes, totaling approximately $5.38 million, which are convertible into common stock. Additionally, Interactive Strength has settled a debt obligation with Vertical Investors by issuing shares of Series C Preferred Stock, addressing a shortfall in the Net Trade Value from a previous agreement. The company has further amended the conversion price of its Series C Convertible Preferred Stock from $1.00 to $3.25 per share, reflecting changes to the rights of security holders. These developments are part of Interactive Strength’s broader financial strategy and ongoing efforts to manage its capital and investor relations effectively. The company’s CEO, Trent (NSE:TREN) Ward, highlighted the strategic nature of these moves, emphasizing the enhanced ability to serve consumers and businesses worldwide.
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