Interactive Strength, Inc., a manufacturer of electronic and electrical equipment, has announced an expansion of its Series A Convertible Preferred Stock capacity. On Monday, the company filed a Certificate of Amendment with the Delaware Secretary of State to increase the authorized number of Series A Preferred Stock from 7 million to 10 million shares.
This corporate action follows the conversion of approximately $0.3 million in outstanding promissory notes into 253,205 shares of Series A Preferred Stock on June 28, 2024. The notes were converted by an accredited investor, as defined by the Securities Act. The shares were issued under an exemption from registration requirements, implying that they are not available for public sale without proper registration or a specific exemption.
The Series A Preferred Stock comes with specific rights and restrictions, including conversion provisions and limitations on ownership and share caps. These terms were initially outlined in a Certificate of Designation filed on January 8, 2024, and subsequently amended on April 19, 2024. The latest amendment, as of June 28, 2024, was included in the same filing as the Certificate of Amendment.
The conversion price for the Series A Preferred Stock is set to be at least equal to or above the closing price of the company's common stock on the Nasdaq Stock Market on the last trading day before the date the Series A Certificate was approved by the board, subject to standard adjustments.
Interactive Strength's strategic move to increase its preferred stock capacity indicates a potential for raising additional capital or restructuring current debts. The company's common stock is listed on the Nasdaq Stock Market under the ticker TRNR.
In other recent news, Interactive Strength Inc. has made substantial financial adjustments, including modifying the terms of a convertible note and warrant with an investor, and terminating a common stock purchase agreement. The Texas-based electronic equipment manufacturer has reduced the conversion price of the senior unsecured convertible note to $4.00, with the remaining principal amount standing at $150,171.02. The exercise price of the associated warrant has also been adjusted to $4.00, thus increasing the shares of common stock issuable under the warrant to 288,900 shares.
The company also declared a 1-for-40 reverse stock split, aiming to comply with the Nasdaq Capital Market's minimum bid price requirement. This action is expected to reduce the number of Interactive Strength's outstanding shares from about 26.6 million to approximately 664,526. Furthermore, Interactive Strength raised approximately $1 million through a registered direct offering and concurrent private placement, selling over 5 million shares of its common stock alongside unregistered warrants, with H.C. Wainwright & Co. serving as the exclusive placement agent.
In addition, Interactive Strength converted $3 million of its $8 million senior loan into equity, effectively reducing its debt liabilities. The maturity date for the remaining balance has been extended to December 2024. These recent developments highlight the company's strategic financial maneuvers aimed at managing its debts while expanding its market presence.
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