Interactive Strength, Inc. Goodwill & Intangibles Disclosure
Note 7. Goodwill, Intangible Assets, net and Digital Assets
Goodwill
Goodwill and intangible assets of $2.3 million and $3.2 million, respectively, were acquired in the Wattbike Acquisition and were recorded at fair value on the acquisition date. Goodwill and intangible assets of $13.2 million and $6.2 million, respectively, were recorded in the CLMBR Acquisition (see Note 23). As of December 31, 2025, and 2024, there was no goodwill impairment.
Changes in goodwill for the years ended December 31, 2025 are as follows:
(in thousands) |
|
Goodwill |
|
|
Balance as of December 31, 2023 |
|
$ |
— |
|
Goodwill acquired |
|
|
13,165 |
|
Purchase accounting adjustments to goodwill |
|
|
55 |
|
Balance as of December 31, 2024 |
|
|
13,220 |
|
Goodwill acquired |
|
|
1,924 |
|
Purchase accounting adjustments to goodwill |
|
|
388 |
|
Foreign currency translation adjustments |
|
|
13 |
|
Balance as of December 31, 2025 |
|
$ |
15,545 |
|
Intangible Assets, Net
Identifiable intangible assets, net consisted of the following:
|
|
As of December 31, |
|
|
As of December 31, |
|
||||||||||||||||||
|
|
2025 |
|
|
2024 |
|
||||||||||||||||||
(in thousands) |
|
Cost |
|
Accumulated Amortization |
Net Book Value |
|
|
Cost |
|
|
Accumulated Amortization |
|
|
Net Book Value |
|
|||||||||
Internal-use software |
|
$ |
6,415 |
|
|
$ |
(6,171 |
) |
|
$ |
244 |
|
|
$ |
6,248 |
|
|
$ |
(5,649 |
) |
|
$ |
599 |
|
Developed technology |
|
|
2,610 |
|
|
|
(535 |
) |
|
|
2,075 |
|
|
|
1,400 |
|
|
|
(213 |
) |
|
|
1,187 |
|
Customer related |
|
|
5,479 |
|
|
|
(944 |
) |
|
|
4,535 |
|
|
|
4,000 |
|
|
|
(398 |
) |
|
|
3,602 |
|
Trademark and trade name |
|
|
1,203 |
|
|
|
(194 |
) |
|
|
1,009 |
|
|
|
800 |
|
|
|
(82 |
) |
|
|
718 |
|
Total identifiable intangible assets |
|
$ |
15,707 |
|
|
$ |
(7,844 |
) |
|
$ |
7,863 |
|
|
$ |
12,448 |
|
|
$ |
(6,342 |
) |
|
$ |
6,106 |
|
Amortization expense amounted to $1.4 million and $2.3 million for the years ended December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, there was no intangible asset impairment.
As of December 31, 2025, estimated annual amortization expense for each of the next five fiscal years is as follows:
2026 |
|
|
1,234 |
|
2027 |
|
|
1,136 |
|
2028 |
|
|
1,045 |
|
2029 |
|
|
960 |
|
2030 |
|
|
934 |
|
Thereafter |
|
|
2,554 |
|
Total |
|
$ |
7,863 |
|
Digital Assets
In June 2025, the Company entered into a securities purchase agreement (the “Purchase Agreement”) with an entity affiliated with ATW Partners (“ATW”) and an entity affiliated with DWF Labs (“DWF”), pursuant to which the Company agreed to sell for $50 million, senior secured convertible exchangeable notes issued by the Company in the aggregate principal amount of $55.6 million, (the “June 2025 Convertible Exchangeable Notes”), which were both (a) convertible into shares of the Company’s Common Stock and (b) exchangeable into the utility tokens and key medium of exchange on the Fetch.ai network (“FET”) (see Note 11). In connection with the Purchase Agreement, the Company also entered into the following agreements: (a) a master netting agreement (the “Master Netting Agreement”); (b) a security and pledge agreement (with such agreement being entered into by the Treasury Subsidiary and acknowledged by the Company) (“Security and Pledge Agreement”); and (c) a backstop agreement (the “Backstop Agreement”).
In October 2025, due to a decrease in FET price, the collateral value was less than 150% of the Backstop Amount (as defined in the Backstop Agreement), and on October 10, 2025, the Company received, pursuant to the Security and Pledge Agreement, a "Top Off" notice from ATW related to the decrease in collateral value. In accordance with the terms of the Master Netting Agreement, ATW proceeded to sell the Company's tokens and then a portion of the collateral tokens until it had generated approximately $18.9 million. This amount satisfied the $22.2 million principal
and accrued interest of the June 2025 Convertible Exchangeable notes held by ATW as of September 30, 2025. An unsecured Remainder Note (as defined in the Master Netting Agreement) in the amount of $3.0 million was issued to ATW to account for the reduction in principal amount as a result of the Netting provisions.
In connection with the decrease in FET price, an event of default occurred under the June 2025 Convertible Exchangeable Notes held by DWF. On December 9, 2025, the Company entered into a Final Netting Agreement (the “Final Netting Agreement”) with DWF and the entity affiliated with FET (“FET Entity”), pursuant to which DWF accelerated its June 2025 Convertible Exchangeable Notes in the amount of $33.3 million, triggered a Liquidation Event (as defined in the Master Netting Agreement) and conducted Liquidation Netting (as defined in the Master Netting Agreement), in accordance with the terms of the Master Netting Agreement.
Pursuant to the Final Netting Agreement, the Company caused the Custodian (as defined in the Master Netting Agreement) to deliver to DWF 82,972,910 Tokens securing the June 2025 Convertible Exchangeable Notes held by DWF. In addition, the Company issued to DWF a Remainder Note in the amount of $4.5 million as payment in full of the remaining principal amount as a result of the Final Netting Agreement.
The Company recognized changes in the fair value of its digital assets as gains and losses or losses in Change in fair value of digital assets on the Company's consolidated statement of operations during the period in which they occurred. As of December 31, 2025, the Company no longer held any digital assets. The details of the activity related to the Company's digital assets as of December 31, 2025 and 2024 are as follows:
(in thousands) |
|
Tether Units |
|
|
Tether Fair Value |
|
|
FET Units |
|
|
FET Fair Value |
|
|
Total Units |
|
|
Total Fair Value |
|
||||||
Digital assets at December 31, 2024 |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
Additions |
|
|
25,000 |
|
|
|
25,000 |
|
|
|
33,103 |
|
|
|
22,250 |
|
|
|
58,103 |
|
|
|
47,250 |
|
Tether used to purchase FET |
|
|
(25,000 |
) |
|
|
(25,000 |
) |
|
|
34,315 |
|
|
|
25,000 |
|
|
|
9,315 |
|
|
|
— |
|
Change in fair value of digital assets |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(27,743 |
) |
|
|
— |
|
|
|
(27,743 |
) |
Digital assets sold in satisfaction of June 2025 Convertible Exchangeable Notes |
|
|
— |
|
|
|
— |
|
|
|
(67,418 |
) |
|
|
(19,507 |
) |
|
|
(67,418 |
) |
|
|
(19,507 |
) |
Digital assets at December 31, 2025 |
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
— |
|
|
|
— |
|
|
$ |
- |
|
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 31, 2026 | Showing above |
| 2023 | Apr 1, 2024 | |
About Goodwill & Intangibles Disclosures
Goodwill and intangible asset disclosures reveal the premium paid in acquisitions and how management assesses whether that premium retains its value. Since goodwill is no longer amortized under US GAAP, the annual impairment test is the only mechanism that adjusts carrying values downward — making the assumptions behind that test critically important for investors.
Key signals: a history of goodwill impairments suggests management consistently overpays for acquisitions. Watch the gap between reporting unit fair value and carrying amount — when fair value exceeds carrying amount by less than 10-20%, a small decline in business performance could trigger a write-down. For finite-lived intangibles, examine useful life assumptions across customer relationships, technology, and trade names; aggressive estimates inflate near-term earnings. Compare total intangibles-to-total-assets ratios against peers to assess acquisition dependency. Rising goodwill as a percentage of equity can signal balance sheet fragility.