Interactive Strength, Inc. Leases Disclosure
Note 14. Leases
The Company adopted ASC 842 on January 1, 2022, using the effective date transition method, which requires a cumulative-effect adjustment to the opening balance of retained earnings on the effective date.
The Company has made certain assumptions and judgments when applying ASC 842 including the adoption of the package of practical expedients available for transition. The practical expedients allowed the Company to not reassess (i) whether expired or existing contracts contained leases, (ii) lease classification for expired or existing leases and (iii) previously capitalized initial direct costs. The Company also elected not to recognize right-of-use assets and lease liabilities for short-term leases (leases with a term of twelve months or less).
Operating lease arrangements primarily consist of office and warehouse leases expiring at various years through 2028. The facility leases have original lease terms of two to seven years and contain options to extend the lease up to 5 years or terminate the lease. Options to extend are included in leased right-of-use assets and lease liabilities in the consolidated balance sheet when the Company is reasonably certain it will renew the underlying leases. Since the implicit rate of such leases is unknown and the Company is not reasonably certain to renew its leases, the Company has elected to apply a collateralized incremental borrowing rate to facility leases on the original lease term in calculating the present value of future lease payments.
As of December 31, 2025 and 2024, the weighted average discount rate for operating leases was 6.42% and 6.89%, respectively, and the weighted average remaining lease term for operating leases as of December 31, 2025 and 2024 was 2.4 and 2.3 years, respectively.
The Company has entered into various short-term operating leases for office and warehouse space, with an initial term of twelve months or less. These short-term leases are not recorded on the Company’s consolidated balance sheets. The components of lease expense and other information for the years ended December 31, 2025 and 2024 were as follows.
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Year Ended December 31, |
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2025 |
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2024 |
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(in thousands) |
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Operating lease costs |
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$ |
372 |
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$ |
311 |
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Variable lease costs |
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137 |
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74 |
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Short-term lease costs |
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20 |
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41 |
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Total lease costs |
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529 |
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426 |
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Other information: |
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Cash paid for amounts included in the measurement of operating lease liability |
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$ |
509 |
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$ |
329 |
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No new right-of-use assets obtained in exchange for lease liabilities for the years ended December 31, 2025 and 2024.
Total right-of-use assets and operating lease liabilities of $0.2 million were acquired in the Wattbike Acquisition in 2025, and total right-of-use assets and operating lease liabilities of $0.4 million were acquired in the CLMBR Acquisition in 2024, and were recorded at fair value on the acquisition date.
The following represents the Company’s minimum annual rental payments under operating leases for each of the next five years and thereafter:
Fiscal Year Ending December 31, |
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Operating |
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(in thousands) |
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2026 |
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145 |
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2027 |
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145 |
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2028 |
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63 |
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2029 |
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— |
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Thereafter |
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— |
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Total future minimum lease payments |
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353 |
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Less: imputed interest |
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(23 |
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Present value of operating lease liability |
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$ |
330 |
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Current portion of lease liability |
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159 |
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Non-current portion of lease liability |
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171 |
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Present value of operating lease liability |
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$ |
330 |
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Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 31, 2026 | Showing above |
| 2024 | Mar 31, 2025 | |
| 2023 | Apr 1, 2024 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.