SECTION I:

Background to the Sportstech Acquisition, Loan & Loan Guarantees

In the Fall of 2024, Sportstech was conducting an M&A process to sell itself – and an advisor of ours introduced us. We calculated that we could invest ~ $5M into the company and offer them a more-than-fair valuation that was tied to superior performance on their part. The agreed-on terms meant we would acquire Sportstech for less than 5x EBITDA, for a growing business. We signed an LOI documenting these terms in December 2024, as we disclosed. 

In negotiating terms, Sportstech’s primary focus was receiving cash immediately, so that they could accelerate growth during the acquisition process. We agreed to loan them $2.3M while we finalized the acquisition, and then we executed the Binding Transaction Agreement (BTA, see link below). 

 

Key points:

  • As described in Section 5 of the BTA, the intention, and agreement, was to complete the transaction on April 1, 2025.

 

  • Correspondingly, there was a loan maturity of April 30, 2025.

 

  • Sportstech could extend the maturity for a further 8 months, until December 30, 2025, for an extension fee of 10% to accommodate their working capital cycle, in the case that we had not yet completed the acquisition.

 

  • Given that Sportstech needed liquidity to grow ahead of closing the acquisition, we required Ali, Sportstech’s Founder and CEO, to personally guarantee the loan and pledge 100% of his shares in Sportstech, on top of a personal commitment to repay TRNR if the transaction did not complete.

 

  • All loan documentation was fully negotiated by reputable law firms, and the documents were signed and notarized in Germany. 

 

As all parties worked to finalize the agreement, it was clear that our thesis – provide working capital and deliver faster growth at Sportstech – was correct. However, we were not able to finalize the transaction by April and Sportstech requested the additional intended capital. We determined that we should continue to fund their growth, as there were no open issues outside of tax structuring, which we had addressed. 

 

Key points: 

  • We agreed to a loan amendment in May 2025, which increased the total loan principal to $5.6M.

 

  • We extended the maturity of the Loan to July 30 at no cost.

 

  • As of July, however, the deal was not yet complete, so Sportstech elected to exercise the loan extension built into the agreement, to December 30, 2025.  

 

Relevant Documentation & Filings:

 

 

SECTION II:

Failed Acquisition; Default on Loan Repayment; Sportstech 12/29 Release; TRNR Release & Letters

Cross-border transactions are complex and transactions in general require a significant amount of work on top of the normal efforts to run a business. This deal was no exception and involved TRNR solving for various audit, tax and Sportstech legacy-lender requirements. 

Towards the end of 2025, having extended the loan term to the limits of the loan agreement (see above), Sportstech asked to again extend the loan past December 30. Given that we still had not closed the transaction, and had begun to doubt Sportstech’s sincerity, we were out of patience by that point. 

We advised them that we either needed to close the transaction as we had all the components needed, consistent with the LOI and BTA, or we needed to end the deal and move towards repayment of the loan. Sportstech claimed they wanted the transaction to move forward, but did not undertake sufficient, actual steps in support of closing the transaction. 

Then, on December 29, facing an obligation that it evidently did not want to fulfill, Sportstech chose to issue a misleading, surprise press release – the primary outcome of which was harming TRNR shareholders. This action necessarily triggered TRNR responses as well as letters back and forth between lawyers. 

Sportstech, in its 12/29 release and subsequent letters, as well as in its 1/28 release, makes many claims. These claims try to muddy the appearance of a clear sequence of events; the existence – and relevance of – formally and professionally negotiated, signed and filed agreements; and the reality that we loaned them money, which they have not repaid.  

Our German litigation counsel is very confident that TRNR will prevail given the documentation in place, agreed-to by both sides. German counsel has also advised us that knowingly signing agreements that you do not intend to follow is fraudulent and could be criminal in Germany. We are now considering pursuing remedies related to that legal avenue as well. 

One simple and relevant fact for shareholders: despite all its otherwise misleading language and claims, Sportstech has confirmed – more than once – that they owe, and intend to pay, at least the principal cash advanced. 

 

Relevant Documentation:

 

 

SECTION III:

Enforcement

 

On 1/28, Sportstech again issued a press release, which seemed to try to mislead the market and discredit the published statements by TRNR regarding our enforcement plans. 

Rather than summarizing Sportstech’s specific claims and explaining how each is misleading or irrelevant, for the moment we simply will list what we are doing. We also want to remind our shareholders that, regardless of what Sportstech says in a press release, TRNR is taking steps that are entirely feasible, defensible and permitted under German law. 

If there is any debate about this, it will eventually be handled in court, where Sportstech’s claims are unlikely to find merit. 

We will use this page to keep shareholders updates on ongoing proceedings and are initially listed below:

  1. We are proceeding with plans for a public auction in Q1 2026, a right that is clearly articulated in the loan agreement in clauses 11 & 12 (see language from the loan agreement, below).
  2. We have drafted lawsuits and shared them with Sportstech and its lenders; in due time, if the situation does not move forward to our satisfaction, we will file them and formally initiate legal action. Saying that litigation has not been started – as Sportstech did on 1/28 – is like saying you have not been shot, when a loaded gun is pointed at your head: form over substance.
  3. We will contest Sportstech’s position at an upcoming hearing in February that a private share sale is not allowed; Sportstech has already failed in their initial attempt for the injunction against a private sale – validating our belief that their arguments are weak. This is in reference to 12(c) below, not 12(a), a public auction, as discussed above.
  4. We will continue to pursue all enforcement actions available, methodically and in parallel, until we have received satisfactory compensation.
  5. We are quite willing to have Sportstech repay the loan principal/cash amount of ~$5M and continue discussions about the remaining interest.

 

Loan Agreement Language – Direct Excerpts from Filing Featured in Section I, Above:

“11. ENFORCEMENT EVENT

If the requirements set forth in Sections 1273 para. 2, 1228 para. 2 BGB with regard to the enforcement of Pledges are met (Pfandreife), in particular if the Secured Obligations have fully or partially not been paid when due and payable and such payment default (Zahlungsverzug) is continuing (“Enforcement Event”), the Pledgee may (in addition to any rights and remedies the Pledgee may be entitled to under any of the Finance Documents or by law) enforce its rights hereunder and realise the Collateral in accordance with Clause 12 (Realisation of the Pledges) without obtaining a final judgment or other instrument (vollstreckbarer Titel) against the Pledgor (derogation of Section 1277 BGB).”

 

“12. REALISATION OF THE PLEDGES

12.1 By derogation from Section 1234 BGB and Section 368 German Commercial Code (Handelsgesetzbuch) the Pledgee shall be entitled upon the occurrence of an Enforcement Event to realise the whole or part of the Pledges and thereby to use all rights conferred to a pledgee by German law. The realisation is only admissible after a period of at least five (5) Business Days after the Pledgee has notified in writing the Pledgor about the occurrence of the Enforcement Event, requesting from the Pledgor the remedy of the Enforcement Event within that period and notifying the Pledgor that otherwise the Pledges will be realised (the “Enforcement Notification”). The Pledgee is then particularly entitled to: 

(a) realise the Collateral by way of a public auction (öffentliche Versteigerung) in accordance with Section 1235 para. 1 BGB that may be held at any place in the Federal Republic of Germany determined by the Pledgee; 

(b) collect any pecuniary Ancillary Right (in particular profits) in accordance with Section 1282 para. 1 BGB; and/or 

(c) a private sale of the Collateral (freihändiger Verkauf) at the current price (laufender Preis), as far as it has a stock exchange or market price (Börsen- oder Marktpreis) or acquire the title itself (Verfallsvereinbarung), provided that the Pledges constitute a commercial pledge (gewerbliches Pfand) pursuant to Section 1259 BGB.”