How Interactive Strength erased a $50M FET token bet and sent common shareholders to the back of the line
The original FET-backed notes are gone, while a separate $2 million secured note arrived in July.
Quick Take
- The stock dividend preserves cash while expanding Interactive Strength’s preferred share count.
- $1.239 million in new base preference now ranks ahead of common equity in a liquidation.
- The company liquidated its FET treasury and satisfied the original FET-backed notes by the end of 2025.
Interactive Strength's crypto treasury of FET tokens was liquidated in late 2025. On July 28, the company paid a dividend with 619,584 preferred shares, preserving cash and putting $1.239 million of minimum base liquidation preference ahead of common holders.
An 8-K filed July 31 breaks out 281,344 Series A shares and 338,240 Series C shares. The issue lifted the outstanding totals to 4,696,089 Series A and 3,187,097 Series C. Compared with the counts immediately before the distribution, Series A grew 6.37% and Series C 11.87%.
Preferred stock ranks ahead of common equity in a liquidation. Each series starts with a $2 original issue price, adjusted for recapitalizations. Series A compounds an 8% cumulative dividend annually. Series C compounds at 15% and ranks ahead of Series A, Series B, and common stock.
The new Series A shares carry $562,688 of base preference and about $45,015 of first-year dividend accrual. Series C adds $676,480 and $101,472. The combined tab comes to $1,239,168 of minimum base preference, plus roughly $146,487 for a full first year before compounding. Those amounts describe equity priority and accrued dividends. Cash generally changes hands only when the board declares a payment, except under the liquidation terms.
Common-share dilution has its own math. It turns on the conversion prices in effect after Interactive Strength's 1-for-7 common-stock reverse split on June 30. The July filing leaves both post-split prices undisclosed. Stockholder-approval limits and 4.99% ownership caps can also restrict issuance. An exact common equivalent remains unknown.
How the FET treasury unwound
Interactive Strength built the crypto treasury with $55.56 million of senior secured convertible exchangeable notes, sold for $50 million. The deal carried a 10% original issue discount, 12% annual interest, and a lien over treasury-subsidiary assets expected to consist of custodied FET.
By the fourth quarter of 2025, the treasury had run its course. The 2025 annual report records the liquidation of all digital assets, zero digital assets at Dec. 31, and full satisfaction of the original FET-backed notes through token sales and separate remainder notes. The FET pledge was gone by year-end.
ATW and DWF received unsecured remainder notes of $3 million and $4.5 million. The first-quarter filing still showed the full $7.5 million face principal at March 31, with an accounting fair value of $4.538 million.
The balance sheet offered little cushion. Cash stood at $4.738 million against a $22.4 million working-capital deficit. Unrestricted liquidity was about $1.3 million at the May 20 filing date, and the company warned of substantial doubt about its ability to continue as a going concern.
On July 21, an investor exercised a pre-existing warrant. Interactive Strength issued a $2 million senior secured convertible note due in July 2027, plus warrants exercisable for 305,810 common shares. The transaction filing ties the note to that older arrangement. FET is absent from its collateral description.
