Bowflex Inc. Condensed Combined Financial Statements

12 Months Ended

Mar. 31, 2024

Condensed Financial Information Disclosure [Abstract]

Bowflex Inc. Condensed Combined Financial Statements

BOWFLEX INC. CONDENSED COMBINED FINANCIAL STATEMENTS

On the Petition Date, the Company Parties filed the Bankruptcy Petitions for relief under the Bankruptcy Code in the Bankruptcy Court. The following financial statements (Balance Sheets and Statements of Operations and Cash Flows) are presented as of and for the year ended March 31, 2024. For additional information regarding the Bankruptcy Petitions, refer to Note 2, Bankruptcy and Note 28, Subsequent Events.

BOWFLEX INC.

(DEBTOR-IN-POSSESSION)

BALANCE SHEET

(In thousands)

	As of March 31,
Assets	2024
Cash	$	15,815
Trade receivables, net of allowances	7,705
Intercompany trade receivables	(6,742)
Inventories	29,529
Prepaids and other current assets	8,574
Income taxes receivable	6,959
Total current assets	61,840
Property, plant and equipment, net	284
Operating lease right-of-use assets	—
Other intangible assets, net	2,900
Other assets	537
Total assets	$	65,562
Liabilities and Shareholders' Equity
Trade payables	$	2,934
Intercompany trade payables	1,575
Accrued liabilities	9,062
Operating lease liabilities, current portion	4,507
Financing lease liabilities, current portion	125
Warranty obligations, current portion	1,875
Income taxes payable	1,735
Debt payable, current portion, net of unamortized debt issuance costs	15,999
Total current liabilities	37,812
Operating lease liabilities, non-current	11,026
Financing lease liabilities, non-current	167
Warranty obligations, non-current	617
Income taxes payable, non current	2,105
Deferred income tax liabilities, non-current	100
Other long-term liabilities	175
Liabilities subject to compromise	53,846
Total liabilities	105,848
Shareholders' equity (deficit):
Common stock - no par value, 75,000 shares authorized, 36,412 and 31,845 shares issued and outstanding	15,384
Retained deficit	(55,710)
Accumulated other comprehensive income	40
Total shareholders' deficit	(40,286)
Total liabilities and shareholders' equity	$	65,562

See accompanying notes to consolidated financial statements

BOWFLEX INC.

(DEBTOR-IN-POSSESSION)

STATEMENT OF OPERATIONS

(In thousands, except per share amounts)

	Year Ended March 31,
	2024
Net Sales	$	180,988
Cost and expenses:
Cost of sales	135,037
Selling, operating and administrative	137,684
Other income, net	3,631
Loss from continuing operations before reorganization items and income taxes	(88,102)
Reorganization items, net	(1,897)
Income tax expense	1,309
Loss from continuing operations	(91,308)
Discontinued operations:	—
Loss from discontinued operations	—
Income tax benefit of discontinued operations	—
Income from discontinued operations	—
Net loss	$	(91,308)

See accompanying notes to consolidated financial statements

BOWFLEX INC.

(DEBTOR-IN-POSSESSION)

STATEMENT OF CASH FLOWS

(In thousands)

	Year Ended March 31,
	2024
Cash flows from operating activities:
Loss from continuing operations	$	(91,308)
Gain from discontinued operations	—
Net loss	(91,308)
Adjustments to reconcile net loss to cash provided by operating activities:
Depreciation and amortization	11,160
Provision for allowance for doubtful accounts	998
Stock-based compensation expense	3,688
Gain on asset dispositions	(9,021)
Loss on debt extinguishment	353
Asset impairment charge	38,874
Deferred income taxes, net of valuation allowance	868
Reorganization items	534
Other	4,189
Changes in operating assets and liabilities:
Trade receivables	18,770
Inventories	6,473
Prepaids and other assets	4,033
Income taxes receivable	359
Trade payables	26,019
Liability-classified stock-based compensation expense	(24)
Accrued liabilities and other liabilities, including warranty obligations	(7,819)
Net cash provided by operating activities (1)	8,146
Cash flows from investing activities:
Proceeds from sale of equity investments	2,350
Proceeds from sale of intellectual properties	10,500
Purchases of property, plant and equipment	(2,895)
Net cash provided by investing activities (1)	9,955
Cash flows from financing activities:
Proceeds from long-term debt	17,200
Payments on long-term debt	(32,101)
Payments of debt issuance costs	(1,400)
Early termination of debt	(353)
Payments on finance lease liabilities	(120)
Proceeds from public offering net of transaction costs	4,547
Proceeds from employee stock purchases	64
Tax payments related to stock award issuances	(123)
Net cash used in financing activities	(12,286)
Effect of exchange rate changes on cash and cash equivalents	51
Increase in cash, cash equivalents and restricted cash	5,866
Cash, cash equivalents and restricted cash:
Cash, cash equivalents and restricted cash at beginning of period	9,949
Cash, cash equivalents and restricted cash at end of period	$	15,815

(1) The difference between the amount of Net cash provided by operating activities and Net cash provided by investing activities included in the table above and the amount of Net cash provided by operating activities and Net cash provided by investing activities included in the Consolidated Statements of Cash Flows for the same period primarily related to the fact that the table above: (i) excludes the operating cash flows of Non-Debtor subsidiaries, which are included in the Consolidated Statements of Cash Flows, and (ii) includes the effects of operating and investing cash flows of the Debtors with the Non-Debtor subsidiaries, which are eliminated in the Consolidated statements of Cash Flows