The beleaguered fitness chain F45 has made a massive loss of more than $US370 million ($582 million) over the last two financial years. In its latest financial statement filed with the Securities and Exchange Commission in the US, F45 flagged a rocky road ahead.
“We may be unable to generate sufficient cash flow or income to satisfy our debt service and other obligations, which would adversely affect our results of operations and financial condition,” it said.
The fitness chain faces an uphill struggle. Last year it significantly cut back its employee numbers, shedding about 110 staff. At the end of 2022, F45 employed 17 Australian staff, 95 in the US, and one in the UK.
In August 2023, the firm pulled its shares from the New York Stock Exchange, just two years after listing, reducing its capacity to source capital.
F45 has updated its accounts for the financial year ending December 31, 2021, and interim first three quarters of 2022, after it revealed major revenue reporting errors in its initial statements.
The business is unable to sell franchises in the US until it has filed its 2023 franchise disclosure document (FDD).
F45 faces legal disputes
The troubled fitness chain also faces ongoing legal action by its own investors, and by celebrities David Beckham and Greg Norman.
The sports celebrities are seeking damages over endorsement payments; Beckham is claiming $US18.85 million for an alleged breach of contract, and Norman is seeking damages of no less than US$1.75 million.
F45 said it disputes the claims and will “vigorously defend itself” but warned the legal proceedings may have an “adverse effect” on the business.
The chain’s own investors last year launched a class action against the business and former and current board members including Hollywood A-lister Mark Walhberg and F45 co-founder Adam Gilchrist (not the cricketer).
The class action alleges the group made misleading statements prior to its public float in July 2021.
F45 filed a motion to dismiss the complaint and said it intends to “zealously defend against the allegations”.