GMEX Robotics (FTEL) Q2 2026 earnings review
GMEX Robotics gym sales inch up, but crypto losses mount
GMEX Robotics, the Australian online seller of gym equipment formerly called Fitell, pivoted into cryptocurrency investing while its core retail losses widened. Six-month merchandise revenue edged up 3% to $2.7 million on promotional order growth, and chief executive Yinying Lu restated the half-year accounts to apply fair value rules to new convertible debt. Even after the accounting revision, consulting fees and a $4.7 million unrealized crypto loss pushed the six-month net loss to $7.0 million.
| Merchandise revenue (6M) | $2.73M +3.2% from a year ago |
|---|---|
| Operating loss (6M) | $4.07M $1.17M loss a year ago |
| Net loss, excluding one-offs (6M) | $3.79M +125.6% from a year ago |
| Common shares outstanding | 1.60M +407% in six months |
⚖️ Verdict: 🔴🔴 Very Bearish
The story got worse because financing and advisory costs overwhelmed the tiny fitness equipment business. Borrowing $65 million via variable-rate convertible notes to buy digital tokens triggered fivefold share dilution in six months and drove operating cash burn to $4.4 million. One positive: excluding a one-off consignment inventory write-down, underlying retail gross margin held steady at 38% by our math.
The question now is whether the company can stop its cash burn and share dilution before unrestricted funds run out. Either management cuts consulting spend and unlocks its restricted stablecoin collateral, or variable-price note conversions continue to multiply the share count to cover expenses. The fiscal 2026 annual report will show whether the cash balance and share count stabilized.
🐂 Bull Case
Promotions Lifted Australian Gym Equipment Orders
GMEX Robotics, formerly known as Fitell, generates all of its operating revenue by selling gym and fitness equipment in Australia through its subsidiary GD Wellness. Merchandise sales rose 3.2% from a year ago to $2.73 million in the six months ended December 31, 2025. The company attributed this gain to "increased efforts on our promotional campaign and exploring new channels to solicit new customers".
Customer order volume grew 8.0% from a year ago to 11,563 orders, which offset a 4.4% drop in average revenue per order to $236.15. "The management considered the drop to be gentle and normal in nature," the filing stated. Because promotions brought in smaller basket sizes, the fitness retailer had to ship 852 additional orders just to add $83,558 in top-line sales.
What to watch: full-year merchandise order counts and average revenue per order in the fiscal 2026 annual report. A further slide in order value would show that customer acquisition depends on discounting.
Underlying Gross Margin Held Steady Before Write-Down
On the restated income statement, cost of goods sold—the price of buying and shipping fitness gear—rose 17.0% from a year ago to $1.91 million. That jump compressed reported gross margin by 8.2 percentage points to 30.1% of revenue. In its commentary, GMEX Robotics noted that the decrease resulted from a "one-off stock allowance expense related to some slow-moving consignment stock".
In the original April filing, the Australian retailer had placed this $227,087 consignment reserve inside general and administrative expenses, before moving it into cost of goods sold in the amended report. Excluding that single inventory charge, underlying gross profit was $1.05 million, or 38.4% of revenue by our math, matching the 38.3% gross margin earned a year earlier despite lower average order prices.
What to watch: gross margin and inventory reserve disclosures in the second half of fiscal 2026. Another consignment write-down would show that slow-moving stock is a recurring merchandise cost rather than a one-off charge.
🐻 Bear Case
Advisory Fees Exceeded Total Company Revenue
"Gross profit margin was 30.1% and 38.3% for the six-month periods ended December 31, 2025 and 2024, respectively, which was very stable," the company wrote, describing its cost structure as steady. Yet total operating expenses more than doubled from a year ago to $4.89 million, or 179.0% of revenue, widening the operating loss from $1.17 million to $4.07 million.
- Consulting fees: $2.93 million, up 85.8 percentage points to 107.5% of revenue
- General and administrative expenses (overhead and legal): $887,177, up 6.8 percentage points to 32.5% of revenue
- Personnel expenses (staff pay and benefits): $670,783, up 2.7 percentage points to 24.6% of revenue
- Normalized net loss (excluding one-offs): $3.79 million, up 125.6% from $1.68 million a year ago
The company spent money on advisors for "issues related to capital raises, business direction and strategy options, including crypto currencies investments, and domicile change". Even after stripping out $1.69 million in one-off digital asset consulting and legal fees, remaining consulting expenses equaled 58.3% of revenue by our math, and the board warned that "there remains material uncertainty as to whether the Company will continue as a going concern".
What to watch: consulting fees and operating cash burn in the fiscal 2026 annual report. A second half with consulting costs above gross profit would drain unrestricted cash and require new financing.
Solana Losses Cut into New Crypto Treasury
Starting in September 2025, the fitness retailer began buying cryptocurrencies and stablecoins—digital tokens pegged to the US dollar—for "diversification of corporate treasury strategies and maximize returns on cash balances". During the half year, the group spent $58.49 million in cash to purchase digital assets and sold $3.16 million, leaving a net cost basis of $55.33 million.
- Solana cryptocurrency: cost basis of $8.49 million, carrying value of $399,654 (an unrealized loss of $8.09 million, or 95.3% by our math)
- Pump cryptocurrency: cost basis of $1.51 million, carrying value of $3.44 million (an unrealized gain of $1.92 million)
- Frax USD stablecoins: cost basis of $45.33 million, carrying value of $46.84 million (an unrealized gain of $1.51 million)
In total, GMEX Robotics booked a $4.65 million unrealized loss on digital assets, equal to 170.5% of its six-month merchandise revenue. Furthermore, the company holds $49.15 million of its $50.67 million digital asset balance inside BitGo wallets jointly controlled with lenders as collateral for convertible debt, leaving only $1.52 million of stablecoins under its sole control.
What to watch: the carrying value of the Solana and Pump tokens and any collateral liquidations in the next filing. Further crypto price drops would shrink the collateral backing the company's debt.
Note Conversions Multiplied Share Count Fivefold
To fund its digital asset purchases, GMEX Robotics issued $65.0 million in face value of Series A and Series C convertible notes—debt that lenders can exchange for stock—between September and November 2025, raising $63.70 million in cash. The notes allow lenders to convert debt into Class A shares at 95% of the lowest daily volume-weighted average stock price over the preceding ten trading days.
During the six-month period, note holder ATW converted $12.05 million of principal and $54,325 of interest into 1,110,713 Class A shares. Along with shares issued for cash and services, total shares outstanding jumped 407.3% by our math in six months, rising from 315,161 to 1,598,801 after adjusting for two reverse stock splits (1-for-16 in September 2025 and 1-for-8 in January 2026).
The company still carries $44.74 million of convertible notes at fair value on its balance sheet, and it sold another $250,000 of Series D convertible notes in March 2026 at a $3.00 initial conversion price. In December 2025, the board also declared a cash dividend totaling $1.04 million, committing cash while operations burned $4.42 million.
What to watch: remaining convertible note principal and Class A share count in the fiscal 2026 annual report. Continued conversions at a discount to market prices will dilute existing shareholders further.
👓 Other Themes
Restatement and Robotics Rebrand Changed the Corporate Setup
In November 2026, chief executive Yinying Lu signed an amended half-year report to restate the unaudited results originally published in April 2026. The company elected fair value accounting for its convertible notes, recording a $3.09 million valuation gain and reducing six-month net loss from $9.87 million to $7.05 million. In March 2026, it moved its legal domicile to the British Virgin Islands and rebranded to GMEX Robotics, "extending its consumer-first foundation beyond fitness equipment e-commerce into the design and deployment of AI-powered robotics and intelligent consumer technologies".
💲 Other KPIs
Unrestricted cash rose from $2.89 million in June 2025 to $8.80 million in December 2025, and GMEX Robotics also holds $1.52 million in unrestricted stablecoins. The cash build came from $65.68 million of debt and equity financing, as operations burned $4.42 million in cash during the six-month period.
Finished goods inventory fell 6.8% from June 2025 to $2.84 million as the Australian subsidiary shipped more orders before year-end and wrote down $227,087 of consignment stock. Deferred revenue—customer deposits for equipment not yet delivered—decreased 5.1% over the same six months to $318,700.
Accounts receivable climbed 39.6% from June 2025 to $338,023, while a $2.50 million loan to an independent borrower remained on the books. Unpaid interest on that loan grew from $212,500 to $297,500, accounting for 88% of accounts receivable by our math, and the firm booked a $100,000 impairment on other receivables.
❓ Key Questions
Why did Solana lose 95% of its cost basis?
Note 5 shows 27,516 Solana tokens bought for $8.49 million (about $308 each by our math) but valued at $399,654 despite a listed market price of $124.89. Management should explain whether tokens were lost, locked, or miscalculated in the table.
What commercial products exist for the robotics rebrand?
The company renamed itself GMEX Robotics in March 2026 to design AI-powered robotics, yet it spent nothing on research and development and holds only $17,846 in physical equipment (a single motor vehicle). Investors need to know how robotics will be funded and built.
Will the $2.5 million third-party loan be repaid?
The August 2023 loan of $2.50 million matured in August 2026, and accrued unpaid interest reached $297,500 by December 2025. Since the amended report was filed in November 2026 without mentioning repayment in subsequent events, management should confirm if the borrower defaulted.
Who received the $2.93 million in consulting fees?
Six-month consulting payments exceeded total merchandise revenue, and the company prepaid another $730,143 in upfront consulting deposits. Management should disclose the recipients and clarify whether any fees remain payable in the second half.