The group's 'Beat Battle' workout, a combination of mixed martial arts and street dance, achieved total sales of £7,970 from three health club chains.
Stephen Brady's Phoenix, however, collected £12,810 from a single deal for their retro 'Groove Train' routine.
Watch Digital Spy's interview with Duane Bryan below:
In the boardroom, it emerged that Sterling lost because the promising concept of 'Beat Battle' wasn't executed properly. Karren Brady added that their promotional video appeared dull in comparison to Phoenix's clip, which featured Azhar Siddique in tight shorts performing exercises on space hoppers.
Bryan and Laura Hogg, who directed and starred in the promo respectively, were brought into the boardroom by Martin for failing to demonstrate the martial arts element of the routine, weakening the product.
However, Bryan defended both himself and Hogg, stating: "Laura shouldn't be here. She came and delivered, she contributed."
He also accused Martin of "trying to pass the buck", while the businessman-come-athlete blasted Bryan for getting too "emotionally involved".
In delivering his verdict, Lord Sugar noted that Hogg had been brought back into the boardroom just one week after almost being fired, but gave her another chance after deciding that she was not responsible for the task's failure.