GrabAGun Digital Holdings Inc. Debt Disclosure

In November 2025, the Company entered into a Business Loan Agreement that consisted of a delayed draw term loan (the “Loan”) to fund the acquisition of a building for use as its corporate headquarters and primary inventory warehouse. The Loan provides for a 12-month draw period, commencing in November 2025, during which advances may be made up to the maximum principal amount of $8.5 million. After the draw period concludes in November 2026, no additional advances may be made, and quarterly interest payments begin in February 2026, with principal and interest payments commencing in February 2027. As of December 31, 2025, the Company has drawn $6.9 million under the Loan.

Interest during the draw period accrues at a variable rate, calculated as a one-month Term Secured Overnight Financing Rate (“SOFR”) plus 1.85%. Following the conclusion of the draw period, the interest adjusts to a fixed rate, determined as the lender’s Tier Cost of Funds (“COF”) plus 1.85%. Principal payments are amortized over a 20-years schedule, with the remaining unpaid principal balance due as a payment upon maturity in November 2036. During the year ended December 31, 2025, the Company incurred $41 thousand of interest expense, recorded within interest income, net on the consolidated statements of operations. As of December 31, 2025, accrued interest totaled $41 thousand and was included within accrued expenses and other current liabilities on the consolidated balance sheets. The difference between the stated interest rate and the effective interest rate was not significant; the stated interest rate for the fiscal year was 5.80%. As of December 31, 2025, the outstanding balance of the Loan was recorded within long-term debt, net on the consolidated balance sheets.

The Loan is secured by a trust deed covering the corporate headquarters and inventory warehouse, along with associated improvements, fixtures, rents, and related personal property. Additionally, the Loan includes an assignment of rents related to this property. The Loan is guaranteed by the Company pursuant to a guarantee agreement executed in November 2025. Under the terms of the agreement, the Company and its consolidated subsidiaries are required to maintain a minimum fixed charge coverage ratio of 1.25x on a trailing twelve-month basis. As of December 31, 2025, the Company was in compliance with all applicable covenants.

As the Loan was issued with an initial variable rate of interest, the Company believes that the fair value of the obligation is approximated by the carrying value of the Loan as of December 31, 2025. The carrying value of the Loan includes the outstanding principal amount, less unamortized debt issuance costs. Therefore, the Company assumes the carrying value of the debt would closely approximate the fair value of the Loan obligation based on Level 2 inputs since the Loan carries a variable interest rate that is based on the one-month Term SOFR during the draw period.