Turtle Beach Corp Debt Disclosure

Note 7. Credit Facilities and Long-Term Debt

Total interest expense, inclusive of amortization of deferred financing costs, on long-term debt obligations was $7.9 million, $8.3 million and $0.6 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Amortization of deferred financing costs was $1.0 million, $0.9 million and $0.1 million for the years ended December 31, 2025, 2024 and 2023, respectively.

Revolving Credit Facility

In 2024, the Company maintained a Revolving Credit Facility with Bank of America that provided up to $50.0 million in borrowing capacity, including a $10.0 million sub-facility for TB Europe, and was secured by substantially all Company assets. On March 13, 2024, the Company entered into a Fourth Amendment, dated as of March 13, 2024 (the “Fourth Amendment”), to the Revolving Credit Facility. The Company executed a Fourth Amendment to the facility, extending the maturity to March 13, 2027, incorporating PDP acquisition assets into the U.S. Borrowing Base and updating interest rate and fee terms. The facility included customary covenants, included a minimum fixed-charge coverage ratio when availability thresholds were not met, and restrictions on additional indebtedness, dividends share repurchases, certain investments, mergers, and asset sales.

On August 1, 2025, the Company entered into a Credit Agreement (the “Credit Agreement”), discussed below, and made a payment of $16.0 million from the Bank of America term loan facility, including $15.9 million and $0.1 million of principal and accrued interest, respectively, to pay off the outstanding Revolving Credit Facility on this date. The Company treated the Credit Agreement as a partial extinguishment to the Revolving Credit Facility and recognized a loss on extinguishment of debt of $0.3 million to write-off the unamortized deferred financing costs in interest expense on the consolidated statements of operations.

Term Loan

In March 2024, the Company entered into a $50.0 million Term Loan Facility with Blue Torch Finance, LLC to support the PDP acquisition, repay certain indebtedness of the acquired business, cover transaction‑related fees, and provide general corporate liquidity. The facility was being amortized over its term, was secured by substantially all Company assets, and carried a prepayment premium that expired in March 2025.

The Term Loan Facility was scheduled to mature on March 13, 2027 and included interest rates tied to base rate or Secured Overnight Financing Rate benchmarks with leverage‑based pricing tiers, as well as customary affirmative, negative, and financial covenants, including minimum liquidity and quarterly total net leverage requirements. As discussed below, the facility was refinanced in 2025 in connection with the Company’s new Credit Agreement.

On August 1, 2025, the Term Loan Facility was repaid in full from the proceeds of the Bank of America credit agreement, discussed below, for the amount of $43.2 million. The Company treated the repayment as a debt extinguishment and recognized a loss on extinguishment of debt of $1.7 million to write-off the unamortized deferred financing costs in interest expense in the condensed consolidated statements of operations.

Credit Agreement

On August 1, 2025, the Company and certain of its subsidiaries (the “Borrowers”) entered into the Credit Agreement with Bank of America, as the administrative agent, the swingline lender and the line of credit issuer. The Credit Agreement, matures on August 1, 2028 and includes a $60.0 million term loan facility and a $90.0 million revolving credit facility with designated sub-facility limits of (i) $15.0 million for the U.K. Borrower, (ii) $10.0 million for a swingline facility and (iii) $5.0 million for letters of credit. Actual credit availability under the revolving facility is subject to a borrowing base limitation that is calculated based on a percentage of eligible trade accounts receivable and inventories, the balances of which fluctuate, and is subject to discretionary reserves and revaluation adjustments. The Borrowers may utilize the facilities for borrowings as well as for the issuance of letters of credit, repaying existing indebtedness outstanding as of the effective date of the Credit Agreement and ongoing working capital and general corporate purposes as defined by the Credit Agreement. The facilities under the Credit Agreement replaced the Company’s previous debt arrangements.

Borrowings bear interest at a rate that varies depending on the type of loan and the Borrower. The interest rate is calculated using a floating rate plus a margin. Depending on the type of loan, the floating rate will either be the prime rate announced by Bank of America, Term SOFR, Daily Simple SOFR, EURIBOR or SONIA. The margin ranges from 2.00% to 2.75% for base rate loans and SONIA based loans and from 3.00% to 3.75% for Term SOFR, Daily Simple SOFR and EURIBOR loans. The Credit Agreement also provides for an unused line fee, letter of credit fees, and agent fees. The Borrowers will be able to voluntarily prepay the principal of any advance, without penalty or premium, at any time in whole or in part, subject to certain breakage costs. As of December 31, 2025, interest rates for the term loan and revolving credit facilities were 7.27% and 7.11%, respectively.

The Credit Agreement requires the Company and its subsidiaries to (i) maintain a fixed charge coverage ratio, defined as the ratio, determined on a consolidated basis for the Company and its subsidiaries for the applicable measurement period, of (a) EBITDA minus unfinanced capital expenditures and cash taxes paid for such period to (b) consolidated interest charges for such period plus principal payments or redemptions of outstanding debt plus certain restricted payments and (ii) maintain a consolidated leverage ratio, defined as the ratio, determined on a consolidated basis for the Company and its subsidiaries for the applicable measurement period, of (a) certain funded indebtedness minus unrestricted cash up to a maximum of $12.0 million to (b) EBITDA.

The Credit Agreement also contains affirmative and negative covenants that, subject to certain exceptions, limit our ability to take certain actions, including our ability to incur debt, pay dividends and repurchase stock, make certain investments and other payments, enter into certain mergers and consolidations, engage in sale leaseback transactions and transactions with affiliates, and encumber and dispose of assets. The Credit Agreement contains customary events of default, including defaults triggered by the failure to make payments when due, breaches of covenants and representations, material impairment in the perfection of the lenders’ security interest in the collateral, and events related to bankruptcy and insolvency of the Company and its subsidiaries. If an event of default occurs and is continuing, the lenders may terminate and/or suspend their obligations to make loans and issue letters of credit and/or accelerate amounts due under the Credit Agreement and exercise other rights and remedies. To secure their obligations under the Credit Agreement, the Company and each of the other loan parties granted an all-assets lien with a first priority security interest in substantially all of their assets to the administrative agent.

As of December 31, 2025, the Company was in compliance with all the financial covenants under the Credit Agreement and excess borrowing availability was approximately $41.1 million.

As part of the Credit Agreement, the Company recorded an aggregate amount of deferred debt financing costs of $2.3 million.

On December 29, 2025, the Company entered into a First Amendment to its Credit Agreement (the "First Amendment"). The First Amendment revised clause (b)(iii) of the definition of “Consolidated Fixed Charge Coverage Ratio” to permit the Company to exclude from the denominator of such ratio up to $10.0 million of restricted payments for the trailing twelve‑month period ended March 31, 2026, and an additional $10.0 million of restricted payments for the trailing twelve‑month period ended June 30, 2026. Aside from this modification, all other material terms, covenants, and conditions of the Credit Agreement remained unchanged.

Maturities of Term Loan Debt