What changed in this filing

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Item 1. Financial Statements

2026-05-07 compared with 2025-11-06 · 180 added, 313 removed, 289 unchanged (63% of the section changed)

4 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Cost of revenue

3 unchanged sentences

General and administrative

Insurance recovery, net

Insurance recovery

Acquisition-related cost

Total operating expenses

Operating income (loss)

Interest expense

Operating (loss) income

Interest expense, net

Other (income) expense, net

Income (loss) before income tax

Income tax expense (benefit)

Net income (loss)

Net income (loss) per share

Loss before income tax

Income tax benefit

Net loss per share

Weighted average number of shares:

1 unchanged sentence

Turtle Beach Corporation

Condensed Consolidated Statements of Comprehensive Income (Loss)

Condensed Consolidated Statements of Comprehensive (Loss) Income

(unaudited, in thousands)

Three Months Ended

Nine Months Ended

September 30,

Net income (loss)

Other comprehensive (loss) income:

1 unchanged sentence

Other comprehensive (loss) income

Comprehensive income (loss)

Comprehensive (loss) income

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(in thousands, except par value and share amounts)

September 30,

Current Assets:

19 unchanged sentences

Common stock, $ 0.001 par value - 25,000,000 shares authorized;

19,307,514 and 19,961,696 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively

19,607,383 and 19,185,869 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively

Additional paid-in capital

Accumulated deficit

Accumulated other comprehensive income (loss)

Accumulated other comprehensive income

Total Stockholders’ Equity

4 unchanged sentences

(unaudited, in thousands)

Nine Months Ended

September 30, 2025

September 30, 2024

Three Months Ended

March 31, 2026

March 31, 2025

CASH FLOWS FROM OPERATING ACTIVITIES

1 unchanged sentence

Depreciation and amortization

Fair value step-up adjustment to acquired inventory

Amortization of intangible assets

Amortization of debt financing costs

Loss on extinguishment of debt

Stock-based compensation

2 unchanged sentences

Provision for obsolete inventory

Loss on impairment of assets

Changes in operating assets and liabilities, net of acquisitions:

4 unchanged sentences

Other liabilities

Net cash provided by (used for) operating activities

Net cash provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES

1 unchanged sentence

Acquisition of a business, net of cash acquired

Net cash provided by (used for) investing activities

Net cash (used for) provided by investing activities

CASH FLOWS FROM FINANCING ACTIVITIES

1 unchanged sentence

Repayment of revolving credit facilities

Proceeds from term loan

Repayment of term loan

1 unchanged sentence

Repurchase of common stock

Debt financing costs

Net cash (used for) provided by financing activities

Net cash used for financing activities

Effect of exchange rate changes on cash and cash equivalents

4 unchanged sentences

Property and equipment purchases included in accounts payable and accrued liabilities

Unpaid debt financing costs

The accompanying notes are an integral part of these condensed consolidated financial statements.

5 unchanged sentences

Balance at December 31, 2025

Other comprehensive income, net of tax

Issuance of restricted stock

Stock options exercised

Stock-based compensation

Repurchase of common stock

Balance at March 31, 2025

Other comprehensive income, net of tax

Issuance of restricted stock

Stock options exercised

Stock-based compensation

Repurchase of common stock

Balance at June 30, 2025

Other comprehensive loss, net of tax

2 unchanged sentences

Stock-based compensation

Exercise of wholly-funded warrants

Repurchase of common stock

Balance at September 30, 2025

Balance at March 31, 2026

Comprehensive

Income (Loss)

(Loss) Income

Balance at December 31, 2024

Other comprehensive loss, net of tax

Issuance of acquisition-related stock

Issuance of restricted stock

Stock options exercised

Stock-based compensation

Balance at March 31, 2024

Other comprehensive income, net of tax

3 unchanged sentences

Repurchase of common stock

Balance at June 30, 2024

Other comprehensive income, net of tax

Issuance of restricted stock

Stock options exercised

Stock-based compensation

Repurchase of common stock

Balance at September 30, 2024

Balance at March 31, 2025

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

Description of Business

Turtle Beach Corporation (“Turtle Beach” or the “Company”), headquartered in San Diego, California and incorporated in the state of Nevada in 2010, is a premier audio and gaming technology company with expertise and experience in developing, commercializing, and marketing innovative products across a range of large addressable markets under the Turtle Beach® brand.

Turtle Beach, a worldwide leader of feature-rich headset solutions for use across multiple platforms, including video game and entertainment consoles, handheld consoles, personal computers (“PC”), tablets and mobile devices, expanded its brand beyond gaming headsets and launched its gaming controller product line, as well as gaming flight simulation and racing simulation accessories, and strengthened its gaming PC keyboards and mice product lines.

In March 2024, Turtle Beach acquired Performance Designed Products LLC (“PDP”), another leading gaming accessory brand with a robust slate of products, including gaming controllers, gamepads for all platforms and licensing deals with popular gaming and entertainment properties.

Turtle Beach Corporation (“Turtle Beach” or the “Company”), develops and markets audio and gaming accessory products under the Turtle Beach® brand for use with video game and entertainment consoles, handheld consoles, personal computers (“PCs”), tablets, and mobile devices.

The Company’s product offerings have expanded over time beyond gaming headsets to include gaming controllers, flight and racing simulation accessories, and PC keyboards and mice.

The Company operates within the gaming accessories market and sells its products through a variety of retail, distribution, and ecommerce channels in the U.S.

and international markets.

The Company is headquartered in San Diego, Californi a, and was incorporated in the State of Nevada in 2010.

Summary of Significant Accounting Policies

15 unchanged sentences

There have been no material changes to the significant accounting policies and estimates from the information provided in Note 2 of the notes to our consolidated financial statements in our Annual Report.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of investments in cash, cash equivalents and accounts receivables.

The Company is exposed to credit risk and liquidity risk in the event of default by the financial

institutions or issuers of investments in excess of FDIC insured limits.

The Company performs periodic evaluations of the relative credit standing of these financial institutions and limits the amount of credit exposure with any institution.

Accounts receivable are unsecured and represent amounts due based on contractual obligations of customers.

Accounts receivable from the Company's major customers representing 10% or more of total accounts receivable were as follows:

* Customer accounted for less than 10% of total accounts receivable in the period.

Customers that accounted for more than 10% of revenue during the three months ended March 31, 2026 and 2025 were as follows:

Three Months Ended

Accounting Pronouncements Issued and Adopted

In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326):

Measurement of Credit Losses for Accounts Receivable and Contract Assets, which provides a practical expedient and accounting policy election which will result in reduced complexity for the measurement of credit losses arising from transactions accounted for under ASC 606—Revenue from Contracts with Customers, which include current contract assets and current contract receivable.

Specifically, the practical expedient permits entities to assume that current conditions as of the balance sheet date do not change for the remaining life of the asset, and the accounting policy election permits an entity other than a public business entity to consider collection activity after the balance sheet date when estimating expected credit losses.

Entities electing to apply the practical expedient and the accounting policy election, if applicable, should apply the amendments prospectively.

This ASU will be effective for annual reporting perio ds beginning after December 15, 2025 , and interim reporting periods within those annual reporting periods, with early adoption permitted.

The Company has adopted this standard, which did no t have a significant impact on its condensed consolidated financial statements.

Accounting Pronouncements Issued but Not Yet Adopted

1 unchanged sentence

ASUs not referenced below were assessed and determined to be either not applicable or are not expected to have a material impact on the Company's unaudited condensed consolidated financial statements.

In December 2023, the Financial Accounting Standards Board ("FASB") issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction.

This ASU is effective for fiscal years beginning after December 15, 2024 and allows for adoption on a prospective basis, with early adoption is permitted.

The Company is currently evaluating the impact of the adoption of this standard to determine its impact on the Company's disclosures.

In November 2024, the FASB issued ASU 2024-03, Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

2 unchanged sentences

The Company is currently evaluating the impact of the adoption of this standard to determine its impact on the Company's disclosures.

In July 2025, the FASB issued ASU 2025-05, Financial Instruments-Credit Losses (Topic 326):

Entities electing to apply the practical expedient and the accounting policy election, if applicable, should apply the amendments prospectively.

This ASU will be effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted.

The Company is currently evaluating the impact of the adoption of this standard to determine its impact on the Company's disclosures.

In September 2025, the FASB issued ASU 2025-06, Intangibles—Goodwill and Other - Internal-Use Software (Subtopic 350-40), which modernizes and simplifies the accounting costs incurred to develop or acquire internal use software costs.

1 unchanged sentence

Under the new standard, capitalization begins when management authorizes and commits funding for the project and completion is probable, aligning better with agile and iterative development practices.

The types of costs eligible remain unchanged, and the update does not affect accounting for software developed for sale or licensing.

The types of costs eligible remain unchanged, and the update does not affect accounting for software developed for sale

or licensing.

This ASU will be effective for fiscal years beginning after December 15, 2027, with early adoption permitted.

The Company is currently evaluating the impact of the adoption of this standard and does not expect that it will have a material impact on its disclosures.

Business Combinations

Performance Designed Products LLC Acquisition

On March 13, 2024, the Company acquired all the issued and outstanding equity of PDP for consideration that included cash and common stock.

PDP was a privately held gaming accessories leader that designs and distributes video game accessories, including controllers, headsets, power supplies, cases, and other accessories.

As a result of the acquisition, the Company strengthened its leadership position in hardware gaming accessories and expanded its product portfolio.

Consideration for the transaction consisted of the issuance of 3.45 million shares of Company common stock and approximately $ 78.9 million in cash, subject to customary post-closing adjustments for working capital, closing cash, closing debt and closing third party expenses.

On a fully-diluted basis, issued stock represented approximately 16.4 % of the total issued and outstanding shares of the Company as of the closing date.

The fair value of the 3.45 million common shares issued as part of the consideration was determined on the basis of the closing market price of the Company’s common shares on the acquisition date, or $ 11.03 per share.

As a result, the total final purchase consideration was $ 114.4 million , partially funded by borrowing on the new term loan facility (see Note 7).

Additionally, the Company recognized $ 9.8 million of

acquisition-related costs that were expensed during the nine months ended September 30, 2024, and are included as “Acquisition-related costs” in the unaudited Condensed Consolidated Statement of Operations.

The following table summarizes the allocation of the consideration transferred to the assets acquired and liabilities assumed at the acquisition date:

(In thousands)

Accounts Receivable

Prepaid and Other Current Assets

Property, Plant & Equipment

Intangible Assets

Accounts Payable

Accrued Liabilities

Lease Payable

Deferred Tax Liability

Total identifiable net assets

Total consideration

On January 28, 2025, the Company finalized the post-closing adjustments related to the acquisition of PDP, resulting in a $ 2.5 million payment from the sellers to the Company.

The payment was received by the Company in January 2025 and accounted for as a reduction of purchase consideration in the first quarter of 2025.

The goodwill from the acquisition, which is fully deductible for tax purposes, consists largely of synergies and economies of scale expected from adding the operations of PDP's and the Company’s existing business and supply channels.

PDP's net revenue has been integrated in the Company's unaudited condensed consolidated financial statements in the nine months ended September 30, 2025.

PDP's net revenue included in the Company’s consolidated results wa s $ 26.7 million and $ 54.4 million f or the three and nine months ended September 30, 2024 , respectively.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270):

Narrow-Scope Improvements, which clarifies that all entities issuing interim financial statements under U.S.

GAAP must follow ASC 270.

The update requires interim financial statements to include a full set of financial information (or condensed versions with clarified format), mandates disclosure of material events since year-end, and provides a consolidated list of required interim disclosures.

This ASU will be effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, with early adoption permitted.

The amendments in this update can be applied either prospectively or retrospectively to any or all prior periods presented in the financial statements.

The Company is currently evaluating the impact of the adoption of this standard and does not expect that it will have a material impact on its disclosures.

Fair Value Measurement

7 unchanged sentences

Financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable and the revolving line of credit.

As of September 30, 2025 and December 31, 2024, the Company has not elected the fair value option for any financial assets and liabilities for which such an election would have been permitted.

The following is a summary of the carrying amounts and estimated fair values of the Company's financial instruments as of September 30, 2025 and December 31, 2024:

September 30, 2025

As of March 31, 2026 and December 31, 2025, the Company has not elected the fair value option for any financial assets and liabilities for which such an election would have been permitted.

The following is a summary of the carrying amounts and estimated fair values of the Company's financial instruments, which is classified as Level 1, as of March 31, 2026 and December 31, 2025 (in thousands):

March 31, 2026

December 31, 2025

(in thousands)

Financial Assets and Liabilities:

Cash and cash equivalents

Revolving credit facility

Cash equivalents are stated at amortized cost, which approximates fair value as of the consolidated balance sheet dates, due to the short period of time to maturity;

and accounts receivable and accounts payable are stated at their carrying value, which approximates fair value due to the short time to the expected receipt or payment.

The carrying value of the Credit Facility and Term Loan due 2028 equals fair value as the stated interest rate approximates market rates currently available to the Company.

The carrying value of the Credit Facility approximates fair value, due to the variable rate nature of the debt, as of September 30, 2025 and December 31, 2024 .

Balance Sheet Components

Inventories consist of the following (in thousands):

September 30,

Finished goods

3 unchanged sentences

Property and equipment, net, consists of the following (in thousands):

September 30,

Machinery and equipment

6 unchanged sentences

Total property and equipment, net

As of September 2025, the Company completed a review of its fixed assets ledger and removed certain fully depreciated demonstration and tooling with an aggregate carrying amount of $ 24.4 million .

There were no proceeds recognized upon disposal.

Depreciation and amortization expense on property and equipment was $ 1.1 million and $ 1.2 million for the three months ended September 30, 2025 and 2024, respectively.

Depreciation and amortization expense on property and equipment was $ 3.3 million for both the nine months ended September 30, 2025 and 2024.

Depreciation and amortization expense on property and equipment was $ 0.9 million and $ 1.1 million for the three months ended March 31, 2026 and 2025, respectively.

Other Current Liabilities

Other current liabilities consist of the following (in thousands):

September 30,

Accrued royalty

5 unchanged sentences

Total other current liabilities

Goodwill and Intangible Assets

Goodwill and Other Intangible Assets

The Company conducts its goodwill impairment analysis annually or more frequently if changes in facts and circumstances indicate that it is more likely than not that the fair value of a reporting unit may be less than its carrying value.

There were no impairment indicators and the Company's market capitalization continues to exceed the net carrying value of the business.

As such, the Company did not perform any further qualitative or quantitative testing.

The following table summarizes the changes in the carrying amount of goodwill (in thousands):

Balance as of January 1, 2025

Purchase price adjustment

Balance as of September 30, 2025

As such, the Company did not perform any further quantitative testing.

There was no change in the carrying amount of goodwill (in thousands):

Intangible Assets, net

Acquired identifiable intangible assets, and related accumulated amortization, as of September 30, 2025 and December 31, 2024 consisted of (in thousands):

September 30, 2025

Acquired identifiable intangible assets, and related accumulated amortization, as of March 31, 2026 and December 31, 2025 consist of (in thousands):

March 31, 2026

Customer relationships

7 unchanged sentences

Total Intangible Assets

Amortization expense related to definite lived intangible assets of $ 2.0 million and $ 2.1 million was recognized for the three months ended September 30, 2025 and 2024, respectively.

Amortization expense related to definite lived intangible assets of $ 6.1 million and $ 4.8 million was recognized for the nine months ended September 30, 2025 and 2024, respectively.

As of September 30, 2025, estimated annual amortization expense related to definite lived intangible assets in future periods was as follows (in thousands):

Amortization expense related to definite lived intangible assets of $ 2.0 million was recognized for both the three months ended March 31, 2026 and 2025.

As of March 31, 2026, estimated annual amortization expense related to definite lived intangible assets in future periods was as follows (in thousands):

2026 (remaining nine months)

Credit Facility and Long-Term Debt

The following table presents the amounts of the Revolving Credit Facility and Term Loan (in thousands):

September 30,

Revolving credit facility

Total interest expense, inclusive of amortization of deferred financing costs, on long-term debt obligations was $ 1.8 million and $ 2.7 million for the three months ended September 30, 2025 and 2024, respectively.

Total interest expense, inclusive of amortization of deferred financing costs, on long-term debt obligations was $ 5.9 million and $ 5.4 million for the nine months ended September 30, 2025 and 2024, respectively.

Amortization of deferred financing costs were $ 0.2 million and $ 0.3 million for the three months ended September 30, 2025 and 2024, respectively.

Amortization of deferred financing costs were $ 0.8 million and $ 0.6 million for the nine months ended September 30, 2025 and 2024, respectively.

Total interest expense, inclusive of amortization of deferred financing costs, on current and non-current debt obligations was $ 1.4 million and $ 2.0 million for the three months ended March 31, 2026 and 2025, respectively.

Amortization of deferred financing costs were $ 0.2 million and $ 0.3 million for the three months ended March 31, 2026 and 2025, respectively.

2024 Revolving Credit Facility

On March 5, 2018, Turtle Beach and certain of its subsidiaries entered into an amended and restated loan, guaranty and security agreement (the “Revolving Credit Facility”) with Bank of America, N.A.

(“Bank of America”), as administrative agent, collateral agent and security trustee for the lenders.

The Revolving Credit Facility provided for a line of credit of up to $ 50 million inclusive of a sub-facility limit of $ 10 million for TB Europe, and was secured by substantially all of the Company's assets.

The Revolving Credit Facility was intended for working capital, letters of credit and other corporate purposes.

In 2024, the Company maintained a Revolving Credit Facility (the “2024 Revolving Credit Facility”) with Bank of America, N.A.

(“Bank of America”) that provided up to $ 50.0 million in borrowing capacity, including a $ 10.0 million sub-facility for Turtle Beach Europe Limited, 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 2024 Revolving Credit Facility.

The Fourth Amendment extended the maturity date to March 13, 2027 , incorporated PDP acquisition assets into the U.S.

Borrowing Base (up to $ 15,000,000 or 30 % of the aggregate Revolver Commitments), and updated interest terms.

Loans bore interest at SOFR, U.S.

Base Rate, SONIA or EUIBOR, plus applicable margins, which was between 0.50 % to 2.50 % for base rate loans and UK base rate loans, and 1.75 % to 3.50 % for U.S.

BSBY rate loans, U.S.

BSBY daily floating rate loans and UK alternative currency loans.

In addition, Turtle Beach was required to pay a commitment fee on the unused revolving loan commitment at a rate ranging from 0.375 % to 0.50 % , and letter of credit fees and agent fees.

The Revolving Credit Facility included customary affirmative and negative covenants and required a minimum fixed charge coverage ratio of at least 1.00 when availability thresholds were not met.

These covenants restricted the Company’s ability to incur additional debt, pay dividends, repurchase stock, make certain investments, enter into mergers, and dispose of assets.

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.

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 in its condensed consolidated statements of operations.

On March 13, 2024, Turtle Beach and certain of its subsidiaries entered into a new financing agreement with Blue Torch Finance, LLC, (“Blue Torch”), pursuant to which Blue Torch provided for an aggregate amount of $ 50 million (the “Term Loan Facility”), the proceeds of which were used to (i) fund a portion of the PDP acquisition purchase price;

(ii) repay certain indebtedness of the acquired business;

(iii) to pay fees and expenses related to such transactions and (iv) for general corporate purposes.

The Term Loan Facility amortized in a monthly amount equal to 0.21 % during the first two years and 0.42 % during the third year.

As the prepayment period concluded on March 13, 2025, the Term Loan Facility was no longer subject to the prepayment premium applied during the first year.

The Term Loan Facility was secured by substantially all of the assets of the Company and its subsidiaries which were party to the Term Loan Facility.

The Term Loan Facility (a) had a maturity date of March 13, 2027 ;

(b) bore interest at a rate equal to (i) a base rate plus 7.25 % per annum for Reference Rate Loans and Secured Overnight Financing Rate (“SOFR”) plus 8.25 % per annum for SOFR Loans if the total net leverage ratio was greater than or equal to 2.25 x and (ii) a base rate plus 6.75 % per annum for Reference Rate Loans and SOFR plus 7.75 % per annum for SOFR Loans if the total net leverage ratio is less than 2.25 x;

and (c) was subject to certain affirmative, negative and financial covenants, including a minimum liquidity covenant and a quarterly total net leverage ratio covenant.

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 executed a Fourth Amendment to the facility, extending the maturity to March 13, 2027 , incorporating Performance Designed Products LLC (“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 the 2025 Credit Facility, defined and discussed below, and repaid in full the amount then-outstanding under the 2024 Revolving Credit Facility.

The Company treated the 2025 Credit Facility as a partial extinguishment to the 2024 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 in its condensed consolidated statements of operations.

2024 Term Loan Facility

In March 2024, the Company entered into a $ 50.0 million Term Loan Facility (the “2024 Term Loan Facility”) with Blue Torch Finance, LLC “Blue Torch”) 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 2024 Term Loan Facility was scheduled to mature on March 13, 2027 and included interest rates tied to base rate or Secured Overnight Financing Rate (“SOFR”) benchmarks with leverage‑based pricing tiers, as well as customary affirmative, negative, and financial covenants, including minimum liquidity and quarterly total net leverage requirements.

On August 1, 2025, the Company entered into the 2025 Credit Facility and repaid in full the amount then-outstanding under the 2024 Term Loan Facility 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 (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 million term loan facility and a $ 90 million revolving credit facility with designated sub-facility limits of (i) $ 15 million for the U.K.

2025 Credit Facility

On August 1, 2025, the Company and certain of its subsidiaries entered into a Credit Agreement with Bank of America, as the administrative agent, the swingline lender and the line of credit issuer (the “2025 Credit Facility”).

The 2025 Credit Facility, was to mature on August 1, 2028 and included 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 will bear interest at a rate that varies depending on the type of loan and the Borrower.

The interest rate will be 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 will range 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 September 30, 2025, interest rates for the term loan and revolving credit facilities were 7.66 % and 7.53 % , 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 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 September 30, 2025, the Company was in compliance with all the financial covenants under the Credit Agreement and excess borrowing availability was approximately $ 34.5 million .

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

Actual credit availability under the revolving facility was subject to a borrowing base limitation that was calculated based on a percentage of eligible trade accounts receivable and inventories, the balances of which fluctuate, and was subject to discretionary reserves and revaluation adjustments.

The 2025 Credit Facility may have been used for borrowings as well as for the issuance of letters of credit, repaying existing indebtedness outstanding as of the effective date of the 2025 Credit Facility and ongoing working capital and general corporate purposes as defined by the Credit Agreement governing the 2025 Credit Facility.

The 2025 Credit Facility replaced the Company’s previous debt arrangements at that time.

Borrowings under the 2025 Credit Facility bore interest at a rate that varied depending on the type of loan and the borrower.

The interest rate was calculated using a floating rate plus a margin.

Depending on the type of loan, the floating rate was either the prime rate announced by Bank of America, Term SOFR, Daily Simple SOFR, the Euro Interbank Offered Rate (“EURIBOR”) or the Sterling Overnight Index Average Reference Rate (“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 2025 Credit Facility also provided for an unused line fee, letter of credit fees, and agent fees.

The borrowers were 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 March 31, 2026.

there were no outstanding borrowings under the revolving credit facility provided by the 2025 Credit Facility .

As of March 31, 2026, interest rates for the term loan and revolving credit facilities under the 2025 Credit Facility were 7.02 % and 0.00 % , respectively.

The 2025 Credit Facility required 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 2025 Credit Facility also contained affirmative and negative covenants that, subject to certain exceptions, limited 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 2025 Credit Facility contained 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.

To secure their obligations under the 2025 Credit Facility, 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 part of the 2025 Credit Facility, the Company recorded an aggregate amount of deferred debt financing costs of $ 2.3 million .

On April 30, 2026, the Company repaid in full the amount then-outstanding under the 2025 Credit Facility in connection with the 2026 Term Loan Facility, as defined and described below.

Refer to Note 12 Subsequent Event for further details on the 2026 Term Loan Facility.

Maturities of Term Loan Debt

As of September 30, 2025, maturities of debt are as follows (in thousands):

The following table summarized the maturities of debt, assuming no prepayments or refinancing, are as follows (in thousands):

2026 (remaining nine months)

Current portion

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Although the amount of any liability that could arise with respect to these actions cannot be determined with certainty, in the Company’s opinion, any such liability will not have a material adverse effect on its consolidated financial position, consolidated results of operations or liquidity.

Shareholders Class Action :

On August 5, 2013, VTB Holdings, Inc.

(“VTBH”) and the Company (f/k/a Parametric Sound Corporation) announced that they had entered into the Merger Agreement pursuant to which VTBH would acquire an approximately 80 % ownership interest and existing shareholders would maintain an approximately 20 % ownership interest in the combined company (the “Merger”).

Following the announcement, several shareholders filed class action lawsuits in California and Nevada seeking to enjoin the Merger.

The plaintiffs in each case alleged that members of the Company’s Board of Directors breached their fiduciary duties to the shareholders by agreeing to a merger that allegedly undervalued the Company.

VTBH and the Company were named as defendants in these lawsuits under the theory that they had aided and abetted the Company’s Board of Directors in allegedly violating their fiduciary duties.

The plaintiffs in both cases sought a preliminary injunction seeking to enjoin closing of the Merger, which, by agreement, was heard by the Nevada court with the California plaintiffs invited to participate.

On December 26, 2013, the court in the Nevada case denied the plaintiffs’ motion for a preliminary injunction.

Following the closing of the Merger, the Nevada plaintiffs filed a second amended complaint, which made essentially the same allegations and sought monetary damages as well as an order rescinding the Merger.

The California plaintiffs dismissed their action without prejudice, and sought to intervene in the Nevada action, which was granted.

Subsequent to the intervention, the plaintiffs filed a third amended complaint, which made essentially the same allegations as prior complaints and sought monetary damages.

On June 20, 2014, VTBH and the Company moved to dismiss the action, but that motion was denied on August 28, 2014.

On September 14, 2017, a unanimous en banc panel of the Nevada Supreme Court granted defendants’ petition for writ of mandamus and ordered the trial court to dismiss the complaint but provided a limited

basis upon which plaintiffs could seek to amend their complaint.

Plaintiffs amended their complaint on December 1, 2017 to assert the same claims in a derivative capacity on behalf of the Company, as well as in a direct capacity, against VTBH, Stripes Group, LLC, SG VTB Holdings, LLC, and the former members of the Company’s Board of Directors.

All defendants moved to dismiss this amended complaint on January 2, 2018, and those motions were denied on March 13, 2018.

Defendants petitioned the Nevada Supreme Court to reverse this ruling on April 18, 2018.

On June 15, 2018, the Nevada Supreme Court denied defendants’ writ petition without prejudice.

The district court subsequently entered a pretrial schedule and set trial for November 2019.

On January 18, 2019, the district court certified a class of shareholders of the Company as of January 15, 2014.

On October 11, 2019, the parties notified the district court that they had reached a settlement that would resolve the pending action if ultimately approved by the Court.

On January 13, 2020, the district court preliminarily approved the settlement between the plaintiffs and all defendants.

A final hearing was held on May 18, 2020, wherein the Court approved the settlement and entered final judgment.

On May 22, 2020, PAMTP LLC, which purports to hold the claims of eight shareholders who opted out of the class settlement described above, brought suit against the Company, the Company’s former Chief Executive Officer, Juergen Stark, Stripes Group, LLC, SG VTB Holdings, LLC, Kenneth Fox, and former members of the Company’s Board of Directors in Nevada state court.

This opt-out action asserts the same direct claims that were asserted by the class of shareholders described above.

The defendants filed two motions to dismiss this complaint, which were heard on August 10, 2020.

The Court denied those motions by order of August 20, 2020.

The case was tried in August 2021 and all remaining defendants, including the Company, prevailed on all counts with final judgment entered in their favor on September 3, 2021.

Plaintiff appealed that judgment.

On June 6, 2024, the Nevada Supreme Court affirmed the judgment in Defendants’ favor and subsequently denied Plaintiff’s petition for rehearing on July 22, 2024.

Insolvency Dispute in Germany:

On February 15, 2024, TBC Holding Company LLC (“TBCH”), a wholly owned subsidiary of Turtle Beach Corporation, was served with a lawsuit that was brought to the German Higher Regional Court in Stade by the insolvency administrator of KJE Europe GmbH (“KJE”) , a company registered and existing under the laws of Germany.

In his complaint, the insolvency administrator claimed that TBCH was liable to reimburse any payments received by the TBCH under a certain settlement agreement with KJE dated June 30, 2020.

On February 28, 2025, the Court ruled in favor of the insolvency administrator holding that TBCH was liable for EUR 1.4 million plus interest and costs.

TBCH appealed the judgment and the parties subsequently negotiated a settlement agreement that became effective following the approval of the creditors' assembly of KJE on August 5, 2025.

Pursuant to the settlement agreement, TBCH made a payment of EUR 0.7 million to KJE's insolvency estate and withdrew its appeal in exchange for a full and final release of all claims the insolvency administrator may have against TBCH, with a portion of the payment amount being allowed as a claim in KJE's insolvency proceedings .

Intellectual Property Dispute :

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Nyko has responded to PDP’s complaint and filed counterclaims for patent infringement by the Ultra Slim.

On June 12, 2025, Nyko filed a lawsuit in the Southern District of California asserting that PDP and Turtle Beach Corporation infringed the same four patents at issue in the declaratory judgment action filed by PDP.

On July 8, 2025, PDP and Turtle Beach moved to dismiss Nyko’s complaint and that motion is pending.

On June 12, 2025, Nyko filed a lawsuit in the Southern District of California asserting that PDP and Turtle Beach Corporation (“TBC”) infringed the same four patents at issue in the declaratory judgment action filed by PDP.

On July 8, 2025, PDP and TBC moved to dismiss Nyko’s complaint.

On March 25, 2026, the Court partially granted that motion, dismissed TBC, and consolidated the two actions.

On April 16, 2026, Nyko filed a First Amended Complaint that again alleged infringement by TBC and PDP.

PDP and TBC’s responses to that Complaint have not yet been filed.

On September 30, 2025, PDP moved for judgment on the pleadings on multiple aspects of Nyko’s counterclaims and that motion is pending.

Intellectual Property Dispute:

On July 18, 2025, Gametronics LLC filed a patent infringement lawsuit against Voyetra Turtle Beach, Inc., (“VTB”) a wholly owned subsidiary of Turtle Beach Corporation, in the United States District Court for the District of Delaware, asserting infringement of three patents by the Victrix Pro BFG Wireless Controller.

VTB and Gametronics have agreed to resolve the dispute.

Intellectual Property Dispute:

On October 3, 2025, Robert Lyden, an individual, filed a patent infringement lawsuit against PDP, VTB, and Turtle Beach Corporation ("TBC”) in the United States District Court for the District of Minnesota, asserting infringement of one patent by the Victrix Pro BFG Wireless Controller and Victrix Gambit Wireless Controller.

PDP, VTB, and TBC are investigating Mr.

Lyden’s allegations.

On October 3, 2025, Robert Lyden, an individual, filed a patent infringement lawsuit against PDP, Voyetra Turtle Beach, Inc.

(“VTB”), and the Company in the United States District Court for the District of Minnesota, asserting infringement of one patent by the Victrix Pro BFG Wireless Controller and Victrix Gambit Wireless Controller.

On December 16, 2025, PDP, VTB and the Company moved to dismiss the complaint for improper venue.

On March 19, 2026, the Court granted that motion and transferred the case to the United States District Court for the Southern District of California where it is now pending.

The Company will continue to vigorously defend itself in the foregoing unresolved matters.

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Accordingly, the Company cannot predict the outcome of these matters.

The Company has not recorded any accrual at September 30, 2025 for contingent losses associated with these matters unless otherwise disclosed above based on its belief that losses, while possible, are not probable.

The Company has not recorded any accrual at March 31, 2026 for contingent losses associated with these matters unless otherwise disclosed above based on its belief that losses, while possible, are not probable.

Further, any possible range of loss cannot be reasonably estimated at this time.

The unfavorable resolution of these matters could have a material adverse effect on the Company’s business, results of operations, financial condition, or cash flows.

The unfavorable resolution of these

matters could have a material adverse effect on the Company’s business, results of operations, financial condition, or cash flows.

The Company is engaged in other legal actions, not described above, arising in the ordinary course of its business and, while there can be no assurance, believes that the ultimate outcome of these other legal actions will not have a material adverse effect on its business, results of operations, financial condition, or cash flows.

5 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Warranty, beginning of period

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damages and expenses, including reasonable attorneys’ fees.

As of September 30, 2025, no material amounts have been accrued for indemnification provisions.

As of March 31, 2026, no material amounts have been accrued for indemnification provisions.

The Company does not believe, based on historical experience and information currently available, that it is probable that any material amounts will be required to be paid under its indemnification arrangements.

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the facts and circumstances involved in any situation that might arise are variable.

The following table presents the Company’s income tax expense (in thousands) and effective income tax rate:

The following table presents the Company’s income tax benefit and effective income tax rate (in thousands, except percentages):

Three Months Ended

Nine Months Ended

September 30,

Income tax expense (benefit)

Income tax benefit

Effective income tax rate

The effective tax rate for the three and nine months ended September 30, 2025 was primarily impacted by the change in U.S.

valuation allowance, foreign taxes, and Federal and State current tax.

The effective tax rate for the three and nine months ended September 30, 2024 was primarily impacted by the release of U.S.

valuation allowance for PDP acquired net deferred tax liabilities.

A nominal provision for income taxes was recorded for the three months ended March 31, 2026, as there were no material changes in the Company’s income tax positions, estimates, or circumstances that would require recognition of a current or deferred tax expense or benefit.

The Company’s income tax positions, including the assessment of valuation allowances and uncertain tax positions, remain consistent with those disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025.

The Company continues to evaluate the realizability of deferred tax assets and the adequacy of valuation allowances, and will update its estimates as appropriate in future periods.

The Company recognizes only those tax positions that meet the more-likely-than-not recognition threshold and establishes tax reserves for uncertain tax positions that do not meet this threshold.

Interest and penalties associated with income tax matters are included in the provision for income taxes in the condensed consolidated statements of operations.

As of September 30, 2025, the Company had uncertain tax positions of $ 2.5 million , inclusive of $ 0.6 million of interest and penalties.

As of March 31, 2026, the Company had uncertain tax positions of $ 1.8 million , inclusive of $ 0.4 million of interest and penalties.

As required by the authoritative guidance on accounting for income taxes, the Company evaluates the realizability of deferred tax assets on a jurisdictional basis at each reporting date.

Accounting for income taxes requires that a valuation allowance be established when it is more likely than not that all or a portion of the deferred taxes will not be realized.

Accounting for income taxes requires that a valuation allowance be established when it is more likely

than not that all or a portion of the deferred taxes will not be realized.

The Company considers all positive and negative evidence in determining if, based on the weight of such evidence, a valuation allowance is required.

In circumstances where there is sufficient negative evidence indicating that the deferred tax assets are not more likely than not realizable, the Company establishes a valuation allowance.

Due to the significant 2022 pre-tax loss, coupled with cumulative book losses projected in early future years, the Company recorded a valuation allowance on its net U.S.

Due to the significant 2022 pre-tax loss, coupled with cumulative book losses, the Company recorded a valuation allowance on its net U.S.

deferred tax assets as of December 31, 2022.

The Company continues to maintain this valuation allowance for the three and nine months ended September 30, 2025.

For the nine months ended September 30, 2024 , the Company recorded a $ 6.2 million tax benefit related to the PDP acquisition, including a reversal of $ 6.9 million of valuation allowance for PDP acquired net deferred tax liabilities.

The Company continues to maintain this valuation allowance for the three months ended March 31, 2026.

The Company will continue to evaluate all available positive and negative evidence in future periods to assess the realizability of its deferred tax assets and the need for a valuation allowance.

Should facts and circumstances change, the Company may adjust its valuation allowance and record income tax expense or benefit in future periods.

The Company is subject to income taxes domestically and in various foreign jurisdictions.

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The federal tax years open under the statute of limitations are 2022 through 2024, and the state tax years open under the statute of limitations are 2022 through 2024, and the foreign tax years open under the statute of limitations are 2022 through 2024.

On July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBBA”).

The OBBBA makes permanent key elements of the Tax Cuts and Jobs Act, including 100 % bonus depreciation, domestic research cost expensing, and the business interest expense limitation.

ASC 740, “Income Taxes”, requires the tax effects of changes in tax rates and tax law be recognized in the period in which the legislation is enacted.

The Company completed its initial assessment of OBBBA for the quarter ended September 30, 2025.

For the provisions effective in 2025, there was no material impact to the Company’s effective tax rate for the quarter ended September 30, 2025.

The Company will continue to evaluate the impact of the new legislation on its condensed consolidated financial statements as additional guidance is issued .

Equity Incentive Plans and Stock-Based Compensation

Equity and Stock-Based Compensation

Stock Repurchase Activity

3 unchanged sentences

The share repurchase program is scheduled to expire on May 6, 2027 .

The Company repurchased 0.7 million shares of its common stock both in the three months ended September 30, 2025 and 2024, respectively, for a total cost of $ 10.3 million and $ 10.1 million , respectively.

The Company repurchased 1.2 million and 1.6 million shares of its common stock during the nine months ended September 30, 2025 and 2024, respectively, for a total cost of $ 17.0 million and $ 25.3 million , respectively.

On August 14, 2025, the Company entered into a stock purchase agreement regarding the purchase and sale of shares of its common stock beneficially owned by DC VGA LLC (“Diversis”), in a private transaction.

The Company agreed to purchase 694,926 shares at a price of $ 14.41 per share of common stock for a total of $ 10.0 million .

In addition, Diversis agreed to sell 693,962 shares to TDG CP LLC, a Delaware limited liability company (“Donerail”) at a price of $ 14.41 per share of common stock for a total of $ 10.0 million .

The purchase price per share of common stock for each transaction represents the average of the volume weighted average price of the common stock of the thirty days prior to and including August 14, 2025.

Donerail is an entity affiliated with William Wyatt, a member of the Company's Board and Dave Muscatel, who was a member of the Board at the time of the transaction, is affiliated with Diversis.

The Audit Committee of the Board, comprised solely of independent directors not affiliated with Diversis and Donerail, approved the transactions.

The agreement contains customary representations, warranties and covenants of the parties.

The Company repurchased 161,815 and 121,321 shares of its common stock in the three months ended March 31, 2026 and 2025, respectively, for a total cost of $ 2.2 million and $ 1.8 million , respectively.

Stock-Based Compensation

Total estimated stock-based compensation expense for employees and non-employees, related to all of the Company’s stock-based awards, was as follows (in thousands):

Total stock-based compensation expense for employees and non-employees, related to all of the Company’s stock-based awards, was as follows (in thousands):

Three Months Ended

Nine Months Ended

September 30,

Cost of revenue

3 unchanged sentences

Total stock-based compensation

The following table presents the stock activity and the total number of shares available for grant as of September 30, 2025:

The following table summarizes the total unrecognized stock-based compensation expense and remaining recognition period by Restricted Stock Units ( “RSUs”) and Performance Stock Units (“PSUs”) (in thousands, except number of years):

March 31, 2026

Unrecognized Expense

Remaining weighted average period (In years)

Total unrecognized stock-based compensation expense

The following table presents the stock activity and the total number of shares available for grant as of March 31, 2026:

Number of Shares Available

Balance at December 31, 2025

Plan Amendment

Options Cancelled

Restricted Stock Cancelled

Restricted Stock Granted

Performance Shares Issued

Balance as of September 30, 2025

Balance as of March 31, 2026

Stock Option Activity

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Options Forfeited

Outstanding at September 30, 2025

Vested and expected to vest at September 30, 2025

Exercisable at September 30, 2025

Stock options are time-based and the majority are exercisable within 10 years of the date of grant, but only to the extent they have vested.

The options generally vest as specified in the option agreements subject to acceleration in certain circumstances.

In the event participants in the plan cease to be employed or engaged by the Company, all vested options would be forfeited if they are not exercised within 90 days.

Forfeitures on equity grants are estimated at 10 % for non-executives and 0 % for senior management based on evaluation of historical and expected future turnover.

Stock-based compensation expense was recorded net of estimated forfeitures, such that expense was recorded only for those stock-based awards expected to vest.

The Company reviews this assumption periodically and will adjust it if it is not representative of future forfeiture data and trends within employee types (senior management vs.

non-executive).

Outstanding at March 31, 2026

Vested and expected to vest at March 31, 2026

Exercisable at March 31, 2026

Stock options generally vested in accordance with the terms of the applicable award agreements and are exercisable for up to ten years once vested.

Vested options must be exercised within 90 days following a participant’s termination of service or they are forfeited.

There have been no options granted since the fiscal year 2021.

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Nonvested restricted stock at December 31, 2025

Shares forfeited

Nonvested restricted stock at September 30, 2025

As of September 30, 2025, total unrecognized compensation cost related to the nonvested restricted stock granted was $ 7.9 million , which is expected to be recognized over a remaining weighted average vesting period of 2.5 years.

As of September 30, 2025 , the Company had 550,000 wholly funded warrants related to a series of transactions pursuant to which the previously outstanding Series B Preferred Stock were retired.

The warrants do not expire.

Net Income (Loss) Per Share

The following table sets forth the computation of basic and diluted net income (loss) per share of common stock attributable to common stockholders (in thousands):

Nonvested restricted stock at March 31, 2026

Performance-Based Restricted Share Activity

Outstanding at December 31, 2025

Outstanding at March 31, 2026

The outstanding PSUs as of March 31, 2026 were comprised of 17,886 , 31,182 and 110,278 performance shares that were granted on April 1, 2023, 2024 and 2025, respectively.

With respect to the PSUs that were granted on April 1, 2025, the vesting is conditional upon the achievement of certain stock price appreciation targets between May 1, 2025 and May 1, 2026, internal financial targets for the year ended December 31, 2025, and continued service over a three-year service period.

The number of units that could be earned ranged from 0 % to 175 % of the target shares depending on the achievement of these targets.

The number of PSUs to be earned is subject to approval by the Board after the completion of the performance period based on the Company’s 2025 financial performance and stock price performance over the performance period 33 % of the earned PSUs granted in 2025 will vest in the second quarter of 2026, with the remaining 67 % vesting annually over the subsequent two years, subject to continued service.

In January 2026, the holders exercised 550,000 wholly-funded warrants to an equal number of shares of the Company's common stock, which related to a series of transactions pursuant to the retirement of Series B Preferred Stock in 2018.

Upon exercise, no warrants remained outstanding.

Net Loss Per Share

The following table sets forth the computation of basic and diluted net loss per share of common stock attributable to common stockholders (in thousands, except per-share data):

Three Months Ended

Nine Months Ended

September 30,

Net income (loss)

Weighted average common shares outstanding — Basic

Plus incremental shares from assumed conversions:

Effect of dilutive securities

Weighted average common shares outstanding — Diluted

Net income (loss) per share:

Net loss per share:

Incremental shares from stock options and restricted stock are computed by the treasury stock method.

The treasury stock method calculates dilution assuming the exercise of all in-the-money options and vesting of restricted stock, reduced by the repurchase of shares with the proceeds from the assumed exercises and unrecognized compensation expense for outstanding awards and the estimated tax benefit of the assumed exercises.

The weighted average shares listed below were not included in the computation of diluted earnings per common share because to do so would have been anti-dilutive for the periods presented or were otherwise excluded under the treasury stock method (in thousands):

Three Months Ended

Nine Months Ended

September 30,

Stock options

2 unchanged sentences

The Company operates in a single reportable segment.

The entire business is managed by a single management team whose chief operating decision maker is the Chief Executive Officer , who evaluates segment performance based on net income (loss) and operating income (loss) for purposes of allocating resources and evaluating financial performance.

The entire business is managed by a single management team whose chief operating decision maker is the Chief Executive Officer , who evaluates segment performance based on net (loss) income and operating (loss) income for purposes of allocating resources and evaluating financial performance.

The following table represents total net revenue based on where customers are physically located (in thousands):

Three Months Ended

Nine Months Ended

September 30,

Europe and Middle East

2 unchanged sentences

Three Months Ended

Nine Months Ended

September 30,

Significant segment expenses:

3 unchanged sentences

Other costs (recovery) (1)

Operating income (loss)

Operating (loss) income

Interest expense, net

Other (income) expense, net

Income tax expense (benefit)

Net income (loss)

(1) Other costs (recovery) in the three and nine months ended September 30, 2025 relates to insurance recovery and acquisition-related costs.

Other costs (recovery) in the three and nine months ended September 30, 2024 include acquisition-related costs.

Acquisition-related costs include costs incurred in connection with the PDP acquisition, warehouse lease impairment, including professional fees such as legal and accounting along with other certain integration-related costs.

Income tax benefit

(1) Other costs (recovery) in the three months ended March 31, 2025 include acquisition-related costs and an insurance recovery.

Subsequent Event

2026 Term Loan Facility

On April 30, 2026, the Company entered into a new financing agreement (the “2026 Term Loan Financing Agreement”) by and among the Company, VTB, as borrower, each subsidiary of the Company listed as a guarantor on the signature pages thereto, the lenders from time to time party thereto, and Blue Torch, as administrative agent and collateral agent, pursuant to which Blue Torch made a loan to VTB in the aggregate amount of $ 85.0 million (the “2026 Term Loan Facility”), the proceeds of which were used to or will be used to (a) refinance existing indebtedness of the Company and its subsidiaries;

(b) for general corporate purposes;

and (c) to pay fees and expenses related to the loan transactions.

The 2026 Term Loan Facility will amortize in a quarterly amount equal to 1.25 % of the aggregate original principal amount of the 2026 Term Loan Facility and may be prepaid at any time subject to a prepayment premium during the first year of the interest payments payable during the first year plus 3.00 %.

The 2026 Term Loan Facility is secured by substantially all of the assets of the Company and its subsidiaries which are party to the 2026 Term Loan Facility.

The 2026 Term Loan Facility (a) will mature on April 30, 2029 ;

(b) will bear interest at a rate equal to (i) a base rate plus 6.50 % per annum for Reference Rate Loans and SOFR plus 7.50 % per annum for SOFR Loans if the total leverage ratio is greater than or equal to 3.00 x, (ii) a base rate plus 6.25 % per annum for Reference Rate Loans and SOFR plus 7.25 % per annum for SOFR Loans if the total leverage ratio is greater than or equal to 2.25 x but less than 3.00 x, and (iii) a base rate plus 5.75 % per annum for Reference Rate Loans and SOFR plus 6.75 % per annum for SOFR Loans if the total leverage ratio is less than 2.25 x;

and (c) is subject to certain affirmative, negative and financial covenants, including a minimum liquidity covenant and a quarterly total net leverage ratio covenant.

2026 Revolving Credit Facility

On April 30, 2026, the Company entered into a Loan, Guaranty and Security Agreement (the “2026 Revolving Credit Agreement”), by and among the Company, VTB, TBC Holding Company LLC, PDP, Turtle Beach Europe Limited, VTB Holdings, Inc., Tide Acquisition Sub II, LLC, the financial institutions party thereto and Bank of America, as agent, collateral agent and security trustee for the lenders to the credit facility (the “2026 Revolving Credit Facility”).

The 2026 Revolving Credit Agreement provides for, among other things:

(a) subject in each case to the applicable borrowing base, a US commitment in an amount equal to $ 50.0 million or $ 65.0 million based on the season and a UK commitment equal to $ 10.0 million or $ 15.0 million based on the season;

(b) a maturity date of April 30, 2029 ;

(c) interest rate and margin terms such that the loans will bear interest at a rate equal to (1) SOFR, (2) the US Base Rate, (3) SONIA for loans denominated in Sterling, and (4) EURIBOR for loans denominated in Euros, plus in each case, an applicable margin, which is between 0.50 % and 1.00 % for US Base Rate Loans and 1.50 % and 2.00 % for US Term SOFR Loans, UK SONIA Rate Loans and UK EURIBOR Loans;

and (d) certain affirmative and negative covenants and a springing (subject to certain triggers) fixed charge coverage ratio.

The obligations under the 2026 Revolving Credit Agreement are secured by substantially all of the assets of the Company and its subsidiaries which are party to the 2026 Revolving Credit Agreement.

The respective priorities of the security interests securing the 2026 Term Loan Financing Agreement and the 2026 Revolving Credit Agreement are governed by an intercreditor agreement, dated as of April 30, 2026, between the Blue Torch and Bank of America.

The foregoing descriptions of the 2026 Term Loan Financing Agreement and 2026 Revolving Credit Agreement do not purport to be complete and are qualified in their entirety by reference to the full text of the 2026 Term Loan Financing Agreement and 2026 Revolving Credit Agreement, copies of which are filed as Exhibits 10.1 and 10.2, respectively, with the Company’s Current Report on Form 8-K filed with the SEC on May 4, 2026.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements