Turtle Beach Corp
For the period ended Sep 30, 2026. Filed Nov 5, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 5, 2026
TBCH$15.19-8.8%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-06.
0001193125-26-338384
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-05.
0001193125-26-450111
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 91 previous paragraphs and 90 current paragraphs.
56 unchanged; 31 reworded; 3 added; 2 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 5 previous and 5 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (3)
Current report
Net revenue for the three months ended September 30, 2026 was $84.7 million, a $4.2 million or 5.3% increase from $80.5 million for the three months ended September 30, 2025. The increase was primarily attributable to higher unit volumes and an increase in average selling price, partially offset by promotional spend.
Current report
Interest expense decreased by $1.0 million, or 27.2% to $2.7 million for the three months ended September 30, 2026 from $3.7 million for the three months ended September 30, 2025, and decreased by $0.03 million, or 0.4%, to $7.7 million for the nine months ended September 30, 2026 from $7.8 million for the nine months ended September 30, 2025. The decrease during the three months ended September 30, 2026 was primarily attributable to the absence of a $1.9 million loss on extinguishment of debt recognized in the three months ended September 30, 2025, partially offset by a $0.9 million increase in contractual interest expense primarily associated with 2026 Term Loan facility. Interest expense remained relatively consistent for the nine months ended September 30, 2026. A $0.5 million increase in contractual interest expense primarily associated with the 2026 Term Loan facility, was partially offset by $0.4 million of interest income.
Current report
Cash provided by operating activities was $29.5 million for the nine months ended September 30, 2026, an increase of $7.3 million from $22.1 million of cash provided by operating activities for the nine months ended September 30, 2025. The $7.3 million increase was primarily driven by $26.2 million of favorable working capital changes, including favorable changes of $16.0 million in accounts payable, $15.6 million in accrued liabilities and $14.1 million in inventories. These benefits were partially offset by a $16.3 million increase in net loss, a $2.6 million decrease in non-cash adjustments and a $20.8 million unfavorable change in accounts receivable. Operating cash flows for the current period also benefited from the receipt of $8.2 million of tariff refunds.
Removed paragraphs (2)
Previous report
Interest expense increased by $1.7 million, or 85.0% to $3.7 million for three months ended June 30, 2026, from $2.0 million or for the three months ended June 30, 2025, and increased by $0.9 million, or 22.0%, to $5.0 million for the six months ended June 30, 2026 from $4.1 million for the six months ended June 30, 2025. The increases were primarily attributable to a $1.8 million loss on extinguishment of debt recognized in connection with the April 2026 refinancing. This increase was partially offset by lower recurring interest expense, primarily reflecting lower average outstanding borrowings following repayments of the Company’s prior credit facilities, partially offset by interest incurred on the 2026 Term Loan Facility, which had an interest rate of 11.17% as of June 30, 2026, and amortization of debt discount and financing costs.
Previous report
Cash provided by operating activities was $35.9 million for the six months ended June 30, 2026, a decrease of $1.4 million from $37.3 million of cash provided by operating activities for the six months ended June 30, 2025. The decrease was primarily attributable to an $18.9 million increase in net loss, partially offset by favorable working capital changes of $17.2 million. Working capital changes provided $44.0 million of cash during the six months ended June 30, 2026, compared with $26.8 million during the prior six-month period, an improvement of $17.2 million. The year-over-year improvement in working capital was primarily driven by an $18.7 million favorable change in inventories, a $9.3 million favorable change in other liabilities, a $3.5 million favorable change in accounts payable, a $2.6 million favorable change in income taxes payable, and a $1.3 million favorable change in prepaid expenses and other assets, partially offset by an $18.2 million unfavorable change in accounts receivable. The current six-month period operating cash flows also reflected a $3.4 million non-cash adjustment for the change in sales returns reserve and the receipt of $8.2 million of tariff refunds, of which $4.3 million reduced cost of revenue, $3.6 million reduced inventory, and $0.3 million was recognized in other expense (income), net.
Reworded paragraphs (31)
Previous wording
This Quarterly Report on Form 10-Q contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this report are indicated by words such as “anticipates,” “expects,” “believes,” “intends,” “plans,” “estimates,” “projects,” “strategies” and similar expressions or negatives thereof. Caution should be taken not to place undue reliance on any such forward-looking statements because they involve risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied in, or reasonably inferred from, such statements. Forward-looking statements are based on the beliefs, as well as assumptions made by, and information currently available to, the Company's management and are made only as of the date hereof. The Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the federal securities laws. In addition, forward-looking statements are subject to certain risks and uncertainties, including those described elsewhere in this Quarterly Report on Form 10-Q that could cause actual results to differ materially from the Company's historical experience and its present expectations or projections.
Current wording
This Quarterly Report on Form 10-Q contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements in this report are indicated by words such as “anticipates,” “expects,” “believes,” “intends,” “plans,” “estimates,” “projects,” “strategies” and similar expressions or negatives thereof. Caution should be taken not to place undue reliance on any such forward-looking statements because they involve risks, uncertainties and other factors that could cause actual results to differ materially from those expressed or implied in, or reasonably inferred from, such statements. Forward-looking statements are based on the beliefs, as well as assumptions made by, and information currently available to, the Company's management and are made only as of the date hereof. The Company undertakes no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the federal securities laws. In addition, forward-looking statements are subject to certain risks and uncertainties, including those described in Part I, Item 1A, “Risk Factors” of the Annual Report and elsewhere in this Quarterly Report on Form 10-Q that could cause actual results to differ materially from the Company's historical experience and its present expectations or projections.
Previous wording
We operate in a nearly $200.0 billion global games and accessories market, according to Newzoo Peripheral Market Forecast. The global gaming audience now exceeds global cinema and music markets with over 3.5 billion active gamers worldwide. Gaming peripherals, such as headsets, controllers, keyboards, mice, microphones, and flight and racing simulation controls are estimated to be an $11.2 billion business globally.
Current wording
We operate in a nearly $200.0 billion global games and accessories market, according to the Newzoo Peripheral Market Forecast. The global gaming audience now exceeds global cinema and music markets with over 3.5 billion active gamers worldwide. Gaming peripherals, such as headsets, controllers, keyboards, mice, microphones, and flight and racing simulation controls are estimated to be an $11.2 billion business globally.
Previous wording
During the three months ended June 30, 2026, we received tariff refunds totaling $8.2 million from the CBP related to previously paid import duties, all of which were recorded as an increase to cash. Of the total amount received, $4.3 million related to tariffs recognized in cost of revenue during the prior fiscal year. Because our right to the refund was established and the refund was received during the current quarter, the amount was recognized as a reduction of cost of goods revenue during the three months ended June 30, 2026. An additional $3.6 million related to tariffs previously capitalized as a component of inventory and was recognized as a reduction to inventory. The remaining amount, representing statutory interest on the refunded duties of $0.3 million, was recognized in Other expense (income), net in the accompanying condensed consolidated statements of operations.
Current wording
During the nine months ended September 30, 2026, we received tariff refunds totaling $8.2 million from the U.S. Customs and Border Protection related to previously paid import duties, all of which were recorded as an increase to cash. Of the total amount received, $4.3 million related to tariffs recognized in cost of revenue. Because our right to the refund was established and the refund was received during the second quarter of fiscal year 2026, the amount was recognized as a reduction of cost of revenue during the nine months ended September 30, 2026. We had previously capitalized $3.6 million of tariffs as a component of inventory. Upon receipt of the refund, we recognized a corresponding $3.6 million reduction in the carrying value of inventory. The remaining amount, representing statutory interest on the refunded duties of $0.3 million, was recognized in Other expense (income), net in the accompanying condensed consolidated statements of operations during the nine months ended September 30, 2026.
Previous wording
For the three months ended June 30, 2026, gross margin increased to 38.8% from 32.2% in the comparable prior year period. The increase was primarily due to a $4.3 million reduction to cost of revenue related to a tariff refund recognized during the three months ended June 30, 2026, of which $3.1 million related to cost of revenue recognized in 2025. This benefit was partially offset by higher product costs and the effect of product mix compared with the prior three-month period.
Current wording
For the three months ended September 30, 2026, gross margin decreased to 34.9% from 37.4% in the comparable prior year period. The decrease was primarily due to higher promotional spend and tariffs during the three months ended September 30, 2026. This decrease was partially offset by lower product and operating costs compared with the prior three-month period.
Previous wording
Comparison of the Six Months Ended June 30, 2026 to the Six Months Ended June 30, 2025
Current wording
Comparison of the Nine Months Ended September 30, 2026 to the Nine Months Ended September 30, 2025
Previous wording
Net revenue for the six months ended June 30, 2026 was $98.5 million, a decrease of $22.2 million, or 18.4%, from $120.7 million. The decrease was primarily attributable to softer market demand for gaming accessories, which was driven in part by macroeconomic challenges affecting consumer spending.
Current wording
Net revenue for the nine months ended September 30, 2026 was $183.2 million, a decrease of $17.9 million, or 9%, from $201.1 million. The decrease was primarily attributable to softer market demand for gaming accessories, which was driven in part by macroeconomic challenges affecting consumer spending.
Previous wording
For the six months ended June 30, 2026, gross margin slightly decreased to 33.6% from 34.5% in the comparable prior year period. Gross profit for the six months ended June 30, 2026 included a $4.3 million reduction to cost of revenue related to the tariff refund received during the period, of which $3.1 million related to cost of revenue recognized in 2025. The year-over-year decrease in gross margin was primarily due to higher costs from certain product mix and transition-related costs associated with the relocation of the Company’s principal third-party logistics provider, partially offset by the tariff refund benefit.
Current wording
For the nine months ended September 30, 2026, gross margin slightly decreased to 34.2% from 35.6% in the comparable prior year period. Gross profit for the nine months ended September 30, 2026 included a $4.3 million reduction to cost of revenue related to the tariff refund received during the period, of which $3.1 million related to cost of revenue recognized in 2025. The year-over-year decrease in gross margin was primarily due to higher costs from certain product mix and transition-related costs associated with the relocation of our principal third-party logistics provider, partially offset by the tariff refund benefit.
Previous wording
Selling and marketing expenses increased by $2.0 million, or 15.5% for the three months ended June 30, 2026 as compared to the same period in the prior year primarily due to higher marketing initiatives and strategic brand positioning.
Current wording
Selling and marketing expenses increased by $2.5 million, or 19.8%, for the three months ended September 30, 2026 as compared to the same period in the prior year primarily due to higher marketing initiatives and strategic brand positioning.
Previous wording
Selling and marketing expenses increased by $1.8 million, or 7.1% for the six months ended June 30, 2026 as compared to the same period in the prior year primarily due to higher marketing initiatives and strategic brand positioning.
Current wording
Selling and marketing expenses increased by $4.3 million, or 11.3%, for the nine months ended September 30, 2026 as compared to the same period in the prior year primarily due to higher marketing initiatives and strategic brand positioning, partially offset by lower employee-related costs.
Previous wording
Research and development costs increased by $0.3 million or 7.6% for the three months ended June 30, 2026 as compared to the same period in the prior year due to engineering costs related to new products.
Current wording
Research and development costs increased by $0.4 million or 9.4%, for the three months ended September 30, 2026 as compared to the same period in the prior year due to engineering costs related to new products, partially offset by lower legal fees.
Previous wording
Research and development costs increased by $0.9 million or 10.9% for the six months ended June 30, 2026 as compared to the same period in the prior year due to engineering costs related to new products.
Current wording
Research and development costs increased by $1.3 million or 10.4%, for the nine months ended September 30, 2026 as compared to the same period in the prior year due to engineering costs related to new products, partially offset by lower legal fees.
Previous wording
General and administrative expenses decreased by $2.0 million or 26.6% for the three months ended June 30, 2026 as compared to the same period in the prior year primarily due to the reduction in employee-related expense.
Current wording
General and administrative expenses decreased by $2.2 million or 29.2%, for the three months ended September 30, 2026 as compared to the same period in the prior year primarily due to the reduction in employee-related expense, partially offset by technology-related cost.
Previous wording
General and administrative expenses decreased by $1.6 million or 10.6% for the six months ended June 30, 2026 as compared to the same period in the prior year primarily due to the reduction in employee-related expense.
Current wording
General and administrative expenses decreased by $3.5 million or 15.0%, for the nine months ended September 30, 2026 as compared to the same period in the prior year primarily due to the reduction in employee-related expense, partially offset by legal fees.
Previous wording
Insurance recovery for the three and six months ended June 30, 2025 totaled $6.0 million and $9.4 million, respectively, and relates to the receipt of certain insurance claims from the previously disclosed loss of inventory while in transit that occurred in the fourth quarter of 2024.
Current wording
Insurance recovery for the three and nine months ended September 30, 2026 was $1.2 million and $1.6 million, respectively. Insurance recovery for the nine months ended September 30, 2025 was $9.4 million, and relates to the receipt of certain insurance claims from the previously disclosed loss of inventory while in transit that occurred in the fourth quarter of 2024. There was no insurance recovery for the three months ended September 30, 2025.
Previous wording
Acquisition-related costs include one-time costs incurred in connection with the PDP acquisition including professional fees such as legal and accounting along with other certain integration related costs.
Current wording
Acquisition-related costs include one-time costs incurred in connection with the PDP acquisition including professional fees such as legal and accounting along with other certain other integration-related costs.
Previous wording
Income tax expense for the three months ended June 30, 2026 was $0.5 million at an effective tax rate of (7.7%) compared to income tax benefit of $0.2 million for the three months ended June 30, 2025 at an effective tax rate of 7.7%. The effective tax rate for the three months ended June 30, 2026 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 months ended June 30, 2025 was primarily impacted by the change in U.S. valuation allowance and foreign taxes.
Current wording
Income tax benefit for the three months ended September 30, 2026 was $1.4 million at an effective tax rate of (47.9%) compared to income tax expense of $0.3 million for the three months ended September 30, 2025 at an effective tax rate of 12.9%. The effective tax rate for the three months ended September 30, 2026 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 months ended September 30, 2025 was primarily impacted by the change in U.S. valuation allowance and foreign taxes.
Previous wording
Income tax expense for the six months ended June 30, 2026 was $0.4 million at an effective tax rate of (1.8%) compared to income tax benefit of $0.4 million for the six months ended June 30, 2025 at an effective tax rate of 9.0%. The effective tax rate for the six months ended June 30, 2026 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 six months ended June 30, 2025 was primarily impacted by the change in U.S. valuation allowance, foreign taxes and Federal and State current tax.
Current wording
Income tax benefit for the nine months ended September 30, 2026 was $1.0 million at an effective tax rate of 5.3% compared to income tax benefit of $0.1 million for the nine months ended September 30, 2025 at an effective tax rate of 5.1%. The effective tax rate for the nine months ended September 30, 2026 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 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.
Previous wording
Adjusted EBITDA (and a reconciliation to Net loss, the nearest GAAP financial measure) for the three and six months ended June 30, 2026 and June 30, 2025, are as follows (in thousands):
Current wording
Adjusted EBITDA (and a reconciliation to Net loss, the nearest GAAP financial measure) for the three and nine months ended September 30, 2026 and September 30, 2025 are as follows (in thousands):
Previous wording
Costs in connection with reorganization of operations which primarily include severance, related benefits and post-acquisition costs related to PDP acquisition.
Current wording
Costs in connection with reorganization of operations which primarily include severance, related benefits and post-acquisition costs related to the PDP acquisition.
Previous wording
Insurance proceeds from claims related to a loss of inventory while in transit that occurred primarily in the fourth quarter of 2024.
Current wording
Insurance proceeds from claims related to a loss of inventory while in transit.
Previous wording
Cash provided by operating activities for the six months ended June 30, 2025 was $37.3 million, primarily due to higher gross receipts, insurance proceeds from claims related to a loss of inventory, lower acquisition-related costs and reduced spending levels.
Current wording
Cash provided by operating activities for the nine months ended September 30, 2025 was $22.1 million, primarily due to higher gross receipts, insurance proceeds from claims related to a loss of inventory, lower acquisition-related costs and reduced spending levels.
Previous wording
Cash provided by investing activities was $2.0 million for the six months ended June 30, 2025, which was primarily related to purchase price working capital adjustments of $2.5 million.
Current wording
Cash used in investing activities was $1.8 million for the nine months ended September 30, 2026, which was primarily related to purchase of property and equipment.
Previous wording
Cash used in investing activities was $0.8 million for the six months ended June 30, 2026, which was primarily related to purchase of property and equipment of $0.8 million. Cash provided by investing activities was $2.0 million for the six months ended June 30, 2025 primarily driven by $2.5 million of cash acquired in relation to the acquisition of the PDP business.
Current wording
Cash provided by investing activities was $1.3 million for the nine months ended September 30, 2025 primarily driven by $2.5 million of cash acquired in relation to the acquisition of the PDP business.
Previous wording
Net cash used in financing activities was $32.4 million during the six months ended June 30, 2026 compared to net cash used by financing activities of $41.7 million during the six months ended June 30, 2025. Financing activities during the six months ended June 30, 2026 consisted primarily of $29.4 million repayments of revolving credit facility, $56.8 million repayments of term loan, and $27.2 million repurchases of common stock. These repayments and repurchases were partially offset by $82.5 million of proceeds from term loan related to the 2026 Credit Agreement.
Current wording
Net cash used in financing activities was $33.5 million during the nine months ended September 30, 2026 compared to net cash used by financing activities of $24.5 million during the nine months ended September 30, 2025. Financing activities during the nine months ended September 30, 2026 consisted primarily of $29.5 million of repayments of the revolving credit facility, $57.8 million of repayments of the term loan, and $27.2 million of repurchases of common stock. These repayments and repurchases were partially offset by $82.5 million of proceeds from the term loan related to the 2026 Credit Agreement.
Previous wording
Net cash used for financing activities was $41.7 million during the six months ended June 30, 2025, which consisted primarily of $29.5 million revolving credit facility net repayments, $6.7 million of share repurchases and $5.6 million of term loan repayments.
Current wording
Net cash used for financing activities was $24.5 million during the nine months ended September 30, 2025, which consisted primarily of $15.9 million revolving credit facility net repayments, $17.0 million of share repurchases, $2.3 million of debt financing costs and $8.9 million of term loan net proceeds.
Previous wording
Management believes that our current cash and cash equivalents, the amounts available under our Revolving Credit Facility and cash flows derived from operations will be sufficient to meet anticipated short-term and long-term funding for working capital and capital expenditures including amounts to develop new products, fund future stock repurchases and to pursue strategic opportunities. Significant assumptions underlie this belief, including, among other things, that there will be no material adverse developments in our business, liquidity or capital requirements, or strategic opportunities that require additional capital.
Current wording
Management believes that our current cash and cash equivalents, the amounts available under our 2026 Revolving Credit Facility and cash flows derived from operations are expected to be sufficient to meet our anticipated short-term and long-term funding requirements for working capital and capital expenditures including amounts to develop new products, scheduled debt service, fund future stock repurchases and to pursue strategic opportunities. This assessment considers the liquidity available under the 2026 Revolving Credit Facility after giving effect to borrowing-base availability, letters of credit and applicable reserves, as well as our required compliance with financial covenants under our debt facilities. Significant assumptions underlie this belief, including, among other things, that there will be no material adverse developments in our business, liquidity or capital requirements, or strategic opportunities that require additional capital.
Previous wording
Foreign cash balances at June 30, 2026 and December 31, 2025 were $5.6 million and $8.7 million, respectively.
Current wording
Foreign cash balances at September 30, 2026 and December 31, 2025 were $3.5 million and $8.7 million, respectively.
Previous wording
On April 30, 2026, we 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. Accordingly, the 2025 Credit Facility was no longer available to us as of June 30, 2026. As part of the repayment, we recognized a loss on extinguishment of debt of $1.8 million to write-off the unamortized deferred financing costs in interest expense in our condensed consolidated statements of operations.
Current wording
On April 30, 2026, we 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. As part of the repayment, we recognized a loss on extinguishment of debt of $1.8 million to write-off the unamortized deferred financing costs in interest expense in our condensed consolidated statements of operations.
Previous wording
On April 30, 2026, we entered into a new financing agreement (the "2026 Term Loan Financing Agreement") by and among us, Voyetra Turtle Beach, Inc. (“VTB"), as borrower, each of our subsidiary 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 ours and our 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. Any prepayment, or any acceleration or other repayment in connection with an insolvency proceeding, occurring during the first twelve months following the closing date will be subject to a prepayment premium equal to (i) the interest that would otherwise have accrued on the principal amount being repaid through the twelve-month anniversary of the closing date, plus (ii) 3.00% of the principal amount being repaid, provided that no such premium applies to regularly scheduled quarterly amortization payments or to certain prepayments specified in the 2026 Term Loan Financing Agreement. The 2026 Term Loan Facility is secured by substantially all of our assets and those of our subsidiaries which are party to the 2026 Term Loan Facility.
Current wording
On April 30, 2026, we entered into a new financing agreement (the "2026 Term Loan Financing Agreement") by and among us, Voyetra Turtle Beach, Inc. (“VTB"), as borrower, each of our subsidiaries 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 ours and our 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. Any prepayment, or any acceleration or other repayment in connection with an insolvency proceeding, occurring during the first twelve months following the closing date will be subject to a prepayment premium equal to (i) the interest that would otherwise have accrued on the principal amount being repaid through the twelve-month anniversary of the closing date, plus (ii) 3.00% of the principal amount being repaid, provided that no such premium applies to regularly scheduled quarterly amortization payments or to certain prepayments specified in the 2026 Term Loan Financing Agreement. The 2026 Term Loan Facility is secured by substantially all of our assets and those of our subsidiaries which are party to the 2026 Term Loan Facility.
Previous wording
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 3.00x, (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 2.25x but less than 3.00x, 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 2.25x; and (c) is subject to certain affirmative, negative and financial covenants, including a minimum liquidity covenant and a quarterly total net leverage ratio covenant. As of June 30, 2026, the interest rate for outstanding borrowings was 11.17%.
Current wording
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 3.00x, (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 2.25x but less than 3.00x, 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 2.25x; and (c) is subject to certain affirmative, negative and financial covenants, including a minimum liquidity covenant and a quarterly total net leverage ratio covenant. As of September 30, 2026, the interest rate for outstanding borrowings was 11.59%.
Previous wording
As of June 30, 2026, we were in compliance with all the financial covenants under the Credit Facility, as amended, and excess borrowing availability was approximately $31.0 million.
Current wording
As of September 30, 2026, we were in compliance with all the financial covenants under the Credit Facility, as amended, and excess borrowing availability was approximately $61.5 million.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
Net revenue for the three months ended June 30, 2026 was $56.4 million, a $0.4 million or 0.7% decrease from $56.8 million for the three months ended June 30, 2025. The decrease was primarily attributable to softer market demand for gaming accessories, which was driven in part by macroeconomic challenges affecting consumer spending.
Previous report — wording carried elsewhere
Loss of inventory while in transit.