Form 10-Q - Quarterly report [Sections 13 or 15(d)]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 001-35465

TURTLE BEACH CORPORATION

(Exact name of registrant as specified in its charter)


Nevada	27-2767540
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

44 South Broadway, 4th Floor White Plains, New York	10601
(Address of principal executive offices)	(Zip Code)

(888) 496-8001

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbols	Name of each exchange on which registered
Common Stock, par value $0.001	HEAR	The Nasdaq Global Market
Preferred Stock Purchase Rights	N/A	The Nasdaq Global Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

The number of shares of the registrant’s Common Stock, par value $0.001 per share, outstanding on July 31, 2024 was 20,754,274.

INDEX


		Page

PART I. FINANCIAL INFORMATION		2

Item 1.	Financial Statements (unaudited)	2

	Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2024 and 2023	2

	Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and Six Months Ended June 30, 2024 and 2023	3

	Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023	4

	Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023	5

	Condensed Consolidated Statement of Stockholder's Equity for the Three and Six Months Ended June 30, 2024 and 2023	6

	Notes to Condensed Consolidated Financial Statements	7

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27

Item 4.	Controls and Procedures	28

PART II. OTHER INFORMATION		29

Item 1.	Legal Proceedings	29

Item 1A.	Risk Factors	29

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29

Item 5.	Other Information	29

Item 6.	Exhibits	30

SIGNATURES		31

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

Turtle Beach Corporation

Condensed Consolidated Statements of Operations

(unaudited)


	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2024			2023			2024			2023
	(in thousands, except per-share data)
Net revenue	$	76,478		$	47,982		$	132,326		$	99,426
Cost of revenue		53,402			36,110			91,464			73,415
Gross profit		23,076			11,872			40,862			26,011
Operating expenses:
Selling and marketing		13,741			10,351			22,754			19,874
Research and development		4,589			4,189			8,491			8,290
General and administrative		7,463			13,125			13,137			20,132
Acquisition-related cost		1,394			—			6,304			—
Total operating expenses		27,187			27,665			50,686			48,296
Operating loss		(4,111	)		(15,793	)		(9,824	)		(22,285	)
Interest expense (income)		2,220			(17	)		2,370			146
Other non-operating expense, net		352			198			722			318
Loss before income tax		(6,683	)		(15,974	)		(12,916	)		(22,749	)
Income tax expense (benefit)		841			(54	)		(5,547	)		(124	)
Net loss	$	(7,524	)	$	(15,920	)	$	(7,369	)	$	(22,625	)

Net loss per share
Basic	$	(0.35	)	$	(0.93	)	$	(0.37	)	$	(1.34	)
Diluted	$	(0.35	)	$	(0.93	)	$	(0.37	)	$	(1.34	)
Weighted average number of shares:
Basic		21,252			17,156			19,795			16,869
Diluted		21,252			17,156			19,795			16,869

See accompanying Notes to the Condensed Consolidated Financial Statements (unaudited)

Turtle Beach Corporation

Condensed Consolidated Statements of Comprehensive Income (Loss)

(unaudited)


	Three Months Ended						Six Months Ended
	June 30, 2024			June 30, 2023			June 30, 2024			June 30, 2023
	(in thousands)
Net loss	$	(7,524	)	$	(15,920	)	$	(7,369	)	$	(22,625	)
Other comprehensive income (loss):
Foreign currency translation adjustment		236			(35	)		(182	)		410
Other comprehensive income (loss)		236			(35	)		(182	)		410
Comprehensive loss	$	(7,288	)	$	(15,955	)	$	(7,551	)	$	(22,215	)

See accompanying Notes to the Condensed Consolidated Financial Statements (unaudited)

Turtle Beach Corporation

Condensed Consolidated Balance Sheets



	June 30,			December 31,
	2024			2023
	(unaudited)
ASSETS	(in thousands, except par value and share amounts)
Current Assets:
Cash and cash equivalents	$	12,462		$	18,726
Accounts receivable, net		46,474			54,390
Inventories		73,347			44,019
Prepaid expenses and other current assets		11,380			7,720
Total Current Assets		143,663			124,855
Property and equipment, net		6,295			4,824
Goodwill		56,762			10,686
Intangible assets, net		46,683			1,734
Other assets		10,985			7,868
Total Assets	$	264,388		$	149,967
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Revolving credit facility	$	24,029		$	—
Accounts payable		48,380			26,908
Other current liabilities		30,827			29,424
Total Current Liabilities		103,236			56,332
Debt, non-current		45,772			—
Income tax payable		1,508			1,546
Other liabilities		8,611			7,012
Total Liabilities		159,127			64,890
Commitments and Contingencies
Stockholders’ Equity
Common stock, $0.001 par value - 25,000,000 shares authorized; 20,753,358 and 17,531,702 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively		21			18
Additional paid-in capital		247,917			220,185
Accumulated deficit		(141,646	)		(134,277	)
Accumulated other comprehensive income (loss)		(1,031	)		(849	)
Total Stockholders’ Equity		105,261			85,077
Total Liabilities and Stockholders’ Equity	$	264,388		$	149,967

See accompanying Notes to the Condensed Consolidated Financial Statements (unaudited)

Turtle Beach Corporation

Condensed Consolidated Statements of Cash Flows

(unaudited)


	Six Months Ended
	June 30, 2024			June 30, 2023
	(in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(7,369	)	$	(22,625	)
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation and amortization		2,084			1,948
Costs recognized on sale of acquired inventory		1,251			—
Amortization of intangible assets		2,698			513
Amortization of debt financing costs		348			75
Stock-based compensation		1,951			6,929
Deferred income taxes		(6,339	)		(209	)
Change in sales returns reserve		(3,209	)		(2,419	)
Provision for obsolete inventory		2,081			(1,098	)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable		32,616			32,685
Inventories		(11,238	)		5,457
Accounts payable		11,281			7,452
Prepaid expenses and other assets		(1,300	)		691
Income taxes payable		192			(261	)
Other liabilities		(10,434	)		(4,928	)
Net cash provided by operating activities		14,613			24,210
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment		(1,967	)		(1,252	)
Acquisition of a business, net of cash acquired		(77,294	)		—
Net cash used for investing activities		(79,261	)		(1,252	)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings on revolving credit facilities		80,288			99,785
Repayment of revolving credit facilities		(56,259	)		(118,838	)
Proceeds of term loan		50,000			—
Repayment of term loan		(417	)		—
Proceeds from exercise of stock options and warrants		2,941			1,358
Repurchase of common stock		(15,207	)		(974	)
Debt issuance costs		(3,170	)		(80	)
Net cash provided by (used for) financing activities		58,176			(18,749	)
Effect of exchange rate changes on cash and cash equivalents		208			182
Net increase (decrease) in cash and cash equivalents		(6,264	)		4,391
Cash and cash equivalents - beginning of period		18,726			11,396
Cash and cash equivalents - end of period	$	12,462		$	15,787

SUPPLEMENTAL DISCLOSURE OF INFORMATION
Cash paid for interest	$	2,224		$	226
Cash paid (received) for income taxes	$	159		$	(137	)

See accompanying Notes to the Condensed Consolidated Financial Statements (unaudited)

Turtle Beach Corporation

Condensed Consolidated Statement of Stockholders’ Equity

(unaudited)


	Common Stock						Additional Paid-In			Accumulated			Accumulated Other Comprehensive
	Shares			Amount			Capital			Deficit			Income (Loss)			Total
	(in thousands)
Balance at December 31, 2023		17,532		$	18		$	220,185		$	(134,277	)	$	(849	)	$	85,077
Net income		—			—			—			155			—			155
Other comprehensive loss, net of tax		—			—			—			—			(418	)		(418	)
Issuance of acquisition-related stock		3,450			3			38,047			—			—			38,050
Issuance of restricted stock		12			—			—			—			—			—
Stock options exercised		171			—			1,257			—			—			1,257
Stock-based compensation		—			—			1,105			—			—			1,105
Balance at March 31, 2024		21,165		$	21		$	260,594		$	(134,122	)	$	(1,267	)	$	125,226
Net loss		—			—			—			(7,524	)		—			(7,524	)
Other comprehensive loss, net of tax		—			—			—			—			236			236
Issuance of restricted stock		365			—			—			—			—			-
Stock options exercised		176			1			1,683			—			—			1,684
Stock-based compensation		—			—			846			—			—			846
Repurchase of common stock		(952	)		(1	)		(15,206	)		—			—			(15,207	)
Balance at June 30, 2024		20,754		$	21		$	247,917		$	(141,646	)	$	(1,031	)	$	105,261


	Common Stock					Additional Paid-In			Accumulated			Accumulated Other Comprehensive
	Shares			Amount		Capital			Deficit			Income (Loss)			Total
	(in thousands)
Balance at December 31, 2022		16,569		$	17	$	206,916		$	(116,598	)	$	(1,394	)	$	88,941
Net loss		—			—		—			(6,705	)		—			(6,705	)
Other comprehensive income, net of tax		—			—		—			—			445			445
Issuance of restricted stock		14			—		—			—			—			—
Stock options exercised		21			—		124			—			—			124
Stock-based compensation		—			—		1,959			—			—			1,959
Balance at March 31, 2023		16,604		$	17	$	208,999		$	(123,303	)	$	(949	)	$	84,764
Net income		—			—		—			(15,920	)		—			(15,920	)
Other comprehensive income, net of tax		—			—		—			—			(35	)		(35	)
Issuance of restricted stock		469			—		—			—			—			—
Stock options exercised		322			—		1,234			—			—			1,234
Stock-based compensation		—			—		4,986			—			—			4,986
Repurchase of common stock		(86	)		—		(974	)		—			—			(974	)
Balance at June 30, 2023		17,309			17		214,245			(139,223	)		(984	)		74,055

See accompanying Notes to the Condensed Consolidated Financial Statements (unaudited)

Turtle Beach Corporation

Notes to Condensed Consolidated Financial Statements

(unaudited)

Note 1. Background and Basis of Presentation

Organization

Turtle Beach Corporation (“Turtle Beach” or the “Company”), headquartered in White Plains, New York 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®, PDP® and ROCCAT® brands. Turtle Beach is 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. ROCCAT is a gaming keyboards, mice and other accessories brand focused on the PC peripherals market. Acquired in March 2024, Performance Designed Products, LLC (“PDP”) is a gaming accessories leader that designs and distributes video game accessories, including controllers, headsets, power supplies, cases, and other accessories.

VTB Holdings, Inc. (“VTBH”), a wholly-owned subsidiary of Turtle Beach Corporation and the owner of Voyetra Turtle Beach, Inc. (“VTB”), was incorporated in the state of Delaware in 2010. VTB, the owner of Turtle Beach Europe Limited (“TB Europe”), was incorporated in the state of Delaware in 1975 with operations principally located in White Plains, New York.

Basis of Presentation

The accompanying interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of management, reflect all adjustments (which include normal recurring adjustments) considered necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods presented. All intercompany accounts and transactions have been eliminated in consolidation. Certain information and footnote disclosures, normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), have been condensed or omitted pursuant to those rules and regulations. The Company believes that the disclosures made are adequate to make the information presented not misleading. The results of operations for the interim periods are not necessarily indicative of the results of operations for the entire fiscal year.

The December 31, 2023 Condensed Consolidated Balance Sheet has been derived from the Company’s audited financial statements included in its Annual Report on Form 10-K filed with the SEC on March 13, 2024 (“Annual Report”).

These financial statements should be read in conjunction with the annual financial statements and the notes thereto included in the Annual Report that contains information useful to understanding the Company’s businesses and financial statement presentations.

Use of estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to use estimates and assumptions that affect the reported amount of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. The significant estimates and assumptions used by management affect: sales return reserve, allowances for cash discounts, warranty reserve, valuation of inventory, valuation of long-lived assets, goodwill and other intangible assets, depreciation and amortization of long-lived assets, valuation of deferred tax assets, probability of performance shares vesting and forfeiture rates utilized in issuing stock-based compensation awards. The Company evaluates estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ from these estimates, and those differences could be material to the consolidated financial statements.

Note 2. Summary of Significant Accounting Policies

The preparation of consolidated annual and quarterly financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the Company’s consolidated financial statements, and the reported amounts of revenue and expenses during the reporting periods. The Company can give no assurance that actual results will not differ from those estimates.

There have been no material changes to the significant accounting policies and estimates from the information provided in Note 1 of the notes to our consolidated financial statements in our Annual Report.

Note 3. Acquisitions

On March 13, 2024, the Company acquired all the issued and outstanding equity of Performance Designed Products, LLC (“PDP”, collectively with FSAR, “PDP Group”) 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 will strengthen its leadership position in hardware gaming accessories and expand 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 preliminary purchase consideration was $116.9 million, partially funded by borrowing on the new term loan facility (see Note 8). Additionally, the Company recognized $6.3 million of acquisition-related costs that were expensed during the six months ended June 30, 2024, and are included as a component of general & administrative expenses in the Condensed Consolidated Statement of Operations.

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


(In thousands)	Amount
Cash		1,562
Accounts Receivable		21,491
Inventory		21,423
Prepaid and Other Current Assets		2,360
Property, Plant & Equipment		1,161
Other Assets		3,478
Intangible Assets		47,769
Accounts Payable		(11,009	)
Accrued Liabilities		(8,215	)
Lease Payable		(2,726	)
Deferred Tax Liability		(6,461	)
Total identifiable net assets		70,833
Goodwill		46,076
Total consideration paid	$	116,909

The fair values assigned to PDP’s assets and liabilities are provisional and were determined based on preliminary estimates and assumptions that management believes are reasonable. The preliminary purchase price allocation is subject to further refinement and may require significant adjustments to arrive at the final purchase price allocation. The final determination of the fair value of certain assets and liabilities will be completed as soon as the necessary information is available, but no later than one year from the acquisition date.

During the three months ended June 30, 2024, we recognized measurement period adjustments primarily to establish preliminary values for the opening balance sheet of the net assets acquired including intangibles assets, which also resulted in a reduction in goodwill from the previously reported preliminary amount.

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.

The preliminary fair value of PDP’s identifiable intangible assets was determined primarily using the “income approach,” which requires a forecast of all expected future cash flows either through the use of the multi-period excess earnings method or the relief-from-royalty method.

Such forecasts are based on inputs that are unobservable and significant to the overall fair value measurement, and as such, are classified as Level 3 inputs (see Note 4). Some of the more significant assumptions inherent in the development of intangible asset values include: the amount and timing of projected future cash flows, the discount rate selected to measure the risks inherent in the future cash flows, the assessment of the intangible asset’s life cycle, as well as other factors. The following table summarizes the preliminary allocation of purchase consideration to identifiable intangible assets:


(In thousands)	Life	Amount
Tradenames	7 Years	$	15,607
Customer relationships	6 Years		4,456
Developed technology	6 Years		27,706
Total		$	47,769

PDP's net revenue included in the Company’s consolidated results was $21.8 million and $27.7 million for the three and six months ended June 30, 2024, respectively. PDP’s net income included in the Company’s consolidated results for the same period was not material.

Pro Forma Financial Information (Unaudited)

The following table reflects the unaudited pro forma operating results of the Company for the three and six months ended June 30, 2024 and 2023, which give effect to the acquisition of PDP as if it had occurred on January 1, 2023.


	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2024			2023			2024			2023
	(in thousands)
Net revenue	$	76,478		$	65,709		$	152,344		$	135,702
Net loss	$	(4,541	)	$	(24,045	)	$	(14,434	)	$	(35,380	)

The pro forma results are based on assumptions that the Company believes are reasonable under the circumstances. The pro forma results are not necessarily indicative of the operating results that would have occurred had the acquisition been effective January 1, 2023, nor are they intended to be indicative of results that may occur in the future.

Note 4. Fair Value Measurement

The Company follows a three-level fair value hierarchy that prioritizes the inputs used to measure fair value. This hierarchy requires entities to maximize the use of observable inputs and minimize the use of unobservable inputs. The three levels of inputs used to measure fair value are as follows:

•

Level 1 — Quoted prices in active markets for identical assets or liabilities.

•

Level 2 — Observable inputs other than quoted prices included in Level 1, such as quoted prices for markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

•

Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. This includes certain pricing models, discounted cash flow methodologies and similar techniques that use significant unobservable inputs.

Financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, debt instruments and certain warrants. As of June 30, 2024 and December 31, 2023, the Company had 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 our financial instruments as of June 30, 2024 and December 31, 2023:


	June 30, 2024				December 31, 2023
	Reported		Fair Value		Reported		Fair Value
	(in thousands)
Financial Assets and Liabilities:
Cash and cash equivalents	$	12,462	$	12,462	$	18,726	$	18,726
Term Loan	$	49,583	$	49,583	$	—	$	—
Revolving credit facility	$	24,029	$	24,029	$	—	$	—

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 2027 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 June 30, 2024 and December 31, 2023.

Note 5. Allowance for Sales Returns

The following table provides the changes in our sales return reserve, which is classified as a reduction of accounts receivable:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
	(in thousands)
Balance, beginning of period	$	6,039		$	6,639		$	8,449		$	7,817
Reserve accrual		2,692			2,556			5,433			6,150
Recoveries and deductions, net		(3,491	)		(3,797	)		(8,642	)		(8,569	)
Balance, end of period	$	5,240		$	5,398		$	5,240		$	5,398

Note 6. Composition of Certain Financial Statement Items

Inventories

Inventories consist of the following:


	June 30, 2024		December 31, 2023
	(in thousands)
Finished goods	$	62,379	$	43,579
Raw materials		10,968		440
Total inventories	$	73,347	$	44,019

Property and Equipment, net

Property and equipment, net, consists of the following:


	June 30, 2024			December 31, 2023
	(in thousands)
Machinery and equipment	$	2,781		$	2,597
Software and software development		2,858			2,438
Furniture and fixtures		1,686			1,700
Tooling		14,071			11,250
Leasehold improvements		2,327			1,988
Demonstration units and convention booths		16,008			15,767
Total property and equipment, gross		39,731			35,740
Less: accumulated depreciation and amortization		(33,436	)		(30,916	)
Total property and equipment, net	$	6,295		$	4,824

Other Current Liabilities

Other current liabilities consist of the following:


	June 30, 2024		December 31, 2023
	(in thousands)
Accrued employee expenses	$	3,009	$	3,944
Accrued royalty		6,596		5,275
Accrued tax-related payables		4,350		5,206
Accrued freight		2,215		2,917
Accrued marketing		1,858		3,335
Accrued expenses		12,799		8,747
Total other current liabilities	$	30,827	$	29,424

Note 7. Goodwill and Other Intangible Assets

Acquired Intangible Assets

Acquired identifiable intangible assets, and related accumulated amortization, as of June 30, 2024 and December 31, 2023 consisted of:


	June 30, 2024
	Gross Carrying Value			Accumulated Amortization			Net Book Value
	(in thousands)
Customer relationships	$	12,541		$	7,530		$	5,011
Tradenames		18,673			3,468			15,205
Developed technology		29,590			3,148			26,442
Foreign currency		(1,189	)		(1,214	)		25
Total Intangible Assets (1)	$	59,615		$	12,932		$	46,683


	December 31, 2023
	Gross Carrying Value			Accumulated Amortization			Net Book Value
	(in thousands)
Customer relationships	$	8,085		$	7,214		$	871
Tradenames		3,066			2,607			459
Developed technology		1,884			1,613			271
Foreign currency		(1,159	)		(1,292	)		133
Total Intangible Assets (1)	$	11,876		$	10,142		$	1,734

(1) The accumulated amortization includes $1.9 million of accumulated impairment charges as of June 30, 2024 and December 31, 2023.

In May 2019, the Company completed its acquisition of the business and assets of ROCCAT. The acquired intangible assets relating to developed technology, customer relationships, and trade name are subject to amortization. In January 2021, the Company completed its acquisition of the business and assets relating to the Neat Microphones business. The acquired intangible assets relating to developed technology, customer relationships, and trade name are subject to amortization.

In March 2024, the Company completed its acquisition of the business and assets of PDP. The acquired intangible assets relating to developed technology, customer relationships, and trade name are subject to amortization. Refer to Note 3, “Acquisitions” for additional information related to PDP’s identifiable intangible assets.

Amortization expense related to definite lived intangible assets of $2.1 million and $2.7 million was recognized for the three and six months ended June 30, 2024, respectively, and $0.2 million and $0.5 million was recognized for the three and six months ended June 30, 2023, respectively.

As of June 30, 2024, estimated annual amortization expense related to definite lived intangible assets in future periods was as follows:


	(in thousands)
2024	$	4,299
2025		8,016
2026		7,761
2027		7,591
Thereafter		18,991
Total	$	46,658

Changes in the carrying values of goodwill for the six months ended June 30, 2024 from the balance as of December 31, 2023.


	(in thousands)
Balance as of January 1, 2024	$	10,686
PDP acquisition		46,076
Balance as of June 30, 2024	$	56,762

Note 8. Revolving Credit Facility and Long-Term Debt


	June 30, 2024		December 31, 2023
	(in thousands)
Revolving credit facility, maturing March 2027	$	24,029	$	—
Term loan Due 2027	$	49,583	$	—

Total interest expense, inclusive of amortization of deferred financing costs, on long-term debt obligations was $2.2 million and $2.7 million for the three and six months ended June 30, 2024, respectively, and $0.1 million and $0.2 million for the three and six months ended June 30, 2023, respectively.

Amortization of deferred financing costs was $0.3 million for the three and six months ended June 30, 2024 and $33 thousand and $75 thousand for the three and six months ended June 30, 2023, respectively.

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 “Credit Facility”) with Bank of America, N.A. (“Bank of America”), as administrative agent, collateral agent and security trustee for Lenders (as defined therein), which replaced the then existing asset-based revolving loan agreement. The Credit Facility was amended on each of December 17, 2018, May 31, 2019, and March 10, 2023. The Credit Facility, as amended, expires on March 13, 2027 and provides for a line of credit of up to $50 million inclusive of a sub-facility limit of $10 million for TB Europe, a wholly-owned subsidiary of Turtle Beach.

On March 13, 2024, the Company entered into a Fourth Amendment, dated as of March 13, 2024 (the “Fourth Amendment”), by and among the Company, VTB, TBC Holding Company LLC, TB Europe, VTBH, the financial institutions party thereto from time to time and Bank of America, as administrative agent, collateral agent and security trustee for the lenders.

The Fourth Amendment provided for, among other things: (i) the acquisition of PDP; (ii) revised the calculation of the U.S. Borrowing Base to include certain acquired assets of PDP equal to the lesser of (a) the sum of the accounts formula amount and the inventory formula amount (each as defined in the Fourth Amendment), (b) $15,000,000, and (c) 30% of the aggregate Revolver Commitments; (iii) extending the maturity date of the Credit Facility from April 1, 2025 to March 13, 2027; and (iv) updated the interest rate and margin terms such that the loans will bear interest at a rate equal to (1) SOFR, (2) the U.S. Base Rate, (3) the Sterling Overnight Index Average Reference Rate (“SONIA”) for loans denominated in Sterling, and (4) the Euro Interbank Offered Rate (“EUIBOR”) for loans denominated in Euros, plus in each case, an applicable margin, which is between 0.50% and 2.50% for Base Rate Loans and 1.75% and 3.50% for Term SOFR Loans, SONIA Rate Loans and EUIBOR Loans.

The maximum credit availability for loans and letters of credit under the Credit Facility is governed by a borrowing base determined by the application of specified percentages to certain eligible assets, primarily eligible trade accounts receivable and inventories, and is subject to discretionary reserves and revaluation adjustments. The Credit Facility may be used for working capital, the issuance of bank guarantees, letters of credit and other corporate purposes.

Amounts outstanding under the Credit Facility bear interest at a rate equal to (i) a rate published by Bank of America or the U.S. Bloomberg Short-Term Bank Yield Index (“BSBY”) rate for loans denominated in U.S. Dollars, (ii) the Sterling Overnight Index Average Reference Rate (“SONIA”) for loans denominated in Sterling, (iii) and the Euro Interbank Offered Rate (“EUIBOR”) for loans denominated in Euros, plus in each case, an applicable margin, which is 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 is 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. As of June 30, 2024, interest rates for outstanding borrowings were 9.10% for base rate loans and 7.19% for Term SOFR loans.

The Company is subject to quarterly financial covenant testing if certain availability thresholds are not met or certain other events occur (as set forth in the Credit Facility). At such times, the Credit Facility requires the Company and its restricted subsidiaries to maintain a fixed charge coverage ratio of at least 1.00 to 1.00 as of the last day of each fiscal quarter.

The Credit Facility also contains affirmative and negative covenants that, subject to certain exceptions, limit our ability to take certain actions, including the Company’s 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. Obligations under the Credit Facility are secured by a security interest and lien upon substantially all of the Company’s assets.

As of June 30, 2024, the Company was in compliance with all financial covenants under the Credit Facility, as amended, and excess borrowing availability was approximately $34.6 million.

Term Loan

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 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 existing 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 will amortize in a monthly amount equal to 0.208333% during the first two years and 0.416667% during the third year 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 Term Loan Facility is secured by substantially all of the assets of the Company and its subsidiaries which are party to the Term Loan Facility.

The Term Loan Facility (a) matures on March 13, 2027; (b) bears 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 is greater than or equal to 2.25x 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 2.25x; 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, 2024, interest rates for outstanding borrowings was 13.69%.

As of June 30, 2024, the Company was in compliance with all financial covenants under the Term Loan.

Note 9. Income Taxes

Generally, in order to determine the quarterly provision for income taxes, the Company uses an estimated annual effective tax rate, which is based on expected annual income and statutory tax rates in the various jurisdictions. However, to the extent that application of the estimated annual effective tax rate is not representative of the quarterly portion of actual tax expense expected to be recorded for the year in a jurisdiction, the Company determines the provision for income taxes based on actual year-to-date income (loss) which it has done for certain jurisdictions for the quarter ended June 30, 2024. Certain significant or unusual items are separately recognized as discrete items in the period during which they occur and can be a source of variability in the effective tax rates from quarter to quarter.

The following table presents the Company’s income tax expense and effective income tax rate:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
	(in thousands)
Income tax expense (benefit)	$	841		$	(54	)	$	(5,547	)	$	(124	)
Effective income tax rate		(12.6	%)		0.3	%		42.9	%		0.5	%

The effective tax rate for the three and six months ended June 30, 2024 was primarily impacted by the change in U.S. valuation allowance related to the acquisition of PDP, foreign taxes, state tax and interest on uncertain tax positions.

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 June 30, 2024, the Company had uncertain tax positions of $2.8 million, inclusive of $0.6 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. 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. deferred tax assets as of December 31, 2022. While the Company continues to maintain this valuation allowance for the three and six months ended June 30, 2024, it did release $6.4 million of valuation allowance for PDP acquired net deferred tax liabilities.

The Company is subject to income taxes domestically and in various foreign jurisdictions. The Company files U.S., state and foreign income tax returns in jurisdictions with various statutes of limitations. The federal tax years open under the statute of limitations are 2019 through 2021, and the state tax years open under the statute of limitations are 2019 through 2022.

Note 10. Equity and Stock-Based Compensation

Stock Repurchase Activity

On April 9, 2019, the Company’s Board of Directors authorized a stock repurchase program to acquire up to $15.0 million of its common stock. Any repurchases under the program will be made from time to time on the open market at prevailing market prices. On April 1, 2021, the Board of Directors approved an extension and expansion of this stock repurchase program up to $25.0 million of its common shares, expiring April 9, 2023. On March 3, 2023, the Company’s Board of Directors approved a two-year extension of this stock repurchase plan. On April 9, 2024, the Board of Directors approved an additional expansion of this stock repurchase program to up to $55 million of the Company’s common shares. During the three and six months ended June 30, 2024, the Company has repurchased 1.0 million shares of its common stock for a total cost of $15.2 million.

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:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
	(in thousands)
Cost of revenue	$	159	$	162	$	290	$	337
Selling and marketing		375		410		862		900
Research and development		273		324		497		680
General and administrative		39		4,074		302		5,012
Total stock-based compensation	$	846	$	4,970	$	1,951	$	6,929

The following table presents the stock activity and the total number of shares available for grant as of June 30, 2024:


	(in thousands)
Balance at December 31, 2023		1,059
Options Cancelled		1
Restricted Stock Granted		(205	)
Restricted Stock Forfeited		19
Performance Shares Granted		(171	)
Balance at June 30, 2024		703

Stock Option Activity


	Options Outstanding
	Number of Shares Underlying Outstanding Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value
						(in years)
Outstanding at December 31, 2023		1,041,452		$	9.10		4.22	$	3,137,285
Options Granted		-			-
Options Exercised		(346,842	)		8.27
Options Forfeited		(824	)		60.87
Outstanding at June 30, 2024		693,786		$	9.45		4.85	$	4,060,476
Vested and expected to vest at June 30, 2024		695,434		$	9.53		4.85	$	4,060,476
Exercisable at June 30, 2024		693,421		$	9.49		4.85	$	4,060,476

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 option grants are estimated at 10% for non-executives and 0% for executives 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 (executive vs. non-executive).

Aggregate intrinsic value represents the difference between the estimated fair value of the underlying common stock and the exercise price of outstanding, in-the-money options. The aggregate intrinsic value of options exercised was $2.3 million for the six months ended June 30, 2024.

The Company uses the Black-Scholes option-pricing model to estimate the fair value of options granted as of the grant date. There were no new options granted during the six months ended June 30, 2024. The total estimated fair value of employee options vested during the six months ended June 30, 2024 was $1.2 million. As of June 30, 2024, total unrecognized compensation cost related to non-vested stock options granted to employees was less than $0.1 million, which is expected to be recognized over a remaining weighted average vesting period of 0.5 years.

Restricted Stock Activity


	Shares			Weighted Average Grant Date Fair Value Per Share
Nonvested restricted stock at December 31, 2023		764,942		$	14.76
Granted		205,268			17.05
Vested		(317,552	)		14.16
Shares forfeited		(19,236	)		10.47
Nonvested restricted stock at June 30, 2024		633,422		$	15.93

As of June 30, 2024, total unrecognized compensation costs related to the nonvested restricted stock awards was $9.1 million, which will be recognized over a remaining weighted average vesting period of 1.5 years.

Performance-Based Restricted Share Units

As of June 30, 2024, the Company had 253,395 performance-based restricted share units outstanding. On April 1, 2024, the Company granted 171,393 PSUs to certain executives, of which 50% vest based on achievement of defined Company stock price appreciation over the period of April 1, 2024 through May 9, 2025, and 50% vest based on defined Adjusted EBITDA targets for the period commencing on the second fiscal quarter in 2024 through the first fiscal quarter of 2025. The awards granted on April 1, 2024 are also subject to three year service-based vesting periods with the ability to earn and vest into such units ranging from 0% to 200% of the granted PSUs. The remaining 82,002 PSUs outstanding were granted to executives on April 1, 2023 and 2022, and will vest over a three-year period from the respective grant dates based on (i) the amount by which revenue growth exceeds a defined baseline market growth each year and (ii) the achievement of specified tiers of Adjusted EBITDA as a percentage of net revenue each year, with the ability to earn and vest into such units ranging from 0% to 200% of the granted PSUs. As of June 30, 2024, achievement of the performance conditions associated with the outstanding 2024, 2023 and 2022 performance shares was deemed not probable.

Note 11. 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:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
	(in thousands, except per-share data)
Net income (loss)	$	(7,524	)	$	(15,920	)	$	(7,369	)	$	(22,625	)

Weighted average common shares outstanding — Basic		21,252			17,156			19,795			16,869
Plus incremental shares from assumed conversions:
Dilutive effect of restricted stock		—			—			—			—
Dilutive effect of stock options		—			—			—			—
Dilutive effect of warrants		—			—			—			—
Weighted average common shares outstanding — Diluted		21,252			17,156			19,795			16,869
Net income (loss) per share:
Basic	$	(0.35	)	$	(0.93	)	$	(0.37	)	$	(1.34	)
Diluted	$	(0.35	)	$	(0.93	)	$	(0.37	)	$	(1.34	)

Incremental shares from stock options and restricted stock awards are computed using the treasury stock method. The weighted average shares listed below were not included in the computation of diluted earnings per share because to do so would have been anti-dilutive for the periods presented or were otherwise excluded under 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.


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
	(in thousands)
Stock options		782		1,363		820		1,384
Unvested restricted stock awards		646		908		676		860
Warrants		550		550		550		550
Total		1,978		2,821		2,046		2,794

Note 12. Segment Information

The following table represents total net revenues based on where customers are physically located:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
	(in thousands)
North America	$	61,993	$	32,356	$	104,152	$	73,068
Europe and Middle East		11,983		11,861		22,944		21,587
Asia Pacific		2,502		3,765		5,230		4,771
Total net revenues	$	76,478	$	47,982	$	132,326	$	99,426

Note 13. Commitments and Contingencies

Litigation

The Company is subject to various legal proceedings and claims that arise in the ordinary course of its business. 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 a 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.

Employment Litigation: On April 20, 2017, a former employee filed an action in the Superior Court for the County of San Diego, State of California. The complaint alleges claims including wrongful termination, retaliation and various other provisions of the California Labor Code.

The complaint seeks unspecified economic and non-economic losses, as well as allegedly unpaid wages, unreimbursed business expenses statutory penalties, interest, punitive damages and attorneys’ fees. The Company filed a cross-complaint against the former employee on May 25, 2017 for certain activities related to his employment with the Company. The matter was tried between September 24 and October 7, 2021. On October 8, 2021 a jury rendered a unanimous verdict in favor of the Company on the employment claims. The Court granted a directed verdict to the Company on its cross-complaint against the former employee. Judgment was entered in favor of the Company on October 27, 2021. On December 20, 2021, the former employee filed a notice of appeal of the judgment. On November 14, 2023, the court of appeal issued its opinion affirming the judgment in favor of the Company. On the Company’s cross-complaint, the court of appeal directed the Company to elect either punitive or statutory treble damages, but otherwise affirmed. On March 8, 2024, the Superior Court entered an amended judgment in favor of the Company and awarding the Company monetary damages, injunctive relief, attorneys’ fees and costs.

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, a company registered and existing under the laws of Germany. In his complaint, the insolvency administrator claims that TBCH is liable to reimburse any payments received by the TBCH under a certain settlement agreement with KJE Europe GmbH dated June 30, 2020. TBCH filed its statement of defense to the complaint on April 30, 2024 and the insolvency administrator filed his response in a brief on June 11, 2024. TBCH does not believe the claims have merit and intends to defend itself in this proceeding.

The Company will continue to vigorously defend itself in the foregoing unresolved matters. However, litigation and investigations are inherently uncertain. Accordingly, the Company cannot predict the outcome of these matters. The Company has not recorded any accrual at June 30, 2024 for contingent losses associated with these matters 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 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.

Warranties

The Company warrants its products against certain manufacturing and other defects. These product warranties are provided for specific periods of time depending on the nature of the product. Warranties are generally fulfilled by replacing defective products with new products. The following table provides the changes in our product warranty reserve, which are included in accrued liabilities:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
	(in thousands)
Warranty, beginning of period	$	687		$	616		$	670		$	618
Warranty costs accrued		263			190			483			375
Settlements of warranty claims		(215	)		(166	)		(418	)		(353	)
Warranty, end of period	$	735		$	640		$	735		$	640

Operating Leases - Right of Use Assets

The Company determines whether an arrangement is a lease at inception. The Company leases office spaces that provide for future minimum rental lease payments under non-cancelable operating leases that have remaining lease terms of one year to nine years, and do not contain any material residual value guarantees or material restrictive covenants.

The components of the right-of-use assets and lease liabilities were as follows:


	Balance Sheet Classification	June 30, 2024
		(in thousands)
Right-of-use assets	Other assets	$	9,717

Lease liability obligations, current	Other current liabilities	$	2,108
Lease liability obligations, noncurrent	Other liabilities		7,714
Total lease liability obligations		$	9,822
Weighted-average remaining lease term (in years)			4.5
Weighted-average discount rate			8.6	%

During the six months ended June 30, 2024, the Company recognized approximately $0.8 million of lease costs in operating expenses and approximately $0.9 million of operating cash flows from operating leases.

Approximate future minimum lease payments for the Company’s right of use assets over the remaining lease periods as of June 30, 2024, are as follows:


	(in thousands)
2024	$	1,174
2025		2,360
2026		2,314
2027		2,284
2028		1,282
Thereafter		2,007
Total minimum payments		11,421
Less: Imputed interest		(1,599	)
Total	$	9,822

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our operations should be read together with our unaudited condensed consolidated financial statements and the related notes included in Part I of this Quarterly Report on Form 10-Q and with our audited consolidated financial statements and the related notes included in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 14, 2024 (the "Annual Report.")

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.

Business Overview

Turtle Beach Corporation (“Turtle Beach” or the “Company“), headquartered in White Plains, New York, 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®, PDP® and ROCCAT® brands. The Turtle Beach® brand is a market share leader in console gaming headsets with a vast portfolio of headsets designed to be compatible with the latest Xbox, PlayStation, and Nintendo consoles, as well as for personal computers (“PCs”) and mobile/tablet devices. Turtle Beach Corporation’s PC product portfolio includes headsets, gaming keyboards, mice and other gaming accessories focused on the PC gaming platform. Recently, Turtle Beach expanded its brand beyond gaming headsets and began making game controllers, gaming flight simulation and racing simulation accessories. Acquired in March 2024, PDP is a gaming accessories leader that designs and distributes video game accessories, including controllers, headsets, power supplies, cases, and other accessories

Business Trends

Turtle Beach operates in an overall $190 billion global games and accessories market. The global gaming audience now exceeds global cinema and music markets with over three billion active gamers worldwide. Gaming peripherals, such as headsets, keyboards, mice, microphones, controllers, and simulation controls are estimated to be an $8.7 billion business globally.

The console and PC gaming accessory markets are driven by major game launches and long-running franchises that encourage players to continually buy equipment and accessories. On Xbox, PlayStation, Nintendo Switch and PC, flagship games like Call of Duty, Destiny, Star Wars: Battlefront, Battlefield, Grand Theft Auto, and battle royale games like Fortnite, Call of Duty Warzone, Apex Legends, and PlayerUnknown’s Battlegrounds, are examples of major franchises that prominently feature online multiplayer modes that encourage communication and drive increased demand for gaming headsets. Many of these established franchises launch new titles annually, leading into the holidays and as a result can cause an additional boost to the normally strong holiday sales for gaming accessories.

Many gamers play online where a gaming headset, which includes a microphone, is required because it allows players to communicate with each other in real-time, provides a more immersive experience, and delivers a competitive advantage.

Console Headset Market

Turtle Beach is the leading console gaming headset manufacturer in the U.S. and other major console markets. Turtle Beach has achieved these global market shares by delivering high-quality products that often include first-to-market innovations, robust features, superior sound, unmatched comfort, and top customer support – all key factors that consumers seek when shopping for a gaming headset.

The global market for console gaming headsets, in which Turtle Beach has been the market leader for the past 14 years, is estimated to be approximately $1.5 billion. PlayStation and Xbox consoles continue to be the dominant gaming platforms in North America and Europe for games that drive headset usage. Consistent with a historical pattern of major new console launches every 7-8 years, Microsoft and Sony launched their latest consoles, Xbox Series X|S and PlayStation 5, ahead of the 2020 holiday season.

Nintendo has sold over 140 million units of its highly popular Nintendo Switch since the platform's release in early 2017. Nintendo continues adding and expanding its library of games, including an increased number of multiplayer chat-enabled games. Nintendo also sells the Nintendo Switch Lite, a follow-on product that offers gamers the hand-held only version of their popular gaming console.

PC Accessories Market

The market for PC gaming headsets, mice, and keyboards is estimated to be approximately $3.3 billion. PC gaming continues to be a main gaming platform in the U.S. and internationally, similarly driven by popular AAA game launches, by popular PC-specific esports leagues, teams, and players, content creators, and influencers, and with the introduction of cross-platform play – where PC gamers can play online against other gamers playing the same game on an Xbox, PlayStation, or Nintendo Switch. While most games are available on multiple platforms, gaming on PC offers advantages including improved graphics, increased speed and precision of mouse/keyboard controls, and the ability for deeper customization. Gaming mice and keyboards are engineered to provide gamers with high-end performance and a superior gaming experience through features such as fast key and button response times, improved materials and build quality, comfortable ergonomic designs, programmable keys and buttons, and software suites to customize and control devices and settings.

PC gaming mice come in a variety of different ergonomic shapes and sizes, are available in both wired and wireless models, offer different sensor options (optical or laser) and responsiveness, and often feature integrated RGB LED lighting and software to unify the lighting with other devices for a visually consistent PC gaming appearance. Similarly, PC gaming keyboards often deliver a competitive advantage by offering options for ultra-responsive mechanical and optical key switches that feel and sound different, as well as offer customizable lighting.

Gamepad/Controllers Market

The market for gamepad controllers is estimated to be approximately $0.7 billion, and shares the same retail footprint and consumer base that Turtle Beach gaming headsets compete in. Controllers now come in various ergonomic shapes, sizes, and colors. Gamers can even further customize their controllers with unique thumbsticks and better grips/textures, weights, and more. Game controllers also range in price from ~$40 to more than $300 for ultra premium options, with premium controllers featuring improved materials, cooling, swappable parts and more. Turtle Beach entered the controllers market in 2021 with the introduction of its wired Recon™ Controller for Xbox and PC. Turtle Beach then launched the lower-cost wired REACT-R™ Controller in 2022, as well as introduced the mobile focused Recon™ Cloud and Atom™ controllers. In 2023, Turtle Beach launched its first wireless controller for Xbox and PC, the premium Stealth™ Ultra controller. Turtle Beach’s controllers not only provide the same responsive, quality controls as first party controllers, but also offer Turtle Beach’s signature gaming audio experience when gamers connect a wired headset to the controller

Gaming Simulation Accessories Market

The market for gaming simulation accessories is estimated to be approximately $1.2 billion. Flight and racing simulation gaming are more popular on higher-end PCs able to deliver the most realistic visuals. However, jumps in visual quality made possible in the latest consoles/games have made flight simulation gaming on Xbox more accessible. In 2020, Microsoft redefined the graphics flight sim gamers can expect while playing with the launch of the latest generation of its Flight Sim games and, in subsequent years, Microsoft expanded the game to Xbox Series X|S1, Xbox One, lower-end gaming PCs, and mobile via Xbox Cloud.

Long-running popular flight sim games like Flight Simulator 2024, X-Plane, and others allow pilots to learn to fly and pilot various aircraft through picture-perfect skies and scenery, with typical flight sim accessories including yokes and pedals, combat flightsticks, and HOTAS (Hands-On Throttle And Stick) controllers. The flight sim market is niche, but is supported by a dedicated, older fanbase willing to spend more on accessories to create the ultimate flight simulation setups, with a variety of expert pilots and creators showcasing their latest content on YouTube and other mediums. Turtle Beach launched the original VelocityOne Flight universal control system in 2021, followed by the VelocityOne™ Rudder and VelocityOne™ Stand in 2022, the VelocityOne™ Flightstick in 2023, and the VelocityOne™ Flightdeck HOTAS controller in 2024.

Racing simulation gaming follows a similar trajectory as flight simulation gaming. The audience of racing sim gamers is also niche, dedicated, slightly older and willing to spend more on creating high-end racing simulation setups predominantly on PC, but also on gaming consoles. There are also a variety of long-running, successful racing game franchises including Forza, Assetto Corsa, and more that allow drivers to get behind the wheel and experience the rush of racing. Typical racing simulation accessories include wheel and pedal setups, swappable steering wheels, shifters, handbrakes and more, ranging in price from a few hundred dollars to thousands of dollars for the most involved simulators. Racing simulation fans also regularly create content and share with the community. Turtle Beach introduced its first VelocityOne™ Race racing simulation wheel and pedals setup in 2024, with additional racing sim accessory launches planned for the future

Supply Chain and Operations

We have a global network of suppliers that manufacture products to meet the quality standards sought by our customers and our cost objectives. We have worked closely with component, manufacturing, and global logistic partners to build a supply chain that we consider dependable, scalable, and efficient to provide high-quality, reliable products employing leading cost management practices. The use of outsourced manufacturing facilities is designed to take advantage of specific expertise and allow for flexibility and scalability to respond to both seasonality and changing demands for our products. While semiconductor availability and freight costs have significantly improved compared to 2022, we continue to closely monitor component availability and freight cost including global supply chain threats within the post-pandemic business environment.

Results of Operations

The following table sets forth the Company’s statements of operations for the periods presented:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
	(in thousands)
Net revenue	$	76,478		$	47,982		$	132,326		$	99,426
Cost of revenue		53,402			36,110			91,464			73,415
Gross profit		23,076			11,872			40,862			26,011
Operating expenses		27,187			27,665			50,686			48,296
Operating loss		(4,111	)		(15,793	)		(9,824	)		(22,285	)
Interest expense (income)		2,220			(17	)		2,370			146
Other non-operating expense, net		352			198			722			318
Loss before income tax		(6,683	)		(15,974	)		(12,916	)		(22,749	)
Income tax expense (benefit)		841			(54	)		(5,547	)		(124	)
Net loss	$	(7,524	)	$	(15,920	)	$	(7,369	)	$	(22,625	)

Net Revenue and Gross Profit

The following table summarizes net revenue and gross profit for the periods presented:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
	(in thousands)
Net Revenue	$	76,478		$	47,982		$	132,326		$	99,426
Gross Profit	$	23,076		$	11,872		$	40,862		$	26,011
Gross Margin		30.2	%		24.7	%		30.9	%		26.2	%

Comparison of the Three Months Ended June 30, 2024 to the Three Months Ended June 30, 2023

Net revenue for the three months ended June 30, 2024 was $76.5 million, a $28.5 million increase from $48.0 million driven by incremental revenue from the PDP acquisition and growth in our product markets.

For the three months ended June 30, 2024, gross margin increased to 30.2%, inclusive of a $1.3 million purchase accounting driven charge to step-up the value of PDP inventory at the time of acquisition and a $1.6 million reserve for ROCCAT inventory on-hand as part of the PC product brand transition to Turtle Beach, from 24.7% in the comparable prior year period. Excluding these two charges, gross margins improved to 34.0% as a result of lower product costs, freight costs and lower promotional spend. The lower product costs are a result of the benefit of our platforming and portfolio rationalization efforts over the past several quarters beginning to be realized in Q2 2024 with the launch of our new console wireless models.

Comparison of the Six Months Ended June 30, 2024 to the Six Months Ended June 30, 2023

Net revenue for the six months ended June 30, 2024 was $132.3 million, a $32.9 million increase from $99.4 million driven by incremental revenue from the PDP acquisition and growth in our product markets.

For the six months ended June 30, 2024, gross margin increased to 30.9%, inclusive of a $1.3 million purchase accounting driven charge to step-up the value of PDP inventory at the time of acquisition and a $1.6 million reserve for ROCCAT inventory on-hand as part of the PC product brand transition to Turtle Beach, from 26.2% in the comparable prior year period. Excluding these two charges, gross margins improved to 33.1% as a result of lower product costs, freight costs and lower promotional spend.

Operating Expenses


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
	(in thousands)
Selling and marketing	$	13,741	$	10,351	$	22,754	$	19,874
Research and development		4,589		4,189		8,491		8,290
General and administrative		7,463		13,125		13,137		20,132
Subtotal operating expenses		25,793		27,665		44,382		48,296
Acquisition-related cost		1,394		—		6,304		—
Total operating expenses	$	27,187	$	27,665	$	50,686	$	48,296

Selling and Marketing

Selling and marketing expenses for the three and six months ended June 30, 2024 totaled $13.7 million and $22.8 million, respectively, compared to $10.4 million and $19.9 million for the three and six months ended June 30, 2023, respectively, due to incremental intangible assets amortization and operating expenses related to the PDP acquisition, and integration related severance costs partially offset by spending reductions taken in second half of 2023.

Research and Development

Research and development costs for the three and six months ended June 30, 2024 was $4.6 million and $8.5 million, respectively, compared to $4.2 million and $8.3 million for the three and six months ended June 30, 2023, respectively, which reflects incremental expense related to the PDP acquisition and certain integration related severance partially offset by lower headcount and costs associated with our product portfolio plans.

General and Administrative

General and administrative expenses for the three months ended June 30, 2024 totaled $7.5 million compared to $13.1 million for the three months ended June 30, 2023. Excluding non-recurring transaction and $1.3 million of activism related costs, but inclusive of incremental costs from PDP operations, expenses decreased $4.3 million as the comparable period included severance charges associated with the CEO transition.

General and administrative expenses for the six months ended June 30, 2024 totaled $13.1 million compared to $20.1 million for the six months ended June 30, 2023. Excluding non-recurring transaction and $1.8 million of activism related costs, but inclusive of incremental costs from PDP operations, expenses decreased $4.6 million primarily due to lower severance and non-cash stock-based compensation.

Acquisition-related cost

Acquisition-related costs included costs incurred in connection with acquisitions including professional fees such as legal and accounting along with other certain integration related costs of the acquisition.

Income Taxes

Income tax benefit for the six months ended June 30, 2024 was ($5.5) million at an effective tax rate of 42.9% compared to income tax benefit for the six months ended June 30, 2023 of ($0.1) million at an effective tax rate of 0.5%. The effective tax rate for the six months ended June 30, 2024 was primarily impacted the by reversal of a portion of the Company’s deferred tax asset valuation allowance.

Key Performance Indicators and Non-GAAP Measures

Management routinely reviews key performance indicators, including revenue, operating income and margins, and earnings per share, among others. In addition, we believe certain other measures provide useful information to management and investors about us and our financial condition and results of operations for the following reasons: (i) they are measures used by our Board of Directors and management team to

evaluate our operating performance; (ii) they are measures used by our management team to make day-to-day operating decisions; (iii) the adjustments made are often viewed as either non-recurring or not reflective of ongoing financial performance and/or have no cash impact on operations; and (iv) the measures are used by securities analysts, investors and other interested parties as a common operating performance measure to compare results across companies in our industry by adjusting for potential differences caused by variations in capital structures (affecting relative interest expense), and the age and book value of facilities and equipment (affecting relative depreciation and amortization expense). These other metrics, however, are not measures of financial performance under accounting principles generally accepted in the United States of America (“GAAP”) and given the limitations of these metrics as analytical tools, should not be considered a substitute for gross profit, gross margins, net income (loss) or other consolidated income statement data as determined in accordance with GAAP.

We believe that the presentation of Adjusted EBITDA, defined as net income (loss) before interest, taxes, depreciation and amortization, stock-based compensation (non-cash) and certain non-recurring special items that we believe are not representative of core operations, is appropriate to provide additional information to investors about our operating profitability adjusted for certain non-cash items, non-routine items that we do not expect to continue at the same level in the future, as well as other items that are not core to our operations. Further, we believe Adjusted EBITDA provides a meaningful measure of operating profitability because we use it for evaluating our business performance, making budgeting decisions, and comparing our performance against that of other peer companies using similar measures. However, Adjusted EBITDA is not a measure of financial performance under GAAP and, given the limitations of these metrics as analytical tools, should not be considered a substitute for gross profit, gross margins, net income (loss) or other consolidated income statement data as determined in accordance with GAAP.

Adjusted EBITDA (and a reconciliation to Net income (loss), the nearest GAAP financial measure) for the three and six months ended June 30, 2024 and June 30, 2023, are as follows:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
	(in thousands)
Net loss	$	(7,524	)	$	(15,920	)	$	(7,369	)	$	(22,625	)
Interest expense (income)		2,220			(17	)		2,370			146
Depreciation and amortization		3,306			1,219			4,782			2,461
Stock-based compensation		846			4,970			1,951			6,929
Income tax benefit (1)		841			(54	)		(5,547	)		(124	)
Restructuring expense (2)		706			—			747			—
CEO transition related costs (3)		—			2,874			—			2,874
Business transaction expense (4)		1,394			—			6,304			—
Incremental costs on acquired inventory (5)		1,251			—			1,251			—
Proxy contest and other (6)		4			1,273			4			1,842
Adjusted EBITDA	$	3,044		$	(5,655	)	$	4,493		$	(8,497	)

(1)

An income tax benefit of $7.0 million was recorded in the three months ended March 31, 2024 as a result of the reversal of a portion of the Company’s deferred tax asset valuation allowance.

(2)

Restructuring charges are expenses that are paid in connection with reorganization of our operations. These costs primarily include severance and related benefits.

(3)

CEO transition related expense includes one-time costs associated with the separation of its former CEO. Such costs included severance, bonus, medical benefits and the tax impact of accelerated vesting of stock-based compensation.

(4)

Business transaction expense includes one-time costs we incurred in connection with acquisitions including professional fees such as legal and accounting along with other certain integration related costs of the acquisition.

(5)

Costs relate to the step up of acquired finished goods inventory to fair market value as required under purchase accounting. This step up in value over original cost is recorded as a charge to cost of revenue as such inventory is sold.

(6)

Proxy contest and other primarily includes one-time legal and other professional fees associated with proxy challenges presented by certain shareholder activists.

Comparison of the Three Months Ended June 30, 2024 to the Three Months Ended June 30, 2023

Adjusted EBITDA for the three months ended June 30, 2024 was $3.0 million, compared to $(5.7) million for the prior year, due to higher revenue and improved margins that were positively impacted by less promotional activity, lower freight costs and operating expense control actions.

Liquidity and Capital Resources

Our primary sources of working capital are cash flow from operations and availability of capital under our revolving credit facility. We have funded operations and acquisitions in recent periods with operating cash flows and proceeds from debt and equity financings.

The following table summarizes our sources and uses of cash:


	Six Months Ended
	June 30,
	2024			2023
	(in thousands)
Cash and cash equivalents at beginning of period	$	18,726		$	11,396
Net cash provided by operating activities		14,613			24,210
Net cash used for investing activities		(79,261	)		(1,252	)
Net cash provided by (used for) financing activities		58,176			(18,749	)
Effect of foreign exchange on cash		208			182
Cash and cash equivalents at end of period	$	12,462		$	15,787

Operating activities

Cash provided by operating activities for the six months ended June 30, 2024 was $14.6 million, a decrease of $9.6 million as compared to $24.2 million for the six months ended June 30, 2023. The decrease is primarily the result of certain acquisition-related business costs.

Investing activities

Cash used for investing activities was $79.3 million for the six months ended June 30, 2024, which was primarily related to the acquisition of the Performance Designed Products business, compared to $1.3 million for the six months ended June 30, 2023 related to certain capital investments.

Financing activities

Net cash provided by financing activities was $58.2 million during the six months ended June 30, 2024 compared to net cash used for financing activities of $18.7 million during the six months ended June 30, 2023. Financing activities during the six months ended June 30, 2024 consisted primarily of the $50 million term loan and $2.9 million of stock option exercise proceeds, partially offset by $3.2 million of debt issuance costs.

Management assessment of liquidity

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.

In addition, the Company monitors the capital markets on an ongoing basis and may consider raising capital if favorable market conditions develop.

Foreign cash balances at June 30, 2024 and December 31, 2023 were $4.1 million and $8.0 million, respectively.

Revolving Credit Facility

As of June 30, 2024, the Company was in compliance with all financial covenants under the Credit Facility, as amended, and excess borrowing availability was approximately $34.6 million.

Term Loan

As of June 30, 2024, the Company was in compliance with all financial covenants under the Term Loan.

Critical Accounting Estimates

Our discussion and analysis of our results of operations and capital resources are based on our consolidated financial statements, which have been prepared in conformity with GAAP. The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities. Management bases its estimates, assumptions and judgments on historical experience and on various other factors that it believes to be reasonable under the circumstances.

Different assumptions and judgments would change the estimates used in the preparation of the condensed consolidated financial statements, which, in turn, could change the results from those reported. Management evaluates its estimates, assumptions and judgments on an ongoing basis. For a discussion of the critical estimates that affect the condensed consolidated financial statements, see “Critical Accounting Estimates” included in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report.

See Note 2, “Summary of Significant Accounting Policies,” to the unaudited condensed consolidated financial statements contained herein for a complete discussion of recent accounting pronouncements. We are currently evaluating the impact of certain recently issued guidance on our financial condition and results of operations in future periods.

Item 3 - Qualitative and Quantitative Disclosures About Market Risk

Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. The Company’s market risk exposure is primarily a result of fluctuations in interest rates, foreign currency exchange rates and inflation.

The Company has used derivative financial instruments, specifically foreign currency forward and option contracts, to manage exposure to foreign currency risks, by hedging a portion of its forecasted expenses denominated in British Pounds expected to occur within a year. The effect of exchange rate changes on foreign currency forward and option contracts is expected to offset the effect of exchange rate changes on the underlying hedged item. The Company does not use derivative financial instruments for speculative or trading purposes. As of June 30, 2024 and December 31, 2023, we did not have any derivative financial instruments.

Foreign Currency Exchange Risk

The Company has exchange rate exposure primarily with respect to the British Pound and Euro. As of June 30, 2024 and December 31, 2023, our monetary assets and liabilities that are subject to this exposure are immaterial, therefore the potential immediate loss to us that would result from a hypothetical 10% change in foreign currency exchange rates would not be expected to have a material impact on our earnings or cash flows. This sensitivity analysis assumes an unfavorable 10% fluctuation in the exchange rates affecting the foreign currencies in which monetary assets and liabilities are denominated and does not take into account the offsetting effect of such a change on our foreign currency denominated revenues.

Inflation Risk

The Company is exposed to market risk due to inflationary pressures affecting our costs and demand for the products we sell. In recent years, our business has been affected by global supply chain constraints and unfavorable changes in economic or political conditions in the countries and markets where we operate. Such inflationary pressures have been and could continue to be exacerbated by higher oil prices, geopolitical turmoil, and economic policy actions and could lead to a recessionary environment. Inflationary pressures can also have a negative impact on demand for the products we sell. Reduced or delayed discretionary spending by consumers in response to inflationary pressures has reduced consumer demand for our products, resulting in reduced sales.

We continue to experience the on-going impacts of a higher interest rate environment, as compared to prior years, which resulted in higher cost of goods, selling expenses, and general and administrative expenses. Such increases have had and may continue to have a negative impact on the Company’s profit margins if selling prices of products do not increase with the increased costs.

Item 4 - Controls and Procedures

Disclosure Controls and Procedures

Disclosure controls and procedures (as defined in Rules 13(a)-15(e) and 15(d)-15(e) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)), are designed to ensure that (1) information required to be disclosed in reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms; and (2) that such information is accumulated and communicated to management, including the principal executive officer and principal financial officer, to allow timely decisions regarding required disclosures. At the conclusion of the period covered by this Quarterly Report on Form 10-Q, we carried out an evaluation, under the supervision of our Principal Executive Officer (or PEO) and our Principal Financial Officer (or PFO), of the effectiveness of the design and operation of our disclosure controls and procedures. Based upon that evaluation, our PEO and PFO concluded that our disclosure controls and procedures, as defined in Rule 13a-15(e) of the Exchange Act, were effective as of June 30, 2024.

Changes in Internal Control over Financial Reporting

There have been no changes in our internal control over financial reporting during the period covered that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting, except that on March 13, 2024, the Company acquired PDP. United States Securities and Exchange Commission guidance allows companies to exclude acquisitions from their assessment of the internal control over financial reporting during the first year following an acquisition. Company is currently integrating PDP’s operations into its overall system of internal control over financial reporting and, if nasecessary, will make appropriate changes as it integrates PDP into the Company's overall internal control over financial reporting process.

Our process for evaluating controls and procedures is continuous and encompasses constant improvement of the design and effectiveness of established controls and procedures and the remediation of any deficiencies, which may be identified during this process.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Accordingly, even effective disclosure controls and procedures can only provide reasonable assurance of achieving their control objectives. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

PART II. OTHER INFORMATION

Item 1 - Legal Proceedings

Please refer to Note 13, “Commitments and Contingencies” in the notes to the unaudited condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q, which is incorporated into this item by reference.

Item 1A - Risk Factors

Information regarding risk factors appears in Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023.

Item 2 - Unregistered Sales of Equity Securities and Use of Proceeds


	Issuer Purchases of Equity Securities
	Total Number of Shares Purchased		Average Price Paid Per Share		Total Number of Shares Purchased As Part of Publicly Announced Plans or Programs		Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
Period
April 1-30, 2024		—	$	—		—		—
May 1-31, 2024		492,811	$	16.27		8,015,851		—
June 1-30, 2024		459,301	$	15.66		7,193,132	$	31,410,853
Total		952,112	$	15.97		15,208,983

Item 5 - Other Information

On June 5, 2024, Gregory Ballard, a member of the Company's board of directors, entered into a Rule 10b5-1 trading arrangement (the "10b5-1 Plan") that is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act, as amended. Mr. Ballard's 10b5-1 Plan provides for the potential sale of 5,542 shares of common stock, including the potential exercise of vested stock options and the associated sale of up to 2,000 shares of common stock, in amounts and prices set forth in the plan. The 10b5-1 Plan terminates on June 4, 2025 or upon the date that all shares under the plan are sold.

Except as described above, none of our other directors or executive officers adopted or terminated a Rule 10b5-1 Trading Plan, or a "non-Rule 10b5-1 trading arrangement" (as each term is defined in Item 408(a) of Regulation S-K) during the three months ended June 30, 2024.

Item 6. Exhibits


3.1			Articles of Incorporation of Turtle Beach Corporation, as amended (Incorporated by reference to Exhibit 3.1 to the Company’s Quarterly Report on Form 10-Q filed August 6, 2018).

3.2			Amended and Restated Bylaws of Turtle Beach Corporation, amended and restated as of April 22, 2024 (Incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K on April 23, 2024).

10.5 †**			Form of Restricted Stock Agreement under the Turtle Beach Corporation 2023 Stock-Based Incentive Compensation Plan.

31.1 **			Certification of Cris Keirn, Principal Executive Officer, pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2 **			Certification of John T. Hanson, Principal Financial Officer, pursuant to Rule 13a-14(a) or 15d-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1 **			Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, executed by Cris Keirn, Principal Executive Officer and John Hanson, Principal Financial Officer.

			Extensible Business Reporting Language (XBRL) Exhibits

101.INS			Inline XBRL Instance Document

101.SCH			Inline XBRL Taxonomy Extension Schema Document

104			Cover Page Interactive Data File (embedded within the Inline XBRL document)

** Filed herewith.

† Management contract or compensatory plan.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



			TURTLE BEACH CORPORATION

Date:	August 8, 2024	By:	/s/ JOHN T. HANSON
			John T. Hanson Chief Financial Officer and Treasurer
			(Principal Financial and Accounting Officer)

Exhibit 10.5

TURTLE BEACH CORPORATION

2023 STOCK-BASED INCENTIVE COMPENSATION PLAN

(as amended pursuant to Amendment No. 2023-1, incorporated herein)

PERFORMANCE STOCK UNIT SUMMARY OF GRANT

Turtle Beach Corporation, a Nevada corporation (the “Company”), pursuant to its 2023 Stock-Based Incentive Compensation Plan, as amended (the “Plan”), hereby grants to the individual listed below (the “Grantee”), this performance stock unit grant representing the target number of performance stock units set forth below (the “Performance Stock Units”) that may become earned and vested by the Grantee based on the level of achievement of the Performance Goals. The actual number of Performance Stock Units earned and vested will be based on the actual performance level achieved with respect to the Performance Goals set forth on Schedule A and the time-based vesting scheduling through the third (3rd) anniversary of the Date of Grant. The Performance Stock Units are subject in all respects to the terms and conditions set forth herein, in the Performance Stock Unit Award Agreement attached hereto as Exhibit A (the “Performance Stock Unit Award Agreement”) and the Plan, each of which is incorporated herein by reference and made part hereof. Unless otherwise defined herein, capitalized terms used in this Performance Stock Unit Summary of Grant (the “Summary of Grant”) and the Performance Stock Unit Award Agreement will have the meanings set forth in the Plan.


Grantee:	[•]
Date of Grant:	April 1, 2024
Target Award:	[•] Performance Stock Units
Performance Period:	As set forth on Schedule A, (i) with respect to Stock Price Appreciation, the period commencing on the Date of Grant and ending on May 9, 2025, and (ii) with respect to Adjusted EBITDA, the period commencing on the Company’s second fiscal quarter 2024 and ending at the end of the Company first fiscal quarter 2025 (the “Performance Period”).
Performance Goals:	For the Performance Period, the Performance Stock Units will vest as to (i) 50% of the Target Award allocable to the Performance Period based on Stock Price Appreciation and (ii) 50% of the Target Award allocable to the Performance Period based on Adjusted EBITDA, each set forth on Schedule A.
Time-Based Vesting Schedule:	The Performance Stock Units will be subject to a three (3) year time-based vesting schedule through the third anniversary of the Date of Grant, with 33% of the Performance Stock Units that become vested based on the achievement of the Performance Goals over the Performance Period vesting at the end of the Performance Period, and the remaining vesting 33% on the second (2nd) anniversary of the Date of Grant and 34%

     
Vesting Upon Death, Disability or Certain Termination Events:
 
Vesting Upon Change in Control:
 
    on the third (3rd) anniversary of the Date of Grant. Except as set forth herein, the Performance Stock Units will become earned and vested based on the performance level achieved with respect to the Performance Goals and the Grantee continuing to be employed by, or provide service to, the Company or any Subsidiary through (i) the Performance Period, (ii) the second (2nd) anniversary of the Date of Grant and (iii) the third (3rd) anniversaries of the Date of Grant (each, a “Vesting Date”). 
The number of Performance Stock Units set forth above is equal to the target number of shares of Company Stock that the Grantee will earn and become vested in for 100% achievement of the Performance Goals (referred to as the “Target Award”). The actual number of shares of Company Stock that the Grantee will become earned and vested in with respect to the Performance Stock Units may be greater or less than the Target Award, or even zero, and will be based on the performance level achieved by the Company with respect to the Performance Goals, as set forth on Schedule A.  Performance level is measured based on the descriptions as set forth on Schedule A.  If actual performance is between performance levels, the number of Performance Stock Units earned and vested will be interpolated on a straight-line basis for pro-rata achievement of the Performance Goals; provided that failure to achieve the threshold performance level with respect to a Performance Goal will result in no Performance Stock Units being earned and vested with respect to that Performance Goal.  
In the event the Grantee ceases to be employed by, or provide service to, the Company or any Subsidiary, for any reason other than in connection with a Change in Control, as set forth below, unvested Performance Stock Units shall be forfeited as of the date of termination of employment or service, irrespective of the level of achievement of the Performance Goals.
In the event a Change in Control occurs while the Grantee is employed by, or providing service to, the Company or any Subsidiary, the Performance Period will end on the date of the Change in Control and the Performance Stock Units attributable to the Performance Period in which the Change in Control occurs shall be converted to Restricted Stock Units, as defined in the Plan, that vest solely on the passage of time, in an amount equal to the greater of: (i) if performance is measurable (as determined by the Committee), the number of Performance Stock Units that would have vested based on the Company’s actual performance level achieved with respect to the Performance Goals as of the Change in Control date, or (ii)

     
    the Target Award, effective as of the date of the Change in Control, and shall vest and be paid on the same dates as the Performance Stock Units would have been paid. 
 Notwithstanding the foregoing, if the Grantee’s employment or service to the Company or any Subsidiary is terminated by the Company or any Subsidiary without Cause or if the Grantee terminates his or her employment for Good Reason (as defined in the Turtle Beach Corporation Amended and Restated Retention Plan Document) during the one-year period immediately following a Change in Control, the unvested portion of the converted Restricted Stock Units described immediately above shall fully vest as of the date of termination.

    Issuance Schedule:

    The Grantee will receive a payment with respect to the Performance Stock Units earned and vested with respect to a Performance Period pursuant to this Performance Stock Unit Award Agreement, if any, as soon as practicable on or after each Vesting Date (each, a “Payment Date”).  Payment will be made with respect to the Performance Stock Units on each Payment Date in accordance with the Performance Stock Unit Award Agreement, with each Performance Stock Unit earned and vested equivalent to one share of Company Stock.  In no event will any fractional shares be issued.  Except as set forth herein, the Grantee must be employed by the Company on each Vesting Date in order to earn and vest in the Performance Stock Units, unless the Committee determines otherwise.

Grantee Acceptance:

By signing the acknowledgement below, the Grantee agrees to be bound by the terms and conditions of the Plan, the Performance Stock Unit Award Agreement and this Summary of Grant. The Grantee accepts as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Plan, this Summary of Grant or the Performance Stock Unit Award Agreement.

The Grantee acknowledges delivery of the Plan and the Plan prospectus together this with this Summary of Grant and the Performance Stock Unit Award Agreement. Additional copies of the Plan and the Plan prospectus are available by contacting Megan Wynne at megan.wynne@turtlebeach.com.

Agreed and accepted:

[Grantee]

Date

SCHEDULE A

PERFORMANCE GOALS

1. Stock Price Appreciation Performance Goal

The number of Performance Stock Units that may become earned and vested will be determined based on the actual performance level of Stock Price Appreciation (as defined below) relative to the Target Stock Price (as defined below) over the Performance Period (the “Performance Goal”).

“Stock Price Appreciation” means, the level of the Company’s stock price appreciation compared to the Target Stock Price, calculated with a volume-weighted average price (“VWAP”) for the thirty (30) day period ending on May 9, 2025.

“Target Stock Price” means $22.35 per share.


April 1, 2024 – May 9, 2025 Performance Period
Performance Period	Target Vesting Allocation*	Performance Level	Performance Goal	Percentage of Performance Stock Units Earned and Vested
April 1, 2024 – May 9, 2025	50%	Threshold	75% of the Target Stock Price	50%
		Target	Target Stock Price	100%
		Stretch	125% of the Target Stock Price	200%

*The actual number of Performance Stock Units earned and vested will be based on the actual performance level achieved at or between each performance level and will be interpolated on a straight-line basis for pro-rata achievement of the Performance Goal. The actual number of Performance Stock Units earned and vested will be determined by the Committee based on the actual performance level achieved with respect to the applicable Performance Goal. The Stock Price Appreciation will be determined based on a 30-day VWAP, calculated as of and including the last date of the Performance Period.

2. Adjusted EBITDA

The number of Performance Stock Units that may become earned and vested will be determined based on the actual performance level of Adjusted EBITDA (as defined below) with respect to the Performance Period (the “Performance Goal”) as compared to the Target Adjusted EBITDA (as defined below).

“Adjusted EBITDA” means, for the Performance Period, the Company’s Adjusted Earnings Before Income Tax, Depreciation, and Amortization as reported in the Management’s Discussion and Analysis of Financial Condition and Results of Operations filed with the Company’s Annual Report on Form 10-K for the fiscal year 2024, plus the Adjusted EBITDA as reported on the Company’s Quarterly Report on Form 10-Q for Q1 of 2025, minus the Adjusted EBITDA as reported on the Company’s Quarterly Report on Form 10-Q for Q1 of 2024.

“Target Adjusted EBITDA” means $67.5 million.


April 1, 2024 – March 31, 2025 Performance Period
Performance Period	Target Vesting Allocation*	Performance Level	Performance Goal	Percentage of Performance Stock Units Earned and Vested
April 1, 2024 – March 31, 2025	50%	Threshold	80% of the Target Adjusted EBITDA	50%
		Target	Target Adjusted EBITDA	100%
		Stretch	125% of the Target Adjusted EBITDA	150%

**The actual number of Performance Stock Units earned and vested will be based on the actual performance level achieved at or between each performance level and will be interpolated on a straight-line basis for pro-rata achievement of the Performance Goal. The actual number of Performance Stock Units earned and vested will be determined by the Committee based on the actual performance level achieved with respect to the Performance Goal relative to the Target Adjusted EBITDA.

EXHIBIT A

TURTLE BEACH CORPORATION

2023 STOCK-BASED INCENTIVE COMPENSATION PLAN

(as amended pursuant to Amendment No. 2023-1, incorporated herein)

PERFORMANCE STOCK UNIT AWARD AGREEMENT

This PERFORMANCE STOCK UNIT AWARD AGREEMENT (“Agreement”) dated as of [_________], 2024 (the “Grant Date”), is by and between Turtle Beach Corporation, a Nevada corporation (the “Company”), and [EMPLOYEE NAME] (the “Grantee”).

RECITALS

WHEREAS, the Company desires to afford the Grantee an opportunity to own Performance Stock Units of the Company as hereinafter provided, in accordance with the provisions of the Turtle Beach Corporation 2023 Stock-Based Incentive Compensation Plan, as amended (the “Plan”), a copy of which is attached hereto as Exhibit B;

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth and for other good and valuable consideration, the parties hereto, intending to be legally bound hereby, agree as follows:

AGREEMENT

Grant of Performance Stock Units. The Company hereby grants to the Grantee an award of Performance Stock Units (the “Performance Stock Units”) in an amount of the Target Award, as set forth in the Summary of Grant, subject to the vesting and other terms and conditions of this Agreement.

Performance Stock Unit Account. Performance Stock Units represent hypothetical shares of common stock of the Company (“Common Stock”) and not actual shares of stock. The Company shall establish and maintain a Performance Stock Unit account, as a bookkeeping account on its records, for the Grantee and shall record in such account the number of Performance Stock Units granted to the Grantee. No shares of Common Stock shall be issued to the Grantee at the time the grant is made, and the Grantee shall not be, nor have any of the rights or privileges of, a stockholder of the Company with respect to any Performance Stock Units recorded in the account.

Vesting.

(a)

The Performance Stock Units will become earned and vested based on the actual performance level achieved with respect to the Performance Goals (as set forth on Schedule A to the Summary of Grant) and the Grantee continuing to be employed by, or provide service to, the Company through each Vesting Date (as defined in the Summary of Grant).

(b)

The Committee will, as soon as practicable following the last day of the Performance Period (as defined in the Summary of Grant), determine (i) the extent, if any, to which, each of the Performance Goals has been achieved with respect to the Performance Period and (ii) the number of shares of Common Stock, if any, which, the Grantee will be entitled to receive with respect to this Agreement, subject in all respects to the additional time-based vesting schedule. Such determination will be final, conclusive and binding on the Grantee, and on all other persons, to the maximum extent permitted by law. In the event that the Committee makes a final determination that the Performance Goals have not been achieved, the Grantee will have no further rights to receive shares of Common Stock hereunder.

(c)

Except as set forth in the Summary of Grant, if the Grantee ceases to be employed by, or provide service to, the Company or any Subsidiary for any reason prior to a Vesting Date, the Grantee will forfeit all rights to receive shares of Common Stock hereunder and the Grantee will not have any rights with respect to any portion of the shares of Common Stock that have not yet become vested as of the date the Grantee ceases to be employed by, or provide service to, the Company, irrespective of the level of achievement of the Performance Goals.

Payment/Conversion of Performance Stock Units.

(a)

Except as otherwise provided in this Section 4, if the Performance Stock Units vest in accordance with Section 3 or 5(b), the Grantee shall be entitled to receive payment of the vested Performance Stock Units as soon as practicable after each Vesting Date.

(b)

On the applicable Payment Date, each vested Performance Stock Unit credited to the Grantee’s account shall be settled in (i) cash with a value equal to the Fair Market Value of the shares of Common Stock underlying the Performance Stock Units, (ii) shares of Common Stock of the Company equal to the number of vested Performance Stock Units, or (iii) a combination of the above, in each case as determined by the Committee in its sole discretion and subject to compliance with the six-month delay described in Section 17 below, if applicable, and the payment of any federal, state, local, or foreign withholding taxes as described in Section 10 below. The obligation of the Company to distribute shares of Common Stock shall be subject to the rights of the Company as set forth in the Plan and to all applicable laws, rules, regulations, and such approvals by governmental agencies as may be deemed appropriate by the Committee, including as set forth in Section 12 below.

Effect of Termination of Employment.

(a)

If the Grantee ceases to be employed by, or provide service to, the Company or any Subsidiary, for any reason other than in the event of a Change in Control, as set forth in Section 5(b) below, the Award shall immediately cease to vest, and the unvested portion shall be forfeited as of the date of termination of employment or service.

(b)

Notwithstanding the foregoing, if the Grantee’s employment is terminated by the Company or any Subsidiary without Cause or if the Grantee terminates his or her employment for Good Reason (as defined in the Turtle Beach Corporation Amended and Restated Retention Plan Document) during the one-year period immediately following a Change in Control, the unvested

portion of the Award shall vest as of the date of such termination, and such termination date shall be a “Vesting Date” for purposes of this Agreement.

Change in Control. Except as provided in Section 5 above and the Summary of Grant, the provisions of the Plan applicable to a Change in Control shall apply to the Performance Stock Units, and, in the event of a Change in Control, the Committee may take such actions as it deems appropriate pursuant to the Plan.

Restrictions; Transferability of Performance Stock Units. The Performance Stock Units and any rights relating thereto are not assignable or transferable, and the Performance Stock Units shall not be alienated, pledged, or otherwise transferred or encumbered by the Grantee. Any attempt to assign, alienate, pledge, attach, sell or otherwise transfer or encumber the Performance Stock Units during the Performance Period shall be wholly ineffective and, if any such attempt is made, the Performance Stock Units shall be forfeited by the Grantee and all of the Grantee’s rights in and to the Performance Stock Units shall immediately terminate without any payment or consideration due to the Grantee.

No Right to Continued Service. Neither the Plan nor this Agreement shall confer upon the Grantee any right to be retained in any position with the Company or any Subsidiary. Further, nothing in the Plan or this Agreement shall be construed to limit the discretion of the Company to terminate the Grantee’s employment, at any time, with or without Cause.

Plan Terms; Definitions. The Performance Stock Units covered by the Award are issued under the Plan and governed by its terms. Except as specifically set forth herein, in the event of any inconsistency in the Plan and this Agreement, the Plan’s terms control. Any term capitalized herein that is not separately defined shall have the meaning set forth in the Plan.

10.

Income Taxes; Withholding Taxes. The Grantee is solely responsible for the satisfaction of all taxes that may arise in connection with the Performance Stock Units pursuant to this Agreement. At the time of taxation, the Company shall have the right to deduct from other compensation or from amounts payable with respect to the Performance Stock Units, including by withholding shares of the Company’s Common Stock, an amount equal to the federal (including FICA), state, local and foreign income and payroll taxes and other amounts as may be required by law to be withheld with respect to the Performance Stock Units. Without limiting the foregoing, upon payment of the Performance Stock Units, the Company may withhold shares of Common Stock subject to the vested Performance Stock Units to cover any of the applicable withholding for related FICA tax and income tax liabilities (not to exceed the maximum statutory rates).

11.

Governing Law. To the extent that Federal laws do not otherwise control, the validity, construction, interpretation, and effect of this instrument shall exclusively be governed by, and determined in accordance with, the applicable laws of the State of California, excluding any conflicts or choice of law rule or principle.

12.

Grant Subject to Applicable Laws and Company Policies. This Award of Performance Stock Units shall also be subject to the Company’s stock ownership guidelines, any applicable clawback or recoupment policies, share trading policies, and other policies that may be implemented by the Board from time to time in accordance with applicable law. Notwithstanding

anything in this Agreement to the contrary, the Plan, this Agreement, and the Performance Stock Units awarded hereunder shall be subject to all applicable laws, including any laws, regulations, restrictions, or governmental guidance that becomes applicable in the event of the Company’s participation in any governmental programs, and the Committee reserves the right to modify this Agreement and the Performance Stock Units as necessary to conform to any restrictions imposed by any such laws, regulations, restrictions, or governmental guidance or to conform to any applicable clawback or recoupment policies, share trading policies, and other policies that may be implemented by the Board from time to time. As a condition of participating in the Plan, and by the Grantee’s acceptance of the Performance Stock Units, the Grantee is deemed to have agreed to any such modifications that may be imposed by the Committee, and agrees to sign such waivers or acknowledgments as the Committee may deem necessary or appropriate with respect to such modifications.

13.

Entire Agreement; Receipt of Documents. This Agreement and the Plan set forth the entire understanding of the parties hereto and supersede all prior agreements, arrangements, and communications, whether oral or written, pertaining to the subject matter hereof. The Grantee hereby acknowledges receipt of a copy of the Plan and this Agreement, represents that he or she has read and understands the terms and provisions thereof, and accepts the Award subject to all the terms and conditions of the Plan and this Agreement.

14.

Counterparts. This Agreement may be executed and delivered in separate counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the same agreement. This Agreement shall become effective only when counterparts have been executed and delivered by all parties whose names are set forth on the signature page(s) hereof. Any signature delivered by fax or in pdf format shall have the same force and effect as an original signature.

15.

Binding Effect; Benefits. This Agreement shall be binding upon and inure to the benefit of the parties to this Agreement and their respective successors and assigns. Nothing in this Agreement, express or implied, is intended or shall be construed to give any person or entity other than the parties to this Agreement or their respective successors or assigns any legal or equitable right, remedy or claim under or in respect of any agreement or any provision contained herein.

16.

Waiver. The waiver by either party hereto of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any preceding or succeeding breach and no failure by either party to exercise any right or privilege hereunder shall be deemed a waiver of such party’s rights or privileges hereunder or shall be deemed a waiver of such party’s rights to exercise the same at any subsequent time or times hereunder.

17.

Section 409A. This Award of Performance Stock Units is intended to be exempt from or comply with the applicable requirements of section 409A of the Code and shall be administered in accordance with section 409A of the Code. Notwithstanding anything in this Agreement to the contrary, if the Performance Stock Units constitute “deferred compensation” under section 409A of the Code and the Performance Stock Units become vested and settled upon the Grantee’s termination of employment, payment with respect to the Performance Stock Units shall be delayed for a period of six months after the Grantee’s termination of employment if the Grantee is a

“specified employee” as defined under section 409A of the Code (as determined by the Committee), if required pursuant to section 409A of the Code. If payment is delayed, the shares of Common Stock of the Company shall be distributed within 30 days of the date that is the six-month anniversary of the Grantee’s termination of employment. If the Grantee dies during the six-month delay, the shares shall be distributed in accordance with the Grantee’s will or under the applicable laws of descent and distribution. Notwithstanding any provision to the contrary herein, payments made with respect to this Award of Performance Stock Units may only be made in a manner and upon an event permitted by section 409A of the Code, and all payments to be made upon a termination of employment hereunder may only be made upon a “separation from service” as defined under section 409A of the Code. To the extent that any provision of this Agreement would cause a conflict with the requirements of section 409A of the Code, or would cause the administration of the Performance Stock Units to fail to satisfy the requirements of section 409A of the Code, such provision shall be deemed null and void to the extent permitted by applicable law. In no event shall a Grantee, directly or indirectly, designate the calendar year of payment. If the Performance Stock Units constitute “deferred compensation” under section 409A of the Code and payment is subject to the execution of a release of claims in favor of the Company and its Affiliates, and if payment with respect to the Performance Stock Units that is subject to the execution of the release could be made in more than one taxable year, payment shall be made in the later taxable year.

[Signature Page Follows]

IN WITNESS WHEREOF, the Company has caused its duly authorized officer to execute and attest this instrument, and the Grantee has placed his or her signature hereon, effective as of the Grant Date set forth above.

TURTLE BEACH CORPORATION

By:

Name: Curtis Baron

Title: Corporate Controller

By:

Grantee: [___________________]

Date: [____________________]

EXHIBIT B

[INSERT COPY OF PLAN]

Exhibit 31.1

CERTIFICATION

I, Cris Keirn, certify that:

I have reviewed this quarterly report on Form 10-Q of Turtle Beach Corporation;

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date:	August 8, 2024	By:	/s/ CRIS KEIRN
			Cris Keirn
			Interim Chief Executive Officer

Exhibit 31.2

CERTIFICATION

I, John T. Hanson, certify that:

I have reviewed this quarterly report on Form 10-Q of Turtle Beach Corporation;

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.


Date:	August 8, 2024	By:	/s/ JOHN T. HANSON
			John T. Hanson
			Chief Financial Officer and Treasurer

Exhibit 32.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER

PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Each of the undersigned hereby certifies, in accordance with 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, in his or her capacity as an officer of Turtle Beach Corporation (the "Company"), that, to his or her knowledge, the Quarterly Report of the Company on Form 10-Q for the period ended June 30, 2024, fully complies with the requirements of Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operation of the Company.


Date:	August 8, 2024	By:	/s/ CRIS KEIRN
			Cris Keirn
			Interim Chief Executive Officer
			(Principal Executive Officer)


Date:	August 8, 2024	By:	/s/ JOHN T. HANSON
			John T. Hanson
			Chief Financial Officer and Treasurer
			(Principal Financial Officer)

Document and Entity Information - shares	6 Months Ended
Document and Entity Information - shares	Jun. 30, 2024	Jul. 31, 2024
Document Information [Line Items]
Entity Registrant Name	TURTLE BEACH CORPORATION
Entity Central Index Key	0001493761
Current Fiscal Year End Date	--12-31
Entity Filer Category	Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	false
Document Type	10-Q
Document Period End Date	Jun. 30, 2024
Document Fiscal Year Focus	2024
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		20,754,274
Entity Shell Company	false
Entity Current Reporting Status	Yes
Entity File Number	001-35465
Entity Tax Identification Number	27-2767540
Entity Address, Address Line One	44 South Broadway
Entity Address, Address Line Two	4th Floor
Entity Address, City or Town	White Plains
Entity Address, State or Province	NY
Entity Address, Postal Zip Code	10601
City Area Code	888
Local Phone Number	496-8001
Entity Incorporation, State or Country Code	NV
Document Quarterly Report	true
Document Transition Report	false
Entity Interactive Data Current	Yes
Common Stock
Document Information [Line Items]
Trading Symbol	HEAR
Title of 12(b) Security	Common Stock, par value $0.001
Security Exchange Name	NASDAQ
Preferred Stock Purchase Rights
Document Information [Line Items]
No Trading Symbol Flag	true
Title of 12(b) Security	Preferred Stock Purchase Rights
Security Exchange Name	NASDAQ

Condensed Consolidated Statements of Operations (unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Statement [Abstract]
Net revenue	$ 76,478	$ 47,982	$ 132,326	$ 99,426
Cost of revenue	53,402	36,110	91,464	73,415
Gross profit	23,076	11,872	40,862	26,011
Operating expenses:
Selling and marketing	13,741	10,351	22,754	19,874
Research and development	4,589	4,189	8,491	8,290
General and administrative	7,463	13,125	13,137	20,132
Acquisition-related costs	1,394		6,304
Total operating expenses	27,187	27,665	50,686	48,296
Operating loss	(4,111)	(15,793)	(9,824)	(22,285)
Interest expense (income)	2,220	(17)	2,370	146
Other non-operating expense, net	352	198	722	318
Loss before income tax	(6,683)	(15,974)	(12,916)	(22,749)
Income tax expense (benefit)	841	(54)	(5,547)	(124)
Net loss	$ (7,524)	$ (15,920)	$ (7,369)	$ (22,625)
Net loss per share
Basic (in dollars per share)	$ (0.35)	$ (0.93)	$ (0.37)	$ (1.34)
Diluted (in dollars per share)	$ (0.35)	$ (0.93)	$ (0.37)	$ (1.34)
Weighted average number of shares:
Basic (in shares)	21,252	17,156	19,795	16,869
Diluted (in shares)	21,252	17,156	19,795	16,869

Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Statement of Comprehensive Income [Abstract]
Net Income (Loss)	$ (7,524)	$ (15,920)	$ (7,369)	$ (22,625)
Foreign currency translation adjustment	236	(35)	(182)	410
Other comprehensive income (loss)	236	(35)	(182)	410
Comprehensive loss	$ (7,288)	$ (15,955)	$ (7,551)	$ (22,215)

Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Current Assets:
Cash and cash equivalents	$ 12,462	$ 18,726
Accounts receivable, net	46,474	54,390
Inventories	73,347	44,019
Prepaid expenses and other current assets	11,380	7,720
Total Current Assets	143,663	124,855
Property and equipment, net	6,295	4,824
Goodwill	56,762	10,686
Intangible assets, net	46,683	1,734
Other assets	10,985	7,868
Total Assets	264,388	149,967
Current Liabilities:
Revolving credit facility	24,029
Accounts payable	48,380	26,908
Other current liabilities	30,827	29,424
Total Current Liabilities	103,236	56,332
Debt, non-current	45,772
Income tax payable	1,508	1,546
Other liabilities	8,611	7,012
Total Liabilities	159,127	64,890
Commitments and Contingencies
Stockholders’ Equity
Common stock, $0.001 par value - 25,000,000 shares authorized; 20,753,358 and 17,531,702 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively	21	18
Additional paid-in capital	247,917	220,185
Accumulated deficit	(141,646)	(134,277)
Accumulated other comprehensive income (loss)	(1,031)	(849)
Total Stockholders’ Equity	105,261	85,077
Total Liabilities and Stockholders’ Equity	$ 264,388	$ 149,967

Condensed Consolidated Balance Sheets (unaudited) (Parenthetical) - $ / shares	Jun. 30, 2024	Dec. 31, 2023
Statement of Financial Position [Abstract]
Common stock par value	$ 0.001	$ 0.001
Common stock shares authorized	25,000,000	25,000,000
Common stock shares issued	20,753,358	17,531,702
Common stock shares outstanding	20,753,358	17,531,702

Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss)	$ (7,369)	$ (22,625)
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:
Depreciation and amortization	2,084	1,948
Costs recognized on sale of acquired inventory	1,251
Amortization of intangible assets	2,698	513
Amortization of debt financing costs	348	75
Stock-based compensation	1,951	6,929
Deferred income taxes	(6,339)	(209)
Change in sales returns reserve	(3,209)	(2,419)
Provision for obsolete inventory	2,081	(1,098)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	32,616	32,685
Inventories	(11,238)	5,457
Accounts payable	11,281	7,452
Prepaid expenses and other assets	(1,300)	691
Income taxes payable	192	(261)
Other liabilities	(10,434)	(4,928)
Net cash provided by (used for) operating activities	14,613	24,210
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property and equipment	(1,967)	(1,252)
Acquisition of a business, net of cash acquired	(77,294)
Net cash used for investing activities	(79,261)	(1,252)
CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings on revolving credit facilities	80,288	99,785
Repayment of revolving credit facilities	(56,259)	(118,838)
Proceeds of term loan	50,000
Repayment of term loan	(417)
Proceeds from exercise of stock options and warrants	2,941	1,358
Repurchase of common stock	(15,207)	(974)
Debt issuance costs	(3,170)	(80)
Net cash provided by (used for) financing activities	58,176	(18,749)
Effect of exchange rate changes on cash and cash equivalents	208	182
Net increase (decrease) in cash and cash equivalents	(6,264)	4,391
Cash and cash equivalents - beginning of period	18,726	11,396
Cash and cash equivalents - end of period	12,462	15,787
SUPPLEMENTAL DISCLOSURE OF INFORMATION
Cash paid for interest	2,224	226
Cash paid (received) for income taxes	$ 159	$ (137)

Condensed Consolidated Statement of Stockholders' Equity (Unaudited) - USD ($) $ in Thousands	Total	Common stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Income (Loss)
Beginning Balance at Dec. 31, 2022	$ 88,941	$ 17	$ 206,916	$ (116,598)	$ (1,394)
Beginning Balance, shares at Dec. 31, 2022		16,569,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss)	(6,705)			(6,705)
Other comprehensive income (loss), net of tax	445				445
Issuance of restricted stock, shares		14,000
Stock options exercised	124		124
Stock options exercised, shares		21,000
Stock-based compensation	1,959		1,959
Ending Balance at Mar. 31, 2023	84,764	$ 17	208,999	(123,303)	(949)
Ending Balance, shares at Mar. 31, 2023		16,604,000
Beginning Balance at Dec. 31, 2022	88,941	$ 17	206,916	(116,598)	(1,394)
Beginning Balance, shares at Dec. 31, 2022		16,569,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss)	(22,625)
Other comprehensive income (loss), net of tax	410
Ending Balance at Jun. 30, 2023	74,055	$ 17	214,245	(139,223)	(984)
Ending Balance, shares at Jun. 30, 2023		17,309
Beginning Balance at Mar. 31, 2023	84,764	$ 17	208,999	(123,303)	(949)
Beginning Balance, shares at Mar. 31, 2023		16,604,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss)	(15,920)			(15,920)
Other comprehensive income (loss), net of tax	(35)				(35)
Issuance of restricted stock, shares		469
Stock options exercised	1,234		1,234
Stock options exercised, shares		322
Stock-based compensation	4,986		4,986
Repurchase of common stock	(974)		(974)
Repurchase of common stock, shares		(86)
Ending Balance at Jun. 30, 2023	74,055	$ 17	214,245	(139,223)	(984)
Ending Balance, shares at Jun. 30, 2023		17,309
Beginning Balance at Dec. 31, 2023	85,077	$ 18	220,185	(134,277)	(849)
Beginning Balance, shares at Dec. 31, 2023		17,532,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss)	155			155
Other comprehensive income (loss), net of tax	(418)				(418)
Issuance of acquisition-related stock	38,050	$ 3	38,047
Issuance of acquisition-related stock , Shares		3,450,000
Issuance of restricted stock, shares		12,000
Stock options exercised	1,257		1,257
Stock options exercised, shares		171,000
Stock-based compensation	1,105		1,105
Ending Balance at Mar. 31, 2024	125,226	$ 21	260,594	(134,122)	(1,267)
Ending Balance, shares at Mar. 31, 2024		21,165,000
Beginning Balance at Dec. 31, 2023	85,077	$ 18	220,185	(134,277)	(849)
Beginning Balance, shares at Dec. 31, 2023		17,532,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss)	(7,369)
Other comprehensive income (loss), net of tax	$ (182)
Stock options exercised, shares	346,842
Repurchase of common stock	$ (15,200)
Repurchase of common stock, shares	(1,000,000)
Ending Balance at Jun. 30, 2024	$ 105,261	$ 21	247,917	(141,646)	(1,031)
Ending Balance, shares at Jun. 30, 2024		20,754
Beginning Balance at Mar. 31, 2024	125,226	$ 21	260,594	(134,122)	(1,267)
Beginning Balance, shares at Mar. 31, 2024		21,165,000
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net Income (Loss)	(7,524)			(7,524)
Other comprehensive income (loss), net of tax	236				236
Issuance of restricted stock, shares		365
Stock options exercised	1,684	$ 1	1,683
Stock options exercised, shares		176
Stock-based compensation	846		846
Repurchase of common stock	$ (15,207)	$ (1)	(15,206)
Repurchase of common stock, shares	(1,000,000)	(952)
Ending Balance at Jun. 30, 2024	$ 105,261	$ 21	$ 247,917	$ (141,646)	$ (1,031)
Ending Balance, shares at Jun. 30, 2024		20,754

Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended				6 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023
Pay vs Performance Disclosure
Net Income (Loss)	$ (7,524)	$ 155	$ (15,920)	$ (6,705)	$ (7,369)	$ (22,625)

Insider Trading Arrangements	3 Months Ended	6 Months Ended
Insider Trading Arrangements	Jun. 30, 2024 shares	Jun. 30, 2024 shares
Trading Arrangements, by Individual
Material Terms of Trading Arrangement		On June 5, 2024, Gregory Ballard, a member of the Company's board of directors, entered into a Rule 10b5-1 trading arrangement (the "10b5-1 Plan") that is intended to satisfy the affirmative defense of Rule 10b5-1(c) under the Exchange Act, as amended. Mr. Ballard's 10b5-1 Plan provides for the potential sale of 5,542 shares of common stock, including the potential exercise of vested stock options and the associated sale of up to 2,000 shares of common stock, in amounts and prices set forth in the plan. The 10b5-1 Plan terminates on June 4, 2025 or upon the date that all shares under the plan are sold. Except as described above, none of our other directors or executive officers adopted or terminated a Rule 10b5-1 Trading Plan, or a "non-Rule 10b5-1 trading arrangement" (as each term is defined in Item 408(a) of Regulation S-K) during the three months ended June 30, 2024.
Gregory Ballard
Trading Arrangements, by Individual
Name		Gregory Ballard
Title		board of directors
Rule 10b5-1 Arrangement Adopted		true
Adoption Date		June 5, 2024
Rule 10b5-1 Arrangement Terminated		true
Termination Date		June 4, 2025
Aggregate Available	5,542	5,542
Other Directors or Executive Officers
Trading Arrangements, by Individual
Title	other directors or executive officers
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

Background and Basis of Presentation

6 Months Ended

Jun. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Background and Basis of Presentation

Note 1. Background and Basis of Presentation

Organization

Basis of Presentation

Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2024

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Note 2. Summary of Significant Accounting Policies

Acquisitions

6 Months Ended

Jun. 30, 2024

Business Combinations [Abstract]

Acquisitions

Note 3. Acquisitions

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


(In thousands)	Amount
Cash		1,562
Accounts Receivable		21,491
Inventory		21,423
Prepaid and Other Current Assets		2,360
Property, Plant & Equipment		1,161
Other Assets		3,478
Intangible Assets		47,769
Accounts Payable		(11,009	)
Accrued Liabilities		(8,215	)
Lease Payable		(2,726	)
Deferred Tax Liability		(6,461	)
Total identifiable net assets		70,833
Goodwill		46,076
Total consideration paid	$	116,909


(In thousands)	Life	Amount
Tradenames	7 Years	$	15,607
Customer relationships	6 Years		4,456
Developed technology	6 Years		27,706
Total		$	47,769

Pro Forma Financial Information (Unaudited)


	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2024			2023			2024			2023
	(in thousands)
Net revenue	$	76,478		$	65,709		$	152,344		$	135,702
Net loss	$	(4,541	)	$	(24,045	)	$	(14,434	)	$	(35,380	)

Fair Value Measurement

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value Measurement

Note 4. Fair Value Measurement

•

Level 1 — Quoted prices in active markets for identical assets or liabilities.

•


	June 30, 2024				December 31, 2023
	Reported		Fair Value		Reported		Fair Value
	(in thousands)
Financial Assets and Liabilities:
Cash and cash equivalents	$	12,462	$	12,462	$	18,726	$	18,726
Term Loan	$	49,583	$	49,583	$	—	$	—
Revolving credit facility	$	24,029	$	24,029	$	—	$	—

Allowance for Sales Returns

6 Months Ended

Jun. 30, 2024

Allowance For Sales Returns [Abstract]

Allowance for Sales Returns

Note 5. Allowance for Sales Returns

The following table provides the changes in our sales return reserve, which is classified as a reduction of accounts receivable:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
	(in thousands)
Balance, beginning of period	$	6,039		$	6,639		$	8,449		$	7,817
Reserve accrual		2,692			2,556			5,433			6,150
Recoveries and deductions, net		(3,491	)		(3,797	)		(8,642	)		(8,569	)
Balance, end of period	$	5,240		$	5,398		$	5,240		$	5,398

Composition of Certain Financial Statement Items

6 Months Ended

Jun. 30, 2024

Condensed Consolidated Balance Sheet Components [Abstract]

Composition of Certain Financial Statement Items

Note 6. Composition of Certain Financial Statement Items

Inventories

Inventories consist of the following:


	June 30, 2024		December 31, 2023
	(in thousands)
Finished goods	$	62,379	$	43,579
Raw materials		10,968		440
Total inventories	$	73,347	$	44,019

Property and Equipment, net

Property and equipment, net, consists of the following:


	June 30, 2024			December 31, 2023
	(in thousands)
Machinery and equipment	$	2,781		$	2,597
Software and software development		2,858			2,438
Furniture and fixtures		1,686			1,700
Tooling		14,071			11,250
Leasehold improvements		2,327			1,988
Demonstration units and convention booths		16,008			15,767
Total property and equipment, gross		39,731			35,740
Less: accumulated depreciation and amortization		(33,436	)		(30,916	)
Total property and equipment, net	$	6,295		$	4,824

Other Current Liabilities

Other current liabilities consist of the following:


	June 30, 2024		December 31, 2023
	(in thousands)
Accrued employee expenses	$	3,009	$	3,944
Accrued royalty		6,596		5,275
Accrued tax-related payables		4,350		5,206
Accrued freight		2,215		2,917
Accrued marketing		1,858		3,335
Accrued expenses		12,799		8,747
Total other current liabilities	$	30,827	$	29,424

Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Note 7. Goodwill and Other Intangible Assets

Acquired Intangible Assets

Acquired identifiable intangible assets, and related accumulated amortization, as of June 30, 2024 and December 31, 2023 consisted of:


	June 30, 2024
	Gross Carrying Value			Accumulated Amortization			Net Book Value
	(in thousands)
Customer relationships	$	12,541		$	7,530		$	5,011
Tradenames		18,673			3,468			15,205
Developed technology		29,590			3,148			26,442
Foreign currency		(1,189	)		(1,214	)		25
Total Intangible Assets (1)	$	59,615		$	12,932		$	46,683


	December 31, 2023
	Gross Carrying Value			Accumulated Amortization			Net Book Value
	(in thousands)
Customer relationships	$	8,085		$	7,214		$	871
Tradenames		3,066			2,607			459
Developed technology		1,884			1,613			271
Foreign currency		(1,159	)		(1,292	)		133
Total Intangible Assets (1)	$	11,876		$	10,142		$	1,734

(1) The accumulated amortization includes $1.9 million of accumulated impairment charges as of June 30, 2024 and December 31, 2023.

As of June 30, 2024, estimated annual amortization expense related to definite lived intangible assets in future periods was as follows:


	(in thousands)
2024	$	4,299
2025		8,016
2026		7,761
2027		7,591
Thereafter		18,991
Total	$	46,658

Changes in the carrying values of goodwill for the six months ended June 30, 2024 from the balance as of December 31, 2023.


	(in thousands)
Balance as of January 1, 2024	$	10,686
PDP acquisition		46,076
Balance as of June 30, 2024	$	56,762

Revolving Credit Facility and Long-Term Debt

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Revolving Credit Facility and Long-Term Debt

Note 8. Revolving Credit Facility and Long-Term Debt


	June 30, 2024		December 31, 2023
	(in thousands)
Revolving credit facility, maturing March 2027	$	24,029	$	—
Term loan Due 2027	$	49,583	$	—

Revolving Credit Facility

As of June 30, 2024, the Company was in compliance with all financial covenants under the Credit Facility, as amended, and excess borrowing availability was approximately $34.6 million.

Term Loan

As of June 30, 2024, the Company was in compliance with all financial covenants under the Term Loan.

Income Taxes

6 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

Income Taxes

Note 9. Income Taxes

The following table presents the Company’s income tax expense and effective income tax rate:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
	(in thousands)
Income tax expense (benefit)	$	841		$	(54	)	$	(5,547	)	$	(124	)
Effective income tax rate		(12.6	%)		0.3	%		42.9	%		0.5	%

Equity and Stock-Based Compensation

6 Months Ended

Jun. 30, 2024

Share-Based Payment Arrangement [Abstract]

Equity and Stock-Based Compensation

Note 10. Equity and Stock-Based Compensation

Stock Repurchase Activity

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:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
	(in thousands)
Cost of revenue	$	159	$	162	$	290	$	337
Selling and marketing		375		410		862		900
Research and development		273		324		497		680
General and administrative		39		4,074		302		5,012
Total stock-based compensation	$	846	$	4,970	$	1,951	$	6,929

The following table presents the stock activity and the total number of shares available for grant as of June 30, 2024:


	(in thousands)
Balance at December 31, 2023		1,059
Options Cancelled		1
Restricted Stock Granted		(205	)
Restricted Stock Forfeited		19
Performance Shares Granted		(171	)
Balance at June 30, 2024		703

Stock Option Activity


	Options Outstanding
	Number of Shares Underlying Outstanding Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value
						(in years)
Outstanding at December 31, 2023		1,041,452		$	9.10		4.22	$	3,137,285
Options Granted		-			-
Options Exercised		(346,842	)		8.27
Options Forfeited		(824	)		60.87
Outstanding at June 30, 2024		693,786		$	9.45		4.85	$	4,060,476
Vested and expected to vest at June 30, 2024		695,434		$	9.53		4.85	$	4,060,476
Exercisable at June 30, 2024		693,421		$	9.49		4.85	$	4,060,476

Restricted Stock Activity


	Shares			Weighted Average Grant Date Fair Value Per Share
Nonvested restricted stock at December 31, 2023		764,942		$	14.76
Granted		205,268			17.05
Vested		(317,552	)		14.16
Shares forfeited		(19,236	)		10.47
Nonvested restricted stock at June 30, 2024		633,422		$	15.93

Performance-Based Restricted Share Units

Net Income (Loss) Per Share

6 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

Net Income (Loss) Per Share

Note 11. 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:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
	(in thousands, except per-share data)
Net income (loss)	$	(7,524	)	$	(15,920	)	$	(7,369	)	$	(22,625	)

Weighted average common shares outstanding — Basic		21,252			17,156			19,795			16,869
Plus incremental shares from assumed conversions:
Dilutive effect of restricted stock		—			—			—			—
Dilutive effect of stock options		—			—			—			—
Dilutive effect of warrants		—			—			—			—
Weighted average common shares outstanding — Diluted		21,252			17,156			19,795			16,869
Net income (loss) per share:
Basic	$	(0.35	)	$	(0.93	)	$	(0.37	)	$	(1.34	)
Diluted	$	(0.35	)	$	(0.93	)	$	(0.37	)	$	(1.34	)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
	(in thousands)
Stock options		782		1,363		820		1,384
Unvested restricted stock awards		646		908		676		860
Warrants		550		550		550		550
Total		1,978		2,821		2,046		2,794

Segment Information

6 Months Ended

Jun. 30, 2024

Segment Reporting [Abstract]

Segment Information

Note 12. Segment Information

The following table represents total net revenues based on where customers are physically located:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
	(in thousands)
North America	$	61,993	$	32,356	$	104,152	$	73,068
Europe and Middle East		11,983		11,861		22,944		21,587
Asia Pacific		2,502		3,765		5,230		4,771
Total net revenues	$	76,478	$	47,982	$	132,326	$	99,426

Commitments and Contingencies

6 Months Ended

Jun. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 13. Commitments and Contingencies

Litigation

Warranties


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
	(in thousands)
Warranty, beginning of period	$	687		$	616		$	670		$	618
Warranty costs accrued		263			190			483			375
Settlements of warranty claims		(215	)		(166	)		(418	)		(353	)
Warranty, end of period	$	735		$	640		$	735		$	640

Operating Leases - Right of Use Assets

The components of the right-of-use assets and lease liabilities were as follows:


	Balance Sheet Classification	June 30, 2024
		(in thousands)
Right-of-use assets	Other assets	$	9,717

Lease liability obligations, current	Other current liabilities	$	2,108
Lease liability obligations, noncurrent	Other liabilities		7,714
Total lease liability obligations		$	9,822
Weighted-average remaining lease term (in years)			4.5
Weighted-average discount rate			8.6	%

Approximate future minimum lease payments for the Company’s right of use assets over the remaining lease periods as of June 30, 2024, are as follows:


	(in thousands)
2024	$	1,174
2025		2,360
2026		2,314
2027		2,284
2028		1,282
Thereafter		2,007
Total minimum payments		11,421
Less: Imputed interest		(1,599	)
Total	$	9,822

Summary of Significant Accounting Policies (Policies)	6 Months Ended
Summary of Significant Accounting Policies (Policies)	Jun. 30, 2024
Accounting Policies [Abstract]
Basis of Presentation	Basis of Presentation The accompanying interim condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) and, in the opinion of management, reflect all adjustments (which include normal recurring adjustments) considered necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods presented. All intercompany accounts and transactions have been eliminated in consolidation. Certain information and footnote disclosures, normally included in annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”), have been condensed or omitted pursuant to those rules and regulations. The Company believes that the disclosures made are adequate to make the information presented not misleading. The results of operations for the interim periods are not necessarily indicative of the results of operations for the entire fiscal year. The December 31, 2023 Condensed Consolidated Balance Sheet has been derived from the Company’s audited financial statements included in its Annual Report on Form 10-K filed with the SEC on March 13, 2024 (“Annual Report”). These financial statements should be read in conjunction with the annual financial statements and the notes thereto included in the Annual Report that contains information useful to understanding the Company’s businesses and financial statement presentations.
Use of Estimates	Use of estimates: The preparation of financial statements in conformity with generally accepted accounting principles requires management to use estimates and assumptions that affect the reported amount of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. The significant estimates and assumptions used by management affect: sales return reserve, allowances for cash discounts, warranty reserve, valuation of inventory, valuation of long-lived assets, goodwill and other intangible assets, depreciation and amortization of long-lived assets, valuation of deferred tax assets, probability of performance shares vesting and forfeiture rates utilized in issuing stock-based compensation awards. The Company evaluates estimates and assumptions on an ongoing basis using historical experience and other factors and adjusts those estimates and assumptions when facts and circumstances dictate. As future events and their effects cannot be determined with precision, actual results could differ from these estimates, and those differences could be material to the consolidated financial statements.

Acquisitions (Tables)

6 Months Ended

Jun. 30, 2024

Business Combinations [Abstract]

Summary of Preliminary Allocation of Consideration Transferred to Assets Acquired and Liabilities Assumed

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


(In thousands)	Amount
Cash		1,562
Accounts Receivable		21,491
Inventory		21,423
Prepaid and Other Current Assets		2,360
Property, Plant & Equipment		1,161
Other Assets		3,478
Intangible Assets		47,769
Accounts Payable		(11,009	)
Accrued Liabilities		(8,215	)
Lease Payable		(2,726	)
Deferred Tax Liability		(6,461	)
Total identifiable net assets		70,833
Goodwill		46,076
Total consideration paid	$	116,909

Summary of Preliminary Allocation of Purchase Consideration to Identifiable Intangible Assets

The following table summarizes the preliminary allocation of purchase consideration to identifiable intangible assets:


(In thousands)	Life	Amount
Tradenames	7 Years	$	15,607
Customer relationships	6 Years		4,456
Developed technology	6 Years		27,706
Total		$	47,769

Summary of Pro Forma Financial Information (Unaudited)


	Three Months Ended						Six Months Ended
	June 30,			June 30,			June 30,			June 30,
	2024			2023			2024			2023
	(in thousands)
Net revenue	$	76,478		$	65,709		$	152,344		$	135,702
Net loss	$	(4,541	)	$	(24,045	)	$	(14,434	)	$	(35,380	)

Fair Value Measurement (Tables)

6 Months Ended

Jun. 30, 2024

Fair Value Disclosures [Abstract]

Summary of Carrying Amounts and Estimated Fair Values of Financial Instruments

The following is a summary of the carrying amounts and estimated fair values of our financial instruments as of June 30, 2024 and December 31, 2023:


	June 30, 2024				December 31, 2023
	Reported		Fair Value		Reported		Fair Value
	(in thousands)
Financial Assets and Liabilities:
Cash and cash equivalents	$	12,462	$	12,462	$	18,726	$	18,726
Term Loan	$	49,583	$	49,583	$	—	$	—
Revolving credit facility	$	24,029	$	24,029	$	—	$	—

Allowance for Sales Returns (Tables)

6 Months Ended

Jun. 30, 2024

Allowance For Sales Returns [Abstract]

Schedule of Allowances for Sales Returns

The following table provides the changes in our sales return reserve, which is classified as a reduction of accounts receivable:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
	(in thousands)
Balance, beginning of period	$	6,039		$	6,639		$	8,449		$	7,817
Reserve accrual		2,692			2,556			5,433			6,150
Recoveries and deductions, net		(3,491	)		(3,797	)		(8,642	)		(8,569	)
Balance, end of period	$	5,240		$	5,398		$	5,240		$	5,398

Composition of Certain Financial Statement Items (Tables)

6 Months Ended

Jun. 30, 2024

Condensed Consolidated Balance Sheet Components [Abstract]

Schedule of Inventory

Inventories consist of the following:


	June 30, 2024		December 31, 2023
	(in thousands)
Finished goods	$	62,379	$	43,579
Raw materials		10,968		440
Total inventories	$	73,347	$	44,019

Schedule of Property and Equipment

Property and equipment, net, consists of the following:


	June 30, 2024			December 31, 2023
	(in thousands)
Machinery and equipment	$	2,781		$	2,597
Software and software development		2,858			2,438
Furniture and fixtures		1,686			1,700
Tooling		14,071			11,250
Leasehold improvements		2,327			1,988
Demonstration units and convention booths		16,008			15,767
Total property and equipment, gross		39,731			35,740
Less: accumulated depreciation and amortization		(33,436	)		(30,916	)
Total property and equipment, net	$	6,295		$	4,824

Other Current Liabilities

Other current liabilities consist of the following:


	June 30, 2024		December 31, 2023
	(in thousands)
Accrued employee expenses	$	3,009	$	3,944
Accrued royalty		6,596		5,275
Accrued tax-related payables		4,350		5,206
Accrued freight		2,215		2,917
Accrued marketing		1,858		3,335
Accrued expenses		12,799		8,747
Total other current liabilities	$	30,827	$	29,424

Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets

Acquired identifiable intangible assets, and related accumulated amortization, as of June 30, 2024 and December 31, 2023 consisted of:


	June 30, 2024
	Gross Carrying Value			Accumulated Amortization			Net Book Value
	(in thousands)
Customer relationships	$	12,541		$	7,530		$	5,011
Tradenames		18,673			3,468			15,205
Developed technology		29,590			3,148			26,442
Foreign currency		(1,189	)		(1,214	)		25
Total Intangible Assets (1)	$	59,615		$	12,932		$	46,683


	December 31, 2023
	Gross Carrying Value			Accumulated Amortization			Net Book Value
	(in thousands)
Customer relationships	$	8,085		$	7,214		$	871
Tradenames		3,066			2,607			459
Developed technology		1,884			1,613			271
Foreign currency		(1,159	)		(1,292	)		133
Total Intangible Assets (1)	$	11,876		$	10,142		$	1,734

(1) The accumulated amortization includes $1.9 million of accumulated impairment charges as of June 30, 2024 and December 31, 2023.

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense

As of June 30, 2024, estimated annual amortization expense related to definite lived intangible assets in future periods was as follows:


	(in thousands)
2024	$	4,299
2025		8,016
2026		7,761
2027		7,591
Thereafter		18,991
Total	$	46,658

Schedule of Changes in Carrying Values of Goodwill

Changes in the carrying values of goodwill for the six months ended June 30, 2024 from the balance as of December 31, 2023.


	(in thousands)
Balance as of January 1, 2024	$	10,686
PDP acquisition		46,076
Balance as of June 30, 2024	$	56,762

Revolving Credit Facility and Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2024

Debt Disclosure [Abstract]

Schedule of Debt


	June 30, 2024		December 31, 2023
	(in thousands)
Revolving credit facility, maturing March 2027	$	24,029	$	—
Term loan Due 2027	$	49,583	$	—

Income Taxes (Tables)

6 Months Ended

Jun. 30, 2024

Income Tax Disclosure [Abstract]

Summary of Income Tax Expense and Effective Income Tax Rate

The following table presents the Company’s income tax expense and effective income tax rate:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
	(in thousands)
Income tax expense (benefit)	$	841		$	(54	)	$	(5,547	)	$	(124	)
Effective income tax rate		(12.6	%)		0.3	%		42.9	%		0.5	%

Equity and Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2024

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Stock-based Compensation Expense

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


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
	(in thousands)
Cost of revenue	$	159	$	162	$	290	$	337
Selling and marketing		375		410		862		900
Research and development		273		324		497		680
General and administrative		39		4,074		302		5,012
Total stock-based compensation	$	846	$	4,970	$	1,951	$	6,929

Stock Activity and Total Number of Shares Available for Grant

The following table presents the stock activity and the total number of shares available for grant as of June 30, 2024:


	(in thousands)
Balance at December 31, 2023		1,059
Options Cancelled		1
Restricted Stock Granted		(205	)
Restricted Stock Forfeited		19
Performance Shares Granted		(171	)
Balance at June 30, 2024		703

Stock Option Activity


	Options Outstanding
	Number of Shares Underlying Outstanding Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value
						(in years)
Outstanding at December 31, 2023		1,041,452		$	9.10		4.22	$	3,137,285
Options Granted		-			-
Options Exercised		(346,842	)		8.27
Options Forfeited		(824	)		60.87
Outstanding at June 30, 2024		693,786		$	9.45		4.85	$	4,060,476
Vested and expected to vest at June 30, 2024		695,434		$	9.53		4.85	$	4,060,476
Exercisable at June 30, 2024		693,421		$	9.49		4.85	$	4,060,476

Restricted Stock Awards

Share Based Compensation Arrangement By Share Based Payment Award [Line Items]

Restricted Stock Activity


	Shares			Weighted Average Grant Date Fair Value Per Share
Nonvested restricted stock at December 31, 2023		764,942		$	14.76
Granted		205,268			17.05
Vested		(317,552	)		14.16
Shares forfeited		(19,236	)		10.47
Nonvested restricted stock at June 30, 2024		633,422		$	15.93

Net Income (Loss) Per Share (Tables)

6 Months Ended

Jun. 30, 2024

Earnings Per Share [Abstract]

Schedule of Computation of Basic and Diluted Net Income (Loss) per Share of Common Stock

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


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
	(in thousands, except per-share data)
Net income (loss)	$	(7,524	)	$	(15,920	)	$	(7,369	)	$	(22,625	)

Weighted average common shares outstanding — Basic		21,252			17,156			19,795			16,869
Plus incremental shares from assumed conversions:
Dilutive effect of restricted stock		—			—			—			—
Dilutive effect of stock options		—			—			—			—
Dilutive effect of warrants		—			—			—			—
Weighted average common shares outstanding — Diluted		21,252			17,156			19,795			16,869
Net income (loss) per share:
Basic	$	(0.35	)	$	(0.93	)	$	(0.37	)	$	(1.34	)
Diluted	$	(0.35	)	$	(0.93	)	$	(0.37	)	$	(1.34	)

Schedule of Antidilutive Securities Excluded from Computation of Diluted Net Income per Share of Common Stock


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
	(in thousands)
Stock options		782		1,363		820		1,384
Unvested restricted stock awards		646		908		676		860
Warrants		550		550		550		550
Total		1,978		2,821		2,046		2,794

Segment Information (Tables)

6 Months Ended

Jun. 30, 2024

Segment Reporting [Abstract]

Schedule of Total Net Revenues

The following table represents total net revenues based on where customers are physically located:


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023
	(in thousands)
North America	$	61,993	$	32,356	$	104,152	$	73,068
Europe and Middle East		11,983		11,861		22,944		21,587
Asia Pacific		2,502		3,765		5,230		4,771
Total net revenues	$	76,478	$	47,982	$	132,326	$	99,426

Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Schedule of Product Warranty Liability

The following table provides the changes in our product warranty reserve, which are included in accrued liabilities:


	Three Months Ended						Six Months Ended
	June 30,						June 30,
	2024			2023			2024			2023
	(in thousands)
Warranty, beginning of period	$	687		$	616		$	670		$	618
Warranty costs accrued		263			190			483			375
Settlements of warranty claims		(215	)		(166	)		(418	)		(353	)
Warranty, end of period	$	735		$	640		$	735		$	640

Components of the Right-of-Use Assets and Lease Liabilities

The components of the right-of-use assets and lease liabilities were as follows:


	Balance Sheet Classification	June 30, 2024
		(in thousands)
Right-of-use assets	Other assets	$	9,717

Lease liability obligations, current	Other current liabilities	$	2,108
Lease liability obligations, noncurrent	Other liabilities		7,714
Total lease liability obligations		$	9,822
Weighted-average remaining lease term (in years)			4.5
Weighted-average discount rate			8.6	%

Schedule of Future Minimum Rental Payments for Operating Leases

Approximate future minimum lease payments for the Company’s right of use assets over the remaining lease periods as of June 30, 2024, are as follows:


	(in thousands)
2024	$	1,174
2025		2,360
2026		2,314
2027		2,284
2028		1,282
Thereafter		2,007
Total minimum payments		11,421
Less: Imputed interest		(1,599	)
Total	$	9,822

Acquisitions - Summary of Preliminary Allocation of Consideration Transferred to Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Mar. 13, 2024	Dec. 31, 2023
Business Acquisition [Line Items]
Goodwill	$ 56,762		$ 10,686
PDP
Business Acquisition [Line Items]
Cash		$ 1,562
Accounts Receivable		21,491
Inventory		21,423
Prepaid and Other Current Assets		2,360
Property, Plant & Equipment		1,161
Other Assets		3,478
Intangible assets		47,769
Accounts Payable		(11,009)
Accrued Liabilities		(8,215)
Lease Payable		(2,726)
Deferred Tax Liability		(6,461)
Total identifiable net assets		70,833
Goodwill		46,076
Total consideration paid		$ 116,909

Acquisitions - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands		3 Months Ended		6 Months Ended
	Mar. 13, 2024	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Business Acquisition [Line Items]
Revenue		$ 76,478	$ 47,982	$ 132,326	$ 99,426
Acquisition-related costs		1,394		6,304
PDP
Business Acquisition [Line Items]
Revenue		$ 21,800		27,700
Acquisition-related costs				$ 6,300
Common stock price per share on acquisition date	$ 11.03
Preliminary purchase consideration	$ 116,909
Common stock shares issued	3,450
Cash	$ 78,900
Percentage of issued stock	16.40%

Acquisitions - Summary of Preliminary Allocation of Purchase Consideration to Identifiable Intangible Assets (Details) - PDP $ in Thousands	Jun. 30, 2024 USD ($)
Business Acquisition [Line Items]
Intangible assets	$ 47,769
Customer Relationships
Business Acquisition [Line Items]
Useful life	6 years
Intangible assets	$ 4,456
Trade Names
Business Acquisition [Line Items]
Useful life	7 years
Intangible assets	$ 15,607
Developed Technology
Business Acquisition [Line Items]
Useful life	6 years
Intangible assets	$ 27,706

Acquisitions - Summary of Pro Forma Financial Information (Unaudited) (Details) - PDP - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Business Acquisition [Line Items]
Net revenue	$ 76,478	$ 65,709	$ 152,344	$ 135,702
Net loss	$ (4,541)	$ (24,045)	$ (14,434)	$ (35,380)

Fair Value Measurement - Summary of Carrying Amounts and Estimated Fair Values of Financial Instruments (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Reported Value Measurement
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents, fair value disclosure	$ 12,462	$ 18,726
Term Loan, fair value disclosure	49,583
Revolving credit facility, fair value disclosure	24,029
Estimate of Fair Value Measurement
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Cash and cash equivalents, fair value disclosure	12,462	$ 18,726
Term Loan, fair value disclosure	49,583
Revolving credit facility, fair value disclosure	$ 24,029

Allowance for Sales Returns - Schedule of Allowances for Sales Returns (Details) - Sales Returns and Allowances - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward]
Balance, beginning of period	$ 6,039	$ 6,639	$ 8,449	$ 7,817
Reserve accrual	2,692	2,556	5,433	6,150
Recoveries and deductions, net	(3,491)	(3,797)	(8,642)	(8,569)
Balance, end of period	$ 5,240	$ 5,398	$ 5,240	$ 5,398

Composition of Certain Financial Statement Items - Schedule of Inventory (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Condensed Consolidated Balance Sheet Components [Abstract]
Finished goods	$ 62,379	$ 43,579
Raw materials	10,968	440
Total inventories	$ 73,347	$ 44,019

Composition of Certain Financial Statement Items - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	$ 39,731	$ 35,740
Less: accumulated depreciation and amortization	(33,436)	(30,916)
Total property and equipment, net	6,295	4,824
Machinery and equipment
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	2,781	2,597
Software and software development
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	2,858	2,438
Furniture and fixtures
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	1,686	1,700
Tooling
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	14,071	11,250
Leasehold improvements
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	2,327	1,988
Demonstration units and convention booths
Property, Plant and Equipment [Line Items]
Total property and equipment, gross	$ 16,008	$ 15,767

Composition of Certain Financial Statement Items - Other Current Liabilities (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Condensed Consolidated Balance Sheet Components [Abstract]
Accrued employee expenses	$ 3,009	$ 3,944
Accrued royalty	6,596	5,275
Accrued tax-related payables	4,350	5,206
Accrued freight	2,215	2,917
Accrued marketing	1,858	3,335
Accrued expenses	12,799	8,747
Total other current liabilities	$ 30,827	$ 29,424

Goodwill and Other Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands	Jun. 30, 2024	Dec. 31, 2023
Finite-lived Intangible Assets [Roll Forward]
Total intangible assets, gross carrying value	$ 59,615	$ 11,876
Finite-lived intangible assets, accumulated amortization	12,932	10,142
Total intangible assets, net book value	46,683	1,734
Total	46,658
Finite-lived intangible assets, gross carrying value	(1,189)	(1,159)
Finite-lived intangible assets, accumulated amortization	(1,214)	(1,292)
Total	25	133
Customer Relationships
Finite-lived Intangible Assets [Roll Forward]
Finite-lived intangible assets, gross carrying value	12,541	8,085
Finite-lived intangible assets, accumulated amortization	7,530	7,214
Total	5,011	871
Trade Names
Finite-lived Intangible Assets [Roll Forward]
Finite-lived intangible assets, gross carrying value	18,673	3,066
Finite-lived intangible assets, accumulated amortization	3,468	2,607
Total	15,205	459
Developed Technology
Finite-lived Intangible Assets [Roll Forward]
Finite-lived intangible assets, gross carrying value	29,590	1,884
Finite-lived intangible assets, accumulated amortization	3,148	1,613
Total	$ 26,442	$ 271

Goodwill and Other Intangible Assets - Schedule of Intangible Assets (Parenthetical) (Details) - USD ($) $ in Millions	6 Months Ended	12 Months Ended
	Jun. 30, 2024	Dec. 31, 2023
Goodwill and Intangible Assets Disclosure [Abstract]
Accumulated impairment charges	$ 1.9	$ 1.9

Goodwill and Other Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Finite Lived Intangible Assets [Line Items]
Amortization of intangible assets	$ 2,100	$ 200	$ 2,698	$ 513

Goodwill and Other Intangible Assets - Schedule of Finite-Lived Intangible Assets, Future Amortization Expense (Details) $ in Thousands	Jun. 30, 2024 USD ($)
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract]
2024	$ 4,299
2025	8,016
2026	7,761
2027	7,591
Thereafter	18,991
Total	$ 46,658

Goodwill and Other Intangible Assets - Schedule of Changes in Carrying Values of Goodwill (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2024 USD ($)
Goodwill and Intangible Assets Disclosure [Abstract]
Balance as of January 1, 2024	$ 10,686
PDP acquisition	46,076
Balance as of June 30, 2024	$ 56,762

Revolving Credit Facility and Long-Term Debt - Schedule Of Debt (Details) $ in Thousands	Jun. 30, 2024 USD ($)
Debt Instrument [Line Items]
Revolving credit facility, maturing March 2027	$ 24,029
Term loan Due 2027	$ 49,583

Revolving Credit Facility and Long-Term Debt - Schedule Of Debt (Parenthetical) (Details)	6 Months Ended
	Jun. 30, 2024
Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Debt instrument maturity term	2027-03

Revolving Credit Facility and Long-Term Debt - Additional Information (Details) - USD ($)				3 Months Ended		6 Months Ended
	Mar. 13, 2024	Mar. 12, 2024	Mar. 05, 2018	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Debt Instrument [Line Items]
Interest expense, debt				$ 2,200,000	$ 100,000	$ 2,700,000	$ 200,000
Amortization of debt financing costs				$ 300,000	$ 33,000	$ 348,000	$ 75,000
Revolving Credit Facility, Maturing March 13, 2027
Debt Instrument [Line Items]
Expiration date			Mar. 13, 2027
Maximum borrowing capacity			$ 50,000,000
Debt instrument, covenant, current fixed charge ratio required, minimum				1.00%		1.00%
Remaining borrowing capacity				$ 34,600,000		$ 34,600,000
Revolving Credit Facility, Maturing March 13, 2027 \| Base Rate
Debt Instrument [Line Items]
Basis spread on variable rate						9.10%
Revolving Credit Facility, Maturing March 13, 2027 \| SOFR
Debt Instrument [Line Items]
Basis spread on variable rate						7.19%
Revolving Credit Facility, Maturing March 13, 2027 \| U.S. BSBY Rate Loans, U.S. BSBY Daily Floating Rate Loans
Debt Instrument [Line Items]
Basis spread on variable rate						1.75%
Revolving Credit Facility, Maturing March 13, 2027 \| UK Alternative Currency Loans
Debt Instrument [Line Items]
Basis spread on variable rate						3.50%
Revolving Credit Facility, Maturing March 13, 2027 \| Minimum
Debt Instrument [Line Items]
Unused commitment fee, percent						0.375%
Revolving Credit Facility, Maturing March 13, 2027 \| Minimum \| Base Rate
Debt Instrument [Line Items]
Basis spread on variable rate						0.50%
Revolving Credit Facility, Maturing March 13, 2027 \| Maximum
Debt Instrument [Line Items]
Unused commitment fee, percent						0.50%
Revolving Credit Facility, Maturing March 13, 2027 \| Maximum \| Base Rate
Debt Instrument [Line Items]
Basis spread on variable rate						2.50%
Revolving Credit Facility, Maturing March 13, 2027 \| UK Borrower
Debt Instrument [Line Items]
Maximum borrowing capacity			$ 10,000,000
Term Loan Facility
Debt Instrument [Line Items]
Expiration date	Mar. 13, 2027
Maximum borrowing capacity	$ 50,000,000
Monthly amortize percentage	0.20833%
Third year interest percetage	0.41667%
Prepayment premium interest percentage	3.00%
Interest rates for outstanding borrowings				13.69%		13.69%
Term Loan Facility \| Minimum
Debt Instrument [Line Items]
Debt leverage ratio	2.25
Term Loan Facility \| Minimum \| Base Rate
Debt Instrument [Line Items]
Basis spread on variable rate	6.75%
Term Loan Facility \| Minimum \| Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt Instrument [Line Items]
Basis spread on variable rate	7.75%
Term Loan Facility \| Maximum
Debt Instrument [Line Items]
Debt leverage ratio	2.25
Term Loan Facility \| Maximum \| Base Rate
Debt Instrument [Line Items]
Basis spread on variable rate	7.25%
Term Loan Facility \| Maximum \| Secured Overnight Financing Rate (SOFR) Overnight Index Swap Rate
Debt Instrument [Line Items]
Basis spread on variable rate	8.25%
Fourth Amendment \| PDP Merger Agreement
Debt Instrument [Line Items]
Expiration date	Mar. 13, 2027	Apr. 01, 2025
Maximum borrowing capacity	$ 15,000,000
Aggregate Revolver Commitments	30.00%
Fourth Amendment \| Minimum \| PDP Merger Agreement \| Base Rate
Debt Instrument [Line Items]
Basis spread on variable rate	0.50%
Fourth Amendment \| Minimum \| PDP Merger Agreement \| SOFR SONIA and EUIBOR Loans
Debt Instrument [Line Items]
Basis spread on variable rate	1.75%
Fourth Amendment \| Maximum \| PDP Merger Agreement \| Base Rate
Debt Instrument [Line Items]
Basis spread on variable rate	2.50%
Fourth Amendment \| Maximum \| PDP Merger Agreement \| SOFR SONIA and EUIBOR Loans
Debt Instrument [Line Items]
Basis spread on variable rate	3.50%

Income Taxes - Summary of Income Tax Expense and Effective Income Tax Rate (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Income Tax Disclosure [Abstract]
Income tax expense (benefit)	$ 841	$ (54)	$ (5,547)	$ (124)
Effective income tax rate	(12.60%)	0.30%	42.90%	0.50%

Income Taxes - Additional Information (Details) $ in Millions	Jun. 30, 2024 USD ($)
Income Tax [Line Items]
Unrecognized tax benefits inclusive of interest and penalties	$ 2.8
Interest and penalties	0.6
PDP
Income Tax [Line Items]
Deferred tax liabilities, valuation allowance	$ 6.4

Equity and Stock-Based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation	$ 846	$ 4,970	$ 1,951	$ 6,929
Cost of revenue
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation	159	162	290	337
Selling and marketing
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation	375	410	862	900
Research and development
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation	273	324	497	680
General and administrative
Employee Service Share Based Compensation Allocation Of Recognized Period Costs [Line Items]
Stock-based compensation	$ 39	$ 4,074	$ 302	$ 5,012

Equity and Stock-Based Compensation - Additional Information (Details) - USD ($)					3 Months Ended		6 Months Ended
	Apr. 01, 2024	Apr. 01, 2023	Mar. 03, 2023	Apr. 01, 2021	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023	Apr. 09, 2024	Dec. 31, 2023	Apr. 09, 2019
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock repurchase activity, authorized amount											$ 15,000,000
Stock repurchase program expiration date				Apr. 09, 2023
Stock repurchase program, period			2 years
Stock repurchased during period, shares					1,000,000		1,000,000
Stock repurchased during period, value					$ 15,207,000	$ 974,000	$ 15,200,000
Forfeiture period after ending employment							90 days
Options exercised, intrinsic value							$ 2,300,000
Estimated grant date fair value of options vested							$ 1,200,000
Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Stock repurchase activity, authorized amount				$ 25,000,000					$ 55,000,000
Stock Options
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award expiration period							10 years
Options granted							0
Compensation cost not yet recognized, period for recognition							6 months
Stock Options \| Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total unrecognized compensation cost					100,000		$ 100,000
Restricted Stock Awards
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Total unrecognized compensation cost					$ 9,100,000		$ 9,100,000
Compensation cost not yet recognized, period for recognition							1 year 6 months
Outstanding balance					633,422		633,422			764,942
Shares granted							205,268
Performance Based Restricted Stock
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Outstanding balance					253,395		253,395
Shares granted	171,393	82,002
Vesting period							3 years	3 years
Performance Based Restricted Stock \| Minimum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Service-based vesting percentage							0.00%
Adjusted EBITDA percentage								0.00%
Performance Based Restricted Stock \| Maximum
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Service-based vesting percentage							200.00%
Adjusted EBITDA percentage								200.00%
Performance Based Restricted Stock \| Tranche One
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting percentage				50.00%
Performance Based Restricted Stock \| Tranche Two
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Award vesting percentage				50.00%
Non-Executives
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Forfeiture rate							10.00%
Executive Officer
Share Based Compensation Arrangement By Share Based Payment Award [Line Items]
Forfeiture rate							0.00%

Equity and Stock-Based Compensation - Stock Activity and Total Number of Shares Available for Grant (Details)	6 Months Ended
	Jun. 30, 2024 shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Shares Available for Grant [Roll Forward]
Balance, beginning of period	1,059,000
Options Cancelled	824
Balance, end of period	703,000
Restricted Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award, Options, Shares Available for Grant [Roll Forward]
Stock Granted	(205,268)
Stock Forfeited	19,236
Performance Shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Shares Available for Grant [Roll Forward]
Stock Granted	(171,000)

Equity and Stock-Based Compensation - Stock Option Activity (Details)	6 Months Ended	12 Months Ended
	Jun. 30, 2024 USD ($) $ / shares shares	Dec. 31, 2023 USD ($) $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward]
Outstanding beginning of period (in shares) \| shares	1,041,452
Options 'Exercised (in shares) \| shares	(346,842)
Options Forfeited (in shares) \| shares	(824)
Outstanding end of period (in shares) \| shares	693,786	1,041,452
Vested and expected to vest (in shares) \| shares	695,434
Exercisable (in shares) \| shares	693,421
Weighted-Average Exercise Price
Outstanding beginning of period (in dollars per share) \| $ / shares	$ 9.1
Options Exercised (in dollars per share) \| $ / shares	8.27
Options Forfeited (in dollars per share) \| $ / shares	60.87
Outstanding end of period (in dollars per share) \| $ / shares	9.45	$ 9.1
Vested and expected to vest (in dollars per share) \| $ / shares	9.53
Exercisable (in dollars per share) \| $ / shares	$ 9.49
Share-based Compensation Arrangement by Share-based Payment Award, Options, Additional Disclosures [Abstract]
Outstanding, weighted average remaining contractual term	4 years 10 months 6 days	4 years 2 months 19 days
Vested and expected to vest, weighted average remaining contractual term	4 years 10 months 6 days
Exercisable, weighted average remaining contractual term	4 years 10 months 6 days
Outstanding, intrinsic value \| $	$ 4,060,476	$ 3,137,285
Vested and expected to vest, intrinsic value \| $	4,060,476
Exercisable, intrinsic value \| $	$ 4,060,476

Equity and Stock-Based Compensation - Restricted Stock Activity (Details) - Restricted Stock Awards	6 Months Ended
	Jun. 30, 2024 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding beginning of period (in shares) \| shares	764,942
Shares granted \| shares	205,268
Vested (in shares) \| shares	(317,552)
Forfeited (in shares) \| shares	(19,236)
Outstanding end of period (in shares) \| shares	633,422
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Outstanding beginning of period (in dollars per share) \| $ / shares	$ 14.76
Granted (in dollars per share) \| $ / shares	17.05
Vested (in dollars per share) \| $ / shares	14.16
Forfeited (in dollars per share) \| $ / shares	10.47
Outstanding end of period (in dollars per share) \| $ / shares	$ 15.93

Net Income (Loss) Per Share - Schedule of Computation of Basic and Diluted Net Income (Loss) per Share of Common Stock (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended				6 Months Ended
	Jun. 30, 2024	Mar. 31, 2024	Jun. 30, 2023	Mar. 31, 2023	Jun. 30, 2024	Jun. 30, 2023
Basic and diluted:
Net Income (Loss)	$ (7,524)	$ 155	$ (15,920)	$ (6,705)	$ (7,369)	$ (22,625)
Basic:
Weighted-average common shares outstanding, basic (in shares)	21,252		17,156		19,795	16,869
Diluted:
Weighted-average common shares outstanding, diluted (in shares)	21,252		17,156		19,795	16,869
Net income (loss) per share:
Basic (in dollars per share)	$ (0.35)		$ (0.93)		$ (0.37)	$ (1.34)
Diluted (in dollars per share)	$ (0.35)		$ (0.93)		$ (0.37)	$ (1.34)

Net Income (Loss) Per Share - Schedule of Antidilutive Securities Excluded from Computation of Diluted Net Income per Share of Common Stock (Details) - shares shares in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	1,978	2,821	2,046	2,794
Stock options
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	782	1,363	820	1,384
Restricted Stock Awards
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	646	908	676	860
Warrants
Antidilutive Securities Excluded From Computation Of Earnings Per Share [Line Items]
Antidilutive securities excluded from computation of earnings per share	550	550	550	550

Segment Information - Schedule of Total Net Revenues (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenue	$ 76,478	$ 47,982	$ 132,326	$ 99,426
North America
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenue	61,993	32,356	104,152	73,068
Europe and Middle East
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenue	11,983	11,861	22,944	21,587
Asia Pacific
Revenues from External Customers and Long-Lived Assets [Line Items]
Net revenue	$ 2,502	$ 3,765	$ 5,230	$ 4,771

Commitments and Contingencies - Additional Information (Details) $ in Millions	6 Months Ended
	Jun. 30, 2024 USD ($)	May 22, 2020 Claim	Aug. 05, 2013
Operating Leased Assets [Line Items]
Number of shareholder claims \| Claim		8
Operating lease, expense	$ 0.8
Operating lease, payments	$ 0.9
Minimum
Operating Leased Assets [Line Items]
Operating lease remaining lease term	1 year
Maximum
Operating Leased Assets [Line Items]
Operating lease remaining lease term	9 years
Merger of VTB Holdings, Inc. and Parametric Sound Corporation \| VTB Holdings, Inc
Operating Leased Assets [Line Items]
Ownership percentage			80.00%
Merger of VTB Holdings, Inc. and Parametric Sound Corporation \| Parametric Sound Corporation
Operating Leased Assets [Line Items]
Ownership percentage			20.00%

Commitments and Contingencies - Schedule of Product Warranty Liability (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2024	Jun. 30, 2023	Jun. 30, 2024	Jun. 30, 2023
Movement in Standard Product Warranty Accrual [Roll Forward]
Warranty, beginning of period	$ 687	$ 616	$ 670	$ 618
Warranty costs accrued	263	190	483	375
Settlements of warranty claims	(215)	(166)	(418)	(353)
Warranty, end of period	$ 735	$ 640	$ 735	$ 640

Commitments and Contingencies - Components of the Right-of-Use Assets and Lease Liabilities (Details) $ in Thousands	Jun. 30, 2024 USD ($)
Lessee, Lease, Description [Line Items]
Right-of-use assets	$ 9,717
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration]	Other assets
Lease liability obligations, current	$ 2,108
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration]	Other current liabilities
Lease liability obligations, noncurrent	$ 7,714
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration]	Other liabilities
Total lease liability obligations	$ 9,822
Weighted-average remaining lease term (in years)	4 years 6 months
Weighted Average
Lessee, Lease, Description [Line Items]
Weighted-average discount rate	8.60%

Commitments and Contingencies - Schedule of Future Minimum Rental Payments for Operating Leases (Details) $ in Thousands	Jun. 30, 2024 USD ($)
Commitments and Contingencies Disclosure [Abstract]
2024	$ 1,174
2025	2,360
2026	2,314
2027	2,284
2028	1,282
Thereafter	2,007
Total minimum payments	11,421
Less: Imputed interest	(1,599)
Total	$ 9,822

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