PLAN OF DISTRIBUTION
We have entered into the Sales Agreement with BofA Securities, Inc., as Sales Agent, under which we are permitted to offer and sell shares of
our Common Stock having an aggregate offering price of up to $30,000,000 through the Sales Agent acting as sales agent or directly to the Sales Agent acting as principal from time to time. The sales, if any, of the Shares made under the Sales
Agreement may be made by means of transactions that are deemed to be at the market offerings as defined in Rule 415 under the Securities Act, including block trades and sales made in ordinary brokers transactions on Nasdaq or
otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices or at negotiated prices. A copy of the Sales Agreement is filed as an exhibit to a current report on Form
8-K filed under the Exchange Act and incorporated by reference into this prospectus supplement.
If we sell shares of our Common Stock to the Sales Agent as principal, we will enter into a separate agreement with the Sales Agent and we
will describe this agreement in a pricing supplement.
On any day (other than a day on which Nasdaq is closed or scheduled to close prior
to its regular weekday closing time) (each, a trading day), we may sell shares through the Sales Agent and, if we determine to do so, we will instruct the Sales Agent as to the maximum number of shares to be sold on such trading day and
the minimum price per shares at which such shares may be sold. Subject to the terms and conditions of the Sales Agreement, the Sales Agent will use its commercially reasonable efforts, consistent with its normal trading and sales practices and
applicable law and regulations, to sell on our behalf all of the designated shares in accordance with such instruction. We or the Sales Agent as sales agent on any trading day may suspend the offering of shares for any reason and at any time, upon
notifying the other party.
If acting as sales agent, the Sales Agent will provide to us written confirmation following the close of
trading on Nasdaq on each trading day on which Shares are sold under the Sales Agreement. Each confirmation will include the number of shares sold on that day, the aggregate gross sales proceeds of the shares, the net proceeds to us (after deduction
of any transaction fees, transfer taxes or similar taxes or fees imposed by any governmental entity or self-regulatory organization in respect of such sales) and the aggregate compensation payable by us to the Sales Agent with respect to such sales.
We will report, on a quarterly basis, the number of shares sold by or through the Sales Agent during such quarterly fiscal period, the net proceeds received by the Company and the aggregate compensation paid by the Company to the Sales Agent with
respect to such sales.
We will pay the Sales Agent a commission of up to 3.0% of the gross sales price of the shares sold through the
Sales Agent. We have agreed to reimburse the Sales Agent for certain of their legal expenses in connection with the establishment of the at the market program.
Settlement for sales of shares will occur on the second business day that is also a trading day following the trade date on which such sales
are made, unless another date is agreed to in writing by us and the applicable Sales Agent.
If the exemptive provisions set forth in Rule
101(c)(1) of Regulation M under the Exchange Act are not satisfied with respect to Turtle Beach or the shares, we will promptly notify the Sales Agent and future offers and sales of shares through the Sales Agent on an agented basis pursuant to the
Sales Agreement shall be suspended until that or other exemptive provisions have been satisfied in the judgment of each party.
The
offering of Common Stock pursuant to the Sales Agreement will terminate upon the earlier of (1) the sale of all shares subject to the Sales Agreement or (2) the termination of the Sales Agreement by us or by the Sales Agent, which may
occur for any reason, at any time, by us or the Sales Agent upon the giving of two days prior written notices to the other party.
In
connection with the sale of the shares on our behalf, the Sales Agent may be deemed an underwriter within the meaning of the Securities Act, and the compensation paid to the Sales Agent may be deemed to be underwriting commissions or
discounts. We have agreed to provide indemnification and contribution to the Sales Agent against certain liabilities, including civil liabilities under the Securities Act.
We estimate that the total expenses of this offering payable by us, excluding commissions payable to the Sales Agent under the Sales
Agreement, will be approximately $285,000
The Sales Agent and its affiliates are a full service financial institution engaged in various
activities, which may include sales and trading, commercial and investment banking, advisory, investment management, investment research, principal investment, hedging, market making, brokerage and other financial and
non-financial activities and services. The Sales Agent and its affiliates have provided, and may in the future provide, a variety of these services to us and to persons and entities with relationships with us,
for which they received or will receive customary fees and expenses. Certain affiliates of the Sales Agent participate in our December 17, 2018 amended and restated loan, guaranty and security agreement, as amended on May 31 2019, as Agent,
Sole Lead Arranger and Sole Bookrunner.
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