NOTE 15 – NNN FIRESUITE LIABILITY

During 2025, the Company entered into arrangements to sell the exclusive use rights to certain luxury concert suites (“Luxe FireSuites”) to third parties and concurrently lease them back for a 15-year term under a triple-net lease structure. Under these agreements, the third-party pays an upfront purchase price for a Luxe FireSuite and the Company (through a subsidiary, as seller-lessee) immediately leases the suite for its own use for 15 years. Monthly lease payments to the buyer/lessor are fixed to yield an 11% annual return on the purchase price, with a 2% escalation each year. The lease is “triple net,” meaning the Company is responsible for all suite-related operating costs (maintenance, insurance, taxes) over the term.

At the end of the 15-year lease term, the buyer/lessor has a one-time option to require the Company to repurchase the Luxe FireSuite rights at a price equal to 150% of the original purchase price (“Lessor Sale Option”). If the buyer/lessor exercises this put option (which expires at lease end), the Company must buy back the suite rights at the agreed price. If the buyer/lessor does not exercise the option, the lease will terminate and the buyer/lessor will retain the ownership of the suite rights going forward (i.e. the buyer/lessor’s rights would continue beyond year 15, and the Company would no longer lease the suite). The repurchase option provides the buyer/lessor with an annual return on its purchase and, as a result, the Company expects that the option will be exercised in most, if not all, cases.

The Company has accounted for these transactions as financing arrangements rather than as a sale. Because the Company did not transfer control of the suites, no revenue or gain has been recognized on the upfront cash proceeds. In substance, the buyer/lessor is providing financing to the Company, with the Luxe FireSuites as collateral. Accordingly, at inception the Company continues to carry the Luxe FireSuite assets on its Consolidated Balance Sheets at their existing carrying amount, and it has recorded the cash proceeds from the buyer/lessor as a long-term financing liability (reported as “NNN firesuite liability”). The Company did not derecognize any of its real estate or equipment as a result of these transactions, since they do not qualify as sales under the applicable accounting guidance.

The monthly payments made by the Company under the leaseback are not recorded as rent expense. These payments represent interest and principal payments on the financing liability. The Company recognizes interest expense on the financing liability over the 15-year term at an effective interest rate that reflects the 11% initial yield and the annual 2% escalations, such that the liability will accrete to the 150% repurchase price by the end of the term.

VENU HOLDING CORPORATION AND SUBSIDIARIES

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED

DECEMBER 31, 2025 AND 2024

NOTE 15 – NNN FIRESUITE LIABILITY (Continued)

The financing liability arising from the Luxe FireSuites transactions is included in the Company’s Consolidated Balance Sheets. As of December 31, 2025 and 2024, the balance of the NNN firesuite liability was $31,064,514 and $0, respectively. This reflects the initial proceeds of $30,789,000 received from buyer/lessor and includes $1,327,422 of accreted interest for year ended December 31, 2025. No proceeds were received during the year ended December 31, 2024. For the year ended December 31, 2025, the Company recognized interest expense of $2,111,395 related to the Luxe FireSuites financing, which is included within Interest Expense in the Consolidated Statements of Operations. No interest expense was recognized for the year ended December 31, 2024.

Following is the future maturities of NNN firesuite liability for the year ending December 31,

 SUMMARY OF FUTURE MATURITIES OF LONG TERM DEBT