NOTE 5 – LEASES

Operating Leases

The Company leases the properties used for some of its restaurants, venues, office space and parking spaces.

The Company leases its office space from an unrelated party. The lease term is until November 30, 2029 and escalates in base rent by 1.3% each year. Additionally, the Company previously leased an executive apartment from an unrelated party, which lease was terminated early in January 2026.

On June 24, 2026, HIA entered into a Lease Agreement and Assignment and Assumption Agreement (the “Assignment Agreement”), pursuant to which HIA reassigned its lease interests in and leases with BBSTCS and BBP (the “Tenants”) to BBRP DST (the “DST Landlord”), a wholly owned subsidiary of Venu. The Assignment Agreement has no impact on the Company’s unaudited condensed consolidated financial statements. It is expected that third parties will purchase and be issued beneficial interests in DST Landlord. Beginning July 1, 2026, and subject to 100% of the beneficial interests in BBRP DST being owned by beneficial holders, annual base rent payable by BBP for the BBP CO concert and event venue is initially $693,000 and escalates by 2.0% annually beginning July 1, 2027, and annual base rent payable by BBSTCS for the BBST CO restaurant is initially $1,213,308 and escalates by 2.0% annually beginning July 1, 2027. As of June 30, 2026, no beneficial interests in BBRP DST had been sold. Any rental income and expense recognized between the DST Landlord and the Tenants will be considered intercompany transactions and eliminated upon consolidation.

Sale-Leaseback Arrangements

On November 5, 2025, the Company, through its wholly owned subsidiary NLRE, closed on a sale-leaseback arrangement, pursuant to which it sold the 5.5 acres of land owned by PPP used for parking for Ford Amphitheater (such land, together with improvements thereon, the “Property”) to a related party (the “Landlord”) and concurrently entered into a ground lease agreement with the Landlord to lease the Property for a 20-year term under an NNN lease structure with an option to re-purchase the Property within the first three years of the closing date of the sale at a fixed price, which would return the asset to the Company’s balance sheet. The Landlord is wholly owned by a significant shareholder of the Company. Annual base rent is initially $1,050,000 and escalates by 2.5% each year beginning on November 5, 2026. This transaction qualifies as a sale under ASC 842 and the lease is accounted based on the guidance for operating leases.

On June 5, 2026, the Company, through the Trust, completed a sale-leaseback arrangement, pursuant to which it transferred the DST Property to a related party of the Company (the “DST Buyer” or “DST Landlord”) and concurrently entered into a ground lease agreement with the DST Landlord to lease the DST Property for a 25-year term under an NNN lease structure with an option to re-purchase the DST Property at any time during the 20-year period following the closing date at a fixed price. The DST Landlord is co-owned by a significant shareholder of the Company and the Company’s Chairman and CEO. Annual base rent is initially $4,224,500 and escalates by 10% each year beginning on June 5, 2027. This transaction does not qualify as a sale under ASC 842 and the lease is accounted for as a financing arrangement that is presented in the Unaudited Condensed Consolidated Balance Sheets as a lease financing liability.

NOTE 5 –LEASES (Continued)

The transaction provided $49,700,000 of consideration, of which $41,718,113 was allocated to the financing liability and $7,981,887 was allocated to warrants issued in the transaction (refer to Note 10 – Equity for further details). The $7,981,887 allocated to warrants represents a discount on the financing liability that is recognized as interest expense over the financing term under the effective-interest method. Interest expense related to the financing arrangement was $341,243 and $341,243 for the three and six months ended June 30, 2026, respectively. No interest expense was recognized for the three and six months ended June 30, 2025.

Total rent expense for operating leases including short-term leases and variable costs was $513,855 and $1,023,119 for the three and six months ended June 30, 2026, respectively. Total rent expense for operating leases including short-term leases and variable costs was $468,252 and $881,472 for the three and six months ended June 30, 2025, respectively. Total cash paid for rent expense for operating leases was $365,656 and $731,897 for the three and six months ended June 30, 2026, respectively. Total cash paid for rent expense for operating leases was $114,275 and $234,873 for the three and six months ended June 30, 2025, respectively.

The following table shows balance sheet information related to the operating leases:

SCHEDULE OF BALANCE SHEET INFORMATION RELATED TO LEASES  

The future minimum lease payments of existing operating lease liabilities are as follows:

SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS OF OPERATING LEASE LIABILITIES  

SCHEDULE OF SUPPLEMENTAL INFORMATION OF OPERATING LEASES 

NOTE 5 –LEASES (Continued)

The future minimum lease payments of lease financing liabilities are as follows:

SCHEDULE OF FUTURE MINIMUM LEASE PAYMENTS OF FINANCING LEASE LIABILITIES   

SCHEDULE OF SUPPLEMENTAL INFORMATION OF FINANCING LEASES