What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-30 compared with 2025-04-14 · 171 added, 165 removed, 126 unchanged (73% of the section changed)

2 unchanged sentences

Unless otherwise indicated, all dollar amounts (“$”) are expressed in thousands.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes and other information included elsewhere in this Form 10-K.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our and our predecessor’s, as applicable, consolidated financial statements and related notes and other information included elsewhere in this Form 10-K.

This discussion contains forward-looking statements that involve risks and uncertainties.

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Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future.

Innventure founds, funds, and operates companies with a focus on transformative, sustainable technology solutions acquired or licensed from MNCs with the intent to maximize values for investors and other stakeholders through positive cash flow generated through holding long term positions in our Operating Companies.

Innventure is an industrial growth conglomerate that founds, funds, and operates companies with a focus on commercializing transformative, sustainable technology solutions acquired or licensed from MNCs or other technology innovators with the intent to maximize values for investors and other stakeholders through positive cash flow generated through holding long term positions in our Innventure Companies.

Refer to Item 1.

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• Innventure’s Technology segment began generating revenue related to its cooling systems for data centers.

• Total operational expenses of approximately $10,506 and $12,517, respectively, relate to increased costs associated with public readiness activities connected with the Business Combination and the subsequent reporting requirements related to being a public entity for the Successor (as defined below) period from October 2, 2024 through December 31, 2024 and the Predecessor (as defined below) period from January 1, 2024 through October 1, 2024.

• Cash inflows from equity raises were approximately $19,552 and $26,981, respectively, for the Successor period from October 2, 2024 through December 31, 2024 and the Predecessor period from January 1, 2024 through October 1, 2024.

These cash inflows from equity raises are compared to net cash outflows related to operating, investing and remaining financing activity of $8,478 and $13,345, respectively, for the Successor period from October 2, 2024 through December 31, 2024 and the Predecessor period from January 1, 2024 through October 1, 2024.

• As a result of the Business Combination, $187,500 of intangible assets and $667,936 of goodwill were recognized.

Overall, $147,515 of net identifiable assets were acquired.

Results of Operations for the Years Ended December 31, 2024 and 2023 (in thousands, except as otherwise noted)

• Total operational expenses of approximately $466.8 million, primarily made up of a goodwill impairment charge and increased costs associated with generating revenue for the Technology Segment, professional and legal fees, and sales and advertising costs for the year ended December 31, 2025.

• Cash inflows from equity and net debt raises were approximately $139.3 million for the year ended December 31, 2025.

These cash inflows from equity and net debt raises are compared to net cash outflows related to operating and investing activities of $84.8 million for the year ended December 31, 2025.

Results of Operations for the Years Ended December 31, 2025 and 2024

To reflect the application of different bases of accounting as a result of the Business Combination, the tables provided below separate the Company’s results via a black line into two distinct periods as follows:

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Accordingly, in addition to presenting our results of operations as reported in our consolidated financial statements in accordance with GAAP, the tables below present the non-GAAP combined results for the year.

Successor Predecessor S/P Combined (Non-GAAP) Predecessor Non-GAAP

Period from October 2, 2024 through December 31, 2024 Period from January 1, 2024 through October 1, 2024 Year ended December 31, 2024 Year ended December 31, 2023 2024 vs 2023 Changes

($) ($) ($) ($) ($) (%)

Successor Predecessor S/P Combined (Non-GAAP) Non-GAAP

Year Ended December 31, 2025 Period from October 2, 2024 through December 31, 2024 Period from January 1, 2024 through October 1, 2024 Year ended December 31, 2024 2025 vs 2024 Changes

(in thousands)

Revenue $ 2,056 $ 456 $ 764 $ 1,220 $ 836 68.5 %

Operating Expenses

Cost of sales 3,752 777 4,529 — 4,529 nil

Cost of sales 18,830 3,752 777 4,529 14,301 nm*

General and administrative 66,710 29,652 26,608 56,260 10,450 18.6 %

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Research and development 25,025 5,340 5,978 11,318 13,707 121.1 %

Goodwill impairment 346,557 — — — 346,557 — %

Total Operating Expenses 466,755 40,753 37,541 78,294 388,461 496.2 %

3 unchanged sentences

Net gain (loss) from investments 131 — 11,547 11,547 (11,416) (98.9) %

Net (loss) gain on investments - due to related parties — (468) (468) 232 (700) (301.7) %

Net (loss) gain on investments - due to related parties — — (468) (468) 468 nm*

Change in fair value of financial liabilities 16,146 (20,946) (478) (21,424) 37,570 175.4 %

Equity method investment (loss) income (902) 893 (9) (632) 623 (98.6) %

Loss on conversion of promissory notes — (1,119) (1,119) — (1,119) nil

Write-off of loan commitment fee asset (10,041) — (10,041) — (10,041) nil

Miscellaneous other expense (57) (64) (121) — (121) nm*

Equity method investment (loss) income (12,592) (902) 893 (9) (12,583) nm*

Realized gain on conversion of available for sale investment 1,507 — — — 1,507 — %

Loss on extinguishment of debt (16,064) — — — (16,064) — %

Loss on extinguishment of related party debt (3,538) — — — (3,538) — %

Loss on conversion of promissory notes — — (1,119) (1,119) 1,119 nm*

Write-off of loan commitment fee asset — (10,041) — (10,041) 10,041 nm*

Miscellaneous other expense (46) (57) (64) (121) 75 (62.0) %

Total Non-operating (Expense) Income (24,134) (33,078) 9,011 (24,067) (67) 0.3 %

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Stockholders / Innventure LLC Unitholders $ (293,317) — $ (61,754) — $ (16,436) $ (78,190) $ (215,127) 153.5 %

Other comprehensive income, net of taxes:

Unrealized gain on available-for-sale debt securities - related party 909 62 971 — 971 nil

Total other comprehensive loss, net of taxes 909 62 $ 971 — 971 nil

Total comprehensive loss, net of taxes (69,184) (28,136) (97,320) (30,984) (66,336) 214.1 %

comprehensive income attributable to

Non-redeemable non-controlling interest (8,339) (11,762) (20,101) (139) (19,962) 14,361.2 %

Net Comprehensive Loss Attributable to Innventure, Inc.

Stockholders / Innventure LLC Unitholders (60,845) (16,374) (77,219) (30,845) (46,374) 150.3 %

________________

*not meaningful

Revenue was $456 for the Successor period from October 2, 2024 through December 31, 2024, $764 for Predecessor period from January 1, 2024 through October 1, 2024 and $1,117 for the Predecessor year ended December 31, 2023.

Revenue for the combined twelve months ended December 31, 2024 was $1,220, an increase of $103, or 9.2%, over the comparable period for the Predecessor year ended December 31, 2023.

The increase was primarily due to new product sales within the Technology segment during the combined twelve months ended December 31, 2024.

The increase was partially offset by non-recurring consulting revenue provided to certain third parties for the Predecessor year ended December 31, 2023.

Revenue was $2.1 million and $1.2 million for the years ended December 31, 2025 and 2024 an increase of $0.8 million, or 68.5%.

The increase was driven by an increase in product sales in the Technology segment, offset by a decrease in management fee income.

Cost of sales

Cost of sales was $3,752 for the Successor period from October 2, 2024 through December 31, 2024, $777 for Predecessor period from January 1, 2024 through October 1, 2024 and nil for the Predecessor year ended December 31, 2023.

Cost of sales for the combined twelve months ended December 31, 2024 was $4,529, an increase of $4,529, over the comparable period for the Predecessor year ended December 31, 2023.

The increase was due to the fact that the Technology segment was pre-revenue for the Predecessor year ended December 31, 2023 and started generating revenue from product sales during the combined twelve months ended December 31, 2024.

Cost of sales relate to those costs incurred to generate the new product sale revenue as well as the amortization expense of $2,065 associated with the recognition of intangibles of the Technology segment as part of the Business Combination.

Cost of sales was $18.8 million and $4.5 million for the year ended December 31, 2025 and 2024, respectively, an increase of $14.3 million.

The increase relates to the generation of revenue at the Technology segment resulting in an increase in costs related to supplies and materials, an increase in amortization of intangible assets and, an increase in employee costs.

General and administrative

General and administrative expense was $29,652 for the Successor period from October 2, 2024 through December 31, 2024, $26,608 for Predecessor period from January 1, 2024 through October 1, 2024 and $17,589 for the Predecessor year ended December 31, 2023.

General and administrative expense for the combined twelve months ended December 31, 2024 was $56,260, an increase of $38,671, or 219.9%, over the comparable period for the Predecessor year ended December 31, 2023.

The increase in expenditure was primarily attributed to an increase in professional services, legal fees and consulting fees related to the Business Combination of $17,600.

The remaining increase in expenditure was due to increased employee costs associated with increased bonuses and stock based compensation grants.

General and administrative expense was $66.7 million and $56.3 million for the year ended December 31, 2025 and 2024, respectively, an increase of 10.4 million, or 18.6%.

The increase in expenditure was attributed to increased stock-based compensation costs, increased intangible asset amortization, and increased professional and legal fees.

Goodwill impairment

Goodwill impairment expense was $346.6 million for the December 31, 2025 The impairment was due to sustained decreases in the Company’s publicly quoted share price and market capitalization, which were sensitive to the general downward volatility experienced in the stock market during late February 2025 through April 2025.

Sales and marketing

Sales and marketing expense was $2,009 for the Successor period from October 2, 2024 through December 31, 2024, $4,178 for Predecessor period from January 1, 2024 through October 1, 2024 and $3,205 for the Predecessor year ended December 31, 2023.

Sales and marketing expense for the combined twelve months ended December 31, 2024 was $6,187, an increase of $2,982, or 93.0%, over the comparable period for the Predecessor year ended December 31, 2023.

The increase was primarily due to increased compensation costs as a result of increased headcount across the business and increases in advertising and marketing related events and expenses associated with the commercialization phase of the Technology segment.

Sales and marketing expense was $9.6 million and $6.2 million for the year ended December 31, 2025 and 2024, respectively, an increase of $3.4 million, or 55.7%.

The increase was due to increased employee costs and an increase in advertising and marketing-related events and expenses primarily associated with the commercialization phase of the Technology segment.

Research and development

Research and Development (“R&D”) expense was $5,340 for the Successor period from October 2, 2024 through December 31, 2024, $5,978 for Predecessor period from January 1, 2024 through October 1, 2024 and $4,001 for the Predecessor year ended December 31, 2023.

R&D expense for the combined twelve months ended December 31, 2024 was $11,318, an increase of $7,317, or 182.9%, over the comparable period for the Predecessor year ended December 31, 2023.

The increase was primarily due to an increase in employee-related costs in the Technology segment and an increase in new product development costs.

Research and development expense was $25.0 million and $11.3 million for the year ended December 31, 2025 and 2024, respectively, an increase of $13.7 million or 121.1%.

The increase was due to an increase in amortization of intangible assets, an increase in employee costs, and an increase in development fees at Refinity.

Interest expense, net

Interest expense, net was $1,132 for the Successor period from October 2, 2024 through December 31, 2024, $1,300 for Predecessor period from January 1, 2024 through October 1, 2024 and $1,224 for the Predecessor year ended

December 31, 2023.

Interest expense, net for the combined twelve months ended December 31, 2024 was $2,432, an increase of $1,208, or 98.7%, over the comparable period for the Predecessor year ended December 31, 2023.

The increase was primarily due to an increase in facilities and borrowings between the periods as well as the increased cost of borrowing experienced during the Successor period.

Interest expense, net was $9.7 million and $2.4 million for the year ended December 31, 2025 and 2024, respectively, an increase of $7.3 million.

The increase was due to interest expense on the convertible debentures (collectively, the “Convertible Debentures”) issued to Yorkville pursuant to each of the securities purchase agreement, dated September 15, 2025 (“Securities Purchase Agreement”), and the securities purchase agreement, dated March 25, 2025, contractual interest expense for the term loan agreement entered into on October 22, 2024 by and among the Company and WTI Fund X, Inc.

and WTI Fund XI, Inc.

(collectively, “WTI Lenders”), which provides for a term loan facility in the aggregate principal amount of up to $50,000 (the “WTI Facility”), amortization of issuance costs on the WTI Facility, partially offset by a net decrease in interest expense related to other debt instruments that have been paid down, and by an increase in interest income.

Net gain (loss) from investments

Net gain on investments was nil for the Successor period from October 2, 2024 through December 31, 2024, $11,547 for Predecessor period from January 1, 2024 through October 1, 2024 and net loss on investments was $6,448 for the Predecessor year ended December 31, 2023.

Net gain on investments for the combined twelve months ended December 31, 2024 was $11,547, an increase of $17,995, or 279.1%, over the comparable period for the Predecessor year ended December 31, 2023.

The increase was due to the unrealized gain on investment in PCT owned stock via Class PCTA Units for the year ended December 31, 2024.

The PCTA associated assets were not recognized as part of the Business Combination.

Net gain on investments was $0.1 million and $11.5 million for the year ended December 31, 2025 and 2024, respectively, a decrease of $11.4 million or 98.9%.

The decrease was due to the gain on investment in PureCycle Technologies, Inc.

(“PCT”) owned stock via Class PCTA units prior year, which is no longer consolidated in the Company’s consolidated financial statements as a result of Business Combination.

Net (loss) gain on investments - due to related parties

Net loss on investments – due to related parties was nil for the Successor period from October 2, 2024 through December 31, 2024, $468 for Predecessor period from January 1, 2024 through October 1, 2024 and net gain on investments was $232 for the Predecessor year ended December 31, 2023.

Net loss on investments – due to related parties for the combined twelve months ended December 31, 2024 was $468, a decrease of $700, or 301.7%, over the comparable period for the Predecessor year ended December 31, 2023.

The decrease was primarily due to an increase in fair value of liability - PCT stock owed to others.

The PCTA associated liabilities were not recognized as part of the Business Combination.

There was no net loss on investments – due to related parties for the year ended December 31, 2025 and $0.5 million for the year ended December 31, 2024.

The change was due to an increase in the fair value of the liability of PCT stock owed to other parties for the prior year.

The Class PCTA associated liabilities are no longer consolidated in the Company’s consolidated financial statements as a result of the Business Combination.

Change in fair value of financial liabilities

The fair value of financial liabilities increased by $20,946 for the Successor period from October 2, 2024 through December 31, 2024, increased by $478 for Predecessor period from January 1, 2024 through October 1, 2024, and decreased by $766 for the Predecessor year ended December 31, 2023.

The fair value of financial liabilities for the combined twelve months ended December 31, 2024 increased by $21,424, an increase of $22,190, or 2,896.9%, over the comparable period for the Predecessor year ended December 31, 2023.

The increase was primarily due to increases in fair value adjustments for warrants and earnout liabilities, which were offset by adjustments in the fair value of embedded derivative liabilities.

The fair value of financial liabilities increased by $16.1 million and decreased by $21.4 million for the year ended December 31, 2025 and 2024, respectively, an increase to income of $37.6 million, or 175.4%.

The increase to income was primarily due to decreases in fair value for warrants and earnout liabilities, and was offset by a net increase in the fair value of the embedded derivative liabilities.

Equity method investment (loss) income

Equity method investment loss was $902 for the Successor period from October 2, 2024 through December 31, 2024, equity method investment gain was $893 for Predecessor period from January 1, 2024 through October 1, 2024 and equity method investment loss was $632 for the Predecessor year ended December 31, 2023.

Equity method investment loss for the combined twelve months ended December 31, 2024 was $9, a decrease of $623, or 98.6%, over the comparable period for the Predecessor year ended December 31, 2023.

The loss in 2023 of $632 recognized represented nonrecurring allocated losses from the ESG Fund and AeroFlexx.

The gain in 2024 was primarily due to a non-recurring allocated gain from the ESG Fund offset by a non-recurring allocated loss from investment of AeroFlexx.

Equity method investment loss was $12.6 million and immaterial for the year ended December 31, 2025 and 2024, respectively.

The change is related to losses from the Company’s equity method investment in AeroFlexx, partially offset by a gain from the ESG Fund in 2024.

Realized gain on conversion of available for sale investment

Realized gain on conversion of available for sale investment was $1.5 million for the year ended December 31, 2025, was due to the partial conversion of the AeroFlexx investment in debt securities resulting in a realized gain.

There was no realized gain on conversion of available for sale investment for the year ended December 31, 2024.

Loss on extinguishment of debt

Loss on extinguishment of debt was a noncash expense totaling $16.1 million for the year ended December 31, 2025 due to the modification of the WTI Facility and a modification of the first and second tranches of the New Convertible Debentures to Yorkville.

There was no gain or loss on extinguishment of debt for the year ended December 31, 2024.

Loss on extinguishment of related party debt

Loss on extinguishment of related party debt was $3.5 million for the year ended December 31, 2025 due to the extinguishment of the related party loans by additional issuances of the Company’s series C preferred stock, $0.0001 par value per share (“Series C Preferred Stock”).

There was no gain or loss on extinguishment of related party debt for the year ended December 31, 2024.

Loss on conversion of promissory notes

Loss on conversion of promissory notes was nil for the Successor period from October 2, 2024 through December 31, 2024, $1,119 for Predecessor period from January 1, 2024 through October 1, 2024 and nil for the Predecessor year ended December 31, 2023.

Loss on conversion of promissory notes for the combined twelve months ended December 31, 2024 was $1,119, an increase of $1,119, over the comparable period for the Predecessor year ended December 31, 2023.

This was due to the automatic conversion of promissory notes in the first quarter of 2024 into equity instruments which was treated as an extinguishment thereby generating a loss.

There was no equivalent transaction in 2023.

Write-off of loan commitment fee asset

Write-off of loan commitment fee asset was $10,041 for the Successor period from October 2, 2024 through December 31, 2024, nil for Predecessor period from January 1, 2024 through October 1, 2024 and nil for the Predecessor year ended December 31, 2023.

Write-off of loan commitment fee asset for the combined twelve months ended December 31, 2024 was $10,041, an increase of $10,041, over the comparable period for the Predecessor year ended December 31, 2023.

The increase was due to a one-time write-off of loan commitment fees related to the WTI Fund loan and security agreement where the Company was unable to draw down subsequent loan tranches because it had not met certain revenue and net loss targets set by the lender.

These fees included warrants and fees incurred in securing the WTI loans.

Loss attributable to non-redeemable non-controlling interests

Loss attributable to non-redeemable non-controlling interests was $8,339 for the Successor period from October 2, 2024 through December 31, 2024, $11,762 for Predecessor period January 1, 2024 through October 1, 2024 and $139 for the Predecessor year ended December 31, 2023.

Loss attributable to non-redeemable non-controlling interests for the combined twelve months ended December 31, 2024 was $20,101, an increase of $19,962, or 14,361.2%, over the comparable period for the Predecessor year ended December 31, 2023.

This was due to the increase in Accelsius loss subject to allocable percentage during the year ended December 31, 2024 as compared to the year ended December 31, 2023.

Unrealized gain on available-for-sale debt securities - related party

Unrealized gain on available-for-sale debt securities - related party, was a gain of $909 for the Successor period from October 2, 2024 through December 31, 2024, a loss of $62 for Predecessor period January 1, 2024 through October 1, 2024 and nil for the Predecessor year ended December 31, 2023.

Unrealized gain (loss) on available-for-sale debt securities - related party for the combined twelve months ended December 31, 2024 was $971, an increase of $971, over the comparable period for the Predecessor year ended December 31, 2023.

The increase was due to the conversion of working capital advances to investments in debt securities which are classified as available-for-sale.

Loss on conversion of promissory notes was $1.1 million during the year ended December 31, 2024 due to the automatic conversion of promissory notes into equity instruments which was treated as an extinguishment thereby generating a loss.

There was no equivalent transaction for the year ended December 31, 2025.

Loss attributable to Non-controlling interest

Loss attributable to non-controlling interests was $182.0 million and $20.1 million for the years ended December 31, 2025 and 2024, respectively.

This was due to the increase in the Technology segment net loss as a result of goodwill impairment.

Non-GAAP Financial Measures

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It is also used internally for allocating resources efficiently, assessing the economic outcomes of acquisitions and strategic decisions, and evaluating the performance of our management team.

There are limitations to Adjusted EBITDA, including its exclusion of cash expenditures, future requirements for capital expenditures and contractual commitments, and changes in or cash requirements for working capital needs.

Adjusted EBITDA also omits significant interest expenses and related cash requirements for interest and payments.

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The following table provides a reconciliation from Net Loss to EBITDA and Adjusted EBITDA for the specified periods:

Successor Predecessor S/P Combined (Non-GAAP) Predecessor

Period from October 2, 2024 through December 31, 2024 Period from January 1, 2024 through October 1, 2024 Year ended December 31, 2024 Year ended December 31, 2023

Successor Predecessor S/P Combined (Non-GAAP)

Year Ended December 31, 2025 Period from October 2, 2024 through December 31, 2024 Period from January 1, 2024 through October 1, 2024 Year ended December 31, 2024

(in thousands)

Net loss $ (475,350) (70,093) (28,198) (98,291)

2 unchanged sentences

Depreciation and amortization expense 22,506 5,455 146 5,601

Provision for income taxes 3,282 (432) 2,850 —

Income tax expense (benefit) (13,483) (3,282) 432 (2,850)

EBITDA (456,649) — (56,747) — (26,320) (83,067)

5 unchanged sentences

27,872 16,338 1,056 17,394

Goodwill impairment (5)

346,557 — — —

Loss on extinguishment of debt (6)

Loss on extinguishment of related party debt (7)

Loss on conversion of promissory notes — — 1,119 1,119

Adjusted EBITDA (78,764) (17,154) (14,253) (31,407)

(1) Interest expense, net – For the combined twelve months ended December 31, 2024, interest expense, net includes interest incurred on our various borrowing facilities and the amortization of debt issuance costs.

(1) Interest expense, net – For the year ended December 31, 2025 and for the combined twelve months ended December 31, 2024, interest expense, net includes interest incurred on our various borrowing facilities and the amortization of debt issuance costs.

Additional debt issuance cost associated with a loan commitment fee asset in the amount of $10,041 was written off in combined twelve months ended December 31, 2024 and has also been included in this adjustment.

This amount is representative of the asset associated with the second and third tranches of the WTI facility.

When it became known that we would not be able to draw on these subsequent tranches based on certain metrics contained within the WTI Facility agreement, we immediately wrote this asset off.

For the Predecessor year ended December 31, 2023, this balance is comprised entirely of interest incurred on our various borrowing facilities.

(2) Transaction and other related costs – For the combined twelve months ended December 31, 2024 and for the Predecessor year ended December 31, 2023 this is comprised entirely of consulting, legal, and other professional fees related to the business combination with Learn CW Investment Corporation (the “Business Combination”).

(3) Change in fair value of financial liabilities – For the combined twelve months ended December 31, 2024 the change in fair value of financial liabilities primarily consists of the change in fair value of the warrant liability, change in fair value of the earnout liability, and the change in the fair value of the embedded derivative associated with convertible notes prior to extinguishment.

For the Predecessor year ended December 31, 2023, this is comprised entirely of the change in fair value of the embedded derivative associated with the convertible notes.

(4) Stock based compensation – For the combined twelve months ended December 31, 2024 stock based compensation primarily consisted of awards in the 2024 Equity and Incentive Plan entered into on October 2, 2024 subsequent to the Business Combination.

This amount is representative of the asset associated with the additional funds under the second and third tranches of the WTI Facility.

When it became known that we would not be able to draw on these subsequent tranches based on certain metrics contained within the WTI Facility, we immediately wrote this asset off.

(2) Transaction and other related costs – For the combined twelve months ended December 31, 2024

this is comprised entirely of consulting, legal, and other professional fees related to the Business Combination.

(3) Change in fair value of financial liabilities – For the December 31, 2025, the change in fair value of financial liabilities primarily consists of the change in fair value of the warrant liability, the earnout liability and the embedded derivatives in various instruments.

For the year ended December 31, 2024, this is comprised entirely of the change in fair value of the embedded derivative associated with the convertible notes.

(4) Stock based compensation – For the December 31, 2025, stock based compensation primarily consisted of awards in the 2024 Equity and Incentive Plan entered into on October 2, 2024 subsequent to the Business Combination.

These awards consisted of Stock Options, Restricted Stock Units, and Stock Appreciation Rights.

Further, a portion of this expense was related to share based payment employee incentive plans in existence at Innventure LLC and other subsidiaries.

For the Predecessor year ended December 31, 2023, stock based compensation was comprised wholly of share based payment employee incentive plans in existence at Innventure LLC and other subsidiaries.

Liquidity and Capital Resources (in thousands, except as otherwise noted)

Further, a portion of this expense was related to share-based payment employee incentive plans in existence at subsidiaries.

Additional Stock Options were granted in February 2025 and additional Restricted Stock Units were granted in June 2025 and August 2025 which are included in the stock-based compensation caption for their respective periods.

For the year ended December 31 2024, stock-based compensation was comprised wholly of share-based payment employee incentive plans in existence at Innventure LLC and other subsidiaries.

(5) Goodwill impairment - For the year ended December 31, 2025, the Company recognized goodwill impairment due to sustained decreases in the Company’s publicly quoted share price and market capitalization, which were, at least in part, sensitive to the general downward volatility experienced in the stock market from late February 2025 through April 2025.

The publicly quoted share price stabilized some in May 2025 and June 2025.

(6) Loss on extinguishment of debt - For the December 31, 2025, the Company modified the WTI Facility, and such modification was accounted for as a debt extinguishment while no debt was repaid.

(7) Loss on extinguishment of related party debt - For the December 31, 2025, the Company extinguished certain related party debts by issuing Series C Preferred Stock.

Liquidity and Capital Resources

As discussed in more detail below, management has concluded that there is substantial doubt about our ability to continue as a going concern within one year after the date that these consolidated financial statements included in Item 1.

of this Form 10-K were issued.

The condensed consolidated financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty.

Sources of Liquidity

In assessing liquidity, we monitor and analyze cash on hand and operating expenditure commitments.

Our liquidity needs are to meet working capital requirements and operating expense obligations.

Our material liquidity requirements are from working capital requirements and operating expense obligations.

To date we have financed our operations primarily through cash flows from investing and financing activities.

The following is a summary of the components of our current liquidity:

The following is a summary of the components of our current liquidity (in thousands):

December 31, 2025 December 31, 2024

2 unchanged sentences

Working capital 6,878 (45,061)

Accumulated deficit $ (78,262) $ (64,284)

Our future liquidity requirements will depend on many factors, including funding required by our Operating Companies, funding needed to support other business opportunities and expenditures, and funding for working capital and general corporate purposes.

Based on current expectations, we estimate we will require at least $50,000 to meet our liquidity requirements for the next 12 months.

We expect to satisfy our liquidity requirements through cash on hand, cash generated from the operations of our Operating Companies, the SEPA with Yorkville (maximum remaining availability of approximately $72,000), the Convertible Debentures to be issued to Yorkville, as well as proceeds from additional financings completed by us or our Operating Companies.

During the year ended December 31, 2024, the Technology segment raised approximately $18,898 of additional equity financing, in comparison to approximately $250 during the year ended December 31, 2023.

In connection with our current business strategy, we intend to conduct additional fundraising of up to $25,000 to fund capital expenditures and other expenses to support the growth of the business.

Bridge Financing

On August 20, 2024, the Company entered into unsecured promissory notes with two related parties for principal amounts of $10,000 and $2,000, respectively.

The Company entered into amended and restated agreements to amend the terms of these unsecured promissory notes on October 1, 2024.

As per the original agreements, the note with the first party contained a loan fee of $1,000 which was payable with the repayment of the principal amount of the note and the note with the second party contained interest at the rate of 11.50% per annum.

The principal amounts, loan fees and accrued interest were repayable at the earlier of October 15, 2024 and the first business day following the date of consummation of the Business Combination.

As per the amended note with the first party, the maturity date was extended to the earlier of (i) January 31, 2025 and (ii) the first business day following the date on which the Company has sufficient capital to be able to repay all amounts outstanding under the note and otherwise meet its expected working capital needs as determined by the Company in its reasonable discretion.

The loan fee of $1,000, required under the original agreement, became due on or around the amendment date but as of December 31, 2024 has not yet been paid and interest will accrue at the rate of 15.99% per annum until paid.

The amendment was accounted for as a troubled debt restructuring as the Company was provided a concession through a decrease in the effective interest rate.

However, no gain or loss was recognized as a result.

As per the amended note with the second party, the maturity date was extended to January 31, 2025 and the interest rate was increased to 13.50% per annum.

Additionally, $1,000 of the principal amount became due on or around the amendment date but as of December 31, 2024 has not yet been paid.

On March 20, 2025, the Company entered into agreements to convert and repay the aggregate principal amount of these unsecured promissory notes with the two related parties and, on March 24, 2025, issued shares of the Company’s Series C preferred stock, par value $0.0001 per share (the “Series C Preferred Stock”) and paid cash to settle these unsecured promissory notes with the two unrelated parties.

Certain Relationship and Related Transactions, and Director Independence for more information.

Series B Preferred Stock

The Company is authorized to issue 25,000,000 shares of preferred stock with a par value of $0.0001 per share, of which, 3,000,000 of the shares of preferred stock are designated as Series B Preferred Stock.

Immediately following the Business Combination, Innventure issued 1,102,000 of Series B Preferred Stock at a purchase price of $10.00 per share (the “Original Issue Price”) for a total amount of $11,020.

See further discussion of the Series B Preferred Stock in Note 13.

Stockholders' Equity within the notes to the consolidated financial statements.

Series C Preferred Stock

5,000,000 shares of preferred stock are designated as Series C Preferred Stock.

On March 24, 2025, the Company agreed to issue an aggregate of up to 275,000 shares of the Series C Preferred Stock in a private placement, at a price of $10.00 per share of Series C Preferred Stock, resulting in an aggregate purchase price of approximately $2,750 before deducting fees and other estimated offering expenses.

In connection with the preferred stock purchase agreements, the Company received an aggregate amount of $1,500 in advanced funds.

In consideration of these funds, the Company issued 150,000 shares of Series C Preferred Stock to the respective parties.

Additionally, on March 24, 2025, the Company issued 578,294 shares of Series C Preferred Stock in exchange for the termination of a related party loan with Glockner Family Venture Fund, LP and issued 1,392,059 shares of Common Stock in exchange for the termination of another related party loan between AeroFlexx Packaging Company, LLC and Auto Now Acceptance Co., LLC.

Further, on March 24, 2025, the Company issued an aggregate of 300,000 shares of Series C Preferred Stock for financial advisory and merchant banking services rendered.

See further discussion of the Series C Preferred Stock in the sub-section titled “Bridge Financing” above and in Note 21.

Subsequent Events within the notes to the consolidated financial statements.

Convertible Debentures

On March 25, 2025, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) to the issuance and sale of convertible debentures (the “Convertible Debentures”) with an aggregate principal amount of up to $30,000.

These Convertible Debentures will be convertible into shares of Common Stock (as converted, the “Conversion Shares”).

On the first business day after certain closing conditions are met, including the timely filing of this Form 10-K, the Company will issue $20,000 in aggregate principal amount of Convertible Debentures (the “First Closing Date”).

Additionally, the Company will issue an additional $10,000 in aggregate principal amount of Convertible Debentures after both (i) the registration statement filed with the SEC registering the resale of the Conversion Shares is declared effective by the SEC and (ii) the Company receives stockholder approval.

The Convertible Debentures will not bear interest unless an event of default occurs, in which case the Convertible Debentures will bear interest at an annual rate of 18%.

The Convertible Debentures will mature 15 months after the First Closing Date and can be converted into shares of Common Stock at a conversion price to be determined.

The Convertible Debentures were issued at an original issue discount of 10%.

In connection with this agreement, the Company agreed to issue warrants to purchase up to 300,000 shares of Common Stock to the WTI Lenders.

These warrants serve as consideration for the WTI Lenders’ consent to the transaction.

The warrants have an exercise price of $0.01 per share and are exercisable until March 31, 2035, with additional customary rights and protections.

See further discussion of the Convertible Debentures in Note 21.

Subsequent Events within the notes to the consolidated financial statements.

Cash flows associated with operating, investing and financing activities for the years ended December 31, 2024 and 2023 are summarized as follows:

Successor Predecessor S/P Combined 2024 Predecessor Change

October 2, 2024 through December 31, 2024 January 1, 2024 through October 1, 2024 Year ended December 31, 2024

Year ended December 31, 2023 Amount % Change

Our long-term future liquidity requirements will depend on many factors, including funding required by us and our Innventure Companies to (i) support the growth of the business and the current business strategy;

(ii) fund working capital, capital expenditures and general corporate expenditures;

and (iii) support other business opportunities and expenditures.

As of December 31, 2025 and over the next 12 months, we anticipate that Innventure, Inc.

will require at least $50.0 million to meet its operating and strategic needs, with an additional $25.0 million required to support growth across our Innventure Companies in accordance with our current business plan.

We expect to meet these needs through a combination of cash on hand, operating cash flows, strategic investments, the SEPA with Yorkville (maximum remaining availability of approximately $66.6 million as of December 31, 2025, subject to the satisfaction of certain conditions in the SEPA and additional financings completed by us and our Innventure Companies.

Summarized below are equity and debt financing activities made during the year ended December 31, 2025, and thereafter:

Equity Financing Activities:

• The Company entered into the SEPA with Yorkville in October 2023, which provides the Company the right, but not the obligation, to sell to Yorkville up to $75.0 million in the Company’s common stock, par value $0.0001 per share (“Common Stock”) from time to time through November 2027 (of which approximately $66.6 million in Common Stock remains available for issuance under the SEPA), subject to the satisfaction of certain conditions in the SEPA.

During the year ended December 31, 2025, the Company issued 997,573 shares of Common Stock pursuant to the SEPA in payment of $4.9 million of principal and $0.2 million of payment premiums for the Convertible Debentures.

In addition to the Common Stock issuances pursuant to the SEPA made in repayment towards the Convertible Debentures, the Company sold 1,071,566 shares of Common Stock under the SEPA, raising $6.1 million in cash proceeds.

• Accelsius raised a total of $7.1 million through the issuance of Accelsius Series A Preferred units during the year ended December 31, 2025.

• The Company issued 2,885,848 shares of Series C Preferred Stock on March 24, 2025 for a total amount of $28.8 million, with the consideration received in the form of cash, services, and related party debt cancellation.

• Accelsius raised $25.0 million on October 2, 2025 through the issuance of 685,163 Accelsius Series B-1 units (“Series B-1 Units”) to Johnson Controls, Inc.

$7.3 million of debt converted to equity in the form of 251,452 Series B-2 units and 125,725 B-2 Warrants in conjunction with the issuance of Series B-1 units by Accelsius.

• The Company raised $9.8 million on October 3, 2025 through a private placement by issuing 1,625,235 shares of Common Stock at $6.00 per share and Series A warrants to purchase 1,625,235 shares of Common Stock.

• On December 29, 2025, Accelsius issued and sold 822,195 Series B-1 Units to Legrand DPC, LLC, (“ Legrand ”), for approximately $30.0 million, before deducting financial advisor fees and other estimated offering expenses.

Additionally, Accelsius issued and sold to JCI an additional 274,065 units of the Series B-1 Units for gross proceeds of approximately $10.0 million.

• On January 12, 2026, the Company entered into securities purchase agreements with four institutional investors for the purchase and sale of 11,428,572 shares of Common Stock for gross proceeds of approximately $40.0 million, before deducting placement agent fees and offering expenses.

Debt Financing Activities:

• The Company issued $30.0 million in Convertible Debentures in April and May 2025, split between two tranches.

The Company received $18.0 million and $9.0 million in cash proceeds for the first and second tranche, respectively.

In connection with the issuance of the Convertible Debentures, the Company issued two warrants (the “2025 WTI Warrants”) to purchase, at a price of $0.01 per share (subject to certain limitations and adjustment), up to an aggregate total of 495,074 shares of Common Stock (subject to future adjustments to the number and type of shares pursuant to the 2025 WTI Warrants), to WTI Fund X, LLC and WTI Fund XI, LLC, exercisable through March 31, 2035.

• Accelsius entered into unsecured convertible notes (“Related Party Term Convertible Notes”) with certain investors deemed to be Related Parties (as defined in the Company’s Related Party Transactions Policy) for a total principal amount of $4.2 million in June 2025.

The Related Party Term Convertible Notes are convertible into Series A Units of Accelsius and have a maturity date of December 31, 2026.

• Accelsius entered into an unsecured Convertible Promissory Note (“CPN”) with a related party lender in June 2025 that is drawable in three tranches with 15% interest and an immaterial loan fee.

On October 8, 2025, the Company repaid the CPN in full due to its related party, amounting to $2.0 million in principal and $0.1 million in interest and loan fees, for a total of $2.1 million.

• Accelsius issued unsecured convertible notes with various other parties for a total principal amount of $7.8 million in June and July of 2025 that are convertible into Series A Units of Accelsius starting January 2026.

• Accelsius entered into unsecured convertible promissory notes totaling $9.2 million in principal between August 12, 2025 and September 19, 2025, with $7.3 million in cash proceeds received by December 31, 2025.

• The Company entered into the Securities Purchase Agreement with Yorkville on September 15, 2025 to issue convertible debentures (the “New Convertible Debentures”).

Of the $15.0 million authorized, one tranche totaling $10.0 million was issued before September 30, 2025 totaling $9.0 million in cash proceeds.

On November 12, 2025, the Company issued an additional tranche of the New Convertible Debentures for $5.0 million, totaling $4.5 million in cash proceeds.

• Pursuant to the Fifth Amendment to Loan and Security Agreement between Innventure LLC and Accelsius, on September 18, 2025 the Company elected to convert $0.5 million of accrued interest outstanding into 45,159 Series A Units of Accelsius.

All convertible notes are subordinated to the WTI Facility and other debt of the Company owed to the WTI Lenders, and the holders of the convertible notes have agreed not to demand repayment while senior obligations remain outstanding.

Cash flows associated with operating, investing and financing activities are summarized as follows (in thousands):

Successor Predecessor S/P Combined 2024 Change

Year Ended December 31, 2025 October 2, 2024 through December 31, 2024 January 1, 2024 through October 1, 2024 Year ended December 31, 2024

Amount % Change

Net Cash Used in Operating Activities $ (80,683) $ (29,214) $ (18,848) $ (48,062) $ (32,621) 67.9 %

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Net Cash Used in Operating Activities

Cash flows used in operating activities were $48,062 for the combined twelve months ended December 31, 2024, as compared to $19,476 for the year ended December 31, 2023, an increase of $28,586, or 146.8%.

The increase is primarily related to change additional costs incurred in connection with the Business Combination, increased employee compensation costs associated with increased headcount.

In addition, there was an increase in R&D costs at the Technology segment.

Cash flows used in operating activities were $80.7 million for the year ended December 31, 2025, as compared to $48.1 million for the year ended December 31, 2024, an increase of $32.6 million, or 67.9%.

The increase is primarily related to working capital impacts and increases in operating losses.

Net Cash Provided (Used in) by Investing Activities

Cash flows provided by in investing activities were $865 for the combined twelve months ended December 31, 2024, as compared to cash flows used in investing activities of $4,667 for the year ended December 31, 2023, an increase of $5,532 or 118.5%.

The increase is primarily related cash withdrawn from the trust as a result of the Business Combination offset by to loans to an equity method investee and acquisitions of property, plant and equipment.

Cash flows used in investing activities were $4.1 million for the combined year ended December 31, 2025, as compared to cash flows provided by investing activities of $0.9 million for the year ended December 31, 2024, a change of $5.0 million.

The increase is primarily related to lower investments in debt securities and advances to our related parties, partially offset by reduced proceeds from sales of investments.

Net Cash Provided by Financing Activities

Cash flows provided by financing activities were $71,907 for the year ended December 31, 2024, as compared to $19,174 for the year ended December 31, 2023, an increase of $52,733 or 275.0%.

The increase is primarily related to proceeds from issuance of equity and debt financing, partially offset by increased repayment of debt.

Cash flows provided by financing activities were $139.1 million for the year ended December 31, 2025, as compared to $71.9 million for the year ended December 31, 2024, an increase of $67.2 million or 93.5%.

The increase is primarily related to proceeds from issuance of equity and debt financing.

Refer to Note 5.

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Debt obligations 12,846 24,510 — — — 37,356

Fixed future installments payable 700 825 825 825 9,900 13,075

Total $ 14,239 $ 25,802 $ 1,053 $ 825 $ 9,900 $ 51,819

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We have experienced recurring losses from operations and negative cash flows from operating activities.

In addition, we had, and may potentially continue to have, an ongoing need to raise additional cash from outside sources to fund our growth plans and related operations.

We believe the successful transition to attaining profitable operations is

dependent upon achieving a level of revenues from our Operating Companies adequate to support our cost structure.

In addition, we and our Innventure Companies continue to have an ongoing need to raise additional cash from outside sources to sustain our and our Innventure Companies’ operations and fund our and their growth plans.

In connection with our assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update 2014-15, “ Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern ,” management has determined that these conditions raise substantial doubt about our ability to continue as a going concern within one year after the date of the consolidated financial statements included in Item 8 of this Form 10-K.

If we are unable to realize our assets, obtain adequate capital from the SEPA or otherwise generate sufficient revenues to support our cost structure within the normal operating cycle of a twelve (12) month period, we may have to consider supplementing our available sources of funds through the following sources:

• other available sources of financing from banks and other financial institutions;

• capital financing;

• financial support from our related parties and shareholders.

We can make no assurances that required financings will be available for the amounts needed, or on terms commercially acceptable to us, if at all.

If one or all of these events does not occur or subsequent capital raises are insufficient to bridge financial and liquidity shortfalls (or both), there would likely be a material adverse effect on our business and financial condition that would materially adversely affect our ability to continue as a going concern.

If we are unable to obtain adequate capital from public or private equity or debt financing or otherwise generate sufficient revenues from our Innventure Companies to support our cost structure within the normal operating cycle of a twelve (12) month period, we may have to implement additional cost reduction measures or adjust the timing or scope of certain operations at Innventure or certain Innventure Companies, in part or in full, to help manage liquidity.

If we raise additional funds through the issuance of additional debt or equity securities (at either the Innventure or Innventure Company level), it could result in substantial dilution to our existing stockholders and increase fixed payment obligations, and these securities may have rights senior to those of our Common Stock.

See “Item 1A.

Risk Factors – Risks Related to Innventure’s Business – There is uncertainty regarding Innventure’s ability to maintain liquidity sufficient to operate its business effectively, which raises substantial doubt about its ability to continue as a going concern.”

Risk Factors – Risk Related to Innventure’s Business – There is uncertainty regarding Innventure’s ability to maintain liquidity sufficient to operate its business effectively, which raises substantial doubt about its ability to continue as a going concern.”

We can make no assurances that required financings will be available for the amounts needed, or on terms commercially acceptable to us, if at all.

If subsequent capital raises or revenues from operations at the Innventure Companies are insufficient to bridge financial and liquidity shortfalls (or both), there would likely be a material adverse effect on our business and financial condition that would materially adversely affect our ability to continue as a going concern.

The consolidated financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty.

Critical Accounting Policies and Use of Estimates

Refer to Note 2.

Accounting Policies to our consolidated financial statements for the years ended December 31, 2024 and 2023 included in Item 8 of this Form 10-K for a discussion of our critical accounting policies.

Our consolidated financial statements have been prepared in conformity with GAAP.

In preparation of these consolidated financial statements, our management is required to use judgment in making estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities as of the date of the consolidated financial statements, as well as the reported expenses incurred during the reporting periods.

Management considers an accounting judgment, estimate, or assumption to be critical when (1) the estimate or assumption is complex in nature or requires a high degree of judgment and (2) the use of different judgments, estimates, and assumptions could have a material impact on the consolidated financial statements.

Our significant accounting policies are described in Note 2.

Accounting Policies to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for further information.

In preparation of these consolidated financial statements, management applied critical estimates and assumptions while determining the carrying value of our equity method investments and fair value measurements, and while performing impairment assessments on long-lived assets and goodwill.

Accordingly, actual results could differ from those estimates.

Fair Value Measurement

We measure certain financial instruments at fair value on a recurring and nonrecurring basis, consisting primarily of our investment in debt securities and warrants.

The investments in debt securities are accounted for on an as-converted basis using a Black-Scholes model and the warrants are accounted for using a Monte Carlo valuation.

Adjustments to fair value require quantitative assessments according to a hierarchy that prioritizes the inputs to valuation techniques measure fair value and requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs.

The Company categorizes each of its fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety.

These levels are:

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

Level 2 – Observable inputs other than quoted prices in Level 1, such as quoted prices for similar assets or liabilities in active markets;

quoted prices in 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 reflect management’s best estimate of what market participants would use in pricing the asset or liability.

Consideration is given to the risk inherent in the valuation technique and the risk inherent in the inputs to the model.

Equity Method Investments

The carrying value of our equity method investments is determined based on amounts invested by the Company, adjusted for the Company’s share in the earnings or losses of each investee, after consideration of contractual arrangements that govern allocations of income or loss, less distributions received.

For investments where the specified allocations of income or loss are different from the allocation of cash from operations and on liquidation, the Company utilizes the hypothetical liquidation book value method to allocate income or loss from the equity method investment.

The Company evaluates its equity method investments for impairment whenever events or changes in circumstances indicate that the carrying amounts of such investments may not be recoverable.

Goodwill Impairment

Goodwill is allocated at the date the goodwill is initially recorded.

We have one operating segment and reporting unit, and evaluate goodwill for impairment as one singular reporting unit.

We evaluate our goodwill for impairment annually at the beginning of the fourth quarter or earlier upon the occurrence of a triggering event, such as substantive unfavorable changes in economic conditions, industry trends, costs, cash flows, or ongoing declines in market capitalization.

Goodwill impairment testing was performed using the income approach via a discounted cash flow model.

The income approach estimates fair value by converting future cash flows to a current amount on the measurement date after taking into consideration marketplace conditions.

Assumptions including discount rate and estimated future cash flows had a significant impact to the estimated fair value of the reporting unit.

Quantitative and Qualitative Disclosures About Market Risk.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis