Innventure, Inc. 10-K

Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA TABLE OF CONTENTS Consolidated Financial Statements Page No. Report of Independent Registered Public Accounting Firm (WithumSmith+Brown, PC;PCAOB ID # 100 63 Report of Independent Registered Public Accounting Firm (BDO USA, P.C.; PCAOB ID# 243 ) 64 Consolidated Balance Sheets as of December 31, 2025 and 2024 65 Consolidated Statements of Operations and Comprehensive Income (Loss) for the year ended December 31, 2025 (Successor), the period October 2, 2024 through December 31, 2024 (Successor), and the period January 1, 2024 through October 1, 2024 (Predecessor). 66 Consolidated Statement of Changes in Mezzanine Capital for the period January 1, 2024 through October 1, 2024 (Predecessor). 67 Consolidated Statement of Changes in Stockholders’ Equity for the year ended December 31, 2025 (Successor), the period October 2, 2024 through December 31, 2024 (Successor), and the period January 1, 2024 through October 1, 2024 (Predecessor). 70 Consolidated Statements of Cash Flows for the year ended December 31, 2025 (Successor), the period October 2, 2024 through December 31, 2024 (Successor), and the period January 1, 2024 through October 1, 2024 (Predecessor). 72 Notes to Consolidated Financial Statements 74 62 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Stockholders of Innventure, Inc.: Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheet of Innventure, Inc. and subsidiaries (the “Company”) as of December 31, 2025, and the related consolidated statements of operations and comprehensive income (loss), changes in stockholders’ equity, and cash flows for the year ended December 31, 2025, and the related notes (collectively referred to as the "consolidated financial statements"). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. Going Concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has incurred operating losses since inception and, as of December 31, 2025, had both an accumulated deficit and working capital deficit, which raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the entity’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provided a reasonable basis for our opinion. /s/ WithumSmith+Brown, PC We have served as the Company's auditor since 2025. Orlando, Florida March 30, 2026 PCAOB ID Number 100 63 Report of Independent Registered Public Accounting Firm Stockholders and Board of Directors Innventure, Inc. Orlando, FL Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheet of Innventure, Inc. and Subsidiaries (the “Company”) as of December 31, 2024, the related consolidated statements of operations and comprehensive income (loss), stockholders’ equity, and cash flows for the period from October 2, 2024 through December 31, 2024 (“Successor”), and the consolidated statements of operations and comprehensive income (loss), changes in mezzanine capital, stockholders’ equity, and cash flows for the period January 1, 2024 through October 1, 2024 (“Predecessor”), and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024, and the results of its operations and its cash flows for the period from October 2, 2024 through December 31, 2024 (Successor), the period from January 1 2024 through October 1, 2024 (“Predecessor”) , in conformity with accounting principles generally accepted in the United States of America. Going Concern Uncertainty The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has suffered recurring losses from operations and has working capital deficiencies that raise substantial doubt about its ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ BDO USA, P.C. We served as the Company's auditor from 2022 to 2025. Raleigh, North Carolina April 14, 2025 64 Table of Contents Innventure, Inc. and Subsidiaries Consolidated Balance Sheets (in thousands, except share and per share amounts) Successor December 31, 2025 December 31, 2024 Assets Cash, cash equivalents and restricted cash $ 60,449 $ 11,119 Restricted cash 5,000 — Accounts receivable 1,094 283 Due from related parties 11,840 4,536 Inventories 1,604 5,178 Prepaid expenses and other current assets 3,167 3,170 Total Current Assets 83,154 24,286 Investments 28,741 28,734 Property, plant and equipment, net 1,941 1,414 Intangible assets, net 160,537 182,153 Goodwill 323,463 667,936 Other assets 1,351 766 Total Assets $ 599,187 $ 905,289 Liabilities and Stockholders' Deficit Accounts payable $ 2,551 $ 3,248 Accrued employee benefits 11,343 9,273 Accrued expenses 7,386 2,478 Contract liabilities 947 — Related party notes payable - current — 14,000 Notes payable - current 12,846 625 Term convertible note, current 7,890 — Convertible note - related party, current 4,331 — Patent installment payable - current 700 1,225 Obligation to issue equity 119 4,158 Warrant liability 27,458 34,023 Income taxes payable 23 — Other current liabilities 682 317 Total Current Liabilities 76,276 69,347 Notes payable, net of current portion 8,327 13,654 Earnout liability 3,890 14,752 Stock-based compensation liability 239 1,160 Patent installment payable, net of current 12,375 12,375 Deferred income taxes 13,848 27,353 Other liabilities 556 355 Total Liabilities 115,511 138,996 Commitments and Contingencies (Note 19) Stockholders' Equity Preferred stock, $ 0.0001 par value, 25,000,000 shares authorized; Series B Preferred Stock, $ 0.0001 par value, 3,000,000 shares designated, 33,144 and 1,102,000 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively. — — Series C Preferred Stock, $ 0.0001 par value, 5,000,000 shares designated, 150,000 shares issued and outstanding as of December 31, 2025 and no shares issued and outstanding as of December 31, 2024. — — Common Stock, $ 0.0001 par value, 250,000,000 shares authorized, 67,743,847 and 44,597,154 shares issued and outstanding as of December 31, 2025 and December 31, 2024, respectively. 7 4 Additional paid-in capital 577,070 502,865 Accumulated other comprehensive gain (loss) ( 1,260 ) 909 Accumulated deficit ( 371,603 ) ( 78,262 ) Total Innventure, Inc., Stockholders’ Equity 204,214 425,516 Non-controlling interest 279,462 340,777 Total Stockholders' Equity 483,676 766,293 Total Liabilities and Stockholder’s Equity $ 599,187 $ 905,289 See accompanying notes to consolidated financial statements. 65 Table of Contents Innventure, Inc. and Subsidiaries Consolidated Statements of Operations and Comprehensive Income (Loss) (in thousands, except share and per share amounts) Successor Successor Predecessor Year Ended December 31, 2025 October 2, 2024 through December 31, 2024 January 1, 2024 through October 1, 2024 Revenue $ 2,056 $ 456 $ 764 Operating Expenses Cost of sales 18,830 3,752 777 General and administrative 66,710 29,652 26,608 Sales and marketing 9,633 2,009 4,178 Research and development 25,025 5,340 5,978 Goodwill impairment 346,557 — — Total Operating Expenses 466,755 40,753 37,541 Loss from Operations ( 464,699 ) ( 40,297 ) ( 36,777 ) Non-operating (Expense) and Income Interest expense, net ( 9,678 ) ( 1,132 ) ( 1,300 ) Net gain (loss) from investments 131 — 11,547 Net (loss) gain on investments - due to related parties — — ( 468 ) Change in fair value of financial liabilities 16,146 ( 20,946 ) ( 478 ) Equity method investment (loss) income ( 12,592 ) ( 902 ) 893 Realized gain on conversion of available for sale investment 1,507 — — Loss on extinguishment of debt ( 16,064 ) — — Loss on extinguishment of related party debt ( 3,538 ) — — Loss on conversion of promissory notes — — ( 1,119 ) Write-off of loan commitment fee asset — ( 10,041 ) — Miscellaneous other expense ( 46 ) ( 57 ) ( 64 ) Total Non-operating (Expense) Income ( 24,134 ) ( 33,078 ) 9,011 Loss before Income Taxes ( 488,833 ) ( 73,375 ) ( 27,766 ) Income tax expense (benefit) ( 13,483 ) ( 3,282 ) 432 Net Loss ( 475,350 ) ( 70,093 ) ( 28,198 ) Less: net loss attributable to Non-redeemable non-controlling interest ( 182,033 ) ( 8,339 ) ( 11,762 ) Net Loss Attributable to Innventure, Inc. Stockholders / Innventure LLC Unitholders ( 293,317 ) ( 61,754 ) ( 16,436 ) Basic and diluted loss per share $ ( 5.39 ) $ ( 1.41 ) Basic and diluted weighted average common shares 54,420,978 43,951,279 Other comprehensive income (loss), net of taxes: Unrealized gain (loss) on available-for-sale debt securities - related party ( 662 ) 909 62 Reclassification of realized gain (loss) on conversion of available for sale investments ( 1,507 ) — — Total other comprehensive gain (loss), net of taxes ( 2,169 ) 909 62 Total comprehensive income (loss), net of taxes ( 477,519 ) ( 69,184 ) ( 28,136 ) Less: comprehensive loss attributable to Non-redeemable non-controlling interest ( 182,033 ) ( 8,339 ) ( 11,762 ) Net Comprehensive Loss Attributable to Innventure, Inc. Stockholders / Innventure LLC Unitholders $ ( 295,486 ) $ ( 60,845 ) $ ( 16,374 ) See accompanying notes to consolidated financial statements. 66 Table of Contents Innventure, Inc. and Subsidiaries Consolidated Statements of Changes in Mezzanine Capital (Predecessor) (in thousands, except share and per share amounts) Class I Amount Class PCTA Amount Total December 31, 2023 $ 2,912 $ 7,718 $ 10,630 Accretion of redeemable units to redemption value 1,565 10,385 11,950 October 1, 2024 $ 4,477 $ 18,103 $ 22,580 See accompanying notes to consolidated financial statements. 67 Innventure, Inc. and Subsidiaries Consolidated Statements of Changes in Stockholders' Equity (in thousands, except share and per share amounts) Class B Preferred Class B-1 Preferred Class A Class C Accumulated Deficit Accumulated OCI Non-Controlling Interest Total Unitholders' Deficit December 31, 2023 (Predecessor) $ 38,122 $ 3,323 $ 1,950 $ 844 $ ( 64,284 ) $ — $ 1,559 $ ( 18,486 ) Net loss — — — — ( 16,436 ) — ( 11,762 ) ( 28,198 ) Other comprehensive loss, net of taxes — — — — — 62 — 62 Units issued to non-controlling interest — — — — — — 13,921 13,921 Issuance of units, net of issuance costs 13,561 — — — — — — 13,561 Unit-based compensation — — — 137 — — 919 1,056 Issuance of units to non-controlling interest in exchange of convertible promissory notes — — — — — — 8,443 8,443 Accretion of redeemable units to redemption value — — — — ( 11,950 ) — — ( 11,950 ) October 1, 2024 (Predecessor) $ 51,683 $ 3,323 $ 1,950 $ 981 $ ( 92,670 ) $ 62 $ 13,080 $ ( 21,591 ) See accompanying notes to consolidated financial statements. 68 Innventure, Inc. and Subsidiaries Consolidated Statements of Changes in Stockholders' Equity (in thousands, except share and per share amounts) Series B Preferred Stock Common Stock Shares Amount Shares Amount Additional Paid-In Capital Accumulated Deficit Accumulated OCI Non-Controlling Interest Total Stockholders' Equity October 2, 2024 (Successor) — $ — — $ — $ 11,342 $ ( 15,845 ) $ — $ — $ ( 4,503 ) Net loss — — — — ( 61,754 ) — ( 8,339 ) ( 70,093 ) Effect of acquisition of Innventure LLC — — 43,589,850 4 461,064 — — 343,030 804,098 Reclassification of warrants from liability to equity — — — 1,265 — — — 1,265 Issuance of common shares, net of issuance costs — — 160,000 — 2,083 — — — 2,083 Issuance of preferred shares, net of issuance costs 1,102,000 — 9,965 — — — 9,965 Issuance of common shares from warrant exercises — — 259,309 — 2,982 — — — 2,982 Other comprehensive gain, net of taxes — — — — — — 909 — 909 Non-controlling interest acquired — — — — — — — 4,129 4,129 Distributions to Stockholders — — — — — ( 663 ) — — ( 663 ) Vesting of contingent at risk sponsor shares — — 587,995 — — — — — — Stock-based compensation — — — — 14,381 — — 1,957 16,338 Accrued preferred dividends — — — — ( 217 ) — — — ( 217 ) December 31, 2024 (Successor) 1,102,000 $ — 44,597,154 $ 4 $ 502,865 $ ( 78,262 ) $ 909 $ 340,777 $ 766,293 See accompanying notes to consolidated financial statements. 69 Table of Contents Innventure, Inc. and Subsidiaries Consolidated Statements of Changes in Stockholders' Equity (in thousands, except share and per share amounts) Stockholders’ Equity Mezzanine Equity Series B Preferred Stock Series C Preferred Stock Common Stock Preferred Stock Shares Amount Shares Amount Shares Amount Additional Paid-In Capital Accumulated Deficit Accumulated OCI Non-Controlling Interest Total Stockholders' Equity Shares Amount December 31, 2024 (Successor) 1,102,000 $ — — $ — 44,597,154 $ 4 $ 502,865 $ ( 78,262 ) $ 909 $ 340,777 $ 766,293 — $ — Net loss — — — — — — — ( 293,317 ) — ( 182,033 ) ( 475,350 ) — — Series B Preferred Stock buyback ( 5,000 ) — — — — — ( 50 ) — — — ( 50 ) — — Series B Preferred Stock issued for paid-in-kind dividends 21,808 — — — — — 218 — — — 218 — — Issuance of common shares, net of issuance costs — — — — 1,699,228 — 10,122 — — — 10,122 — — Issuance of common shares for services — — — — 119,971 — 1,102 — — — 1,102 — — Conversion of convertible debentures — — — — 11,003,432 1 46,999 — — — 47,000 — — RSU settlement, net — — — — 343,011 — ( 479 ) — — — ( 479 ) — — Vesting of earnout shares — — — — 2,344,682 1 873 — — — 874 — — Other comprehensive gain, net of taxes — — — — — — — — ( 2,169 ) — ( 2,169 ) — — Conversion of related party notes — — — — — — — — — — — 2,310,848 23,109 Issuance of Series C Preferred Stock, net — — — — — — — — — — — 275,000 2,663 Issuance of Series C Preferred Stock for services — — — — — — — — — — — 300,000 3,000 Non-controlling interest issued and related transfers — — — — — — ( 33,693 ) — — 113,308 79,615 — — Distributions to stockholders — — — — — — — ( 24 ) — — ( 24 ) — — Stock-based compensation — — — — — — 20,462 — — 7,410 27,872 — — Accrued preferred dividends — — — — — — ( 86 ) — — — ( 86 ) — ( 34 ) Conversion to Common Stock ( 1,085,664 ) — — — 7,636,369 1 27,269 — — — 27,270 ( 2,735,848 ) ( 27,270 ) Transfer of Series C Preferred Stock from Mezzanine equity to Stockholders' equity — — 150,000 — — — 1,468 — — — 1,468 ( 150,000 ) ( 1,468 ) December 31, 2025 (Successor) 33,144 — $ — 150,000 $ — 67,743,847 $ 7 $ 577,070 $ ( 371,603 ) $ ( 1,260 ) $ 279,462 $ 483,676 — $ — 70 Table of Contents Innventure, Inc. and Subsidiaries Consolidated Statements of Changes in Stockholders' Equity (in thousands, except share and per share amounts) See accompanying notes to consolidated financial statements. 71 Table of Contents Innventure, Inc. and Subsidiaries Consolidated Statements of Cash Flows (in thousands, except share and per share amounts) Successor Successor Predecessor Year Ended December 31, 2025 October 2, 2024 through December 31, 2024 January 1, 2024 through October 1, 2024 Cash Flows Used in Operating Activities Net loss $ ( 475,350 ) $ ( 70,093 ) $ ( 28,198 ) Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation 27,872 16,338 1,056 Interest income on debt securities - related party ( 394 ) ( 106 ) ( 110 ) Change in fair value of financial liabilities ( 16,146 ) 20,946 478 Net loss on investments - due to related parties — — 468 Write-off of loan commitment fee asset — 10,041 — Non-cash interest expense on notes payable 6,588 248 351 Net gain on investments ( 131 ) — ( 11,547 ) Accrued unpaid interest on note payable 336 69 930 Equity method investment loss (income) 12,592 902 ( 893 ) Realized gain on conversion of available for sale investments ( 1,507 ) — — Loss on extinguishment of debt 16,064 — — Loss on extinguishment of related party debt 3,538 — — Loss on conversion of promissory notes — — 1,119 Deferred income taxes ( 13,450 ) ( 3,301 ) 432 Depreciation and amortization 22,506 5,455 146 Goodwill impairment 346,557 — — Other costs, net 195 64 185 Changes in operating assets and liabilities: Accounts receivable ( 811 ) ( 166 ) ( 117 ) Prepaid expenses and other current assets ( 11,676 ) ( 1,301 ) ( 1,353 ) Inventory 3,574 ( 2,354 ) ( 2,824 ) Accounts payable ( 1,392 ) ( 11,211 ) 6,013 Accrued employee benefits 1,727 1,656 3,838 Accrued expenses ( 480 ) ( 484 ) 674 Stock-based compensation liability ( 921 ) 1,160 — Income taxes payable 23 — — Other current liabilities ( 358 ) ( 77 ) ( 146 ) Contract liabilities 947 — — Obligation to issue equity — 3,000 10,920 Other assets ( 61 ) — ( 20 ) Patent installment payable ( 525 ) — ( 250 ) Net Cash Used in Operating Activities ( 80,683 ) ( 29,214 ) ( 18,848 ) Cash Flows (Used in) Provided by Investing Activities Investment in available-for-sale debt securities - equity method investee ( 2,708 ) — — Investment in debt securities - equity method investee — — ( 7,400 ) Advances to equity method investee — ( 4,240 ) ( 135 ) Acquisition of property, plant and equipment ( 1,417 ) ( 266 ) ( 736 ) Acquisition of intangible assets — ( 30 ) — Acquisition of net assets, net of cash acquired, through business combination — 16 — Proceeds from sale of investments — — 2,314 Cash withdrawn from trust as a result of business combination — 11,342 — Net Cash (Used in) Provided by Investing Activities ( 4,125 ) 6,822 ( 5,957 ) Cash Flows Provided by Financing Activities Proceeds from issuance of equity, net of issuance costs 12,654 15,383 13,122 Proceeds from the issuance of equity to non-controlling interest, net of issuance costs 71,377 4,169 13,859 Proceeds from the issuance of convertible promissory note 4,350 — — Proceeds from the issuance of term convertible notes 14,950 — — Proceeds from issuance of debt securities, net of issuance costs 40,500 19,455 — Payment of debts ( 4,617 ) ( 250 ) ( 540 ) Distributions to Stockholders ( 76 ) ( 663 ) — Proceeds from the issuance of promissory notes to related parties — — 12,000 Repayment of promissory note — ( 4,628 ) — Cash Flows Provided by Financing Activities 139,138 33,466 38,441 Net Increase in Cash, Cash Equivalents and Restricted Cash 54,330 — 11,074 — 13,636 Cash, Cash Equivalents and Restricted Cash Beginning of period 11,119 45 2,575 Cash, Cash Equivalents and Restricted Cash End of period $ 65,449 $ 11,119 $ 16,211 72 Table of Contents Innventure, Inc. and Subsidiaries Consolidated Statements of Cash Flows (in thousands, except share and per share amounts) Successor Predecessor Year Ended December 31, 2025 October 2, 2024 through December 31, 2024 January 1, 2024 through October 1, 2024 Supplemental Cash Flow Information Cash paid for interest $ — $ 991 $ 1,070 Supplemental Disclosure of Noncash Financing Information Accretion of redeemable units to redemption value — — 11,950 Debt discount and embedded derivative upon issuance — — — Issuance of units to non-controlling interest in exchange of convertible promissory notes — — 7,324 Conversion of working capital loans to equity method investees into investments in debt securities - related party 4,375 — 2,600 Transfer of liability warrants to equity warrants in the Business Combination — 1,265 — Initial recognition of loan commitment fee — 16,190 Transfer of loan commitment fee asset — 6,694 — Recognition of right of use asset and corresponding lease liability 927 — — Extinguishment of debt with Series C Preferred Stock 14,000 — — Contribution of Series C Preferred Stock to equity method investee 5,783 — — Conversion of AFX available-for-sale term loan into equity method investments 8,757 — — Issuance of common stock as repayment of convertible debt 47,000 — — Issuance of stock in exchange for services 4,102 250 — Conversion of preferred stock into common stock 36,910 — — Transfer of Series C Preferred Stock from Mezzanine to Stockholders' equity 1,440 — — Embedded derivative in association with Convertible Debentures 1,774 — — Equity reallocation between non-controlling interest and additional paid-in capital 36,963 — — Embedded derivative liability derecognition 3,297 — — See accompanying notes to consolidated financial statements. 73 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Note 1. Nature of Business Unless the context otherwise requires, references herein to "Innventure", "we", "us", "our" and "the Company" refer to the business and operations of Innventure LLC and its consolidated subsidiaries (the “Predecessor”) for all periods prior to the Closing (as defined below) and to the business and operations of Innventure, Inc. and its consolidated subsidiaries (the “Successor”) for all periods after Closing. 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 technology innovators, which are typically Multinational Corporations (‘‘MNCs’’), with the intent to maximize value for investors and other stakeholders through positive cash flow generated through long-term ownership of operating subsidiaries. As owner-operators, our goal is to take what we believe to be breakthrough technologies that have advanced beyond proof of concept from evaluation to scaled commercialization utilizing an approach designed to help mitigate risk in collaboration with the MNCs (our channel partner(s)), as we build disruptive companies that we believe have the potential to achieve a target enterprise value of at least $ 1 billion. We define ‘‘disruptive’’ as innovations that, in our opinion, have the ability to significantly change the way businesses, industries, markets, and/or consumers operate. Innventure, Inc., is headquartered in Orlando, Florida. Business Combination On October 24, 2023, Learn SPAC HoldCo, Inc. (“Holdco”), a Delaware corporation and direct, wholly-owned subsidiary of Learn CW Investment Corporation (“Learn CW”), a Cayman Islands exempted company, LCW Merger Sub, Inc. (“LCW Merger Sub”), a Delaware corporation and direct, wholly-owned subsidiary of Holdco, and Innventure Merger Sub, LLC (“Innventure Merger Sub” and together with LCW Merger Sub, the “Merger Subs”), a Delaware limited liability company and direct, wholly-owned subsidiary of Holdco entered into a Business Combination Agreement (the “Business Combination Agreement”) with Innventure LLC, a Delaware limited liability company. As further discussed below and in Note 8. Business Combinations, on October 2, 2024 (the “Closing Date” or “Closing”), Learn CW and Innventure LLC consummated a business combination (the “Business Combination”) pursuant to the terms of the Business Combination Agreement. Following the Closing, both Learn CW and Innventure LLC became subsidiaries of Holdco, Holdco changed its name to “Innventure, Inc.” and became a publicly traded company. Holdco was determined to be the accounting acquirer. Both Learn CW and Holdco, a direct wholly-owned subsidiary of Learn CW prior to the Business Combination, were created for the purpose of consummating a business combination. Innventure, Inc. and its subsidiaries is the successor to Innventure LLC following the Business Combination and is a Delaware corporation, whose common stock is listed and traded on the Nasdaq Global Market (“Nasdaq”). Following the Business Combination, the Company continues the business of Innventure LLC. The information provided in this Annual Report on Form 10-K reflects two distinct periods, the period up to the Closing Date labeled as the Predecessor and the period including and after that date labeled as the Successor. The Business Combination was accounted for using the acquisition method of accounting and the Successor financial statements reflect a new basis of accounting that is based on the fair value of the net assets acquired. As a result of the application of the acquisition method of accounting as of the Closing Date, the accompanying Consolidated Financial Statements include a black line division which indicates that the Predecessor and Successor reporting entities shown are presented on a different basis and are therefore, not comparable. 74 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Note 2. Accounting Policies Basis of Presentation The consolidated financial statements of the Company are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and in accordance with the rules and regulations of the Securities and Exchange Commission (“SEC”). The Successor consolidated financial statements include the accounts of the Company, its wholly owned and majority-owned subsidiaries and entities in which the Company is deemed to have a direct or indirect controlling financial interest based on either a variable interest model or voting interest model. The Predecessor consolidated financial statements include all accounts of Innventure LLC and its consolidated subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. During the year ended December 31, 2025, we identified an error and recorded an immaterial out of period adjustment of $ 12.4 million to correct an overstatement of Additional paid-in capital, an immaterial out of period adjustment of $ 4.5 million to correct understatement of Net loss attributable to Innventure, Inc. stockholders and an immaterial out of period adjustment of $ 16.9 million to correct an understatement of Non-controlling interest. The impact of the adjustments are not material to the consolidated financial statements for any interim or annual periods prior to December 31, 2025 nor the current financial period. The out of period adjustment to Additional paid-in capital is included in Non-controlling interest issued and related transfers within the condensed consolidated statements of changes in mezzanine and stockholders' equity (deficit) and the adjustment related to Net loss attributable to Innventure, Inc. within Comprehensive loss attributable to non-controlling interest on the consolidated statements of operations and comprehensive income (loss). Going Concern As of December 31, 2025, the Company had a cash balance of $ 60.4 million, accumulated deficit of $ 371.6 million and a working capital deficit of $ 6.9 million. During the year ended December 31, 2025 the Company incurred a net loss of $ 475.4 million. Management believes the Company will continue to incur losses and negative cash flows from operating activities for the foreseeable future and will need additional capital or debt financing to proceed with its business plans. Additionally, the future value of investments held is unpredictable and subject to market events outside of the Company’s control. In connection with the Company’s assessment of going concern considerations, management has determined that in order to maintain its current level of operations, the Company will require additional working capital from cash flows from operations, the sale of its capital and/or issuance of debt. The Company intends to obtain additional financing in the future to proceed with its business plans. If the Company is unable to acquire additional working capital, it will be required to significantly reduce its current level of operations. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern within one year after the date of the accompanying consolidated financial statements are issued; however, the above conditions raise substantial doubt about the Company’s ability to do so. The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result should the Company be unable to continue as a going concern. There can be no assurance that management will be successful in implementing its business plan or that the successful implementation of such business plan will improve our operating results. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Management bases its estimates on historical experience and on various other factors it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Accordingly, actual results could differ from those estimates. 75 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Fair Value Measurements The Company measures the fair value of assets and liabilities on a recurring and nonrecurring basis according to a fair value hierarchy that prioritizes the inputs to valuation techniques used to 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. Investments Equity Method Investments Equity method investments are investments where the Company does not consolidate the investee, but can exert significant influence over the financial and operating policies of the investee. 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. Cash distributions received as a result of the Company’s share of cumulative earnings are classified as operating activities. Cash distributions, if any, received that are in excess of the Company’s share of cumulative earnings or losses are classified as investing activities. Exchange-traded Investments Exchange-traded equity investments are generally carried at fair value on the consolidated balance sheets with changes in the fair value recorded through net income (“FVTNI”) within non-operating income (expense). Variable Interest and Voting Interest Entities The Company performs an analysis of its investments to determine if they are either a Variable Interest Entity (“VIE”) or a Voting Interest Entity (“VOE”). Factors considered in this analysis include the entity’s legal organization; the entity’s capital structure and sufficiency of equity at risk; the rights of equity investment holders; the Company’s contractual involvement with, and economic interest in, the entity; and any related party or de facto agent implications of the Company’s involvement with the entity. Entities that are determined to be VIEs are consolidated if the Company is the primary beneficiary (“PB”) of the entity. If the Company is not deemed to be the PB of a VIE, the Company accounts for the investment or other variable interests in a VIE as either an equity method investment or other investment, as applicable. VOEs are typically consolidated if the Company holds the majority voting interest. Upon the occurrence of certain events (such as changes in the investment or the governance structure), management reviews and reconsiders its previous conclusion regarding the status of an entity as a VIE or VOE, and when applicable, whether the Company continues to qualify as the PB of a VIE. Refer to Note 3. Investments for further discussion on investments in VIEs. 76 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Impairments of Investments Management periodically assesses equity method investments for impairment. If impairment exists, an impairment charge would be recorded for the excess of the carrying amount of the investment over its estimated fair value in the consolidated statements of operations and comprehensive income (loss). Impairment evaluation considers qualitative factors, including the financial conditions and specific events related to an investee, that may indicate the fair value of the investment is less than its carrying value. Available-for-Sale Investments Available-for-sale (“AFS”) debt securities are generally reported at estimated fair value, with unrealized gains and losses recorded in other comprehensive income (loss) on our consolidated statements of operations and comprehensive income (loss). AFS debt securities with an amortized cost basis in excess of estimated fair value are assessed to determine what amount of that difference, if any, is caused by expected credit losses. Allowance for credit losses on AFS debt securities are recognized as a charge in other loss on our consolidated statements of operations and comprehensive income (loss), and any remaining unrealized losses, net of taxes, are included in other comprehensive income (loss). Cash, Cash Equivalents and Restricted Cash Cash and cash equivalents primarily consist of cash, money market funds and short-term highly liquid investments with original maturities of three months or less. The Company has concentrated credit risk for cash and cash equivalents by maintaining deposits in banks, which may, at times, exceed amounts covered by insurance provided by the US Federal Deposit Insurance Corporation and management continues to monitor the financial condition of the major financial institutions where these funds are held. Cash that is restricted and not available for general operations is considered restricted cash. The Company's restricted cash is related to cash received through the Company's Class B Preferred Stock capital raise and held in escrow prior to finalization of the Class B Preferred Stock investment. As of December 31, 2025, the Company had restricted cash related to the capital raise of $ 5.0 million and, as of December 31, 2024, had no restricted cash. Additionally, the Company maintains certain compensating balances that may be withdrawn, but the availability of short-term lines of credit is dependent upon the maintenance of such compensating balances. As of December 31, 2025 and 2024, the Company had compensating balances of $ 0.1 million. Inventory Inventories are stated at the lower of cost or net realizable value. Cost is determined principally under the average cost method. The Company periodically reviews its inventory and identifies that which is excess, slow moving and obsolete by considering factors such as inventory levels, expected product life and forecasted sales demand. Any identified excess, slow moving and obsolete inventory is written down to its net realizable value through a charge to cost of sales. Property, Plant and Equipment Property, plant and equipment is recorded at cost less accumulated depreciation. The Company depreciates the cost of property, plant and equipment using the straight-line method with depreciable lives of 10 years for Machinery & equipment, 3 years for Computers & office equipment and the lesser of useful life or the remaining lease terms for Leasehold improvements. The Company expenses normal maintenance and repair costs as incurred. 77 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Impairment of Long-Lived Assets The Company assesses its property, plant and equipment and other long lived assets for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by comparing the carrying amount of an asset to the future undiscounted net cash flows expected to be generated by the asset. In the event such an asset is considered impaired, the impairment to be recognized is measured by the amount by which the carrying value of the asset exceeds the estimated fair value of the asset. If such assets are not impaired, but their useful lives have decreased, the remaining net book value is depreciated over the revised useful life. Assets to be disposed of are reported at the lower of the carrying value of estimated fair value less estimated costs to sell. Intangible Assets Intangible assets with finite lives are amortized over their estimated useful lives and reviewed for impairment whenever events or other changes in circumstances indicate that the carrying amount may not be recoverable. If required, recoverability of these assets is determined by comparison of their carrying value to the estimated future undiscounted cash flows the assets are expected to generate over their remaining estimated useful lives. If such assets are considered to be impaired, the impairment to be recognized in earnings equals the amount by which the carrying value of the assets exceeds their estimated fair value determined by either a quoted market price, if any, or a value determined by utilizing a discounted cash flow technique. Goodwill Goodwill reflects the excess purchase price over the fair value of net tangible and intangible assets acquired in a business combination. Goodwill is evaluated for impairment annually, or more frequently if circumstances indicate a possible impairment. The Company compares the fair value of its reporting unit to its carrying value. If the carrying value of the net assets assigned to the reporting unit exceeds the fair value of its reporting unit, the Company would record an impairment loss equal to the difference. The Company operates in one operating segment which the Company considers to be its only reporting unit. There was a $ 346.6 million impairment of goodwill recognized for the year ended December 31, 2025 and no impairment recognized for the year ended December 31, 2024. Stock and Warrants Stock may be classified as a liability, temporary capital (i.e., mezzanine capital) or permanent stockholders' equity. In order to determine the appropriate classification, an evaluation of the cash redemption and other features is required. Where there exists an absolute right of redemption presently or in the future, the units in question would be classified as a liability. If units are contingently redeemable upon the occurrence of an event that is outside of the issuer’s control, the units are classified as mezzanine capital. The probability that the redemption event will occur is irrelevant. If no redemption features exist, or if a contingent redemption feature is within the Company’s control, the capital unit would be considered permanent stockholders' equity. The Company accounts for warrants to acquire stock as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms. In order to determine the appropriate classification, consideration is given as to whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require net cash settlement in a circumstance outside of the Company’s control, among other conditions. This assessment requires the use of judgment and is conducted at the time of warrant issuance and as of each reconsideration and balance sheet date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for stockholders' equity classification, the warrants are recorded as a component of additional paid-in capital at fair value at the time of issuance. For issued or modified warrants that do not meet all of the criteria for stockholders' equity classification, the warrants are recorded as a liability at their initial fair value on the date of issuance and remeasured at fair value as of each reconsideration and balance sheet date thereafter. The change in fair value is recognized in the Company’s consolidated statements of operations and comprehensive income (loss). 78 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Revenue Recognition The Company’s product sales arrangements contain performance obligations satisfied at a point in time when control of the product transfers to the customer, based on the contractual terms. This typically occurs when title and risk and rewards of ownership have transferred to the customer. Revenue is recorded net of sales taxes, discounts, and expected returns. Sales discounts and other incentives are treated as variable consideration when estimating the revenue to be recognized. The Company earns management fees, consulting revenue and carried interest allocations from investment advisory services it provides to its customers. The Company considers the investment advisory services represent a single performance obligation. Management fees, generally 1 - 2 % of capital committed to the Innventus ESG Fund I, L.P. (the “ESG Fund”), are recognized over time using the time-elapsed method, resulting in straight-line revenue recognition over the performance period. Management fees are considered variable consideration but are typically fully recognized at the end of each reporting period as they are not subject to clawback. Carried interest allocations, typically 10 - 20 %, are recognized based on cumulative fund performance and are subject to achieving minimum return levels, usually 8 %. These allocations are considered variable consideration and are recognized when a significant reversal is no longer probable. Stock-Based Compensation The Company participates in multiple stock-based compensation plans which are further discussed in Note 14. Stock-based Compensation. The fair value of stock-based awards is measured on the grant date of the award and recognized as compensation expense over the period of service that generally coincides with the vesting period of the award. Service-based awards vest over the period defined in each individual grant agreement. For equity awards with a graded vesting schedule, compensation cost is recognized on a straight-line basis over the requisite service period of the entire award. Expense related to grants of stock-based awards is included in the respective expense category in which the employee serves in the consolidated statements of operations and comprehensive income (loss). The Company recognizes forfeitures as they occur. Income Taxes Prior to the Business Combination, Innventure LLC qualified as a partnership for federal income tax purposes that consolidated financial results with corporate subsidiaries within the financial statements. Consequently, federal income taxes were not payable or provided by Innventure LLC but various corporate subsidiaries were subject to corporate federal, state, and local taxes. Corporate income taxes were recorded for the period from January 1, 2024 through October 1, 2024. On October 2, 2024, the Business Combination occurred which merged Innventure LLC into Innventure Merger Sub, LLC, a wholly owned subsidiary of the Company. The Company became a publicly traded entity and began being taxed as a corporation. The Company accounts for income taxes pursuant to the asset and liability method of ASC 740, Income Taxes, which requires the recognition of current tax liabilities or receivables for the amount of taxes that are estimated as payable or refundable for the current year, and deferred tax assets and liabilities for the expected future tax consequences attributable to temporary differences between the financial statement carrying amounts and their respective tax bases of assets and liabilities and the expected benefits of net operating loss and credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in operations in the period enacted. A valuation allowance is provided when it is more likely than not that a portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income and the reversal of deferred tax liabilities during the period in which related temporary differences become deductible. 79 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements The Company follows the provisions of ASC 740-10 related to the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. ASC 740-10 prescribes a comprehensive model for the financial statement recognition, measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. The benefit of tax positions taken or expected to be taken in our income tax returns is recognized in the financial statements if such positions are more likely than not of being sustained upon examination by taxing authorities. Differences between tax positions taken or expected to be taken in a tax return and the benefit recognized and measured pursuant to the interpretation are referred to as “unrecognized benefits”. A liability is recognized (or amount of net operating loss carryover or amount of tax refundable is reduced) for an unrecognized tax benefit because it represents an enterprise’s potential future obligation to the taxing authority for a tax position that was not recognized as a result of applying the provisions of ASC 740-10. Interest costs and related penalties related to unrecognized tax benefits are required to be calculated, if applicable. As of December 31, 2025 and 2024, no liability for unrecognized tax benefits was required to be reported. The Company does not expect any significant changes in unrecognized tax benefits in the next year. Recently Adopted Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures ("ASU 2023-09"), which requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as information on income taxes paid to enhance the transparency and decision usefulness of income tax disclosures. The amendments in this ASU are effective for annual periods beginning after December 15, 2024 on a prospective basis. The Company adopted ASU 2023-09 for the year ended December 31, 2025. The Company has made the required disclosures related to this ASU within Note 16. Income taxes. Recently Issued But Not Yet Adopted Accounting Standards In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative (“ASU 2023-06”). This standard modifies the disclosure or presentation requirements of a variety of topics and aligns requirements with the SEC’s existing disclosure requirements. ASU 2023-06 is effective on the date each amendment is removed from Regulation S-X or Regulation S-K with early adoption prohibited. The Company will monitor the removal of various requirements from the current regulations in order to determine when to adopt the related amendments, but does not anticipate the adoption of the new guidance will have a material impact on the Company’s consolidated financial statements. The Company will continue to evaluate the impact of this guidance on its consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses ("ASU 2024-03"). In January 2025, the FASB issued Clarifying the Effective Date (“ASU 2025-01”) to add some clarity around the effective date of the guidance. ASU 2024-03 requires disclosures about specific types of expenses included in the expense captions presented on the face of the income statement as well as disclosures about selling expenses. The new standard is effective for fiscal years beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The amendments may be applied either prospectively, to financial statements issued after the effective date, or retrospectively, to all prior periods presented. The Company is currently evaluating the impact that the adoption of this accounting standard will have on its consolidated financial statements. In May 2025, the FASB issued ASU 2025-04, Compensation—Stock Compensation (Topic 718) and Revenue from Contracts with Customers (Topic 606): Clarifications to Share-Based Consideration Payable to a Customer , which reduces the diversity in practice and improves the decision usefulness and operability of the guidance for share-based consideration payable to a customer in conjunction with selling goods or services. The amendments in this ASU are effective for annual reporting periods (including interim reporting periods within annual reporting periods) beginning after December 15, 2026. Early adoption is permitted. The Company is currently evaluating the impact that the adoption of this accounting standard will have on its consolidated financial statements. 80 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements In July 2025, the FASB issued ASU 2025-05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets , which provides a practical expedient for the application of the current expected credit loss (“CECL”) model to current accounts receivable and contract assets. The amendments in this ASU are effective for the fiscal years beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted. If elected, the amendments in this ASU should be applied prospectively. The Company is currently evaluating the impact ASU 2025-05 will have on its consolidated financial statements. In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software , which increases the operability of the recognition guidance considering different methods of software development. The amendments in this ASU are effective for the fiscal years beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted as of the beginning of an annual reporting period. If elected, the amendments in this ASU should be applied prospectively. The Company is currently evaluating the impact ASU 2025-06 will have on its consolidated financial statements. In September 2025, the FASB issued ASU 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract , which is expected to reduce the cost and complexity of evaluating whether contracts with features are derivatives, better portray the economics of those contracts in the financial statements, reduce diversity from the application of the current guidance and changing business environment, and to clarify Topic 606 applicability to share-based noncash consideration for the transfer of goods or services. The amendments in this ASU are effective for the fiscal years beginning after December 15, 2026, and interim reporting periods within those annual reporting periods. Early adoption is permitted. If elected, the amendments in this ASU should be applied prospectively. The Company is currently evaluating the impact ASU 2025-07 will have on its consolidated financial statements. Note 3. Investments December 31, 2025 December 31, 2024 (in thousands) Equity-method investments $ 19,495 $ 17,547 Investment in debt securities - AFS 9,246 11,187 Total Investments $ 28,741 $ 28,734 Equity-method investments ESG Fund The ESG Fund is an investment company that follows a specialized basis of accounting established by GAAP. The Company’s general partnership interest in the ESG Fund is substantially illiquid. While the ESG Fund’s holdings are accounted for at fair value, the equity-method investment in the ESG Fund is adjusted to reflect the fair value of the underlying investments of the ESG Fund as of December 31, 2025 and 2024. The fair value of the underlying investments in the ESG Fund is based on the Company’s assessment, which takes into account expected cash flows, earnings multiples and/or comparisons to similar market transactions, among other factors. Valuation adjustments reflecting consideration of credit quality, concentration risk, sales restrictions and other liquidity factors are integral to valuing these instruments. AeroFlexx The Company determined that AeroFlexx has insufficient equity at risk to fund its operations, as of December 31, 2025 and 2024, and therefore will meet the definition of a VIE. The Company does not have power to direct AeroFlexx's operations. AeroFlexx’s core operations are not closely associated with the Company and it was not created specifically to provide substantially all benefits to Innventure. Therefore, the Company is not considered the primary beneficiary and does not consolidate AeroFlexx as a VIE. The Company accounts for its investments in 81 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements AeroFlexx under the equity method and held a 37.1 % and 34.1 % interest in AeroFlexx as of December 31, 2025 and 2024, respectively. The Company’s carrying amounts and maximum exposure relating to AeroFlexx, were as follows (in thousands): December 31, 2025 December 31, 2024 Asset type Carrying Amount Maximum Exposure to Loss Carrying Amount Maximum Exposure to Loss Equity method investment in AeroFlexx $ 18,957 $ 18,957 $ 16,930 $ 16,930 Investments in debt securities - AFS 9,246 9,246 11,187 11,187 Due from related party 10,754 10,754 4,472 4,472 Total $ 38,957 $ 38,957 $ 32,589 $ 32,589 Summarized financial information: Balance sheets (in thousands) ESG Fund AeroFlexx December 31, December 31, 2025 2024 2025 2024 Total Assets $ 85,712 $ 97,445 $ 15,709 $ 17,002 Total Liabilities 575 93 29,082 27,861 Total Equity (Deficit) $ 85,137 $ 97,352 $ ( 13,373 ) $ ( 10,859 ) Statements of operation (in thousands) ESG Fund AeroFlexx Years ended December 31, Years ended December 31, 2025 2024 2025 2024 Revenue $ — $ 202 $ 85 $ 38 Gross (Loss) Profit — ( 735 ) ( 95 ) ( 57 ) Net Income (Loss) $ ( 12,263 ) $ 39,437 $ ( 15,824 ) $ ( 13,663 ) Investment in debt securities - AFS On July 1, 2024, the Company entered into a loan agreement with AeroFlexx under which the Company will lend up to $ 10.0 million to AeroFlexx. The term loans and any unpaid accrued interest are required to be repaid by the maturity date, which is the earlier of (i) December 31, 2026 or (ii) the date of the sale, transfer or other disposition of all AeroFlexx’s assets or AeroFlexx's stock. After any full or partial repayment of the term loans, AeroFlexx may borrow additional funds up to the $ 10.0 million limit until the maturity date. The loans bear interest at the applicable federal rate published by the Internal Revenue Service and is adjusted on a quarterly basis. The Company has an option to convert the outstanding principal amount of the term loans and any unpaid accrued interest into shares or units in connection with the next issuance of equity securities by AeroFlexx, at a price equal to 100 % of the price per share or unit and on the same terms and conditions as applicable to such issuance. 82 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements During 2024, the Company lent AeroFlexx the entire $ 10.0 million principal balance under this agreement. As of January 1, 2025, AeroFlexx was unable to raise any additional equity financing; therefore, the outstanding principal and unpaid accrued interest with an amount equal to the equity deficit of $ 7.3 million was automatically converted into Class D preferred units of AeroFlexx (“Class D Units”) at the price of $ 6.83 per share in accordance with the loan agreement. Upon conversion, a realized gain of $ 1.5 million was recognized for the year ended December 31, 2025 and is included in non-operating income in the consolidated statements of operations and comprehensive income (loss). The total principal balance drawn as of December 31, 2025 was $ 10.0 million. During the year ended December 31, 2025, $ 4.4 million was reclassified from Due from related parties under the term loan and $ 2.7 million was drawn down by AeroFlexx under the term loan. The Company accounted for the loans as an investment in debt securities and classified them as available for sale debt securities. Based on the AFS classification, the Company records this investment at fair value at each reporting date and as such recorded the changes in fair value of these loans (including the adjustment to fair value at inception date) in Other Comprehensive Income ("OCI"). The amortized cost, gross unrealized gains and losses, and fair value of AFS debt securities is represented in the table below (in thousands): Amortized cost Gross unrealized gains Gross unrealized losses Fair value December 31, 2025 Investment in Debt Securities - AFS $ 10,444 $ — $ ( 1,198 ) $ 9,246 December 31, 2024 Investment in Debt Securities - AFS $ 10,278 $ 909 $ — $ 11,187 At December 31, 2025 and 2024, there was no allowance for credit loss related to the available for sale securities portfolio. Accrued interest receivable on available for sale debt securities totaled $ 0.4 million and $ 0.2 million at December 31, 2025 and 2024, respectively. The amortized cost and fair value of debt securities, by contractual maturity, as of December 31, 2025 is shown below (in thousands). Expected maturities can differ from contractual maturities. Amortized cost Fair value Due within one year $ 10,444 $ 9,246 $ 10,444 $ 9,246 As the contractual maturity of the loan is December 31, 2026, it is included in the current line item Investments of the consolidated balance sheets. The decrease of $ 0.7 million and an increase of $ 0.9 million in fair value of this investment in debt securities for the years ended December 31, 2025 and 2024, respectively, is included as Unrealized gain (loss) on available for sale debt securities - related party in the consolidated statements of operations and comprehensive income (loss). Additionally, the Company’s carrying amount and maximum exposure relating to AeroFlexx advances and other receivables were $ 10.8 million and $ 4.5 million as of December 31, 2025 and December 31, 2024, included in Due from related parties on the consolidated balance sheets. 83 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Note 4. Fair Value Fair Value Hierarchy The following tables present the Company’s fair value hierarchy for assets and liabilities measured at fair value on a recurring basis (in thousands): December 31, 2025 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets: Investment in debt security - AFS $ — $ — $ 9,246 $ 9,246 Liabilities: Earnout liability $ — $ — $ 3,890 $ 3,890 2024 WTI Warrant liability — — 13,080 13,080 2025 WTI Warrant liability — — 3,230 3,230 Private placement warrant liability — 11,148 — 11,148 December 31, 2024 Quoted Prices in Active Markets for Identical Assets (Level 1) Significant Other Observable Inputs (Level 2) Significant Unobservable Inputs (Level 3) Total Assets: Investment in debt security - AFS $ — $ — $ 11,187 $ 11,187 Liabilities: Earnout liability $ — $ — $ 14,752 $ 14,752 2024 WTI Warrant liability — — 17,230 17,230 Private placement warrant liability — 16,793 — 16,793 Gains and losses for such assets and liabilities categorized within the Level 3 table set forth may include changes in fair value that are attributable to both observable inputs (Levels 1 and 2) and unobservable inputs (Level 3). 84 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Changes in the estimated fair value of Level 3 financial assets and liabilities that are measured on a recurring basis are as follows (in thousands): Forward Contract Embedded derivative liability - convertible promissory notes Embedded derivative liability - August 2025 Notes Investment in debt securities - AFS Earnout liability 2024 WTI Warrant liability 2025 WTI Warrant liability Embedded derivative liability (asset) - Convertible Debentures Balance as of January 1, 2024 (Predecessor) $ — $ 1,994 $ — $ — $ — $ — $ — $ — Additions — — — 10,110 — — — — Settlement — ( 2,472 ) — — — — — — Change in fair value — 478 — 62 — — — — Balance as of October 1, 2024 (Predecessor) $ — $ — $ — $ 10,172 $ — $ — $ — $ — Balance as of October 2, 2024 Successor) — — — 10,172 11,352 — — — Additions 54 — — 106 — 15,690 — — Settlement ( 99 ) — — — — — — — Change in fair value 45 — — 909 3,400 1,540 — — Balance as of December 31, 2024 (Successor) $ — $ — $ — $ 11,187 $ 14,752 $ 17,230 $ — $ — Balance as of January 1, 2025 (Successor) $ — $ — $ — $ 11,187 $ 14,752 $ 17,230 $ — $ — Additions — — — 7,477 — — 3,090 1,476 Settlement and derecognitions — — ( 1,677 ) ( 8,756 ) ( 873 ) — — ( 3,297 ) Change in fair value — — 1,677 ( 662 ) ( 9,989 ) ( 4,150 ) 140 1,821 Balance as of December 31, 2025 (Successor) $ — $ — $ — $ 9,246 $ 3,890 $ 13,080 $ 3,230 $ — There were no transfers in or out of levels during the Successor period for the year ended December 31, 2025, the Successor period from October 2, 2024 through December 31, 2024, or the Predecessor period from January 1, 2024 through October 1, 2024. Standby Equity Purchase Agreement On October 24, 2023, the Company entered into the Standby Equity Purchase Agreement (“SEPA”) with Yorkville (as defined below), as further described in Note 13. Stockholders' Equity with applicable terms defined. The SEPA became effective concurrently with the Business Combination. The SEPA includes two components subject to fair value 85 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements measurement: the Purchased Put Option and Forward Contract. These are considered freestanding financial instruments not indexed to the Company’s stock. The Purchased Put Option is accounted for as a derivative asset, initially measured at fair value upon Closing and subsequently measured at fair value each reporting period with changes in fair value recorded in the consolidated statements of operations and comprehensive income (loss). The Purchased Put Option fair value is considered de minimis upon Closing due to the exercise price being at a discount to market prices and remains nominal as of December 31, 2025 and 2024. The Forward Contract is initially measured at fair value upon any Advance Notice (as defined below) and subsequently remeasured with changes in fair value recorded in the consolidated statements of operations and comprehensive income (loss). A derivative liability or asset will be recorded when there is an Advance Notice outstanding as of a reporting period. There were no outstanding Advance Notices as of December 31, 2025 and 2024. Investment in debt securities - AFS The investment in debt securities is stated at fair value as described in Note 3. Investments. The terms of the securities are such that they are highly likely to convert into Class D Units of AeroFlexx. The fair value of the debt securities is estimated on an as-converted basis using a discounted cash flow model by discounting the contractual debt cash flows at a rate incorporating the credit risk of AeroFlexx as of December 31, 2025 and using a Black-Scholes model as of December 31, 2024 incorporating breakpoints upon which each tranche of AeroFlexx equity participates in distributions. December 31, 2025 December 31, 2024 Volatility n/a 120 % Time to liquidity n/a 2 years Discount for lack of marketability n/a 31.00 % Weighted average cost of capital n/a 45.00 % Risk-free rate n/a 4.23 % AeroFlexx yield 17.01 % As further discussed in Note 3. Investments, outstanding principal and accrued interest of $ 7.3 million for the investment in debt securities - AFS was automatically converted into Class D Units in accordance with the loan agreement. Prior to the conversion, the fair value was estimated using a Black Scholes model. Post conversion, the fair value is estimated using a discounted cash flow model by discounting the contractual debt cash flows at a rate incorporating the credit risk of AeroFlexx. Earnout Shares Upon Closing of the Business Combination, Earnout Shares were issued to previous Innventure Members and contingently issued to Sponsors (as defined and further described in Note 10. Earnout Shares). The fair value of the Earnout Shares was determined using a Monte Carlo valuation model that utilizes significant assumptions, including expected volatility, expected term, and risk-free rate, to determine the probability of achieving common share price and revenue milestones. The shares may vest upon either the achievement of the common share price milestone or revenue or event-based milestones specific to each of three tranches. Specifically, the future stock price of the Company and revenues of Accelsius and AeroFlexx are simulated assuming a Geometric Brownian Motion (GBM) in a risk-neutral framework. The Earnout Share payoff is calculated based on the contractual terms, and then discounted at the term-matched risk-free rate. The risk-free interest rate was determined by reference to the U.S. Treasury yield curve for time periods approximately equal to the remaining contractual term of the Earnout Shares. Discounting conventions of revenue-based milestones are mid-period assuming annual revenue forecasts are earned on average at the mid-period of the forecast period. The value of the Earnout Shares is calculated as the average present value over all future modeled payoffs. 86 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements The inputs used in simulating the Company’s stock price include, the term, stock price, volatility, risk-free rate and dividend yield. Prior to the Business Combination, the Company never paid or declared dividends, thus the dividend yield is based on our history and expectation of dividend payouts and is estimated to be 0 % as of December 31, 2025 and 2024. The following table summarizes the inputs used in simulating the Company’s stock price for purposes of valuing the Earnout Shares: December 31, 2025 December 31, 2024 Term 5.8 years 6.8 years Stock price $ 4.18 $ 13.85 Volatility 60.00 % 56.00 % Risk-free rate 3.77 % 4.42 % Revenue risk premium 27.80 % 36.10 % Revenue volatility 157.30 % 176.00 % The Earnout Shares related to Milestone Three are liability classified, and the Earnout Shares related to Milestone One and Two are equity classified as further described in Note 10. Earnout Shares. The assumptions used in measuring fair value of Milestone Three Earnout Shares are considered Level 3 inputs, which include weighted average cost of capital risk premium, operational leverage ratio, revenue risk premium and revenue volatility. For further information on the Earnout Shares, refer to Note 10. Earnout Shares. Warrants In October 2024, The Company issued freestanding warrants (the “2024 WTI Warrants”) to the WTI Lenders in connection with the WTI Facility (as defined and further described in Note 5. Borrowings and Note 11. Warrants). The fair value measurement of 2024 WTI Warrants is based on unobservable inputs (Level 3 fair value measurement). The fair value of the 2024 WTI Warrants was determined using a Monte Carlo valuation model in which the future stock price is simulated assuming a GBM in a risk-neutral framework. The model utilizes significant assumptions including stock price, stock price volatility, and credit spread. The credit spread relates to estimated counterparty credit risk of Innventure being able to make payments related to the WTI Lenders’ put right, in which the 2024 WTI Lenders may exchange the WTI Warrants for a total cash payment of $ 15.0 million after the four-year anniversary of issuance. The risk-free interest rate was determined by reference to the U.S. Treasury yield curve. In April 2025, the Company issued freestanding warrants (the 2025 “WTI Warrants”) to the WTI Lenders in connection with the WTI Facility (as defined and further described in Note 5. Borrowings and Note 11. Warrants). The fair value measurement of 2025 WTI Warrants is based on unobservable inputs (Level 3 fair value measurement). 87 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements The initial fair value of the 2025 WTI Warrants was determined using a Monte Carlo valuation model in which the future stock price is simulated assuming a GBM in a risk-neutral framework. The model utilizes significant assumptions including stock price, stock price volatility and credit spread. Specifically, the initial valuation as of the April 14, 2025 issuance date considered a stock price of $ 3.65 , stock price volatility of 57.00 %, and credit spread of 27.70 %. The risk-free interest rate was determined by reference to the U.S. Treasury yield curve. The following table summarizes the inputs used in the GBM for purposes of valuing the WTI Warrants as of each year end: December 31, 2025 December 31, 2024 2025 WTI Warrants: Geometric Brownian Motion Stock price $ 4.18 N/A Stock price volatility 60.00 % N/A Credit spread 26.00 % N/A 2024 WTI Warrants: Geometric Brownian Motion Stock price $ 4.18 $ 13.85 Stock price volatility 60.00 % 56.00 % Credit spread 26.00 % 18.80 % Significant increases or decreases to any of these inputs would result in a significantly higher or lower liability. For further information on the 2024 WTI Warrants (as defined below), and 2025 WTI Warrants, refer to Note 11. Warrants. Derivative Liabilities Embedded derivative liabilities contained within the previously issued 8 % convertible promissory notes (the “2025 Notes”) were stated at fair value. Fair value was determined utilizing discounted cash flows, using unobservable market data inputs, and an option pricing model based on a probability-weighted expected outcome with respect to a financing or a change of control. The derivatives associated with the 2025 Notes were settled in March 2024 due to conversion of the 2025 Notes in a qualified financing. A summary of the significant unobservable inputs utilized to estimate the fair value at settlement is as follows: Embedded derivative within 2025 Notes issued August 18, 2022 with a principal balance of $ 4,000 Settlement Discount Rate 35 % Probability of Expected Outcomes Financing 100 % Change in control — % Other — % Embedded derivative within 2025 Notes issued June 7 & July 3, 2023 with an aggregate principal balance of 2,000 Discount Rate 71 % - 87 % Probability of Expected Outcomes Financing 100 % Change in control — % Other — % 88 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements As further discussed and defined in Note 5. Borrowings, the Company issued Convertible Debentures (as defined below) which contain certain features which qualify as embedded derivates requiring bifurcation. The fair value of the embedded derivative is determined utilizing a “with and without” method, in which the fair value is calculated as the difference in the fair value of the entire hybrid instrument and the fair value of the instrument excluding the bifurcated derivative features. The initial fair value of the embedded derivative was determined using a discounted cash flow model as of April 14, 2025 and May 15, 2025 which is reflective of the dates of the Convertible Debenture issuances. The model uses a significant assumption of a debt yield of 44.5 % for the April 14, 2025 issuance and 42.6 % for the May 15, 2025 issuance. September 30, 2025 Embedded derivative asset - Convertible Debentures: Binomial Lattice Model Stock price $ 5.79 Stock price volatility 60.00 % Debt yield 38.70 % Debt spread 35.00 % At the time of issuance of the August 2025 Notes (defined below), the related embedded derivative liability had a de minimis fair value. On September 30, 2025, the Company recognized $ 1,677 for the embedded derivative liability related to the contingent exchange feature. The fair value was determined using a Black-Scholes valuation model, utilizing inputs related to the risk-free rate, volatility, time to liquidity, and the Accelsius Series B-1 issuance price. Specifically, the September 30, 2025 valuation considered a risk-free rate of 3.66 %, volatility of 70.00 %, time to liquidity of 4.25 years, and an Accelsius Series B-1 unit issuance price of $ 36.49 . The derivative associated with the August 2025 notes were settled in October 2025 due to the conversion of the August 2025 Notes in a qualified financing. Other Our financial instruments that are not re-measured at fair value include prepaid expenses and other current assets, due from related parties, other assets, accounts payable, accrued expenses, accrued employee benefits, other current liabilities and other liabilities as the carrying amounts approximate fair value due to the short maturity terms of these instruments. 89 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Note 5. Borrowings Maturities December 31, 2025 Interest Rates December 31, 2024 Interest Rates (in thousands) (in thousands) Related Party Notes 2024 - 2025 $ — — $ 14,000 8 % - 15.99 % Series 1 promissory notes 2025 - 2026 122 15 % 725 12 % - 15 % Related party convertible notes 2025 - 2026 4,331 3.94 % - 15 % — Convertible debentures 2026 5,572 — % - 5 % — Term convertible notes 2026 7,890 3.94 % — WTI Facility 2028 19,441 13.50 % 20,000 13.50 % Total Notes Payable 37,356 34,725 Less: unamortized debt discount ( 3,962 ) ( 6,446 ) Less: current portion of related party notes payable — ( 14,000 ) Less: current portion of term convertible note ( 7,890 ) — Less: current portion of related party term convertible note ( 4,331 ) — Less: current portion of notes payable ( 12,846 ) ( 625 ) Total Long-term Notes $ 8,327 $ 13,654 The Company's debt is carried on a historical cost basis net of unamortized discounts and premiums. Costs associated with acquiring debt are presented in the consolidated balance sheets as a direct deduction from the carrying amount of the debt as a debt discount. Discounts on debt are amortized over the contractual life of the related debt instrument using the effective interest method (unless otherwise specified below) and are included in Interest expense, net in the consolidated statements of operations and comprehensive income (loss). The Company’s notes payable, excluding debt issuance costs, mature as follows (in thousands): Amount 2026 $ 12,846 2027 24,510 Total $ 37,356 Series 1 Promissory Notes In 2018, the Company authorized the issuance and sale of unsecured promissory notes to investors up to $ 35.0 million (the “Series 1 promissory notes”). From 2018 to 2021, the Company issued promissory notes with a total principal amount of $ 4.9 million. The notes require monthly interest payments, have an original maturity period of 36 - 48 months, and bear interest at 9 %- 12 % per annum. The notes contain two term extension options, at the Company’s election, which can extend the notes’ maturity period to 60 months in total. If the Company elects its first term extension option, the note will bear interest at 12 % for months 36 through 48 . If the Company elects its second term extension option, the notes will bear interest at 15 % for months 48 through 60 . Extensions on Series 1 promissory notes were as follows (in thousands): December 31, 2025 December 31, 2024 Principal amount of 1st extension promissory notes $ — $ 122 Principal amount of 2nd extension promissory notes $ 122 $ 603 90 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Interest expense on Series 1 promissory notes was as follows (in thousands): Successor Predecessor Year Ended December 31, 2025 October 2, 2024 through December 31, 2024 January 1, 2024 through October 1, 2024 Interest attributable to contractual interest $ 71 $ 29 $ 138 Subsequent to December 31, 2025, in January 2026, the company repaid the outstanding balance of the Series 1 promissory notes. Related Party Notes The Company entered into unsecured promissory notes with two related parties, the first on August 20, 2024, for a principal amount of $ 10.0 million, and the second on August 22, 2024, for a principal amount of $ 2.0 million. 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 $ 1.0 million 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. As per the amended note with the first party, the maturity date was extended to the earlier of (i) January 31, 2025 or (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 $ 1.0 million, required under the original agreement, became due on or around the amendment date 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, $ 1.0 million of the principal amount became due on or around the amendment date. Interest expense on the related party notes was as follows (in thousands): Successor Predecessor Year Ended December 31, 2025 October 2, 2024 through December 31, 2024 January 1, 2024 through October 1, 2024 Total interest expense $ 419 $ 611 $ 932 In addition to the related party notes above, the Company also had a related party note for $ 1.0 million through an unsecured promissory note with an additional related party dated May 2, 2024. As per the terms of the executed agreement, the principal amount became due on December 21, 2024 and interest will accrue at the rate of 8.00 % per annum. Upon maturity, the Company is required to repay the outstanding principal amount of $ 1.0 million and a loan fee equal to approximately $ 0.1 million. On March 20, 2025, in connection with the issuance of Series C Preferred Stock (as defined below), the Company extinguished the outstanding amount of related party notes. The Company recognized a loss $ 3.5 million in Loss on extinguishment of related party debt on the consolidated statements of operations and comprehensive income (loss) for the year ended December 31, 2025. 91 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements WTI Facility On October 22, 2024, the Company entered into a term loan with WTI Fund X, Inc. and WTI Fund XI, Inc., (collectively, “WTI Lenders”). The terms of the loan provides for a term loan facility in the aggregate principal amount of up to $ 50.0 million (the "WTI Facility"). The total aggregate principal was available in three separate tranches subject to the Company meeting certain conditions. The Company received $ 20.0 million (the “First Tranche”) on November 15, 2024. The First Tranche, principal and interest, shall be repaid over a period of 30 months in equal, monthly installments, commencing after an initial 12 -month period of interest-only monthly payments, resulting in a total term of 42 months. The funds under each of the Second Tranche and the Third Tranche are no longer available to the Company. Borrowings under the WTI Facility will accrue interest at a rate per annum equal to the greater of (i) the “prime rate” of interest, as published by The Wall Street Journal on the date that the WTI Lenders prepare the promissory notes for the borrowings under such tranche, plus 5 % and (ii) 13.50 % and will amortize, after an interest-only period of twelve months in the case of the First Tranche in equal monthly installments over a period of thirty months . Obligations are secured by a lien on the majority of the assets of Innventure LLC and Innventure, Inc. On March 21, 2025, in connection with the issuance of the first tranche of Convertible Debentures (as further described below) to Yorkville, the Company and Innventure LLC entered into a consent (the “Consent”) with WTI Fund X, LLC and WTI Fund XI, LLC (the “WTI Holders”) and the WTI Lenders, modifying the WTI Facility. Specifically, under the Consent, the Company and the WTI Lenders and WTI Holders agreed (i) that from and after the date that the Company receives the initial proceeds from the Convertible Debentures and until such time as such obligations have been paid in full, the Company must maintain at least $ 5.0 million of cash on deposit; (ii) that effective on the date that the Company receives the initial proceeds from the Convertible Debentures, the 2025 WTI Warrants (as further defined and described in Note 11. Warrants) will become payable to the WTI Lenders and their affiliates; and (iii) to certain additional consent provisions. Such provisions from the Consent became effective on April 14, 2025 when the Company received proceeds from the Convertible Debentures. The modification of the WTI Facility was accounted for as an extinguishment of debt though the WTI Facility remains outstanding, resulting in a loss on extinguishment of $ 3.5 million recorded on the consolidated statements of operations and comprehensive income (loss) for the year ended December 31, 2025. The legal requirement to maintain at least $ 5.0 million of cash on deposit is presented as Restricted cash on the consolidated balance sheets. In connection with the WTI Facility, the Company issued the 2024 WTI Warrants and the 2025 WTI Warrants (collectively the “WTI Warrants”) to the WTI Lenders (as further defined and described in Note 11. Warrants). The Company accounted for each of the WTI Warrants as detachable warrants at their fair value. The fair value of the WTI Warrants was recorded as a liability and as a discount to the WTI Facility on the consolidated balance sheets. The WTI Warrants are classified as a liability in accordance with ASC 480, as they represent an instrument that is not an outstanding share and may require the issuer to settle the obligation by transferring assets, specifically cash. The Company is amortizing the discount over the term of the WTI Facility using the straight-line method. Interest expense on the WTI facility was as follows (in thousands): Successor Predecessor Year Ended December 31, 2025 October 2, 2024 through December 31, 2024 January 1, 2024 through October 1, 2024 Interest attributable to contractual interest $ 2,738 $ 352 $ — Interest attributable to amortization of issuance costs and discounts 2,111 248 — Total interest expense $ 4,849 $ 600 $ — 92 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Convertible Debentures On March 25, 2025, the Company entered into a securities purchase agreement (“Existing Purchase Agreement”) with Yorkville related to the issuance and sale of convertible debentures (“Existing Convertible Debentures” collectively with the New Convertible Debentures defined below, the “Convertible Debentures”) with an aggregate principal amount of up to $ 30.0 million. The Existing Convertible Debentures are convertible into shares of Common Stock and contain certain features that represent embedded derivatives, which are bifurcated and included within Prepaid expenses and other current assets on the consolidated balance sheets. The Company issued the aggregate principal amount of the Existing Convertible Debentures in two tranches tied to separate reporting and filing requirements. On April 14, 2025, the Company issued the first tranche of the Existing Convertible Debentures with a principal amount of $ 20.0 million, resulting in cash proceeds to the Company of $ 18.0 million, representing an original issue discount of 10 %. The first tranche was scheduled to be repaid in twelve monthly payments with a 5 % payment premium due to the lender with each payment. Also on April 14, 2025, 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, as of the date of issuance and December 31, 2025 (subject to future adjustments to the number and type of shares pursuant to the 2025 WTI Warrants), to the WTI Holders. Each of the 2025 WTI Warrants is exercisable through March 31, 2035. On May 15, 2025, the Company issued the second tranche of the Existing Convertible Debentures with a principal amount of $ 10.0 million, resulting in cash proceeds to the Company of $ 9.0 million, representing an original issue discount of 10 %. The second tranche was scheduled to be repaid in eleven monthly payments with a 5 % payment premium due to the lender with each payment. There is no contractual interest associated with amounts outstanding for the Existing Convertible Debentures for the year ended December 31, 2025. On September 15, 2025, the Company entered into an additional amendment to the Existing Purchase Agreement for the Existing Convertible Debentures (the “September 2025 Amendment”). Pursuant to the September 2025 Amendment, the Company and Yorkville agreed to amend the definition of conversion price so that the fixed price of $ 10.00 was reduced to $ 7.00 and a floor price of $ 1.59 was implemented. Additionally, the monthly payments applicable to the Existing Convertible Debentures were removed and replaced with repayment due upon maturity in connection with the early repayment of the approximately $ 2.0 million. The payment premium on this payment was waived. However, payments and related payment premiums resume should the Innventure stock price fall below the floor price, the Company issues in excess of 99 % of Common Stock under the exchange cap or Yorkville is unable to utilize a registration statement to resell shares of Common Stock. On September 15, 2025, the Company entered into a securities purchase agreement (the “Securities Purchase Agreement”) with Yorkville for up to $ 15.0 million in convertible debentures (“New Convertible Debentures”), issuable in two tranches. The first tranche of $ 10.0 million was issued with a 10 % original issue discount, yielding $ 9.0 million in net proceeds, and bears 5 % annual interest, with repayment due September 15, 2026. The debentures are convertible into Common Stock and contain certain features that represent embedded derivatives which are bifurcated and included within Prepaid expenses and other current assets on the condensed consolidated balance sheets. On November 12, 2025, the Company issued the second tranche of the New Convertible Debentures for $ 5.0 million. The debentures were issued with a 10 % original issue discount, yielding $ 4.5 million in net proceeds, bear 5 % annual interest, and mature on September 15, 2026. The September 2025 Amendment and first and second tranche of the New Convertible Debentures were accounted for collectively as a troubled debt restructuring. The Company determined that a concession was provided based on a decrease in the effective interest rate when compared to the original terms of the Existing Convertible Debentures. Under the troubled debt restructuring a loss on extinguishment of debt of $ 12.6 million was recorded on the consolidated statements of operations and comprehensive income (loss) for the year ended December 31, 2025. 93 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements During the year ended December 31, 2025, the Company issued 997,573 shares of its Common Stock pursuant to the SEPA in payment of $ 4.9 million of principal and $ 0.2 million of payment premium for the Convertible Debentures. Also, the Company issued 10,005,859 shares of Common Stock due to the exercise of conversion option by Yorkville for a principal amount of $ 30.7 million of the Convertible Debentures. For further information on this conversion, see Note 13. Stockholders' Equity. During the year ended December 31, 2025 the Company made cash payments toward the Convertible Debentures totaling $ 3.4 million of principal and $ 0.1 million of payment premium. Subsequent to December 31, 2025, on January 27, 2026, the Company issued 304,377 shares of Common Stock due to the exercise of conversion option by Yorkville for a principal amount of $ 1.0 million of the Convertible Debentures. Additionally, we made a cash payment of $ 5.5 million inclusive of principal, interest and fees, satisfying the Convertible Debentures in full. Interest expense on the Convertible Debentures was as follows (in thousands): Successor Predecessor Year Ended December 31, 2025 Period from October 2, 2024 through December 31, 2024 Period from January 1 2024 through October 1, 2024 Interest attributable to contractual interest $ 231 $ — $ — Interest attributable to amortization of issuance costs 4,279 — — Total interest expense $ 4,510 $ — $ — Term Convertible Notes At various dates in June and July of 2025, Accelsius entered into unsecured convertible notes with various other parties (the “Term Convertible Notes”) for a total principal amount of $ 7.8 million. The Term Convertible Notes have a stated maturity date of December 31, 2026 and bear interest at the annual applicable federal rate published by the Internal Revenue Service. The Term Convertible Notes, which are subordinated to the WTI Facility, are convertible at the option of the lenders, starting January 2, 2026, for all amounts due under the notes at the time of conversion, into Accelsius’ Series A Units at a price per unit equal to $ 12.18 . For as long as any portion of the WTI Facility remains outstanding, the lenders will not demand payment related to this Term Convertible Notes, unless they convert the debt into equity. The interest expense on the Term Convertible Notes was $ 0.2 million for the year ended December 31, 2025. Related Party Convertible Notes On June 26, 2025, Accelsius entered into an unsecured Convertible Promissory Note (“CPN”) with a related party lender. The maximum principal amount under the CPN is $ 3.0 million, issuable in three equal draws, upon the request of Accelsius and subject to the related party’s sole discretion. On June 27, 2025, Accelsius received the first $ 1.0 million draw and on July 24, 2025 received the second $ 1.0 million draw. The CPN had a stated interest rate of 15 % and Accelsius was required to pay an immaterial loan fee (“Loan Fee”) upon maturity, repayment or conversion of this note. 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. The CPN was convertible at the option of the related party lender for all amounts due under the Convertible Note, including the Loan Fee, into either preferred units of Accelsius at a price equal to 80 % of the next funding round price if Accelsius raises at least $ 5.0 million from unaffiliated investors, or into common units of Accelsius, if no such funding round occurs before the maturity date, with unit pricing of common units determined by an independent valuation firm. 94 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements In June of 2025, Accelsius also entered into unsecured convertible notes (“Related Party Term Convertible Notes”, together with the CPN, the “Related Party 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. The Related Party Term Convertible Notes have a stated maturity date of December 31, 2026 and bear interest at the annual applicable federal rate published by the Internal Revenue Service. The Related Party Term Convertible Notes, which are subordinated to the WTI Facility, are convertible at the option of the lenders, starting January 2, 2026, for all amounts due under the notes at the time of conversion, into Accelsius’ Series A Units at a price per unit equal to $ 12.18 . For as long as any portion of the WTI Facility remains outstanding, the Related Party Term Convertible Notes lenders will not demand payment related to the Related Party Term Convertible Notes, unless they convert the debt into equity. The interest expense on Related Party Convertible Notes, including the amortization of the loan fee, was $ 0.2 million for the year ended December 31, 2025. August 2025 Notes Between August 12, 2025 and September 19, 2025, Accelsius issued unsecured convertible promissory notes (the “August 2025 Notes”) totaling $ 9.2 million in principal, with $ 7.3 million in proceeds received by December 31, 2025. The notes bear interest at 6.5 % annually, are repayable upon demand after two years and are subordinate to existing senior debt. Upon the Company’s next preferred equity round raising at least $ 5.0 million from unaffiliated investors, the notes will automatically convert into preferred units at 80 % of the unit price, with accompanying warrants exercisable for 0.5 units at 120 % of the unit price. On October 2, 2025, the August 2025 Notes were converted into 251,452 Series B-2 units. For further information on this conversion, see Note 13. Stockholders' Equity. The August 2025 Notes are subordinate to the WTI Facility, Convertible Debentures, Term Convertible Notes and indebtedness of Accelsius owed to Innventure LLC and for as long as any portion of these senior debts remains outstanding, the lenders will not demand payment related to this August 2025 Notes, unless they convert the debt into equity. The interest expense on the August 2025 Notes was immaterial for the December 31, 2025. Convertible Promissory Notes Accelsius previously issued 8 % convertible promissory notes (the “2025 Notes”) that can be converted into equity units at the later of a qualified financing event or upon maturity, which is 36 -months. A qualified financing event is one or more transactions that results in gross proceeds of at least $ 2.0 million. Upon the occurrence of a qualified financing event, the 2025 Notes convert to the series of stock issued in that financing at the lesser of (a) a 20 % discount or (b) $ 200.0 million divided by the number of fully diluted units outstanding immediately prior to the financing. This conversion option is accounted for as a derivative instrument and the fair value of such is discussed in Note 4. Fair Value. On March 31, 2024, the 2025 Notes with a $ 6.0 million principal balance and $ 0.8 million of accrued interest were converted into 693,480 Accelsius Series A units at a conversion price of $ 9.74 per share. The conversion was pursuant to the occurrence of a qualified financing event. The related embedded derivative liability was extinguished in connection with the conversion, resulting in a loss on conversion of $ 1.1 million recorded on the consolidated statements of operations and comprehensive income (loss) in the Predecessor period from January 1, 2024 through October 1, 2024. 95 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Interest expense on the 2025 Notes was as follows (in thousands): Successor Predecessor Year Ended December 31, 2025 Period from October 2, 2024 through December 31, 2024 Period from January 1, 2024 through October 1, 2024 Interest attributable to contractual interest $ — $ — $ 120 Interest attributable to amortization of implied discounts — — 231 Total interest expense $ — $ — $ 351 96 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Note 6. Inventories, net December 31, 2025 December 31, 2024 (in thousands) Raw materials $ 667 $ 2,974 Work in process 148 50 Finished goods 789 2,154 Total inventories $ 1,604 $ 5,178 97 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Note 7. Property, Plant and Equipment Successor December 31, 2025 December 31, 2024 (in thousands) Leasehold improvements $ 960 $ 548 Machinery & equipment 1,922 664 Computers & office equipment 28 14 Construction in progress — 266 Property, Plant and Equipment, Gross 2,910 1,492 Less: Accumulated depreciation ( 969 ) ( 78 ) Property, Plant and Equipment, Net $ 1,941 $ 1,414 Total depreciation expense on property, plant and equipment was as follows (in thousands): Successor Predecessor Year Ended December 31, 2025 Period from October 2, 2024 through December 31, 2024 Period from January 1 2024 through October 1, 2024 Depreciation Expense $ 891 $ 78 $ 148 98 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Note 8. Business Combination As discussed in Note 1. Nature of Business, the Closing of the Business Combination occurred on October 2, 2024 pursuant to the terms of the Business Combination Agreement. Upon Closing, 250,000,000 shares of the Company’s common stock (“Common Stock”), par value $ 0.0001 per share, and 25,000,000 shares of the Company’s preferred stock, par value $ 0.0001 per share, were authorized. Of the 25,000,000 shares of preferred stock authorized, the Company designated 3,000,000 shares as Series B preferred stock ("Series B Preferred Stock"). As a result of the Business Combination, (a) each Learn CW Class A ordinary share and Class B ordinary share issued and outstanding immediately prior to Closing (and not cancelled or redeemed) was converted into the right to receive one share of Common Stock; (b) each Learn CW public warrant and private placement warrant outstanding immediately prior to Closing was assumed and converted into a Company warrant ("Warrant"); (c) the Innventure LLC equity units (other than the Innventure LLC Class PCTA units ("Class PCTA Units") and Class I units ("Class I Units")) issued and outstanding immediately prior to Closing were converted into the right to receive shares of Common Stock; and (d) the Class PCTA Units and the Class I Units of Innventure LLC remained outstanding. The Business Combination has been accounted for using the acquisition method of accounting. Holdco was determined to be the accounting acquirer as Innventure LLC was determined to be a VIE and Holdco was determined to be the primary beneficiary. In applying the VIE model, the Class I and Class PCTA Units and associated assets and liabilities are considered silos within Innventure LLC for which Holdco is not considered the primary beneficiary; therefore such silos were not acquired and are omitted from the Company’s consolidated financial statements. Accordingly, the Company recorded all assets acquired and liabilities assumed that Holdco was determined to be the primary beneficiary of at their acquisition date fair values, with any excess recognized as goodwill. Consideration Transferred The aggregate consideration for the Business Combination (the “Purchase Consideration”) paid to the holders of Innventure LLC’s outstanding equity and profits interests and warrants, other than the Class PCTA Units and the Class I Units (such holders, the “Innventure Members”), consisted of 43,494,999 shares of Common Stock. A portion of this Purchase Consideration to be delivered to Innventure Members consists of a contingent right to receive up to 5,000,000 (the “Company Earnout Shares”) shares of Common Stock. Refer to Note 10. Earnout Shares for more details on the Company Earnout Shares. Immediately after giving effect to the Business Combination (including as a result of the conversions described above), there were 43,589,850 shares of Common Stock and 18,645,997 Warrants issued and outstanding. As of the Closing, the Innventure Members owned approximately 88.3 % of the Company’s outstanding shares of Common Stock and the former shareholders of Learn CW, including (i) Learn CW's sponsor, CWAM LC Sponsor LLC (the “Sponsor”) and (ii) Learn CW's independent directors, owned approximately 13.7 % of the Company’s outstanding shares of Common Stock. 99 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements The number of shares of Common Stock issued and outstanding at the Closing of the Business Combination were: Innventure LLC Units Immediately Prior to Closing Common Stock Conversion Ratio Common Stock Upon Closing Class B Preferred Units 10,875,000 2.09 22,754,664 Class B-1 Preferred Units 5,609,951 2.09 11,738,165 Class A Units 342,608 2.09 716,867 Class C Units 1,570,125 2.09 3,285,303 Total 18,397,684 38,494,999 Learn CW Shares Learn CW Public shareholders 1,027,674 1.00 1,027,674 Learn CW Class B Shareholders 5,000,000 1.00 5,000,000 Total 6,027,674 6,027,674 Less: Learn CW shares subject to clawback provisions ( 932,823 ) Total Common Stock Issued and Outstanding at Closing 43,589,850 The consideration transferred for the Business Combination is summarized as follows (in thousands): Holdco Common Stock transferred to Innventure Members (1) $ 418,441 Contingent consideration (2) 53,980 Consideration transferred 472,421 Non-controlling interest (3) 343,030 Total business enterprise value $ 815,451 (1) Represents the fair value of the 38,494,999 of aggregate consideration paid in shares (excluding the Company Earnout shares) at a Closing share price of $ 10.87 . (2) Represents the fair value of the Company Earnout Shares issued and contingently issuable to Innventure Members. Refer to Note 10. Earnout Shares for more details. (3) The non-controlling interest represents the fair value of equity in Accelsius held by non-controlling parties. The fair value is calculated using a discounted cash flow methodology to determine the Accelsius equity value which is pro rated by the non-controlling ownership percentage (Level 3). Significant inputs used to measure the fair value of the non-controlling interest include the long-term growth rate of 3.0 %, normalized tax rate of 27.9 %, normalized net working capital of 18.0 %, and weighted average cost of capital of 17.6 %. Investing cash flow activity as a result of the Business Combination is summarized as follows (in thousands): Amount Cash consideration transferred $ — Add: Cash and cash equivalents acquired 16 Investing cash flow activity as a result of the Business Combination $ 16 100 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements On the Closing Date, Innventure settled certain obligations using cash from the Learn CW trust account that was released at Closing and financing secured through Series B Preferred Stock. The financing secured through Series B Preferred Stock is discussed in Note 13. Stockholders' Equity. (in thousands) Amount Cash proceeds from Learn CW trust account $ 11,342 Net cash proceeds from Series B Preferred Stock issuance 10,572 Total Innventure, Inc. cash sources $ 21,914 Payment of Learn CW accounts payable and accrued expenses $ 9,233 Payment of Learn CW promissory note due to Sponsor 4,628 Payment of Innventure LLC transaction costs at Closing 6,206 Total cash uses $ 20,067 Net cash proceeds $ 1,847 The Business Combination has been accounted for as a business combination using the acquisition method of accounting. The total purchase price was allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their respective fair values on the acquisition date. 101 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements The purchase consideration was allocated to the following assets and liabilities (in thousands): Amount Assets acquired: Cash and cash equivalents $ 16 Accounts receivable 117 Due from related parties 210 Inventory 2,824 Prepaid expenses and other current assets 1,955 Equity method investments 18,449 Investment in debt securities - AFS 10,172 Property, plant, and equipment 1,227 Intangible assets 187,500 Other assets 829 Total assets acquired: $ 223,299 Liabilities assumed: Accounts payable $ 6,286 Accrued employee benefits 7,617 Accrued expenses 1,972 Related party payable 13,932 Notes payable 975 Patent installment payable 13,600 Deferred tax liability 30,654 Other liabilities 748 Total liabilities assumed: $ 75,784 Net identifiable assets acquired $ 147,515 Goodwill $ 667,936 The assessment of fair value is based on information that was available to management that existed at Closing but not later than one year after Closing. Goodwill is recognized as the excess of consideration over the net assets acquired of Innventure LLC and represents the value derived by Innventure LLC’s strong market position and assembled workforce. Goodwill arising from the Business Combination is attributable to the Company’s Technology segment and is not deductible for tax purposes. 102 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements The fair value of definite-lived intangible assets as of the Closing Date included (in thousands): Amount Trade names $ 17,800 Customer relationships 4,600 Developed technology 165,100 Total $ 187,500 Refer to Note 9. Goodwill and Intangible Assets for additional information. The Predecessor financial statements for the period from January 1, 2024 to October 1, 2024 include $ 9.6 million of transaction costs from Innventure LLC. These transaction costs are recorded within General and administrative expenses within the consolidated statements of operations and comprehensive income (loss). Prior to the Closing Date, Learn CW incurred $ 9.2 million of transaction costs related to the Business Combination, which are not reported in the Predecessor consolidated statements of operations and comprehensive income (loss) since Learn CW is not the Predecessor; these transaction costs are included within Accumulated deficit for the Successor period beginning October 2, 2024. Innventure LLC contributed revenues of $ 0.5 million and net loss of $ 18.3 million in the consolidated statements of operations and comprehensive income (loss) for the Successor period from October 2, 2024 through December 31, 2024. Innventure LLC incurred certain acquiree expenses contingent solely upon the consummation of the Business Combination. Such costs consisted of $ 5.3 million in transaction costs and $ 0.2 million of expense related to share-based award accelerated vesting. Such costs are presented “on the line” and are not reflected in either Predecessor or Successor financial statement periods. “On the line” describes those expenses triggered by the consummation of a business combination that are not recognized in the consolidated statements of operations and comprehensive income (loss) as they are not directly attributable to either period but instead were contingent on the Business Combination. Pro Forma Financial Information (Unaudited) The following unaudited pro forma financial information summarizes the results of operations for the Company as though the Business Combination had occurred as of the beginning of the comparable prior annual reporting period. The Successor and Predecessor Periods for the year ended December 31, 2024 have been combined. The unaudited pro forma financial information has been presented for illustrative purposes only and is not necessarily indicative of results of operations that would have been achieved had the Business Combination taken place on the date indicated, or the future consolidated results of operations of the Company. The unaudited pro forma results reflect the step-up amortization adjustments for the fair value of intangible assets acquired, transaction expenses, public warrant reclass from liabilities to equity, removal of Learn CW investment income, and accelerated vesting of equity-based compensation. The amounts of revenue for the year ended December 31, 2024 was $ 1.2 million. The amount of net loss for the year ended December 31, 2024 was $ 106.0 million. Note 9. Goodwill and Intangible Assets Goodwill (in thousands) Balance as of December 31, 2024 $ 667,936 Impairment ( 346,557 ) Other 2,084 Balance as of December 31, 2025 $ 323,463 103 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements In addition to annual impairment testing of goodwill, which is performed in the fourth quarter of each fiscal year, the Company continuously monitors for events and circumstances that could negatively impact the key assumptions used in determining fair value and therefore would require interim impairment testing, including long-term revenue growth projections, profitability, discount rates, volatility in the Company's market capitalization and general industry, market and macroeconomic conditions. During the year ended December 31, 2025, the Company recorded $ 346.6 million in non-deductible, non-cash goodwill impairment charges, within the consolidated statements of operations and comprehensive income (loss) 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 in late February 2025 through April 2025. The Company’s annual fourth quarter, June 30, 2025 and March 31, 2025 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. These fair values are Level 3 assets in the fair value hierarchy. In the event there are further adverse changes in the Company’s projected cash flows or further changes in key assumptions, including but not limited to an increase in the discount rate and further decline in the Company’s stock price, the Company may be required to record additional non-cash impairment charges to goodwill. Such non-cash charges could have a material adverse effect on the Company’s consolidated statements of operations and comprehensive income (loss) and consolidated balance sheets in the reporting period of the charge. Other intangible assets, net December 31, 2025 December 31, 2024 Intangible Asset Weighted-Average Amortization Period Remaining (Years) Gross Carrying Amount Accumulated Amortization Net Carrying Amount Gross Carrying Amount Accumulated Amortization Net Carrying Amount (in thousands) Trade names 14.8 $ 17,800 $ ( 1,390 ) $ 16,410 $ 17,800 $ ( 277 ) $ 17,523 Customer relationships 1.8 4,600 ( 1,915 ) 2,685 4,600 ( 382 ) 4,218 Developed technology 8.0 165,100 ( 23,678 ) 141,422 165,100 ( 4,718 ) 160,382 Other finite-lived intangible assets 1.9 30 ( 10 ) 20 30 — $ 30 Total intangible assets $ 187,530 $ ( 26,993 ) $ 160,537 $ 187,530 $ ( 5,377 ) $ 182,153 Amortization expense of $ 21.6 million and $ 5.4 million was recognized for the years ended December 31, 2025 and for the successor period October, 2 2024 through December 31, 2024, respectively, and is recorded within Cost of sales, General and administrative and Research and development on the consolidated statements of operations and comprehensive income (loss). 104 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Estimated future amortization expense is as follows (in thousands): Amortization Expense 2026 $ 21,616 2027 21,234 2028 20,073 2029 18,853 2030 15,173 Thereafter 63,588 Total $ 160,537 105 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Note 10. Earnout Shares Upon Closing of the Business Combination, 5,000,000 Company Earnout Shares were contingently issuable to Innventure Members. Additionally, 344,828 earnout shares were issued to the Sponsor who received consideration in the Business Combination. These shares, referred to as "Sponsor Earnout Shares," are subject to clawback. The Company Earnout Shares and the Sponsor Earnout Shares are collectively referred to as the “Earnout Shares”. The Earnout Shares will vest upon the following milestone conditions: • 40 % of the Earnout Shares will vest upon Accelsius having entered into binding contracts providing for revenue for the Company (as defined in the Business Combination Agreement) within 7 years following the Closing (the “Vesting Period”) in excess of $ 15.0 million in revenue ("Milestone One"); • 40 % of the Earnout Shares will vest upon the Company’s formation of a new subsidiary, in partnership with an MNC, as determined using the Innventure LLC's “DownSelect” process, within the Vesting Period ("Milestone Two"); and • 20 % of the Earnout Shares will vest upon AeroFlexx having received in excess of $ 15.0 million in revenue within the Vesting Period ("Milestone Three"). The Sponsor Earnout Shares have a vesting provision that occurs upon a change of control event or upon the occurrence of the VWAP of the shares of Innventure, Inc. Common Stock exceeding $ 11.50 per share for at least twenty days in any immediately preceding thirty day period (the "VWAP Completion Event"). These vesting conditions are not effective on the Company Earnout shares until 6 months following the Business Combination. The Earnout Shares related to Milestone One and Milestone Two were determined to be classified as equity. At Closing, 4,275,862 equity-classified Earnout Shares were fair valued at $ 46.4 million, inclusive of 2,137,931 Milestone One shares fair valued at $ 23.2 million and 2,137,931 Milestone Two shares fair valued at $ 23.2 million which are presented in Additional paid-in capital on the consolidated balance sheets at December 31, 2024. On January 7, 2025, a total of 344,828 Sponsor Earnout Shares fully vested and were no longer subject to contingencies as the Company’s public stock price had surpassed $ 11.50 for twenty consecutive days, thereby fulfilling the vesting provision for the Sponsor Earnout Shares. These vesting conditions were not effective on the Company Earnout Shares until 6 months following the Business Combination. On January 8, 2025, the Company’s Board of Directors formally recognized the creation of the Refinity subsidiary, thereby meeting the Milestone Two conditions for the Company Earnout Shares. As such, 2,000,000 shares of Common Stock were issued on February 4, 2025 as a result of the satisfaction of the respective milestone. The Earnout Shares related to Milestone Three are classified as a liability. There were 1,000,000 and 1,068,966 liability-classified Earnout Shares fair valued at $ 3.9 million and $ 14.8 million as of December 31, 2025 and 2024, respectively. The Company recognized losses of $ 10.0 million and $ 3.4 million in Change in fair value of financial liabilities on the consolidated statements of operations and comprehensive income (loss) for the year ended December 31, 2025 and for the successor period October 2, 2024 through December 31, 2024, respectively. 106 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Note 11. Warrants Number of Public Warrants Number of Private Warrants Number of 2024 WTI Warrants Number of 2025 WTI Warrants Outstanding, October 2, 2024 (Successor) 11,499,997 7,146,000 — — Exercised ( 259,309 ) — — — Issued — — 2 — Outstanding, December 31, 2024 11,240,688 7,146,000 2 — Exercised — — — — Issued — — — 2 Outstanding, December 31, 2025 11,240,688 7,146,000 2 2 Public and Private Placement Warrants Upon the consummation of the Business Combination, 11,499,997 Learn CW public warrants and 7,146,000 private placement warrants outstanding immediately prior to Closing was assumed by the Company and each converted into a Company warrant ("Warrant"). All references to “Class A ordinary shares” of Learn CW in Learn CW’s prior agreement were amended to shares of Common Stock of the Company. The Warrants will become exercisable on November 1, 2024 and will expire on October 2, 2029 or earlier upon redemption or liquidation. The Warrants are exercisable for $ 11.50 per share. The private placement warrants are identical to the public warrants, except that the private placement warrants and the Common Stock issuable upon the exercise of the private placement warrants will not be transferable, assignable or salable until 30 days after the completion of the Business Combination, subject to certain limited exceptions. Additionally, the private placement warrants will be exercisable on a cashless basis and will be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the private placement warrants are held by someone other than the initial purchasers or their permitted transferees, the private placement warrants will be redeemable by Learn CW and exercisable by such holders on the same basis as the public warrants. Public Warrants The Company determined the public warrants are equity-classified and are presented as permanent equity on the consolidated balance sheets. As such, the public warrants are measured at fair value at Closing using the warrant price at Closing multiplied by the number of public warrants and will not be subsequently re-measured. As of the Closing date the fair value of the equity classified public warrants was $ 1.3 million and is presented in the consolidated balance sheets. See Note 4. Fair Value for details on valuation. The public warrants expire on October 2, 2029. For the successor period October 2, 2024 through December 31, 2024, 259,309 public warrants were exercised. Each public warrant that was exercised was converted into one share of Common Stock for an exercise price of $ 11.50 , amounting to a total of $ 3.0 million in cash proceeds. Private Placement Warrants The private placement warrants are liability classified and are not eligible for an exception from derivative accounting. The private placement warrants are presented as a current liability on the consolidated balance sheets given their exercisable term, which is 30 days from Closing. The private placement warrants are measured at fair value based on the price of the public warrants (Level 2 fair value measurement). 107 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements The private placement warrants will expire on October 2, 2029 or earlier upon redemption or liquidation and are exercisable for $ 11.50 per share. As of December 31, 2025 and December 31, 2024, the fair value of the private placement warrants is $ 11.1 million and $ 16.8 million, respectively, and is presented as a current liability in the consolidated balance sheets. For the years ended December 31, 2025 and for the successor period October 2, 2024 through December 31, 2024, the Company recognized losses of $ 5.6 million and $ 16.0 million, respectively, in Change in fair value of financial liabilities on the consolidated statements of operations and comprehensive income (loss). WTI Warrants On October 22, 2024, in connection with the WTI Facility, the Company issued warrants (the "2024 WTI Warrants") to the WTI Lenders. The 2024 WTI Warrants are considered freestanding financial instruments and are recorded at fair value on the consolidated balance sheets as a warrant liability in the amount of $ 13.1 million and $ 17.2 million as of December 31, 2025 and 2024, respectively. For the years ended December 31, 2025 and for the Successor period October 2, 2024 through December 31, 2024, the Company recognized losses of $ 4.2 million and $ 1.5 million, respectively, in change in fair value of financial liabilities on the consolidated statements of operations and comprehensive income (loss). The 2024 WTI Warrants expire on March 31, 2035. See Note 4. Fair Value for details on the valuation. • If the WTI Lenders choose to exercise the 2024 WTI Warrants for Common Stock, the exercise price is $ 10.00 per share; however, if the volume-weighted average price (VWAP) of the Company's Common Stock is less than $ 10.00 per share as of the date which is eighteen months after the Company's Common Stock began trading, then the exercise price shall be reduced to such lower VWAP. • If the WTI Lenders choose to exercise the 2024 WTI Warrants for Subsequent Round Stock, the exercise price shall be the lowest price per share paid by any person for the Company's equity securities issued in a corresponding subsequent round. The 2024 WTI Warrants are exercisable at the option of the holders until March 31, 2035, and may be exchanged for a cash amount of $ 15.0 million (subject to ratable reduction for partial exercises) upon the occurrence of certain liquidity events or at any time from and after October 22, 2028. The holders also have the right to participate in future equity or convertible debt offerings up to an aggregate amount of $ 5.0 million or to maintain their pro rata ownership, subject to customary exclusions. The 2024 WTI Warrants are considered freestanding financial instruments and are recorded at fair value on the consolidated balance sheets as a warrant liability. The fair value of the 2024 WTI Warrants upon issuance was $ 15.7 million. On April 14, 2025, the Company issued 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, as of the date of issuance and June 30, 2025 (subject to future adjustments to the number and type of shares pursuant to the 2025 WTI Warrants), to the WTI Holders. Each of the 2025 WTI Warrants is exercisable through March 31, 2035, with additional customary rights and protections. The 2025 WTI Warrants were issued to the WTI Holders in conjunction with the first issuance of the Convertible Debentures. The 2025 WTI Warrants serve as consideration for certain provisions under the Consent. The Company recognized the related warrant liability at fair value at an amount of $ 3.1 million at the time of issuance. The 2025 WTI Warrants are recorded at fair value on the consolidated balance sheets in the amount of $ 3.2 million as of December 31, 2025. For the year ended December 31, 2025, the Company recognized a loss of $ 0.1 million, in the change in fair value of financial liabilities on the consolidated statements of operations and comprehensive income (loss). The 2025 WTI Warrants expire on March 31, 2035. See Note 4. Fair Value for details on the valuation. 108 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Note 12. Mezzanine Capital Predecessor period The redemption of Class PCTA Units or Class I Units is not solely in control of the Company and, as such, both classes of units are considered redeemable at the option of the holder. The Class PCTA Units were probable of becoming redeemable and the Class I Units are currently redeemable. Valuation Class PCTA Units were valued on a monthly basis to align with the underlying value of the PCT stock. Changes in the redemption value (e.g., fair value) were recognized immediately as they occurred and the carrying value of the instrument was adjusted to equal the redemption value at the end of each reporting period. Class I Units were valued on a quarterly basis based on the underlying fair value of the ESG Fund. Voting Class PCTA Units carry the right to hold, vote and dispose of the Company’s investment in the related shares of PCT common stock. All Class PCTA Units are held by Innventure1 LLC (“Innventure1”). Class I Units carry the right to hold, vote and dispose of the Company’s partnership interest in the ESG Fund with respect to its General Partner (“GP”) affiliated commitment. Class I Units are held by WE-INN LLC. The holders of units of any other class are not permitted to vote on matters specific to the Class PCTA or Class I Units. Liquidation Preference Distributions to Class PCTA and Class I Unit holders are based on their ownership percentage of the respective class. Redemption The Company will distribute the Class I investments held by Innventus ESG Fund I, L.P., to the investor in-kind at the election of WE-INN LLC. There is no maximum amount that the Company could be required to pay if the instrument is redeemed. 109 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Note 13. Stockholders' Equity For periods prior to the Closing, the Predecessor had Class B Preferred Units, Class B-1 Preferred Units, Class A Units and Class C Units issued and outstanding. In connection with the Business Combination on October 2, 2024, as described in Note 8. Business Combinations, the Successor acquired all membership interests that were in existence for the Predecessor. 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 $ 11.0 million. Series B Preferred Stock are subject to: (i) a mandatory conversion on the date that is five years after original issuance (the “Maturity Date”); and (ii) an optional conversion, at the election of the holder, at any time prior to the Maturity Date upon the effectiveness of a registration statement by the Company registering the underlying shares of Common Stock issuable upon conversion. The number of shares of Common Stock that each holder of Series B Preferred Stock will receive upon conversion will be the number of Series B Preferred shares multiplied by the Conversion Rate, subject to a threshold amount. The conversion rate (“Conversion Rate”) will equal a fraction whose numerator is $ 10.00 and whose denominator is the lesser of: (i) $ 12.50 and (ii) the Reset Conversion Price, where the “Reset Conversion Price” means the greater of: (a) $ 5.00 and (b) the 10 -trading day volume-weighted average closing price of the Common Stock. Any fractional shares resulting from conversion will be rounded up to the next whole share. Holders of Series B Preferred Stock are entitled to cast the number of votes equal to: (i) $ 10.00 , divided by (ii) the Minimum Price (which shall have the meaning assigned in Nasdaq Listing Rule 5635(d)) of Common Stock as of the initial issue date of the Series B Preferred Stock. Holders of Series B Preferred Stock will vote with the holders of Common Stock as a single class and on an as-converted basis, except as provided by law or applicable to Nasdaq Listing Rules. The voting power of Series B Preferred Stock holders cannot exceed 19.99 % of the total outstanding voting power. Series B Preferred Stock will rank senior to the Common Stock, which is junior stock when compared to Series B Preferred Stock. Dividends for Series B Preferred Stock will accrue annually at the rate of 8.0 % of the Original Issue Price of $ 10.00 per share. All dividends are prior to and in preference over any dividend on any junior stock or parity stock and shall be declared and fully paid before any dividends are declared and paid, or any other distributions are made, on any junior stock or parity stock. When dividends are declared by the Company’s board of directors, dividends will be due and payable annually in arrears as payment in kind on the last day of the last quarter in each fiscal year. Holders of Series B Preferred Stock are also eligible to receive dividends and distributions declared on Common Stock, as though their shares were converted into Common Stock, based on the Conversion Rate, using assets legally available for distribution by the Company. The preferred dividends that became due on December 31, 2024, were recorded within Obligation to issue equity on the consolidated balance sheets. As of December 31, 2024, the cumulative dividends on Series B Preferred Stock were $ 0.2 million. On March 19, 2025, the Company distributed 21,808 shares of Series B Preferred Stock to represent $ 0.2 million in cumulative dividends for Series B Preferred Stock, covering the period from the initial issue date, as defined in the certificate of designation of Series B Preferred Stock, to December 31, 2024, as a payment in kind at the specified rate. During the year ended December 31, 2025, certain holders of Series B Preferred Stock exercised their conversion right and converted 1,085,664 shares of Series B Preferred Stock for 2,164,673 shares of Common Stock. Upon conversion, all the converted Series B Preferred Stock shares were canceled and retired. As a result, the Company had a total of 33,144 shares of Series B Preferred Stock issued and outstanding as of December 31, 2025. As of December 31, 2025, the Company accrued an immaterial amount for the 8 % dividend in the Obligation to issue equity on the consolidated balance sheets. 110 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Series C Preferred Stock As of December 31, 2025, 5,000,000 shares of the authorized preferred stock are designated as Series C Preferred Stock, $ 0.0001 par value per share (the “Series C Preferred Stock”). On March 24, 2025, Innventure issued 2,885,848 shares of Series C Preferred Stock at the original issue price for a total amount of $ 28.8 million. The consideration received by the Company was in the form of cash, services rendered and the cancellation of related party debt. During the year ended December 31, 2025, certain holders of Series C Preferred Stock exercised their conversion right and converted 2,735,848 shares of Series C Preferred Stock for 5,471,696 shares of Common Stock. Upon conversion, all the converted Series C Preferred Stock shares were canceled and retired. The Series C Preferred Stock is subject to similar terms and conditions as the Series B Preferred Stock. The Company had a total of 150,000 shares of Series C Preferred Stock issued and outstanding as of December 31, 2025. As of December 31, 2025, the Company accrued $ 0.1 million for the 8 % dividend in the Obligation to issue equity on the consolidated balance sheets. Standby Equity Purchase Agreement In October 2023, we entered into the SEPA with YA II PN, LTD., an exempt limited partnership from the Cayman Islands (“Yorkville”). Concurrently with the Business Combination, this agreement became effective. Pursuant to the SEPA, the Company shall have the right, but not the obligation, to sell to Yorkville up to $ 75.0 million of Common Stock, par value $ 0.0001 per share, at the Company’s request any time during the commitment period commencing on the Closing and continuing for a term of 3 years (“Purchased Put Option”). As consideration, Innventure agreed and paid, to YA Global II SPV, LLC, a subsidiary of Yorkville, (i) a structuring fee and (ii) a commitment fee both totaling $ 0.4 million. The commitment fee was expensed in full immediately following the consummation of the Business Combination, according to ASC 815, and recorded within the General and administrative expense line item in the consolidated statements of operations and comprehensive income (loss) for the successor period October 2, 2024 through December 31, 2024. Each advance that Innventure issues in writing to Yorkville under the SEPA (each, an “Advance,” and notice of such request, and “Advance Notice”) may be in an amount of Common Stock up to the greater of: (i) $ 10.0 million or (ii) the aggregate daily trading volume of Common Stock for the five trading days prior to Innventure requesting an Advance. The purchase price for the shares of Common Stock set forth in the Advance is determined by multiplying the market price of Common Stock by either (a) 95 % of the daily volume weighted average price (“VWAP”) during the applicable one-day pricing period or (b) 97 % of the lowest daily VWAP during the applicable three consecutive trading day pricing period. The applicable pricing period depends on the type of Advance Notice selected by the Company under the SEPA. Additionally, the Company may establish a minimum acceptable price in each Advance Notice below which the Company will not be obligated to make any sales to Yorkville. Once the Company draws on the SEPA, the related number of shares issuable constitutes a forward contract to issue common stock (“Forward Contract”). The SEPA will automatically terminate on the earlier to occur of (i) November 01, 2027 and (ii) the date on which Yorkville shall have made payment of advances pursuant to the SEPA for Common Stock equal to the commitment amount of $ 75.0 million. For the year ended December 31, 2025 and the successor period October 2, 2024 through December 31, 2024, the Company sold 1,071,566 and 135,000 shares of Common Stock under the SEPA, raising $ 6.1 million and $ 1.7 million, respectively, which is classified within Issuance of common shares, net of issuance costs in the consolidated statements of changes in stockholders' equity (deficit). At Risk Sponsor Shares In connection with the Business Combination Agreement, the Company entered into the Sponsor Support Agreement under which 5,000,000 shares were issued to the Sponsor at the Closing, as follows: 2,775,172 Fixed Shares, 344,828 Sponsor Earnout Shares, and 1,880,000 At Risk Sponsor Shares. The Fixed Shares issued to the sponsor are not subject to any contingencies or forfeiture provisions. The Sponsor Earnout Shares are issued until they are deemed forfeited due to non-achievement of the associated Milestones. See 111 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Note 10. Earnout Shares for more discussion on the Sponsor Earnout Shares. The At Risk Sponsor Shares are issued, but a portion of such shares are subject to forfeiture in case the Company is not able to secure additional financing based on the calculation within the Sponsor Support Agreement. As per the discussion of additional financing per the Sponsor Support Agreement, the number of shares subject to forfeiture were calculated to be 587,995 . The rest of the At-Risk Sponsor Shares, 1,292,005 , were free from any forfeiture conditions or contingencies. When the Company received the First Tranche of the WTI Facility on November 15, 2024, the additional financing condition was met and all the remaining At-Risk Sponsor Shares were considered non-forfeitable and free from any contingencies. See Note 5. Borrowings for more discussion over the First Tranche of the WTI Facility. Similar to the Sponsor Earnout Shares, all the At-Risk Sponsor Shares were entitled to non-forfeitable dividends or distributions along with other common stockholders of the Company, from their issuance date. Service Provider Shares In December 2023, the Company entered into an agreement to receive financial advisory services in exchange for equity. Upon Closing of the Business Combination, the Company became liable for $ 0.4 million of Common Stock divided by the conversion price of $ 10.87 , resulting in 40,552 shares. In connection with the closing of the WTI Facility mentioned in Note 5. Borrowings, the Company became liable for $ 0.5 million worth of Common Stock calculated as the volume-weighted average price of the Common Stock over the five consecutive trading days ending on the trading day immediately preceding November 15, 2024, $ 11.13 , for a total of 44,919 shares. On February 3, 2025, the Company has issued the aggregate 85,471 shares of Common Stock for services rendered. In October 2023, the Company entered into an agreement to receive financial advisory services in exchange for equity. Upon Closing of the Business Combination, the Company is obligated to pay a success fee in cash in an amount of $ 0.6 million and equity success fee in $ 3.0 million of Series C Preferred Stock, par value $ 0.0001 per share, of the Company (the “Series C Preferred Stock”) at $ 10.00 per share. On March 24, 2025, the Company issued the 300,000 shares of Series C Preferred Stock for services rendered. Series B Units On October 2, 2025, Accelsius issued and sold 685,163 Accelsius Series B-1 Units (the “Series B-1 Units”) to Johnson Controls, Inc. (“JCI”) for approximately $ 25.0 million, before deducting financial advisor fees and other estimated offering expenses. JCI is entitled to appoint and remove a director to the board of directors of Accelsius if JCI and its affiliates maintain a significant ownership percentage. As a result of the sale of Series B-1 Units to JCI, the August 2025 Notes converted into 251,452 Series B-2 units and 125,725 B-2 Warrants were issued. 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. 112 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Additionally, Accelsius issued and sold to JCI an additional 274,065 units of the Series B-1 Units for gross proceeds of approximately $ 10 million. The Series B-1 Units are convertible at any time and from time to time into Accelsius’ Class A Common Units by dividing the Series B-1 Unit’s Issue Price (as defined below) by the Conversion Price (as defined below) in effect at the time of conversion. The Issue Price means $ 36.49 per unit, subject to appropriate adjustment in the event of any unit dividend, unit split, combination or other similar recapitalization with respect to the applicable Series B-1 Units. The “ Conversion Price ” shall initially equal $ 36.49 and will be subject to certain adjustments. Private Placement Issuances On October 3, 2025, the Company raised approximately $ 9.8 million through a private placement, 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 (the “Series A Warrants”). The Series A Warrants, exercisable from April 6, 2026 at $ 8.00 per share, are redeemable under certain conditions until October 3, 2030. 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. 113 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Note 14. Stock-based Compensation Capital Incentive Plan The Predecessor’s capital incentive plan (the “Capital Incentive Plan”), as amended, permitted the grant of 1,585,125 shares of Class C Units to its employees, directors, and consultants, as designated by the Board of Directors. Upon Closing of the Business Combination, the vesting of all Innventure LLC unvested Class C Capital Incentive Plan units was accelerated, resulting in 203,651 units vested and additional compensation expense of $ 223 . The Class C Capital Incentive Plan units were then immediately exchanged as part of the Business Combination for Common Stock. The Company recognized compensation costs related to the Capital Incentive Plan as follows: Successor Successor Predecessor Year Ended December 31, 2025 Period from October 2, 2024 through December 31, 2024 Period from January 1 2024 through October 1, 2024 Compensation expense $ — $ — $ 137 2024 Equity and Incentive Compensation Plan On October 2, 2024, the Company entered into the 2024 Equity and Incentive Compensation Plan (the “Plan”), wherein the Company is permitted to grant awards to employees, directors, consultants, and former service providers of the Company. The Plan provides for the granting of awards (“Awards”) including, restricted stock units (“RSUs”), stock options, and stock appreciation rights (“SARs”). The number of shares of Common Stock available under the Plan is initially limited to 11,022,894 . The share limit will automatically increase by 3 % on the first day of each fiscal year, beginning in 2025, unless a smaller number of shares is determined by the Board of Directors. The Awards vest over the service periods defined in each individual grant agreement. All RSUs will vest at various dates through August 2028. The fair value of the Awards issued to employees is recognized as compensation expense on a straight-line basis over the requisite service period. As of December 31, 2025, 4,629,340 shares remain available under the Plan. 114 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Restricted Stock Units Each RSU represents the right to receive one share of Common Stock upon vesting of such RSU. The fair value of RSUs is determined based on the closing market price of the Company’s Common Stock at the date of the grant. If a cash dividend is declared on the Company’s Common Stock before the RSUs have vested, holders of RSUs are entitled to received dividends in the form of a cash credit, and shall be paid in cash at the same time as the RSUs are settled. The summary of RSU activity is as follows: Number of Shares Weighted Average Grant Date Fair Value (per share) Unvested at January 1, 2025 1,905,008 $ 12.20 Granted 653,118 4.60 Vested ( 1,382,725 ) 11.61 Forfeited ( 123,562 ) 9.36 Unvested at December 31, 2025 1,051,839 $ 8.68 During the year ended December 31, 2025 and the Successor period from October 2, 2024 through December 31, 2024, the Company recognized compensation costs related to the RSUs of $ 16.1 million and $ 1.6 million, respectively, within General and administrative expense in the consolidated statements of operations and comprehensive income (loss). As of December 31, 2025, the Company had $ 8.9 million in stock-based compensation expense remaining to be recognized over approximately 1.58 years. Stock Options On February 26, 2025, the Company issued 140,000 stock options to two independent contractors. The stock options were granted with an exercise price of $ 8.84 . Using the Black-Scholes option pricing model, the estimated grant date fair value of stock options was $ 3.20 per option based on an expected volatility of 56 %, an expected option term of approximately 5.9 years, and risk-free rate of return of 4.06 %. The stock options have a maximum contractual life of 10 years from the grant date. On December 9, 2024, stock options were granted with an exercise price of $ 12.20 , which aligns with the Company’s closing share price on December 9, 2024. Using the Black-Scholes option pricing model, the weighted average estimated grant date fair value of stock options was $ 6.63 per unit based on an expected volatility of 56 %, an expected option term of approximately 5.28 - 5.62 years, and risk-free rate of return of 4.0 - 4.1 %. The stock options have a maximum contractual life, and a weighted average remaining contractual term, of 10 years from the grant date. 115 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Stock options activity for the year ended December 31, 2025 is as follows: Number of Shares Weighted Average Exercise Price Weighted Average Grant Date Fair Value (per share) Outstanding on December 31, 2024 913,849 $ 12.20 $ 6.63 Granted 152,295 8.84 4.97 Vested ( 640,799 ) 11.75 6.57 Forfeited ( 85,755 ) 12.20 6.69 Outstanding at December 31, 2025 339,590 $ 11.44 $ 6.31 Exercisable at December 31, 2025 702,359 12.20 6.63 During the year ended December 31, 2025 and for the Successor period from October 2, 2024 through December 31, 2024, the Company recognized compensation costs related to the stock options of $ 4.1 million and $ 0.4 million, respectively, within General and administrative expense in the consolidated statements of operations and comprehensive income (loss). As of December 31, 2025, the Company had $ 2.1 million in compensation expense remaining to be recognized over approximately 1.45 years. Stock Appreciation Rights On December 31, 2024 the Company granted 350,000 stock appreciation rights with respect to the equity of Accelsius Holdings LLC. The SARs were awarded to certain Innventure directors, officers, and former service providers of the Company and its affiliates (the “Participants”). The SARs entitle the Participants to shares of Common Stock, or cash, equal to the value of the appreciation in Accelsius’ stock price over the base price of $ 12.18 . Two Participants, who were considered non-employees, were granted 30,000 cash-settled SARs and three Participants were granted 320,000 stock-settled SARs. The cash-settled SARs are considered liability-classified and the stock-settled SARs are considered equity-classified. Both the cash-settled SARs and stock-settled SARs will be automatically exercised upon the two-year anniversary of the date of grant. The remaining weighted average contractual term is 1 year as of December 31, 2025. The estimated grant date fair value of the cash-settled SARs and the stock-settled SARs was $ 1.1 million and $ 12.4 million, respectively. The SARs were valued using the Black-Scholes option-pricing model based on an expected volatility of 70 %, an expected term of approximately two years , and risk-free rate of return of 4 %. The SARs are considered fully vested at the date of grant and compensation cost for both SARs was recognized immediately at the date of grant. During the Successor period from October 2, 2024 through December 31, 2024, the Company recorded $ 13.5 million in compensation expense related to the SARs within General and administrative expense in the consolidated statements of operations and comprehensive income (loss). These cash-settled SARs are liability classified and are revalued at each reporting period. The SARs were valued as of December 31, 2025 using the Black-Scholes option-pricing model based on an expected volatility of 70 %, an expected term of approximately 1.0 year, and risk-free rate of return of 3 %. The Company recognized a decrease in compensation expense in the amount of $ 0.9 million in relation to the change in fair value of the cash-settled SARs for the year ended December 31, 2025. 116 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements On June 25, 2025, the SARs agreements were amended. Under these amendments, any payments by the Company to the participants shall be made in the form of shares of Common Stock and the maximum number of shares of Common Stock that may be issued pursuant to the SAR Agreements shall be 4,000,000 . There were no new or forfeited grants as of December 31, 2025. Subsidiary Equity Plans Accelsius Subsidiary Equity Plan Accelsius, a subsidiary of the Company, adopted an equity incentive plan on March 24, 2022 (the “Accelsius Subsidiary Equity Plan”). In March 2023, the Accelsius Subsidiary Equity Plan was amended to permit the grant of 4,915,000 Class C units of the subsidiary to the subsidiary’s employees, directors, and consultants, as designated by the Board of Directors. The awards vest over the period defined in each individual grant agreement which is generally accelerated upon a change of control event. Accelsius typically has the option to repurchase all vested units upon an employee’s termination of employment or service. The summary of Accelsius Subsidiary Equity Plan activity is as follows: Successor Period Predecessor Period Year Ended December 31, 2025 Period from October 2, 2024 through December 31, 2024 Period from January 1, 2024 through October 1, 2024 Compensation expense (in thousands) $ 7,411 $ 1,341 $ 918 Class C units granted 1,048,000 168,500 110,000 Weighted average grant date fair value per share $ 20.37 $ 46.38 $ 4.41 The Company recognizes compensation costs within General and administrative, Sales and marketing and Research and development expense in the consolidated statements of operations and comprehensive income (loss). As of December 31, 2025, the Company had $ 20.4 million in unit-based compensation expense remaining to be recognized over approximately 1.92 years. The grant date fair value was estimated using an Option Pricing Model to allocate the total equity value of Accelsius to the Class C Units. The total equity value was estimated using the Discounted Cash Flow method and Management’s projections. The resulting values of Class C Units were then discounted for lack of marketability ( 20 %). Series A Issuance On October, 18 2024, Accelsius issued 16,427 equity classified Series A Preferred Units to an employee of the Company which was determined to be stock based payment. The grant date fair value of $ 0.6 million was recognized as compensation cost during the Successor period from October 2, 2024 through December 31, 2024,(within General and administrative expense in the consolidated statements of operations and comprehensive income (loss)), immediately at the date of grant as there is no requisite service period or vesting period. The fair value of the awards was estimated using a Black-Scholes model with a discount for lack of marketability of 20 % applied. 117 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Note 15. Revenues The Company provides investment management services to the ESG Fund, a related party, through which it earns revenue from management fees. Management fee revenue is affected by economic factors related to the asset class composition of the holdings and the contractual terms such as the basis for calculating the management fees and investors’ ability to redeem. The Company did not recognize any carried interest allocation during the year ended December 31, 2025, the Successor period from October 2, 2024 through December 31, 2024, and the Predecessor period from January 1, 2024 through October 1, 2024, as the amounts were probable of significant reversal given the consideration is highly susceptible to factors outside the Company's influence. Cumulative carried interest allocation amounts that are subject to restraint and as such are not yet recognized were $ 9.6 million and $ 11.3 million as of December 31, 2025 and 2024, respectively. The Company also provides management services to AeroFlexx, which do not have a carried interest feature. The following table represents the breakout of revenue by source (in thousands): Successor Predecessor Year Ended December 31, 2025 October 2, 2024 through December 31, 2024 January 1, 2024 through October 1, 2024 Product revenue $ 1,557 $ 233 $ 95 Management fees - related party 499 223 669 Total revenue $ 2,056 $ 456 $ 764 The following table represents major customer concentration of revenue: Successor Predecessor Year Ended December 31, 2025 October 2, 2024 through December 31, 2024 January 1, 2024 through October 1, 2024 Customer A - Related Party 19.0 % 43.0 % 77.0 % Customer B - Related Party 5.3 % 5.9 % 10.6 % Customer C 31.8 % — % — % Customer D — % — % 12.4 % Customer E 3.0 % 48.9 % — % Customer F 20.1 % — % — % Total Revenue Concentration of Major Customers 79.2 % 97.8 % 100.0 % 118 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Note 16. Income Taxes The Company is subject to federal and state income taxes with respect to any income or loss generated as well as the allocable share of any taxable income or loss of Innventure LLC and other partnership subsidiaries. The partnership subsidiaries within the consolidated group generally do not pay income taxes in most jurisdictions. Instead, taxable income or loss of the partnership subsidiaries is passed through to its members, including the Company. The partnership subsidiaries are liable for income taxes in those states not recognizing its pass-through status and for certain of its subsidiaries not taxed as pass-through entities. Through Innventure LLC, the Company acquired ownership interest in various domestic entities taxed as corporations. Where required or allowed, the corporation subsidiaries file and pay tax in a standalone basis for federal and state income tax purposes. The Company anticipates the US structure to remain in existence for the foreseeable future. In addition, Accelsius Ltd, a UK corporation, began operations in 2025 resulting in income tax return filing requirement for the Company in the UK. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted into U.S. tax law. OBBBA includes a broad range of tax reform provisions, such as the permanent extension of certain expiring provisions of the 2017 Tax Cuts and Jobs Act and modifications to the international tax framework. The enactment of OBBBA did not have a material impact on the Company’s results of operations, financial position, or cash flows for the year. The provision for income before taxes was as follows (in thousands): Successor Predecessor Year Ended December 31, 2025 October 2, 2024 through December 31, 2024 January 1, 2024 through October 1, 2024 United States $ ( 488,148 ) $ ( 73,375 ) $ ( 27,766 ) Foreign 1 ( 685 ) — — Total $ ( 488,833 ) $ ( 73,375 ) ( 27,766 ) 1 The Company adopted ASU 2023-09 on a prospective basis, and as a result for the year ended December 31, 2025, foreign income is presented on the country of domicile which results in Innventure, Inc’s income before taxes included. For the periods ended December 31, 2024 and October 1,2024, Innventure, Inc’s income was included in the United States based on the country of tax jurisdiction. The provision for income taxes was as follows: Successor Successor Predecessor Year Ended December 31, 2025 October 2, 2024 through December 31, 2024 January 1, 2024 through October 1, 2024 Current Expense: State 23 18 — Total Current Expense 23 18 — Deferred Expense: Federal ( 13,648 ) ( 3,300 ) 432 State 142 — — Total Deferred Expense ( 13,506 ) ( 3,300 ) 432 Total Expense: $ ( 13,483 ) $ ( 3,282 ) $ 432 119 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Beginning with the year ended December 31, 2025, the Company has adopted ASU 2023-09 and, as a result, the reconciliation of income tax expense has been updated on a prospective basis. The Company did not pay income taxes net of refunds during the year ended December 31, 2025. As no income taxes were paid, disaggregation by federal, state, or foreign jurisdiction was not applicable for the period presented. The income tax benefit reflected in the Consolidated Statements of Operations differs from the tax computed by applying the statutory U.S. federal rate of 21% to "Income tax expense (Benefit)" was as follows: Successor December 31, 2025 In thousands (except percentages) Income taxes at federal statutory rate ( 102,655 ) 21.0 % State taxes, net of federal benefit 2 ( 145 ) — % Warrant liability ( 1,379 ) 0.3 % Non-deductible expenses 34 — % Change in earnout fair value ( 2,098 ) 0.4 % Other permanent differences 7,224 ( 1.5 ) % Change in valuation allowance 11,618 ( 2.4 ) % Goodwill impairment 72,777 ( 14.9 ) % Officer’s compensation 1,141 ( 0.2 ) % Total provision (benefit) for income taxes $ ( 13,483 ) 2.7 % 2 Arizona, Florida, New York, Oklahoma, and Virginia represent majority of the tax effect in this category. For the successor period October 2, 2024 through December 31, 2024 and the predecessor period January 1, 2024 through October 1, 2024, income tax expense reflected in the Consolidated Statements of Operations differs from the tax computed by applying the statutory U.S. federal rate of 21% to "Income tax expense (benefit)" was as follows: Successor Predecessor October 2, 2024 through December 31, 2024 January 1, 2024 through October 1, 2024 Income taxes at federal statutory rate ( 15,405 ) 21.0 % — — % State taxes, net of federal benefit ( 1,801 ) 2.5 % — — % Tax on pre-tax earnings of corporate subsidiaries — — % ( 3,022 ) 10.9 % Warrant liability 3,685 ( 5.0 ) % — — % Non-deductible expenses 6 — % 6 — % Change in earnout fair value ( 714 ) 1.0 % — — % Other permanent differences ( 423 ) 0.6 % — — % Change in valuation allowance 11,664 ( 15.9 ) % 3,448 ( 12.4 ) % R&D credit ( 294 ) 0.4 % — — Total provision (benefit) for income taxes $ ( 3,282 ) 4.6 % $ 432 ( 1.5 ) % 120 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Entities within the consolidated group that are considered a corporation for federal income tax purposes, recognize deferred income tax assets and liabilities for the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases using currently enacted tax rates in effect for the year in which the differences are expected to reverse. Significant components of deferred tax assets and liabilities as of December 31, 2025 and 2024 are as follows: December 31, 2025 December 31, 2024 Deferred Tax Assets: Deferred lease liabilities $ 262 $ 138 Reserves and other accruals 8,991 4,873 Capitalized R&D expense 3,740 2,562 Fixed assets and intangibles 2,830 3,113 Unrealized Gain/Loss 1,945 — Loss carry-forwards and other tax attributes 29,753 15,682 Total Deferred Tax Assets 47,521 26,368 Less: Valuation allowance ( 23,130 ) ( 11,664 ) Net Deferred Tax Assets $ 24,391 $ 14,704 Deferred Tax Liabilities: Amortization $ ( 34,213 ) $ ( 38,443 ) Investment in Partnerships ( 3,982 ) ( 3,505 ) Right of use assets ( 44 ) ( 109 ) Total Deferred Tax Liabilities ( 38,239 ) ( 42,057 ) Net Deferred Tax Liabilities $ ( 13,848 ) $ ( 27,353 ) Deferred tax assets are regularly reviewed for recoverability and a valuation allowance is provided when it is more likely than not that some portion or all of a deferred tax asset will not be realized. The ultimate realization of deferred tax assets is dependent upon future taxable income during the periods in which those temporary differences become deductible. In assessing the need for a valuation allowance, management considers all available positive and negative evidence, including the ability to carryback operating losses to prior periods and the expected future utilization of net operating loss carryforwards, the reversal of deferred tax liabilities, projected taxable income, and tax-planning strategies. Valuation allowances are established when it is more likely than not that all or a portion of a deferred tax asset will not be realized. The valuation allowance on deferred tax assets was $ 23.1 million as of December 31, 2025 and $ 11.7 million as of December 31, 2024, resulting in a net change of $ 11.5 million. The increase in valuation allowance of $ 11.5 million during the period mainly relates to U.S. federal and state operating loss carryforwards and equity based compensation deferred tax assets that were deemed unrealizable. During this period, Accelsius LLC has recognized $ 39.6 million deferred tax liability balance in acquired intangible assets during 2024 as a result of the Business Combination transaction that is nontaxable in nature. These deferred tax liabilities are expected to reverse over time, typically as the intangible assets are amortized for financial reporting purposes. The Company and the remaining corporate subsidiaries maintained the valuation allowance as the entities have been in a pre-tax loss position, with insufficient projected taxable income (exclusive of reversing taxable temporary differences) to recognize the benefit of net deferred tax assets as of the end of the year. As of December 31, 2025, the taxable entity had net operating loss carryforwards for income tax purposes of approximately $ 127.0 million related to US federal taxes and $ 0.7 million related to the UK, all of which may be carried forward indefinitely. The Company and certain subsidiaries also have state net operating loss (“NOL”) carryforwards in the amount of $ 40.6 million. The state NOL carryforwards begin to expire in 2039, however, some state NOL’s are able to be carried forward indefinitely. 121 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements As of December 31, 2025 and 2024, the Company had no material unrecognized income tax benefits or uncertain tax positions. Also, we do not expect to incur interest charges or penalties related to our tax positions, but if such charges or penalties are incurred, our policy is to account for interest charges as interest expense and penalties as tax expense in the consolidated statements of operations. As of December 31, 2025, tax years 2023 through 2025 remain open and subject to examination by the Internal Revenue Service and the states where the Company has nexus. The company is also subject to examination for the tax year 2025 in the UK due to Accelsius LTD. 122 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Note 17. Net Loss Per Share The Company follows the two-class method when computing net loss per common share when shares are issued that meet the definition of participating securities. The two-class method requires income available to common shareholders for the period to be allocated between common shares and participating securities based upon their respective rights to receive dividends as if all income for the period had been distributed. The two-class method also requires losses for the period to be allocated between common shares and participating securities based on their respective rights if the participating security contractually participates in losses. As holders of Series B preferred shares, Series C preferred shares and WTI warrants, which are determined to be participating securities, do not have a contractual obligation to fund losses, undistributed net losses are not allocated to them for purposes of the loss per share calculation. Given the historical structure of the Predecessor, the Company determined that the calculation of earnings per membership unit results in values that are not a valuable metric to users of these consolidated financial statements. Therefore, earnings per share (“EPS”) information is omitted for the Predecessor periods. Presented in the table below is a reconciliation of the numerator and denominator for the EPS calculations( in thousands except per share amounts ): December 31, 2025 October 2, 2024 through December 31, 2024 Numerator: Net loss attributable to Innventure, Inc. shareholders $ ( 293,317 ) $ ( 61,754 ) Less: Cumulative earnings to participating securities 120 217 Undistributed loss for participating securities ( 293,437 ) ( 61,971 ) Less: Undistributed loss attributable to participating securities — — Net Loss attributable to common shareholders, basic and diluted $ ( 293,437 ) $ ( 61,971 ) Denominator: Weighted average number of units outstanding, basic and diluted 54,421 43,951 Net loss per share attributable to common shareholders, basic and diluted $ ( 5.39 ) $ ( 1.41 ) Basic and diluted net loss per share was the same for each period presented as the inclusion of all potential common stock outstanding would have been anti-dilutive. The following table presents the potential common stock outstanding that was excluded from the computation of diluted net loss per share of common stock for the periods presented because including them would have been antidilutive: 123 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements December 31, 2025 December 31, 2024 Public warrants 11,246,000 11,500,000 Private placement warrants 7,146,000 7,146,000 2024 WTI Warrants 1,000,000 1,000,000 Convertible Debentures 1,750,726 — 2025 WTI Warrants 495,074 — Series B Preferred Stock 55,067 1,011,869 Series C Preferred Stock 249,214 — Share options 1,026,404 975,409 RSUs 1,029,435 2,036,476 SARs 4,000,000 320,000 124 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Note 18. Related Party Transactions As more fully described in Note 5. Borrowings, the Company has various notes with affiliates, including short-term notes with three separate related parties which were settled on March 20, 2025. In addition, the Company issued a convertible note to the ESG Fund pursuant to the Amended and Restated Series I Convertible Note Purchase Agreement, dated as of June 2, 2023, by and among Accelsius, ESG Fund, and the other parties thereto, which were converted during the Predecessor period January 1, 2024 to October 1, 2024. During the year ended December 31, 2025 (Successor), the Company entered into the Related Party Convertible Notes with various related parties, including other lenders. Transactions with Directors As more fully described in Note 12. Stock-based Compensation, the Company issued various equity awards to related parties throughout 2024. On December 9, 2024, the Company issued 1,246,722 RSUs with a grant date fair value of $ 15.2 million and 590,163 stock options with a grant date fair value of $ 3.9 million to a cumulative of eight directors. On December 31, 2024, the Company issued 200,000 SARs with a grant date fair value of $ 7.8 million to four directors and former directors. On March 22, 2024, Accelsius issued 100,000 Class C Units with a grant date fair value of $ 0.4 million to one director under the Accelsius Subsidiary Equity Plan. Additionally, on June 25, 2025, the Company issued 111,525 RSUs with a grant date fair value of $ 0.6 million to five directors pursuant to the Innventure Non-Management Director Compensation Plan. On August 25, 2025, the Company issued 338,601 RSUs with a grant date fair value of $ 1.5 million to two directors, pursuant to the 2024 Plan. Transactions with the ESG Fund In the normal course of business, the Company advances certain expenses on behalf of the ESG Fund. Certain expenses paid by the Company, which meet certain criteria, are reimbursed to the Company by the ESG Fund. Amounts paid by the Company and reimbursable by the ESG Fund were $ 0.1 million for the year ended December 31, 2025 (Successor), $ 0.1 million for the Successor period from October 2, 2024 through December 31, 2024, and $ 0.1 million for the Predecessor period from January 1, 2024 through October 1, 2024. There was an immaterial receivable related to those expenses included in Due from related parties in the consolidated balance sheet as of December 31, 2025 and a $ 0.1 million receivable due from related parties in the consolidated balance sheet as of December 31, 2024. As more fully described in Note 2. Accounting Policies, the Company earns a 1 - 2 % management fee for administrative, finance and accounting, and other back-office functions from the ESG Fund. Management fees earned from the ESG Fund were $ 0.4 million for the year ended December 31, 2025 (Successor), $ 0.2 million for the Successor period from October 2, 2024 through December 31, 2024, and $ 0.6 million for the Predecessor period from January 1, 2024 through October 1, 2024, which is recorded as Revenue in the consolidated statements of operations and comprehensive income (loss). In March 2021, the Company entered into a purchase option agreement with the ESG Fund to sell 145,161 shares of PureCycle Technologies, Inc. (“PCT”) common stock with an exercise price of $ 1 . The option period would have expired on July 22, 2024 and the Company measured the derivative liability at fair value. The option was exercised in March 2022 and the shares are subject to the lock-up provisions. The liability due to the ESG Fund was derecognized as a result of the Business Combination. Transactions with AeroFlexx As of December 31, 2025 and December 31, 2024, the Company had $ 10.5 million and $ 4.4 million, respectively, of advances to AeroFlexx which is included in Due from related parties in the consolidated balance sheets. The advances have no stated interest or maturity date but are expected to be repaid within a year. On March 24, 2025, the Company issued 578,294 shares of Series C Preferred Stock to settle AeroFlexx’s debt with a related party. The Company considers the stock issuance to be an investment in AeroFlexx of $ 5.8 million which was recorded in Investments on the consolidated balance sheets. 125 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Note 19. Commitments and Contingencies PCT Guaranty On April 22, 2020, the Company entered into a guaranty with a counterparty to unconditionally guarantee PCT’s obligation to reimburse a $ 5.0 million prepayment upon PCT’s failure to meet certain performance thresholds. Performance thresholds include the commission and construction of a plant. The guaranty has no expiration. There was no amounts paid by the Company for both the guaranty or for interest. As of December 31, 2025 and December 31, 2024, there was no principal outstanding under the guaranty. Patent Agreement Contingent Fees In 2022, the Company entered into two agreements with an MNC to purchase in-process research and development consisting of patents, technology, and knowledge transfer related to cooling technology for critical electronic equipment in a transaction that was determined to be an asset acquisition. On June 30, 2025, Accelsius entered into an amended and restated agreement with the MNC. The amended agreement modifies several terms and notably (a) eliminates revenue-based royalty payments, (b) extends the due dates for fixed installment payments, (c) modifies and reduces the buy-out fee payable to the MNC in lieu of future installment payments upon certain events such as an assignment of the agreement or a capital event (including a change of control or initial public offering), at the option of either the MNC or Accelsius, and (d) eliminates Accelsius’s ability to unilaterally terminate the agreement upon the occurrence of certain events (other than a material breach) and provides the MNC with certain limited information rights related to the equity ownership of Accelsius. Under the terms of the agreements, the Company is required to make fixed installment payments, as disclosed below, for each year of the agreement through December 31, 2040 (in thousands): Amount 2026 $ 700 2027 825 2028 825 2029 825 2030 825 Thereafter 9,075 Total $ 13,075 License and Royalty Commitments On December 12, 2024, the Company entered into a license agreement (the “Technology License”) with a third party to obtain exclusive rights to use certain know-how, patents, and data relating to processes for the gasification of plastic waste (the “Technology”). Ownership of the Technology will transfer to the Company for a fee of $ 0.5 million contingent upon achievement of a commercial milestone. The Company incurred a nonrefundable upfront fee of $ 0.5 million under the Technology License, which was immediately expensed as incurred on December 12, 2024 and presented as an expense in the consolidated statements of operations and comprehensive income (loss) for the period ended December 31, 2024. Additionally, the Company committed to pay a semi-annual fee until ownership transfers or the Technology is no longer licensed, which is accrued on a monthly basis. During the year ended December 31, 2025 and 2024, an immaterial amount was recognized within General and administrative expense in the consolidated statements of operations and comprehensive income (loss). Under the Technology License, the Company is committed to pay annual royalties based on Refinity related gross sales and licensing revenue starting in 2025. As of December 31, 2025, no royalty payments were made or accrued for under the commitment. 126 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Framework Agreement On January 22, 2025, Refinity entered into the Framework Agreement (“Framework Agreement”) with a third party to obtain research services focusing on the further development and optimization of the Gasification Technology. Refinity agreed to pay a minimum fee of € 2.0 million for the period beginning January 22, 2025 and ending April 30, 2026 (“Year 1”), and € 3.0 million for the period beginning May 1, 2026 and ending April 30, 2027 (“Year 2”); provided that, if the third party is unable to provide all of the services contemplated to be provided during Year 1 due to its resource constrains, any unused portion of the minimum fee for Year 1 will be deferred to Year 2 and added to the Year 2 minimum fee. Expenses for services from contracts under the Framework Agreement are recognized as incurred and are applied to the minimum fee. During the year ended December 31, 2025, Refinity incurred € 1.7 million of service expenses toward the Year 1 minimum fee. After currency conversion, Refinity incurred $ 1.9 million toward the Year 1 minimum fee during the year ended December 31, 2025. Additionally, during the year ended December 31, 2025, Refinity made payments of $ 2.0 million on costs incurred as a part of the Year 1 minimum fee. 127 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements Note 20. Business Segment Data The Company’s Chief Executive Officer is the Chief Operating Decision Maker (“CODM”) of the Company. The CODM makes operating decisions, allocates resources and assesses performance based on review of historical and potential future product sales, operating expenses, and net income (loss). Based on the information utilized by the CODM to operate the Company, there is one operating segment and reportable segment, Technology. The Technology segment includes the business activities of Accelsius, a consolidated subsidiary focused on development and manufacture of data center cooling products. Other components of the Company’s consolidated information primarily include operations relating to the original platform business, service activities, Refinity, and equity method investment activities (“Other”). The following table presents information about the Company’s Technology segment for the Successor period from October 2, 2024 through December 31, 2024, the Predecessor period from January 1, 2024 through October 1, 2024, and for the Predecessor year ended December 31, 2023. The information includes the significant expense categories and amounts regularly provided to the CODM for the reportable segment, which may reflect a different presentation than amounts presented elsewhere in the consolidated financial statements. Inter-segment transactions are not eliminated from segment results when management considers those transactions in assessing the results of the Technology segment. Successor Predecessor December 31, 2025 October 2, 2024 through December 31, 2024 January 1, 2024 through October 1, 2024 (in thousands) (in thousands) Revenue from external customers $ 1,557 $ 233 $ 95 Interest income 139 — 7 Cost of sales $ 7,831 $ 3,752 $ 777 Employee costs 26,377 3,933 8,076 Facilities, equipment & supplies 3,117 121 581 General and administrative 5,578 751 398 Outside services 1,589 390 842 Research and development 13,864 3,224 2,711 Sales and marketing 1,073 193 442 Depreciation expense * 1,181 6 99 Interest expense 855 90 564 Income tax expense (benefit) ( 13,571 ) ( 3,637 ) 432 Goodwill Impairment 346,557 — — Other ** 2,435 168 1,832 Total Expenses $ 396,886 $ 8,991 $ 16,754 Net Loss $ ( 395,190 ) $ ( 8,758 ) $ ( 16,652 ) * Represents depreciation not already included in Cost of sales. ** Other - change in fair value of financial liabilities, loss on conversion of promissory notes, travel and other miscellaneous expenses. 128 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements The following table reconciles the reportable segment to amounts reflected in our consolidated financial statements. Successor Predecessor December 31, 2025 October 2, 2024 through December 31, 2024 January 1, 2024 through October 1, 2024 Revenues: Technology $ 1,557 $ 233 $ 95 Other 607 250 750 Elimination of management services provided to Technology ( 108 ) ( 27 ) ( 81 ) Consolidated Revenues $ 2,056 $ 456 $ 764 Interest Expense: Technology $ 855 $ 90 $ 564 Other 9,865 1,240 1,069 Elimination of Intercompany Interest ( 486 ) — Consolidated Interest Expense $ 10,234 $ 1,330 $ 1,633 Interest Income: Technology $ 139 $ — $ 7 Other 903 198 326 Elimination of Intercompany Interest ( 486 ) — — Consolidated Interest Income $ 556 $ 198 $ 333 Depreciation and Amortization Expense: Technology $ 22,497 $ 5,455 $ 146 Other 9 — Consolidated Depreciation and Amortization Expense $ 22,506 $ 5,455 $ 146 Net Loss: Technology $ ( 395,190 ) $ ( 8,758 ) $ ( 16,652 ) Other ( 80,160 ) ( 61,335 ) ( 11,546 ) Consolidated Net Loss $ ( 475,350 ) $ ( 70,093 ) $ ( 28,198 ) Capital Expenditures: Technology $ 1,417 $ 266 $ 736 Other — — — Consolidated Capital Expenditures $ 1,417 $ 266 $ 736 All long-lived assets are located entirely in the United States of America (USA). Segment assets are not reviewed by the CODM and therefore are not disclosed. 129 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.