Innventure, Inc.: Form 10-Q for the period ended Sep 30, 2025

Unless the context otherwise requires, references in this section to “we”, “us” and “our” refer to the business and operations of Innventure LLC and its consolidated subsidiaries prior to the Business Combination, which became the business of the Company and its subsidiaries following the consummation of the Business Combination. Unless otherwise indicated, all dollar amounts (“$”) are expressed in thousands.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our and our predecessor’s, as applicable, unaudited condensed consolidated financial statements and related notes as of September 30, 2025 and for the three and nine months ended September 30, 2025 and 2024 included in Item 1 of this Form 10-Q and our predecessor’s, as applicable, audited consolidated financial statements and related notes as of and for the years ended December 31, 2024 and 2023 included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (“Form 10-K”). This discussion contains forward-looking statements that involve risks, uncertainties and assumptions. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below in this section and those discussed in the sections titled “Risk Factors” and “Cautionary Statement Regarding Forward–Looking Statements” included elsewhere in this Form 10-Q and in the Form 10-K. Additionally, our historical results are not necessarily indicative of the results that may be expected for any period in the future.

Overview

Innventure founds, funds, and operates companies with a focus on transformative, sustainable technology solutions that we acquire or license from technology innovators, which are typically multinational corporations (“MNCs”) with the intent to maximize values for investors and other stakeholders through positive cash flow generated through holding long term positions in AeroFlexx, LLC (“AeroFlexx” or “AFX”), Accelsius Holdings LLC (“Accelsius” or “ACC”) and Refinity Olefins, LLC (“Refinity” and, together with AeroFlexx and Accelsius, the “Innventure Companies” and, together with those subsidiary companies that Innventure may found, fund, and operate going forward, the “Operating Companies”). Refer to Item 1. Business of the Form 10-K for a detailed discussion of our business activities.

Segments

Based on the allocation of resources and assessment of financial performance by our Chief Executive Officer (who has been determined to be our Chief Operating Decision Maker), we have identified one reportable segment: Technology. The Company’s remaining operations are not reportable segments and are classified as “Other.” “Other” primarily includes the Company’s remaining operations consisting of Innventure’s original platform business, service activities, Refinity and other equity method investment activities.

The Business Combination

On October 2, 2024 (the “Closing Date” or “Closing”), Learn CW Investment Corporation (“Learn CW”), a Cayman Islands exempted company, and Innventure LLC, a Delaware limited liability company, consummated a business combination (the “Business Combination”) pursuant to the terms of the Business Combination Agreement previously entered into on October 24, 2023. Following the Closing, both Learn CW and Innventure LLC became subsidiaries of Learn SPAC HoldCo, Inc. (“Holdco”), a Delaware corporation and direct, wholly-owned subsidiary of Learn CW prior to Closing. Holdco changed its name to “Innventure, Inc.” and became a publicly traded company. The Business Combination has been accounted for using the acquisition method of accounting. The Company determined the accounting acquirer to be Holdco. Accordingly, the Company recorded assets acquired, liabilities assumed and non-controlling interest at their acquisition date fair values and recognized goodwill.

As a consequence of the Business Combination, Innventure, Inc. is the successor to an SEC-registered and Nasdaq-listed company which will require Innventure to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices. Innventure is incurring additional annual expenses as a public company for, among other things, directors’ and officers’ liability insurance, director fees and additional internal and external accounting, legal and administrative resources, including increased audit and legal fees.

Innventure’s future results of consolidated operations and financial position may not be comparable to historical results as a result of the Business Combination.

Results of Operations for the three and nine months ended September 30, 2025 (Successor) and three and nine months ended September 30, 2024 (Predecessor) (in thousands, except as otherwise noted)

To reflect the application of different bases of accounting as a result of the Business Combination, the tables provided below separate the Company’s results via a black line into two distinct periods as follows: (1) three and nine months ended September 30, 2024 (labeled “Predecessor”) and (2) three and nine months ended September 30, 2025 (labeled “Successor”).

Comparison of the nine months ended September 30, 2025 and September 30, 2024:

* not meaningful

Revenue

Revenue was $1,234 for the nine months ended September 30, 2025 (Successor) and $764 for the nine months ended September 30, 2024 (Predecessor), an increase of $470, or 61.5%. The increase was driven by an increase of $667 of product sales in the Technology segment, offset by a decrease of $197 of management fee income.

Cost of sales

Cost of sales was $7,192 for the nine months ended September 30, 2025 (Successor) and $777 for the nine months ended September 30, 2024 (Predecessor), an increase of $6,415, or 825.6%. The increase relates to the generation of revenue at the Technology segment resulting in an increase in costs related to supplies and materials amounting to $798, an increase in amortization of intangible assets of $3,660 and an increase in employee costs of $1,642.

General and administrative

General and administrative expense was $55,172 for the nine months ended September 30, 2025 (Successor) and $25,323 for the nine months ended September 30, 2024 (Predecessor), an increase of $29,849, or 117.9%. The increase in expenditure was attributed to increased stock-based compensation costs of $21,916, increased intangible asset amortization of $3,563 and increased professional and legal fees of $4,430.

Goodwill impairment

Goodwill impairment expense was $346,557 for the nine months ended September 30, 2025 (Successor) and $— for the nine months ended September 30, 2024 (Predecessor), an increase of $346,557. The increase was due to sustained decreases in the Company’s publicly quoted share price and market capitalization, which were sensitive to the general downward volatility experienced in the stock market during late February 2025 through April 2025. For the three months ended September 30, 2025 (Successor), there was no goodwill impairment charge.

Sales and marketing

Sales and marketing expense was $6,818 for the nine months ended September 30, 2025 (Successor) and $4,178 for the nine months ended September 30, 2024 (Predecessor), an increase of $2,640, or 63.2%. The increase was due to increased employee costs of $1,772 and an increase in advertising and marketing-related events and expenses primarily associated with the commercialization phase of the Technology segment of $745.

Research and development

Research and development expense was $18,472 for the nine months ended September 30, 2025 (Successor) and $5,978 for the nine months ended September 30, 2024 (Predecessor), an increase of $12,494 or 209.0%. The increase was due to an increase in amortization of intangible assets of $8,981, an increase in employee costs of $2,154 and an increase in development fees at Refinity of roughly $1,357.

Interest expense, net

Interest expense, net was $7,586 for the nine months ended September 30, 2025 (Successor) and $1,300 for the nine months ended September 30, 2024 (Predecessor), an increase of $6,286, or 483.5%. The increase was due to interest expense on the convertible debentures (collectively, the “Convertible Debentures”) issued to Yorkville pursuant to each of the securities purchase agreement, dated September 15, 2025 (“Securities Purchase Agreement”), and the securities purchase agreement, dated March 25, 2025, of $3,705, contractual interest expense for the term loan agreement entered into on October 22, 2024 by and among the Company and WTI Fund X, Inc. and WTI Fund XI, Inc. (collectively, “WTI Lenders”), which provides for a term loan facility in the aggregate principal amount of up to $50,000 (the “WTI Facility”) of $2,048, amortization of issuance costs on the WTI Facility of $1,457, partially offset by a net decrease in interest expense related to other debt instruments that have been paid down of $587 and by an increase in interest income of $389.

Net gain on investments

Net gain on investments was $— for the nine months ended September 30, 2025 (Successor) and $11,547 for the nine months ended September 30, 2024 (Predecessor), a decrease of $11,547 or 100.0%. The decrease was due to the gain on investment in PureCycle Technologies, Inc. (“PCT”) owned stock via Class PCTA units during the nine months ended September 30, 2024 (Predecessor), which is no longer consolidated in the Company’s condensed consolidated financial statements as a result of Business Combination.

Net loss on investments – due to related parties

Net loss on investments – due to related parties was $— for the nine months ended September 30, 2025 (Successor) and $468 for the nine months ended September 30, 2024 (Predecessor), a decrease of $468 or 100.0%. The decrease was due to an increase in the fair value of the liability of PCT stock owed to other parties for the nine months ended September 30, 2024 (Predecessor). The Class PCTA associated liabilities are no longer consolidated in the Company’s condensed consolidated financial statements as a result of the Business Combination.

Change in fair value of financial liabilities

The fair value of financial liabilities decreased by $19,496 for the nine months ended September 30, 2025 (Successor) and increased by $478 for the nine months ended September 30, 2024 (Predecessor), an increase to income of $19,974, or 4,178.7%. The increase to income was primarily due to decreases in fair value for warrants of $14,371 and earnout liabilities of $8,419 and was offset by a net increase in the fair value of the embedded derivative liabilities of $2,816.

Equity method investment (loss) income

Equity method investment loss was $10,282 for the nine months ended September 30, 2025 (Successor) and the equity method investment income was $893 for the nine months ended September 30, 2024 (Predecessor), a change of $11,175, or 1,251.4%. The loss during the nine months ended September 30, 2025 (Successor) is related to losses from the Company’s equity method investment in AeroFlexx of $10,233. The income during the nine months ended September 30, 2024 (Predecessor) was due to allocated income from the Innventus ESG Fund I, L.P. (the “ESG Fund”) of $1,742 offset by losses from the Company’s equity method investment in AeroFlexx of $849.

Realized gain on conversion of available for sale investment

Realized gain on conversion of available for sale investment was $1,507 for the nine months ended September 30, 2025 (Successor) and $— for the nine months ended September 30, 2024 (Predecessor), an increase of $1,507. The increase was due to the partial conversion of the AeroFlexx investment in debt securities resulting in a realized gain during the nine months ended September 30, 2025 (Successor).

Loss on extinguishment of debt

Loss on extinguishment of debt was $3,462 for the nine months ended September 30, 2025 (Successor) and $— for the nine months ended September 30, 2024 (Predecessor), an increase of $3,462. The increase was due to the modification of the WTI Facility in connection with the issuance of the first tranche of Convertible Debentures to Yorkville, which was accounted for as an extinguishment. There was no gain or loss on extinguishment of debt for the nine months ended September 30, 2024 (Predecessor).

Loss on extinguishment of related party debt

Loss on extinguishment of related party debt was $3,538 for the nine months ended September 30, 2025 (Successor) and $— for the nine months ended September 30, 2024 (Predecessor), an increase of $3,538. The increase was due to the extinguishment of the related party loans by additional issuances of the Company’s series C preferred stock, $0.0001 par value per share (“Series C Preferred Stock”) during the nine months ended September 30, 2025 (Successor). There was no gain or loss on extinguishment of related party debt for the nine months ended September 30, 2024 (Predecessor).

Loss on conversion of promissory notes

Loss on conversion of promissory notes was $— for the nine months ended September 30, 2025 (Successor) and $1,119 for the nine months ended September 30, 2024 (Predecessor), a decrease of $1,119 or 100.0%. This was due to the automatic conversion of promissory notes during the nine months ended September 30, 2024 (Predecessor) into equity instruments which was treated as an extinguishment thereby generating a loss. There was no equivalent transaction for the nine months ended September 30, 2025 (Successor).

Unrealized gain (loss) on available for sale debt securities - related party

Unrealized loss on available for sale debt securities - related party was $410 for the nine months ended September 30, 2025 (Successor) and $2,373 for the nine months ended September 30, 2024 (Predecessor), a decrease of $1,963 or 82.7%. The decrease was due to the fair value adjustment to the AeroFlexx investment in debt securities which are classified as available for sale.

Reclassification of realized gain on conversion of available for sale investments

Reclassification of realized gain on conversion of available for sale investments was $1,507 for the nine months ended September 30, 2025 (Successor) and $— for the nine months ended September 30, 2024 (Predecessor), an increase of $1,507. The increase was due to the partial conversion of the AeroFlexx investment in debt securities resulting in a realized gain during the nine months ended September 30, 2025 (Successor).

Loss attributable to Non-controlling interest

Loss attributable to non-controlling interests was $174,128 for the nine months ended September 30, 2025 (Successor) and $11,762 for the nine months ended September 30, 2024 (Predecessor), an increase of $162,366, or 1,380.4%. This was due to the increase in the Technology segment net loss as a result of goodwill impairment during the nine months ended September 30, 2025 (Successor) as compared to the nine months ended September 30, 2024 (Predecessor).

Comparison of the three months ended September 30, 2025 and September 30, 2024:

* not meaningful

Revenue

Revenue was $534 for the three months ended September 30, 2025 (Successor) and $317 for the three months ended September 30, 2024 (Predecessor), an increase of $217 or 68.5%. The increase was driven by an increase of $412 of product sales in the Technology segment, offset by a decrease of $196 of management fee income.

Cost of sales

Cost of sales was $4,147 for the three months ended September 30, 2025 (Successor) and $777 for the three months ended September 30, 2024 (Predecessor), an increase of $3,370 or 433.7%. The increase relates to the generation of revenue at the Technology segment resulting in an increase in costs related to material costs and supplies amounting to $509, an increase in amortization of intangible assets of $2,047 and an increase of employee costs of $655.

General and administrative

General and administrative expense was $16,927 for the three months ended September 30, 2025 (Successor) and $9,052 for the three months ended September 30, 2024 (Predecessor), an increase of $7,875, or 87.0%. The increase was due to increased stock-based compensation costs of $7,592 and amortization expense resulting from the intangibles acquired in the Business Combination of $661.

Sales and marketing

Sales and marketing expense was $2,514 for the three months ended September 30, 2025 (Successor) and $1,629 for the three months ended September 30, 2024 (Predecessor), an increase of $885, or 54.3%. The increase was due to increased employee costs of $590 and a $236 increase in advertising and marketing-related events and expenses primarily associated with the commercialization phase of the Technology segment.

Research and development

Research and development expense was $6,151 for the three months ended September 30, 2025 (Successor) and $2,533 for the three months ended September 30, 2024 (Predecessor), an increase of $3,618, or 142.8%. The increase was due to an increase of $2,693 of amortization of intangible assets and an increase in employee costs of $900.

Interest expense, net

Interest expense, net was $3,401 for the three months ended September 30, 2025 (Successor) and $852 for the three months ended September 30, 2024 (Predecessor), an increase of $2,549, or 299.2%. The increase was due to interest expense on the Convertible Debentures of $2,004, an increase in contractual interest expense on the WTI Facility of $690, amortization of issuance costs on the WTI Facility of $601, partially offset by a net decrease in interest expense related to other debt instruments that have been paid down of $956.

Net gain on investments

Net gain on investments was $— for the three months ended September 30, 2025 (Successor) and net gain on investments was $7,148 for the three months ended September 30, 2024 (Predecessor), a decrease of $7,148 or 100.0%. The decrease was due to the gain on investment in PCT owned stock via Class PCTA units during the three months ended September 30, 2024 (Predecessor), which is no longer consolidated in the Company’s condensed consolidated financial statements as a result of Business Combination.

Net loss on investments – due to related parties

Net loss on investments – due to related parties was $— for the three months ended September 30, 2025 (Successor) and $308 for the three months ended September 30, 2024 (Predecessor), a decrease of $308 or 100.0%. The decrease was due to a decrease in the fair value of the liability of PCT stock owed to other parties for the three months ended September 30, 2024 (Predecessor). The Class PCTA associated liabilities are no longer consolidated in the Company’s condensed consolidated financial statements as a result of the Business Combination.

Change in fair value of financial liabilities

The fair value of financial liabilities increased by $4,109 for the three months ended September 30, 2025 (Successor) and was $— for the three months ended September 30, 2024 (Predecessor), an overall decrease to income of $4,109. The decrease to income was primarily due to an increase in fair value of the earnout liabilities of $1,090 and a net increase in the fair value of the embedded derivative liabilities of $3,272, offset by a decrease in the fair value of the warrant liabilities of $254.

Equity method investment (loss) income

Equity method investment loss was $1,602 for the three months ended September 30, 2025 (Successor) and equity method investment income was $109 for the three months ended September 30, 2024 (Predecessor), a decrease of $1,711, or 1,569.7%. The loss during the three months ended September 30, 2025 (Successor) is related to losses from the Company’s equity method investment in AeroFlexx of $1,621. The income during the three months ended September 30, 2024 (Predecessor) was due to allocated income from the ESG Fund of $400, offset by losses from the Company’s equity method investment in AeroFlexx of $290.

Unrealized gain (loss) on available for sale debt securities - related party

Unrealized gain on available for sale debt securities - related party was $281 for the three months ended September 30, 2025 (Successor) and unrealized loss on available for sale debt securities - related party amounted to $2,373 for the three months ended September 30, 2024 (Predecessor), a change of $2,654, or 111.8%. The change was due to the fair value adjustment to the AeroFlexx investment in debt securities which are classified as available for sale.

Loss attributable to Non-controlling interest

Loss attributable to non-controlling interests was $6,403 for the three months ended September 30, 2025 (Successor) and $5,430 for the three months ended September 30, 2024 (Predecessor), an increase of $973, or 17.9%. This increase was due to the increase in the Technology segment net loss.

Non-GAAP Financial Measures

We use certain financial measures that are not calculated in accordance with generally accepted accounting principles in the U.S. (“GAAP”) to supplement our consolidated financial statements. These non-GAAP financial measures provide additional information to investors to facilitate comparisons of past and present operating results, identify trends in our underlying operating performance, and offer greater transparency on how we evaluate our business activities. These measures are integral to our processes for budgeting, managing operations, making strategic decisions, and evaluating our performance.

Our primary non-GAAP financial measures are EBITDA and Adjusted EBITDA. We define EBITDA as net income before interest, income taxes, and depreciation and amortization. Adjusted EBITDA is defined as EBITDA further adjusted to exclude certain non-cash items, non-recurring expenses and other items that are not indicative of our core operating activities. These may include stock-based compensation, acquisition costs and other financial items. We believe Adjusted EBITDA is valuable for investors and analysts as it provides additional insight into our operational performance, excluding the impacts of certain financing, investing, and other non-operational activities. This measure helps in comparing our current operating results with prior periods and with those of other companies in our industry. It is also used internally for allocating resources efficiently, assessing the economic outcomes of acquisitions and strategic decisions, and evaluating the performance of our management team.

There are limitations to Adjusted EBITDA, including its exclusion of cash expenditures, future requirements for capital expenditures and contractual commitments, and changes in or cash requirements for working capital needs. Adjusted EBITDA also omits significant interest expenses and related cash requirements for interest and payments. While depreciation and amortization are non-cash charges, the associated assets will often need to be replaced in the future, and Adjusted EBITDA does not reflect the cash required for such replacements. Additionally, Adjusted EBITDA does not account for income or other taxes or necessary cash tax payments.

Investors should use caution when comparing our non-GAAP measure to similar metrics used by other companies, as definitions can vary. Adjusted EBITDA should not be considered in isolation or as a substitute for GAAP financial measures. We provide Adjusted EBITDA as supplemental information to enhance the overall understanding of our financial performance.

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

(1) Interest Expense, net, includes interest incurred on our various borrowing facilities and the amortization of debt issuance costs.

(2) Transaction and other related costs – For the three and nine months ended September 30, 2024 (Predecessor), this is comprised of consulting, legal, and other professional fees related to the Business Combination.

(3) Change in fair value of financial liabilities – For the three and nine months ended September 30, 2025 (Successor), the change in fair value of financial liabilities primarily consists of the change in fair value of the warrant liability, the earnout liability and the embedded derivatives in various instruments. For the three and nine months ended September 30, 2024 (Predecessor), this is comprised entirely of the change in fair value of the embedded derivative associated with the convertible notes.

(4) Stock based compensation – For the three and nine months ended September 30, 2025 (Successor), stock based compensation primarily consisted of awards in the 2024 Equity and Incentive Plan entered into on October 2, 2024 subsequent to the Business Combination. These awards consisted of Stock Options, Restricted Stock Units, and Stock Appreciation Rights. Further, a portion of this expense was related to share-based payment employee incentive plans in existence at subsidiaries. Additional Stock Options were granted in February 2025 and additional Restricted Stock Units were granted in June 2025 and August 2025 which are included in the stock-based compensation caption for their respective periods. For the three and nine months ended September 30, 2024 (Predecessor), stock-based compensation was comprised wholly of share-based payment employee incentive plans in existence at Innventure LLC and other subsidiaries.

(5) Goodwill impairment - For the nine months ended September 30, 2025 (Successor), the Company recognized goodwill impairment due to sustained decreases in the Company’s publicly quoted share price and market capitalization, which were, at least in part, sensitive to the general downward volatility experienced in the stock market from late February 2025 through April 2025. The publicly quoted share price stabilized some in May 2025 and June 2025. For the three months ended September 30, 2025 (Successor), there was not a triggering event that occurred, resulting in no additional goodwill impairment charge.There was no similar goodwill impairment charge for the three and nine months ended September 30, 2024 (Predecessor).

(6) Loss on extinguishment of debt - For the three and nine months ended September 30, 2025 (Successor), the Company modified the WTI Facility, and such modification was accounted for as a debt extinguishment while no debt was repaid. There was no loss on extinguishment of debt for the three and nine months ended September 30, 2024 (Predecessor).

(7) Loss on extinguishment of related party debt - For the three and nine months ended September 30, 2025 (Successor), the Company extinguished certain related party debts by issuing Series C Preferred Stock. There was no loss on extinguishment of related party debt for the three and nine months ended September 30, 2024 (Predecessor).

In presenting Adjusted EBITDA, we aim to provide investors with an additional tool for assessing the operational performance of our business. It serves as a useful complement to our GAAP results, offering a more comprehensive understanding of our financial health and operational efficiencies.

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

As discussed in more detail below, management has concluded that there is substantial doubt about our ability to continue as a going concern within one year after the date that these consolidated financial statements included in Item 1. of this Form 10-Q were issued. The condensed consolidated financial statements have been prepared assuming that we will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty.

In assessing liquidity, we monitor and analyze cash on hand and operating expenditure commitments. Our material cash requirements are from working capital requirements and operating expense obligations.

Sources of Liquidity

The following is a summary of the components of our liquidity as of September 30, 2025 and December 31, 2024:

Our long-term future liquidity requirements will depend on many factors, including funding required by us and our Operating Companies to (i) support the growth of the business and the current business strategy; (ii) fund working capital, capital expenditures and general corporate expenditures; and (iii) support other business opportunities and expenditures. As of September 30, 2025, we had limited cash on hand, and over the next 12 months, we anticipate that Innventure and its Operating Companies will require at least $50,000 to meet our collective operating and strategic needs, with an additional $25,000 required to support growth across our Operating Companies in accordance with our current business plan. We expect to meet these needs through a combination of cash on hand, operating cash flows, strategic investments, the Standby Equity Purchase Agreement (the “SEPA”) with Yorkville (maximum remaining availability of approximately $67,000 as of September 30, 2025, subject to the satisfaction of certain conditions in the SEPA and the Purchase Agreements, as described below, which impose additional limitations and conditions upon our ability to access the SEPA) and additional financings completed by us and our Operating Companies. Summarized below are equity and debt financing activities made during the nine months ended September 30, 2025 (Successor) and thereafter:

Recent equity financing activities include:

• The Company entered into the SEPA with Yorkville in October 2023, which provides the Company the right, but not the obligation, to sell to Yorkville up to $75,000 in the Company’s common stock, par value $0.0001 per share (“Common Stock”) from time to time through November 2027 (of which approximately $67,000 in Common Stock remains available for issuance under the SEPA), subject to the satisfaction of certain conditions in the SEPA and the Purchase Agreements, which impose additional limitations and conditions upon the Company’s ability to access the SEPA. During the nine months ended September 30, 2025 (Successor), the Company issued 997,573 shares of Common Stock pursuant to the SEPA in payment of $4,937 of principal and $247 of payment premiums for the Convertible Debentures. In addition to the Common Stock issuances pursuant to the SEPA made in repayment towards the Convertible Debentures, the Company sold 73,993 shares of Common Stock under the SEPA, raising $931 in cash proceeds.
• Accelsius raised a total of $7,120 through the issuance of Accelsius Series A Preferred units during the nine months ended September 30, 2025 (Successor).
• The Company issued 2,885,848 shares of Series C Preferred Stock on March 24, 2025 for a total amount of $28,858, with the consideration received in the form of cash, services, and related party debt cancellation.
• Accelsius raised $25,000 on October 2, 2025 through the issuance of 685,163 Series B-1 units to JCI. $7,337 of debt converted to equity in the form of 251,452 Series B-2 units and 125,725 B-2 Warrants in conjunction with the issuance of Series B-1 units by Accelsius.
• The Company raised $9,751 on October 3, 2025 through a private placement by issuing 1,625,235 shares of Common Stock at $6.00 per share and Series A warrants to purchase 1,625,235 shares of Common Stock.

Recent debt financing activities include:

• The Company issued $30,000 in Convertible Debentures in April and May 2025, split between two tranches. The Company received $18,000 and $9,000 in cash proceeds for the first and second tranche, respectively. In connection with the issuance of the Convertible Debentures, the Company issued two warrants (the “2025 WTI Warrants”) to purchase, at a price of $0.01 per share (subject to certain limitations and adjustment), up to an aggregate total of 495,074 shares of Common Stock (subject to future adjustments to the number and type of shares pursuant to the 2025 WTI Warrants), to WTI Fund X, LLC and WTI Fund XI, LLC, exercisable through March 31, 2035.
• Accelsius entered into unsecured convertible notes (“Related Party Term Convertible Notes”) with certain investors deemed to be Related Parties (as defined in the Company’s Related Party Transactions Policy) for a total principal amount of $4,250 in June 2025. The Related Party Term Convertible Notes are convertible into Series A Units of Accelsius and have a maturity date of December 31, 2026.
• Accelsius entered into an unsecured Convertible Promissory Note (“CPN”) with a related party lender in June 2025 that is drawable in three tranches with 15% interest and a $35 loan fee. As of September 30, 2025, $2,000 was drawn down by Accelsius. On October 8, 2025, the Company repaid the CPN in full due to its related party lender, amounting to $2,000 in principal, $74 in interest, and $35 for the loan fee.
• Accelsius issued unsecured convertible notes with various other parties for a total principal amount of $7,750 in June and July of 2025 that are convertible into Series A Units of Accelsius starting January 2026.
• Accelsius entered into unsecured convertible promissory notes totaling $9,150 in principal between August 12, 2025 and September 19, 2025, with $7,300 in cash proceeds received by September 30, 2025.
• The Company entered into the Securities Purchase Agreement with Yorkville on September 15, 2025 to issue the New Convertible Debentures. Of the $15,000 authorized, one tranche totaling $10,000 was issued before September 30, 2025 totaling $9,000 in cash proceeds. On November 12, 2025, the Company issued the second tranche of the New Convertible Debentures for $5,000, totaling $4,500 in cash proceeds. In addition, as provided by the Securities Purchase Agreement, for so long as any amounts remain outstanding under the Convertible Debentures, unless otherwise agreed by Yorkville: (A) the Company shall not submit an advance notice in writing to Yorkville under the SEPA (each, an “Advance,” and notice of such request, an “Advance Notice”) prior to January 15, 2026 (the date that is four months from September 15, 2025); (B) thereafter, the Company may submit an Advance Notice provided that an Amortization Event (as defined in the Convertible Debentures) has not occurred, or has occurred but is not continuing, and certain other conditions have been satisfied under the Convertible Debentures; and (C) notwithstanding the limitations set forth in (A) and (B) above, if an Amortization Event has occurred and is continuing, the Company may submit an Advance Notice provided that (1) the Company requests an Option 2 Pricing Period (as defined in the SEPA) in such Advance Notice and (2) all of the proceeds from such Advance Notice shall be used to satisfy payments due or coming due pursuant to the Convertible Debentures.
• Pursuant to the Fifth Amendment to Loan and Security Agreement between Innventure LLC and Accelsius, on September 18, 2025 the Company elected to convert $550 of accrued interest outstanding into 45,159 Series A Units of Accelsius.

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

Cash Flows

Cash flows associated with operating, investing and financing activities for the nine months ended September 30, 2025 (Successor) and nine months ended September 30, 2024 (Predecessor) are summarized as follows:

Net Cash Used in Operating Activities

Cash flows used in operating activities were $56,328 for the nine months ended September 30, 2025 (Successor), as compared to $18,647 for the nine months ended September 30, 2024 (Predecessor), an increase of $37,681, or 202.1%. The increase is primarily related to an increase in the Company’s operating expenses.

Net Cash Used in by Investing Activities

Cash flows used in investing activities were $4,079 for the nine months ended September 30, 2025 (Successor), as compared to $5,822 for the nine months ended September 30, 2024 (Predecessor), a decrease of $1,743 or 29.9%. The decrease is primarily related to lower investments in debt securities and advances to our related parties, partially offset by reduced proceeds from sales of investments.

Net Cash Provided by Financing Activities

Cash flows provided by financing activities were $63,349 for the nine months ended September 30, 2025 (Successor), as compared to $38,191 for the nine months ended September 30, 2024 (Predecessor), an increase of $25,158 or 65.9%. The increase is primarily related to proceeds from the issuance of additional debt financing.

Indebtedness

Refer to Note 5. Borrowings to our condensed consolidated financial statements for the three and nine months ended September 30, 2025 (Successor) and three and nine months ended September 30, 2024 (Predecessor) included in Item 1. of this Form 10-Q for a discussion of our indebtedness.

Contractual Obligations

The following table presents a summary of our contractual obligations, including payments due by period, as of September 30, 2025:

Going Concern

We have experienced recurring losses from operations and negative cash flows from operating activities. In addition, we continue to have an ongoing need to raise significant additional cash from outside sources to sustain our operations and fund our growth plans.

In connection with our assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that these conditions raise substantial doubt about our ability to continue as a going concern within one year after the date of the condensed consolidated financial statements included in Item 1. of this Form 10-Q. If we are unable to obtain adequate capital from public or private equity or debt financing or otherwise generate sufficient revenues from our Operating Companies to support our cost structure within the normal operating cycle of a twelve (12) month period, we may have to implement additional cost reduction measures or adjust the timing or scope of certain operations at Innventure or certain Innventure Companies, in part or in full, to help manage liquidity. If we raise additional funds through the issuance of additional debt or equity securities (at either the Innventure or Operating Company level), it could result in substantial dilution to our existing stockholders and increased fixed payment obligations, and these securities may have rights senior to those of our Common Stock. See “Item 1A. Risk Factors – Risks Related to Innventure’s Business – There is uncertainty regarding Innventure’s ability to maintain liquidity sufficient to operate its business effectively, which raises substantial doubt about its ability to continue as a going concern.” in our Form 10-K.

We can make no assurances that required financings will be available for the amounts needed, or on terms commercially acceptable to us, if at all. If subsequent capital raises or revenues from operations at the Innventure Companies are insufficient to bridge financial and liquidity shortfalls (or both), there would likely be a material adverse effect on our business and financial condition that would materially adversely affect our ability to continue as a going concern.

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

Critical Accounting Estimates

As described in Note 2. Accounting Policies to our unaudited condensed consolidated financial statements included in this Form 10-Q, there have been no material changes to our critical accounting policies and estimates as compared to the critical accounting policies and estimates disclosed in the 2024 Annual Report.

We are a smaller reporting company, as defined in Rule 12b-2 under the Exchange Act, for this reporting period and are not required to provide the information required under this item.

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(e) and 15(d)-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this report. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports that are filed or submitted under the Exchange Act is accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosures. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Based on that evaluation, the Chief Executive Officer and the Chief Financial Officer have concluded that the Company's disclosure controls and procedures were not effective at a reasonable level of assurance as of September 30, 2025, because of the material weaknesses in our internal control over financial reporting.

The material weaknesses identified were as follows:

• Innventure’s system of internal controls over financial reporting failed to prevent or detect material adjustments necessary to appropriately present certain complex and significant unusual transactions in accordance with GAAP due primarily to insufficient staffing of personnel possessing the appropriate accounting and financial reporting knowledge and experience to review and monitor third-party consultants;
• Innventure’s system of internal controls over financial reporting did not include necessary information technology general controls including related to (i) periodic user access reviews, (ii) user provisioning and de-provisioning, (iii) restriction of privileged access and (iv) authentication settings;
• Innventure did not maintain effectively designed and implemented controls over the costing and existence of inventory as of September 30, 2024, including controls over the calculation of such inventory on the weighted average basis;
• Innventure did not maintain evidence of control procedures over the periodic reconciliation of significant accounts. This included lack of segregation of duties and lack of review.

We have developed a remediation plan for the material weaknesses that have been identified, including enhancing our complement of resources with accounting and internal control knowledge through additional hiring and/or training to implement and perform additional controls over: (a) the initial and subsequent accounting for complex and significant unusual transactions, (b) general IT controls and (c) segregation of duties. We are currently implementing this plan. When fully implemented and operating effectively, such enhancements are expected to remediate the material weaknesses described above. However, we cannot provide any assurance that these remediation efforts will be successful or that our internal control over financial reporting will be effective as a result of these efforts.

Changes in Internal Control over Financial Reporting

Management is in the process of establishing and is refining its internal procedures and controls to address the material weaknesses previously disclosed.

Other than as described above, during the most recent fiscal quarter, there have been no changes in the Company's internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

We are a smaller reporting company, as defined in Rule 12b-2 under the Exchange Act, for this reporting period and are not required to provide the information required under this item.