INNOVATE Corp.

16. Related Parties

As of March 31, 2026, Lancer Capital held $2.3 million of the Company's 2027 Convertible Notes, which were issued on August 4, 2025, in exchange for the $2.0 million of principal amount of the Company's 2026 Convertible Notes held by Lancer prior to the exchange. The principal amount of the 2027 Convertible Notes includes capitalized interest and extension fees. As of March 31, 2026, the $2.3 million in 2027 Convertible Notes are convertible into 54,338 shares of common stock of INNOVATE. As of December 31, 2025, Lancer Capital held the $2.2 million in 2027 Convertible Notes which were convertible into 51,874 shares of common stock of INNOVATE. During both the three months ended March 31, 2026 and 2025, Lancer Capital earned less than $0.1 million in interest relating to these notes. Refer to Note 11. Debt Obligations for additional information on the Convertible Notes.

CGIC is a former significant shareholder and is the shareholder of the Company's Series A-3 Preferred Stock and Series A-4 Preferred Stock. Refer to Note 15. Temporary Equity for additional information. In addition, as of March 31, 2026 and December 31, 2025, the Company owed $47.8 million and $45.9 million, respectively, in principal amount of a promissory note owed to CGIC. Refer to Note 11. Debt Obligations for additional information. During the three months ended March 31, 2026, the Company paid $0.6 million to CGIC related to a tax refund received from the IRS.

As of March 31, 2026 and December 31, 2025, R2 Technologies had $49.4 million and $47.9 million, respectively, in principal amount of a 12.0% senior secured promissory note due to Lancer Capital. Refer to Note 11. Debt Obligations for additional information.

For the three months ended March 31, 2026 and 2025, R2 Technologies recognized revenue of $0.5 million and $0.4 million, respectively from sales and profit sharing agreements with a subsidiary of Huadong, a related party of R2 Technologies. There were $0.2 million and $0.6 million of related receivables from this subsidiary of Huadong as of March 31, 2026 and December 31, 2025, respectively.

Share-based compensation and royalty expenses related to Blossom Innovations, LLC ("Blossom"), an investor of R2 Technologies since 2014, totaled $0.1 million and $0.3 million, for the three months ended March 31, 2026 and 2025, respectively. The related payables due to Blossom totaled $0.2 million as of both March 31, 2026, and December 31, 2025.

Refer to Note 6. Investments for transactions with equity method investees of the Company.