Innventure, Inc.

Previous wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes as of March 31, 2026 and for the three months ended March 31, 2026 and 2025 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, 2025 and 2024 included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (“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.

Current wording

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes as of June 30, 2026 and for the three and six months ended June 30, 2026 and 2025 included in Item 1 of this Form 10-Q and our and our predecessor’s, as applicable, audited consolidated financial statements and related notes as of and for the years ended December 31, 2025 and 2024 included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (“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.

Previous wording

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 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, Accelsius, and those subsidiary companies that Innventure may found, fund, and operate going forward, the “Innventure Companies”). Refer to Item 1. “Business” of the Form 10-K for a detailed discussion of our business activities.

Current wording

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 stockholders and other stakeholders through positive cash flow generated through long term ownership and operation of AeroFlexx, LLC (“AeroFlexx”), Accelsius Holdings LLC (“Accelsius”) and Refinity Olefins, LLC (“Refinity” and, together with AeroFlexx, Accelsius, and those subsidiary companies that Innventure may found, fund, and operate going forward, the “Innventure Companies”). Refer to Item 1. “Business” of the Form 10-K for a detailed discussion of our business activities.

Previous wording

Results of Operations for the three months ended March 31, 2026 and 2025

Current wording

Results of Operations for the three and six months ended June 30, 2026 and 2025

Previous wording

Revenue was $1.4 million and $0.2 million for the three months ended March 31, 2026 and 2025, respectively, an increase of $1.2 million. The increase was driven by an increase of product sales and service revenue in the Technology segment.

Current wording

Revenue was $1.0 million and $0.5 million for the three months ended June 30, 2026 and 2025, respectively, an increase of $0.5 million or 100.2%. The increase was driven by an increase of product sales and service revenue in the Technology segment.

Previous wording

Sales and marketing expense was $2.9 million and $2.1 million for the three months ended March 31, 2026 and 2025, respectively, an increase of $0.8 million, or 38.2%. The increase is due to increased marketing-related events and expenses primarily associated with the commercialization of the Technology segment, and employee expenses, partially offset by a decrease in marketing related professional fees.

Current wording

Sales and marketing expense was $3.1 million and $2.2 million for the three months ended June 30, 2026 and 2025, respectively, an increase of $0.9 million, or 39.9%. The increase was due to increased marketing-related events and expenses primarily associated with the commercialization of the Technology segment, and employee expenses, partially offset by a decrease in marketing related professional fees.

Previous wording

Research and development expense was $7.8 million and $6.3 million for the three months ended March 31, 2026 and 2025, respectively, an increase of $1.5 million, or 25.4%. The increase was due to increased expense in the development of new technologies related to Refinity.

Current wording

Research and development expense was $9.8 million and $6.1 million for the three months ended June 30, 2026 and 2025, respectively, an increase of $3.7 million, or 61.2%. The increase was due to increased expenses in the development of new technologies related to Refinity.

Previous wording

Cost of sales was $5.3 million and $0.2 million for the three months ended March 31, 2026 and 2025, respectively, an increase of $5.1 million. The increase relates to the generation of revenue in the Technology segment resulting in an increase in costs related to supplies and materials, amortization of intangible assets, and employee costs.

Current wording

Cost of sales was $10.3 million and $3.0 million for the six months ended June 30, 2026 and 2025, respectively, an increase of $7.3 million. The increase relates to the generation of revenue in the Technology segment resulting in an increase in costs related to supplies and materials, amortization of intangible assets, and employee costs.

Previous wording

General and administrative expense was $12.8 million and $19.7 million for the three months ended March 31, 2026 and 2025, respectively, a decrease of $6.9 million or 35.2%. The decrease in expenditures was due to a decrease in stock-based compensation costs and a decrease in professional and legal fees.

Current wording

General and administrative expense was $27.2 million and $38.2 million for the six months ended June 30, 2026 and 2025, respectively, a decrease of $11.0 million or 28.8%. The decrease in expenditures was due to a decrease in stock-based compensation costs and a decrease in professional and legal fees.

Previous wording

Goodwill impairment expense was $233.2 million for the three months ended March 31, 2025. The impairment was due to sustained decreases in the Company’s publicly quoted share price and market capitalization, which were sensitive to the general downward volatility experienced in the stock market during the three months ended March 31, 2025. There was no goodwill impairment charge for three months ended March 31, 2026.

Current wording

Goodwill impairment expense was $346.6 million for the six months ended June 30, 2025. The impairment was due to sustained decreases in the Company’s publicly quoted share price and market capitalization, which were sensitive to the general downward volatility experienced in the stock market during the six months ended June 30, 2025. There was no goodwill impairment charge for the six months ended June 30, 2026.

Previous wording

Interest expense, net was $1.0 million and $1.5 million for the three months ended March 31, 2026 and 2025, respectively, a decrease of $0.5 million, or 35.7%. The decrease was due to a decrease in interest expense on related party notes that were paid off during the three months ended March 31, 2025, and a decrease in interest expense on the Series 1 Promissory Notes, which were repaid during the three months ended March 31, 2026.

Current wording

Interest expense, net was $1.5 million and $4.2 million for the six months ended June 30, 2026 and 2025, respectively, a decrease of $2.7 million, or 63.7%. The decrease was due to a decrease in interest expense on related party notes that were paid off during the six months ended June 30, 2025, a decrease in interest expense on the unsecured promissory notes issued and sold to investors between 2018 and 2021, which were repaid during the six months ended June 30, 2026, and due to a decrease in interest related to the amortization of issuance costs for the Convertible Debentures, which were either converted to equity or paid off during the six months ended June 30, 2026.

Previous wording

The fair value of financial liabilities increased by $0.1 million and $16.4 million for the three months ended March 31, 2026 and 2025, respectively, a decrease of $16.3 million. The change was primarily due to a lower increase in fair value of liabilities for warrants issued and earnout liabilities as compared to prior year, partially offset by a gain in fair value of the private placement warrants.

Current wording

The fair value of financial liabilities increased by $2.1 million and decreased by $23.6 million for the six months ended June 30, 2026 and 2025, respectively, a change of $25.7 million. The change was primarily due to an increase in fair value of liabilities for warrants issued and earnout liabilities as compared to prior year, partially offset by a decrease in fair value of the private placement warrants.

Previous wording

Equity method investment loss was $1.5 million and $6.8 million for the three months ended March 31, 2026 and 2025, respectively a change of $5.2 million, or 77.6%.The change is related to losses from the Company’s equity method investment in AeroFlexx.

Current wording

Equity method investment loss was $3.0 million and $8.7 million for the six months ended June 30, 2026 and 2025, respectively, a change of $5.7 million, or 65.4%. The change is related to losses from the Company’s equity method investment in AeroFlexx.

Previous wording

Realized gain on conversion of available for sale investment was $1.5 million for three months ended March 31, 2025. The gain was due to the partial conversion of the AeroFlexx investment in debt securities resulting in a realized gain. There was no realized gain on conversion of available for sale investment for three months ended March 31, 2026.

Current wording

Realized gain on conversion of available for sale investment was $1.5 million for the six months ended June 30, 2025. The gain was due to the partial conversion of the AeroFlexx investment in debt securities resulting in a realized gain. There was no realized gain on conversion of available for sale investment for the six months ended June 30, 2026.

Previous wording

Loss on extinguishment of debt was $1.0 million for the three months ended March 31, 2026. This is due to a loss incurred as a result of the repayment of the Convertible Debentures. There was no loss on extinguishment of debt for three months ended March 31, 2025.

Current wording

Loss on extinguishment of debt was $1.0 million and $3.5 million for the six months ended June 30, 2026 and 2025, respectively. The loss for the six months ended June 30, 2026, is due to a loss incurred as a result of the repayment of the Convertible Debentures. The prior-year loss was due to the modification of the WTI Facility in connection with the issuance of the first tranche of the Convertible Debentures.

Previous wording

Loss on extinguishment of related party debt was $3.5 million for the three months ended March 31, 2025 due to the extinguishment of the related party loans by additional issuances of the Company’s series C preferred stock, $0.0001 par value per share (“Series C Preferred Stock”). There was no gain or loss on extinguishment of related party debt for the three months ended March 31, 2026.

Current wording

Loss on extinguishment of related party debt was $3.5 million for the six months ended June 30, 2025 due to the extinguishment of the related party loans by additional issuances of the Company’s Series C preferred stock, $0.0001 par value per share (“Series C Preferred Stock”). There was no gain or loss on extinguishment of related party debt for the six months ended June 30, 2026.

Previous wording

(2) Change in fair value of financial liabilities – For the three months ended March 31, 2026 and 2025, the change in fair value of financial liabilities primarily consists of the change in fair value of the warrant liability, the earnout liability and the embedded derivatives in various instruments.

Current wording

(2) Change in fair value of financial liabilities – For the three and six months ended June 30, 2026 and 2025, the change in fair value of financial liabilities primarily consists of the change in fair value of the warrant liability, the earnout liability and the embedded derivatives in various instruments.

Previous wording

(3) Stock based compensation – For the three months ended March 31, 2026 and 2025, stock based compensation primarily consisted of awards in the 2024 Equity and Incentive Plan. 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.

Current wording

(3) Stock based compensation – For the three and six months ended June 30, 2026 and 2025, stock based compensation primarily consisted of awards in the 2024 Equity and Incentive Plan. 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.

Previous wording

(4) Goodwill impairment - For the three months ended March 31, 2025. the Company recognized goodwill impairment due to sustained decreases in the Company’s publicly quoted share price and market capitalization, which were, at least in part, sensitive to the general downward volatility experienced in the stock market in the comparable period in the prior year.

Current wording

(4) Goodwill impairment - For the three and six months ended June 30, 2025, the Company recognized goodwill impairment due to sustained decreases in the Company’s publicly quoted share price and market capitalization, which were, at least in part, sensitive to the general downward volatility experienced in the stock market in the comparable period in the prior year. There was no goodwill impairment for the three and six months ended June 30, 2026.

Previous wording

(5) Loss on extinguishment of debt - For the three months ended March 31, 2026 the Company repaid the Convertible Debentures, which resulted in an aggregate of $1.0 million loss on extinguishment of debt. There was no loss on extinguishment of debt for three months ended March 31, 2025. (6) Loss on extinguishment of related party debt - For the three months ended March 31, 2025, 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 months ended March 31, 2026.

Current wording

(5) Loss on extinguishment of debt - For the six months ended June 30, 2026 the Company repaid the Convertible Debentures, which resulted in an aggregate of $1.0 million loss on extinguishment of debt. There was no loss on extinguishment of debt for the three months ended June 30, 2026. For the three and six months ended June 30, 2025, the Company recognized a loss on extinguishment of debt of $3.5 million in connection with the modification of the WTI Facility.

Previous wording

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 condensed 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.

Current wording

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 the condensed 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.

Previous wording

Our long-term future liquidity requirements will depend on many factors, including funding required by us and our Innventure Companies to (i) support the growth of each of Innventure and the Innventure Companies and their respective business strategies; (ii) fund working capital, capital expenditures and general corporate expenditures; and (iii) support other business opportunities and expenditures. As of March 31, 2026, and over the next 12 months, we anticipate that Innventure will require at least $50.0 million to meet its operating and strategic needs, with up to an additional $25,000 to support our Innventure Companies to the extent that they do not raise capital independently.

Current wording

Our long-term future liquidity requirements will depend on many factors, including funding required by us and our Innventure Companies to (i) support the growth of each of Innventure and the Innventure Companies and their respective business strategies; (ii) fund working capital, capital expenditures and general corporate expenditures; and (iii) support other business opportunities and expenditures. As of June 30, 2026, and over the next 12 months, we anticipate that Innventure will require at least $50.0 million to meet its operating and strategic needs, with up to an additional $25.0 million to support our Innventure Companies to the extent that they do not raise capital independently.

Previous wording

We expect to meet these needs through a combination of cash on hand, operating cash flows, strategic investments, the SEPA with Yorkville (maximum remaining availability of approximately $54.9 million as of May 8, 2026 subject to the satisfaction of certain conditions in the SEPA) and additional financings completed by us and our Innventure Companies. While Innventure believes that Accelsius, AeroFlexx and Refinity have reached sufficient levels of maturity to be in a position to raise their own financing, if required, Innventure intends to continue to provide financial support to these Innventure Companies. Summarized below are equity and debt financing activities made for the three months ended March 31, 2026 and as of the date of this Form 10-Q.

Current wording

We expect to meet these needs through a combination of cash on hand, operating cash flows, strategic investments, the SEPA with Yorkville (maximum remaining availability of approximately $53.9 million subject to the satisfaction of certain conditions in the SEPA) and additional financings completed by us and our Innventure Companies. While Innventure believes that Accelsius, AeroFlexx and Refinity have reached sufficient levels of maturity to be in a position to raise their own financing, if required, Innventure intends to continue to provide financial support to these Innventure Companies. Summarized below are equity and debt financing activities made for the six months ended June 30, 2026 and as of the date of this Form 10-Q.

Previous wording

•On January 9, 2026, the Company sold 67,000 shares of Common Stock under the SEPA, raising $0.3 million in cash proceeds. During the period between April 1, 2026 and May 13, 2026, the Company sold an additional 1,950,000 shares of Common Stock under the SEPA, raising $11.9 million in cash proceeds.

Current wording

•During the six months ended June 30, 2026, the Company sold 2,164,552 shares of Common Stock under the SEPA, raising $13.3 million in cash proceeds.

Previous wording

Cash flows associated with operating, investing and financing activities for the three months ended March 31, 2026 and 2025 are summarized as follows:

Current wording

Cash flows associated with operating, investing and financing activities for the six months ended June 30, 2026 and 2025 are summarized as follows:

Previous wording

Cash flows used in operating activities were $34.0 million for the three months ended March 31, 2026, as compared to $14.7 million for the three months ended March 31, 2025, an increase of $19.3 million, or 131.6%. The increase is primarily related to working capital impacts.

Current wording

Cash flows used in operating activities were $59.5 million for the six months ended June 30, 2026, as compared to $36.8 million for the six months ended June 30, 2025, an increase of $22.7 million, or 61.8%. The increase is primarily related to working capital impacts.

Previous wording

Cash flows used in investing activities were $0.8 million for the three months ended March 31, 2026, as compared to $3.3 million for the three months ended March 31, 2025, a decrease of $2.4 million or 74.0%. The decrease is primarily related to lower remittances in investments in available-for-sale debt securities in the current period.

Current wording

Cash flows used in investing activities were $1.1 million for the six months ended June 30, 2026, as compared to $3.6 million for the six months ended June 30, 2025, a decrease of $2.6 million or 70.5%. The decrease is primarily related to lower remittances in investments in available-for-sale debt securities in the current period.

Previous wording

Cash flows provided by financing activities were $29.8 million for the three months ended March 31, 2026, as compared to $8.2 million for the three months ended March 31, 2025, an increase of $21.6 million or 263.1%. The increase is primarily related to proceeds from the issuance of equity, partially offset by the repayment of debts.

Current wording

Cash flows provided by financing activities were $41.6 million for the six months ended June 30, 2026, as compared to $41.2 million for the six months ended June 30, 2025, an increase of $0.4 million or 1.0%. The increase is primarily related to proceeds from the issuance of equity, partially offset by the repayment of debts.

Previous wording

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 issuance 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 Innventure Companies to support our cost structure within the normal operating cycle of a twelve (12) month period, we may have to implement additional cost reduction measures or adjust the timing or scope of certain operations at Innventure or certain Innventure Companies, in part or in full, to help manage liquidity. If we raise additional funds through the issuance of additional debt or equity securities (at either the Innventure or Innventure Company level), it could result in substantial dilution to our existing stockholders and 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.

Current wording

We have experienced recurring losses from operations and negative cash flows from operating activities. In addition, we and our Innventure Companies continue to have an ongoing need to raise additional cash from outside sources to sustain our and our Innventure Companies’ operations and fund our growth plans. In connection with our assessment of going concern considerations in accordance with Financial Accounting Standards 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 issuance 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 Innventure Companies to support our cost structure within the normal operating cycle of a twelve (12) month period, we may have to implement additional cost reduction measures or adjust the timing or scope of certain operations at Innventure or certain Innventure Companies, in part or in full, to help manage liquidity. If we raise additional funds through the issuance of additional debt or equity securities (at either the Innventure or Innventure Company level), it could result in substantial dilution to our existing stockholders and 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.

Previous wording

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 2025 Annual Report.

Current wording

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 our Form 10-K.