Company: INV
Filing Date: 2025-05-09
Form Type: ARS
Source: 0001628280-25-024065
Chunk: 113

Company: Innventure, Inc.
Filing Date: 2025-05-09
Form: ARS
Chunk 113
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 or revenue or event-based milestone 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 Table of Contents Innventure, Inc. and Subsidiaries Notes to Consolidated Financial Statements (in thousands, except share or per share data) 80

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. 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 estimated to be 0% as of December 31, 2024. The following table summarizes the inputs used in simulating the Company’s stock price for purposes of valuing the Earnout Shares: October 2, 2024 December 31, 2024 Term 7 years 6.8 years Stock price $ 10.87 $ 13.85 Volatility 56.00 % 56.00 % Risk-Free Rate 3.62 % 4.42 % Dividend Yield — % — % The Milestone One and Milestone Two Earnout Shares are equity classified and the Milestone Three Earnout Shares are liability classified, as further described in Note 10. Earnout Shares. The assumptions used in measuring fair value of Milestone One and Milestone Three are considered Level 3 inputs, which include weighted average cost of capital risk premium, operational leverage ratio, revenue risk premium and revenue volatility. Milestone One The following table summarizes the unobservable inputs used in estimating the fair value of the Earnout Shares based on revenue for Accelsius (Milestone One): October 2, 2024 Revenue risk premium 6.10 % Revenue volatility 44.00 % Milestone Two Milestone Two is contingent on the Company’s formation of a new subsidiary, in partnership with an MNC, as determined using the Innventure