Company: INV
Filing Date: 2025-04-14
Form Type: 10-K
Source: 0001628280-25-017614
Chunk: 174

Company: Innventure, Inc.
Filing Date: 2025-04-14
Form: 10-K
Item: Item 8
Chunk 174
---
 leverage ratio, revenue risk premium and revenue volatility. Milestone OneThe 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, 2024Revenue risk premium6.10 %Revenue volatility44.00 %Milestone TwoMilestone Two is contingent on 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. The probability of achievement based on the Company’s analysis was 98% on October 2, 2024.Milestone ThreeThe following table summarizes the unobservable inputs used in estimating the fair value of the Earnout Shares based on revenue for AeroFlexx (Milestone Three): October 2, 2024December 31, 2024Revenue risk premium30.60 %36.10 %Revenue volatility165.00 %176.00 %For further information on the Earnout Shares, refer to Note 10. Earnout Shares.WarrantsThe Company issued freestanding 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 WTI Warrants is based on unobservable inputs (Level 3 fair value measurement). 

81

Table of ContentsInnventure, Inc. and SubsidiariesNotes to Consolidated Financial Statements(in thousands, except share or per share data)

The fair value of the 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 WTI Lenders may exchange the WTI Warrants for a total cash payment of $15,000 after the four-year anniversary of issuance. The risk-free interest rate was determined by reference to the U.S. Treasury yield curve.October 22, 2024December 31, 2024Stock Price$11.50 $13.85 Stock Price Volatility56.00 %56.00 %Credit Spread18.60 %18.80 %Other

Our financial instruments that are