Company: INV
Filing Date: 2025-05-09
Form Type: ARS
Source: 0001628280-25-024065
Chunk: 112

Company: Innventure, Inc.
Filing Date: 2025-05-09
Form: ARS
Chunk 112
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ancing or a change of control. The derivatives associated with the 2025 Notes were settled in March 2024 due to conversion of the 2025 Notes in a qualified financing. A summary of the significant unobservable inputs utilized to estimate the fair value is as follows: Embedded derivative within 2025 Note issued August 18, 2022 with a principal balance of $4,000 Settlement December 31, 2023 Discount Rate .......................................................................................................... 35 % 35% - 36% Probability of Expected Outcomes Financing ................................................................................................................ 100 % 95 % Change in control ................................................................................................... — % 3 % Other ...................................................................................................................... — % 2 % Embedded derivative within 2025 Notes issued June 7 & July 3, 2023 with an aggregate principal balance of $2,000 Discount Rate .......................................................................................................... 71% - 87% 71% - 88% Probability of Expected Outcomes Financing ................................................................................................................ 100 % 95 % Change in control ................................................................................................... — % 3 % Other ...................................................................................................................... — % 2 % Significant increases or decreases to any of these inputs would result in a significantly higher or lower liability. Investment in debt securities - AFS The investment in debt securities is stated at fair value as described in Note 3. Investments. The terms of the securities are such that they are highly likely to convert into Class D Units of AeroFlexx. The fair value of the debt securities is estimated on an as-converted basis using a Black-Scholes model incorporating breakpoints upon which each tranche of AeroFlexx equity participates in distributions. October 2, 2024 December 31, 2024 Volatility 120.00 % 120.00 % Time to liquidity 2 years 2 years Discount for lack of marketability 18.00 % 31.00 % Weighted average cost of capital 45.00 % 45.00 % Risk-free rate 3.51 % 4.23 % Earnout Shares Upon Closing of the Business Combination, Earnout Shares were issued to previous Innventure Members and contingently issued to Sponsors (as defined and further described in Note 10. Earnout Shares). The fair value of the Earnout Shares was determined using a Monte Carlo valuation model that utilizes significant assumptions, including expected volatility, expected term, and risk-free rate, to determine the probability of achieving common share price and revenue milestones. The shares may vest upon either the achievement of the common share price milestone