PART I Financial Information Item 1. Financial Statements (Unaudited) H1 2025 unaudited financials show a $394.9 million net loss, driven by a $346.6 million goodwill impairment, raising going concern doubts Condensed Consolidated Balance Sheets Total assets decreased to $556.0 million by June 30, 2025, primarily due to goodwill impairment, significantly impacting equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $6,965 | $11,119 | | Total Current Assets | $21,129 | $24,286 | | Goodwill | $323,463 | $667,936 | | Total Assets | $555,985 | $905,289 | | Total Current Liabilities | $72,317 | $69,347 | | Total Liabilities | $129,925 | $138,996 | | Total Stockholders' Equity | $426,060 | $766,293 | - A significant goodwill impairment of $344.5 million was the primary driver for the reduction in total assets18 Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) H1 2025 net loss surged to $394.9 million, primarily due to a $346.6 million goodwill impairment, despite revenue growth Six Months Ended June 30 - Financial Performance (in thousands, except per share data) | Metric | 2025 (Successor) | 2024 (Predecessor) | | :--- | :--- | :--- | | Revenue | $700 | $447 | | Total Operating Expenses | $404,472 | $22,265 | | Goodwill impairment | $346,557 | $0 | | Loss from Operations | ($403,772) | ($21,818) | | Net Loss | ($394,949) | ($18,840) | | Net Loss Attributable to Innventure, Inc. Stockholders | ($227,224) | ($12,507) | | Basic and diluted loss per share | ($4.60) | N/A | - A non-cash goodwill impairment charge of $346.6 million was the main contributor to the significant increase in net loss for the first six months of 202521 Condensed Consolidated Statements of Cash Flows H1 2025 saw net cash used in operations increase to $36.8 million, offset by $41.2 million from financing activities Six Months Ended June 30 - Cash Flow Summary (in thousands) | Cash Flow Category | 2025 (Successor) | 2024 (Predecessor) | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | ($36,754) | ($16,391) | | Net Cash Used in Investing Activities | ($3,640) | ($4,377) | | Net Cash Provided by Financing Activities | $41,240 | $20,274 | | Net (Decrease) Increase in Cash | $846 | ($494) | - The company relied heavily on financing activities, which provided $41.2 million in cash, to fund its operations and offset the $36.8 million cash burn from operating activities31 Notes to Condensed Consolidated Financial Statements Notes detail the Business Combination, a $346.6 million goodwill impairment, new debt, and management's going concern doubts - Management has determined that conditions raise substantial doubt about the company's ability to continue as a going concern within one year, citing recurring losses, negative cash flows, and the need to raise significant additional capital464749 - The company recorded non-cash goodwill impairment charges of $113.3 million and $346.6 million for the three and six months ended June 30, 2025, respectively, due to sustained decreases in its stock price and market capitalization120122 - In March 2025, the company entered into a securities purchase agreement for up to $30.0 million in convertible debentures, receiving gross proceeds of $27.0 million in April and May 2025100101102 - The company has one reportable operating segment, Technology, which includes the activities of its subsidiary Accelsius. This segment generated revenues of $255 thousand and incurred a net loss of $366.8 million for the six months ended June 30, 2025, with the loss largely due to the goodwill impairment192195 Management's Discussion and Analysis of Financial Condition and Results of Operations H1 2025 revenue grew, but operating expenses surged due to a $346.6 million goodwill impairment, impacting liquidity and going concern issues Six Months Ended June 30 - Results of Operations Comparison (in thousands) | Metric | 2025 (Successor) | 2024 (Predecessor) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $700 | $447 | $253 | 56.6% | | Total Operating Expenses | $404,472 | $22,265 | $382,207 | 1,716.6% | | Loss from Operations | ($403,772) | ($21,818) | ($381,954) | 1,750.6% | | Net Loss | ($394,949) | ($18,840) | ($376,109) | 1,996.3% | - The increase in operating expenses was driven by a $346.6 million goodwill impairment, $14.3 million in increased stock-based compensation, and higher amortization of intangible assets following the Business Combination221224 Adjusted EBITDA Reconciliation (Non-GAAP, in thousands) | Metric | Six months ended June 30, 2025 | Six months ended June 30, 2024 | | :--- | :--- | :--- | | Net loss | ($394,949) | ($18,840) | | EBITDA | ($383,201) | ($18,323) | | Adjusted EBITDA | ($38,002) | ($9,996) | - The company's liquidity position is strained, with cash of $7.0 million and a working capital deficit of $51.2 million as of June 30, 2025. Management estimates a need for at least $50,000 in additional funding over the next 12 months269 - Management reiterates that there is substantial doubt about the company's ability to continue as a going concern, and its future is dependent on obtaining adequate capital through equity or debt financing, including its SEPA with Yorkville294295 Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the company is not required to provide market risk disclosures - As a smaller reporting company, Innventure, Inc. is not required to provide quantitative and qualitative disclosures about market risk298 Controls and Procedures Disclosure controls and procedures were ineffective as of June 30, 2025, due to identified material weaknesses in internal control - The CEO and CFO concluded that the company's disclosure controls and procedures were not effective at a reasonable level of assurance as of June 30, 2025301 - Material weaknesses were identified in several areas, including: - Insufficient staffing with appropriate accounting knowledge for complex transactions - Lack of necessary IT general controls (e.g., user access reviews, privileged access restriction) - Lack of segregation of duties and review over reconciliation of significant accounts302304 PART II Other Information Legal Proceedings The company reports no material pending legal proceedings involving itself or its subsidiaries - As of the reporting date, the company is not a party to any material pending legal proceedings307 Risk Factors As a smaller reporting company, the company is not required to provide risk factor disclosures - As a smaller reporting company, Innventure, Inc. is not required to provide risk factor disclosures in its Form 10-Q308 Unregistered Sales of Equity Securities and Use of Proceeds Unregistered equity sales included $30 million in convertible debentures, warrants, and common stock issuances - Issued Convertible Debentures to Yorkville with a total principal amount of $30 million in April and May 2025309 - Issued 495,074 warrants (2025 WTI Warrants) to WTI Holders on April 14, 2025, exercisable through March 31, 2035312 - Multiple issuances of common stock were made to Yorkville between May and June 2025 under the terms of the Standby Equity Purchase Agreement (SEPA)313 Other Information A director adopted a Rule 10b5-1 trading plan for 1,170,262 shares, with executive chairman's units seeing accelerated vesting - Director Daniel Hennessy adopted a Rule 10b5-1 trading plan for the sale of up to 1,170,262 shares of common stock317 - The board approved the accelerated vesting of 46,875 unvested Accelsius Incentive Units for Executive Chairman Mike Otworth320321 Exhibits This section lists all exhibits filed with the Form 10-Q, including corporate documents, financing agreements, and officer certifications
Innventure, Inc.(INV) - 2025 Q2 - Quarterly Report