Stock-based Compensation (Q2) |
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Jun. 30, 2025 |
Dec. 31, 2024 |
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| Stock-based Compensation |
Note 12. Stock-based Compensation
2024 Equity and Incentive Compensation Plan
Restricted Stock Units
On June 25, 2025, the Company issued 111,525 restricted stock units (“RSUs”) to five directors
pursuant to the Innventure Non-Management Director Compensation Plan . The RSUs had a grant date fair value of $600 based on a fair
value per unit of $5.38. The fair value of RSUs is determined based on the closing market price of the Company’s Common Stock at the
date of the grant.
During the three and six months ended June 30, 2025 (Successor), the Company
recognized compensation costs related to the RSUs of $6,979 and $10,895, respectively, in the condensed consolidated statements of operations and comprehensive income (loss). As of June 30, 2025, the Company had $12,946 in stock-based compensation expense remaining to be recognized over approximately 1.4 years.
Stock Options
On February 26, 2025, the Company issued 140,000 stock options to two
independent contractors. The stock options were granted with an exercise price of $8.84. Using the Black-Scholes option pricing
model, the estimated grant date fair value of stock options was $4.97 per option based on an expected volatility of 56%, an expected option term of approximately 5.9
years, and risk-free rate of return of 4.06%. The stock options have a maximum contractual life of 10 years from the grant date.
During the three and six months ended June 30, 2025 (Successor), the Company
recognized compensation costs related to the stock options of $1,515 and $2,541, respectively, in the condensed consolidated statements of operations and comprehensive income (loss). As of June 30, 2025, the Company had $4,217 in compensation expense remaining to be recognized over approximately 1.6 years.
Stock Appreciation Rights
In 2024, the Company issued 30,000 cash-settled stock appreciation rights (“SARs”) which were recognized at their fair value as of the date of the grant. These SARs entitle participants to cash equal
to the value of the appreciation in Accelsius’ stock price over the base price established of $12.175. These cash-settled SARs are
liability classified and are revalued at each reporting period. The SARs were valued as of June 30, 2025 using the Black-Scholes option-pricing model based on an expected volatility of 80%, an expected term of approximately 1.5 years, and risk-free rate of
return of 4%. The Company recognized a decrease in compensation expense in the amount of $244 and $693 in relation to the change in fair value of the
cash-settled SARs for the three and six months ended June 30, 2025 (Successor), respectively.
On June 25, 2025, the SARs agreements were amended. Under these amendments, any
payments by the Company to the participants shall be made in the form of shares of Common Stock and the maximum number of shares of Common Stock that may be issued pursuant to the SAR Agreements shall be 4,000,000.
Subsidiary Equity Plan
Accelsius Subsidiary Equity Plan
During the three and six months ended June 30, 2025 (Successor), there were 133,000 Class C units granted under the Accelsius Subsidiary Equity Plan, with a grant date fair value per share of $20.75. During the three and six months ended June 30, 2024 (Predecessor), there were and 110,000 Class C units granted, respectively, with a
grant date fair value per unit of $— and $4.41, respectively.
The Company recognized compensation costs related to the Accelsius Subsidiary
Equity Plan of $912 and $1,810
for the three and six months ended June 30, 2025 (Successor) and $248 and $593 for the three and six months ended June 30, 2024 (Predecessor), respectively, in the condensed consolidated statements of operations and comprehensive income (loss). As of June 30,
2025, the Company had $8,457 in unit-based compensation expense remaining to be recognized over approximately 2.21 years.
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Note 14. Stock-based Compensation
Capital Incentive Plan
The Predecessor’s capital incentive plan (the “Capital Incentive Plan”), as
amended, permitted the grant of 1,585,125 shares of Class C Units to its employees, directors, and consultants, as designated by the
Board of Directors. Upon Closing of the Business Combination, the vesting of all Innventure LLC unvested Class C Capital Incentive Plan units was accelerated, resulting in 203,651 units vested and additional compensation expense of $223.
The Class C Capital Incentive Plan units were then immediately exchanged as part of the Business Combination for Common Stock.
The Company recognized compensation costs related to the Capital Incentive Plan
as follows:
2024 Equity and Incentive Compensation Plan
On October 2, 2024, the Company entered into the 2024 Equity and Incentive
Compensation Plan (the “Plan”), wherein the Company is permitted to grant awards to employees, directors, consultants, and former service providers of the Company. The Plan provides for the granting of awards including, restricted stock units
(“RSUs”), stock options, and stock appreciation rights (“SARs”). The number of shares of Common Stock available under the Plan is initially limited to 11,022,894.
The share limit will automatically increase by 3% on the first day of each fiscal year, beginning in 2025, unless a smaller number
of shares is determined by the Board of Directors.
On December 9, 2024, the Company granted 975,409 stock options and 2,036,476
restricted stock units (together the “Awards”) to certain directors, employees and consultants. The Awards vest over the service periods defined in each individual grant agreement, which is generally accelerated upon a change in control. All
RSUs will be vested by May 1, 2027 and all stock options will be vested by April 30, 2027. The fair value of the Awards issued to employees is recognized as compensation expense on a straight-line basis over the requisite service period.
Restricted Stock Units
Each RSU represents the right to receive one share of Common Stock upon vesting
of such RSU. The fair value of RSUs is determined based on the closing market price of the Company’s Common Stock at the date of the grant. If a cash dividend is declared on the Company’s Common Stock before the RSUs have vested, holders of
RSUs are entitled to received dividends in the form of a cash credit, and shall be paid in cash at the same time as the RSUs are settled.
The summary of RSU activity for the Successor period from October 2, 2024 through
December 31, 2024 is as follows:
During the Successor period from October 2, 2024 through December 31, 2024, the
Company recognized compensation costs related to the RSUs of $1,604 within General and administrative expense in the consolidated
statements of operations and comprehensive income (loss). As of December 31, 2024, the Company had $23,241 in stock-based
compensation expense remaining to be recognized over approximately 1.65 years.
Stock Options
The stock options were granted with an exercise price of $12.20, which aligns with the Company’s closing share price on December 9, 2024. Using the Black-Scholes option pricing model, the estimated grant
date fair value of stock options was $6,468 based on an expected volatility of 56%, an expected option term of approximately 5.28 - 5.62 years, and risk-free rate of return of 4.0
- 4.1%. The stock options have a maximum contractual life, and a weighted average remaining contractual term, of 10 years from the grant date.
Stock options activity for the Successor period from October 2, 2024 through
December 31, 2024 is as follows:
During the Successor period from October 2, 2024 through December 31, 2024, the
Company recognized compensation costs related to the stock options of $405 within General and administrative expense in the
consolidated statements of operations and comprehensive income (loss). As of December 31, 2024, the Company had $6,063 in
compensation expense remaining to be recognized over approximately 1.68 years.
Stock Appreciation Rights
On December 31, 2024 the Company granted 350,000 stock appreciation rights with respect to the equity of Accelsius Holdings LLC. The SARs were awarded to certain Innventure directors,
officers, and former service providers of the Company and its affiliates (the “Participants”). The SARs entitle the Participants to shares of
Common Stock, or cash, equal to the value of the appreciation in Accelsius’ stock
price over the base price of $12.175. Two
Participants, who were considered non-employees, were granted cash-settled SARs and three Participants were granted stock-settled
SARs. The cash-settled SARs are considered liability-classified and the stock-settled SARs are considered equity-classified
Both the cash-settled SARs and stock-settled SARs will be automatically exercised
upon the two-year anniversary of the date of grant. The weighted average contractual term is 2 years.
The estimated grant date fair value of the cash-settled SARs and the
stock-settled SARs was $1,160 and $12,371,
respectively. The SARs were valued using the Black-Scholes option-pricing model based on an expected volatility of 70%, an expected
term of approximately 2 years, and risk-free rate of return of 4%. The SARs are considered fully vested at the date of grant and compensation cost for both SARs was recognized immediately at the date of grant. During the Successor
period from October 2, 2024 through December 31, 2024, the Company recorded $13,531 in compensation expense related to the SARs
within General and administrative expense in the consolidated statements of operations and comprehensive income (loss).
The summary of SARs activity for the Successor period from October 2, 2024
through December 31, 2024 is as follows:
Subsidiary Equity Plans
Accelsius Subsidiary Equity Plan
Accelsius, a subsidiary of the Company, adopted an equity incentive plan on
March 24, 2022 (the “Accelsius Subsidiary Equity Plan”). In March 2023, the Accelsius Subsidiary Equity Plan was amended to permit the grant of 3,300,000
Class C units of the subsidiary to the subsidiary’s employees, directors, and consultants, as designated by the Board of Directors. The awards vest over the period defined in each individual grant agreement which is generally accelerated upon a
change of control event. Accelsius has the option to repurchase all vested units upon an employee’s termination of employment or service.
The summary of Accelsius Subsidiary Equity Plan activity is as follows:
Note: The grant date fair value per share for the year ended December 31, 2023 is
an average amount.
The Company recognizes compensation costs within General and administrative,
Sales and marketing and Research and development expense in the consolidated statements of operations and comprehensive income (loss). As of December 31, 2024, the Company had $8,103 in unit-based compensation expense remaining to be recognized over approximately 2.42 years.
The grant date fair value was estimated using an Option Pricing Model to allocate
the total equity value of Accelsius to the Class C Units. The total equity value was estimated using the Discounted Cash Flow method and Management’s projections. The resulting values of Class C Units were then discounted for lack of
marketability (20%).
Series A Issuance
On October, 18 2024, Accelsius issued 16,427 equity classified Series A Preferred Units to an employee of the Company which was determined to be stock based payment. The grant date fair value of $616 was recognized as compensation cost (within General and administrative expense in the consolidated statements of operations and comprehensive
income (loss)), immediately at the date of grant as there is no requisite service period or vesting period. The fair value of the awards was estimated using a Black-Scholes model with a discount for lack of marketability of 20% applied.
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