v3.26.1
Borrowings
 6 Months Ended
Jun. 30, 2026
Debt Disclosure [Abstract]  
Borrowings
Note 5. Borrowings
MaturitiesJune 30, 2026Interest RatesDecember 31, 2025Interest Rates
(in thousands)
Series 1 Promissory Notes
2026
$— 0.0%$122 15.00%
Related party convertible notes
2026
4,407 
4.00% - 15%
4,331 
Convertible debentures2026— 
0.0% - 5%
5,572 
Term convertible notes20268,026 4.00%7,890 
WTI Facility202816,521 
13.50%
19,441 
13.50%
Total Notes Payable
28,954 37,356 
Less: unamortized debt discount(2,912)(3,962)
Less: current portion of related party convertible notes(4,407)(4,331)
Less: current portion of notes payable(7,700)(12,846)
Less: current portion of convertible notes(8,026)(7,890)
Total Long-term Notes
$5,909 $8,327 
The Company's debt is carried on a historical cost basis net of unamortized discounts and premiums. Costs associated with acquiring debt are presented in the condensed consolidated balance sheets as a direct deduction from the carrying amount of the debt as a debt discount. Discounts on debt are amortized over the contractual life of the related debt instrument using the effective interest method (unless otherwise specified below) and are included in Interest expense, net in the condensed consolidated statements of operations and comprehensive income (loss).
The Company’s notes payable, excluding debt issuance costs, mature as follows (in thousands):
Amount
2026 (remaining six months)$16,149 
20278,244 
20284,561 
Total Debt$28,954 
Series 1 Promissory Notes
In 2018, the Company authorized the issuance and sale of unsecured promissory notes to investors up to $35.0 million (the “Series 1 Promissory Notes”). From 2018 to 2021, the Company issued promissory notes with a total principal amount of $4.9 million. The notes require monthly interest payments, have an original maturity period of 36-48 months, and bear interest at 9%-12% per annum. The notes contain two term extension options, at the Company’s election, which can extend the notes’ maturity period to 60 months in total. If the Company elects its first term extension option, the note will bear interest at 12% for months 36 through 48. If the Company elects its second term extension option, the notes will bear interest at 15% for months 48 through 60.
Extensions on Series 1 Promissory Notes were as follows (in thousands):
June 30, 2026December 31, 2025
Principal amount of 2nd extension promissory notes$— $122 
Interest expense on Series 1 Promissory Notes was as follows (in thousands):
Three Months endedSix Months Ended
June 30, 2026June 30, 2025June 30, 2026June 30, 2025
Interest attributable to contractual interest$— $16 $1 $48 
In January 2026, the Company repaid the outstanding balance of the Series 1 Promissory Notes.
WTI Facility
On October 22, 2024, the Company entered into a term loan with WTI Fund X, Inc. and WTI Fund XI, Inc. (collectively, “WTI Lenders”). The terms of the loan provide for a term loan facility in the aggregate principal amount of up to $50.0 million (the "WTI Facility"). The total aggregate principal was available in three separate tranches subject to the Company meeting certain conditions. The Company received $20.0 million (the “First Tranche”) on November 15, 2024. The First Tranche, principal and interest, shall be repaid over a period of 30 months in equal, monthly installments, commencing after an initial 12-month period of interest-only monthly payments, resulting in a total term of 42 months. The funds under each of the second tranche and the third tranche are no longer available to the Company.
Borrowings under the WTI Facility will accrue interest at a rate per annum equal to the greater of (i) the “prime rate” of interest, as published by The Wall Street Journal on the date that the WTI Lenders prepare the promissory notes for the borrowings under such tranche, plus 5% and (ii) 13.50% and will amortize, after an interest-only period of 12 months in the case of the First Tranche in equal monthly installments over a period of 30 months. Obligations are secured by a lien on the majority of the assets of Innventure LLC and Innventure, Inc.
On March 21, 2025, in connection with the issuance of the first tranche of Convertible Debentures (as further described below) to Yorkville, the Company and Innventure LLC entered into a consent (the “Consent”) with WTI Fund X, LLC and WTI Fund XI, LLC (the “WTI Holders”) and the WTI Lenders, modifying the WTI Facility. Specifically, under the Consent, the Company and the WTI Lenders and WTI Holders agreed (i) that from and after the date that the Company receives the initial proceeds from the Convertible Debentures and until such time as such obligations have been paid in full, the Company must maintain at least $5.0 million of cash on deposit; (ii) that effective on the date that the Company receives the initial proceeds from the Convertible Debentures, the 2025 WTI Warrants will become issuable to the WTI Holders; and (iii) to certain additional consent provisions. Such provisions from the Consent became effective on April 14, 2025 when the Company received proceeds from the Convertible Debentures. The modification of the WTI Facility was accounted for as an extinguishment of debt though the WTI Facility remains outstanding, resulting in a loss on extinguishment of $3.5 million recorded on the consolidated statements of operations and comprehensive income (loss) for the year ended December 31, 2025. The legal requirement to maintain at least $5.0 million of cash on deposit is presented as Restricted cash on the condensed consolidated balance sheets.
In connection with the WTI Facility, the Company issued the 2024 WTI Warrants and the 2025 WTI Warrants (collectively with the 2024 WTI Warrants, the “WTI Warrants”) to the WTI Holders (as further defined and described in Note 10. Warrants). The Company accounted for each of the WTI Warrants as detachable warrants at their fair value. The fair value of the WTI Warrants was recorded as a liability and as a discount to the WTI Facility on the condensed consolidated balance sheets. The WTI Warrants are classified as a liability in accordance with ASC 480, as they represent an instrument that is not an outstanding share and may require the issuer to settle the obligation by transferring assets, specifically cash. The Company is amortizing the discount over the term of the WTI Facility using the straight-line method.
Interest expense on this facility was as follows (in thousands):
Three Months endedSix Months Ended
June 30, 2026June 30, 2025June 30, 2026June 30, 2025
Interest attributable to contractual interest$398 $683 $1,035 $1,358 
Interest attributable to amortization of issuance costs and discounts412 348 1,050 856 
Total interest expense$810 $1,031 $2,085 $2,214 
Convertible Debentures
On March 25, 2025, the Company entered into a securities purchase agreement (“Existing Purchase Agreement”) with Yorkville related to the issuance and sale of convertible debentures (“Existing Convertible Debentures” collectively with the New Convertible Debentures defined below, the “Convertible Debentures”) with an aggregate principal amount of up to $30.0 million. The Existing Convertible Debentures are convertible into shares of Common Stock and contain certain features that represent embedded derivatives, which are bifurcated and included within Prepaid expenses and other current assets on the condensed consolidated balance sheets. The Company issued the aggregate principal amount of the Existing Convertible Debentures in two tranches tied to separate reporting and filing requirements.
On April 14, 2025, the Company issued the first tranche of the Existing Convertible Debentures with a principal amount of $20.0 million, resulting in cash proceeds to the Company of $18.0 million, representing an original issue discount of 10%. The first tranche was scheduled to be repaid in twelve monthly payments with a 5% payment premium due to the lender with each payment. Also on April 14, 2025, the Company issued two warrants (the “2025 WTI Warrants”) to purchase, at a price of $0.01 per share (subject to certain limitations and adjustment), up to an aggregate total of 495,074 shares of Common Stock, as of the date of issuance and June 30, 2026 (subject to future adjustments to the number and type of shares pursuant to the 2025 WTI Warrants), to the WTI Holders. Each of the 2025 WTI Warrants is exercisable through March 31, 2035. For further information on the 2025 WTI Warrants, refer to Note 10. Warrants.
On May 15, 2025, the Company issued the second tranche of the Existing Convertible Debentures with a principal amount of $10.0 million, resulting in cash proceeds to the Company of $9.0 million, representing an original issue discount of 10%. The second tranche was scheduled to be repaid in eleven monthly payments with a 5% payment premium due to the lender with each payment. There is no contractual interest associated with amounts outstanding for the Existing Convertible Debentures for the three and six months ended June 30, 2026 and 2025.
On September 15, 2025, the Company entered into an additional amendment to the Existing Purchase Agreement for the Existing Convertible Debentures (the “September 2025 Amendment”). Pursuant to the September 2025 Amendment, the Company and Yorkville agreed to amend the definition of conversion price so that the fixed price of $10.00 was reduced to $7.00 and a floor price of $1.59 was implemented. Additionally, the monthly payments applicable to the Existing Convertible Debentures were removed and replaced with repayment due upon maturity in connection with the early repayment of the approximately $2.0 million. The payment premium on this payment was waived. However, payments and related payment premiums resume should the Innventure stock price fall below the floor price, the Company issues in excess of 99% of Common Shares under the exchange cap or Yorkville is unable to utilize a registration statement to resell Common Shares.
On September 15, 2025, the Company entered into a securities purchase agreement with Yorkville for up to $15.0 million in convertible debentures (“New Convertible Debentures”), issuable in two tranches. The first tranche of $10.0 million was issued with a 10% original issue discount, yielding $9.0 million in net proceeds, and bears 5% annual interest, with repayment due September 15, 2026. The debentures are convertible into Common Stock and contain certain features that represent embedded derivatives which are bifurcated and included within Prepaid expenses and other current assets on the condensed consolidated balance sheets.
On November 12, 2025, the Company issued the second tranche of the New Convertible Debentures for $5.0 million. The debentures were issued with a 10% original issue discount, yielding $4.5 million in net proceeds, bear 5% annual interest, and mature on September 15, 2026.
The September 2025 Amendment and first tranche of the New Convertible Debentures were accounted for collectively as a troubled debt restructuring. The Company determined that a concession was provided based on a decrease in the effective interest rate when compared to the original terms of the Existing Convertible Debentures. Under the troubled debt restructuring a loss on extinguishment of debt of $12.6 million was recorded on the consolidated statements of operations and comprehensive income (loss) for the year ended December 31, 2025.
On January 27, 2026, the Company issued 304,377 shares of Common Stock due to the exercise of conversion option by Yorkville for a principal amount of $1.1 million of the Convertible Debentures. Additionally, the Company made a cash payment of $5.5 million inclusive of principal, interest and fees, satisfying the Convertible Debentures in full. The repayment of the Convertible Debentures resulted in an aggregate of $1.0 million loss on extinguishment of debt during the six months ended June 30, 2026. There was no loss on extinguishment of debt during the three months ended June 30, 2026.
Interest expense on the Convertible Debentures was as follows (in thousands):
Three Months endedSix Months Ended
June 30, 2026June 30, 2025June 30, 2026June 30, 2025
Interest attributable to contractual interest— — $94 $— 
Interest attributable to amortization of issuance costs
— 1,701 — 1,701 
Total interest expense$— $1,701 $94 $1,701 
Term Convertible Notes
At various dates in June and July of 2025, Accelsius entered into unsecured convertible notes with various other parties (the “Term Convertible Notes”) for a total principal amount of $7.8 million. The Term Convertible Notes have a stated maturity date of December 31, 2026 and bear interest at the annual applicable federal rate published by the Internal Revenue Service.
As of January 2, 2026, the Term Convertible Notes, which are subordinated to the WTI Facility, are convertible at the option of the lenders, for all amounts due under the notes at the time of conversion, into Accelsius’ Series A Units at a price per unit equal to $12.175. For as long as any portion of the WTI Facility remains outstanding, the lenders will not demand payment related to the Term Convertible Notes, unless they convert the debt into equity.
The interest expense on the Term Convertible Notes was $0.1 million and $0.2 million for the three and six months ended June 30, 2026, respectively. Interest expense on the Term Convertible Notes was immaterial for the three and six months ended June 30, 2025.
Related Party Convertible Notes
In June of 2025, Accelsius entered into unsecured convertible notes (“Related Party Convertible Notes”) with certain investors deemed to be Related Parties (as defined in the Company’s Related Party Transactions Policy) for a total principal amount of $4.2 million. The Related Party Convertible Notes have a stated maturity date of December 31, 2026 and bear interest at the annual applicable federal rate published by the Internal Revenue Service.
The Related Party Convertible Notes, which are subordinated to the WTI Facility, are convertible at the option of the lenders, starting January 2, 2026, for all amounts due under the notes at the time of conversion, into Accelsius’ Series A Units at a price per unit equal to $12.175. For as long as any portion of the WTI Facility remains outstanding, the Related Party Convertible Notes lenders will not demand payment related to the Related Party Convertible Notes, unless they convert the debt into equity.
The interest expense on Related Party Convertible Notes, including the amortization of the loan fee, was immaterial and $0.1 million for the three and six months ended June 30, 2026, respectively. Interest expense on Related Party Convertible Notes was immaterial for the three and six months ended June 30, 2025.