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.

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 (“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. The Awards vest over the service periods defined in each individual grant agreement. All RSUs will vest at various dates through August 2028. The fair value of the Awards issued to employees is recognized as compensation expense on a straight-line basis over the requisite service period. As of December 31, 2025, 4,629,340 shares remain available under the Plan.

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.


	Number of Shares	Weighted Average Grant Date Fair Value (per share)
Unvested at January 1, 2025	1,905,008	$	12.20
Granted	653,118	4.60
Vested	(1,382,725)	11.61
Forfeited	(123,562)	9.36
Unvested at December 31, 2025	1,051,839	$	8.68

During the year ended December 31, 2025 and the Successor period from October 2, 2024 through December 31, 2024, the Company recognized compensation costs related to the RSUs of $16.1 million and $1.6 million, respectively, within General and administrative expense in the consolidated statements of operations and comprehensive income (loss). As of December 31, 2025, the Company had $8.9 million in stock-based compensation expense remaining to be recognized over approximately 1.58 years.

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 $3.20 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.

On December 9, 2024, 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 weighted average estimated grant date fair value of stock options was $6.63 per unit 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.


	Number of Shares	Weighted Average Exercise Price		Weighted Average Grant Date Fair Value (per share)
Outstanding on December 31, 2024	913,849	$	12.20	$	6.63
Granted	152,295	8.84		4.97
Vested	(640,799)	11.75		6.57

Forfeited	(85,755)	12.20		6.69
Outstanding at December 31, 2025	339,590	$	11.44	$	6.31
Exercisable at December 31, 2025	702,359	12.20		6.63

During the year ended December 31, 2025 and for the Successor period from October 2, 2024 through December 31, 2024, the Company recognized compensation costs related to the stock options of $4.1 million and $0.4 million, respectively, within General and administrative expense in the consolidated statements of operations and comprehensive income (loss). As of December 31, 2025, the Company had $2.1 million in compensation expense remaining to be recognized over approximately 1.45 years.

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 $12.18. Two Participants, who were considered non-employees, were granted 30,000 cash-settled SARs and three Participants were granted 320,000 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 remaining weighted average contractual term is 1 year as of December 31, 2025.

The estimated grant date fair value of the cash-settled SARs and the stock-settled SARs was $1.1 million and $12.4 million, respectively. The SARs were valued using the Black-Scholes option-pricing model based on an expected volatility of 70%, an expected term of approximately two 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 $13.5 million in compensation expense related to the SARs within General and administrative expense in the consolidated statements of operations and comprehensive income (loss).

These cash-settled SARs are liability classified and are revalued at each reporting period. The SARs were valued as of December 31, 2025 using the Black-Scholes option-pricing model based on an expected volatility of 70%, an expected term of approximately 1.0 year, and risk-free rate of return of 3%. The Company recognized a decrease in compensation expense in the amount of $0.9 million in relation to the change in fair value of the cash-settled SARs for the year ended December 31, 2025.

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. There were no new or forfeited grants as of December 31, 2025.

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 4,915,000 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 typically has the option to repurchase all vested units upon an employee’s termination of employment or service.


	Successor Period				Predecessor Period
	Year Ended December 31, 2025		Period from October 2, 2024 through December 31, 2024		Period from January 1, 2024 through October 1, 2024
Compensation expense (in thousands)	$	7,411	$	1,341	$	918
Class C units granted	1,048,000		168,500		110,000
Weighted average grant date fair value per share	$	20.37	$	46.38	$	4.41

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, 2025, the Company had $20.4 million in unit-based compensation expense remaining to be recognized over approximately 1.92 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%).