Innventure (INV) risk factors, FY2024 10-K

Risks Related to Innventure’s Business

1. 01Innventure may not be able to obtain additional financing to fund the operations and growth of the business
2. 02There is uncertainty regarding Innventure’s ability to maintain liquidity sufficient to operate its business effectively, which raises substantial doubt about its ability to continue as a going concern
3. 03Innventure’s principal revenues are expected to be earned in the future through its Operating Companies, including through AeroFlexx, Accelsius and Refinity, and Innventure depends on its Operating Companies for cash
4. 04Innventure’s business model is to launch Operating Companies, which are not guaranteed to succeed and could be very costly
5. 05Innventure may not be successful in finding future opportunities to license or acquire breakthrough technology solutions from Technology Solutions Providers
6. 06The Innventure Companies are currently early commercial stage companies that may never achieve or sustain profitability
7. 07The WTI Facility may impair Innventure LLC’s, the Company’s and the Operating Companies’ financial and operating flexibility
8. 08It is not possible to predict the extent to which the Company will, intends to, or may rely on Yorkville and the SEPA and the Convertible Debentures as a source of funding
9. 09It is not possible to predict the actual number of shares Innventure will sell under the SEPA or the Convertible Debentures to Yorkville, or the actual gross proceeds resulting from those sales
10. 10Innventure’s success will depend on its ability to attract and retain personnel and manage human capital both for itself and the Innventure Companies, while controlling labor costs
11. 11Innventure’s pursuit of new business strategies and acquisitions could disrupt its ongoing business, present risks not originally contemplated and materially adversely affect its business, reputation, results of operations and financial condition

Risks Related to the Innventure Companies’ Operations

1. 12The Innventure Companies are early-stage companies, and their limited operating history makes it difficult to evaluate their future prospects and the risks and challenges they may encounter
2. 13Accelsius’ cooling products may be subject to increased regulatory scrutiny due to their use of working fluid refrigerants that contain fluorine
3. 14The market, including customers and potential investors, may be skeptical of the viability and benefits of Accelsius’ and Refinity’s products and processes because they are based on relatively novel and complex technology
4. 15AFX is early in the development of its commercial production capacity and has not yet fully diversified suppliers for critical raw materials, specifically its film
5. 16AFX may not be able to meet applicable regulatory requirements for the use of AFX’s products in food grade applications, and, even if the requirements are met, complying on an ongoing basis with the numerous regulatory requirements applicable to AFX’s products and AFX’s facilities will be time-consuming and costly

Risks Related to Our Common Stock

1. 17The market price of our Common Stock is likely to be highly volatile, and you may lose some or all of your investment
2. 18Volatility in Innventure’s share price could subject Innventure to securities class action litigation
3. 19If securities or industry analysts do not publish research or reports about Innventure, or publish negative reports, then Innventure’s stock price and trading volume could decline
4. 20Innventure does not currently intend to pay dividends on its Common Stock, and, consequently, your ability to achieve a return on your investment will depend on appreciation, if any, in the price of our Common Stock
5. 21Future sales of shares of our Common Stock or other equity may depress its stock price
6. 22Provisions in the A&R Certificate of Incorporation and under Delaware law could discourage a takeover that stockholders may consider favorable and may lead to entrenchment of management
7. 23The exclusive forum clause set forth in the Warrant Agreement may have the effect of limiting an investor’s rights to bring legal action against Innventure and could limit the investor’s ability to obtain a favorable judicial forum for disputes with us
8. 24We are an emerging growth company and smaller reporting company, and we cannot be certain if the reduced reporting requirements applicable to emerging growth companies and smaller reporting companies will make our Common Stock less attractive to investors
9. 25Future offerings of debt or offerings or issuances of equity securities by Innventure may adversely affect the market price of the Common Stock or otherwise dilute all other stockholders
10. 26If Innventure’s estimates or judgments relating to its critical accounting estimates prove to be incorrect or financial reporting standards or interpretations change, Innventure’s results of operations could be adversely affected
11. 27Exclusive forum provisions in the A&R Certificate of Incorporation and Bylaws could limit Innventure’s stockholders’ ability to choose their preferred judicial forum for disputes with Innventure or its directors, officers, or employees
12. 28If Innventure is deemed to be an investment company under the Investment Company Act, it may be required to institute burdensome compliance requirements and its activities may be restricted, which may make it difficult to operate or to execute its growth plans
13. 29Furthermore, if Innventure were to operate its Operating Companies primarily for the purpose of making a profit in the sale of its Operating Companies’ securities rather than retaining majority (or sole) ownership of such companies, it may increase the likelihood that Innventure could be deemed an investment company
14. 30Additional financing transactions by the Operating Companies could impact your rights as a stockholder of Innventure

Risks Related to Intellectual Property

1. 31Innventure may be unable to sufficiently protect the IP rights of itself and the Innventure Companies and may encounter disputes from time to time relating to its use of the IP of third parties
2. 32Changes in U.S. or foreign trade policies, including additional tariffs or global trade conflicts, may adversely impact our business and operating results
3. 33Innventure, the Innventure Companies, and their MNC partners face risks and uncertainties related to litigation, regulatory actions and investigations
4. 34Cyber-attacks or a failure in Innventure’s information technology and data security infrastructure could adversely affect Innventure’s business and operations
5. 35Innventure may face particular data protection and privacy risks in connection with the European Union’s Global Data Protection Regulation, the California Consumer Privacy Act and other privacy laws and regulations
6. 36business grows, it is therefore possible that we will have a higher regulatory risk profile and increased costs as we seek to comply with new regulatory requirements related to the processing of personal and commercial data
7. 37AI technologies could present business, compliance and reputational risks
8. 38Expectations relating to ESG considerations expose Innventure to potential liabilities, increased costs, reputational harm and other adverse effects on Innventure’s business
9. 39Climate change, or legal, regulatory or market measures to address climate change may materially adversely affect Innventure’s financial condition and business operations
10. 40Changes in tax laws could adversely affect Innventure and the Innventure Companies