Innventure secures $20 million through convertible debenture

Innventure, Inc. (NASDAQ:INV), a company classified under "Blank Checks" [6770] industry with a market capitalization of $164 million, has entered into a significant financial agreement and issued a convertible debenture as part of its capital-raising efforts. According to InvestingPro data, the company’s financial health score stands at 0.54, indicating weak overall conditions, with current liabilities exceeding liquid assets. On Monday, the company reported the issuance of a $20 million First Convertible Debenture to investment entity YA II PN, Ltd., known as Yorkville.

The debenture, which will mature on July 14, 2026, was issued at a 10% original issue discount, resulting in gross proceeds of approximately $18 million for Innventure. This capital injection comes at a crucial time, as InvestingPro analysis shows the company is quickly burning through cash, with a current ratio of 0.51 and trailing twelve-month revenue of just $0.99 million. It carries no interest unless there is a default, after which it would accrue interest at an annual rate of 18%. Monthly repayments ranging from $1 million to $3 million, plus a 5% payment premium and any accrued interest, are slated to start 30 days after the issuance.

The debenture can be converted into Innventure’s common stock at an initial conversion price of $10.00 per share, subject to adjustments on the six and nine-month anniversaries of the issuance date. However, conversions are limited to ensure that Yorkville does not own more than 4.99% of Innventure’s outstanding common stock post-conversion, unless certain conditions are met.

The agreement also includes an Exchange Cap, which restricts the number of shares that can be issued upon conversion to comply with Nasdaq Stock Market rules, unless stockholder approval is obtained or a counsel opinion confirms such approval is not necessary.

In addition, Innventure has granted Yorkville registration rights for the resale of the conversion shares, with the company required to file a registration statement within 15 calendar days post its Annual Report filing for the year ended December 31, 2024.

Innventure’s wholly-owned subsidiary, Innventure LLC, has also provided a global guaranty agreement to Yorkville, securing the company’s obligations under the Purchase Agreement and the Convertible Debentures.

Separately, Innventure issued warrants to WTI Fund X, LLC and WTI Fund XI, LLC as part of a consent agreement with the WTI Entities. These warrants allow the purchase of up to 300,000 shares of common stock at $0.01 per share through March 31, 2035, and include customary registration rights and change-of-control adjustments.

The financial maneuvers, including the convertible debenture and warrants, are part of Innventure’s broader strategy to raise capital while providing investment opportunities to its partners. The timing is notable as the stock has experienced significant volatility, trading at $3.65, down over 70% year-to-date. For deeper insights into Innventure’s financial health and growth prospects, InvestingPro subscribers can access comprehensive analysis and 13 additional ProTips in our detailed Research Report, part of our coverage of over 1,400 US equities. The transactions, exempt from registration under the Securities Act according to Section 4(a)(2), are based on Yorkville’s status as an "accredited investor."

Investors and stakeholders can reference the full text of the agreements filed with the SEC as part of Innventure’s 8-K filing for complete details.

In other recent news, nVenture reported its financial results for Q4 2024, revealing a total revenue of $1.2 million. Despite this revenue, the company experienced an adjusted EBITDA loss of $27.9 million, largely due to high costs related to sales, R&D, and marketing. The company anticipates revenue growth primarily in the second half of 2025, with a focus on aligning capital investments with revenue visibility. nVenture also completed a business combination with LearnCW and began trading on NASDAQ. In terms of partnerships, nVenture announced collaborations with major companies such as Dow Chemical (NYSE:DOW) Company, Procter & Gamble, and Nokia (HE:NOKIA). These partnerships are part of nVenture’s strategy to explore opportunities within the waste-to-value ecosystem. Analyst discussions during the earnings call focused on nVenture’s strategies for engaging with OEM and hyperscaler clients, reflecting interest in operational efficiency and future growth potential.

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