Qnity Electronics, Inc. (Q) Risk Factors

Recent key developments

Concrete developments — dated events, named agreements and instruments, legal proceedings — that Qnity Electronics, Inc. surfaced in its latest filing.

• Enactment of the One Big Beautiful Bill Act (OBBBA) on July 4, 2025, modifying international corporate income tax law, including changes to tax rates for Global Intangible Low-Taxed Income and Foreign-Derived Intangible Income, modification of expense allocation for foreign tax credits, and changes to foreign tax credit limitationsJuly 4, 2025
• Enactment of the Inflation Reduction Act of 2022, imposing a 15% corporate alternative minimum tax on certain corporations2022
• OECD Pillar Two global minimum corporate tax rate of 15% on multinational enterprises adopted through domestic top-up tax legislation in countries where the Company operates
• OECD released guidance on January 5, 2026 detailing a “side-by-side” framework that could exempt certain U.S.-parented groups, including Qnity, from certain Pillar Two rulesJanuary 5, 2026
• Separation and Distribution Agreement with DuPont governing Spin-Off, including allocation of environmental liabilities and PFAS liabilities based on Applicable Percentages
• Qnity incurred indebtedness in an aggregate principal amount of $4.1 billion in connection with the Spin-Off, consisting of the $2.35 billion Senior Secured Term Loan Facility entered into on October 31, 2025, the $1.0 billion of Senior Secured Notes due 2032 issued on August 15, 2025, $750 million of Senior Unsecured Notes due 2033 issued on August 15, 2025, and the $1.25 billion Senior Secured Revolving Facility entered into on October 31, 20252025
• Tax Matters Agreement with DuPont includes indemnification obligations for taxes if the Spin-Off fails to qualify for tax-free treatment, and two-year restrictions on certain transactions
• Corteva Letter Agreement and Legacy Liabilities Assignment Agreement restrict Qnity's ability to transfer or separate businesses and assets without assigning certain Legacy Liabilities or meeting alternative conditions
• Intellectual Property Cross-License Agreement with DuPont, where DuPont has sole right to enforce licensed intellectual property
• Transition Services Agreements with DuPont following the Spin-Off provide services for limited periods, requiring Qnity to replace services upon expiration
• Spin-Off from DuPont completed, resulting in approximately 209,443,730 shares of Qnity common stock issued and outstanding