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Item 2. Management’s Discussion and Analysis

2022-11-10 compared with 2022-08-12 · 633 added, 354 removed, 29 unchanged (97% of the section changed)

Discussion and Analysis of Financial Condition and Results of Operations.

References to the “Company,”

“Inflection Point Acquisition Corp.,” “our,” “us” or “we” refer to Inflection Point Acquisition

The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction

with the unaudited interim condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report on Form 10-Q

(this “Quarterly Report”).

Cautionary Note Regarding

Forward-Looking Statements

This Quarterly Report

includes forward-looking statements.

These forward-looking statements are based on our current expectations and beliefs concerning future

developments and their potential effects on us.

There can be no assurance that future developments affecting us will be those that we

have anticipated.

These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or

other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking

Our forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations,

hopes, beliefs, intentions or strategies regarding the future.

In addition, any statements that refer to projections, forecasts or other

characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements.

Management’s Discussion and Analysis

of Financial Condition and Results of Operations.

References to the “Company,” “Inflection

Point Acquisition Corp.,” “our,” “us” or “we” refer to Inflection Point Acquisition Corp.

following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with

the unaudited interim condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report on Form 10-Q (this

“Quarterly Report”).

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report includes forward-looking

These forward-looking statements are based on our current expectations and beliefs concerning future developments and their

potential effects on us.

There can be no assurance that future developments affecting us will be those that we have anticipated.

forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may

cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements.

forward-looking statements include, but are not limited to, statements regarding our or our management team’s expectations, hopes,

beliefs, intentions or strategies regarding the future.

In addition, any statements that refer to projections, forecasts or other characterizations

of future events or circumstances, including any underlying assumptions, are forward-looking statements.

The words “anticipate,”

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but are not limited to, those set forth in the Risk Factors section of our Annual Report on Form 10-K for the year ended December 31,

2021 filed with the SEC.

The following discussion and analysis of our financial condition and results of operations should be read in

conjunction with the unaudited interim condensed financial statements and the notes thereto contained elsewhere in this Quarterly Report.

We are a blank check

company incorporated on January 27, 2021 as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset

acquisition, share purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”).

Our sponsor is Inflection

Point Holdings LLC, a Cayman Islands limited liability company (the “Sponsor”).

The registration statement for our initial

public offering was declared effective on September 21, 2021.

On September 24, 2021, we consummated our initial public offering (the “IPO”)

of 30,000,000 units, at $10.00 per unit (the “Units”).

2021 filed with the SEC and this Quarterly Report.

The following discussion and analysis of our financial condition and results of operations

should be read in conjunction with the unaudited interim condensed financial statements and the notes thereto contained elsewhere in this

Quarterly Report.

We are a blank check company incorporated on January

27, 2021 as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase,

reorganization or similar business combination with one or more businesses (the “Initial Business Combination”).

Our sponsor is Inflection Point Holdings LLC,

a Cayman Islands limited liability company (the “Sponsor”).

The registration statement for our initial public offering was

declared effective on September 21, 2021.

On September 24, 2021, we consummated our initial public offering (the “IPO”) of

30,000,000 units, at $10.00 per unit (the “Units”).

Each Unit consists of one of our Class A ordinary shares, $0.0001

par value (the “Class A ordinary shares” or “Public Shares”) and one-half of one redeemable warrant

(each, a “Public Warrant”).

The underwriters had a 45-day option from the effective date to purchase up to an additional 4,500,000

Units to cover over-allotments, if any.

(each, a “Public Warrant”), with each whole warrant entitling the holder to purchase one Class A ordinary share for $11.50 per

share, subject to adjustment.

The underwriters had a 45-day option from the effective date to purchase up to an additional 4,500,000 Units

to cover over-allotments, if any.

On October 29, 2021, the underwriters partially exercised the over-allotment option (the “Over-Allotment”

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generating additional gross proceeds of $29,750,000, and forfeited their option to purchase the remaining 1,525,000 Units.

Simultaneously with the

closing of the IPO, our Sponsor purchased an aggregate of 6,250,000 private placement warrants (“IPO Private Placement Warrants”)

at a price of $1.00 per IPO Private Placement Warrants, for an aggregate purchase price of $6,250,000.

On October 29, 2021, simultaneously

with the sale of the Over-Allotment Units, our Sponsor purchased an additional 595,000 private placement warrants (the “Over-Allotment

Private Placement Warrants” and together with the IPO Private Placement Warrants, the “Private Placement Warrants”),

generating aggregate gross proceeds to us of $595,000.

An aggregate of 12 qualified

institutional buyers (“Anchor Investors”) expressed an interest to purchase an aggregate of approximately $322.3 million of

the Units to be sold in the IPO.

None of the Anchor Investors expressed an interest in purchasing more than 9.9% of the Units sold in

The Anchor Investors were allocated and purchased a total of 29,540,000 Units or 98.5% of the Units sold in the IPO.

Anchor Investors, Kingstown 1740 Fund, LP, is an affiliate of our Sponsor, and was allocated and purchased 2,900,000 Units in the IPO.

In addition, subject

to each Anchor Investor purchasing 100% of the Units allocated to it, in connection with the closing of the IPO, our Sponsor sold membership

interests reflecting an allocation of Class B ordinary shares, par value $0.0001 per share (the “Founder Shares”) to each

Anchor Investor, or an aggregate of 1,625,000 Founder Shares to all Anchor Investors.

We estimated the aggregate fair value of these Founder

Shares attributable to Anchor Investors to be approximately $9.68 million, or $5.96 per share.

The excess of the fair value of the Founder

Shares was determined to be an offering cost in accordance with Staff Accounting Bulletin Topic 5A.

Offering costs allocated to the Public

Shares and the Public Warrants was all charged to shareholder’s equity upon the completion of the IPO.

Transaction costs amounted

to $26,658,313, consisting of $4,595,000 of underwriting commissions, $11,541,250 of deferred underwriting commissions, $9,680,125 of

excess fair value of founder shares, and $841,938 of other offering costs, with $23,439 allocated to the over-allotment option, $24,538,134

allocated to the Class A ordinary shares subject to redemption, and $2,096,740 allocated to the Class A ordinary shares not subject to

redemption, the Public Warrants and the Private Placement Warrants.

Following the closing

of the IPO on September 24, 2021, $300,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the IPO and the sale

of the IPO Private Placement Warrants was deposited into a trust account (the “Trust Account”).

Following the closing of the

Over-Allotment on October 29, 2021, an additional $29,750,000 ($10.00 per Over-Allotment Unit) from the net proceeds from the sale of

the Over-Allotment Units in the Over-Allotment and the sale of the Over-Allotment Private Placement Warrants was deposited into the Trust

The proceeds deposited in the Trust Account are, and will be, invested only in U.S.

government securities, within the meaning

set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), having a maturity

of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which

invest only in direct U.S.

Simultaneously with the closing of the IPO, our

Sponsor purchased an aggregate of 6,250,000 private placement warrants (“IPO Private Placement Warrants”) at a price of $1.00

per IPO Private Placement Warrants, for an aggregate purchase price of $6,250,000.

On October 29, 2021, simultaneously with the sale of

the Over-Allotment Units, our Sponsor purchased an additional 595,000 private placement warrants (the “Over-Allotment Private Placement

Warrants” and together with the IPO Private Placement Warrants, the “Private Placement Warrants”), generating aggregate

gross proceeds to us of $595,000.

An aggregate of 12 qualified institutional buyers

(“Anchor Investors”) expressed an interest to purchase an aggregate of approximately $322.3 million of the Units to be sold

None of the Anchor Investors expressed an interest in purchasing more than 9.9% of the Units sold in the IPO.

The Anchor Investors

were allocated and purchased a total of 29,540,000 Units or 98.5% of the Units sold in the IPO.

One of the Anchor Investors, Kingstown

1740 Fund, LP (“Kingstown 1740”), is an affiliate of our Sponsor, and was allocated and purchased 2,900,000 Units in the IPO.

In addition, subject to each Anchor Investor purchasing

100% of the Units allocated to it, in connection with the closing of the IPO, our Sponsor sold membership interests reflecting an allocation

of Class B ordinary shares, par value $0.0001 per share (the “Founder Shares”) to each Anchor Investor, amounting to an aggregate

of 1,625,000 Founder Shares to all Anchor Investors collectively.

We estimated the aggregate fair value of these Founder Shares attributable

to Anchor Investors to be approximately $9.68 million, or $5.96 per share.

The excess of the fair value of the Founder Shares was determined

to be an offering cost in accordance with Staff Accounting Bulletin Topic 5A.

Offering costs allocated to the Public Shares and the Public

Warrants was all charged to shareholder’s equity upon the completion of the IPO.

Transaction costs amounted to $26,658,313, consisting

of $4,595,000 of underwriting commissions, $11,541,250 of deferred underwriting commissions, $9,680,125 of excess fair value of founder

shares, and $841,938 of other offering costs, with $23,439 allocated to the over-allotment option, $24,538,134 allocated to the Class

A ordinary shares subject to redemption, and $2,096,740 allocated to the Class A ordinary shares not subject to redemption, the Public

Warrants and the Private Placement Warrants.

Following the closing of the IPO on September

24, 2021, $300,000,000 ($10.00 per Unit) from the net proceeds of the sale of the Units in the IPO and the sale of the IPO Private Placement

Warrants was deposited into a trust account (the “Trust Account”).

Following the closing of the Over-Allotment on October

29, 2021, an additional $29,750,000 ($10.00 per Over-Allotment Unit) from the net proceeds from the sale of the Over-Allotment Units in

the Over-Allotment and the sale of the Over-Allotment Private Placement Warrants was deposited into the Trust Account.

The proceeds deposited

in the Trust Account are, and will be, invested only in U.S.

government securities, within the meaning set forth in Section 2(a)(16) of

the Investment Company Act of 1940, as amended (the “Investment Company Act”), having a maturity of 185 days or less or in

money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act which invest only in direct

government treasury obligations.

Except with respect to interest earned on the funds held in the Trust Account

that may be released to us to pay taxes, if any, the proceeds from the Public Offering and the sale of the Private Placement Warrants

will not be released from the Trust Account until the earliest of (i) the completion of an initial Business Combination, (ii) the redemption

of our Public Shares if we are unable to complete the initial Business Combination by September 24, 2023, subject to applicable law, or

(iii) the redemption of our Public Shares properly submitted in connection with a shareholder vote to amend our amended and restated memorandum

and articles of association to (A) modify the substance or timing of our obligation to allow redemption in connection with the initial

Business Combination or to redeem 100% of its Public Shares if we have not consummated an initial Business Combination by September 24,

2023 or (B) with respect to any other material provisions relating to shareholders’ rights or pre-initial Business Combination activity.

The proceeds deposited in the Trust Account could become subject to the claims of our creditors, if any, which could have priority over

the claims of our Public Shareholders.

Our management has broad

discretion with respect to the specific application of the net proceeds of the Public Offering and the sale of the Private Placement Warrants

although substantially all of the net proceeds are intended to be generally applied toward consummating an initial Business Combination

(less deferred underwriting commissions).

Our initial Business Combination must be with one or more operating businesses or assets with

a fair market value equal to at least 80% of the value of the Trust Account (excluding the amount of any deferred underwriting discount

held in trust and taxes payable on the income earned on the Trust Account).

However, we will only complete an initial Business Combination

if the post-transaction company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise

acquires a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment

There is no assurance that we will be able to successfully effect an initial Business Combination.

We will have until September

24, 2023 to complete the initial Business Combination (the “Combination Period”).

However, if we are unable to complete the

initial Business Combination within the Combination Period, we will (i) cease all operations except for the purpose of winding up, (ii)

as promptly as reasonably possible but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable

in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust

Account (less tax payable and up to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding Public

Shares, which redemption will completely extinguish Public Shareholders’ rights as shareholders (including the right to receive

further liquidation distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval

of our remaining shareholders and our board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii) to our

obligations under Cayman Islands law to provide for claims of creditors and in all cases subject to the other requirements of applicable

Liquidity and Capital

Except with respect to interest earned on the funds held in the Trust Account that may be released

to us to pay taxes, if any, the proceeds from the Public Offering and the sale of the Private Placement Warrants will not be released

from the Trust Account until the earliest of (i) the completion of an Initial Business Combination, (ii) the redemption of our Public

Shares if we are unable to complete an Initial Business Combination by September 24, 2023, subject to applicable law, or (iii) the redemption

of our Public Shares properly submitted in connection with a shareholder vote to amend our amended and restated memorandum and articles

of association to (A) modify the substance or timing of our obligation to allow redemption in connection with an Initial Business Combination

or to redeem 100% of its Public Shares if we have not consummated an Initial Business Combination by September 24, 2023 or (B) with respect

to any other material provisions relating to shareholders’ rights or pre-Initial Business Combination activity.

The proceeds deposited

in the Trust Account could become subject to the claims of our creditors, if any, which could have priority over the claims of our Public

Shareholders.

Our management has broad discretion with respect

to the specific application of the net proceeds of the Public Offering and the sale of the Private Placement Warrants although substantially

all of the net proceeds are intended to be generally applied toward consummating an Initial Business Combination (less deferred underwriting

commissions).

Our Initial Business Combination must be with one or more operating businesses or assets with a fair market value equal

to at least 80% of the value of the Trust Account (excluding the amount of any deferred underwriting discount held in trust and taxes

payable on the income earned on the Trust Account).

However, we will only complete an Initial Business Combination if the post-transaction

company owns or acquires 50% or more of the issued and outstanding voting securities of the target or otherwise acquires a controlling

interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act.

is no assurance that we will be able to successfully effect an Initial Business Combination.

We will have until September 24, 2023 to complete

an Initial Business Combination (the “Combination Period”).

However, if we are unable to complete an Initial Business Combination

within the Combination Period, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible

but not more than ten business days thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate

amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account (less tax payable and up

to $100,000 of interest to pay dissolution expenses) divided by the number of then outstanding Public Shares, which redemption will completely

extinguish Public Shareholders’ rights as shareholders (including the right to receive further liquidation distributions, if any),

and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and our

board of directors, liquidate and dissolve, subject in the case of clauses (ii) and (iii) to our obligations under Cayman Islands law

to provide for claims of creditors and in all cases subject to the other requirements of applicable law.

Proposed Business Combination with Intuitive

On September 16, 2022, the Company entered

into a business combination agreement (the “Business Combination Agreement”) with Intuitive Machines, LLC, a Texas limited

liability company (“Intuitive Machines” and, subsequent to the Proposed Business Combination, “Intuitive Machines OpCo”),

pursuant to which, subject to the satisfaction or waiver of certain closing conditions, including the approval of the Business Combination

Agreement and the transactions contemplated thereby by the Company’s shareholders, (1) at the closing of the transactions contemplated

by the Business Combination Agreement (the “Closing”) and following the Domestication (as defined below), (a) the Company

will acquire equity securities and become the managing member of Intuitive Machines OpCo and (b) the Company will issue voting equity

securities without economic rights to the existing members of Intuitive Machines prior to the Closing (“Intuitive Machines Members”),

resulting in a combined company organized in an umbrella partnership C corporation (“Up-C”) structure, in which substantially

all of the assets and the business of the combined company will be held by Intuitive Machines OpCo;

(2) the Company will domesticate (the

“Domestication”) as a Delaware corporation in accordance with the Delaware General Corporation Law (“DGCL”), the

Companies Act (As Revised) of the Cayman Islands (the “Companies Act”) and the Company’s amended and restated memorandum

and articles of association, (3) Intuitive Machines will change its jurisdiction from Texas to Delaware (the “Conversion”)

and complete a recapitalization (the “Recapitalization”) whereby all outstanding equity securities of Intuitive Machines will

be converted or exchanged into common units, options, and unvested earn out units, as applicable, and (4) the other transactions contemplated

by the Business Combination Agreement and documents related thereto will be consummated (such transactions, together with the business

combination and the Domestication, Conversion, and Recapitalization, the “Proposed Business Combination”).

In connection with

the Proposed Business Combination, the Company will be renamed “Intuitive Machines, Inc.” (“New Intuitive Machines”).

The Domestication

As a condition to the Proposed Business Combination,

the Company will change its jurisdiction of incorporation by effecting a deregistration under Section 206 of the Companies Act and

a domestication under Section 388 of the DGCL, pursuant to which the Company’s jurisdiction of incorporation will be changed

from the Cayman Islands to the State of Delaware.

Immediately prior to the Domestication, pursuant to the Company’s amended and

restated memorandum and articles of association, each Founder Share will convert automatically, on a one-for-one basis, into a Class A

ordinary share.

Immediately following such conversion, in connection with the Domestication, each of the then issued and outstanding

Class A ordinary shares will convert automatically, on a one-for-one basis, into one share of New Intuitive Machines Class A

common stock, par value $0.0001 per share, each of which will carry voting rights of one vote per share (collectively, the “New

Intuitive Machines Class A Common Stock”);

(iii) each whole warrant to purchase one Class A ordinary share (each warrant, a

“Company Warrant”) will automatically represent the right to purchase one share of New Intuitive Machines Class A Common Stock

on the same terms as the Company Warrants (each a “New Intuitive Machines Warrant”) and (c) each of the units of the Company

outstanding as of immediately prior to the Domestication will automatically be canceled and each holder will be entitled to one share

of New Intuitive Machines Class A Common Stock and one-half of one New Intuitive Machines Warrant, per unit.

No fractional New Intuitive

Machines Warrants will be issued upon such cancellation.

Concurrently with the Domestication and subject

to the satisfaction or waiver of the conditions set forth in the Business Combination Agreement, including approval by the Company’s

shareholders, the Company will adopt a certificate of incorporation (the “Proposed Certificate of Incorporation”) that, among

other things, will implement a revised class structure with the shares of New Intuitive Machines Class A Common Stock having one

vote per share and economic rights, the shares of Class B common stock of New Intuitive Machines, par value $0.0001 per share, having

one vote per share and no economic rights (collectively, the “New Intuitive Machines Class B Common Stock”) and the shares

of Class C common stock of New Intuitive Machines, par value $0.0001 per share, having three votes per share and no economic rights

(collectively, the “New Intuitive Machines Class C Common Stock” and the New Intuitive Machines Class A Common Stock,

the New Intuitive Machines Class B Common Stock and New Intuitive Machines Class C Common Stock, collectively, the “New

Intuitive Machines Common Stock”).

The Proposed Certificate of Incorporation will also authorize the issuance of “blank check”

preferred stock, par value $0.0001 per share, having such characteristics as the board may, from time to time, provide.

The Company’s

board of directors will adopt a Certificate of Designation of Preferences, Rights and Limitations of 10% Series A Cumulative Convertible

Preferred Stock, creating the Series A Preferred Stock (as defined below).

The Conversion and Recapitalization

In connection with the Proposed Business Combination,

Intuitive Machines will change its jurisdiction of organization from Texas to Delaware.

Immediately prior to the Closing, Intuitive Machines

will effectuate the Recapitalization whereby all outstanding equity securities of Intuitive Machines will be converted into common units

of Intuitive Machines OpCo (“Intuitive Machines OpCo Common Units”), options to purchase Intuitive Machines OpCo Common Units

(“Intuitive Machines OpCo Options”) and unvested earn out units of Intuitive Machines OpCo (“Earn Out Units”).

Consideration and Structure

As a result of the Up-C structure, the business

combination consideration to be received by Intuitive Machines Members will consist of securities of both Intuitive Machines OpCo having

economic rights but not voting rights and New Intuitive Machines having voting rights but not economic rights equal to a value of approximately

$700,000,000.

In particular, the business combination consideration to be received by the Intuitive Machines Members will be an aggregate

of (a) (i) 68,125,987 Intuitive Machines OpCo Common Units, (ii) 1,874,013 Intuitive Machines OpCo Options and (iii) 10,000,000

Earn Out Units and (b) (i) 278 shares of New Intuitive Machines Class B Common Stock (excluding 1,874,013 shares of

New Intuitive Machines Class B Common Stock reserved for issuance upon exercise of Intuitive Machines OpCo Options) and (ii) 68,125,709 shares

of New Intuitive Machines Class C Common Stock (excluding 10,000,000 shares of New Intuitive Machines Class C Common Stock reserved

for issuance upon vesting of the Earn Out Units).

The 10,000,000 Earn Out Units received by the

applicable Intuitive Machines Members will be subject to vesting and will be earned, released and delivered upon satisfaction of the following

(i) 2,500,000 Earn Out Units will vest if, during the Earn Out Period (as defined below), Intuitive Machines is awarded the

OMES III Contract by NASA (“Triggering Event I”), (ii) 5,000,000 Earn Out Units will vest if, within the Earn Out Period,

Triggering Event I occurs and the volume weighted average closing sale price of New Intuitive Machines Class A Common Stock equals or

exceeds $15.00 per share (“Triggering Event II-A”), (iii) 7,500,000 Earn Out Units will vest if, within the Earn Out Period,

Triggering Event I has not occurred and the volume weighted average closing sale price of New Intuitive Machines Class A Common Stock

equals or exceeds $15.00 per share (“Triggering Event II-B”), and (iv) 2,500,000 Earn Out Units will vest if, within the Earn

Out Period, Triggering Event III occurs the volume weighted average closing sale price of New Intuitive Machines Class A Common Stock

equals or exceeds $17.50 per share (“Triggering Event III”), provided, that Triggering Event II-A and Triggering Event II-B

may not both be achieved.

“Earn Out Period” means (i) with respect to Triggering Event I, the time period beginning on September

16, 2022 and ending at 11:59 pm ET on December 31, 2023, and (ii) with respect to Triggering Event II-A, Triggering Event II-B and Triggering

Event III, the time period beginning on the date that is 150 days following the date of Closing and ending on the date that is the five

(5) year anniversary of the date of Closing.

If a Change of Control (as defined in the Business Combination Agreement) occurs during the

Earn Out Period that results in the holders of New Intuitive Machines Class A Common Stock receiving a per share price greater than or

equal to $15.00 or $17.50, respectively, then immediately prior to the consummation of such Change of Control, to the extent not previously

triggered, then Triggering Event II-A or Triggering Event II-B will be deemed to have occurred, as applicable, and the applicable Earn

Out Units shall vest.

After the expiration of the applicable lock-up

period, holders of certain Intuitive Machines OpCo Common Units will be permitted to exchange such Intuitive Machines OpCo Common Units

(along with the cancellation of the paired share of New Intuitive Machines Class B Common Stock or share of New Intuitive Machines Class

C Common Stock) for shares of New Intuitive Machines Class A Common Stock on a one-for-one basis pursuant to the second amended and restated

limited liability company agreement of Intuitive Machines OpCo (the “Second A&R Operating Agreement”) (subject to customary

conversion rate adjustments for stock splits, stock dividends and reclassifications) or, at the election of New Intuitive Machines (determined

by a majority of the directors of New Intuitive Machines who are disinterested with respect to such determination), cash from a substantially

concurrent public offering or private sale in an amount equal to the net amount, on a per share basis, of cash received as a result of

such public offering or private sale.

Upon the vesting of any Earn Out Units, each of

the applicable Intuitive Machines Members will be issued (i) by Intuitive Machines OpCo an equal number of Intuitive Machines OpCo Common

Units and (ii) by New Intuitive Machines an equal number of shares of New Intuitive Machines Class C Common Stock, in exchange for surrender

of the applicable Earn Out Units and the payment to New Intuitive Machines of a per-share price equal to the par value per share of the

New Intuitive Machines Class C Common Stock.

Upon the exercise of any Intuitive Machines OpCo Option, (i) Intuitive Machines OpCo will

issue to the exercising holder such number of Intuitive Machines OpCo Common Units to be received by such exercising holder as a result

of such exercise and (ii) New Intuitive Machines will issue to the exercising holder an equal number of shares of New Intuitive Machines

Class B Common Stock, in exchange for the payment to New Intuitive Machines of a per-share price equal to the par value per share of the

New Intuitive Machines Class B Common Stock.

Representations, Warranties, Covenants and

The parties to the Business Combination Agreement

have made customary representations, warranties and covenants in the Business Combination Agreement, including, among others, covenants

with respect to the conduct of Intuitive Machines and the Company prior to the Closing.

The Closing is subject to certain customary conditions.

There is no assurance that the Proposed Business Combination will be completed.

The Business Combination Agreement may be terminated

under certain customary and limited circumstances at any time prior to the Closing, including, among others, (i) by mutual written consent

of the Company and Intuitive Machines;

(ii) either the Company or Intuitive Machines if the Closing has not occurred on or before September

and (iii) by Intuitive Machines if the Company has not obtained shareholder approval after the conclusion of the extraordinary

general meeting of the Company’s shareholders to be held for the purpose of voting on the Proposed Business Combination.

Upon termination

of the Business Combination Agreement, in certain circumstances, Intuitive Machines will reimburse the Company for any amounts due and

owing to the Sponsor, up to $1,500,000.

The Series A Investment

On September 16, 2022, concurrently with the execution

of the Business Combination Agreement, the Company entered into a purchase agreement (the “Series A Purchase Agreement”) with

Kingstown 1740 (an existing security holder of the Company and an affiliate of the Sponsor) and Ghaffarian Enterprises, LLC (an affiliate

of Kamal Ghaffarian, an Intuitive Machines founder) (collectively, the “Series A Investors”), pursuant to which, and on the

terms and subject to the conditions of which, New Intuitive Machines agreed to issue and sell to the Series A Investors (i) an aggregate

of 26,000 shares of 10% Series A Cumulative Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”)

which will be convertible into shares of New Intuitive Machines Class A Common Stock in accordance with the terms of the Certificate of

Designation of Preferences, Rights and Limitations of 10% Series A Cumulative Convertible Preferred Stock (the “Certificate of Designation”)

to be adopted by the Company’s board of directors following the Domestication but prior to the Closing and (ii) warrants to purchase

541,667 shares of New Intuitive Machines Class A Common Stock at an initial exercise price of $15.00 per share, subject to adjustment

(the “Preferred Investor Warrants”).

The Series A Investment will be consummated following the Domestication but immediately

prior to the Closing.

Tax Receivable Agreement

The Business Combination Agreement contemplates

that, at the Closing, New Intuitive Machines will enter into a tax receivable agreement (the “Tax Receivable Agreement”) with

Intuitive Machines OpCo and certain Intuitive Machines Members (the “TRA Holders”).

Pursuant to the Tax Receivable Agreement,

New Intuitive Machines will generally be required to pay the TRA Holders 85% of the amount of the cash tax savings, if any, in U.S.

state, and local taxes that are based on, or measured with respect to, net income or profits, and any interest related thereto that New

Intuitive Machines (and applicable consolidated, unitary, or combined subsidiaries thereof, if any and collectively the “Tax Group”)

realizes, or is deemed to realize, as a result of certain tax attributes (the “Tax Attributes”), including:

● existing tax basis in certain assets of Intuitive Machines OpCo and certain of its direct or indirect

subsidiaries, including assets that will eventually be subject to depreciation or amortization, once placed in service;

● tax basis adjustments resulting from taxable exchanges of Intuitive Machines OpCo Common Units (including

any such adjustments resulting from certain payments made by New Intuitive Machines under the Tax Receivable Agreement) acquired by New

Intuitive Machines from a TRA Holder pursuant to the terms of the Second A&R Operating Agreement;

● certain tax benefits realized by New Intuitive Machines as a result of certain U.S.

federal income

tax allocations of taxable income or gain away from New Intuitive Machines and to other members of Intuitive Machines OpCo and deductions

or losses to New Intuitive Machines and away from other members of Intuitive Machines OpCo, in each case as a result of the Proposed Business

● tax deductions in respect of portions of certain payments made under the Tax Receivable Agreement.

Upon the completion of the Proposed Business Combination,

New Intuitive Machines will be a party to the Tax Receivable Agreement.

Under the terms of the Tax Receivable Agreement, New Intuitive

Machines will make payments to the TRA Holders in respect of 85% of the cash tax savings resulting from the net tax benefit to New Intuitive

Machines of certain Tax Attributes (calculated using certain assumptions, and subject to the terms of the Tax Receivable Agreement).

until a TRA Holder exchanges at least 5% of its Intuitive Machines OpCo Common Units, New Intuitive Machines will hold such payments applicable

to existing basis until the TRA Holder satisfies such threshold exchange.

Upon the completion of the Proposed Business Combination, no

TRA Holder will have exchanged at least 5% of its Intuitive Machines OpCo Common Units.

The tax impacts of the transaction were estimated

based on the applicable law in effect on June 30, 2022.

Future exchanges will result in incremental tax

attributes and potential cash tax savings for New Intuitive Machines.

Depending on New Intuitive Machines’ assessment on realizability

of such tax attributes, the arising Tax Receivable Agreement liability will be recorded at the exchange date against equity, or at a later

point through income.

However, if all of the TRA Holders were to exchange

or sell us all of their Intuitive Machines OpCo Common Units, New Intuitive Machines would recognize a deferred tax asset of approximately

$169.2 million and a liability under the Tax Receivable Agreement of approximately $147.2 million, assuming:

(i) all exchanges

or purchases occurred on the same day;

(ii) a price of $10 per share;

(iii) a constant corporate tax rate;

New Intuitive Machines will have sufficient taxable income to fully utilize the tax benefits;

and (v) no material changes in tax

These amounts are estimates and have been prepared for illustrative purposes only.

The actual amount of deferred tax assets and related

liabilities that New Intuitive Machines will recognize will differ based on, among other things, the timing of the exchanges, the price

per share of New Intuitive Machines Class A Common Stock at the time of the exchange, and the tax rates then in effect and certain

change of control or early termination events occurring.

If New Intuitive Machines exercises its right

to terminate the Tax Receivable Agreement or in the case of a change in control of New Intuitive Machines or a material breach of New

Intuitive Machines’ obligations under the Tax Receivable Agreement, all obligations under the Tax Receivable Agreement will be accelerated

and New Intuitive Machines will be required to make a payment to the TRA Holders in an amount equal to the present value of future payments

under the Tax Receivable Agreement.

This payment would be based on certain assumptions, including that New Intuitive Machines would have

sufficient taxable income to fully utilize the benefits arising from the Tax Attributes subject to the Tax Receivable Agreement.

Intuitive Machines were to elect to terminate the Tax Receivable Agreement immediately after the Proposed Business Combination, assuming

the market value of New Intuitive Machines Class A Common Stock is equal to $10 per share, the Company currently estimates that it

would be required to pay approximately $99.7 million to satisfy its total liability.

Equity Facility

On September 16, 2022, the Company entered

into a common stock purchase agreement (the “Cantor Purchase Agreement”), dated September 16, 2022, with CF Principal Investments

LLC (“CFPI”) relating to an equity facility under which shares of newly issued New Intuitive Machines Class A Common Stock

may be sold to CFPI by New Intuitive Machines.

Pursuant to the terms of the Cantor Purchase Agreement, New Intuitive Machines will have

the right, but not the obligation, from time to time at its sole discretion, until the first day of the month following the 18-month period

from and after the Commencement (as defined in the Cantor Purchase Agreement), to direct CFPI to purchase up to the lesser of (i) $50 million

of newly issued New Intuitive Machines Class A Common Stock and (ii) the Exchange Cap, by delivering written notice to CFPI

prior to the commencement of trading on any trading day, subject to certain customary conditions and limitations set forth in the

Cantor Purchase Agreement.

In connection with the execution of the Cantor Purchase Agreement, the Company agreed to issue 100,000 shares

(the “Commitment Shares”) of New Intuitive Machines Class A Common Stock to CFPI.

The Company entered into a registration

rights agreement with CFPI, pursuant to which it agreed to register for resale, pursuant to Rule 415 under the Securities Act of 1933,

as amended (the “Securities Act”), the shares of New Intuitive Machines Class A Common Stock that are sold to CFPI under the

equity facility and the Commitment Shares.

Sponsor Support Agreement

Concurrently with the execution and delivery of

the Business Combination Agreement, the Sponsor, the Company and Intuitive Machines entered into the Sponsor Support Agreement pursuant

to which the Sponsor agreed to, among other things, vote and approve the Business Combination Agreement and all other documents and transaction

contemplated thereby, and to waive, subject to the consummation of the Proposed Business Combination, any and all anti-dilution rights

with respect to the rate that the Founder Shares convert into Class A ordinary shares in connection with the transactions contemplated

by the Business Combination Agreement, in each case, subject to the terms and conditions of the Sponsor Support Agreement.

In connection

with the Sponsor Support Agreement, the Company provided the Sponsor with indemnification against certain claims brought against the Sponsor

for a period of six years following the Closing.

Non-Redemption Agreement

Concurrently with the execution of the Business

Combination Agreement, the Company and Intuitive Machines entered into a non-redemption agreement (the “Non-Redemption Agreement”)

with Kingstown 1740, an affiliate of the Sponsor, pursuant to which Kingstown 1740 agreed not to redeem the 2,900,000 Class A ordinary

shares held by it.

For additional information regarding the Proposed

Business Combination, see the Company’s Registration Statement on Form S-4 filed by on October 13, 2022.

Liquidity and Capital Resources;

Going Concern

As of June 30, 2022, we had $2,632 in cash

and working capital deficit of $86,518.

On September 30, 2021,

our Sponsor agreed to provide us with loans in such amounts as may be required by us to fund our working capital requirements up to an

aggregate of $250,000.

On March 8, 2022, the Sponsor agreed to provide us with loans in such amounts as may be required by us to

fund our working capital requirements up to an aggregate of $500,000.

In addition, in order to finance transaction costs in connection

with an initial Business Combination, our sponsor or an affiliate of our Sponsor or certain of our officers and directors may provide

working capital loans to us.

As of June 30, 2022, there were no amounts outstanding under any working capital loans.

As of September 30, 2022, we had $19,442 in cash and working capital

deficit of $1,995,115.

On September 30, 2021, our Sponsor agreed to provide

us with loans in such amounts as may be required by us to fund our working capital requirements up to an aggregate of $250,000.

March 8, 2022, the Sponsor agreed to provide us with loans in such amounts as may be required by us to fund our working capital requirements

up to an aggregate of $500,000.

On August 4, 2022, the Sponsor agreed to loan

the Company up to $1,000,000 to be used for ongoing expenses reasonably related to the business of the Company and the consummation of

an Initial Business Combination pursuant to a convertible promissory note (the “Working Capital Note”).

All unpaid principal under the Working Capital

Note shall be due and payable in full on the earlier of (i) September 24, 2023 and (ii) the effective date of an Initial Business Combination,

involving the Company and one or more businesses (such earlier date, the “Maturity Date”), unless accelerated upon the occurrence

of an event of default as set forth in the Working Capital Note.

The Sponsor will have the option, at any time on or prior to the Maturity

Date, to convert up to $1,000,000 outstanding under the Working Capital Note into warrants to purchase Class A ordinary shares at a conversion

price of $1.00 per warrant, with each warrant entitling the holder to purchase one Class A ordinary share at a price of $11.50 per share,

subject to the same adjustments applicable to the Private Placement Warrants.

As of September 30, 2022, there was $125,000 outstanding

under the Working Capital Note.

Until consummation of its Initial Business Combination,

the Company will be using these funds for paying existing accounts payable, identifying and evaluating prospective Initial Business Combination

candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to

merge with or acquire, and structuring, negotiating and consummating an Initial Business Combination.

In addition to the Working Capital

Note, in order to finance transaction costs in connection with an Initial Business Combination, the Sponsor or an affiliate of the Sponsor,

or certain of the Company’s officers and directors may, but, except as set forth above, are not obligated to, loan the Company funds

as may be required on a non-interest basis (any such loans together with the loans made under the Working Capital Note, the “Working

Capital Loans”).

Based on the foregoing, the $19,442 in cash held

outside the Trust Account will not be sufficient to allow us to operate for at least 12 months from the date of this Quarterly Report,

assuming that an initial Business Combination is not consummated during that time.

2022, the Company issued the Note to the Sponsor, pursuant to which the Company may borrow up to $1,000,000 from the Sponsor, related

to ongoing expenses reasonably related to the business of the Company and the consummation of the Business Combination.

principal under the Note shall be due and payable in full on the Maturity Date, unless accelerated upon the occurrence of an event of

default as set forth in the Note.

The Sponsor will have the option, at any time on or prior to the Maturity Date, to convert up to $1,000,000

outstanding under the Note into warrants to purchase Class A ordinary shares at a conversion price of $1.00 per warrant, with each warrant

entitling the holder to purchase one Class A ordinary share at a price of $11.50 per share, subject to the same adjustments applicable

to the Private Placement Warrants.

As of August 12, 2022, there were no amounts outstanding under the Note.

Until consummation of its initial Business Combination, we will be

using these funds for paying existing accounts payable, identifying and evaluating prospective initial Business Combination candidates,

performing due diligence on prospective target businesses, paying for travel expenditures, selecting the target business to merge with

or acquire, and structuring, negotiating and consummating the initial Business Combination.

We can raise additional

capital through working capital loans from our Sponsor, certain of our officers and directors, or through loans from third parties.

we are unable to raise additional capital, we may be required to take additional measures to conserve liquidity, which could include,

but not necessarily be limited to, curtailing operations, suspending the pursuit of our business plan, and reducing overhead expenses.

We cannot provide assurance that new financing will be available to us on commercially acceptable terms, if at all.

These conditions raise

substantial doubt about our ability to continue as a going concern for a reasonable period of time, which is considered to be one year

from the issuance date of the financial statements included elsewhere in this Quarterly Report.

outside the Trust Account will not be sufficient to allow the Company to operate for at least 12 months from the issuance of these unaudited

condensed financial statements, assuming that an Initial Business Combination is not consummated during that time.

Prior to the completion of an Initial Business

Combination, the Company does not expect to seek loans from parties other than our Sponsor or an affiliate of our Sponsor as it does not

believe third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in the

Trust Account.

If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity,

which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of its business plan, and reducing

overhead expenses.

The Company cannot provide assurance that new financing will be available to it on commercially acceptable terms, if

In connection with the Company’s assessment of going concern

considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Codification (“ASC”) Topic

205-40, “Basis of Presentation - Going Concern”, the Company has until September 24, 2023 (absent any extensions of such period)

to consummate the Proposed Business Combination or another Initial Business Combination.

It is uncertain that the Company will be able

to consummate the Proposed Business Combination or another Initial Business Combination by this time.

If the Proposed Business Combination

or another Initial Business Combination is not consummated by this date, there will be a mandatory liquidation and subsequent dissolution

of the Company.

Management has determined that the liquidity condition and mandatory liquidation, should the Proposed Business Combination

or another Initial Business Combination not occur, and potential subsequent dissolution, raises substantial doubt about the Company’s

ability to continue as a going concern after September 24, 2023.

No adjustments have been made to the carrying amounts of assets or liabilities

should the Company be required to liquidate after September 24, 2023.

The Company intends to complete the Proposed Business Combination

or another Initial Business Combination before the mandatory liquidation date.

However, there can be no assurance that the Company will

be able to consummate the Proposed Business Combination or any Initial Business Combination by September 24, 2023.

Risks and Uncertainties

We are currently evaluating

the impact of the COVID-19 pandemic and Russian-Ukraine war on the industry and has concluded that while it is reasonably possible that

the virus and the war could have a negative effect on our financial position, results of its operations and/or search for a target company,

the specific impact is not readily determinable as of the date of these unaudited condensed financial statements.

The unaudited condensed

financial statements do not include any adjustments that might result from the outcome of this uncertainty.

We are currently evaluating the impact of the

COVID-19 pandemic and Russian-Ukraine war on the industry and have concluded that while it is reasonably possible that the virus and the

war could have a negative effect on our financial position, results of its operations and/or search for a target company, the specific

impact is not readily determinable as of the date of the unaudited condensed financial statements included elsewhere in this Quarterly

The unaudited condensed financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Results of Operations

As of June 30, 2022,

we had not commenced any operations.

All activity for the period from January 27, 2021 (inception) through June 30, 2022 relates to our

formation and the Public Offering and, subsequent to the closing of the IPO, identifying a target company for an initial Business

We have neither engaged in any operations nor generated any revenues to date.

We will not generate any operating

revenues until after the completion of our initial Business Combination, at the earliest.

We generate non-operating income in

the form of interest income on cash and cash equivalents from the proceeds derived from the Public Offering.

We incur increased expenses

as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence

For the three months

ended June 30, 2022, we had net loss of $108,680, which consisted primarily of formation and operating costs amounting to $577,024 offset

by interest income earned on cash and marketable securities held in Trust Account amounting to $468,344.

For the six months ended

June 30, 2022, we had net loss of $429,135, which consisted primarily of formation and operating costs amounting to $924,893 offset by

interest income earned on cash and marketable securities held in Trust Account amounting to $495,758.

For the three months

ended June 30, 2021, we had net loss of $16,114, which consisted solely of formation and operating costs.

As of September 30, 2022, we had not commenced

any operations.

All activity for the period from January 27, 2021 (inception) through September 30, 2022 relates to our formation and

the Public Offering and, subsequent to the closing of the IPO, identifying a target company for an Initial Business Combination.

have neither engaged in any operations nor generated any revenues to date.

We will not generate any operating revenues until after

the completion of our Initial Business Combination, at the earliest.

We generate non-operating income in the form of interest

income on cash and cash equivalents from the proceeds derived from the Public Offering.

We incur increased expenses as a result of

being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

For the three months ended September 30, 2022,

we had net loss of $520,888, which consisted primarily of formation and operating costs amounting to $2,011,943, offset by interest income

earned on cash and marketable securities held in Trust Account amounting to $1,491,055.

For the nine months ended September 30, 2022,

we had net loss of $950,023, which consisted primarily of formation and operating costs amounting to $2,936,836, offset by interest income

earned on cash and marketable securities held in Trust Account amounting to $1,986,813.

For the three months ended September 30,

2021, we had a net loss of $44,976 which consisted of formation and operating costs amounting to $21,737 and $23,439 of issuance

cost of over-allotment offset by interest income earned on cash and marketable securities held in Trust Account amounting to

For the period from January 27, 2021

27, 2021 (inception) to June 30, 2021, we had net loss of $19,888, which consisted solely of formation and operating costs.

We do not have any long-term

debt obligations, capital lease obligations, operating lease obligations, purchase obligations or long-term liabilities.

As of June 30, 2022 and

December 31, 2021, we did not have any off-balance sheet arrangements.

Administrative Services

Commencing on September

22, 2021, we agreed to pay Kingstown Capital Management L.P., an affiliate of our Sponsor, $15,000 per month for office space, utilities

and secretarial and administrative support services.

Upon the earlier of the completion of the initial Business Combination or our

liquidation, we will cease paying such monthly fees.

(Inception) to September 30, 2021, we had net loss of $64,864, which consisted of formation and operating costs amounting to $41,625

and $23,439 of issuance cost of over-allotment offset by interest income earned on cash and marketable securities held in Trust

Account amounting to $200.

We do not have any long-term debt obligations,

capital lease obligations, operating lease obligations, purchase obligations or long-term liabilities.

As of September 30, 2022 and December 31, 2021,

we did not have any off-balance sheet arrangements.

Administrative Services Agreement

Commencing on September 21, 2021, we agreed to

pay Kingstown Capital Management L.P., an affiliate of our Sponsor, $15,000 per month for office space, utilities and secretarial

and administrative support services.

Upon the earlier of the completion of an Initial Business Combination or our liquidation, we

will cease paying such monthly fees.

Registration Rights

The holders of the (i) Founder

Shares and the Class A ordinary shares issuable upon conversion of Founder Shares, (ii) Forward Purchase Shares, (iii) Private

Placement Warrants and the Class A ordinary shares underlying such Private Placement Warrants and (iv) warrants that may be

issued upon conversion of working capital loans and the Class A ordinary shares underlying such warrants will have registration rights

to require us to register a sale of any of our securities held by them and our any other securities acquired by them prior to the consummation

of our initial Business Combination pursuant to a registration rights agreement entered into in connection with the IPO.

The holders of the (i) Founder Shares and

the Class A ordinary shares issuable upon conversion of Founder Shares, (ii) Forward Purchase Shares, (iii) Private Placement

Warrants and the Class A ordinary shares underlying such Private Placement Warrants and (iv) warrants that may be issued upon

conversion of Working Capital Loans and the Class A ordinary shares underlying such warrants will have registration rights to require

us to register a sale of any of our securities held by them and our any other securities acquired by them prior to the consummation of

our Initial Business Combination pursuant to a registration rights agreement entered into in connection with the IPO.

Pursuant to the

registration rights agreement and assuming $1,500,000 of working capital loans are converted into additional Private Placement Warrants,

we will be obligated to register up to 21,588,750 Class A ordinary shares and 8,345,000 Private Placement Warrants.

The number of

Class A ordinary shares includes (i) 8,243,750 Class A ordinary shares to be issued upon conversion of the Founder Shares,

(ii) 5,000,000 Forward Purchase Shares, (iii) 6,845,000 Class A ordinary shares underlying the Private Placement Warrants and

(iv) 1,500,000 Class A ordinary shares underlying the warrants issuable upon conversion of working capital loans.

The number of warrants

includes 6,845,000 Private Placement Warrants and 1,500,000 additional warrants issuable upon the conversion of working capital loans.

The holders of these securities are entitled to make up to three demands, excluding short form demands, that we register such securities.

In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent

to our completion of our initial Business Combination.

We will bear the expenses incurred in connection with the filing of any such registration

registration rights agreement and assuming $1,500,000 of Working Capital Loans are converted into additional warrants, we will be obligated

to register up to 21,588,750 Class A ordinary shares and 8,345,000 warrants.

The number of Class A ordinary shares includes

(i) 8,243,750 Class A ordinary shares to be issued upon conversion of the Founder Shares, (ii) 5,000,000 Forward Purchase Shares,

(iii) 6,845,000 Class A ordinary shares underlying the Private Placement Warrants and (iv) 1,500,000 Class A ordinary shares

underlying the warrants issuable upon conversion of Working Capital Loans.

The number of warrants includes 6,845,000 Private Placement

Warrants and 1,500,000 additional warrants issuable upon the conversion of Working Capital Loans.

The holders of these securities are

entitled to make up to three demands, excluding short form demands, that we register such securities.

In addition, the holders have certain

“piggy-back” registration rights with respect to registration statements filed subsequent to our completion of our Initial

Business Combination.

We will bear the expenses incurred in connection with the filing of any such registration statements.

At the Closing, the Company, the Sponsor and certain

securityholders of Intuitive Machines will enter into an amended and restated registration rights agreement (the “A&R Registration

Rights Agreement”), pursuant to which, among other things, the Sponsor and such securityholders will be granted certain customary

registration rights, on the terms and subject to the conditions therein, with respect to securities of New Intuitive Machines that they

will hold following the Proposed Business Combination.

Underwriting Agreement

We granted the underwriters

a 45-day option from the Effective Date to purchase up to an additional 4,500,000 Units to cover over-allotments, if any.

On October 29,

2021, the underwriters partially exercised the over-allotment option and purchased 2,975,000 Over-Allotment Units, generating aggregate

gross proceeds of $29,750,000, and forfeited their option to purchase the remaining 1,525,000 Units.

The underwriters were

entitled to a cash underwriting discount of 2.0% per Unit, or $4,595,000, excluding the proceeds from the purchase of an aggregate of

10,000,000 Units by certain of our Anchor Investors, $4,000,000 of which was payable upon the closing of the IPO and $595,000 was payable

upon closing of the Over-Allotment.

Additionally, Citigroup Global Markets Inc.

will be entitled to a deferred underwriting

discount of 3.5% of the gross proceeds of the Public Offering, or $11,541,250 upon the completion of our initial Business Combination.

The deferred fee will become payable from the amounts held in the Trust Account solely in the event that we complete an initial Business

Combination, subject to the terms of the underwriting agreement.

Professional Service

We reimburse our Sponsor

for services provided by one of our Sponsor’s employees who serves as our Chief of Staff (“ COS ”).

The COS receives

$12,500 per month for services rendered, commencing September 25, 2021, through the closing of our initial Business Combination.

three and six months ended June 30, 2022, we recorded $37,500 and $75,000, respectively, of compensation for services provided.

June 30, 2022, there was $12,500 due to the COS.

Critical Accounting

This management’s

discussion and analysis of our financial condition and results of operations is based on our unaudited condensed financial statements,

which have been prepared in accordance with US GAAP.

The preparation of our unaudited condensed financial statements requires us to make

estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent

assets and liabilities in our unaudited condensed financial statements.

On an ongoing basis, we evaluate our estimates and judgments,

including those related to fair value of financial instruments and accrued expenses.

We base our estimates on historical experience, known

trends and events and various other factors that we believe to be reasonable under the circumstances, the results of which form the basis

for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources.

Actual results

may differ from these estimates under different assumptions or conditions.

We have identified the following as its critical accounting

We granted the underwriters a 45-day option from

the Effective Date to purchase up to an additional 4,500,000 Units to cover over-allotments, if any.

On October 29, 2021, the underwriters

partially exercised the over-allotment option and purchased 2,975,000 Over-Allotment Units, generating aggregate gross proceeds of $29,750,000,

and forfeited their option to purchase the remaining 1,525,000 Units.

The Company provided a discount to the underwriters at the closing

of the Public Offering of 2.0% per Unit, or $4,595,000, excluding the proceeds from the purchase of an aggregate of 10,000,000 Units by

certain of our Anchor Investors, $4,000,000 of which was payable upon the closing of the IPO and $595,000 was payable upon closing of

the Over-Allotment.

Additionally, the underwriting agreement states that the Company will pay Citigroup Global Markets Inc.

deferred discount of $0.35 per Unit sold in the Public Offering including pursuant to the Over-Allotment, or an aggregate of $11,541,250

upon the Company’s completion of an Initial Business Combination, which would be payable from the amounts held in the Trust

Account solely in the event that we complete an Initial Business Combination, subject to the terms of the underwriting agreement.

Professional Service Agreement

We reimburse our Sponsor for services provided

by one of our Sponsor’s employees who serves as our Chief of Staff (“COS”).

The COS receives $12,500 per month for services

rendered, commencing September 25, 2021, through the closing of our Initial Business Combination.

For the three and nine months ended

September 30, 2022, we recorded $37,500 and $112,500, respectively, of compensation for services provided.

As of September 30, 2022, there

was $37,500 due to the COS.

Critical Accounting Policies

This management’s discussion and analysis

of our financial condition and results of operations is based on our unaudited condensed financial statements, which have been prepared

in accordance with US GAAP.

The preparation of our unaudited condensed financial statements requires us to make estimates and judgments

that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities

in our unaudited condensed financial statements.

On an ongoing basis, we evaluate our estimates and judgments, including those related

to fair value of financial instruments and accrued expenses.

We base our estimates on historical experience, known trends and events and

various other factors that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments

about the carrying values of assets and liabilities that are not readily apparent from other sources.

Actual results may differ from these

estimates under different assumptions or conditions.

We have identified the following as its critical accounting policies:

Offering Costs

We comply with the requirements

of the ASC 340-10-S99-1.

Offering costs consists of legal, accounting, underwriting fees and other costs incurred through the balance

sheet date that are directly related to the Public Offering.

Offering costs are allocated to the separable financial instruments

to be issued in the Public Offering based on a relative fair value basis, compared to total proceeds received.

Transaction costs

amounted to $26,658,313, consisting of $4,595,000 of underwriting commissions, $11,541,250 of deferred underwriting commissions, $9,680,125

of excess fair value of founder shares, and $841,938 of other offering costs, with $23,439 included in the unaudited condensed statements

of operations as an allocation for the over-allotment option, $24,538,134 included in temporary equity as an allocation for the Class

A ordinary shares subject to redemption, and $2,096,740 included in additional paid-in capital as an allocation for the Class A ordinary

shares not subject to redemption, the Public Warrants and the Private Placement Warrants.

Subject to each Anchor

Investor purchasing 100% of the Units allocated to it in the IPO, and in connection with the closing of the IPO, our Sponsor sold membership

interests reflecting an allocation of an aggregate of 1,625,000 Founder Shares to the Anchor Investors collectively.

We, through an independent

valuations expert, estimated the aggregate fair value of these Founder Shares attributable to Anchor Investors to be approximately $9.68

million, or $5.96 per share.

The excess of the fair value of the Founder Shares was determined to be an offering cost in accordance with

Staff Accounting Bulletin Topic 5A.

Class A Ordinary Shares

Subject to Possible Redemption

All of the Class A Ordinary

Share sold as part of the Units in the Public Offering contain a redemption feature which allows for the redemption of such Public Shares

in connection with our liquidation, if there is a shareholder vote or tender offer in connection with the initial Business Combination

and in connection with certain amendments to our amended and restated memorandum and articles of association.

In accordance with SEC and

its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely

within our control require ordinary shares subject to redemption to be classified outside of permanent equity.

The Class A ordinary

shares are subject to SEC and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99.

If it is probable that the equity instrument will become redeemable, we have the option to either accrete changes in the redemption value

over the period from the date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later)

to the earliest redemption date of the instrument or to recognize changes in the redemption value immediately as they occur and adjust

the carrying amount of the instrument to equal the redemption value at the end of each reporting period.

We recognize changes in redemption

value immediately as they occur.

Immediately upon the closing of the IPO and the Over-Allotment, we recognized the remeasurement from

initial book value to redemption amount value.

The change in the carrying value of redeemable ordinary shares resulted in charges against

additional paid-in capital.

Related Party Redemption

Waiver Agreement

In September 2021, we

entered into a redemption waiver agreement with one of our Anchor Investors, Kingstown 1740 Fund, LP, whereby Kingstown 1740 Fund, LP

agreed to waive its redemption rights on 1,386,989 Class A ordinary shares it holds, and these Class A ordinary shares are classified

as shareholders’ equity.

Net Loss Per Ordinary

We comply with accounting

and disclosure requirements of ASC Topic 260, “Earnings Per Share.” Our unaudited condensed statements of operations includes

a presentation of loss per share for ordinary shares subject to possible redemption in a manner similar to the two-class method of loss

The remeasurement associated with the redeemable Class A ordinary shares is excluded from net loss per ordinary share as the

redemption value approximates fair value.

Net loss per share, basic and diluted, for Class A redeemable ordinary shares is calculated

by dividing interest income earned and realized gains or losses on the Trust Account for the six months ended June 30, 2022 and for the

period from January 27, 2021 (Inception) to June 30, 2021, by the weighted average number of Class A ordinary shares outstanding since

original issuance.

We have not considered the effect of the Public Warrants or the Private Placement Warrants to purchase an aggregate

of 23,332,500 of our Class A ordinary shares in the calculation of diluted loss per share, since their exercise is contingent

upon future events.

Net loss per share, basic and diluted, for Class A and Class B non-redeemable ordinary shares is calculated by dividing

the net loss, adjusted for income or loss attributable to Class A ordinary shares, by the weighted average number of Class A and Class

B non-redeemable ordinary shares outstanding for the period.

Class A non-redeemable ordinary shares and Class B non-redeemable ordinary

shares, which include the Founder Shares, do not have any redemption features and do not participate in the income or losses of the Trust

At June 30, 2022 and December 31, 2021, we did not have any dilutive securities and other contracts that could, potentially,

be exercised or converted into ordinary shares and then share in the earnings of our company.

As a result, diluted loss per share is the

same as basic loss per share for the period presented.

We evaluated the warrants

in accordance with ASC 815-40, “Derivatives and Hedging — Contracts in Entity’s Own Equity,” and concluded that

there were no indexation or tender offer provisions in the warrant agreement that precluded the warrants from being accounted for as components

of equity, and the warrants meet the criteria in ASC 815-40-25 to be classified in shareholders’ deficit.

Fair value of the Public

and Private Placement Warrants was determined by an independent valuation expert as of September 24, 2021 (the date of the IPO) and October

We comply with the requirements of the ASC 340-10-S99-1.

costs consists of legal, accounting, underwriting fees and other costs incurred through the balance sheet date that are directly related

to the Public Offering.

Offering costs are allocated to the separable financial instruments issued in the Public Offering based on

a relative fair value basis, compared to total proceeds received.

Transaction costs amounted to $26,658,313, consisting of $4,595,000

of underwriting commissions, $11,541,250 of deferred underwriting commissions, $9,680,125 of excess fair value of founder shares, and

$841,938 of other offering costs, with $23,439 included in the unaudited condensed statements of operations as an allocation for the over-allotment

option, $24,538,134 included in temporary equity as an allocation for the Class A ordinary shares subject to redemption, and $2,096,740

included in additional paid-in capital as an allocation for the Class A ordinary shares not subject to redemption, the Public Warrants

and the Private Placement Warrants.

Subject to each Anchor Investor purchasing 100%

of the Units allocated to it in the IPO, and in connection with the closing of the IPO, our Sponsor sold membership interests reflecting

an allocation of an aggregate of 1,625,000 Founder Shares to the Anchor Investors collectively.

We, through an independent valuations

expert, estimated the aggregate fair value of these Founder Shares attributable to Anchor Investors to be approximately $9.68 million,

or $5.96 per share.

The excess of the fair value of the Founder Shares was determined to be an offering cost in accordance with Staff

Accounting Bulletin Topic 5A.

Class A Ordinary Shares Subject to Possible

All of the Class A Ordinary Share sold as part

of the Units in the Public Offering contain a redemption feature which allows for the redemption of such Public Shares in connection with

our liquidation, if there is a shareholder vote or tender offer in connection with an Initial Business Combination and in connection with

certain amendments to our amended and restated memorandum and articles of association.

In accordance with SEC and its staff’s guidance

on redeemable equity instruments, which has been codified in ASC 480-10-S99, redemption provisions not solely within our control require

ordinary shares subject to redemption to be classified outside of permanent equity.

The Class A ordinary shares are subject to SEC

and its staff’s guidance on redeemable equity instruments, which has been codified in ASC 480-10-S99.

If it is probable that the

equity instrument will become redeemable, we have the option to either accrete changes in the redemption value over the period from the

date of issuance (or from the date that it becomes probable that the instrument will become redeemable, if later) to the earliest redemption

date of the instrument or to recognize changes in the redemption value immediately as they occur and adjust the carrying amount of the

instrument to equal the redemption value at the end of each reporting period.

We recognize changes in redemption value immediately as

Immediately upon the closing of the IPO and the Over-Allotment, we recognized the remeasurement from initial book value to

redemption amount value.

The change in the carrying value of redeemable ordinary shares resulted in charges against additional paid-in

Related Party Redemption Waiver Agreement

In September 2021, we entered into a redemption

waiver agreement with one of our Anchor Investors, Kingstown 1740, whereby Kingstown 1740 agreed to waive its redemption rights on 1,386,989

Class A ordinary shares it holds, and these Class A ordinary shares are classified as shareholders’ equity.

Net Loss Per Ordinary Share

We comply with accounting and disclosure requirements

of ASC Topic 260, “Earnings Per Share.” Our unaudited condensed statements of operations includes a presentation of loss per

share for ordinary shares subject to possible redemption in a manner similar to the two-class method of loss per share.

The remeasurement

associated with the redeemable Class A ordinary shares is excluded from net loss per ordinary share as the redemption value approximates

Net loss per share, basic and diluted, for Class A redeemable ordinary shares is calculated by dividing interest income earned

and realized gains or losses on the Trust Account for the nine months ended September 30, 2022 and for the period from January 27, 2021

(Inception) to September 30, 2021, by the weighted average number of Class A ordinary shares outstanding since original issuance.

not considered the effect of the Public Warrants or the Private Placement Warrants to purchase an aggregate of 23,332,500 of our Class A

ordinary shares in the calculation of diluted loss per share, since their exercise is contingent upon future events.

share, basic and diluted, for Class A and Class B non-redeemable ordinary shares is calculated by dividing the net loss, adjusted for

income or loss attributable to Class A ordinary shares, by the weighted average number of Class A and Class B non-redeemable ordinary

shares outstanding for the period.

Class A non-redeemable ordinary shares and Class B non-redeemable ordinary shares, which include the

Founder Shares, do not have any redemption features and do not participate in the income or losses of the Trust Account.

30, 2022 and December 31, 2021, we did not have any dilutive securities and other contracts that could, potentially, be exercised or converted

into ordinary shares and then share in the earnings of our company.

As a result, diluted loss per share is the same as basic loss per

share for the period presented.

We evaluated the warrants in accordance with ASC

815-40, “Derivatives and Hedging — Contracts in Entity’s Own Equity,” and concluded that there were no indexation

or tender offer provisions in the warrant agreement that precluded the warrants from being accounted for as components of equity, and

the warrants meet the criteria in ASC 815-40-25 to be classified in shareholders’ deficit.

Fair value of the Public and Private

Placement Warrants was determined by an independent valuation expert as of September 24, 2021 (the date of the IPO) and October 29, 2021

(the date of the Over-Allotment) using a Monte Carlo Model.

5 unchanged sentences

Forward Purchase Agreement

In September 2021, we

entered into a forward purchase agreement (“ FPA ”) pursuant to which certain affiliates of our Sponsor (“ Kingstown ”)

agreed to purchase up to 5,000,000 forward purchase Class A ordinary shares (“ Forward Purchase Shares ”), for $10.00

per share, or an aggregate amount of up to $50,000,000, in a private placement that will close concurrently with the closing of our initial

Business Combination, subject to approval by the Kingstown investment committee.

We have the right, in our sole discretion, to reduce

the amount of Forward Purchase Shares that Kingstown may purchase pursuant to the FPA.

We have not considered the effect of the Forward

Purchase Shares in the calculation of diluted income per share, since their issuance is contingent upon future events.

We evaluated the FPA

under ASC 480 and ASC 815-40 to determine the appropriate accounting treatment.

The FPA does not meet the criteria to be classified as

a liability under ASC 480.

In addition, there is no net cash settlement feature and settlement will be in gross physical delivery of Class

A ordinary shares;

therefore, the FPA should be classified as equity.

However, as the issuance of Forward Purchase Shares is contingent

on several factors, including the consummation of the initial Business Combination, approval by the Kingstown investment committee, and

our discretion, we will record the FPA when it becomes probable that the triggering events will occur.

Until such time, due to the contingent

nature of the FPA, we will disclose the contingency in the notes to our unaudited condensed financial statements.

We do not believe that

inflation had a material impact on our business, revenues or operating results during the period presented.

Emerging Growth Company

We are an “emerging

growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart our Business Startups Act of

2012, (the “JOBS Act”), and may take advantage of certain exemptions from various reporting requirements that are applicable

to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the

auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation

in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive

compensation and shareholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1)

of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until

private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class

of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards.

Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth

companies but any such election to opt out is irrevocable.

We have elected not to opt out of such extended transition period which means

that when a standard is issued or revised and it has different application dates for public or private companies, we, as an emerging growth

company, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

This may make comparison

of our unaudited condensed financial statements with another public company which is either not an emerging growth company or an emerging

growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences

in accounting standards used.

Quantitative and Qualitative Disclosures

About Market Risk.

We are a smaller reporting

company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.

In September 2021, we entered into a forward purchase

agreement (“FPA”) pursuant to which certain affiliates of our Sponsor (“Kingstown”) agreed to purchase up to 5,000,000

forward purchase Class A ordinary shares (“Forward Purchase Shares”), for $10.00 per share, or an aggregate amount of up to

$50,000,000, in a private placement that will close concurrently with the closing of our Initial Business Combination, subject to approval

by the Kingstown investment committee.

We have the right, in our sole discretion, to reduce the amount of Forward Purchase Shares that

Kingstown may purchase pursuant to the FPA.

We have not considered the effect of the Forward Purchase Shares in the calculation of diluted

income per share, since their issuance is contingent upon future events.

We evaluated the FPA under ASC 480 and ASC 815-40

to determine the appropriate accounting treatment.

The FPA does not meet the criteria to be classified as a liability under ASC 480.

addition, there is no net cash settlement feature and settlement will be in gross physical delivery of Class A ordinary shares;

the FPA should be classified as equity.

However, as the issuance of Forward Purchase Shares is contingent on several factors, including

the consummation of an Initial Business Combination, approval by the Kingstown investment committee, and our discretion, we will record

the FPA when it becomes probable that the triggering events will occur.

Until such time, due to the contingent nature of the FPA, we will

disclose the contingency in the notes to our unaudited condensed financial statements.

Series A Purchase Agreement

In connection with the transactions contemplated

by the Business Combination Agreement, the Company entered into the Series A Purchase Agreement with the Series A Investors.

to the Securities Purchase Agreement, the Series A Investors have agreed to purchase an aggregate of $26.0 million of Series A Preferred

Stock and Preferred Investor Warrants in the Series A Investment.

The Company will, upon the terms and subject to the conditions of the

Series A Purchase Agreement, issue and sell to the Series A Investors (i) an aggregate of 26,000 shares of Series A Preferred Stock which

will be convertible into shares of New Intuitive Machines Class A Common Stock at an initial conversion price determined by dividing the

Stated Value (as defined in the Certificate of Designation) of such shares of Series A Preferred Stock by the conversion price of $12.00

per share, subject to adjustment, at the holder’s option and (ii) the Preferred Investor Warrants to purchase 541,667 shares of

New Intuitive Machines Class A Common Stock at an initial exercise price of $15.00 per share, subject to adjustment in accordance with

the terms of the Preferred Investor Warrants.

The Series A Investment will be consummated following the Domestication but immediately

prior to the Closing.

The Preferred Investor Warrants and Series A Preferred

Stock each represent freestanding financial instruments.

The Series A Preferred Stock will be classified in temporary equity pursuant

to ASC 480-10-S99-3A.

The Preferred Investor Warrants will be initially recorded at fair value, with the residual amount allocated to

the Series A Preferred Stock.

We do not believe that inflation had a material

impact on our business, revenues or operating results during the period presented.

Emerging Growth Company Status

We are an “emerging growth company,”

as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS

Act”), and may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies

that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements

of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports

and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder

approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act

exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies

(that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered

under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) are required to comply with the new or revised

financial accounting standards.

The JOBS Act provides that a company can elect to opt out of the extended transition period and comply

with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable.

We have elected

not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application

dates for public or private companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies

adopt the new or revised standard.

This may make comparison of our unaudited condensed financial statements with another public company

which is either not an emerging growth company or an emerging growth company which has opted out of using the extended transition period

difficult or impossible because of the potential differences in accounting standards used.

Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company as defined

by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis