What changed in this filing

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Item 7. Management’s Discussion and Analysis

2025-03-25 compared with 2024-03-25 · 336 added, 283 removed, 221 unchanged (74% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

As a result of the closing of the Business Combination on February 13, 2023, which was accounted for as a reverse recapitalization in accordance with GAAP, the financial statements of Intuitive Machines, LLC, a Delaware limited liability company and our wholly-owned subsidiary, are now the financial statements of the Company .

As a result of the closing of the Business Combination on February 13, 2023, which was accounted for as a reverse recapitalization in accordance with U.S.

GAAP, the financial statements of Intuitive Machines, LLC, a Delaware limited liability company and our wholly-owned subsidiary, are now the financial statements of the Company .

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and related notes thereto included elsewhere in this Annual Report.

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and its consolidated subsidiaries.

We are a space infrastructure and services company founded in 2013 that is contributing to the establishment of lunar infrastructure and commerce on the Moon.

We believe we have a leading position in the development of lunar space operating in four business lines described further below.

We are initially focused on establishing the lunar infrastructure and basis for commerce to inform and sustain human presence off Earth.

We believe our business is well positioned for continued growth and expansion:

Servicing the National Aeronautics and Space Administration (“NASA”) and a worldwide set of commercial payload customers, working to provide access to the lunar surface, cislunar space and data transmission for science, technology, and infrastructure.

Working to provide a thriving, diverse lunar economy, creating new opportunities and markets to enable on-orbit applications, a permanent presence on the Moon, and expand the commercial space exploration marketplace.

We are currently working to provide access to the lunar surface and collect and transmit cislunar data for science, technology, and infrastructure.

We are a space technology, infrastructure, and services company founded in 2013 that is contributing to the establishment of cislunar infrastructure and helping to develop cislunar and deep space commerce.

Cislunar encompasses objects in orbit in the Earth-Moon system and on the Lunar surface, while deep space exploration is space beyond the Moon, including Mars.

We believe we have a leading position in the development of technology platforms operating in three core pillars —delivery services, data transmission services, and infrastructure as a service— as described below under Our Business Strategy .

We are focused on establishing the lunar infrastructure associated with each of the three pillars, which provides the basis for commerce to inform and sustain human presence off Earth.

Our vision is that our infrastructure services enable our customers to focus on their unique contributions to create a thriving, diverse cislunar economy and expand the commercial space exploration marketplace to the Lunar surface and beyond.

The United States (“U.S.”) government has indicated that returning to the moon is of strategic importance to the U.S.

and we believe it will continue to have bipartisan support as we enter the next generation space race with the People’s Republic of China (“China”) .

We believe that space is the next economic frontier, with the moon being the next stepping stone, and the increased demand from governments, intelligence agencies, commercial industries, and private individuals has created multiple opportunities for long-term growth.

We intend to participate in expanding the cislunar economy through a steady cadence of missions, with the intent of offering reduced cost of access and operations while providing reliable missions on a defined schedule.

We are one of a select few companies servicing NASA and a worldwide set of commercial payload customers.

We believe we have a strong position with a first mover advantage, as evidenced by three Commercial Lunar Payload Services (“CLPS”) awards to date as of December 31, 2023.

On February 22, 2024, Intuitive Machines’ Nova-C lander became the first U.S.

vehicle to softly land on the lunar surface since 1972 and landed the vehicle further south than any vehicle in the world has ever soft-landed on the Moon.

Our Nova-C lander on the IM-1 mission carried approximately 100 kilograms of payloads and executed numerous experiments and technology demonstrations at the lunar surface near the south pole.

Our goal is to follow the successful IM-1 mission with IM-2, which will continue to execute experiments and technology demonstrations at the Shackleton Connecting Ridge at the lunar south pole, and IM-3, our third CLPS award, which will land at Reiner Gamma.

These missions, along with additional expeditions, are in partnership with NASA, Nokia Corporation, Columbia Sportswear Company, Aegis Aerospace, Inc.

and other commercial players.

Intuitive Machines offers its customers the flexibility needed to pioneer a thriving, diverse lunar economy and to enable a permanent presence on the Moon.

Additionally, the U.S.

Space Forces’ (the “Space Force”) requirement to ensure freedom of action in space is driving their initial focus on cislunar Space Domain Awareness sensors and xGEO Position Navigation and Tim ing solutions as a result of the ongoing efforts by the United States and the People’s Republic of China (“China”) to return to the lunar surface in a sustainable manner.

We believe the U.S.

Department of Defense funding for cislunar activities will drive the Space Force to rely on purchasing cislunar commercial services for the next five plus years, as opposed to acquiring and operating new government systems.

This funding provides an opportunity for companies such as Intuitive Machines to sell Space Domain Awareness, Position Navigation and Timing, and secure communications to the Space Force, especially given that the commercial sector will be the driving force in providing cislunar products and services due to the capital that is flowing to new space entrants.

This, along with other domestic and foreign allied policies, enhances our belief in the growing space economy and why we are well-positioned.

We believe we have a strong position, as evidenced by four Commercial Lunar Payload Services (“CLPS”) awards to date as of December 31, 2024.

On February 22, 2024, our Nova-C lander became the first U.S.

vehicle to softly land on the lunar surface since 1972, utilizing our Nova-C Guidance, Navigation and Control (“GN&C”) and Propulsion systems, both of which were designed and are produced in-house.

Our IM-1 Nova-C lander carried approximately 100 kilograms of science experiment and technology demonstration payloads, including the first CLPS payload, to a landing site closer to the lunar south pole than any previous mission.

We operated on the lunar surface beyond the CLPS required mission duration and downloaded over 500 MB of payload customer data on our commercial Lunar Data Network.

In March 2025, our IM-2 mission landed at the southernmost location of the moon, 5 degrees from the south pole.

While in transit, our space to ground communications brought down over 8GB of data from space over our network;

delivered 3 rideshare customers to trans lunar injection orbit and assisted them with ground tracking and communication;

and demonstrated precision autonomous orbit operations circling the moon for 39 orbits over a 72 hour period.

While on the surface, we demonstrated the ability to manage power in thermal conditions on the south pole surface and in a crater.

With the challenge of not being able to recharge the IM-2 lander solar panels post landing, the mission was still able to complete several mission and payload milestones, including downloading 500 MB of payload customer data from the lunar surface.

See Our Business Strategy for a description of our additional lunar missions, lunar relay communications, lunar vicinity navigation, and autonomous surface rover operations.

Space Force (“Space Force”) has recently begun to turn its attention to the cislunar space, as noted in the Mitchell Institute paper “Securing Cislunar Space and the First Island Off the Coast of Earth.” As the leading CLPS provider and the first company to have successfully landed and operated on the Moon, we believe we are at the forefront of NASA's push for a sustainable return to the lunar surface, while simultaneously driving critical early conversations with the U.S.

Department of Defense (“U.S.

DoD”) and Space Force to secure the Moon and cislunar space to ensure peaceful and strategic operations in this emerging domain.

Our Business Model

We primarily generate revenue through our contracts with customers of our lunar access services and by collecting and transmitting cislunar data for science, technology and infrastructure in our Space Products and Infrastructure services.

We primarily generate revenue through our contracts with customers of our orbital and lunar access services and by collecting and transmitting cislunar data for science, technology and infrastructure.

We are a provider and supplier of space products and services that we believe will enable sustained robotic and human exploration to the Moon, Mars, and beyond.

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We expect that deeper adoption of our products and services from our customers will come in many forms, including increased reliance on our technology as a core part of a mission, increased usage of our landers for lunar transportation and exploration, and greater dependence on our advanced software analytics capabilities for satisfying each customers’ needs.

Our core technologies underpin our capabilities in four business units:

Lunar Access Services, Orbital Services, Lunar Data Services and Space Products and Infrastructure.

Under Accounting Standards Codification (“ASC”) 280 “Segment Reporting,” we concluded that our business units operate as one reportable segment.

See our Segment Reporting disclosure under Note 2 in our consolidated financial statements for further discussion on our reportable segment.

Lunar Access Services

Our Lunar Access Services business provides reliable and affordable means for governments, companies and individuals to explore and place objects in cislunar space or on the lunar surface.

We have developed a complete lunar program that includes mission control, the Nova-C lander, a space-to-ground communications network, and a series of launch vehicle contracts with SpaceX.

As of December 31, 2023, we had three missions on the flight manifest, with plans to increase the frequency and complexity of the missions over time.

On February 22, 2024, our Nova-C lander on the IM-1 mission became the first U.S.

vehicle to softly land on the lunar surface since 1972 and landed the vehicle further south than any vehicle in the world has ever soft-landed on the Moon.

We are currently focused on using our proprietary lunar lander vehicles to execute CLPS contracts for NASA to fly scientific equipment to the lunar surface and support experiments.

We also have a robust and growing set of commercial customers pursuing R&D and technology maturation efforts aimed at capturing the growing cislunar economy.

This service includes softly landing on the lunar surface while carrying significant payloads, shuttling numerous technology demonstrations to the lunar surface, deploying the first drill to test for water ice on the Moon and deploying drones to test Long Term Evolution networks.

Orbital Services

Orbital Services provides in-space orbital services for both commercial and government organizations.

These services include repair, refueling, and raising the orbits of existing satellites.

We seek to leverage our domain expertise and space products, such as optical navigation, rendezvous and proximity operations, robotic mechanisms for satellite delivery, debris removal and Space Domain Awareness in orbits from low Earth orbit out to cislunar space.

We also serve as the prime contractor and partner on NASA center support contracts, such as the recently awarded OMES III and JETSON Low Power contracts, that expand our relationship with NASA and emphasize our capabilities in key technology focus areas.

Lunar Data Services

Our Lunar Data Services business will establish a private and secure network called the Lunar Data Network (the “LDN”) that sends and receives secure communications, navigation and imagery to and from the Moon.

The LDN is designed to support line-of-sight and data relay services for spacecraft in cislunar space and systems anywhere on the lunar surface.

We intend to evolve the network to provide backup services to NASA and the U.S.

The LDN is currently comprised of a mission control center, strategically positioned global ground stations, and base-band units installed at each ground station.

With the launch of future lander missions, the LDN will be further enhanced with the deployment of our lunar data relay satellites to offer continuous lunar coverage.

We believe providing these lunar data services to NASA and the Space Force will be an increasingly important priority given China’s recent declaration that it intends to build its own lunar satellite network and manned lunar habitat.

Space Products and Infrastructure

Our Space Products and Infrastructure business offers reliable and cost-effective space products to its customers with offerings that include propulsion systems, navigation systems, lunar mobility, power infrastructure and human habitation systems.

We also provide highly specialized aerospace engineering services for complex space systems development to NASA and the aerospace industry across the United States.

With extensive additive manufacturing capabilities, including an in-house composites shop and robust machine shop, we believe we have the capabilities and expertise required to rapidly manufacture on-demand prototypes, development parts, flight units, and spares with a focus on producing small series and high-quality serial productions of metal components utilizing additive manufacturing.

Additionally, we believe this business allows us to expand into prime positions on payload contracts with NASA and other customers.

We operate under three core pillars which we believe are required to develop cislunar and deep space commerce:

delivery services, data transmission services, and infrastructure as a service.

Under Accounting Standards Codification (“ASC”) 280 “Segment Reporting,” we concluded that our core pillars operate as one reportable segment.

See our Segment Reporting disclosure under Notes 2 and 16 in our consolidated financial statements for further discussion on our reportable segment.

Provided below are summarized descriptions of our three core pillars.

• Delivery Services provides for the transportation and delivery of payloads, such as, satellites, scientific instruments and cargo to various destinations in space, in addition to rideshare delivery and lunar surface access.

• Data Transmission Services offerings include the collection, processing, and interpretation of space-based data, utilizing applications, such as, command, control, communications, reconnaissance and prospecting.

• Infrastructure as a Service delivers space assets performing tasks and making decisions without human intervention that are designed to perform essential functions, such as, navigation, maintenance, scientific data collection, and system health monitoring.

We integrate these fundamental pillars to not only enable access to the Moon but also to lay the foundation for a thriving cislunar and deep space economy.

We believe our delivery, data transmission, and infrastructure capabilities uniquely position us to drive innovation, create long-tail revenue streams, and ultimately support humanity’s push to establish profitable industries in space.

We expect to achieve leading time to market across these core pillars driven by our short design to manufacture process, enabled through vertical integration and rapid iterative testing.

We leverage technologies developed for our three core service pillars to expand into adjacent markets where these capabilities provide a competitive advantage.

Delivery Services

We utilize our proprietary lunar lander vehicles to service CLPS contracts by flying NASA scientific equipment and commercial payloads to the lunar surface and supporting mission operations.

With four CLPS contracts awarded to date, we are pioneering lunar access.

We are also scaling our lander capabilities to support larger payloads, including heavy cargo-class infrastructure delivery for projects like the Lunar Terrain Vehicle (“LTV”), ensuring a reliable path for sustained human and robotic exploration of the Moon.

In August 2024, NASA awarded Intuitive Machines a $116.9 million contract to deliver six science and technology payloads, including one European Space Agency-led drill suite to the Moon’s South Pole.

This award leverages the Company’s lunar delivery, data transmission, and autonomous operation capabilities to explore the region targeted for sustained human operations.

As part of NASA’s CLPS initiative, this marks the Company’s fourth contract award, IM-4, to deliver science and technology payloads and return valuable data while autonomously operating on the surface of the Moon.

In February 2024, our IM-1 lander became the first U.S.

vehicle to softly land on the lunar surface since 1972.

In March 2025, our IM-2 mission landed at the southernmost location of the Moon, 5 degrees from the south pole.

While on the surface, we demonstrated the ability to manage power in thermal conditions on the south pole surface and in a crater.

With the challenge of not being able to recharge the IM-2 lander solar panels post landing, the mission was still able to complete several mission and payload milestones.

Revenue streams from delivery services are expected to include transportation and delivery of payloads (satellites, scientific instruments, and cargo) to various destinations in space, including rapid in-space mobility solutions enabled by our proprietary engine technology.

Data Transmission Services

We believe that our Data Transmission Services offering is made up of a validated and complete lunar communications solution.

Our Lunar Data Network (“LDN”) consists of our Nova Control Center (“NCC”), our existing global collection of dishes called the Lunar Telemetry, Tracking and Communications Network (“LTN”), and a constellation of Lunar Data Network Satellites to be deployed as part of our NSN 2.2 contract award .

In September 2024, NASA awarded Intuitive Machines the sole NSN contract for communication and navigation services for missions in the near space region, which extends from Earth’s surface to beyond the Moon (NSN 2.2).

The NSN contract is a firm-fixed-price, multiple award, Indefinite-Delivery/Indefinite-Quantity (“IDIQ”) task order contract, with a base period of five years with an additional five-year option, with a maximum potential value of $4.82 billion.

The initial NSN contract award includes incrementally funded task orders totaling $150.0 million over the next 3 years.

As the sole awardee of the initial tranche of NSN contracts, we are deploying a constellation of lunar relay satellites to provide continuous cislunar communication and navigation services.

This capability supports NASA’s Artemis missions while introducing a scalable, pay-by-the-minute data service model, enabling enhanced video, telemetry, and autonomous navigation.

Our strategy leverages the additional performance capacity of our lunar landers to deploy satellites at marginal costs, creating a robust and cost-effective lunar communication infrastructure that forms the data backbone of our cislunar operations.

We believe providing these lunar data and navigation services to NASA, NSS, and commercial/international customers will be an increasingly important priority.

In December 2024, NASA awarded Intuitive Machines NSN contracts for DTE services for the lunar vicinity (NSN 1.2) and beyond the lunar vicinity (NSN 1.3).

These contracts allow use of terrestrial ground stations to support science missions in lunar orbit, on the lunar surface, or beyond the Moon.

Our network is secured by layered levels of protection including advanced architecture, enterprise-level endpoint and antivirus protection, and Splunk advanced Security Information & Event Management (“SIEM”) control.

Our Network Control Center (“NCC”) is located at our headquarters in Houston, Texas and was built from the ground up.

NCC enables collaboration, innovation and seamless operations, in this 24-hour facility that was designed to provide tracking, telemetry and communications support for cislunar space and the surface of the Moon.

Our Network Control Center (“NCC”) is located at our headquarters in Houston, Texas and was built from the ground up by our highly experienced team.

Once established and deployed, the data transmission services are expected to include and support NASA, U.S.

national security, international, and commercial data needs.

We will collect, transmit, and monetize data buys from data collected in-transit to the moon, in a variety of cislunar orbits, and on the surface of the moon for our future missions.

Infrastructure as a Service

Our Infrastructure as a Service pillar delivers essential systems and platforms to enable sustainable lunar exploration and commercial activity.

By focusing on mobility, energy, and operational capabilities, we are creating the foundational infrastructure needed to support NASA’s Artemis campaign and commercial endeavors on the Moon.

Key areas of focus include the LTV, its commercialization potential, and the Fission Surface Power (“FSP”) initiative, all designed to build a thriving and sustainable lunar economy.

During 2024, NASA awarded Intuitive Machines a $30.8 million LTV contract to support the agency’s Artemis Campaign as a prime contractor, leading the development of the Moon RACER.

Designed to operate in extreme lunar conditions, including the Moon's South Pole, the LTV features advanced autonomous driving, power management, and communications systems.

Adjacent and Opportunistic Market Opportunities

Due to Intuitive Machines’ unique technology platforms and engineering expertise, we are also pursuing and executing on business opportunities outside the three core pillars for customers aligned with our talent and product offerings.

This includes work on the JETSON Low Power project for the Air Force Research Laboratory (AFRL), the development of scalable reentry technologies, and federal engineering services contracts at various NASA centers.

In the $9.5 million JETSON Low Power project, we are helping AFRL develop the architecture and technology for deploying and maintaining a network of navigation beacons in cislunar space that require little-to-no support once

delivered to their orbits.

This includes a new radioisotope power generator that gives IM invaluable experience with nuclear power systems that can be applied to future lunar surface infrastructure, such as NASA’s FSP program.

We have also made significant progress to date in federal services contracts.

Our federal service contracts provide us access to one of our key customers, NASA, allows us to develop technologies important for the cislunar economy, and provides a skilled labor force which can support our three core pillars.

In 2023, we were awarded as the prime contractor by NASA on the OMES III contract, with a focus on spacecraft mechanisms and robotics.

In addition in 2024, we were also selected as an awardee under the One Acquisition Solution for Integrated Services Plus Multi-Agency Contract (“OASIS+”).

Recent Developments

Business Combination and Related Transactions

The Company was formerly known as Inflection Point Acquisition Corp.

(“IPAX”), which was a blank check company originally 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.

On September 24, 2021, IPAX consummated an initial public offering, after which its securities began trading on the Nasdaq.

On September 16, 2022, IPAX entered into that certain Business Combination Agreement by and between IPAX and Intuitive Machines, LLC.

On February 13, 2023, Intuitive Machines, LLC consummated the previously announced Business Combination and other related transactions as further described in Note 1 - Business Description and Note 3 - Business Combination and Related Transactions to our consolidated financial statements included in Item 8 of Part II of this Annual Report.

The Business Combination was accounted for akin to a reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with U.S.

Generally Accepted Accounting Principles (“U.S.

The Business Combination and other related transactions had several significant impacts on our reported financial position and results, as a consequence of the reverse recapitalization treatment.

Private Placement

On September 5, 2023, the Company consummated a securities purchase agreement (the “Purchase Agreement”) with Armistice Capital Master Fund Ltd (the “Purchaser”) pursuant to which the Company agreed to sell securities to the Purchaser in a private placement (the “Initial Private Placement”).

The Purchase Agreement provided for the sale and issuance by the Company of (i) an aggregate of 4,705,883 shares of the Company’s Class A Common Stock (the “PIPE Shares” and (ii) an accompanying (a) warrant to purchase up to 4,705,883 shares of Class A Common Stock (the “Initial Series A Warrant”) at an exercise price of $4.75 per share and (b) warrant to purchase up to 4,705,883 shares of Class A Common Stock (the “Initial Series B Warrant”) at an exercise price of $4.75 per share, for aggregate gross proceeds of $20.0 million, before deducting related transaction costs of $1.4 million.

The Initial Series A Warrant and the Initial Series B Warrant are immediately exercisable and will expire on March 5, 2029 and March 5, 2025, respectively.

After giving effect to the Business Combination, the Private Placement and other related transactions, there are currently (i) 21,029,876 shares of Class A Common Stock issued and outstanding, (ii) 0 shares of Class B Common Stock issued and outstanding, (iii) 70,909,012 shares of Class C Common Stock issued and outstanding, and (iv) 26,000 shares of Series A Preferred Stock issued and outstanding.

The shares of Class B Common Stock and Class C Common Stock do not have any economic value but entitle the holder thereof to one and three votes per share, respectively.

The Company also has outstanding a total of 21,930,394 Public Warrants and Private Warrants to purchase one share of Class A Common Stock with an exercise price of $11.50 per share and 9,411,766 Series A Warrants and B Warrants to purchase one share of the Company’s Class A Common Stock with an exercise price of $4.75 per share.

The Company also issued 541,667 Preferred Investor Warrants in conjunction with the issuance of the Series A Preferred Stock to purchase an aggregate 706,522 shares of the Company’s Class A Common Stock with an exercise price of $11.50 per share.

The Class A Common Stock, and the Public Warrants and Private Warrants trade on the Nasdaq under the symbols, “LUNR” and “LUNRW”, respectively.

In December 2024, the Company completed an underwritten public offering of 10,952,381 shares of its Class A Common Stock at a price to the public of $10.50 per share (the “Public Offering”), which included the full exercise of the underwriters’ option to purchase an additional 1,275,714 shares of Class A Common Stock from the Company.

The Company also entered into an agreement with an accredited investor, pursuant to which the Company sold to the investor $10.0 million of shares of its Class A Common Stock in a concurrent private placement at a purchase price per share equal to the public offering price per share in the Offering of $10.50 (the “Private Offering” together with the Public Offering, the “2024 Offering”).

The net proceeds to the Company from the Offering and concurrent private placement, after deducting transaction costs of $6.5 million, were approximately $116.9 million.

In December 2024, the Company secured two additional contracts from NASA’s Near Space Network (“NSN”) for Direct-to-Earth (“DTE”) services.

DTE communication and navigation services are critical for enabling missions to exit Earth’s orbit, reach lunar destinations, and explore deep space.

The new contract awards are NSN 1.2 for DTE Geostationary to Cislunar DTE Services, offering enhanced data transmission capabilities and autonomous operations and NSN 1.3 for xCislunar DTE Services, addressing mission needs for highly elliptical orbits and deep space operations.

Both contracts are firm-fixed-price, indefinite-delivery/indefinite-quantity task orders designed to bolster NASA’s Lunar Exploration Ground Segment.

These awards add capacity to alleviate demand on the Deep Space Network and support unique mission requirements.

Subsequent Events

Warrant Transactions

On January 10, 2024, the Company entered into a Warrant Exercise Agreement with an existing investor to exercise in full an existing Series B Common Stock Purchase Warrant to purchase up to an aggregate 4,705,883 shares of Class A Common Stock.

In consideration for the immediate and full exercise of the existing Series B Common Stock Purchase Warrant, the existing investor received (i) a new unregistered Series A Common Stock Purchase Warrant to purchase up to an aggregate of 4,705,883 shares of Class A Common Stock with an exercise price of $2.75 per share and a term of 5 years, 6 months and (ii) a new unregistered Series B Common Stock Purchase Warrant to purchase up to an aggregate of 4,705,883 shares of Class A Common Stock with an exercise price of $2.75 per share and a term of 18 months in a private placement pursuant to Section 4(a)(2) of the Securities Act of 1933.

In connection with the Warrant Exercise Agreement, the Company also agreed to reduce the exercise price of the existing Series B Common Stock Purchase Warrant from $4.75 to $2.50 per share and reduced the exercise price of the existing Series A Common Stock Purchase Warrant from $4.75 to $2.75 per share.

The gross proceeds to the Company from the exercise of the existing Series B Common Stock Purchase Warrant was approximately $11.8 million.

In a series of transactions during February 2024, the investor exercised its remaining 4,705,883 Series B and 9,411,766 Series A Common Stock Purchase Warrants providing an additional $38.8 million of gross proceeds to the Company.

Loan and Loan Conversion

On January 10, 2024, the Company entered into a series of loan documents with Pershing LLC, an affiliate of Bank of New York Mellon, pursuant to which Pershing LLC agreed to an extension of credit in an amount not to exceed $10.0 million to the Company (the “Loan Documentation”).

Borrowings under this credit facility bear interest at the target interest rate set by the Federal Open Market Committee (“Fed Funds Rate”), subject to a 5.5% floor, plus a margin.

For borrowings, the applicable rate margin is 0.9%.

The proceeds are available for working capital needs and other general corporate purposes.

The credit facility is due on February 22, 2024.

The Loan Documentation included one or more guarantees (the “Credit Support Guarantees”) by Ghaffarian Enterprises, LLC (an affiliate of Dr.

Kamal Ghaffarian) (“Ghaffarian Enterprises”) and documentation by which Ghaffarian Enterprises, LLC supported such Credit Support Guarantees with collateral including marketable securities (the “Credit Support”), in each case in favor of the lender for the benefit of the Company.

On January 10, 2024, the Company and Ghaffarian Enterprises entered into a credit support fee and subrogation agreement, where the Company agreed to pay a support fee of $148 thousand for the Credit Support.

On January 28, 2024, the Company and the Guarantor entered into a letter agreement (the “Letter Agreement”) pursuant to which, on January 29, 2024:

(i) the Guarantor contributed $10.0 million to the Company for purposes of repaying the principal amount owed to the Lender under the Credit Line as of the repayment date specified thereunder (the “Repayment Obligation”), in exchange for which (x) the Company issued to the Guarantor 3,487,278 shares of the Company’s Class A Common Stock and Conversion Warrants described further below.

Following the Contribution, the Company all amounts due to the Lender in satisfaction of the Credit Line were repaid in full.

Pursuant to the Letter Agreement, the Company agreed to issue to the Guarantor, pursuant to Section 4(a)(2) of the Securities Act of 1933, (i) a new unregistered Series A Common Stock Purchase Warrant to purchase up to an aggregate of 4,150,780 shares of, at the Guarantor’s election, Class A Common Stock (at an exercise price per share equal to $2.57 per share), Class C Common Stock (at an exercise price per share equal to $0.0001 per share), or a combination thereof, with an expiration date of January 29, 2029, and (ii) a new unregistered Series B Common Stock Purchase Warrant to purchase up to an aggregate of 4,150,780 shares of, at the Guarantor’s election, Class A Common Stock (at an exercise price per share equal to $2.57 per share), Class C Common Stock (at an exercise price per share equal to $0.0001 per share), or a combination thereof, with an expiration date of January 29, 2025.

Series A Preferred Stock Conversion

As a result of the Warrant Exercise Agreement on January 10, 2024 in conjunction with the Warrant Transactions discussed above and in accordance with the Certificate of Designation, the Series A Preferred Stock conversion price was reduced to $3.00 per share.

In a series of notifications to the Company during February 2024, the registered holder of 21,000 shares of Series A Preferred Stock elected to convert all of its Series A Preferred Stock holdings into Class A Common Stock at a conversion price of $3.00 per share.

The Company issued 7,738,743 shares of Class A Common Stock as a result of the conversion.

Warrant Redemption

On February 4, 2025, the Company announced the redemption of all of its outstanding warrants (the Public Warrants and Private Warrants as defined in Note 9, collectively the “Warrants”) to purchase shares of the Company’s Class A Common Stock that were issued under the warrant agreement, dated September 21, 2021 (the “Warrant Agreement”), by and between the Company and Continental Stock Transfer & Trust Company, as warrant agent, and that remained unexercised at 5:00 p.m., New York City time, on March 6, 2025 (the “Redemption Date”) for the redemption price of $0.01 per Warrant.

During the period from January 1, 2025 to March 6, 2025, 15,358,229 of the Warrants were exercised resulting in gross proceeds of $176.6 million.

On the Redemption Date, a total of 6,571,724 Warrants remained unexercised as of 5:00 p.m.

New York City time, and the Company redeemed those Warrants for an aggregate redemption price of $66 thousand.

As such, the Warrants ceased trading on the Nasdaq and were delisted, with the suspension of trading effective before the market opened on March 6, 2025.

In connection with the Warrant Redemption, Michael Blitzer, a director and warrant holder, agreed to exercise 1,800,000 of the Warrants, and the Company agreed to repurchase 941,080 shares of the Company’s Class A Common Stock for an aggregate purchase price of $20.7 million.

Earn Out Units

On February 4, 2025, the Company issued an aggregate of 7,500,000 shares of Intuitive Machines’ Class C Common Stock in connection with meeting the conditions of the following milestones, Triggering Events II-A and III (as defined in Note 2), resulting in the vesting of Earn Out Units of 5,000,000 and 2,500,000, respectively.

Refer to Note 2 for additional information on the Earn Out Units.

Loan Agreement

O n March 4, 2025, we entered into a loan and security agreement (the “Loan Agreement”) with Stifel Bank.

The Loan Agreement provides for a secured revolving credit facility in an aggregate principal amount of up to $40.0 million (the “Revolving Facility”).

The proceeds of the loans (and any letters of credit issued thereunder) may be used for the funding of growth initiatives, including working capital needs and general corporate purposes as the Company continues to focus on minimizing its cost of capital while maximizing available funding alternatives.

Amounts outstanding under the Revolving Facility will bear interest at a rate per annum equal to the greater of (a) Term SOFR (secured overnight financing rate) plus 2.75% and (b) 6.00% .

The Loan Agreement matures on April 30, 2027 (the “Maturity Date”).

to certain conditions in the Loan Agreement, amounts borrowed thereunder may be repaid and reborrowed at any time prior to the Maturity Date.

As of the date of this filing, the revolving credit facility remains unborrowed.

Key Factors Affecting Our Performance

We believe that our future success and financial performance depend on several factors that present significant opportunities for our business, but also pose risks and challenges, including those discussed below and in the section titled Part I., Item 1A.

“Risk Factors” in this Annual Report.

Inflation and Macroeconomic Pressures

In combination with the economic recovery from the COVID-19 pandemic and repercussions from geopolitical events, the global economy continues to experience volatile disruptions including to the commodity and labor markets.

The global economy continues to experience volatile disruptions including to the commodity and labor markets.

These disruptions have contributed to an inflationary environment which has affected, and may continue to adversely affect, the price and availability of certain products and services necessary for our operations, which in turn, has adversely impacted, and may continue to adversely impact our business, financial condition and results of operations.

We continue to monitor economic conditions and the impact of macroeconomic pressures, including repercussions from the recent banking crisis, rising interest rates, sustained inflation and recession fears, supply chain disruptions, monetary and fiscal policy measures (including future actions or inactions of the United States government related to the “debt-ceiling”), heightened geopolitical tensions (such as the war in Ukraine and Israel), changes to the U.S.

federal budget, and the political and regulatory environment on our business, customers, suppliers and other third parties (including the potential for U.S.

government shut down).

federal budget, and the political and regulatory environment on our business, customers, suppliers and other third parties.

While rising costs and other inflationary pressures have not had a material impact on our business to date, we are monitoring the situation and assessing its impact on our business, including to our partners and customers.

Key Factors Affecting Our Performance

“Risk Factors” in this Annual Report.

Our ability to commence and expand spaceflight mission operations

Our success will depend in large part on our ability to commence and expand our lunar mission operations in 2024 and beyond.

We completed our first mission in February 2024 and we are on track to complete the two additional funded missions with a goal of establishing a regular cadence of multiple missions per year of increasing size and complexity by late 2025.

This will provide our customers with proven and reliable cislunar access, with which to plan their future manifest.

With binding agreements for 3 launches as of December 31, 2023, we have $268.6 million in backlog, and we are in active discussions with numerous potential customers, including government agencies and private companies, to potentially add to our contracted revenue.

Prior to commencing missions, we must complete internal integration activities as well as launch vehicle integration with our launch provider, SpaceX.

Any delays in our launch date or in otherwise commencing our missions, including due to congestion at the pad launch site or delays in obtaining various approvals or licenses, could adversely impact our results and growth plans.

As we improve production efficiency and schedule reliability and reach our target of multiple missions per year manifested 2-3 years in advance, we expect to improve our market penetration, which we believe will lead to higher revenue from both volume and mission complexity as well as increased operating leverage.

Our ability to expand our product and services offerings

We are in the preliminary stages of developing our full space infrastructure.

We are in the preliminary stages of developing our full space infrastructure offerings.

These services are expected to grant customers access to cislunar space and the lunar surface at lower price points than previous lunar missions.

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We expect to make significant investments in our lunar and data programs in the short term.

Although we believe that our financial resources, including the proceeds of the Business Combination and the subsequent Private Placement, will be sufficient to meet our capital needs in the short term, our timeline and budgeted costs for these offerings are subject to substantial uncertainty, including due to compliance requirements of U.S.

Although we believe that our financial resources will be sufficient to meet our capital needs in the short term, our timeline and budgeted costs for these offerings are subject to substantial uncertainty, including due to compliance requirements of U.S.

federal export control laws and applicable foreign and local regulations, the impact of political and economic conditions, and the need to identify opportunities and negotiate long-term agreements with customers for these services, among other factors.

Our business may not generate sufficient funds, and we may otherwise be unable to maintain sufficient cash reserves to pay any additional indebtedness that we may incur.

Ability to improve profit margins and scale our business

The growth of our business is dependent on our ability to improve our profit margins over time while successfully scaling our business.

We intend to continue investing in initiatives to improve our operating leverage and significantly increase utilization.

Our ability to achieve our production-efficiency objectives could be negatively impacted by a variety of factors including, among other things, lower-than-expected facility utilization rates, manufacturing and production cost overruns, increased purchased material costs and unexpected supply-chain quality issues or interruptions.

If we are unable to achieve our goals, we may not be able to increase operating margin, which would negatively impact gross margin and profitability.

Our ability to expand spaceflight mission operations

Our success will partially depend on our ability to expand our lunar mission operations in 2025 and beyond.

We completed the first mission in February 2024 and completed our second mission in March 2025.

We are working to establish a regular cadence of missions.

We believe that this will provide our customers with proven and reliable cislunar access, with which to plan their future manifest.

With binding agreements for additional launches as of December 31, 2024, we have $328.3 million in backlog, and we are in active discussions with numerous potential customers, including government agencies and private companies, to potentially add to our contracted revenue backlog.

Prior to commencing missions, we must complete internal integration activities as well as launch vehicle integration with our launch provider, SpaceX.

Any delays to our targeted mission launch date or in commencing our missions, including due to congestion at the pad launch site or delays in obtaining various approvals or licenses, could adversely impact our results and growth plans.

Ability to continue to capitalize on government expenditures and private enterprise investment in the space economy

Our future growth is largely dependent on our ability to continue to capitalize on increased government spending and private investment in the space economy.

From 2019 to 2024, the U.S.

federal government increased its space exploration and development budget for NASA by approximately 15.8%, or $3.4 billion.

federal government expenditures and private enterprise investment have fueled our growth in recent years, and it has resulted in our continued ability to secure increasingly valuable contracts for products and services in 2024.

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federal government spending could unfavorably impact the space exploration sector in the future.

On January 20, 2025, President Donald J.

Trump announced an executive order establishing the “Department of Government Efficiency” to maximize government efficiency and productivity.

Pressures on and uncertainty surrounding the U.S.

federal government’s budget and potential changes in budgetary priorities, could adversely affect the funding for individual programs and delay purchasing decisions by our customers.

If our existing programs and project pursuits are not focused on the federal government’s higher priorities, our business, prospects, financial condition and operating results could be adversely affected.

However, we expect U.S.

federal government expenditures and private investment in the space economy will continue to result in increased purchases of our products and services.

Ability to improve profit margins and scale our business

The growth of our business is dependent on our ability to improve our profit margins over time while successfully scaling our business.

We intend to continue investing in initiatives to improve our operating leverage and significantly increase utilization.

If we are unable to achieve our goals, we may not be able to increase operating margin, which would negatively impact gross margin and profitability.

Our ability to continue to innovate

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We believe the synergy of these technologies enables greater responsiveness to the commercial and government requirements for lunar exploration.

To continue establishing market share and attracting customers, we plan to continue to make substantial investments in research and development for the continued enhancements of our landers and other space systems.

Over time, we expect our research and development expenditures to continue to grow on an absolute basis, but remain consistent or decrease as a percent of our total revenue as we expand our service offerings.

Components of Results of Operations

Most of our revenue is derived from long-term contracts for the delivery of payloads to the lunar surface.

We perform work under contracts that broadly consist of fixed-price, cost-reimbursable, time-and-materials or a combination of the three.

Pricing for all customers is based on specific negotiations with each customer.

For a description of our revenue recognition policies, see the section titled “Critical Accounting Policies and Estimates.”

Historically, most of our revenue has been derived from fixed-price, long-term contracts for the delivery of payloads to the lunar surface.

In order to satisfy these contracts, we undertake the engineering for the research, design, development, manufacturing, integration and sustainment of advanced technology space systems.

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Revenue from long-term contracts can fluctuate from period to period largely based on the stage of the project and overall mission.

These projects will typically have a ramp up period in the beginning stage and wind down as the mission nears launch date.

A significant portion of the revenue (approxi mately 10% o f the contract price) contains variable considerations which is constrained to nil for accounting purposes as it is dependent on a successful mission landing.

These projects will typically have a ramp up period in the beginning stage and wind down as the mission nears the targeted launch date.

A significant portion of the revenue (approxi mately 10% o f the contract price) contains variable consideration which is constrained to nil for accounting purposes as it is dependent on a successful mission landing.

This may cause fluctuations in future revenue, profits and cash flows.

We perform work under contracts that broadly consist of fixed-price, cost-reimbursable, time-and-materials or a combination of the three.

Pricing for all customers is based on specific negotiations with each customer.

For a description of our revenue recognition policies, see the section titled “Critical Accounting Policies and Estimates.” A small portion of our revenue is generated from engineering services which are time-and-material type contracts.

Going forward, cost-reimbursable contracts may constitute a material portion of our revenue.

Since late 2023, we have been performing a more significant amount of work on cost-reimbursable contracts such as OMES III.

Under cost-reimbursable contracts, the price is generally variable based upon our actual allowable costs incurred for materials, equipment, reimbursable labor hours, overhead and G&A expenses.

Profit on cost-reimbursable contracts may be in the form of a fixed fee or a mark-up applied to costs incurred, or a combination of the two.

The fee may also be an incentive fee based on performance indicators, milestones or targets and can be based on customer discretion or in the form of an award fee determined based on customer evaluation of the Company's performance against contractual criteria.

Cost-reimbursable contracts are generally less risky because the owner/customer retains many of the project risks, however it generally requires us to use our best efforts to accomplish the scope of the work within a specified time and budget.

Cost-reimbursable contracts with the U.S.

government are generally subject to the Federal Acquisition Regulation (“FAR”) and are competitively priced based on estimated or actual costs of providing the contractual goods or services.

The FAR provides guidance on types of costs that are allowable in establishing prices for goods and services provided to the U.S.

government and its agencies.

Pricing for non-U.S.

government agencies and commercial customers is based on specific negotiations with each customer.

Cost of revenue (excluding depreciation)

Cost of revenue (excluding depreciation) consists primarily of direct material and labor costs, launch costs, manufacturing overhead, other personnel-related expenses, which include salaries, bonuses, benefits and stock-based compensation expense and freight expense.

Cost of revenue (excluding depreciation) consists primarily of direct material and labor costs, launch services, manufacturing overhead, freight expense, and other personnel-related expenses, which include salaries, bonuses, benefits and stock-based compensation expense.

We expect our cost of revenue to increase in absolute dollars in future periods as we sell more products and services.

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Tangible fixed assets include property and equipment.

Impairment of property and equipment

Impairment of long-lived assets occurs whenever events or changes in circumstances indicate the carrying value of a long-lived asset may not be recoverable.

Long-lived assets consists of property and equipment, net.

An impairment loss is recognized if the carrying amount of a long-lived asset is not recoverable and exceeds it fair value.

See Note 4 of the consolidated financial statements for additional information on the impairment of property and equipment.

General and administrative expense (excluding depreciation)

Selling, general and administrative expense (excluding depreciation) consist primarily of personnel-related expenses for our sales, marketing, supply chain, finance, legal, human resources and administrative personnel, as well as the costs of customer service, information technology, professional services, insurance, travel, allocated overhead and other marketing, communications and administrative expenses.

We expect to invest in our corporate organization and incur additional expenses associated with transitioning to, and operating as, a public company, including increased legal and accounting costs, investor relations costs, higher insurance premiums and compliance costs.

Selling, general and administrative expense (excluding depreciation) consist primarily of personnel-related expenses for our sales, marketing, supply chain, research and development (“R&D”), finance, legal, human resources and administrative personnel, as well as the costs of customer service, information technology, professional services, insurance, travel, allocated overhead and other marketing, communications and administrative expenses.

R&D represents costs incurred for the Company’s continued enhancements of our landers, lunar data network, other space systems, and also for the development and innovation of our proprietary technology platforms.

R&D costs primarily include engineering personnel salaries and benefits, subcontractor costs, materials and supplies, and other related expenses.

We also expect to invest in our corporate organization and incur additional expenses associated with transitioning to, and operating as, a public company, including increased legal and accounting costs, investor relations costs, higher insurance premiums and compliance costs.

As a result, we expect that selling, general and administrative expenses will increase in absolute dollars in future periods as a percentage of total revenue.

Interest expense, net

Interest expense, net consists of interest income earned on cash and cash equivalents and short-term investment balances held by us in interest bearing time deposit accounts.

Interest expense is incurred on long-term debt.

Interest income (expense), net

Interest income (expense), net consists of interest income earned on cash and cash equivalents and short-term investment balances held by us in interest bearing demand deposit accounts.

Interest expense is incurred primarily on long-term debt and credit support arrangements.

Change in fair value of earn-out liabilities

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Change in fair value of warrant liabilities

In connection with the closing of the Private Placement, the Company issued the Initial Series A Warrant and the Initial Series B Warrant (the “Warrants”) which are classified as liabilities on our balance sheet.

In connection with the Private Placement, Warrant Exercise Agreement, and the Bridge Loan Conversion, the Company has issued warrants which are classified as liabilities on our balance sheet.

At each period end, the warrants are remeasured to their fair value with the changes during the period recognized in other income (expense) on our consolidated statement of operations.

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Change in fair value of SAFE Agreements

Prior to closing the Business Combination, Intuitive Machines, LLC issued six SAFE Agreements in late 2021 and early 2022.

Prior to closing the Business Combination (as discussed in Note 1) , Intuitive Machines, LLC issued six SAFE Agreements in late 2021 and early 2022.

The funds received upon issuance of the SAFE Agreements were used to fund operations.

Pursuant to the guidance under ASC 480 “Distinguishing Liabilities from Equity,” management determined that the SAFE Agreements should be initially recorded as liabilities at fair value and subsequently remeasured at fair value with changes recognized in earnings until conversion at a qualifying financing event or termination of the SAFE Agreements.

Upon the consummation of the Business Combination, the SAFE Agreements liability was eliminated and converted into shares of our Class A Common Stock.

See Note 10 for additional information on the SAFE Agreements.

Upon the consummation of the Business Combination in February 2023, the SAFE Agreements liability was eliminated and converted into shares of our Class A Common Stock.

See Note 11 - Fair Value Measurements of the consolidated financial statements for additional information on the SAFE Agreements.

Loss on issuance of securities

In connection with the Private Placement as discussed in Notes 9 and 10 to the consolidated financial statements, the Company issued warrants and recognized a loss on the issuance as the fair value of the securities exceeded the gross proceeds at the issuance date.

In connection with the Private Placement, Warrant Exercise Agreement, and the Bridge Loan Conversion as discussed in Notes 9 and 11 to the consolidated financial statements, the Company issued warrants and recognized a loss on the issuance as the fair value of the securities exceeded the gross proceeds at the issuance date.

The Company evaluated the terms of the warrants and determined they meet the criteria in ASC 815, “Derivatives and Hedging”, to be classified as a derivative liability, initially measured at fair value.

The subsequent changes in fair value are recognized in earnings in other income (expense) on the consolidated statement of operations.

Other (expense) income, net

Other (expense) income, net primarily consists of expense driven by fair value adjustments related to our Commitment Shares liability as discussed under Equity Facility in Note 3 to the consolidated financial statements, slightly offset by miscellaneous income sources.

Income tax (expense) benefit

Other income (expense), net

Other (expense) income, net primarily consists of immaterial miscellaneous income sources.

Income tax expense

Intuitive Machines, Inc.

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The financial results of Intuitive Machines, LLC were consolidated into Intuitive Machines, Inc.

for the period from February 13, 2023 to December 31, 2023 and resulted in the allocation of approximately 77.1% of Intuitive Machines, LLC’s net loss to noncontrolling interests.

for the periods February 13, 2023 forward and resulted in the allocation of approximately 35.5% of Intuitive Machines, LLC’s net loss to noncontrolling interests.

Net income attributable to noncontrolling interest

Intuitive Machines and KBR entered into a joint venture agreement (the “OMES III JV Agreement”) within Space Network Solutions to execute the OMES III contract with a profits interest of 47% for Intuitive Machines and 53% for KBR, which represents the noncontrolling interest.

We have determined that the OMES III JV Agreement represents a silo within Space Network Solutions and is a standalone VIE.

Intuitive Machines is the primary beneficiary of this VIE which is consolidated for financial reporting purposes.

Results of Operations

The following tables set forth our results of operations for the periods presented.

The period-period comparison of financial results is not necessarily indicative of future results.

The period over period comparison of financial results is not necessarily indicative of future results.

The following table sets forth information regarding our consolidated results of operations for the year ended December 31, 2024 compared to the year ended December 31, 2023.

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Cost of revenue (excluding depreciation) 190,369 101,044 89,325

Cost of revenue (excluding depreciation) - affiliated companies 34,862 2,949 31,913

Depreciation 1,859 1,376 483

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Other income (expense), net:

Interest expense, net (823) (836) 13

Interest income (expense), net 180 (823) 1,003

Change in fair value of earn-out liabilities (120,124) 66,252 (186,376)

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Loss on issuance of securities (93,136) (6,729) (86,407)

Other (expense) income, net (483) 6 (489)

Other income (expense), net 1,242 (483) 1,725

Total other income (expense), net (289,489) 71,299 (360,788)

Income (loss) before income taxes (346,885) 10,180 (357,065)

Income tax (expense) benefit (40) 23 (63)

Income tax expense (37) (40) 3

Net income (loss) (346,922) 10,140 (357,062)

Net loss attributable to Intuitive Machines, LLC prior to the Business Combination — (6,481) 6,481

Net income for the period February 13, 2023 through December 31, 2023 20,773 — 20,773

Net income (loss) (post Business Combination) (346,922) 16,621 (363,543)

Net loss attributable to redeemable noncontrolling interest (67,004) (45,141) (21,863)

Net income attributable to the Company 62,804 — 62,804

Cumulative preferred dividends (2,343) — (2,343)

Net income attributable to Class A common shareholders $ 60,461 $ — $ 60,461

Revenue for the years ended December 31, 2023 and 2022 was primarily driven by NASA and other commercial payload contracts associated with the IM-1, IM-2 and IM-3 missions.

The following provides a summary of the material contracts and estimated mission launch dates for each mission impacting our results of operations (estimated contract revenue and contract revenue excludes variable consideration that is constrained):

• The NASA payload contract for the IM-1 mission was awarded in June 2019 with an initial targeted mission launch date in March 2022 .

Total IM-1 mission estimated contract revenue under NASA and other commercial fixed-priced contracts was $120.1 million as of December 31, 2023.

As of December 31, 2022, total IM-1 mission estimated contract revenues were approximately $117.3 million.

During the third quarter of 2022, the targeted mission launch date was revised from December 2022 to March 2023.

In April 2023, we received an additional modification from NASA to change the targeted landing site within the South Pole extending the targeted mission launch date to no later than February 2024 and increasing contract revenue by approximately $3.1 million.

• The initial NASA payload contract for the IM-2 mission was awarded in October 2020 with a targeted mission launch date i n December 2022.

Total IM-2 mission estimated contract revenue under NASA and other commercial fixed-priced contracts was $102.1 million as of December 31, 2023 as compared to $106.7 million as of December 31, 2022.

One of our commercial rideshare customers opted to re-manifest its payload from the IM-2 mission to the IM-3 mission resulting in a decrease to estimated contract revenues of approximately $4.5 million on the IM-2 mission.

The IM-2 mission launch and post-launch services run through June 2024 under our contract with NASA although we anticipate launching after that date as we work with our customer to identify a final targeted landing site that will impact the mission timeline.

Net income attributable to noncontrolling interest 3,495 — 3,495

Net income (loss) attributable to the Company (283,413) 61,762 (345,175)

Preferred dividends (896) (2,343) 1,447

Net income (loss) attributable to Class A common shareholders $ (284,309) $ 59,419 $ (343,728)

Revenue for the years ended December 31, 2024 and 2023 was primarily driven by NASA and other commercial payload contracts associated with the IM-1, IM-2 and IM-3 lunar payload missions as well as the OMES III contract where we provide engineering services to the Landsat Servicing mission at the Goddard Space Flight Center in Maryland.

Additionally, we earned revenue from several other general and feasibility study engineering contracts for the year ended December 31, 2024, including the JETSON Low Power, LTV and NSN contract awards.

The following provides a summary of the significant contracts and targeted mission launch dates for each lunar payload mission impacting our results of operations:

• The NASA payload contract for the IM-1 mission was awarded in June 2019 and was completed in February 2024.

As a result of the successful landing on the lunar surface, previously constrained revenue of approximately $12.3 million as of December 31, 2023 was released and approximately $11.6 million was

recognized as revenue during the first quarter of 2024, bringing the total IM-1 mission contract revenue under NASA and other commercial fixed-priced contracts to $132.4 million.

As of March 31 2024, the IM-1 mission and all related contracts have been closed out.

• The initial NASA payload contract for the IM-2 mission was awarded in October 2020 with a targeted mission launch date in December 2022.

Total IM-2 mission estimated contract revenue under NASA and other commercial fixed-priced contracts increased to $123.8 million as of December 31, 2024 (excluding constrained revenue of $15.8 million) as compared to $102.1 million as of December 31, 2023.

The increase in total mission estimated contract revenue is mostly due to a task order modification with NASA finalized in the second quarter of 2024 to change the mission targeted landing site within the South Pole region of the moon and extend the expected mission launch and post-launch services of IM-2 to no later than August 2025.

The task order modification increased estimated contract revenue by approximately $12.5 million.

In addition, several new awards for commercial landed payload and commercial rideshare contracts further contributed to the increase in the estimated revenue.

In early 2025, we completed the IM-2 mission and continue to work with our customers to close out all related contracts.

• The initial NASA payload contract for the IM-3 mission was awarded in November 2021 with an initial targeted mission launch date no later than June 2024 under our current contract with NASA.

Total IM-3 mission estimated revenue under fixed-priced contracts is $80.9 million as of December 31, 2023 as compared to $78.8 million as of December 31, 2022.

The increase in estimated contract revenues for the IM-3 mission is primarily due to the award of a new $2.1 million commercial landed payload received in the first quarter of 2023.

The IM-3 mission launch and post-launch services run through June 2024 under our contract with NASA although we anticipate launching after that date as we work with our customer to identify its complement of payloads that will impact the mission timeline.

Total revenue decreased by $6.4 million, or 7%, for the year ended December 31, 2023 compared to the same period in 2022.

Revenue on the IM-1 mission decreased approximately $27.9 million to $7.2 million for the year ended December 31, 2023 from $35.2 million for the same period in 2022 primarily due to the mission nearing completion in 2023.

As of December 31, 2023, the IM-1 mission was 98% complete and was successfully completed in February 2024.

Revenue on the IM-2 mission for the year ended December 31, 2023 was $22.1 million as compared to $25.1 million in the same period of 2022 and was primarily driven by a change in progress towards completion of the IM-1 mission.

Total IM-3 mission estimated revenue under fixed-priced contracts is $93.0 million (excluding constrained revenue of $9.7 million) as of December 31, 2024 as compared to $80.9 million as of December 31, 2023.

The increase in total mission estimated contract revenue is mostly due to a task order modification with NASA to identify its complement of payloads and extend the IM-3 mission timeline to no later than June 2026.

The task order modification increased estimated contract revenue by approximately $9.0 million.

• The initial NASA payload contract for the IM-4 mission was awarded in August 2024 with an initial targeted mission launch date no later than August 2028.

Total IM-4 mission estimated revenue under fixed-priced contracts is $105.2 million (excluding constrained revenue of $11.7 million) as of December 31, 2024.

Total revenue increased by $148.4 million, or 187%, for the year ended December 31, 2024 compared to the same period in 2023 and was substantially driven by a full year of revenue in 2024 from the OMES III contract execution which began in the fourth quarter of 2023 as further discussed below.

Revenue on the IM-1 mission increased approximately $5.2 million to $12.4 million for the year ended December 31, 2024 from $7.2 million for the same period in 2023.

The increase in IM-1 revenue was due to the successful completion of the mission in February 2024 which resulted in the release of approximately $12.3 million of previously constrained revenue, and approximately $11.6 million was recognized as revenue during the first quarter of 2024.

Revenue on the IM-2 mission decreased slightly by $3.0 million to $19.1 million for the year ended December 31, 2024 from $22.1 million for the same period in 2023 as revenue from commercial payload and commercial rideshare contracts leveled off as the mission neared the upcoming launch in February 2025.

The IM-2 mission was approximately 97% complete as of December 31, 2024.

Revenue from the IM-3 mission increased approximately $5.1 million to $24.9 million for the year ended December 31, 2023 from $19.8 million for the same period in 2022 primarily due to the commercial landed payload contract awarded in the first quarter of 2023 and novation of the commercial rideshare contract in the second quarter of 2023.

Revenue from the IM-3 mission decreased approximately $11.9 million to $13.0 million for the year ended December 31, 2024 from $24.9 million for the same period in 2023 and was largely attributable to unfavorable adjustments from task order modifications extending the targeted mission launch window to no later than June 2026.

The IM-3 mission was approximately 69% complete as of December 31, 2024.

Revenue from engineering and other services increased approximately $19.5 million including $12.5 million associated with the start up of the OMES III contract in December 2023 and $3.6 million associated with the initial phase of the fission surface power contract which was completed in the third quarter of 2023.

Operating Expenses

Revenues from task orders under the OMES III contract, which commenced in December 2023, were approximately $145.0 million for the year ended December 31, 2024 compared to $12.5 million for the same period in 2023.

Other revenue contracts from engineering and other services increased approximately $23.1 million mostly driven by $18.3 million in revenues from the LTV contract awarded in April 2024.

Cost of revenue (excluding depreciation)

Total cost of revenue increased by $121.2 million, or 117%, for the year ended December 31, 2024 compared to the same period in 2023.

Cost of revenue on the IM-1 mission decreased by $5.1 million due to lower progress as the mission neared completion as well as delay fees in 2022 on launch vehicle costs that did not recur in 2023.

On the IM-2 mission, cost of revenue was approximately $31.7 million for the year ended December 31, 2023 compared to $33.0 million in the same period in 2022.

IM-3 mission cost of revenue increased approximately $13.7 million primarily due to higher progress as our focus shifted in the latter half of 2023 from final completion of the IM-1 mission and the later phases of the IM-2 mission to ramping up activities on the IM-3 mission.

Cost of revenue for engineering and other services projects increased

approximately $18.7 million during the year ended December 31, 2023 including $11.6 million associated with the start up of the OMES III contract in December 2023 and $3.6 million associated with the initial phase of the fission service power contract which was completed in the third quarter of 2023.

As of December 31, 2023, all three of our lunar missions were in loss positions, primarily as a result of constrained variable consideration and continued increases in the estimated costs to complete the missions.

The IM-1 mission became a loss contract in 2019 primarily as a result of constrained variable consideration.

During year ended December 31, 2023, the IM-1 mission accrued loss increased by $10.2 million due to the delay of the targeted mission launch date discussed above.

We have included additional labor costs in our cost estimates at completion as result of extending the targeted mission launch date.

Additionally, costs increased as a result of technical challenges identified through systems testing in early 2023 primarily associated with electronics and tank valves.

On the IM-2 mission, we increased the accrued contract loss by approximately $14.2 million during the year ended December 31, 2023 which was primarily driven by additional labor and subcontractor costs associated with the extension of the targeted launch date as well as increased costs associated with fuel systems and avionics based on our evaluation and consideration of the technical issues encountered on the IM-1 mission.

On the IM-3 mission, the accrued contract loss increased by approximately $5.8 million during the year ended December 31, 2023 primarily due to additional estimated labor and subcontractor costs associated with the extension of the targeted launch date.

Cost of revenue on the IM-1 mission decreased by $12.8 million due to winding down progress as the mission was completed in February 2024.

On the IM-2 mission, cost of revenue decreased slightly by approximately $1.4 million for the year ended December 31, 2024 compared to the same period in 2023 as the mission neared completion.

IM-3 mission cost of revenue decreased by approximately $11.4 million to $20.2 million for the year ended December 31, 2024 compared to $31.6 million for the same period in 2023, primarily due to lower activity as the focus shifted towards the upcoming IM-2 mission launch, as previously discussed.

As of December 31, 2024, two lunar missions were in loss positions.

On the IM-2 mission, we increased the accrued contract loss by approximately $9.9 million during the year ended December 31, 2024 which was primarily driven by

unfavorable adjustments resulting from task order modifications to change the mission targeted landing site and extension of the targeted mission launch window to early 2025.

On the IM-3 mission, the accrued contract loss increased by approximately $12.5 million during the year ended December 31, 2024 and was largely attributable to unfavorable adjustments resulting from task order modifications extending the targeted mission launch window to no later than 2026.

Cost of revenue from task orders under the OMES III contract were approximately $138.3 million for the year ended December 31, 2024 compared to $11.6 million for the same period in 2023.

The OMES III contract started in December 2023.

Other contract cost of revenue increased approximately $17.3 million for the year ended December 31, 2024 compared to the same periods in 2023 mostly driven by $15.4 million in cost of revenue from the LTV contract awarded in April 2024.

Impairment of property and equipment

During the third quarter of 2024, management determined that certain assets under development by a third party subcontractor were not in compliance according to the contract.

Management concluded the carrying cost of these assets was not recoverable and recorded an impairment charge of approximately $5.0 million including capitalized interest of $0.5 million, in our consolidated statements of operations for the year ended December 31, 2024.

See Note 4 to the consolidated financial statements for additional information.

During the fourth quarter of 2023 and in connection with moving operations to our new facility, the Lunar Production and Operations Center (“LPOC”), as discussed further in Note 5 to the consolidated financial statements, management identified the move as a significant adverse change in the usage of space from our prior facility.

As such, management determined that certain leasehold improvements and furniture and fixtures from our prior facility will not be utilized at the LPOC and the carrying value will not be recoverable.

For the year ended December 31, 2023, we recorded impairment charges of approximately $1.0 million in our consolidated statements of operations.

See Note 4 to the consolidated financial statements for additional information.

General and administrative expense (excluding depreciation)

General and administrative expense (excluding depreciation) increased by $18.1 million for the year ended December 31, 2023 compared to the same period in 2022, driven primarily by our growth to support corporate and business operations, resulting in higher headcount driving increased compensation expense of $2.6 million and related share-based compensation expense of $3.6 million.

For the same comparative periods, we incurred increases in expenses related for insurance of $2.3 million and professional services, software licenses and various other administrative costs of $8.0 million primarily associated with being a newly public company and the corresponding need for increased legal and accounting support and information technology infrastructure.

The Company also incurred transaction costs of $1.4 million related to the Private Placement during the third quarter of 2023.

General and administrative expense (excluding depreciation) increased by $18.9 million for the year ended December 31, 2024 compared to the same period in 2023, primarily attributable to our growth to support corporate and business operations, resulting in higher headcount driving increased employee compensation and benefits expense of $9.4 million and related share-based compensation expense of $4.5 million.

For the same comparative periods, we incurred increases in expenses for rent expense of $2.5 million primarily driven by the move to our new corporate headquarters in late 2023, professional services of $1.9 million, software licenses of $1.7 million, and various other administrative costs of $1.0 million.

These increases were slightly offset by a decrease in bids and proposals of $2.1 million.

Other income (expense), net

Total other income (expense), net favorable change of $72.2 million for the year ended December 31, 2023 compared to the same period in 2022 was primarily due to favorable changes in fair value of the earn-out liabilities of $66.3 million and warrant liabilities of $15.4 million, partially offset by an unfavorable change in the fair value of SAFE Agreements of $2.3 million, and loss on issuance of securities of $6.7 million.

Income tax (expense) benefit

Total other income (expense), net unfavorable change of $360.8 million for the year ended December 31, 2024 compared to the same period in 2023 was primarily due to unfavorable changes in fair value of the earn-out liabilities of $186.4 million and warrant liabilities of $93.1 million, and loss on issuance of securities of $86.4 million.

These unfavorable changes were partially offset by favorable changes of $2.4 million related to the SAFE Agreement liability which was eliminated and converted to Class A Common Stock u pon the consummation of the Business Combination in February 2023, $1.0 million in interest income (expense), net as the Company paid off the Credit Mobilization Facility during late 2023 through mid 2024 (as further discussed in Note 6 to the consolidated financial statements) , and various other income of $1.7 million.

Income tax expense

For the years ended December 31, 2024 and 2023, we recognized a combined U.S.

federal and state (expense) / benefit for income taxes of $(40) thousand and $23 thousand, respectively.

federal and state expense for income taxes of $37 thousand and $40 thousand, respectively.

The effective combined U.S.

federal and state income tax rates were (0.01%) and 0.39% for the years ended December 31, 2024 and 2023, respectively.

For year ended December 31, 2023, our effective tax rate differed from the statutory rate primarily due to deferred taxes for which no benefit is being recorded and losses attributable to noncontrolling interest unitholders that are taxable on their respective share of taxable income.

For year ended December 31, 2024, our effective tax rate differed from the statutory rate of 21% primarily due to deferred taxes for which no benefit is being recorded and losses attributable to noncontrolling interest unitholders that are taxable on their respective share of taxable income.

For the year ended December 31, 2023, our effective tax rate differed from the statutory rate primarily due to Intuitive Machines, LLC's status as a partnership for U.S.

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We monitor the following key business metrics and non-GAAP financial measures that assist us in evaluating our business, measuring our performance, identifying trends and making strategic decisions.

We define backlog as our total estimate of the revenue we expect to realize in the future as a result of performing work on awarded contracts, less the amount of revenue we have previously recognized.

We define backlog as our total estimate of the revenue we expect to realize in the future as a result of performing work on awarded contracts, less the amount of revenue previously recognized.

We monitor our backlog because we believe it is a forward-looking indicator of potential sales which can be helpful to investors in evaluating the performance of our business and identifying trends over time.

We generally include total expected revenue in backlog when a contract is awarded by the customer under a legally binding agreement.

Our backlog does not include any estimate of future potential

work orders that might be awarded under government-wide acquisition contracts, agency-specific indefinite delivery/indefinite quantity contracts or other multiple-award contract vehicles, nor does it include option periods that have not been exercised by the customer.

Due to government procurement rules, in certain cases revenue included in backlog are subject to budget appropriation or other contract cancellation clauses.

Our backlog does not include any estimate of future potential work orders that might be awarded under government-wide acquisition contracts, agency-specific indefinite delivery/indefinite quantity contracts or other multiple-award contract vehicles, nor does it include option periods that have not been exercised by the customer.

Due to government procurement rules, in certain cases revenue included in backlog is subject to budget appropriation or other contract cancellation clauses.

Nearly all contracts allow customers to terminate the agreement at any time for convenience.

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Orders comprising backlog as of a given balance sheet date are typically invoiced in subsequent periods.

As of December 31, 2023, we expect to recognize approximately 80% of our backlog over the next 12 months during 2024, approximately 3% to 5% over the subsequent twelve months of 2025 and the remaining thereafter.

As of December 31, 2024, we expect to recognize approximately 60% to 65% of our backlog in 2025, approximately 15% to 20% in 2026 and the remaining thereafter.

Our backlog could experience volatility between periods, including as a result of customer order volumes and the speed of our fulfillment, which in turn may be impacted by the nature of products and services ordered, the amount of inventory on hand to satisfy orders and the necessary development and manufacturing lead time required to satisfy certain orders.

Backlog increased by $66.7 million as of December 31, 2023 compared to December 31, 2022, primarily due to new awards of $184.4 million primarily attributable to the OMES III project for $142.4 million, an international payload on a future mission for $17.6 million, the JETSON contract for $9.5 million, and various other projects.

These increases are partially offset by continued performance on existing contracts of $79.5 million and decreases related to contract value adjustments of $38.2 million primarily related to certain time and materials and other contracts.

As of December 31, 2023, our ba cklog of $268.6 million exceeded our remaining performance obligations of $57.2 million as reported in Note 4 - Revenue to our consolidated financial statements included in this Annual Report.

The difference of $211.4 million was primarily due $62.1 million of variable consideration associated with constrained revenue and $149.3 million in backlog related to the funded value of OMES III and various other time and materials service contracts where revenue is recognized when services are performed and contractually billable and therefore not included in remaining performance obligations.

Backlog increased by $59.8 million as of December 31, 2024 compared to December 31, 2023, due to $303.7 million in new awards primarily associated with the IM-4 CLPS, NSN, and LTV contracts awarded from NASA as well as task order modifications to the existing IM-2 CLPS, IM-3 CLPS and OMES III contracts.

These increases were partially offset by continued performance on existing contracts of $228.0 million and decreases related to contract value adjustments of $15.9 million mostly related to various fixed price contracts.

As of December 31, 2024, our ba cklog of $328.3 million exceeded our remaining performance obligations of $168.7 million as reported in Note 3 to our consolidated financial statements.

The difference of $159.6 million was primarily due $66.0 million of variable consideration associated with constrained revenue and $93.6 million in backlog related to the funded value of the OMES III project and various other time and materials service contracts where revenue is recognized when services are performed and contractually billable and therefore not included in remaining performance obligations.

Non-GAAP Financial Measures

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Adjusted EBITDA is a key performance measure that our management team uses to assess our operating performance.

We calculate Adjusted EBITDA as net income (loss) excluding results from non-operating sources including interest income, interest expense, gain on extinguishing of debt, share based compensation, change in fair value instruments, depreciation, and provision for income taxes.

We calculate Adjusted EBITDA as net income (loss) excluding results from non-operating sources including interest income, interest expense, share based compensation, change in fair value instruments, gain or loss on issuance of securities, other income/expense, depreciation, impairment of property and equipment, and provision for income taxes.

We present Adjusted EBITDA because we believe it is helpful in highlighting trends in our operating results and because it is frequently used by analysts, investors, and other interested parties to evaluate companies in our industry.

Adjusted EBITDA has limitations as an analytical measure, and you should not consider it in isolation or as a substitute for analysis of our results as reported under GAAP.

Adjusted EBITDA has limitations as an analytical measure, and you should not consider it in isolation or as a substitute for analysis of our results as reported under U.S.

Some of these limitations are:

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• Adjusted EBITDA does not consider the impact of share-based compensation expense, which is expected to continue to be part of our compensation strategy;

• Adjusted EBITDA does not consider the impact of change in fair value of SAFE Agreements, change in fair value of earn-out liabilities, change in fair value of warrant liabilities, or loss on issuance of securities that we do not consider to be routine in nature for the ongoing financial performance of our business;

• Adjusted EBITDA does not consider the impact of change in fair value of SAFE Agreements, change in fair value of earn-out liabilities, change in fair value of warrant liabilities, loss on issuance of securities, or impairment of property and equipment, that we do not consider to be routine in nature for the ongoing financial performance of our business;

• Adjusted EBITDA excludes non-cash charges for depreciation of property and equipment, and although the assets being depreciated may have to be replaced in the future, Adjusted EBITDA does not reflect cash capital expenditure requirements for such replacements or for new capital expenditure requirements;

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Other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income (loss) and our other GAAP results.

The following table presents a reconciliation of net income (loss), the most directly comparable financial measure presented in accordance with GAAP, to Adjusted EBITDA.

Because of these limitations, you should consider Adjusted EBITDA alongside other financial performance measures, including various cash flow metrics, net income (loss) and our other U.S.

GAAP results.

The following table presents a reconciliation of net income (loss), the most directly comparable financial measure presented in accordance with U.S.

GAAP, to Adjusted EBITDA.

Year Ended December 31,

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Adjusted to exclude the following:

Taxes 40 (23)

Income tax expense 37 40

Depreciation 1,859 1,376

Impairment on property and equipment 5,044 964

Interest expense, net 823 836

Interest (income) expense, net (180) 823

Share-based compensation expense 8,798 4,273

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Loss on issuance of securities 93,136 6,729

Other expense (income), net 483 (6)

Other (income) expense, net (1,242) 483

Adjusted EBITDA $ (41,695) $ (54,506)

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We believe that free cash flow is a meaningful indicator of liquidity that provides information to management and investors about the amount of cash generated from operations that, after purchases of property and equipment, can be used for strategic initiatives, including continuous investment in our business and strengthening our balance sheet.

Free Cash Flow has limitations as a liquidity measure, and you should not consider it in isolation or as a substitute for analysis of our cash flows as reported under GAAP.

Free Cash Flow has limitations as a liquidity measure, and you should not consider it in isolation or as a substitute for analysis of our cash flows as reported under U.S.

Some of these limitations are:

• Free Cash Flow is not a measure calculated in accordance with GAAP and should not be considered in isolation from, or as a substitute for financial information prepared in accordance with GAAP.

• Free Cash Flow is not a measure calculated in accordance with U.S.

GAAP and should not be considered in isolation from, or as a substitute for financial information prepared in accordance with U.S.

• Free Cash Flow may not be comparable to similarly titled metrics of other companies due to differences among methods of calculation.

• Free Cash Flow may be affected in the near to medium term by the timing of capital investments, fluctuations in our growth and the effect of such fluctuations on working capital and changes in our cash conversion cycle.

The following table presents a reconciliation of net cash used in operating activities, the most directly comparable financial measure presented in accordance with GAAP, to free cash flow:

The following table presents a reconciliation of net cash used in operating activities, the most directly comparable financial measure presented in accordance with U.S.

GAAP, to free cash flow:

Year Ended December 31,

(in thousands)

Net cash (used in) provided by operating activities $ (45,279) $ 784

Net cash used in operating activities $ (57,587) $ (45,279)

Purchases of property and equipment (10,111) (29,911)

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Liquidity and Capital Resources

Since inception, we have funded our operations through internally generated cash on hand, proceeds from sales of our capital stock, including the execution of SAFE Agreements, our At The Market Offering Program (the “ATM Program”) with Cantor (as described below), our 2024 Offering (as described below), proceeds from warrant exercises, and proceeds from the issuance of bank debt.

We assess our liquidity in terms of our ability to generate adequate amounts of cash to meet current and future needs.

Our expected primary uses of cash on a short and long-term basis are for working capital requirements, capital expenditures, debt service requirements and other general corporate services.

Our expected primary uses of cash on a short and long-term basis are for working capital requirements, capital expenditures, general corporate purposes, including operations, research and development and potential mergers and acquisitions.

Our primary working capital requirements are for project execution activities including purchases of materials, subcontracted services and payroll which fluctuate during the year, driven primarily by the timing and extent of activities required on new and existing projects.

Our capital expenditures are primarily related to machinery and equipment, computers and software, and leases.

As of December 31, 2023, we had cash and cash equivalents of $4.5 million and a working capital deficit of $51.8 million.

As further described in Note 3 - Business Combination and Related Transactions of our consolidated financial statements, on February 13, 2023, Intuitive Machines, Inc.

(formerly known as Inflection Point Acquisition Corp.

(“IPAX”) and our wholly owned subsidiary, Intuitive Machines, LLC consummated the Business Combination and related transactions.

Upon the closing of the Business Combination and issuance of 10% Series A Cumulative Convertible Preferred Stock, par value $0.0001 per share (the “Series A Preferred Stock”) to certain investors, the Company received approximately $34.1 million of gross proceeds to fund operations.

Additionally, in connection with the Business Combination, the Company entered into a common stock purchase agreement with an investor establishing a committed equity facility pursuant to which the Company has the right, but not the obligation, to direct the counterparty to purchase up to the lesser of $50.0 million of newly issued Class A common stock and the Exchange Cap (as defined in the common stock purchase agreement), subject to certain requirements and limitations.

Additionally, subsequent to the closing of the Business Combination, we received $12.7 million in cash associated with the termination of a prepaid forward purchase agreement and $16.1 million associated with the exercises of Public Warrants.

On September 5, 2023, the Company consummated a securities purchase agreement pursuant to which the Company agreed to sell securities in a private placement which included the issuance by the Company of the PIPE Shares and the accompanying Initial Series A Warrant and Initial Series B Warrant, for aggregate gross proceeds of approximately $20.0 million.

See Notes 9 and 10 for additional information on the securities purchase agreement.

Additionally, as further described in Note 17 to our consolidated financial statements, the Company received approximately $60.6 million in gross proceeds from warrant exercises and other equity transactions in the first quarter of 2024.

Management believes that the cash and cash equivalents as of December 31, 2023 and the additional liquidity provided by the equity facility and other subsequent equity transactions discussed above will be sufficient to fund the short-term liquidity needs and the execution of the business plan through at least the twelve-month period from the date the financial statements are issued.

Our capital expenditures are primarily related to machinery and equipment, computers and software, and leasehold improvements.

As of December 31, 2024, we had cash and cash equivalents of $207.6 million and working capital of $194.3 million.

For the year ended December 31, 2024, the Company received approximately $294.7 million in gross proceeds from warrant exercises, sales of stock under the ATM program and the 2024 Offering, and other equity transactions, as further described in Notes 8 and 9.

In connection with the Business Combination as discussed in Notes 1 and 8, the Company entered into the Cantor Purchase Agreement, pursuant to which the Company may direct CFPI, at the Company’s discretion, to purchase up to the lesser of (i) $50.0 million of newly issued shares of Class A Common Stock and (ii) the “exchange cap” specified therein, subject to certain customary conditions and limitations set forth in the agreement.

The Cantor Purchase Agreement contractually terminated on September 1, 2024.

Additionally, in April 2024, the Company and Cantor entered into a Controlled Equity Offering Sales Agreement with Cantor acting as the Company’s exclusive sales agent for the sale of newly issued shares of Class A Common Stock for aggregate proceeds up to $100.0 million, as further described in Note 8 as the ATM Program.

Pursuant to the ATM program, the Company raised approximately $97.5 million, net of $2.5 million in transaction fees, during the second and third quarters of 2024.

The Company also entered into an agreement with an accredited investor, pursuant to which the Company sold to the investor 952,381 shares of its Class A Common Stock in a concurrent private placement at a purchase price per share equal to the Public Offering price per share of $10.50 (the “Private Offering” together with the Public Offering, the “2024 Offering”).

The net proceeds to the Company from the 2024 Offering, after deducting transaction costs of $6.5 million, were approximately $116.9 million.

As further described in Note 17 - Subsequent Events, the Company announced on February 4, 2025, the redemption of all of its outstanding warrants (the Public Warrants and Private Warrants as defined in Note 9, collectively the “Warrants”) and Warrants remaining unexercised as of March 6, 2025 (the “Redemption Date”) were redeemed by the Company for $0.01 per Warrant.

During the first quarter of 2025, the Company received approximately $176.6 million in gross proceeds from the Warrant exercises of 15,358,229.

On the Redemption Date, a total of 6,571,724 Warrants remained unexercised and the Company redeemed those Warrants for an aggregate redemption price of $66 thousand.

In connection with the Warrant Redemption, a warrant holder agreed to exercise 1,800,000 of the Public Warrants, and the Company agreed to repurchase 941,080 shares of the Company’s Class A Common Stock for an aggregate purchase price of $20.7 million.

Management believes that the cash and cash equivalents as of December 31, 2024 and the additional liquidity provided by subsequent equity transactions, will be sufficient to fund the short-term liquidity needs and the execution of the business plan through at least the twelve-month period from the date the financial statements are issued.

Loan Agreement

O n March 4, 2025, we entered into a loan and security agreement (the “Loan Agreement”) with Stifel Bank.

The Loan Agreement provides for a secured revolving credit facility in an aggregate principal amount of up to $40.0 million (the “Revolving Facility”).

Amounts outstanding under the Revolving Facility will bear interest at a rate per annum equal to the greater of (a) Term SOFR (secured overnight financing rate) plus 2.75% and (b) 6.00% .

The Loan Agreement matures on April 30, 2027 (the “Maturity Date”).

Subject to certain conditions in the Loan Agreement, amounts borrowed thereunder may be repaid and reborrowed at any time prior to the Maturity Date.

As o f the date of this filing, the revolving credit facility remains unborrowed.

Live Oak Mobilization Credit Facility

On December 12, 2019, we entered into a loan agreement with Live Oak Banking Company (the “Credit Mobilization Facility”) which provided a $12.0 million Credit Mobilization Facility with a due date of December 12, 2022 and a $1.0 million line of credit with a due date of December 12, 2020.

Both the Credit Mobilization Facility and the line of credit thereunder initially bore interest, payable monthly, at a rate per annum equal to 6.0%.

The Credit Mobilization Facility and the line of credit thereunder are secured by substantially all of our assets.

On December 8, 2020, we entered into a Loan Modification Agreement with Live Oak Banking Company which amended the terms of the line of credit under the Credit Mobilization Facility, including decreasing the maximum principal from $1.0 million to $0.4 million, extending the maturity date from December 12, 2020 to December 10, 2021, and changing the interest rate from 6.0% to a variable interest rate at the prime rate, as published in the Wall Street Journal, plus 2.0%.

On April 30, 2021, we entered into a commitment with Live Oak Banking Company which provided a $12.0 million contract mobilization credit facility with a loan maturity of November 15, 2022 (the “New Credit Mobilization Facility”), which superseded the existing Credit Mobilization Facility.

The New Credit Mobilization Facility bears interest (payable monthly) at a rate per annum equal to 5.25%, adjusted quarterly based on the prime rate, as published in the Wall Street Journal, plus 2.0%.

On December 10, 2021, the line of credit expired.

We had no balance outstanding at that time and did not renew the line of credit.

On July 14, 2022, we entered into the Second Amended and Restated Loan Agreement with Live Oak Banking Company which provided an $8.0 million mobilization credit facility with a loan maturity of July 14, 2024 and extended the maturity

date of our existing $12.0 million mobilization credit facility to November 14, 2023.

The mobilization credit facilities bear interest (payable monthly) at a rate per annum equal to the greater of (a) the prime rate, as published in the Wall Street Journal, plus 2.0% and (b) 5.0%.

The $8.0 million mobilization credit facility requires early payment of principal upon the completion of certain mission milestones.

If the milestones are completed, principal payments of $4.1 million and $3.9 million would be due prior to loan maturity in 2023 and 2024, respectively.

The $12.0 million mobilization credit facility requires principal payments of $8.0 million on August 15, 2023 and $4.0 million on November 14, 2023.

The mobilization credit facilities require the Company to meet certain financial and other covenants and are secured by substantially all of the assets of the Company.

The credit mobilization facilities require compliance with various covenants customary for agreements of this type, including those restricting our ability to incur debt, incur liens and undergo certain fundamental changes.

The credit mobilization facilities also include events of default customary for agreements of this type.

As of December 31, 2023, we were in compliance with all covenants under the credit mobilization facilities.

During the third quarter of 2023, we considered options to modify the terms of the Second Amended and Restated Loan Agreement with Live Oak.

We received confirmation from Live Oak to defer the $8.0 million principal payment due on August 15, 2023 under the $12.0 million mobilization credit facility pending the outcome of the loan modification.

On October 31, 2023, management decided to no longer pursue loan modification and promptly paid the deferred $8.0 million principal payment.

On November 3, 2023, we received a letter of good standing from Live Oak stating the Company was current on all payments due and was in full compliance with the terms and conditions of the $8.0 million and $12.0 million mobilization credit facilities under the Second Amended and Restated Loan Agreement.

On November 15, 2023, we paid the remaining $4.0 million on the $12.0 million mobilization credit facility.

There was $8.0 million and $20.0 million outstanding under the credit mobilization facilities as of December 31, 2023 and 2022, respectively.

In December 2019, the Company entered into a loan agreement with Live Oak Banking Company (the “Credit Mobilization Facility”) which provided a $12.0 million credit mobilization facility that was paid in full as of November 2023.

In July 2022, we entered into the Second Amended and Restated Loan Agreement with Live Oak Banking Company which provided an $8.0 million credit mobilization facility with a loan maturity of July 14, 2024.

The Credit Mobilization Facility bears interest (payable monthly) at a rate per annum equal to the greater of (a) the prime rate, as published in the Wall Street Journal newspaper, plus 2.0% and (b) 5.0% and requires the Company to meet certain financial and other covenants and are secured by substantially all of the assets of the Company.

There was $8.0 million outstanding under the Credit Mobilization Facility as of December 31, 2023.

The Company paid $5.0 million during the second quarter of 2024, and paid the remaining $3.0 million in July 2024 and the facility has been terminated.

See Note 6 - Debt to our consolidated financial statements for additional information related to the credit mobilization facilities.

The following table summarizes our cash flows for the periods presented:

Borrowings under the Bridge Loan bear interest at the target interest rate set by the Federal Open Market Committee (“Fed Funds Rate”), subject to a 5.5% floor, plus a margin.

For borrowings, the applicable rate margin is 0.9%.

The $10.0 million in borrowings are available for working capital needs and other general corporate purposes must be repaid by February 22, 2024.

The Bridge Loan included guarantees (the “Credit Support Guarantees”) by Ghaffarian Enterprises, LLC (an affiliate of Dr.

On January 29, 2024, the Bridge Loan was repaid in full as a result of $10.0 million in contributions from the Guarantor under the Bridge Loan Conversion transaction further described in Note 8.

In March 2024, the Company filed a shelf registration statement on Form S-3 (File No.

333-278288) with the Securities and Exchange Commission, which permits the offering, issuance, and sale of up to a maximum aggregate offering price of $300.0 million of the Company’s Class A common stock and warrants.

Up to a maximum of $100.0 million of the maximum aggregate offering price of $300.0 million may be issued and sold pursuant to an at-the-market financing facility under a capital controlled equity offering sales agreement between the Company and Cantor Fitzgerald & Co.

As of the third quarter of 2024, the Company raised approximately $97.5 million in net proceeds (net of $2.5 million in transaction fees) pursuant to the at-the-market financing facility.

In addition, subject to market and other conditions, we may opportunistically pursue underwritten public offerings of our Class A common stock under such shelf registration statement for our account or the account of our selling stockholders.

Unless otherwise specified in the prospectus supplement relating to any such offering, we expect to use the net proceeds of any sales of Class A common stock for our account for general

corporate purposes.

We would not receive any proceeds from the sale of our Class A common stock by the selling stockholders.

We expect to continue to evaluate opportunities for such underwritten offerings over the near and intermediate term.

The following table summarizes our cash flows for the periods presented (in thousands):

Year Ended December 31,

(in thousands)

Net cash (used in) provided by operating activities $ (45,279) $ 784

Net cash used in operating activities $ (57,587) $ (45,279)

Net cash used in investing activities $ (10,111) $ (29,911)

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Operating Activities

During the year ended December 31, 2023, our operating activitie s used $45.3 million of net cash as compared to $0.8 million of net cash provided during the year ended December 31, 2022.

The $46.1 million unfavorable change was primarily due to higher operating expenses in 2023 as a result of becoming a public company as well as to support our missions, including increases in headcount and professional service fees, and is also affected by changes in operating assets and liabilities which consist primarily of working capital balances for our projects.

Working capital levels may vary and are impacted by the stage of completion and contractual terms of projects.

During the year ended December 31, 2024, our operating activitie s used $57.6 million of net cash as compared to $45.3 million of net cash used during the year ended December 31, 2023.

Changes in operating assets and liabilities which consist primarily of working capital balances for our projects may vary and are impacted by the stage of completion and contractual terms of projects.

The primary components of our working capital accounts are trade accounts receivable, contract assets, accounts payable, and contract liabilities.

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During the year ended December 31, 2024, investing activities used $10.1 million of net cash as compared to $29.9 million of net cash used during the year ended December 31, 2023.

The $13.5 million increase in cash used was primarily due to capital expenditures associated with equipment to be used for future missions and our new Lunar Production and Operations Center that was completed in late 2023.

The $19.8 million favorable change primarily results from capital expenditures that occurred during 2023 for our Lunar Production and Operations Center that was completed in late 2023 slightly offset by capital expenditures associated primarily with the new NSN contract award in late 2024.

Financing Activities

During the year ended December 31, 2024, financing activitie s provided $272.8 million of net cash as compared to $53.9 million of net cash provided during the year ended December 31, 2023 .

Th e $41.8 million increase was primarily associated with $34.1 million in proceeds received upon consummation of the Business Combination and Series A

Preferred Stock issuance which was partially offset by $9.4 million in related transaction costs paid.

We also received $12.7 million in cash associated with the termination of a prepaid forward purchase agreemen t, $20.0 million in proceeds received upon the close of the Private Placement and another $16.1 million in proceeds from the exercise of Public Warrants.

These increases were slightly offset by the repayment of a loan under our Credit Mobilization Facility of $12.0 million and member distributions of $8.0 million .

During 2022, our financing activities primarily included proceeds from borrowings of $7.9 million and SAFE Agreements of $4.3 million.

During 2024, our financing activities primarily included $61.3 million in proceeds from the exercise of warrants, $224.0 million in net proceeds from the issuance of securities, $10.0 million in proceeds received in borrowings under the Bridge Loan offset by the repayment of $10.0 million, $8.0 million repayment on a loan under our Credit Mobilization Facility, $2.3 million in distributions to noncontrolling interests, and $2.2 million in net activity related to our share-based awards.

During 2023, our financing activities primarily included $34.1 million in proceeds received upon consummation of the Business Combination and Series A Preferred Stock issuance slightly offset by $9.4 million in related transaction costs paid .

We also received $20.0 million in proceeds upon the close of the Private Placement, $12.7 million in cash associated with the termination of a prepaid forward purchase agreement and $16.1 million in proceeds from the exercise of warrants, slightly offset by $12.0 million repayment on a loan under our Credit Mobilization Facility and member distributions of $8.0 million.

Contractual Obligations and Commitments

Lease Commitments

We lease real estate for office space and for administrative, research, marketing and light manufacturing operations.

These leases are classified as operating leases with various expiration dates through 2043.

See Note 6 - Leases to our consolidated financial statements for more information regarding our lease commitments.

In September 2021, we signed a ground lease agreement for the development of our Lunar Production and Operations Center (“LPOC”) that will serve as a production and testing facility of lunar lander components and other aerospace related operations.

The lessor will reimburse up to $40.0 million for certain costs incurred by us for design, construction, and development.

Management concluded that it was deemed the owner, for accounting purposes only, of the facility under build-to-suit lease accounting due to its involvement in the construction activities of the facility.

Accordingly, we are accounting for the construction of the facility as a financing arrangement.

As of December 31, 2022, we had capitalized $10.3 million of construction in progress and a corresponding financing obligation of $9.1 million.

Upon completion of the construction, the lease agreement will have an initial term of 20 years with four optional renewal periods of 5 years each.

During the fourth quarter of 2022, construction was completed for the Small Engine Verification facility (the “SEV” facility) portion of the LPOC, and we took possession of the SEV facility.

Upon commencement of the SEV facility portion of the lease, management determined that it qualified for sale and leaseback accounting, with the leaseback being classified as an operating lease.

No gain or loss was recognized or deferred on the sale of the SEV facility, as the fair value upon completion was determined to be equal to the carrying value.

As of December 31, 2023, the Company recorded right-of-use assets of $2.9 million and corresponding lease liabilities of approximately $3.2 million.

As of December 31, 2022, the Company recorded right-of-use assets and corresponding lease liabilities of approximately $3.1 million.

During the third quarter of 2023, the remaining construction for the LPOC was near completion, we took possession of the entire facility.

Upon commencement of the lease, we determined that the LPOC qualified for sale and leaseback accounting, with the leaseback being classified as an operating lease.

No gain or loss was recognized or deferred on the sale of the lunar operations center, as the fair value upon commencement was determined to be equal to the carrying value.

As of the lease commencement date, we derecognized approximately $30.4 million of construction in progress and the corresponding financing obligation of $30.4 million associated with capitalized construction costs of the lunar operations center and related reimbursements received from the lessor.

We recognized operating lease right-of-use assets of $32.3 million and operating lease liabilities of $26.7 million as of the lease commencement date, which included $5.6 million of reimbursable costs to be received from the lessor.

As of December 31, 2023, we have approximately $3.8 million of contractual obligations to complete construction of the LPOC which will be funded through a combination of remaining reimbursements from the lessor and available cash on hand.

For disclosures regarding our Live Oak Credit Mobilization Facility, refer to the preceding discussions under Liquidity and Capital Resources and Note 7 - Debt.

The following table presents our significant contractual obligations and commitments as of December 31, 2024 (in thousands) :

Total 2025 2026 2027 2028 2029 Thereafter

Operating lease obligations (1)

$ 69,521 $ 2,522 $ 2,614 $ 2,175 $ 2,232 $ 2,710 $ 57,268

Finance lease obligations (1)

110 47 41 17 5 — —

Purchase commitments (2)

97,089 38,973 37,829 20,287 — — —

Total $ 166,720 $ 41,542 $ 40,484 $ 22,479 $ 2,237 $ 2,710 $ 57,268

(1) Refer to Note 5 for additional information on our operating and finance lease obligations.

(2) From time-to-time, we enter into long-term commitments with vendors to purchase launch services and for the development of certain components in conjunction with our obligations under revenue contracts with our customers.

As of December 31, 2023, we had remaining purchase obligations under non-cancelable commitments with two vendors totaling $37.7 million of which $36.2 million is due within the next twelve months and the remaining $1.5 million is due in the subsequent twelve-month period.

This represents our significant remaining purchase obligations under non-cancelable commitments.

See Note 7 of the consolidated financial statements for information regarding our tax receivable agreement.

Off-Balance Sheet Arrangements

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This may make comparison of our 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.

If the Company loses its EGC status, it will qualify as a large accelerated filer based on its unaffiliated market capitalization, according to Rule 12b-2 of the Securities Exchange Act of 1934, as amended.

Quantitative and Qualitative Disclosures About Market Risk

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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-K

Item 7. Management’s Discussion and Analysis