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Item 8. Financial Statements and Supplementary Data

2025-03-25 compared with 2024-03-25 · 689 added, 431 removed, 857 unchanged (57% of the section changed)

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We have audited the accompanying consolidated balance sheets of Intuitive Machines, Inc.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2023 and 2022, the related consolidated statements of operations, mezzanine equity, shareholders’ deficit and cash flows for each of the two years in the period ended December 31, 2023 and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2024 and 2023, the related consolidated statements of operations, mezzanine equity, shareholders’ deficit, and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Basis for opinion

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

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Restricted cash 2,042 62

Trade accounts receivable, net of allowance for expected credit losses of $ 0 and $ 836 , respectively

Trade accounts receivable 44,759 16,881

Contract assets 34,592 7,126

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Finance lease right-of-use assets 114 95

Deferred income taxes — 7

Total assets $ 355,404 $ 85,908

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Total current liabilities 98,831 81,533

Long-term debt, net of current maturities — 3,863

Contract liabilities, non-current 14,334 —

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Finance lease liabilities, non-current 63 67

Simple Agreements for Future Equity ("SAFE Agreements") — 18,314

Earn-out liabilities 134,156 14,032

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MEZZANINE EQUITY

Series A preferred stock subject to possible redemption, $ 0.0001 par value, 25,000,000 shares authorized, 26,000 shares issued and outstanding at December 31, 2023

Series A preferred stock subject to possible redemption, $ 0.0001 par value, 25,000,000 shares authorized, 5,000 and 26,000 shares issued and outstanding

Redeemable noncontrolling interests 1,005,965 181,662

SHAREHOLDERS’ DEFICIT

Common units — 1

Class A common stock, $ 0.0001 par value, 500,000,000 shares authorized, 22,279,876 shares issued and 21,029,876 outstanding at December 31, 2023

Class B common stock, $ 0.0001 par value, 100,000,000 shares authorized, 0 shares issued and outstanding at December 31, 2023

Class C common stock, $ 0.0001 par value, 100,000,000 shares authorized, 70,909,012 shares issued and outstanding at December 31, 2023

Treasury stock, at cost, 1,250,000 shares at December 31, 2023

Class A common stock, $ 0.0001 par value, 500,000,000 shares authorized, 101,859,000 and 22,279,876 shares issued and 100,609,000 and 21,029,876 outstanding

Class B common stock, $ 0.0001 par value, 100,000,000 shares authorized, 0 shares issued and outstanding

Class C common stock, $ 0.0001 par value, 100,000,000 shares authorized, 55,394,533 and 70,909,012 shares issued and outstanding

Treasury stock, at cost, 1,250,000 shares

( 12,825 ) ( 12,825 )

Paid-in capital — —

Accumulated deficit ( 996,453 ) ( 248,619 )

Total shareholders’ deficit attributable to the Company ( 1,009,262 ) ( 261,435 )

Noncontrolling interests 1,228 —

Total shareholders’ deficit ( 1,008,034 ) ( 261,435 )

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

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

Depreciation 1,859 1,376

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Other income (expense), net:

Interest expense, net ( 823 ) ( 836 )

Interest income (expense), net 180 ( 823 )

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

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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 )

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

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

Income tax (expense) benefit ( 40 ) 23

Income tax expense ( 37 ) ( 40 )

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

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

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

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

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

Net income attributable to the Company 62,804 —

Cumulative preferred dividends ( 2,343 ) —

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

Net income per share (1)

Net income per share of Class A common stock - basic $ 3.43

Net income per share of Class A common stock - diluted 2.46

Net income attributable to noncontrolling interest 3,495 —

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

Preferred dividends ( 896 ) ( 2,343 )

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

Net income (loss) per share (1)

Net income (loss) per share of Class A common stock - basic $ ( 4.63 ) $ 3.37

Net income (loss) per share of Class A common stock - diluted ( 4.63 ) 2.42

Weighted-average common shares outstanding

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Weighted average shares outstanding - diluted 61,410,250 25,564,313

(1) As a result of the Business Combination (as defined herein), the capital structure has changed and income per share information is only presented after the Closing Date (as defined herein) of the Business Combination, for the period from February 13, 2023 through December 31, 2023.

See Note 3 - Business Combination and Related Transactions and Note 13 - Net Income per Share for additional information.

(1) As a result of the Business Combination, the capital structure changed and net income per share information for 2023 represents results after the Closing Date of the Business Combination, for the period from February 13, 2023 through December 31, 2023.

See Note 1 - Business Description and Note 12 - Net Income (Loss) per Share for additional information.

The accompanying notes are an integral part of these consolidated financial statements

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(In thousands except per share data)

Year Ended December 31, 2023

Series A Preferred Stock Redeemable Noncontrolling Interest

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Balance, December 31, 2023 26,000 $ 28,201 $ 181,662

Conversion of Series A preferred stock (Note 7) ( 21,000 ) ( 23,120 ) —

Cumulative preferred dividends — 896 —

Accretion of preferred stock discount — 13 —

Subsequent remeasurement of redeemable noncontrolling interests — — 891,307

Net loss attributable to redeemable noncontrolling interests — — ( 67,004 )

Balance, December 31, 2024 5,000 $ 5,990 $ 1,005,965

The accompanying notes are an integral part of these consolidated financial statements

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Capital Accumulated

Deficit Total Shareholders’ Equity

Deficit Total Shareholders’ Deficit

Units Shares Amount Shares Amount Shares Amount

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Net loss — — — — — — — — — — ( 6,481 ) ( 6,481 )

Balance, December 31, 2022 122,505,500 $ 1 — $ — — $ — — $ — $ — $ 14,967 $ ( 72,587 ) $ ( 57,619 )

Issuance of units 21,500 — — — — — — — — 22 — 22

Share-based compensation expense — — — — — — — — — 101 — 101

Net loss — — — — — — — — — — ( 5,751 ) ( 5,751 )

Effects of Business Combination

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Balance, December 31, 2023 — $ — 22,279,876 $ 2 — $ — 70,909,012 $ 7 $ ( 12,825 ) $ — $ ( 248,619 ) $ ( 261,435 )

INTUITIVE MACHINES, INC.

Consolidated Statements of Shareholders’ Deficit (continued)

(In thousands except per share data)

Class A Common Stock

Class C Treasury Stock Paid-in

Capital Accumulated

Deficit Total Shareholders’ Deficit attributable to the Company NCI Total Shareholders’ Deficit

Shares Amount Shares Amount

Balance, December 31, 2023 22,279,876 $ 2 70,909,012 $ 7 $ ( 12,825 ) $ — $ ( 248,619 ) $ ( 261,435 ) $ — $ ( 261,435 )

Share-based compensation expense — — — — — 8,798 — 8,798 — 8,798

Cumulative preferred dividends — — — — — ( 896 ) — ( 896 ) — ( 896 )

Accretion of preferred stock discount — — — — — ( 13 ) — ( 13 ) — ( 13 )

Conversion of Series A preferred stock (Note 8) 7,738,743 1 — — — 23,119 — 23,120 — 23,120

Class A common stock issued for warrants exercised (Note 9) 22,974,743 3 — — — 184,561 — 184,564 — 184,564

Class A common stock issued related to loan conversion (Notes 6 and 8) 3,487,278 — — — — — — — — —

Class A common stock issued for stock options exercised 250,947 — — — — 52 — 52 — 52

Class A common stock issued for vested RSUs and PSUs 1,339,417 — — — — ( 2,281 ) — ( 2,281 ) — ( 2,281 )

Class A common stock issued for Class C canceled 15,361,622 1 ( 15,361,622 ) ( 1 ) — — — — — —

Distribution to noncontrolling interests — — — — — — — — ( 2,267 ) ( 2,267 )

Issuance of Class A common stock related to ATM Program (Note 8) 16,521,612 2 — — — 97,495 — 97,497 — 97,497

Issuance of Class A common stock related to the 2024 Offering and Concurrent Private Placement (Note 8) 11,904,762 1 ( 152,857 ) — — 116,874 — 116,875 — 116,875

Transaction costs (Note 8) — — — — — ( 350 ) — ( 350 ) — ( 350 )

Tax receivable agreement - obligation to partners — — — — — ( 473 ) — ( 473 ) — ( 473 )

Issuance of Class C common stock related to earn-out awards (Note 8) — — — — — — — — — —

Subsequent remeasurement of redeemable noncontrolling interests — — — — — ( 426,886 ) ( 464,421 ) ( 891,307 ) — ( 891,307 )

Net income attributable to noncontrolling interest 0 — — — — — — — 3,495 3,495

Net loss attributable to the Company — — — — — — ( 283,413 ) ( 283,413 ) — ( 283,413 )

Balance, December 31, 2024 101,859,000 $ 10 55,394,533 $ 6 $ ( 12,825 ) $ — $ ( 996,453 ) $ ( 1,009,262 ) $ 1,228 $ ( 1,008,034 )

The accompanying notes are an integral part of these consolidated financial statements

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Depreciation 1,859 1,376

Bad debt (recoveries) expense ( 836 ) 836

Bad debt expense (recovery) 440 ( 836 )

Impairment of property and equipment 5,044 964

Loss on disposal of property and equipment — 6

Share-based compensation expense 8,798 4,273

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Other liabilities 3,910 17,191

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

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

Cash flows from investing activities:

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Member distributions — ( 7,952 )

Net costs of stock option exercises ( 348 ) —

Stock option exercises 300 —

Forward purchase agreement termination — 12,730

Warrants exercised 61,261 16,124

Investment from non-controlling interests 686 —

SAFE Agreements — 4,250

Contributions from (distributions to) noncontrolling interests ( 2,267 ) 686

Payment of withholding taxes from share-based awards ( 2,529 ) ( 348 )

Net cash provided by financing activities 272,787 53,924

Net decrease in cash, cash equivalents and restricted cash ( 21,266 ) ( 3,525 )

Net increase (decrease) in cash, cash equivalents and restricted cash 205,089 ( 21,266 )

Cash, cash equivalents and restricted cash at beginning of the period 4,560 25,826

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Cash and cash equivalents at end of the period $ 207,607 $ 4,498

Year Ended December 31,

Supplemental disclosure of cash flow information

Cash paid for interest, net $ 1,919 $ 1,013

Cash paid for interest $ 408 $ 1,919

Cash paid for taxes $ 613 $ 35

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Issuance of Class C Common Stock related to earn-out awards (Note 8) $ — $ 19,376

Conversion of Series A preferred stock (Note 8) $ 23,120 $ —

Preferred dividends $ ( 896 ) $ ( 2,343 )

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(formerly known as Inflection Point Acquisition Corp.

or “IPAX”), collectively with its subsidiaries (the “Company,” “IM,” “Intuitive Machines,” “we,” “us” or “our”) designs, manufactures and operates space products and services.

Intuitive Machines’ near-term focus is to create and operate space systems and space infrastructure on and in the vicinity of the Moon that enable scientific and human exploration and utilization of lunar resources to support sustainable human presence on the Moon and exploration to Mars and beyond.

Intuitive Machines offers its customers the flexibility needed to pioneer a thriving and diverse lunar economy designed to enable a permanent presence in lunar orbit and on the lunar surface.

or “IPAX”), collectively with its subsidiaries (the “Company,” “IM,” “Intuitive Machines,” “we,” “us” or “our”) is a space technology, infrastructure, and services company that is contributing to the establishment of cislunar infrastructure and commerce.

Cislunar encompasses objects in orbit in the Earth-Moon system and on the Lunar surface.

We are 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 as we scale these services.

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.

IM is currently headquartered in Houston, Texas.

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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 Stock Market LLC (“Nasdaq”).

On September 24, 2021, IPAX consummated an initial public offering, after which its securities began trading on the Nasdaq Stock Market LLC (the “Nasdaq”).

IPAX Business Combination

On September 16, 2022, IPAX entered into a certain Business Combination Agreement (the “Business Combination Agreement”) by and between IPAX and Intuitive Machines, LLC, a Delaware limited liability company (formerly, a Texas limited liability company).

On February 10, 2023, as contemplated by the Business Combination Agreement and described in the section titled “The Business Combination Proposal” of the final prospectus and definitive proxy statement of IPAX, dated January 24, 2023 and filed with the SEC on January 24, 2023, IPAX filed a notice of deregistration with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and filed a certificate of incorporation and certificate of corporate domestication with the Secretary of State of the State of Delaware, pursuant to which IPAX was domesticated and continues as a Delaware corporation, changing its name to “Intuitive Machines, Inc.”

On February 10, 2023, IPAX filed a notice of deregistration with the Cayman Islands Registrar of Companies, together with the necessary accompanying documents, and filed a certificate of incorporation and certificate of corporate domestication with the Secretary of State of the State of Delaware, pursuant to which IPAX was domesticated and continues as a Delaware corporation, changing its name to “Intuitive Machines, Inc.”

On February 13, 2023 (the “Closing Date”), Intuitive Machines, Inc.

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The treatment of the Business Combination as a reverse recapitalization was based upon the pre-merger members of Intuitive Machines, LLC holding the majority of the voting interests of Intuitive Machines, Inc., Intuitive Machines, LLC’s existing management team serving as the initial management team of Intuitive Machines, Inc., Intuitive Machines, LLC’s appointment of the majority of the initial board of directors of Intuitive Machines, Inc., and the significance of Intuitive Machines, LLC’s operations prior to the Business Combination which represent the entirety of Company’s operations.

In connection with the Business Combination, approximately $ 34.1 million of cash held in trust, net of redemptions by IPAX’s public shareholders, became available for use by the Company as well as proceeds received from the contemporaneous sale of preferred stock in connection with the closing of a PIPE investment.

In addition, the Company entered into a common stock purchase agreement, dated September 16, 2022 (the “Cantor Purchase Agreement”) relating to an equity facility under which shares of newly issued Intuitive Machines Class A common stock, par value $ 0.0001 per

share (the “Class A Common Stock”) may be sold to CF Principal Investments LLC (“CFPI”), at the Company’s discretion, up to the lesser of (i.) $ 50.0 million and (ii) the “exchange cap” specified therein, subject to certain customary conditions and limitations set for in the Cantor Purchase Agreement.

Beginning on February 14, 2023, the Company’s Class A Common Stock and warrants to purchase the Class A Common Stock at an exercise price of $ 11.50 per share (th e “Public Warrants”) began trading on Nasdaq under the symbols “LUNR” and “LUNRW,” respectively.

See Note 3 - Business Combination and Related Transactions for additional information.

Beginning on February 14, 2023, the Company’s Class A Common Stock and warrants to purchase the Class A Common Stock at an exercise price of $ 11.50 per share (th e “Warrants” as further defined in Note 9 ) began trading on Nasdaq under the symbols “LUNR” and “LUNRW,” respectively.

On February 4, 2025, the Company announced the redemption of all of its outstanding publicly issued Warrants.

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

Refer to Note 17 - Subsequent Events for more information on the redemption.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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The Company’s consolidated financial statements and related notes as of and for the years ended December 31, 2024 and 2023 have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) and pursuant to the rules and regulations of the SEC.

Our consolidated financial statements include the accounts of Intuitive Machines, the accounts of Intuitive Aviation Inc.

(“IA” or “Intuitive Aviation”), a wholly owned subsidiary, Space Network Solutions, LLC (“SNS” or “Space Network Solu tions”) a majority-owned subsidiary, and IX, LLC, a variable interest entity (“VIE”) for which we are the primary beneficiary.

Our consolidated financial statements include the accounts of Intuitive Machines, the accounts of Space Network Solutions, LLC (“SNS” or “Space Network Solu tions”) a majority-owned subsidiary, and IX, LLC, a variable interest entity (“VIE”) for which we are the primary beneficiary.

All intercompany balances and transactions have been eliminated in consolidation.

The December 31, 2022 balances reported herein are derived from the consolidated financial statements of Intuitive Machines, LLC.

Reclassifications

Certain prior period amounts have been reclassified to conform to current period presentation.

These reclassifications did not result in an changes to previously reported net income.

The Company reclassed a certain line item in the consolidated statements of cash flows.

These reclassifications did not result in any changes to previously reported net income.

The Company reclassed a certain line item in the consolidated balance sheet.

Emerging Growth Company

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The Company did not opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an EGC, can adopt the new or revised standard at the time private companies adopt the new or revised standard.

The effective dates shown in this Note 2 below reflect the election to use the extended transition period.

If the Company loses its EGC, 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.

Use of Estimates

The preparation of our consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes.

The preparation of our consolidated financial statements in conformity with U.S.

GAAP requires us to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and the accompanying notes.

Due to the inherent uncertainty involved in making estimates, actual results could differ from those estimates.

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Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker (“CODM”) in making decisions regarding resource allocation and assessing performance.

All of the Company’s assets are maintained in the United States.

The Company has determined that it operates in one operating segment and one reportable segment, as the CODM reviews financial information presented on a consolidated basis for purposes of making operating decisions, allocating resources and evaluating financial performance.

See Note 16 - Segment Information for additional disclosures on segment reporting.

Concentration of Credit Risks

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Certain account balances exceed the Federal Deposit Insurance Corporation insurance limits of $250,000 per account.

The Company generally does not require collateral to support the obligations of the counterparties and cash levels held at banks are more than federally insured limits.

The Company generally does not require collateral to support the obligations of the counterparties and cash levels held at banks are more than federally

insured limits.

The Company limits its exposure to credit loss by maintaining its cash and cash equivalents with highly rated financial institutions.

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Major customers are defined as those individually comprising more than 10% of the Company’s total revenue.

There was one major customer that accounted for 74 % and 83 %, respectively, of the Company’s total revenue for the years ended December 31, 2023 and 2022, and accounted for 80 % of the accounts receivable balance as of December 31, 2023.

The largest customer had no accounts receivable as of December 31, 2022, while two other customers accounted for 35 % and 14 %.

There was one major customer that accounted for 90 % and 74 % of the Company’s total revenue for the years ended December 31, 2024 and 2023, respectively, and accounted for 90 % and 80 % of the accounts receivable balance as of December 31, 2024 and 2023, respectively.

Major suppliers are defined as those individually comprising more than 10% of the annual goods or services purchased.

For the years ended December 31, 2023 and 2022, the Company had one major supplier representing 18 % and 63 %, respectively, of goods and services purchased.

As of December 31, 2023 and 2022, the one major supplier represented 2 % and 21 %, respectively, of the accounts payable balance.

For the years ended December 31, 2024 and 2023, the Company had one major supplier representing 17 % of goods and services purchased for both periods.

As of December 31, 2024, there were two major suppliers representing 14 % and 8 % of the accounts payable balance.

There were no accounts payable balances associated with a major supplier as of December 31, 2023.

Liquidity and Capital Resources

The consolidated financial statements as of December 31, 2024 and for the years ended December 31, 2024 and 2023, and related notes were prepared on the basis of a going concern, which contemplates that the Company will be able to realize assets and discharge liabilities in the normal course of business.

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

As further described in Note 1 - Business Description, on February 13, 2023, the Company received approximately $ 34.1 million of gross proceeds to fund operations as a result of the Business Combination with IPAX.

Additionally, in connection with the Business Combination, 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.

Subsequent to the closing of the Business Combination, the Company received $ 12.7 million in cash associated with the termination of a forward purchase agreement and $ 16.1 million in cash proceeds associated with warrant exercises.

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 an aggregate of 4,705,883 shares of the Company’s Class A Common Stock for aggregate gross proceeds of approximately $ 20.0 million.

See Note 9 - Mezzanine Equity and Equity for additional information on this securities purchase agreement.

Additionally, as further described in Note 17, 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.

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

The Company has historically funded its operations through internally generated cash on hand, proceeds from sales of its 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.

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 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.

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 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”) will be 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 (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.

Cash and Cash Equivalents

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The remaining difference was paid by Intuitive Machines, LLC in 2022 or by IPAX prior to the closing of the Business Combination.

Securities Purchase Agreement

Transaction costs related to the consummation of the securities purchase agreement described further in Note 9, includes direct legal, broker, accounting and other fees.

Transaction costs totaled approximately $ 1.4 million during the year ended December 31, 2023 charged to general and administrative expenses in our statement of operations.

Issuance of Securities

Transaction costs related to various agreements for the issuance of securities (as further described in Note 8), includes direct legal, broker, accounting and other fees.

Transaction costs related to these activities totaled approximately $ 9.4 million for the year ended December 31, 2024, recorded as an offset in additional paid-in capital in our consolidated balance sheets and approximately $ 1.4 million for the year ended December 31, 2023, charged to general and administrative expenses in our statement of operations.

Accounts Receivable and Allowance for Credit Losses

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

For the year ended December 31, 2023, we recorded impairment charges of approximately $ 1.0 million within our consolidated statements of operations associated with leasehold improvements and furniture and fixtures in connection with our previous corporate headquarters .

No impairment charges were recorded for the year ended December 31, 2022.

See Note 5 for further discussion of our impairment loss on property and equipment.

For the year ended December 31, 2024, we recorded impairment charges of approximately $ 5.0 million within our consolidated statements of operations associated with construction in progress of certain assets under development by a third part subcontractor that were not in compliance according to the specifications under contract.

For the year ended December 31, 2023, we recorded impairment charges of $ 1.0 million within the consolidated statements of operations associated with leasehold improvements and furniture and fixtures in connection with our previous corporate headquarters.

See Note 4 for further discussion of our impairment losses on property and equipment.

Earn-Out Liabilities

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

Upon issuance and release of the shares after each Triggering Event (as defined in Note 3) is met, the related Earn Out Units will be remeasured to fair value at that time with the changes recognized in other income (expense), and such Earn Out Units will be reclassed to shareholders’ equity (deficit) on the consolidated balance sheet.

Upon issuance and release of the shares after each Triggering Event (as defined below) is met, the related Earn Out Units will be remeasured to fair value at that time with the changes recognized in other income (expense), and such Earn Out Units will be reclassed to shareholders’ equity (deficit) on the consolidated balance sheet.

As of the Closing Date, the Earn Out Units had a fair value of $ 99.7 million.

As a result of the OMES III Contract award by the National Aeronautics and Space Administration (“NASA”) in May 2023, Triggering Event I (as defined below) under the earn out agreement vested resulting in the issuance of 2,500,000 shares of Intuitive Machines Class C common stock, par value $ 0.0001 per share (the “Class C Common Stock”) with a fair value of approximately $ 19.4 million to the applicable Intuitive Machines, LLC Members resulting in a reduction to earn-out liabilities and an increase to shareholders’ deficit.

As of December 31, 2023, the remaining Earn Out Units had a fair value of $ 14.0 million, with the changes in the fair value between the Closing Date and December 31, 2023 of $ 66.3 million recognized as change in fair value of the earn-out liability under other income (expense) within the consolidated statements of operations.

As of December 31, 2024, the remaining Earn Out Units had a fair value of $ 134.2 million.

See Note 11 - Fair Value Measurements for additional information related to the changes in fair value on the earn-out liabilities.

Triggering Events

The 10,000,000 Earn Out Units received by the applicable Intuitive Machines, LLC Members related to the Business Combination (discussed in Note 1) are subject to vesting and will be earned, released and delivered upon satisfaction of the following milestones (each, a “Triggering Event”):

(i) 2,500,000 Earn Out Units will vest if, during the Earn Out Period (as defined below), Intuitive Machines is awarded the OMES III Contract by NASA (“Triggering Event I”);

(ii) 5,000,000 Earn Out Units will vest if, within the Earn Out Period, Triggering Event I occurs and the volume weighted average closing sale price of the Class A Common Stock equals or exceeds $ 15.00 per share (“Triggering Event II-A”);

(iii) 7,500,000 Earn Out Units will vest if, within the Earn Out Period, Triggering Event I has not occurred and the volume weighted average closing sale price of the Class A Common Stock equals or exceeds $ 15.00 per share (“Triggering Event II-B”) and;

(iv) 2,500,000 Earn Out Units will vest if, within the Earn Out Period, Triggering Event III occurs the volume weighted average closing sale price of the Class A Common Stock equals or exceeds $ 17.50 per share (“Triggering Event III”), provided, that Triggering Event II-A and Triggering Event II-B may not both be achieved.

“Earn Out Period” means (i) with respect to Triggering Event I, the time period beginning on September 16, 2022 and ending at 11:59 pm ET on December 31, 2023, and (ii) with respect to Triggering Event II-A, Triggering Event II-B and Triggering Event III, the time period beginning on the date that is 150 days following the Closing Date and ending on the date that is the five ( 5 ) year anniversary of the Closing Date.

Subsequent Earn Out Events

In February 2025, the remaining Earn Out Units vested due to Triggering Events II-A and III (as defined above) under the earn out agreement resulting in the issuance of 5,000,000 and 2,500,000 , respectively, shares of Intuitive Machines’ Class C Common Stock.

See Note 17 - Subsequent Events for additional information related to these earn out events.

The Series A Investment

Concurrently with the execution of the Business Combination Agreement (as described in Note 1), Intuitive Machines, Inc.

entered into the Series A Purchase Agreement with Kingstown 1740 Fund, LP (an existing security holder of Intuitive Machines, Inc.

and an affiliate of IPAX’s sponsor, Inflection Point Holdings LLC (the “Sponsor”) and Ghaffarian Enterprises, LLC (an affiliate of Kamal Ghaffarian, an Intuitive Machines, LLC founder) (collectively, the “Series A Investors”), pursuant to which, and on the terms and subject to the conditions of which, Intuitive Machines, Inc.

agreed to issue and sell to the Series A Investors (i) an aggregate of 26,000 shares of 10% Series A Cumulative Convertible Preferred Stock, par value $ 0.0001 per share (the “Series A Preferred Stock”) which will be convertible into shares of Class A Common Stock in accordance with the terms of the Certificate of Designation of Preferences, Rights and Limitations of 10% Series A Cumulative Convertible Preferred Stock (the “Certificate of Designation”) and (ii) warrants to purchase 541,667 shares of Class A Common Stock at an initial exercise price of $ 15.00 per share, subject to adjustment (the “Preferred Investor Warrants”).

In conjunction with the closing of the Business Combination, the Company received proceeds of $ 26.0 million and issued 26,000 shares of Series A Preferred Stock and 541,667 Preferred Investor Warrants.

The Series A Preferred Stock and Preferred Investor Warrants each represent freestanding financial instruments.

The Series A Preferred Stock is not a mandatorily redeemable financial instrument and is redeemable at the option of the Series A Investors.

The Series A Preferred Stock was recorded as Series A preferred stock subject to possible redemption and classified as temporary equity pursuant to ASC 480-10-S99.

The Preferred Investor Warrants were classified as equity.

The $ 26.0 million in proceeds received were allocated to the Series A Preferred Stock and Preferred Investor Warrants based on the relative fair value of the instruments at closing.

See Note 8 for additional information on the Series A Preferred Stock and Note 9 for additional information on the Series A Preferred Warrants.

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms pursuant to the guidance of ASC 480, “Distinguishing Liabilities from Equity” and ASC 815, “Derivatives and Hedging”.

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Fair Value Measurements

The Company’s financial instruments consist of cash and cash equivalents, restricted cash, trade receivables, trade payables, amounts receivable or payable to related parties and long-term debt.

The carrying amount of cash and cash equivalents, trade receivables, trade payables and receivables and payables from affiliates approximates fair value because of the short-term nature of the instruments.

The Company’s financial instruments consist of cash and cash equivalents, restricted cash, trade accounts receivables, accounts payables, amounts receivable or payable to related parties and long-term debt.

The carrying amount of cash and cash equivalents, trade accounts receivables, accounts payables and receivables and payables from affiliates approximates fair value because of the short-term nature of the instruments.

The fair value of debt approximates its carrying value because the cost of borrowing fluctuates based upon market conditions.

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The prior investors’ interests in Intuitive Machines, LLC represents a redeemable noncontrolling interest.

At its discretion, the members have the right to exchange their common units in Intuitive Machines, LLC (along with the cancellation of the paired shares of Intuitive Machines Class B Common Stock or Class C Common Stock in Intuitive Machines) for either shares of Class A Common Stock on a one -to-one basis or cash proceeds of equal value at the time of redemption.

Any redemption of Intuitive Machines, LLC Common Units in cash must be funded through a private or public offering of Class A Common Stock and is subject to the Board’s approval.

At its discretion, the members have the right to exchange their common units in Intuitive Machines, LLC (along with the cancellation of the paired shares of Intuitive Machines Class C Common Stock in Intuitive Machines) for either shares of Class A Common Stock on a one -to-one basis or cash proceeds of equal value at the time of redemption.

Any redemption of Intuitive Machines, LLC Common Units in cash must be funded through a private or public offering of Class A Common Stock and is subject to the Board’s approva l.

As of December 31, 2024, the prior investors of Intuitive Machines, LLC hold the majority of the voting rights on the Board.

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The redeemable noncontrolling interests were initially measured at the Intuitive Machines, LLC prior investors’ share in the net assets of the Company upon consummation of the Business Combination.

Subsequent remeasurements of the Company’s redeemable noncontrolling interests are recorded as a deemed dividend each reporting period, which reduces retained

earnings, if any, or additional paid-in capital of Intuitive Machines.

Remeasurements of the Company’s redeemable noncontrolling interests are based on the fair value of our Class A Common Stock.

Subsequent remeasurements of the Company’s redeemable noncontrolling interests are recorded as a deemed dividend each reporting period, which reduces retained earnings, if any, or additional paid-in capital of Intuitive Machines.

Remeasurements of the Company’s redeemable

noncontrolling interests are based on the fair value of our Class A Common Stock.

See Note 8 - Mezzanine Equity and Equity for additional information related to the redeemable noncontrolling interests.

General and Administrative Expense

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professional fees and other general corporate costs;

and research and development.

Human capital expenses primarily include salaries and benefits.

Research and development (“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.

Revenue Recognition

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Customer-furnished materials are included in both contract revenue and cost of revenue when management concludes that the company is acting as a principal rather than as an agent.

Revenue for uninstalled materials is recognized when the cost is incurred and control is transferred to the customer, which revenue is recognized using the cost-to-cost method.

Revenue for uninstalled materials is recognized when the cost is incurred and control is transferred to the customer, which revenue is recognized using the

cost-to-cost method.

Certain costs associated with significant long-term service arrangements are capitalized and amortized across the life of the contract.

Capitalized contract costs primarily relate to prepaid pre-launch integration and engineering services and launch services subcontracted with a third party.

Pre-launch integration and engineering services and launch services are capitalized and amortized over the term of the contract on a systematic basis that is consistent with the transfer

of the goods and services to our end customer.

Pre-launch integration and engineering services and launch services are capitalized and amortized over the term of the contract on a systematic basis that is consistent with the transfer of the goods and services to our end customer.

Project mobilization costs are generally charged to the project as incurred when they are an integrated part of the performance obligation being transferred to the client.

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The advance payment generally is not considered to contain a significant financing component as we expect to recognize those amounts in revenue within a year of receipt as work progresses on the related performance obligation.

Intuitive Machines

Intuitive Machines, Inc.

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All such payments to the TRA Holders are the obligations of Intuitive Machines, Inc., and not that of Intuitive Machines, LLC.

As of December 31, 2023, there have been no exchanges of Intuitive Machines, LLC units for Class A Common Stock of Intuitive Machines, Inc.

and, accordingly, no TRA liabilities currently exist.

See Note 3 - Business Combination and Related Transactions for further description of the TRA.

See Note 7 - Income taxes for additional information on the TRA liability.

Earnings (Loss) Per Share (“EPS”)

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The Company is assessing the potential impact of adopting the ASU on its financial statements.

In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40):

Disaggregation of Income Statement Expenses, which is intended to improve the disclosures of expenses by providing more detailed information about the types of expenses in commonly presented expense captions.

The standard is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The standard can be applied either prospectively or retrospectively.

The Company is currently evaluating the impact of the standard on the presentation of its consolidated financial statements and related disclosures.

In November 2023, the FASB issued ASU No.

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It requires a public entity to disclose the title and position of the Chief Operating Decision Maker.

The new standard is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted.

The new standard became effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

A public entity should apply the amendments in this ASU retrospectively to all prior periods presented in the financial statements.

The Company is assessing the potential impact of adopting the ASU on its financial statements.

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments.

ASU 2016-13 requires an entity to utilize a new impairment model known as the current expected credit loss (“CECL”) model to estimate its lifetime “expected credit loss” and record an allowance that, when deducted from the amortized cost basis of the financial asset, presents the net amount expected to be collected on the financial asset.

ASU 2016-13 also requires new disclosures for financial assets measured at amortized cost, loans, and available-for-sale debt securities.

The Company adopted this ASU as of January 1, 2023.

The adoption did not have a material impact on the Company’s consolidated financial statements.

The adoption of this ASU did not have a material impact on the Company’s consolidated financial statements.

Other Current Liabilities

As of December 31, 2023 and December 31, 2022, other current liabilities consisted of the following (in thousands):

As of December 31, 2024 and 2023, other current liabilities consisted of the following (in thousands):

2024 December 31,

Financing obligation, current (see Note 6 - Leases)

Payroll accruals $ 10,274 $ 2,553

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Commercial insurance financing — 493

Commitment shares liability (see Note 3 - Business Combination and Related Transactions)

Commitment shares liability (see Note 8)

Other accrued liabilities 212 94

Other current liabilities $ 11,489 $ 4,747

NOTE 3 - BUSINESS COMBINATION AND RELATED TRANSACTIONS

On February 13, 2023 as contemplated by the Business Combination Agreement, Intuitive Machines, Inc.

and Intuitive Machines, LLC consummated the Business Combination, whereby:

(i) Intuitive Machines, LLC appointed Intuitive Machines, Inc.

a s its managing member;

(ii) Intuitive Machines, Inc.

issued to certain existing members of Intuitive Machines, LLC, 10,566 shares of Intuitive Machines Class B Common Stock having one vote per share and no economic right s, or 68,140,188 shares of Class C Common Stock having three votes per share and no economic rights, in each case, in exchange for payment from such Intuitive Machines, LLC members of a per-share price equal to the par value per share of such stock, and equal to the number of Intuitive Machines, LLC Common Units held by such person as of and on the

Closing Date;

(iii) Intuitive Machines, Inc.

contributed to Intuitive Machines, LLC an amount in cash of $ 8.1 million, net of transaction costs, in exchange for certain units in Intuitive Machines, LLC;

and (iv) the Transactions were consummated as further described below.

Intuitive Machines, LLC Conversion and Recapitalization

In connection with the Business Combination, Intuitive Machines, LLC changed its jurisdiction of organization from Texas to Delaware.

Immediately prior to the closing of the Business Combination, Intuitive Machines, LLC effectuated the recapitalization whereby all outstanding equity securities of Intuitive Machines, LLC were converted into Common Units of Intuitive Machines, LLC (“Intuitive Machines, LLC Common Units”), options to purchase Intuitive Machines, LLC common units (“Intuitive Machines, LLC options”) and unvested Earn Out Units of Intuitive Machines, LLC.

Consideration and Structure

As a result of the Up-C structure, the Business Combination consideration received by Intuitive Machines, LLC members consisted of securities of both Intuitive Machines, LLC having economic rights but not voting rights and Intuitive Machines, Inc.

having voting rights but not economic rights equal to a value of approximately $ 700.0 million.

In particular, the Business Combination consideration received by the Intuitive Machines, LLC members comprised of an aggregate of (a) (i) 68,155,203 Intuitive Machines, LLC Common Units, (ii) 1,874,719 Intuitive Machines, LLC Options and (iii) 10,000,000 Earn Out Units and (b) (i) 15,015 shares of Class B Common Stock (excluding 1,873,307 shares of Class B Common Stock reserved for issuance upon exercise of Intuitive Machines, LLC Options) and (ii) 68,140,188 shares of Class C Common Stock (excluding 10,000,000 shares of Class C Common Stock reserved for issuance upon vesting of the Earn Out Units).

The 10,000,000 Earn Out Units received by the applicable Intuitive Machines, LLC Members are subject to vesting and will be earned, released and delivered upon satisfaction of the following milestones (each, a “Triggering Event”):

(i) 2,500,000 Earn Out Units will vest if, during the Earn Out Period (as defined below), Intuitive Machines is awarded the OMES III Contract by NASA (“Triggering Event I”), (ii) 5,000,000 Earn Out Units will vest if, within the Earn Out Period, Triggering Event I occurs and the volume weighted average closing sale price of the Class A Common Stock equals or exceeds $ 15.00 per share (“Triggering Event II-A”), (iii) 7,500,000 Earn Out Units will vest if, within the Earn Out Period, Triggering Event I has not occurred and the volume weighted average closing sale price of the Class A Common Stock equals or exceeds $ 15.00 per share (“Triggering Event II-B”), and (iv) 2,500,000 Earn Out Units will vest if, within the Earn Out Period, Triggering Event III occurs the volume weighted average closing sale price of the Class A Common Stock equals or exceeds $ 17.50 per share (“Triggering Event III”), provided, that Triggering Event II-A and Triggering Event II-B may not both be achieved.

If a Change of Control (as defined in the Business Combination Agreement) occurs during the Earn Out Period that results in the holders of the Class A Common Stock receiving a per share price greater than or equal to $ 15.00 or $ 17.50 , respectively, then immediately prior to the consummation of such Change of Control, to the extent not previously triggered, then Triggering Event II-A or Triggering Event II-B will be deemed to have occurred, as applicable, and the applicable Earn Out Units shall vest.

Upon the vesting of any Earn Out Units, each of the applicable Intuitive Machines, LLC Members will be issued (i) by Intuitive Machines, LLC an equal number of Intuitive Machines, LLC Common Units and (ii) by Intuitive Machines, an equal number of shares of Class C Common Stock, in exchange for surrender of the applicable Earn Out Units and the payment to Intuitive Machines, Inc.

of a per-share price equal to the par value per share of the Class C Common Stock.

See Note 2 for further discussion of Triggering Event I which vested upon the OMES III award by NASA in May 2023.

After the expiration of the applicable lock-up period on August 14, 2023, holders of certain Intuitive Machines, LLC Common Units will be permitted to exchange such Intuitive Machines, LLC Common Units (along with the cancellation of the paired share of Class B Common Stock or share of Class C Common Stock) for shares of Class A Common Stock on a one -for-one basis pursuant to the second amended and restated limited liability company agreement of Intuitive Machines, LLC (the “Second A&R Operating Agreement”) (subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications) or, at the election of Intuitive Machines, Inc.

(determined by a majority of the directors of Intuitive Machines, Inc.

who are disinterested with respect to such determination), cash from a substantially concurrent public offering or private sale in an amount equal to the net amount, on a per share basis, of cash received as a result of such public offering or private sale.

The Series A Investment

On September 16, 2022, concurrently with the execution of the Business Combination Agreement, Intuitive Machines, Inc.

entered into the Series A Purchase Agreement with Kingstown 1740 Fund, LP (an existing security holder of Intuitive Machines, Inc.

The Series A Preferred Stock and Preferred Investor Warrants each represent freestanding financial instruments.

The Series A Preferred Stock is not a mandatorily redeemable financial instrument and is redeemable at the option of the Series A Investors.

The Series A Preferred Stock was recorded as Series A preferred stock subject to possible redemption and classified as temporary equity pursuant to ASC 480-10-S99.

The Preferred Investor Warrants were classified as equity.

The $ 26.0 million in proceeds received were allocated to the Series A Preferred Stock and Preferred Investor Warrants based on the relative fair value of the instruments at closing.

Tax Receivable Agreement

Intuitive Machines, Inc.

entered into the TRA with Intuitive Machines, LLC and the TRA Holders at closing of the Business Combination.

Pursuant to the TRA, Intuitive Machines, Inc.

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

federal, state, and local taxes that are based on, or measured with respect to, net income or profits, and any interest related thereto that Intuitive Machines, Inc.

(and applicable consolidated, unitary, or combined subsidiaries thereof, if any realizes, or is deemed to realize, as a result of certain tax attributes (the “Tax Attributes”), including:

• existing tax basis in certain assets of Intuitive Machines, LLC and certain of its direct or indirect subsidiaries, including assets that will eventually be subject to depreciation or amortization, once placed in service;

• tax basis adjustments resulting from taxable exchanges of Intuitive Machines, LLC Common Units (including any such adjustments resulting from certain payments made by Intuitive Machines, Inc.

under the TRA) acquired by Intuitive Machines, Inc.

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

• certain tax benefits realized by Intuitive Machines, Inc.

as a result of certain U.S.

federal income tax allocations of taxable income or gain away from Intuitive Machines, Inc.

and to other members of Intuitive Machines, LLC and deductions or losses to Intuitive Machines, Inc.

and away from other members of Intuitive Machines, LLC, in each case as a result of the Business Combination;

• tax deductions in respect of portions of certain payments made under the TRA.

Under the terms of the TRA, Intuitive Machines, Inc.

will make payments to the TRA Holders in respect of 85 % of the cash tax savings resulting from the net tax benefit of certain Tax Attributes.

However, until a TRA Holder exchanges at least 5 % of its Intuitive Machines, LLC Common Units, Intuitive Machines, Inc.

will hold such payments applicable to existing basis until the TRA Holder satisfies such threshold exchange.

As of December 31, 2023, no TRA Holder had exchanged at least 5 % of its Intuitive Machines, LLC Common Units.

Fut ure exchanges will result in incremental tax attributes and potential cash tax savings for Intuitive Machines, Inc.

Depending on Intuitive Machines’ assessment on realizability of such Tax Attributes, the arising TRA liability will be recorded through income.

Equity Facility

On September 16, 2022, the Company entered into the Cantor Purchase Agreement with CFPI relating to an equity facility under which shares of newly issued Class A Common Stock may be sold to CFPI by Intuitive Machines, Inc.

Pursuant to the terms of the Cantor Purchase Agreement, Intuitive Machines, Inc.

will have the right, but not the obligation, from time to time at its sole discretion, until the first day of the month following the 18 -month period from and after the Commencement (as defined in the Cantor Purchase Agreement), to direct CFPI to purchase up to the lesser of (i) $ 50.0 million of newly issued shares of Class A Common Stock and (ii) the Exchange Cap, by delivering written notice to CFPI prior to the commencement of trading on any trading day, subject to certain customary conditions and limitations set forth

in the Cantor Purchase Agreement.

In connection with the execution of the Cantor Purchase Agreement, the Company agreed to issue 100,000 shares of Class A Common Stock to CFPI.

The Company entered into a registration rights agreement with CFPI, pursuant to which it agreed to register for resale, pursuant to Rule 415 under the Securities Act, the shares of Class A Common Stock that are sold to CFPI under the equity facility and the Commitment Shares.

During the second quarter of 2023, we recorded a recapitalization adjustment to increase other current liabilities and decrease to paid-in capital for $ 1.0 million to recognize the Commitment Share liability within our consolidated balance sheets which was not previously recognized in the balance sheet of IPAX prior to the closing of the Business Combination.

In June 2023, the Company issued 95,785 Commitment Shares to CFPI.

Under the terms of the Cantor Purchase Agreement, to the extent after the resale of the Commitment Shares by CFPI is less than $ 1.0 million, the Company will pay CFPI the difference between $ 1.0 million and the net proceeds of the resale of the Commitment Shares received by CFPI in cash.

As of December 31, 2023, none of the Commitment Shares have been sold by CFPI and the Company has recorded a liability of approximately $ 755 thousand, reflected in other current liabilities in our consolidated balance sheets as of December 31, 2023, representing the difference between $ 1.0 million and the fair value of the Commitment Shares.

As of December 31, 2023, no shares of Class A Common Stock have been sold to CFPI under the Cantor Purchase Agreement.

Forward Purchase Agreements

Prior to the closing of Business Combination, the Company entered into forward purchase agreements with two separate counterparties pursuant to which each counterparty agreed to purchase 1,250,000 shares of Class A Common Stock from shareholders who had previously tendered such shares for redemption but agreed to reverse their redemption and sell such shares to the counterparties at the redemption price of approximately $ 10.19 per share.

The Company prepaid approximately $ 25.5 million to the counterparties at the closing of the Business Combination to secure its purchase obligation to repurchase the 2,500,000 shares of Class A Common Stock at the redemption price per share on the option expiration date that was one month after closing of the Business Combination.

The forward purchase agreements were accounted for as a prepaid asset and marked to fair value through earnings each period until the agreements were terminated or expired.

The Company paid transaction fees to the counterparties totaling $ 750 thousand which was recorded as general and administrative expense during the first quarter of 2023.

On February 23, 2023, one of the counterparties exercised their right to optional early termination of the forward purchase agreement for 1,250,000 shares of Class A Common Stock and returned approximately $ 12.7 million in cash to the Company resulting in an immaterial net loss on termination during the first quarter of 2023.

On March 8, 2023, the remaining forward purchase agreement expired resulting in the Company’s repurchase of 1,250,000 shares of Class A Common Stock resulting in a net gain on settlement of the agreement of approximately $ 93 thousand recorded in other income (expense) during the first quarter of 2023.

The repurchased shares of Class A Common Stock were recorded as treasury stock upon expiration of the forward purchase agreement in the amount of $ 12.8 million based on a stock price of $ 10.26 per share on the date of repurchase.

Immaterial Error Corrections to Previously Issued Financial Statements

During the third quarter of 2024, we identified and corrected immaterial errors affecting previously issued financial statements related to historical estimated contract losses on certain lunar payload services contracts.

These errors were due to the improper inclusion of constrained variable consideration in determining estimated contract losses from fiscal year 2020 through the second quarter of fiscal year 2024.

Additionally, we corrected several other immaterial errors previously identified within the same reporting periods.

As of June 30, 2024, the cumulative error for all periods previously reported was an understatement of Net income attributable to the Company of approximately $ 5.1 million impacting Contract liabilities (current and non-current) and Accounts payable – affiliated companies in our consolidated balance sheets and Cost of revenues (excluding depreciation) and General and administrative expense (excluding depreciation) in our consolidated statements of operations.

The errors had no impact to total operating cash flows in our previously reported cash flows.

We assessed the materiality of the errors, both quantitatively and qualitatively, in accordance with the SEC’s SAB No.

99 and SAB No.

108, and concluded these errors were not material to any of our previously issued quarterly or annual financial statements.

In order to correctly present the errors noted above, previously issued financial statements have been revised and are presented as “As Corrected” in the tables below.

The effect of the corrections on the consolidated balance sheet at December 31, 2023 and consolidated statement of operations for the fiscal year ended December 31, 2023 are as follows (in thousands):

December 31, 2023

Revised Balance Sheet Amounts:

As Previously Reported Adjustments As Corrected

Accounts payable - affiliated companies $ 3,493 $ 2,293 $ 5,786

Contract liabilities, current $ 45,511 $ ( 4,140 ) $ 41,371

Total current liabilities $ 83,380 $ ( 1,847 ) $ 81,533

Total liabilities $ 139,327 $ ( 1,847 ) $ 137,480

Accumulated deficit $ ( 250,466 ) $ 1,847 $ ( 248,619 )

Total shareholders’ deficit $ ( 263,282 ) $ 1,847 $ ( 261,435 )

Year Ended December 31, 2023

Revised Consolidated Statement of Operations Amounts:

As Previously Reported Adjustments As Corrected

Revenue $ 79,521 $ 30 $ 79,551

Cost of revenue (excluding depreciation) $ 97,523 $ 3,521 $ 101,044

Cost of revenue (excluding depreciation) - affiliated companies $ 2,949 $ — $ 2,949

General and administrative expense (excluding depreciation) $ 32,946 $ 1,391 $ 34,337

Total operating expenses $ 135,758 $ 4,912 $ 140,670

Operating loss $ ( 56,237 ) $ ( 4,882 ) $ ( 61,119 )

Income before income taxes $ 15,062 $ ( 4,882 ) $ 10,180

Net income $ 15,022 $ ( 4,882 ) $ 10,140

Net loss attributable to Intuitive Machines, LLC prior to the Business Combination $ ( 5,751 ) $ ( 730 ) $ ( 6,481 )

Net income (post Business Combination) $ 20,773 $ ( 4,152 ) $ 16,621

Net loss attributable to redeemable noncontrolling interest $ ( 42,031 ) $ ( 3,110 ) $ ( 45,141 )

Net income attributable to the Company $ 62,804 $ ( 1,042 ) $ 61,762

Net income attributable to Class A common shareholders $ 60,461 $ ( 1,042 ) $ 59,419

Net income per share:

Net income per share of Class A common stock - basic $ 3.43 $ ( 0.06 ) $ 3.37

Net income per share of Class A common stock - diluted $ 2.46 $ ( 0.04 ) $ 2.42

The effect of the corrections on the condensed consolidated statement of operations for the three months ended March 31, 2024 and 2023 are as follows (in thousands, except per share amounts):

Three Months Ended March 31, 2024

Revised Condensed Consolidated Statement of Operations Amounts:

As Previously Reported Adjustments As Corrected

Revenue $ 73,068 $ 151 $ 73,219

Cost of revenue (excluding depreciation) $ 51,552 $ ( 1,712 ) $ 49,840

Cost of revenue (excluding depreciation) - affiliated companies $ 9,359 $ — $ 9,359

General and administrative expense (excluding depreciation) $ 17,143 $ ( 762 ) $ 16,381

Total operating expenses $ 78,468 $ ( 2,474 ) $ 75,994

Operating loss $ ( 5,400 ) $ 2,625 $ ( 2,775 )

Loss before income taxes $ ( 120,656 ) $ 2,625 $ ( 118,031 )

Net loss $ ( 120,656 ) $ 2,625 $ ( 118,031 )

Net loss (post Business Combination) $ ( 120,656 ) $ 2,625 $ ( 118,031 )

Net loss attributable to redeemable noncontrolling interest $ ( 23,291 ) $ 1,774 $ ( 21,517 )

Net loss attributable to the Company $ ( 98,337 ) $ 851 $ ( 97,486 )

Net loss attributable to Class A common shareholders $ ( 98,808 ) $ 851 $ ( 97,957 )

Net loss per share:

Net loss per share of Class A common stock - basic and diluted $ ( 2.70 ) $ 0.02 $ ( 2.68 )

Three Months Ended March 31, 2023

Revised Condensed Consolidated Statement of Operations Amounts:

As Previously Reported Adjustments As Corrected

Cost of revenue (excluding depreciation) $ 23,126 $ 1,006 $ 24,132

General and administrative expense (excluding depreciation) $ 8,777 $ 487 $ 9,264

Total operating expenses $ 32,199 $ 1,493 $ 33,692

Operating loss $ ( 13,963 ) $ ( 1,493 ) $ ( 15,456 )

Loss before income taxes $ ( 20,232 ) $ ( 1,493 ) $ ( 21,725 )

Net loss $ ( 23,447 ) $ ( 1,493 ) $ ( 24,940 )

Net loss attributable to Intuitive Machines, LLC prior to the Business Combination $ ( 5,751 ) $ ( 730 ) $ ( 6,481 )

Net loss (post Business Combination) $ ( 17,696 ) $ ( 763 ) $ ( 18,459 )

Net loss attributable to redeemable noncontrolling interest $ ( 8,336 ) $ ( 618 ) $ ( 8,954 )

Net loss attributable to the Company $ ( 9,360 ) $ ( 145 ) $ ( 9,505 )

Net loss attributable to Class A common shareholders $ ( 9,688 ) $ ( 145 ) $ ( 9,833 )

Net loss per share:

Net loss per share of Class A common stock - basic and diluted $ ( 0.64 ) $ ( 0.01 ) $ ( 0.65 )

The effect of the corrections on the condensed consolidated statement of operations for the three and six months ended June 30, 2024 and 2023 are as follows (in thousands, except per share amounts):

Three Months Ended June 30, 2024

Revised Condensed Consolidated Statement of Operations Amounts:

As Previously Reported Adjustments As Corrected

Revenue $ 41,408 $ 233 $ 41,641

Cost of revenue (excluding depreciation) $ 47,838 $ 590 $ 48,428

Cost of revenue (excluding depreciation) - affiliated companies $ 9,264 $ — $ 9,264

General and administrative expense (excluding depreciation) $ 12,057 $ ( 1,031 ) $ 11,026

Total operating expenses $ 69,582 $ ( 441 ) $ 69,141

Operating loss $ ( 28,174 ) $ 674 $ ( 27,500 )

Income before income taxes $ 15,981 $ 674 $ 16,655

Net income $ 15,981 $ 674 $ 16,655

Net income (post Business Combination) $ 15,981 $ 674 $ 16,655

Net loss attributable to redeemable noncontrolling interest $ ( 3,088 ) $ 283 $ ( 2,805 )

Net income attributable to the Company $ 18,280 $ 391 $ 18,671

Net income attributable to Class A common shareholders $ 18,143 $ 391 $ 18,534

Net income per share:

Net income per share of Class A common stock - basic $ 0.33 $ 0.01 $ 0.34

Net income per share of Class A common stock - diluted $ 0.29 $ 0.01 $ 0.30

Three Months Ended June 30, 2023

Revised Condensed Consolidated Statement of Operations Amounts:

As Previously Reported Adjustments As Corrected

Cost of revenue (excluding depreciation) $ 22,481 $ 582 $ 23,063

General and administrative expense (excluding depreciation) $ 8,376 $ 403 $ 8,779

Total operating expenses $ 31,176 $ 985 $ 32,161

Operating loss $ ( 13,183 ) $ ( 985 ) $ ( 14,168 )

Income before income taxes $ 15,249 $ ( 985 ) $ 14,264

Net income $ 18,777 $ ( 985 ) $ 17,792

Net income (post Business Combination) $ 18,777 $ ( 985 ) $ 17,792

Net loss attributable to redeemable noncontrolling interest $ ( 10,744 ) $ ( 1,001 ) $ ( 11,745 )

Net income attributable to the Company $ 29,521 $ 16 $ 29,537

Net income attributable to Class A common shareholders $ 28,866 $ 16 $ 28,882

Net income per share:

Net income per share of Class A common stock - basic $ 1.84 $ — $ 1.84

Net income per share of Class A common stock - diluted $ 1.52 $ — $ 1.52

Six Months Ended June 30, 2024

Revised Condensed Consolidated Statement of Operations Amounts:

As Previously Reported Adjustments As Corrected

Revenue $ 114,476 $ 384 $ 114,860

Cost of revenue (excluding depreciation) $ 99,390 $ ( 1,122 ) $ 98,268

Cost of revenue (excluding depreciation) - affiliated companies $ 18,623 $ — $ 18,623

General and administrative expense (excluding depreciation) $ 29,200 $ ( 1,793 ) $ 27,407

Total operating expenses $ 148,050 $ ( 2,915 ) $ 145,135

Operating loss $ ( 33,574 ) $ 3,299 $ ( 30,275 )

Loss before income taxes $ ( 104,675 ) $ 3,299 $ ( 101,376 )

Net loss $ ( 104,675 ) $ 3,299 $ ( 101,376 )

Net loss (post Business Combination) $ ( 104,675 ) $ 3,299 $ ( 101,376 )

Net loss attributable to redeemable noncontrolling interest $ ( 26,379 ) $ 2,057 $ ( 24,322 )

Net loss attributable to the Company $ ( 80,057 ) $ 1,242 $ ( 78,815 )

Net loss attributable to Class A common shareholders $ ( 80,665 ) $ 1,242 $ ( 79,423 )

Net loss per share:

Net loss per share of Class A common stock - basic and diluted $ ( 1.76 ) $ 0.03 $ ( 1.73 )

Six Months Ended June 30, 2023

Revised Condensed Consolidated Statement of Operations Amounts:

As Previously Reported Adjustments As Corrected

Cost of revenue (excluding depreciation) $ 45,607 $ 1,588 $ 47,195

General and administrative expense (excluding depreciation) $ 17,153 $ 890 $ 18,043

Total operating expenses $ 63,375 $ 2,478 $ 65,853

Operating loss $ ( 27,146 ) $ ( 2,478 ) $ ( 29,624 )

Loss before income taxes $ ( 4,983 ) $ ( 2,478 ) $ ( 7,461 )

Net loss $ ( 4,670 ) $ ( 2,478 ) $ ( 7,148 )

Net loss attributable to Intuitive Machines, LLC prior to the Business Combination $ ( 5,751 ) $ ( 730 ) $ ( 6,481 )

Net income (loss) (post Business Combination) $ 1,081 $ ( 1,748 ) $ ( 667 )

Net loss attributable to redeemable noncontrolling interest $ ( 19,080 ) $ ( 1,619 ) $ ( 20,699 )

Net income attributable to the Company $ 20,161 $ ( 129 ) $ 20,032

Net income attributable to Class A common shareholders $ 19,178 $ ( 129 ) $ 19,049

Net income per share:

Net income per share of Class A common stock - basic $ 1.23 $ — $ 1.23

Net income per share of Class A common stock - diluted $ 0.83 $ — $ 0.83

The effect of the corrections on the condensed consolidated statement of operations for the three and nine months ended September 30, 2023 are as follows (in thousands, except per share amounts):

Three Months Ended September 30, 2023

Revised Condensed Consolidated Statement of Operations Amounts:

As Previously Reported Adjustments As Corrected

Cost of revenue (excluding depreciation) $ 25,768 $ 725 $ 26,493

General and administrative expense (excluding depreciation) $ 9,853 $ 60 $ 9,913

Total operating expenses $ 35,950 $ 785 $ 36,735

Operating loss $ ( 23,219 ) $ ( 785 ) $ ( 24,004 )

Income before income taxes $ 15,701 $ ( 785 ) $ 14,916

Net income $ 15,096 $ ( 785 ) $ 14,311

Net income (post Business Combination) $ 15,096 $ ( 785 ) $ 14,311

Net loss attributable to redeemable noncontrolling interest $ ( 18,555 ) $ ( 437 ) $ ( 18,992 )

Net income attributable to the Company $ 33,651 $ ( 348 ) $ 33,303

Net income attributable to Class A common shareholders $ 32,977 $ ( 348 ) $ 32,629

Net income per share:

Net income per share of Class A common stock - basic $ 1.89 $ ( 0.02 ) $ 1.87

Net income per share of Class A common stock - diluted $ 1.29 $ ( 0.02 ) $ 1.27

Nine Months Ended September 30, 2023

Revised Condensed Consolidated Statement of Operations Amounts:

As Previously Reported Adjustments As Corrected

Cost of revenue (excluding depreciation) $ 71,375 $ 2,313 $ 73,688

General and administrative expense (excluding depreciation) $ 27,006 $ 950 $ 27,956

Total operating expenses $ 99,325 $ 3,263 $ 102,588

Operating loss $ ( 50,365 ) $ ( 3,263 ) $ ( 53,628 )

Income before income taxes $ 10,718 $ ( 3,263 ) $ 7,455

Net income $ 10,426 $ ( 3,263 ) $ 7,163

Net loss attributable to Intuitive Machines, LLC prior to the Business Combination $ ( 5,751 ) $ ( 730 ) $ ( 6,481 )

Net income (post Business Combination) $ 16,177 $ ( 2,533 ) $ 13,644

Net loss attributable to redeemable noncontrolling interest $ ( 37,635 ) $ ( 2,056 ) $ ( 39,691 )

Net income attributable to the Company $ 53,812 $ ( 477 ) $ 53,335

Net income attributable to Class A common shareholders $ 52,155 $ ( 477 ) $ 51,678

Net income per share:

Net income per share of Class A common stock - basic $ 3.20 $ ( 0.03 ) $ 3.17

Net income per share of Class A common stock - diluted $ 2.16 $ ( 0.02 ) $ 2.14

NOTE 3 - REVENUE

4 unchanged sentences

Revenue by Contract Type

Fixed price $ 58,712 74 % $ 80,801 94 %

Cost reimbursable $ 146,516 64 % $ 13,920 17 %

Fixed price 74,681 33 % 58,743 74 %

Time and materials 6,803 3 % 6,888 9 %

2 unchanged sentences

Contract assets primarily relate to deferred contract costs for subcontracted launch services, as well as work completed not yet billed for performance obligations that are satisfied over time.

Deferred contract costs and unbilled receivables are

recorded contract assets on our consolidated balance sheets.

Deferred contract costs and unbilled receivables are recorded contract assets on our consolidated balance sheets.

Contract assets related to deferred contract costs are amortized straight-line across the life of the long-term service arrangement.

4 unchanged sentences

Long-term deferred revenue and provisions for loss contracts are recorded in long-term contract liabilities on our consolidated balance sheets.

The following table presents contract assets as of December 31, 2023 and December 31, 2022 (in thousands):

The following table presents contract assets as of December 31, 2024 and 2023 (in thousands):

2024 December 31,

4 unchanged sentences

Amortization expense associated with deferred contract costs for subcontracted launch services was recorded in cost of revenue and was $ 13.7 million and $ 31.2 million, respectively, for the years ended December 31, 2024 and 2023.

The following table presents contract liabilities as of December 31, 2023 and December 31, 2022 (in thousands):

The following table presents contract liabilities as of December 31, 2024 and 2023 (in thousands):

2024 December 31,

5 unchanged sentences

Contract liabilities – long-term

Contract loss provision — 2,188

Total contract liabilities – long-term — 2,188

Deferred revenue 14,334 —

Total contract liabilities $ 79,518 $ 41,371

Revenue recognized from amounts included in contract liabilities at the beginning of the period was $ 38.2 million and $ 31.4 million during the year ended December 31, 2023 and 2022, respectively.

Revenue recognized from amounts included in contract liabilities at the beginning of the period was $ 13.6 million and $ 38.2 million during the years ended December 31, 2024 and 2023, respectively.

Loss Contracts

Contract losses are a result of constraining variable consideration and estimated contract costs exceeding current contract price.

The Company experiences favorable or unfavorable changes to contract losses from time to time due to changes in estimated contract costs and modifications that result in changes to contract price.

We recorded unfavorable and (favorable) changes in net losses related to contracts with customers of $ 30.3 million and $( 9.3 ) million, respectively, for the years ended December 31, 2023 and 2022.

A contract loss occurs when the current estimate of the consideration that we expect to receive is less than the current estimate of total estimating costs to complete the contract.

For purposes of determining the existence of or amount of a contract loss, we consider total contract consideration, including any variable consideration constrained for revenue recognition purposes.

We may experience favorable or unfavorable changes to contract losses from time to time due to changes in estimated contract costs and modifications that result in changes to contract price.

We recorded net losses related to contracts with customers of $ 28.1 million and $ 23.6 million, respectively, for the years ended December 31, 2024 and 2023.

As of December 31, 2024, the status of these loss contracts was as follows:

• The first contract, for lunar payload services, became a loss contract in 2019 due to the constraint of variable consideration.

Variable consideration has been constrained to $ 0 from a total potential amount of $ 12.3 million.

For the years ended December 31, 2023, and 2022, changes in contract price and estimated contract costs resulted in unfavorable and (favorable) changes of $ 10.2 million and $( 11.1 ) million, respectively.

As of December 31, 2023, and 2022, this contract was approximately 99 % complete and 96 % complete, respectively.

• The first contract, for lunar payload services, became a loss contract due to estimated contract costs exceeding the estimated amount of consideration that we expected to receive.

The contract was successfully completed in February 2024 .

As of December 31, 2023 and 2022, the contract loss provision recorded in contract liabilities, current in our consolidated balance sheets was $ 10 thousand and $ 0.4 million, respectively.

• The second contract, for lunar payload services, became a loss contract in 2021 due to the constraint of variable consideration and estimated contract costs exceeding current contract price.

Variable consideration has been

constrained to $ 0 from a total potential amount of $ 7.8 million.

For the years ended December 31, 2023 and 2022, changes in estimated contract costs resulted in an additional $ 5.8 million and a reduction of $( 4.7 ) million in contract loss, respectively.

As a result of a successful mission, previously constrained variable consideration of $ 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.

For the years ended December 31, 2024, and 2023, changes in estimated contract costs resulted in an additional $ 5.7 million and $ 9.0 million in contract loss, respectively.

• The second contract, for lunar payload services, became a loss contract in 2021 due to estimated contract costs exceeding the estimated amount of consideration that we expected to receive.

For the years ended December 31, 2024 and 2023, changes in estimated contract costs resulted in an additional $ 12.5 million and $ 5.8 million in contract loss, respectively.

As of December 31, 2024, and 2023, this contract was approximately 69 % complete and 64 % complete, respectively.

The period of performance for this contract currently runs through June 2024 although we anticipate that the launch and post-launch services will occur after that date.

As of December 31, 2023 and 2022, the contract loss provision recorded in contract liabilities, current was $ 7.4 million and $ 7.7 million, respectively, and zero and $ 2.2 million, respectively, in contract liabilities, non-current in our consolidated balance sheets.

• The third contract, for lunar payload services, became a loss contract in 2022 due to the constraint of variable consideration and estimated contract costs exceeding current contract price.

Variable consideration has been constrained to $ 0 from a total potential amount of $ 11.4 million.

The period of performance for this contract currently runs through June 2026 as a result of modification to the contract.

As of December 31, 2024 and 2023, the contract loss provision recorded in contract liabilities, current was $ 7.0 million and $ 0.9 million, respectively, in our consolidated balance sheets.

• The third contract, for lunar payload services, became a loss contract in 2023 due to estimated contract costs exceeding the estimated amount of consideration that we expected to receive.

For the years ended December 31, 2024 and 2023, changes in estimated contract costs resulted in an additional $ 9.9 million and $ 8.8 million in contract loss, respectively.

As of December 31, 2024, this contract was approximately 95 % complete.

The period of performance for this contract currently runs through June 2024 although we anticipate that the launch and post-launch services will occur after that date.

The period of performance for this contract currently runs through August 2025 as a result of modifications to the contract.

As of December 31, 2024 and 2023, the contract loss provision recorded in contract liabilities, current in our consolidated balance sheets was $ 0.9 million and $ 4.6 million, respectively.

3 unchanged sentences

As of December 31, 2024, the aggregate amount of the transaction price allocated to remaining performance obligations was $ 168.7 million.

The Company expects to recognize revenue on approximately 90 - 95 % of the remaining performance obligations over the next 12 months, and the remaining in 2025 and thereafter.

The Company expects to recognize revenue on approximately 55 - 60 % of the remaining performance obligations over the next 12 months, 20 %- 25 % in 2026 and the remaining thereafter.

Remaining performance obligations do not include variable consideration that was determined to be constrained as of December 31, 2024.

For time and materials contracts, we have adopted the practical expedient that allows us to recognize revenue based on our right to invoice;

therefore, we do not report unfulfilled performance obligations for time and materials agreements.

For time and materials contracts and cost reimbursable contracts, we have adopted the practical expedient that allows us to recognize revenue based on our right to invoice;

therefore, we do not report unfulfilled performance obligations for time and materials agreements and cost reimbursable agreements.

NOTE 4 - PROPERTY AND EQUIPMENT, NET

11 unchanged sentences

Total depreciation expense related to property and equipment for the years ended December 31, 2024 and 2023 was $ 1.9 million and $ 1.4 million, respectively.

As of December 31, 2023 and 2022, the Company pledged property and equipment with net book value of approximately $ 18.3 million and $ 20.3 million, respectively, as security for its Credit Mobilization Facility (as defined below) with Live Oak Banking Company.

As of December 31, 2023, construction in progress includes construction costs of $ 13.5 million associated with the fabrication of a commercial communications satellite.

The Company capitalized interest in connection with construction in progress of $ 967 thousand and $ 247 thousand for the years ended December 31, 2023 and 2022, respectively.

Construction in progress includes constructions costs associated with the fabrication of a commercial communications satellite.

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 specifications under contract.

Management concluded that 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.

As of December 31, 2024, construction in progress includes construction costs of $ 11.1 million associated with the commercial communications satellite and $ 4.7 million associated with the satellite communications and navigation network related to the NSN contract recently awarded in September 2024.

The Company capitalized interest in connection with construction in progress of $ 1.0 million for the year ended December 31, 2023 and recognized no capitalized interest for the year ended December 31, 2024.

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, management identified the move as a significant adverse change in the usage of space from our prior facility.

2 unchanged sentences

NOTE 5 - LEASES

The Company leases real estate for office space and for administrative, research, marketing and light manufacturing operations of the lessee’s aerospace related research and development business under operating leases.

There are four finance leases.

The Company has eight real estate leases with lease terms ranging from 6 months to 250 months and four equipment leases with lease terms ranging from 36 months to 60 months, some of which contain options to extend and some of which contain options to terminate the lease without cause at the option of lessee.

The Company leases real estate for administrative office space, research, marketing and light manufacturing operations of the lessee’s aerospace related research and development business under operating leases.

The Company has seven real estate leases with lease terms ranging from 52 months to 250 months and six equipment leases (of which five are finance leases) with lease terms ranging from 36 months to 60 months, some of which contain options to extend and some of which contain options to terminate the lease without cause at the option of lessee.

The Company’s real estate leasing agreements include terms requiring the Company to reimburse the lessor for its share of real estate taxes, insurance, operating costs and utilities which the Company accounts for as variable lease costs when incurred since the Company has elected to not separate lease and non-lease components, and hence are not included in the measurement of lease liability.

1 unchanged sentence

There are no restrictions or covenants imposed by any of the leases, and none of the Company’s leases contain material residual value guarantees.

In September 2021, we signed a ground lease agreement for the development of our 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 and 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, of which $ 0.7 million is expected to be reimbursed by the lessor recorded as other current liabilities and $ 3.1 million to be funded from available cash recorded as current operating lease liabilities.

The components of total lease expense are as follows (in thousands):

24 unchanged sentences

Present value of lease liabilities $ 37,280 $ 100

construction costs to be funded by the Company 3,150 —

reimbursable construction costs from the lessor ( 677 ) —

Total lease liabilities $ 35,383 $ 92

NOTE 6 - DEBT

7 unchanged sentences

Live Oak Credit Mobilization 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 line of credit bear interest (payable monthly) at a rate per annum equal to 6 %.

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

On December 8, 2020 the Company entered into a Loan Modification Agreement with Live Oak Banking Company (“Live Oak”) which amended the terms of the line of credit, including decreasing the maximum principal from $ 1.0 million to $ 400 thousand, 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 newspaper, 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, which superseded the existing contract mobilization credit facility.

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

The Company 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 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 $ 8.0 million mobilization credit facility requires early payment of principal upon the completion of certain mission milestones of $ 4.1 million and $ 3.9 million in 2023 and 2024, respectively.

The $ 12.0 million mobilization credit facility required principal payments of $ 8.0 million on August 15, 2023 and $ 4.0 million on 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 newspaper, plus 2.0 % and (b) 5.0 %.

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.

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.

On December 12, 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 mobilization credit 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.

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 “Bridge Loan”).

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.

Kamal Ghaffarian) (“Ghaffarian Enterprises” or “Guarantor”) 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 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.

Loan Agreement

See Note 17 - Subsequent Events for information related to a loan and security agreement executed with Stifel Bank during the first quarter of 2025.

NOTE 7 - INCOME TAXES

2 unchanged sentences

Federal $ — $ —

State 33 ( 16 )

State and local ( 4 ) 7

6 unchanged sentences

Noncontrolling interest 13,458 10,705

Nontaxable entity — 1,348

Fair value activity on earn-out liability ( 13,913 ) —

Fair value on earn-out liabilities 25,226 ( 13,913 )

Fair value on warrant liabilities 18,646 —

Other permanent differences ( 99 ) ( 1,796 )

Stock compensation ( 480 ) —

Research and development benefit — ( 611 )

6 unchanged sentences

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, 2022, our effective tax rate differed from the

statutory rate of 21% primarily due to Intuitive Machines, LLC's status as a partnership for United States federal income tax purposes.

For the year ended December 31, 2023, our effective tax rate differed from the statutory rate of 21% primarily due to Intuitive Machines, LLC's status as a partnership for United States federal income tax purposes.

The significant components of the Company’s deferred tax assets and liabilities are as follows (in thousands):

3 unchanged sentences

Restricted stock options 629 184

Property and equipment — 11

Inventory — 148

Deferred revenue 25 11

9 unchanged sentences

As a result of the Business Combination, the Company was appointed as the sole managing member of Intuitive Machines, LLC.

Prior to the close of the Business Combination, the Company's financial reporting predecessor, Intuitive Machines, LLC, was treated as a pass-through entity for tax purposes and no provision, except for certain state taxes, was made in the consolidated financial statements for income taxes.

consolidated financial statements for income taxes.

Any income tax items for the periods prior to the close of the Business Combination are related to Intuitive Machines, LLC.

The Company is a corporation and thus is subject to United States (“U.S.”) federal, state and local income taxes.

The Company is a corporation and thus is subject to U.S.

federal, state and local income taxes.

Intuitive Machines, LLC is a partnership for U.S.

12 unchanged sentences

The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible.

The Company considers the scheduled reversal of deferred tax liabilities, projected future income, and tax planning strategies in making this

The Company considers the scheduled reversal of deferred tax liabilities, projected future income, and tax planning strategies in making this assessment.

The Company continues to closely monitor and weigh all available evidence, including both positive and negative, in making its determination whether to maintain a valuation allowance.

Tax Receivable Agreement

In conjunction with the consummation of the Transactions, Intuitive Machines, Inc.

entered into a related party transaction, Tax Receivable Agreement (the “TRA”) with Intuitive Machines, LLC and certain Intuitive Machines, LLC members (the “TRA Holders”).

Pursuant to the TRA, Intuitive Machines, Inc.

is required to pay the TRA Holders 85 % of the amount of the cash tax savings, if any, in U.S.

federal, state, and local taxes that are based on, or measured with respect to, net income or profits, and any interest related thereto that the Company realizes, or is deemed to realize, as a result of certain tax attributes, including:

• existing tax basis in certain assets of Intuitive Machines, LLC and its subsidiaries;

• tax basis adjustments resulting from taxable exchanges of Intuitive Machines, LLC Common Units acquired by the Company;

• certain tax benefits realized by the Company as a result of the Business Combination;

• tax deductions in respect of portions of certain payments made under the TRA.

All such payments to the TRA Holders are the obligations of the Company, and not that of Intuitive Machines, LLC.

As of December 31, 2024, based primarily on historical losses of the Company, management has determined it is more-likely-than-not that the Company will be unable to utilize its deferred tax assets subject to the TRA;

therefore, management applies a full valuation allowance to deferred tax asset for a corresponding liability under the TRA related to the tax savings the Company may realize from the utilization of tax deductions related to basis adjustments created by the transactions in the Business Combination Agreement.

As of December 31, 2024, management does not expect a TRA liability to be recorded.

Subsequent remeasurement of the TRA liability on December 31, 2024, from September 30, 2024, resulted in recognition of other income of $ 0.5 million recognized in other income (expense), net in the consolidated statements of operations.

Net Operating Loss

As of December 31, 2024, the company had approximately $ 13.7 million of federal net operating loss carryforwards (“NOL carryforwards”), which do not have an expiration date.

The Company’s deferred tax assets, including these NOL carryforwards have been reduced by a valuation allowance due to a determination made that it is more likely than not that some or all of the deferred assets will not be realized based on the weight of all available evidence.

The Company’s deferred tax assets, including these NOL

carryforwards have been reduced by a valuation allowance due to a determination made that it is more likely than not that some or all of the deferred assets will not be realized based on the weight of all available evidence.

Uncertain Tax Positions

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NOTE 8 - MEZZANINE EQUITY AND EQUITY

Business Combination

The consolidated statements of shareholders’ deficit, mezzanine equity and noncontrolling interests reflect the reverse recapitalization and Business Combination as described in Note 1 - Business Description and Note 3 - Business Combination and Related Transactions.

As Intuitive Machines, LLC was deemed to be the accounting acquirer in the Business Combination, all periods prior to the consummation of the Business Combination reflect the balances and activity of Intuitive Machines, LLC.

The consolidated balances as of December 31, 2022 from the financial statements of Intuitive Machines, LLC as of that date and membership unit activity in the consolidated statements of change in shareholders’ deficit, as well as mezzanine and noncontrolling interests, prior to the consummation of the Business Combination have not been retroactively adjusted.

Upon consummation of the Transactions, the Company’s capital stock consisted of (i) 8,243,750 shares of Class A Common Stock held by the Sponsor, (ii) 5,493,182 shares of Class A Common Stock issued to public shareholder, net of redemptions, (iii) 2,066,667 shares of Class A Common Stock issued as a result of the conversion of SAFE Agreements previously held by investors in Intuitive Machines, LLC, (iv) 10,566 shares of Class B Common Stock issued to Intuitive Machines, LLC Class B Unit holders, (v) 68,140,188 shares of Class C Common Stock issued to the Founders of Intuitive Machines, LLC, and (vi) 26,000 shares of Series A Preferred Stock issued to PIPE investors.

In addition, 10,000,000 Earn Out Units were issued to the Intuitive Machines, LLC Founders representing contingently issuable shares of Class A Common Stock as further described in Note 3.

Private Placement

Private Placement Transaction

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 “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 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.

During the first quarter of 2024, the Initial Series A Warrant and the Initial Series B Warrant were fully exercised.

See Note 9 for additional information on these warrants.

On August 30, 2023, in connection with the entry into the Purchase Agreement, the Company and certain directors, officers and 5 % stockholders of the Company entered into lock-up agreements.

Pursuant to the applicable lock-up agreement, Michael Blitzer, a member of the board of directors of the Company, agreed not to transfer shares of Class A Common Stock or any securities convertible, exchangeable or exercisable into shares of Class A Common Stock held of record as of August 30, 2023 or acquired of record thereafter from August 30, 2023 until (i) with respect to 50 % of such securities, 30 days after the date that the registration statement relating to the securities that were issued and sold in the Private Placement (the “Resale Registration Statement”) has been declared effective by the SEC and (ii) with respect to the remaining 50 % of such securities, until 60 days after the effective date of the Resale Registration Statement, subject, in each case, to limited exceptions.

The lock-up parties other than Mr.

Blitzer agreed not to transfer shares of Class A Common Stock or any securities convertible, exchangeable or exercisable into shares of Class A Common Stock beneficially owned as of August 30, 2023 or with respect to which beneficial ownership is acquired thereafter from August 30, 2023 until 60 days after the effective date of the Resale Registration Statement, subject, in each case, to limited exceptions.

The Resale Registration Statement was declared effective on September 29, 2023.

Bridge Loan Conversion

On January 28, 2024, the Company and the Guarantor entered into a letter agreement (the “Letter Agreement”) pursuant to which, on January 29, 2024 the Guarantor contributed $ 10.0 million to the Company for purposes of repaying the principal amount owed to the lender under the Bridge Loan in exchange for which the Company issued to the Guarantor 3,487,278 shares of the Company’s Class A Common Stock and Conversion Warrants described further in Note 9.

Following the contribution, all amounts due to the Lender in satisfaction of the Bridge Loan were repaid in full.

Public Offering and Private Offering

On December 5, 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 and 152,857 shares of Class A Common Stock from a selling stockholder.

On December 2, 2024, the Company 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.

Capital Stock

The table below reflects share information about the Company’s capital stock as of December 31, 2024.

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In the event of liquidation, dissolution or winding up of the affairs of the Company, Class C Common Stock holders are entitled to receive par value per share only.

Class C Common Stock

ownership is limited only to Intuitive Machines, LLC Founders in an amount not to exceed at any time the aggregate number of Intuitive Machines, LLC Founder Common Units held of record by such founder.

Class C Common Stock ownership is limited only to Intuitive Machines, LLC Founders in an amount not to exceed at any time the aggregate number of Intuitive Machines, LLC Founder Common Units held of record by such founder.

The Intuitive Machines, LLC Founders are Dr.

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Class B and C Common Stock Conversions to Class A Common Stock

After the expiration of the applicable lock-up period on August 14, 2023, holders of certain Intuitive Machines, LLC Common Units will be permitted to exchange their Intuitive Machines, LLC Common Units (along with the cancellation of the paired share of Class B Common Stock or share of Class C Common Stock) for shares of Class A Common Stock on a one -for-one basis (subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications) or at the Company’s election (determined by a majority of our directors who are disinterested with respect to such determination), cash from a substantially concurrent public offering or private sale in an amount equal to the net amount, on a per share basis, of cash received as a result of such public offering or private sale.

After the expiration of the applicable lock-up period on August 14, 2023, holders of certain Intuitive Machines, LLC Common Units were permitted to exchange their Intuitive Machines, LLC Common Units (along with the cancellation of the paired share of Class B Common Stock or share of Class C Common Stock) for shares of Class A Common Stock on a one -for-one basis (subject to customary conversion rate adjustments for stock splits, stock dividends and reclassifications) or at the Company’s election (determined by a majority of our directors who are disinterested with respect to such determination), cash from a substantially concurrent public offering or private sale in an amount equal to the net amount, on a per share basis, of cash received as a result of such public offering or private sale.

During the third quarter of 2023, all of the previously issued shares of Class B Common Stock (and paired Intuitive Machines, LLC Common Units) were exchanged for shares of Class A Common Stock on a one -for-one basis.

The Intuitive Machines, LLC Common Units and shares of Class B Common Stock were subsequently cancelled.

Equity Facility

Pursuant to the terms of the Cantor Purchase Agreement, Intuitive Machines, Inc.

had the right, but not the obligation, from time to time at its sole discretion, until the first day of the month following the 18-month period from and after the Commencement (as defined in the Cantor Purchase Agreement), to direct CFPI to purchase up to the lesser of (i) $ 50.0 million of newly issued shares of Class A Common Stock and (ii) the Exchange Cap, by delivering written notice to CFPI prior to the commencement of trading on any trading day, subject to certain customary conditions and limitations set forth in the Cantor Purchase Agreement.

In connection with the execution of the Cantor Purchase Agreement, the Company agreed to issue 100,000 shares of Class A Common Stock to CFPI.

In June 2023, the Company issued 95,785 Commitment Shares to CFPI.

Under the terms of the Cantor Purchase Agreement, to the extent after the resale of the Commitment Shares by CFPI is less than $ 1.0 million, the Company agreed to pay CFPI the difference between $ 1.0 million and the net proceeds of the resale of the Commitment Shares received by CFPI in cash.

During the first quarter of 2024, CFPI sold the 95,785 Commitment Shares resulting in a reduction of the Commitment Share liability to approximately $ 771 thousand.

Under a separate agreement in March 2024, CFPI agreed to proportionally reduce the liability to the extent CFPI earned commissions under the Controlled Equity Offering Sales Agreement discussed below.

As a result of the Class A Common Stock sold under the Controlled Equity Offering Sales Agreement during the nine months ended September 30, 2024, the Commitment Share liability was reduced to zero and there is no remaining liability as of December 31, 2024.

The Cantor Purchase Agreement contractually terminated on September 1, 2024 and no shares of Class A Common Stock were sold to CFPI under the Cantor Purchase Agreement.

Controlled Equity Offering Sales Agreement

On March 27, 2024, the Company entered into a Controlled Equity Offering Sales Agreement (the “Sales Agreement”) with Cantor Fitzgerald & Co.

(“Cantor” or “agent”) to sell shares of the Class A Common Stock having an aggregate sale price of up to $ 100.0 million through our ATM Program under which Cantor acts as the sales agent.

The sales of the shares made under the ATM Program may be made by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415 promulgated under the Securities Act of 1933, as amended.

The agent sells the Class A Common Stock based upon the Company’s instructions (including any price, time or size limits or other customary parameters or conditions the Company may impose).

Under the ATM Program, the agent is entitled to total compensation at a commission rate of up to 3.0 % of the sales price per share sold.

As of the third quarter of 2024, the Company had sold and issued 16,521,612 shares of Class A Common Stock under the ATM Program and received cash proceeds of approximately $ 97.5 million, net of $ 2.5 million in transaction fees, thereby reaching the $ 100.0 million limit of aggregate Class A Common Stock sales under the ATM Program.

Series A Preferred Stock (Mezzanine Equity)

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Upon any liquidation or deemed liquidation event, the holders of Series A Preferred Stock will be entitled to receive out of the available proceeds, before any distribution is made to holders of Common Stock or any other junior securities, an amount per share equal to the greater of (i) 100 % of the Accrued Value (as defined in the Certificate of Designation) or (ii) such amount per share as would have been payable had all shares of Series A Preferred Stock been converted into Class A Common Stock immediately prior to the liquidation event.

Each share of Series A Preferred Stock will be convertible at the holder's option into shares of Class A Common Stock at an initial conversion ratio determined by dividing the Accrued Value (as defined in the Certificate of Designation) of such shares of Series A Preferred Stock by the conversion price of $ 12.00 per share subject to adjustment in accordance with the terms of the Certificate of Designation.

As result of the Private Placement discussed above and in accordance with the terms of the Certificate of Designation, the Series A Preferred Stock conversion price was reduced to $ 5.10 per share.

terms of the Certificate of Designation.

As a result of the Private Placement on September 5, 2023 as discussed above and in accordance with the terms of the Certificate of Designation, the Series A Preferred Stock conversion price was reduced to $ 5.10 per share.

Additionally, as a result of the Warrant Exercise Agreement on January 10, 2024 in conjunction with the warrant transactions discussed in Note 9, the Series A Preferred Stock conversion price was further reduced from $ 5.10 per share 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 and recorded an increase to equity of approximately $ 23.1 million and a corresponding decrease to Series A Preferred Stock in the consolidated balance sheets.

The Series A Preferred Stock shall be redeemable at the option of the holder commencing any time after the 5 th year anniversary of the Closing Date at a price equal to the 100 % of the sum of (i) original purchase price plus (ii) all accrued/declared but unpaid dividends.

The Series A Preferred Stock shall be redeemable at the Company’s option commencing any time (A) after the 3rd year anniversary of the Closing Date at a price equal to the 115 % of the Accrued Value, (B) after the 4th anniversary of the Closing Date at a price equal to the 110 % of the Accrued Value and (C) after the 5th anniversary of the Closing Date at a price equal to the 100 % of the Accrued Value.

Redeemable Noncontrolling Interests

Redeemable Noncontrolling Interests (Mezzanine Equity)

As of December 31, 2024, the prior investors of Intuitive Machines, LLC owns 35.5 % of the common units of Intuitive Machines, LLC.

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The ability to put common units is solely within the control of the holder of the redeemable noncontrolling interests.

If the prior investors elect the redemption to be settled in

cash, the cash used to settle the redemption must be funded through a private or public offering of Class A Common Stock and subject to the Company’s Board approval.

If the prior investors elect the redemption to be settled in cash, the cash used to settle the redemption must be funded through a private or public offering of Class A Common Stock and subject to the Company’s Board approval.

The financial results of Intuitive Machines, LLC and its subsidiaries are consolidated with Intuitive Machines, Inc.

with the redeemable noncontrolling interests' share of our net loss separately allocated.

NOTE 10 - WARRANTS AND SAFE AGREEMENTS

NOTE 9 - WARRANTS

Public and Private Warrants

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The Private Warrants are identical to the Public Warrants except that the Private Warrants may not, subject to certain limited exceptions, be transferred assigned or sold by the holders until 30 days after the closing of the Business Combination.

The Public Warrants and Private Warrants do not entitle the holder to any voting rights, dividends or other rights as a shareholder of the Company prior to exercise.

The Public Warrants and Private Warrants (collectively, the “Warrants”) do not entitle the holder to any voting rights, dividends or other rights as a shareholder of the Company prior to exercise.

Once the Warrants become exercisable, the Company may redeem the outstanding warrants, in whole or in part, at a price of $ 0.01 per warrant upon a minimum of 30 days prior written notice of redemption and if, and only if, the closing price of the Company’s Class A Common Stock equals or exceeds $ 18.00 per share (as adjusted for adjustments to the number of shares issuable upon exercise pursuant to any anti-dilution adjustments) for any 20 days within a 30 -trading day period ending three business days before the Company sends the notice of redemption to the warrant holders.

The number of Class A Common Stock issuable on exercise of each warrant will be increased in proportion to certain increases in outstanding Class A Common Stock including any share capitalization payable, sub-division of shares or other similar events.

During the year ended December 31, 2023, Public Warrants of 1,402,106 were exercised resulting in the issuance of an equal number of shares of Class A Common Stock.

The Company has received cash proceeds of approximately $ 16.1 million as of December 31, 2023.

The number of Class

A Common Stock issuable on exercise of each warrant will be increased in proportion to certain increases in outstanding Class A Common Stock including any share capitalization payable, sub-division of shares or other similar events.

During the years ended December 31, 2024 and 2023, Warrants of 431 and 1,402,106 , respectively, were exercised resulting in the issuance of an equal number of shares of Class A Common Stock.

See Note 17 - Subsequent Events for information related to the subsequent exercises and redemption of the outstanding Warrants.

Series A Preferred Warrants

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The Preferred Investor Warrants do not entitle the holder to any voting rights, dividends or other rights as a shareholder of the Company prior to exercise.

As result of the Private Placement discussed in Note 9 and in accordance with the terms of the Certificate of Designation, the Series A Preferred Warrants exercise price was reduced to $ 11.50 per share and the aggregate number of shares of

Class A Common Stock issuable upon exercise of the Series A Preferred Warrants was proportionally increased to 706,522 .

As result of the Private Placement Transaction on September 5, 2023 discussed in Note 8 and in accordance with the terms of the Certificate of Designation, the Series A Preferred Warrants exercise price was reduced from $ 15.00 to $ 11.50 per share and the aggregate number of shares of Class A Common Stock issuable upon exercise of the Series A Preferred Warrants was proportionally increased to 706,522 .

As of December 31, 2024, there have been no exercises of the Preferred Investor Warrants.

The Initial Series A Warrant and the Initial Series B Warrant (collectively, the “Initial Warrants”)

In connection with the issuance of Class A Common stock at the closing of the Private Placement as discussed in Note 9, the Company issued (i) the Initial Series A Warrant, which is exercisable for up to 4,705,883 shares of the Company’s Class A Common Stock at an exercise price of $ 4.75 per share and (ii) the Initial Series B Warrant, which is exercisable for up to 4,705,883 shares of Class A Common Stock at an exercise price of $ 4.75 per share, in each case, subject to adjustment.

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

The Company evaluated the terms of the Initial 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 with changes in fair value recognized in earnings in other income (expense) on the consolidated statement of operations.

The Initial Series A Warrant and Initial Series B Warrant had an initial fair value of $ 17.4 million and $ 9.3 million, respectively.

The gross aggregate proceeds of $ 20.0 million from the Private Placement were allocated to the Initial Series A Warrant and Initial Series B Warrant resulting in a loss on the transaction of approximately $ 6.7 million recognized as loss on issuance of securities in our consolidated statement of operations.

As of December 31, 2023, the fair value of the Initial Series A Warrant and Initial Series B Warrant decreased to approximately $ 8.6 million and $ 2.7 million, respectively, resulting in a gain of approximately $ 15.4 million recognized as change in fair value of warrant liabilities in our consolidated statement of operations.

Each of the Initial Warrants includes the right of the holder to exercise such warrant on a cashless basis at any time on or after March 5, 2024 if and to the extent that the shares of Class A Common Stock underlying such warrant are not registered.

The Warrants do not entitle the holder to any voting rights, dividends or other rights as a shareholder of the Company prior to exercise.

As of December 31, 2023, there have been no exercises of the Warrants.

SAFE Agreements

Prior to closing of the Business Combination, 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 initially be 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.

As of December 31, 2022, the SAFE Agreements had a fair value of $ 18.3 million recorded as a long term liability in the consolidated balance sheets.

As a result of closing of the Business Combination, the SAFE Agreements were converted into 2,066,667 shares of Class A Common Stock.

At the Closing Date, the fair value of the SAFE Agreements was estimated at $ 20.7 million resulting in a change in fair value of SAFE Agreements of approximately $ 2.4 million recorded in the consolidated statements of operations for the year ended December 31, 2023.

Warrant Exercise Agreement and Warrant Exercises

On January 10, 2024, the Company entered into a Warrant Exercise Agreement with the Armistice Capital Master Fund Ltd (the “Purchaser”) to exercise in full a warrant to purchase up to an aggregate 4,705,883 shares of Class A Common Stock (the “Initial Series B Warrant”).

In consideration for the immediate and full exercise of the Initial Series B 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 5.5 years (the “New Series A Warrant”) 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 (the “New Series B Warrant”), collectively, (the “New Warrants”), 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 Initial Series B Warrant from $ 4.75 to $ 2.50 per share and reduced the exercise price of a warrant to purchase up to 4,705,883 shares of Class A Common Stock (the “Initial Series A Warrant”) from $ 4.75 to $ 2.75 per share.

As a result of the modifications to the 4,705,883 Initial Series A Warrant and the 4,705,883 Initial Series B Warrant, collectively (the “Initial Warrants”), the Company recognized an unfavorable change in fair value of warrant liabilities of $ 1.2 million in the consolidated statement of operations.

Upon the immediate exercise of the 4,705,883 Initial Series B Warrants, the Company issued 4,705,883 shares of Class A Common Stock, received cash proceeds of approximately $ 11.8 million and recognized a gain on issuance of securities of approximately $ 1.3 million in the consolidated statements of operations.

The New Series A Warrant and New Series B Warrant were immediately exercisable and have a term of 5.5 years and 18 months, respectively.

The Company evaluated the terms of the New 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 with changes in fair value recognized in other income (expense) on the consolidated statement of operations.

The New Series A Warrant and New Series B Warrant had an initial fair value of $ 10.8 million and $ 5.7 million, respectively, which was recorded as a $ 16.6 million loss on issuance of securities in our consolidated statement of operations.

Subsequently, the Purchaser exercised 4,705,883 Initial Series A Warrants, 4,705,883 New Series A Warrants and 4,705,883 New Series B Warrants during the period from February 9, 2024 to February 23, 2024.

As a result, the Company issued 14,117,649 shares of Class A Common Stock and received cash proceeds of approximately $ 38.8 million.

The Company recorded a loss on issuance of securities of approximately $ 47.9 million as a result of these warrant exercises.

Conversion Warrants

In connection with the January 2024 Bridge Loan Conversion discussed further in Note 6, 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, and a term of 5 years, (the “Conversion Series A Warrant”) 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, and a term of 18 months (the “Conversion Series B Warrant”), collectively (the “Conversion Warrants”).

On May 31, 2024, the Guarantor assigned the Conversion Warrants to a third party investor in a private transaction.

Pursuant to the assignment to a third party investor, the Conversion Warrants are no longer exercisable for Class C Common Stock.

All other terms related to the Conversion Warrants remain the same as previously discussed.

Pursuant to the guidance under ASC 480 “Distinguishing Liabilities from Equity,” the Company determined that the Conversion Warrants should be recorded as liabilities as of the issuance date and March 31, 2024 and subsequently determined that they meet the criteria in ASC 815, “Derivatives and Hedging”, to be classified as a derivative liability as of May 31, 2024 and June 30, 2024, initially measured at fair value with changes in fair value recognized in earnings in other income (expense) on the consolidated statement of operations.

The Conversion Series A Warrant and Conversion Series B Warrant had an initial fair value of $ 10.0 million and $ 5.5 million, respectively.

The gross proceeds of $ 10.0 million from the Letter Agreement were allocated to the Conversion Warrants resulting in a loss on the transaction of approximately $ 5.5 million recognized as loss on issuance of securities in our consolidated statement of operations.

As of December 31, 2024, the fair value of the Conversion Series A Warrant increased to approximately $ 68.8 million, resulting in a loss of approximately $ 58.8 million recognized as change in fair value of warrant liabilities in our consolidated statement of operations.

During the period from June 5, 2024 to June 7, 2024, the investor exercised 300,000 Conversion Series B Warrants, resulting in the issuance of an equal number of shares of Class A Common Stock, cash proceeds to the Company of $ 0.8 million, and recording a gain on issuance of securities of approximately $ 0.6 million.

As of the exercise dates, the Company recognized an unfavorable change in fair value of the warrant liabilities of $ 0.8 million in our consolidated statement of operations.

During the period from November 21, 2024 to November 29, 2024, the investor exercised the remaining 3,850,780 Conversion Series B Warrants, resulting in the issuance of an equal number of Class A Common Stock, cash proceeds to the Company of $ 9.9 million, and recording a loss on issuance of securities of approximately $ 25.0 million.

As of the exercise dates, the Company recognized an unfavorable change in fair value of the warrant liabilities of $ 16.9 million in our consolidated statement of operations.

NOTE 10 - SHARE-BASED COMPENSATION AND RETIREMENT BENEFITS

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Pursuant to the 2021 Plan, up to 6,125,000 shares of Class B units were reserved for issuance, upon exercise of the aforementioned Incentive Unit Options made to employees, directors and consultants.

As a result of the Business Combination discussed in Note 3 - Business Combination and Related Transactions and per the terms of the Second Amended and Restated Intuitive Machines, LLC Operating Agreement, the unexpired and unexercised outstanding Incentive Unit Options at the closing of the Business Combination, whether vested or unvested, were proportionately adjusted using a conversion ratio of 0.5562 (rounded down to the nearest whole number of options).

As a result of the Business Combination discussed in Note 1 and per the terms of the Second Amended and Restated Intuitive Machines, LLC Operating Agreement, the unexpired and unexercised outstanding Incentive Unit Options at the closing of the Business Combination, whether vested or unvested, were proportionately adjusted using a conversion ratio of 0.5562 (rounded down to the nearest whole number of options).

The exercise price of each option was adjusted accordingly.

Each Incentive Unit Option continues to be subject to the terms and conditions of the 2021 Plan and will be exercisable for Class B common units of Intuitive Machines, LLC (the “Class B Common Units”).

When an option is exercised, the participant will receive Class A Common Stock.

When an option is

exercised, the participant will receive new Class A Common Stock.

As a result of the conversions, there was no incremental compensation cost and the terms of the outstanding options, including fair value, vesting conditions and classification, were unchanged.

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Intrinsic Value

(in thousands)

Outstanding as of December 31, 2023 1,325,354 $ 3.15 7.41 $ —

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543,961 $ 3.06 6.67 $ 8,212

Aggregate intrinsic value represents the difference between the exercise price of the options and the estimated fair value of the Company’s units determined by our Board for each of the respective periods.

The aggregate intrinsic value of an exercised option represents the difference between the exercise price of the underlying option and the fair value of the Company’s Class A Common Stock at the time of the exercise.

The aggregate intrinsic value at December 31, 2024 represents the difference between the exercise price and the fair value of the Company’s Class A Common Stock as of December 31, 2024 or the last trading day prior to December 31, 2024.

The following table provides a summary of weighted-average grant-date fair value of unit options under the 2021 Plan:

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Non-vested as of December 31, 2024

The weighted average grant-date fair value per share of options granted to employees was zero and $ 3.07 during 2023 and 2022, respectively.

The weighted average grant-date fair value per share of options granted to employees was zero for fiscal years 2024 and 2023.

Following the consummation of the Business Combination, no new awards were granted under the 2021 Plan.

Share-based compensation expense related to options was $ 362 thousand and $ 787 thousand for the years ended December 31, 2024 and 2023, respectively, and was classified in the consolidated statement of operations under general and administrative expense.

As of December 31, 2023, the Company had $ 699 thousand in estimated unrecognized

share-based compensation costs related to outstanding unit options that is expected to be recognized over a weighted average period of 3.40 years.

The following weighted average assumptions were used to calculate the fair value of each unit option award under the 2021 Plan using the Black-Scholes option pricing model:

December 31, 2022

Expected unit price volatility 65 – 70 %

Risk-free interest rate 2.9 – 3.6 %

Expected annual dividend yield 0.0 %

Expected term (years) 6.50

As of December 31, 2024, the Company had $ 336 thousand in estimated unrecognized share-based compensation costs related to outstanding unit options that is expected to be recognized over a weighted average period of 2.49 years.

Intuitive Machines, Inc.

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Under the 2023 Plan, a maximu m of 12,706,811 sh ares of Class A Common Stock are authorized to be issued.

As of December 31, 2023, the Company has issued restricted stock units (“RSUs”) as outlined in the following disclosure.

As of December 31, 2024, the Company has issued restricted stock units (“RSUs”) and performance stock units (“PSUs”) as outlined in the following disclosure.

No other awards have been granted under the 2023 Plan.

Restricted Stock Units

In 2023, the Company granted RSUs with time-based vesting requirements under the 2023 Plan.

These RSUs typically vest over one to four years .

The fair value of RSUs is based on the Company’s closing stock price on the date of grant.

The following table provides a summary of the Company’s RSU activity:

Units Weighted Average Grant Date Fair Value

As of December 31, 2024, approximately 8,060,355 shares were available for future grants under the 2023 Plan.

Restricted Stock Units and Performance Stock Units

Pursuant to the 2023 Plan, the Company grants RSUs with time-based vesting requirements which typically vests over one to four years and PSUs with target performance-based vesting requirements based on continuous service.

The fair value of RSUs and PSUs are based on the Company’s closing stock price on the date of grant.

The following table provides a summary of the Company’s RSU and PSU activity:

Weighted Average Grant Date Fair Value

Outstanding as of December 31, 2023 1,826,946 $ 7.01

Granted 3,661,962 3.70

Vested ( 1,764,465 ) 5.08

Forfeited ( 417,404 ) 7.56

Balance as of December 31, 2024 3,307,039 $ 4.31

Share-based compensation expense related to RSUs was $ 3.5 million for year ended December 31, 2023, and disclosed in the consolidated statement of operations under general and administrative expense.

As of December 31, 2023, the Company had $ 9.4 million in estimated unrecognized share-based compensation costs related to unvested RSUs that is expected to be recognized over a weighted average period of 2.98 years.

(1) PSU grants of 919,007 were included at the 100% attainment level which were based on several performance goals related to our mission which successfully completed in February 2024 of which all 919,007 PSU grants fully vested in April 11, 2024.

(2) PSU grants of 53,333 were included at the 100% attainment level which are based on two performance goals related to the Company’s financial management plan.

Each goal has a performance multiplier of 50 % and must be attained by September 1, 2025.

The weighted average grant-date fair value per share of RSUs and PSUs granted to employees was $ 3.70 and $ 7.02 for fiscal years 2024 and 2023, respectively.

Share-based compensation expense related to RSUs was $ 5.1 million and $ 3.5 million for years ended December 31, 2024 and 2023, respectively.

Share-based compensation expense related to PSUs was $ 3.3 million and zero for years ended December 31, 2024 and 2023, respectively.

Share-based compensation expense for RSUs and PSUs are classified in the consolidated statement of operations under general and administrative expense.

As of December 31, 2024, the estimated unrecognized share-based compensation costs related to unvested RSUs and PSUs were $ 10.3 million and $ 0.3 million, respectively, and is expected to be recognized over a weighted average period of 2.69 years and 0.67 years, respectively.

Defined Contribution Retirement Plan

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Contributions to this plan are based on pretax income discretionary amounts determined on an annual basis.

Our expense for the defined contribution plan totaled approximately $ 945 thousand and $ 521 thousand for the years ended December 31, 2023 and 2022, respectively.

Our expense for the defined contribution plan totaled approximately $ 2.1 million and $ 0.9 million for the years ended December 31, 2024 and 2023, respectively.

NOTE 11 - FAIR VALUE MEASUREMENTS

The following tables summarize the fair value of assets and liabilities that are recorded in the Company’s consolidated balance sheets as of December 31, 2023 and 2022 at fair value on a recurring basis.

The following tables summarize the fair value of assets and liabilities that are recorded in the Company’s consolidated balance sheets as of December 31, 2024 and 2023 at fair value on a recurring basis (in thousands).

December 31, 2024

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Measurement Total Level 1 Level 2 Level 3

SAFE Agreement liabilities Recurring $ 18,314 $ — $ — $ 18,314

Earn-out liabilities Recurring $ 14,032 $ — $ — $ 14,032

Warrant liabilities - Series A Recurring 8,612 — — 8,612

Warrant liabilities - Series B Recurring 2,682 — — 2,682

Warrant liabilities 11,294 — — 11,294

Total liabilities measured at fair value $ 25,326 $ — $ — $ 25,326

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Balance, December 31, 2023 14,032 8,612 2,682 11,294 —

Additions — 20,827 11,262 32,089 —

Change in fair value 120,124 59,810 17,841 77,651 —

Converted to equity — ( 20,471 ) ( 31,785 ) ( 52,256 ) —

Balance, December 31, 2024 $ 134,156 $ 68,778 $ — $ 68,778 $ —

Earn-out Liabilities

The fair value of the earn-out liabilities as of December 31, 2023 was estimated using a Monte Carlo simulation approach that modeled the triggering events including the simulated stock price of the Company over the maturity dates.

The significant assumptions utilized in estimating the fair value of the earn-out liabilities include:

The fair value of the earn-out liabilities was estimated using a Monte Carlo simulation approach that modeled the triggering events including the simulated stock price of the Company over the maturity dates.

As of December 31, 2024, the significant assumptions utilized in estimating the fair value of the earn-out liabilities include:

(i) Intuitive Machines stock price of $ 18.16 ;

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and (iv) expected volatility of 85 %.

In conjunction with the closing of the Business Combination on February 13, 2023, the fair value of the earn-out liabilities was estimated at $ 99.7 million.

The significant assumptions utilized in estimating the fair value of the earn-out liabilities include:

As of , the significant assumptions utilized in estimating the fair value of the earn-out liabilities include:

(i) Intuitive Machines stock price of $ 2.56 ;

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and (iv) expected volatility of 105 %.

The probability of the Company being awarded the OMES III contract was assumed at 60 %.

As a result of the Business Combination, certain Intuitive Machines, LLC members received 10,000,000 earn out units of Intuitive Machines, LLC (“Earn Out Units”) subject to certain triggering events.

Upon the vesting of any Earn Out Units, each of the certain Intuitive Machines, LLC members will be issued (i) by Intuitive Machines, LLC an equal number of Intuitive Machines, LLC Common Units and (ii) by Intuitive Machines, an equal number of shares of Class C Common Stock, in exchange for surrender of the applicable Earn Out Units and the payment to Intuitive Machines, Inc.

of a per-share price equal to the par value per share of the Class C Common Stock.

Under the earn out agreement, Earn Out Units of 2,500,000 vested for the year ended December 31, 2023.

For the year ended December 31, 2024, there were no vestings of Earn Out Units.

See Note 17 for information related to subsequent earn out events.

Warrant Liabilities

The fair value of the Series A Warrant and the Series B Warrant liabilities as of December 31, 2023 was estimated using a Black-Scholes-Merton model.

The significant assumptions utilized in estimating the fair value of the Series A Warrant liabilities include:

Initial Warrants

Pursuant to the Warrant Exercise Agreement on January 10, 2024 (as further described in Note 9 and discussed below), the terms of the Initial Warrants were modified, and the Initial Series B Warrant was exercised in full and converted to equity.

The pre-modification fair value of the Initial Warrant liabilities was estimated using a Black-Scholes-Merton model.

The significant assumptions utilized in estimating the pre-modification fair value of the Series A Warrant liabilities include:

(i) a per share price of the Class A Common Stock of $ 2.83 ;

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and (iv) expected volatility of 104 %.

The significant assumptions utilized in estimating the fair value of the Series B Warrant liabilities include:

The significant assumptions utilized in estimating the pre-modification fair value of the

Series B Warrant liabilities include:

(i) a per share price of the Class A Common Stock of $ 2.83 ;

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and (iv) expected volatility of 85 %.

In connection with the closing of the Private Placement on September 5, 2023 as described further in Note 9, the fair values of the Series A Warrant and the Series B Warrant liabilities were estimated at $ 17.4 million and $ 9.3 million, respectively.

The significant assumptions utilized in estimating the fair value of the Series A Warrant liabilities include:

During February 2024, the investor also fully exercised and converted to equity the Initial Series A Warrant.

Refer to Note 9 for more information on the warrant exercises.

Pursuant to the Warrant Exercise Agreement on January 10, 2024 as described further in Note 9, the fair values of the New Series A Warrant and the New Series B Warrant liabilities were estimated at $ 10.8 million and $ 5.7 million, respectively, utilizing the Black-Scholes-Merton model.

The significant assumptions utilized in estimating the fair value of the New Series A Warrant liabilities include:

(i) a per share price of the Class A Common Stock of $ 2.83 ;

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and (iv) expected volatility of 105 %.

The significant assumptions utilized in estimating the fair value of the Series B Warrant liabilities include:

The significant assumptions utilized in estimating the fair value of the New Series B Warrant liabilities include:

(i) a per share price of the Class A Common Stock of $ 2.83 ;

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and (iv) expected volatility of 83 %.

During February 2024, the investor fully exercised and converted to equity the New Warrants.

Refer to Note 9 for more information on the warrant exercises.

Conversion Warrants

Pursuant to the Letter Agreement and the issuance of warrants on January 29, 2024 as described further in Notes 6 and 9, the fair values of the Conversion Series A Warrant and the Conversion Series B Warrant liabilities were estimated at $ 10.0 million and $ 5.1 million, respectively, utilizing the Black-Scholes-Merton model.

The significant assumptions utilized in estimating the fair value of the Conversion Series A Warrant liabilities include:

(i) a per share price of the Class A Common Stock of $ 3.05 ;

(ii) a dividend yield of 0.0 %;

(iii) a risk-free rate of 3.97 %;

and (iv) expected volatility of 102 %.

The significant assumptions utilized in estimating the fair value of the Conversion Series B Warrant liabilities include:

(i) a per share price of the Class A Common Stock of $ 3.05 ;

(ii) a dividend yield of 0.0 %;

(iii) a risk-free rate of 4.53 %;

and (iv) expected volatility of 76 %.

The fair value of the Conversion Series A Warrant liabilities as of December 31, 2024 was estimated using a Black-Scholes-Merton model.

The significant assumptions utilized in estimating the fair value of the Conversion Series A Warrant liabilities include:

(i) a per share price of the Class A Common Stock of $ 18.16 ;

(ii) a dividend yield of 0.0 %;

(iii) a risk-free rate of 4.33 %;

and (iv) expected volatility of 93 %.

During June 2024 and November 2024, the investor fully exercised and converted to equity the Conversion Series B Warrants.

Refer to Note 9 for more information on the warrant exercises.

SAFE Agreements

Prior to the Business Combination described in Notes 1 and 3, the fair value of the SAFE Agreements under the equity financing scenario were estimated using a Monte Carlo simulation approach.

Prior to the Business Combination described in Note 1 , the fair value of the SAFE Agreements under the equity financing scenario were estimated using a Monte Carlo simulation approach.

The fair value of the SAFE Agreements under the liquidity event and dissolution event scenarios were estimated based on the present value of the purchase amount.

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The periods in which the scenarios are expected to occur for the liquidity event and dissolution events are 0.25 year and 1 year, respectively, as of December 31, 2022.

In conjunction with the closing of the Business Combination on February 13, 2023, the fair value of the SAFE Agreements was estimated at $ 20.7 million.

The fair value was estimated using the 2,066,667 shares of Class A Common Stock issued to the SAFE investors at the Closing Date using the issuance price of $ 10.00 per share.

NOTE 13 - NET INCOME PER SHARE

Basic net income p er share of Class A common stock is computed by dividing net income attributable to Class A common shareholders from February 13, 2023, or the Closing Date, to December 31, 2023 by the weighted-average number of shares of Class A common stock outstanding for the same periods.

Diluted net income per share of Class A common stock includes additional weighted average common shares that would have been outstanding if potential common shares with a dilutive effect had been issued using the if-converted method for the Series A Preferred Stock and the treasury method for our RSUs, options, and warrants.

In conjunction with the closing of the Business Combination on February 13, 2023 (as further discussed in Note 1), the SAFE Agreements liability was eliminated and converted into shares of our Class A Common Stock.

T he fair value of the SAFE Agreements was estimated at $ 20.7 million using the 2,066,667 shares of Class A Common Stock issued to the SAFE investors at the Closing Date at the issuance price of $ 10.00 per share.

NOTE 12 - NET INCOME (LOSS) PER SHARE

Basic net income (loss) p er share of Class A common stock is computed by dividing net income (loss) attributable to Class A common shareholders for the year ended December 31, 2024, and the period from February 13, 2023, or the Closing Date, to December 31, 2023 December 31, 2024 by the weighted-average number of shares of Class A common stock outstanding for the same periods.

During loss periods, diluted net loss per share for all periods presented is the same as basic net loss per share as the inclusion of the potentially issuable shares would be anti-dilutive.

Prior to the Business Combination, the membership structure of Intuitive Machines, LLC included membership units.

In conjunction with the closing of the Business Combination, the Company effectuated a recapitalization whereby all membership units were converted to common units of Intuitive Machines, LLC and Intuitive Machines, Inc.

implemented a revised class structure including Class A common stock having one vote per share and economic rights, Class B common stock having one vote per share and no economic rights, and Class C Common Stock having three votes per share and no economic rights.

Shares of the Company’s Class B Common Stock and Class C Common Stock do not participate in the earnings or losses of the Company and are therefore not participating securities.

The Company has determined that the calculation of loss per unit for periods prior to the Business Combination would not be meaningful to the users of these consolidated financial statements.

Therefore, net loss per share information has not been presented for periods prior to the Business Combination on February 13, 2023.

The basic and diluted net income per share for the year ended December 31, 2023 represent only the period of February 13, 2023 to December 31, 2023.

The following table presents the computation of the basic and diluted income per share of Class A Common Stock for the period of February 13, 2023 (the Closing Date) to December 31, 2023 (in thousands, except share data):

December 31, 2023

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

Net loss attributable to redeemable noncontrolling interests for the period from February 13, 2023 through December 31, 2023 ( 42,031 )

Net income for the period from February 13, 2023 through December 31, 2023 attributable to the Company 62,804

The following table presents the computation of the basic and diluted income (loss) per share of Class A Common Stock (in thousands, except share data):

Year Ended December 31,

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

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

Net income attributable to noncontrolling interest 3,495 —

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

Cumulative preferred dividends ( 896 ) ( 2,343 )

Net income for the period from February 13, 2023 through December 31, 2023 attributable to Class A common shareholders $ 60,461

Net income (loss) attributable to the Company $ ( 284,309 ) $ 59,419

Basic weighted-average shares of Class A common stock outstanding 61,410,250 17,648,050

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Diluted weighted-average shares of Class A common stock outstanding 61,410,250 25,564,313

Net income per share of Class A common stock - basic $ 3.43

Net income per share of Class A common stock - diluted $ 2.46

The following table presents potentially dilutive securities, as of the end of the period, excluded from the computation of diluted net earnings per share of Class A Common Stock.

December 31, 2023

Net income (loss) per share of Class A common stock - basic $ ( 4.63 ) $ 3.37

Net income (loss) per share of Class A common stock - diluted $ ( 4.63 ) $ 2.42

The following table presents potentially dilutive securities, as of the end of the periods, excluded from the computation of diluted net income (loss) per share of Class A Common Stock as their effect would be anti-dilutive, their exercise price was out-of-the-money, or because of unsatisfied contingent issuance conditions.

Year Ended December 31,

RSUs and PSUs (1)

3,307,039 1,832,918

Options (1)(4)

989,423 261,432

Series A Preferred Stock (2)

Warrants ( publicly issued ), Initial Warrants, Conversion Warrants, and Series A Preferred Warrants (1)(4)

26,787,265 32,048,682

Earn Out Units (3)

7,500,000 7,500,000

(1) Represents number of instruments outstanding at the end of the period that were evaluated under the treasury stock method for potentially dilutive effects and were determined to be anti-dilutive.

(2) Represents number of instruments outstanding as converted at the end of the period that were evaluated under the if-converted method for potentially dilutive effects and were determined to be anti-dilutive.

(3) Represents number of Earn Out Units outstanding at the end of the period that were excluded due to unsatisfied contingent issuance conditions.

See Note 3 for terms and conditions of the contingencies related to the Earn Out Units.

See the subsequent disclosure on the Earn Out Units below.

(4) Options and warrants with exercises prices greater than the average market price of our Class A common stock are excluded from the computation of diluted net income (loss) per share because they are out-of-the-money.

The out-of-the-money instruments included in the table above were as follows:

options of 0 and 261,432 for the year ended December 31, 2024 and 2023, respectively, and warrants of 22,636,485 and 32,048,682 for the year ended December 31, 2024 and 2023, respectively.

See Note 17 - Subsequent Events for additional information related to changes to our capital structure during the first quarter of 2025 resulting from 15,358,229 of Class A Common Stock issued for Warrants exercised, redemption of 6,571,724 outstanding Warrants, 941,080 repurchase of our Class A Common Stock, and 7,500,000 of Class C Common Stock issued in connection with vested Earn Out Units.

NOTE 13 - COMMITMENTS AND CONTINGENCIES

Legal Proceedings

From time to time, the Company is a party to various lawsuits, claims and other legal proceedings that arise in the ordinary course of business.

The Company applies accounting for contingencies to determine when and how much to accrue for and disclose related to legal and other contingencies.

Accordingly, the Company discloses contingencies deemed to be reasonably possible and accrues loss contingencies when, in consultation with legal advisors, it is concluded that a loss is probable and reasonably estimable.

While the resolution of these legal proceedings and claims cannot be predicted with certainty, management believes the outcome of such matters will not have a material adverse effect on our consolidated financial statements.

We are subject to legal proceedings, claims and liabilities that arise in the ordinary course of business.

We accrue for losses associated with legal claims when such losses are considered probable and the amounts can be reasonably estimated.

The Company bases any accrual for losses on a variety of factors, including informal settlement discussions.

As of December 31, 2024, the aggregate amount accrued was approximately $ 2.1 million.

The amounts accrued as of December 31, 2023 for legal matters were not material.

For matters for which no accrual has currently been made or for potential losses in excess of amounts accrued, the Company currently believes, based on its internal investigations, that any losses that are reasonably possible and estimable will not, in the aggregate, have a material adverse effect on its financial position, results of operations, or cash flows.

However, the ultimate outcome of legal proceedings involves judgments, estimates, and inherent uncertainties and cannot be predicted with certainty.

Should the ultimate outcome of any legal matter be unfavorable, it could have a material adverse effect on our business, financial condition and results of operations.

The Company may also incur substantial legal fees, which are expensed as incurred, in defending against legal claims.

On November 22, 2024, Starlight Strategies IV LLC ( “Plaintiff”), an alleged successor in interest to a purported former holder of shares of the Company’s 10 % Series A Cumulative Convertible Preferred Stock, par value $ 0.0001 per share (the “Series A Preferred Stock”) filed a breach of contract action in Delaware Chancery Court.

The complaint alleges that the Plaintiff’s predecessor received fewer shares of common stock upon conversion of its shares of Series A Preferred Stock than it was allegedly entitled to receive under the terms of the applicable certificate of designation.

The Plaintiff is seeking unspecified contractual damages and equitable relief.

The Company has filed its answer to the complaint and asserted counterclaims against the Plaintiff and third-party claims against certain entities affiliated with the Plaintiff.

Also, on January 24, 2025, Kingstown 1740 Fund L.P.

and Kingstown Capital Partners LLC (together, “Kingstown”) moved to intervene, seeking to file a complaint in intervention against Starlight.

The court granted Kingstown leave to intervene.

In connection with the intervention, the Company has agreed to pay Kingstown’s legal fees.

We believe that we have meritorious defenses and claims against the Plaintiff and its affiliates, and we intend to vigorously defend the litigation.

Purchase Commitments

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, 2024, we had remaining purchase obligations under non-cancelable commitments with ten vendors totaling $ 97.1 million of which approximately $ 39.0 million due in 2025, $ 37.8 million due in 2026, and the remaining $ 20.3 million due in 2027.

NOTE 14 - RELATED PARTY TRANSACTIONS

Intuitive Machines, Intuitive Aviation, IX LLC and Space Network Solutions, LLC have entered into recurring transaction agreements with certain related parties, including sales agreements and loan agreements.

Intuitive Machines, IX LLC and Space Network Solutions, LLC have entered into recurring transaction agreements with certain related parties, including sales agreements and loan agreements.

Axiom Space, Inc.

The Company recognized revenue from Axiom Space, Inc.

(“Axiom”) related to engineering services of $ 153 thousand and $ 1.6 million for the years ended December 31, 2023 and 2022, respectively.

As of December 31, 2022, there was $ 0.8 million of affiliate accounts receivable which was fully reserved.

During the third quarter of 2023, the affiliate accounts receivable balance was collected and the reserve was reversed.

As of December 31, 2023, there were no affiliate accounts receivable related to Axiom.

Kamal Ghaffarian, the Chairman of the Board and one of the co-founders of Intuitive Machines, LLC is a co-founder and current member of management at Axiom.

(“Axiom”) related to space infrastructure development activities of $ 50 thousand and $ 153 thousand for the years ended December 31, 2024 and 2023, respectively.

As of December 31, 2024 and 2023, there were no affiliate accounts receivable related to Axiom.

Kamal Ghaffarian, the Chairman of the Board and one of the co-founders of Intuitive Machines, is a co-founder, CEO, and Executive Chairman of Axiom.

Revenue related to Axiom are incurred in the normal course of business and amounts are settled under normal business terms.

IBX, LLC and PTX, LLC

The Company incurred expenses with IBX, LLC and PTX, LLC (“IBX/PTX”) related to bid & proposal, capture management and various consulting services of $ 0.1 million and $ 2.1 million for the years ended December 31, 2023 and 2022, respectively.

As of December 31, 2023 and 2022, there was approximately $ 0.4 million of affiliate accounts payable related to IBX/PTX expenses.

Kamal Ghaffarian is a member of Management at Intuitive Machines and a member of Management at IBX/PTX.

Expenses related to IBX/PTX are incurred in the normal course of business and amounts are settled under normal business terms.

The Company incurred expenses with IBX, LLC and PTX, LLC (“IBX/PTX”) of $ 54 thousand and $ 1.5 million for the years ended December 31, 2024 and 2023, respectively.

As of December 31, 2024 and 2023, there was approximately zero million and $ 2.7 million, respectively, of affiliate accounts payable related to IBX/PTX expenses.

IBX/PTX is an innovation and investment firm committed to advancing the state of humanity and human knowledge.

We rely on IBX/PTX for the provision of management and professional services in the day-to-day operation of our business.

These expenses include, among others, fees for the provision of administrative, accounting and legal services.

As such, expenses incurred in relation to IBX/PTX are incurred in the normal course of business and amounts are settled under normal business terms.

Kamal Ghaffarian, the Chairman of the Board and one of the co-founders of Intuitive Machines, is a co-founder and current member of management of IBX/PTX.

On November 12, 2020, KBR, Inc.

(“KBR”) made an initial capital contribution in Space Network Solutions resulting in a 10 % ownership of Space Network Solutions, which was previously a wholly owned subsidiary of Intuitive Machines, LLC.

(“KBR”), a U.S.-based firm operating in the science, technology and engineering industries, made an initial investment in our operating subsidiary, Space Network Solutions (“SNS”) resulting in a 10 % ownership by KBR of Space Network Solutions as of the date of such investment.

The Company recognized affiliate revenue from KBR related to engineering services of $ 2.1 million and $ 3.1 million for the years ended December 31, 2024 and 2023, respectively.

As of December 31, 2024 and 2023, there were $ 0.4 million and $ 0.5 million, respectively, of affiliate accounts receivable related to KBR revenue.

In addition, SNS incurred cost of revenue with KBR related to the OMES III contract of $ 34.9 million and $ 2.9 million for years ended December 31, 2024 and 2023, respectively.

See Note 15 for more information on the OMES III contract with KBR.

Revenue related to KBR are incurred in the normal course of business and amounts are settled under normal business terms.

The Company recognized revenue from ASES related to engineering services of $ 1.1 million for the year ended December 31, 2023.

As of December 31, 2023, there was $ 0.1 million of affiliate accounts receivable related to ASES revenue.

The Company recognized revenue from ASES related to engineering services of $ 0.7 million and $ 1.1 million for the years ended December 31, 2024 and 2023, respectively.

As of December 31, 2024 and 2023, there was $ 0.1 million of affiliate accounts receivable related to ASES revenue.

ASES is a joint venture between Aerodyne Industries, LLC and KBR.

Kamal Ghaffarian, the Chairman of the Board and one of the co-founders of Intuitive Machines, LLC is a current member of management at Aerodyne Industries with an ownership interest in Aerodyne Industries.

Kamal Ghaffarian, the Chairman of the Board and one of the co-founders of Intuitive Machines, is a current member of management at Aerodyne Industries, LLC.

Revenue related to ASES are incurred in the normal course of business and amounts are settled under normal business terms.

X-energy, LLC

As of December 31, 2023 and 2022, there were zero and $ 0.1 million, respectively, of affiliate accounts payable related to X-energy, LLC (“X-energy”) expenses.

The Company incurred expenses with X-energy, LLC (“X-energy”) of $ 0.3 million for the year ended December 31, 2024 and incurred no expenses for the year ended December 31, 2023.

As of December 31, 2024 and 2023, there was no affiliate accounts payable related to X-energy expenses.

Expenses related to X-energy are incurred in the normal course of business and amounts are settled under normal business terms.

Penumbra, LLC

In November 2019, certain members of our management team formed Penumbra, LLC (“Penumbra”) as an Isle of Man entity.

The sole purpose of forming Penumbra was to permit us to obtain required licenses for its Lunar Data Network line of business to operate in the ordinary course.

The Company incurred expenses with Penumbra related to license fees for the year ended December 31, 2022 of $ 134 thousand, and incurred no expenses for the year ended December 31, 2023.

As of December 31, 2023, no member of our management team has received any financial benefit from its ownership interest in Penumbra, LLC, other than expense reimbursements incurred in the ordinary course.

As of December 31, 2023, this entity is dissolved.

Kamal Ghaffarian, the Chairman of the Board and one of the co-founders of Intuitive Machines, is the Executive Chairman of X-Energy Reactor Company, LLC, which is the parent company of X-Energy.

NOTE 15 - VARIABLE INTEREST ENTITIES

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Therefore, we consolidate this VIE for financial reporting purposes.

The IX LLC JV was formed to pursue nuclear space pro JV received an award from Battelle Energy Alliance to design a fission surface power system that can operate on the surface of the Moon to support sustained lunar presence and exploration of Mars.

The IX LLC JV was formed to pursue nuclear space propulsion and surface power systems in support of future space exploration goals.

In the third quarter of 2022, the IX LLC JV received an award from Battelle Energy Alliance to design a fission surface power system that can operate on the surface of the Moon to support sustained lunar presence and exploration of Mars.

Provided below is the summarized financial information for our consolidated VIEs (in thousands).

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Trade accounts receivable, net 8,639 12,501 490 —

Contract assets — — — —

Prepaid and other current assets 26 — — —

Total current assets 12,914 13,688 490 —

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Accounts payable - affiliated companies 3,913 2,949 490 —

Contract liabilities, current — — — 790

Total current liabilities 9,203 12,042 490 —

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Net income $ 6,339 $ 246 $ — $ —

NOTE 16 - SEGMENT INFORMATION

The Company operates in one operating segment and one reportable segment underpinned by three core pillars (delivery services, data transmission services, and infrastructure as a service) that have similar capabilities, customers, and economic characteristics.

The Company’s chief operating decision-maker (“CODM”) is our chief executive officer.

Our CODM reviews and evaluates consolidated Net income (loss), a U.S.

GAAP measure, and Adjusted Earnings before Interest, Taxes, Depreciation, and Amortization (“Adjusted EBITDA”), a non-GAAP measure, for purposes of evaluating financial performance, making operating decisions, allocating resources, and planning and forecasting for future periods.

Although we utilize a non-GAAP measure of Adjusted EBITDA to evaluate our ability to generate cash and as an alternative measure of profitability, our primary profitability measure is the GAAP measure of Net income (loss).

All of the Company’s long-lived assets are maintained in the U.S.

We geographically disaggregate our revenues based on the customer’s country of domicile.

Substantially all of our revenues are derived from customers in the U.S., and our revenues from foreign customers were not material for the years ended December 31, 2024 and 2023.

Refer to Note 2 for information regarding our major customer and Note 3 for further information on revenues.

The following presents the significant financial information with respect to the Company’s reportable segment for the years ended December 31, 2024 and 2023 (in thousands):

Year Ended December 31,

Revenue $ 228,000 $ 79,551

Cost of revenue (excluding depreciation) (1)

225,231 103,993

Depreciation 1,859 1,376

Impairment of property and equipment 5,044 964

General and administrative expense (excluding depreciation):

Sales and marketing expense (2)

Other general and administrative expense (3)

50,140 28,948

Total general and administrative expense (excluding depreciation) 53,262 34,337

Operating loss ( 57,396 ) ( 61,119 )

Interest income (expense), net 180 ( 823 )

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

Change in fair value of warrant liabilities ( 77,651 ) 15,435

Change in fair value of SAFE Agreements — ( 2,353 )

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

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

Income tax expense ( 37 ) ( 40 )

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

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

(2) Sales and marketing expense primarily includes business development and research and development related expenses such as, employee compensation and benefits, subcontract costs, marketing, and materials and supplies costs.

Costs incurred for business development were $ 1.7 million and $ 4.4 million and research and development costs were $ 1.4 million and $ 1.0 million for the years ended December 31, 2024 and 2023, respectively.

(3) Other general and administrative expense primarily includes all other employee compensation and benefits, stock-based compensation, facilities costs, professional services, software licenses, and other administrative costs.

NOTE 17 - SUBSEQUENT EVENTS

Warrant Transactions

On January 10, 2024, the Company entered into a Warrant Exercise Agreement with an existing investor to exercise in full the Initial Series B 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 Initial Series B 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 (the “Second Series A Warrant”) 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 (the “Second Series B Warrant”) 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 Initial Series B Warrant from $ 4.75 to $ 2.50 per

share and reduced the exercise price of the Initial Series A Warrant from $ 4.75 to $ 2.75 per share.

The gross proceeds to the Company from the exercise of the Initial Series B Warrant was approximately $ 11.8 million.

In a series of transactions during February 2024, the investor exercised in full its remaining Second Series B Warrant, Initial Series A Warrant, and Second Series A Warrant providing an additional $ 38.8 million of gross proceeds to the Company.

Loan and Loan Conversion

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 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.

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”).

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

Changes in and Disagreement with Accountants on Accounting and Financial Disclosures

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 8. Financial Statements and Supplementary Data