Intuitive Machines, Inc. [LUNRW] Filings

10-Q 1 lunr-20240630.htm 10-Q lunr-20240630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

____________________________

FORM 10-Q

____________________________

(Mark One)


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024


¨			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission file number 001-40823

____________________________

INTUITIVE MACHINES, INC.

(Exact name of registrant as specified in its charter)

____________________________


Delaware									36-5056189
(State or other jurisdiction of incorporation or organization)									(I.R.S. Employer Identification No.)

13467 Columbia Shuttle Street
Houston, Texas									77059
(Address of Principal Executive Offices)									(Zip Code)

(281) 520-3703

Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, par value $0.0001 per share	LUNR	The Nasdaq Stock Market LLC
Warrants to purchase one share of Class A Common Stock, each at an exercise price of $11.50 per share	LUNRW	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):


Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	x
		Emerging growth company	x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes o No x

As of August 7, 2024, the Registrant had 62,923,974 shares of Class A common stock, $0.0001 par value, 0 shares of Class B common stock, $0.0001 par value, and 65,627,539 shares of Class C common stock, $0.0001 par value, outstanding.

INTUITIVE MACHINES, INC.

Table of Contents


			Page
Part I – Financial Information			1
Item 1. Financial Statements			1
Unaudited Condensed Consolidated Balance Sheets			2
Unaudited Condensed Consolidated Statements of Operations			3
Unaudited Condensed Consolidated Statements of Mezzanine Equity			4
Unaudited Condensed Consolidated Statements of Shareholders’ Deficit			5
Unaudited Condensed Consolidated Statements of Cash Flows			7
Notes to Unaudited Condensed Consolidated Financial Statements			8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations of Intuitive Machines			28
Item 3. Quantitative and Qualitative Disclosures About Market Risk			45
Item 4. Controls and Procedures			45
Part II – Other Information			46
Item 1. Legal Proceedings			46
Item 1A. Risk Factors			46
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			46
Item 3. Defaults Upon Senior Securities			46
Item 4. Mine Safety Disclosures			46
Item 5. Other Information			46
Item 6. Exhibits			47
Signatures			48

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (the “Quarterly Report”) contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. All statements other than statements of historical facts contained in this Quarterly Report are forward-looking statements. Such statements can be identified by the fact that they do not relate strictly to historical or current facts. When used in this Quarterly Report, words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “strive,” “would,” “strategy,” “outlook,” the negative of these words or other similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. These forward-looking statements include, but are not limited to statements regarding our expectations and plans relating to our first mission to the Moon, including the expected timing thereof and our progress and preparation thereof; our expectations with respect to, among other things, demand for our product portfolio, our submission of bids for contracts; our expectations regarding protests of government contracts awarded to us; our operations, our financial performance and our industry; our business strategy, business plan, and plans to drive long term sustainable shareholder value; and our expectations on revenue and cash generation. These forward-looking statements reflect our predictions, projections or expectations based upon currently available information and data. Our actual results, performance or achievements may differ materially from those expressed or implied by the forward-looking statements, and you are cautioned not to place undue reliance on these forward-looking statements. The following important factors and uncertainties, among others, could cause actual outcomes or results to differ materially from those indicated by the forward-looking statements in this Quarterly Report:

•our reliance upon the efforts of our Board of Directors (the “Board”) and key personnel to be successful;

•our limited operating history;

•our failure to manage our growth effectively;

•competition from existing or new companies;

•unsatisfactory safety performance of our spaceflight systems or security incidents at our facilities;

•failure of the market for commercial spaceflight to achieve the growth potential we expect;

•any delayed launches, launch failures, failure of our satellites or lunar landers to reach their planned orbital locations, significant increases in the costs related to launches of satellites and lunar landers, and insufficient capacity available from satellite and lunar lander launch providers;

•our customer concentration;

•our reliance on a single launch service provider;

•risks associated with commercial spaceflight, including any accident on launch or during the journey into space;

•risks associated with the handling, production and disposition of potentially explosive and ignitable energetic materials and other dangerous chemicals in our operations;

•our reliance on a limited number of suppliers for certain materials and supplied components;

•failure of our products to operate in the expected manner or defects in our sub-systems;

•counterparty risks on contracts entered into with our customers and failure of our prime contractors to maintain their relationships with their counterparties and fulfill their contractual obligations;

•failure to comply with various laws and regulations relating to various aspects of our business and any changes in the funding levels of various governmental entities with which we do business;

•our failure to protect the confidentiality of our trade secrets and unpatented know how;

•our failure to comply with the terms of third-party open source software our systems utilize;

•our ability to maintain an effective system of internal control over financial reporting, and to address and remediate existing material weaknesses in our internal control over financial reporting;

•the U.S. government’s budget deficit and the national debt, as well as any inability of the U.S. government to complete its budget process for any government fiscal year, and our dependence on U.S. government contracts;

•our failure to comply with U.S. export and import control laws and regulations and U.S. economic sanctions and trade control laws and regulations;

•uncertain global macro-economic and political conditions (including as a result of a failure to raise the “debt ceiling”) and rising inflation;

•our history of losses and failure to achieve profitability in the future or failure of our business to generate sufficient funds to continue operations;

•the cost and potential outcomes of potential future litigation;

•our public securities’ potential liquidity and trading; and

•and other factors detailed under the section titled Part I, Item 1A. Risk Factors of our Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (the “2023 Annual Report on Form 10-K”), the section titled Part I, Item 2, Management’s Discussion and Analysis of Financial Condition and Results of Operations and the section titled Part II., Item 1A. “Risk Factors” in this Quarterly Report and in our subsequent filings with the U.S. Securities and Exchange Commission (the “SEC”).

These forward-looking statements are based on information available as of the date of this Quarterly Report and current expectations, forecasts, and assumptions, and involve a number of judgments, risks, and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date, and we do not undertake any obligation to update forward-looking statements to reflect events or circumstances after the date they were made, whether as a result of new information, future events, or otherwise, except as may be required under applicable securities laws. We intend the forward-looking statements contained in this Quarterly Report to be covered by the safe harbor provisions for forward-looking statements contained in Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended, the (“Exchange Act”).

Part I – Financial Information

Item 1. Financial Statements

INTUITIVE MACHINES, INC.

Condensed Consolidated Balance Sheets

(in thousands, except share data and par value)

(Unaudited)


	June 30, 2024		December 31, 2023

ASSETS
Current assets
Cash and cash equivalents	$	31,631	$	4,498
Restricted cash	2,042		62
Trade accounts receivable, net of allowance for expected credit losses of $440 and $0, respectively	38,262		16,881

Contract assets	7,324		6,489
Prepaid and other current assets	3,852		3,681
Total current assets	83,111		31,611
Property and equipment, net	21,305		18,349
Operating lease right-of-use assets	35,577		35,853
Finance lease right-of-use assets	128		95


Total assets	$	140,121	$	85,908
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ DEFICIT
Current liabilities
Accounts payable and accrued expenses	$	23,917	$	16,771
Accounts payable - affiliated companies	5,749		3,493
Current maturities of long-term debt	3,000		8,000
Contract liabilities, current	40,550		45,511
Operating lease liabilities, current	3,025		4,833
Finance lease liabilities, current	36		25
Other current liabilities	8,733		4,747
Total current liabilities	85,010		83,380

Contract liabilities, non-current	3,316		—
Operating lease liabilities, non-current	31,293		30,550
Finance lease liabilities, non-current	84		67

Earn-out liabilities	14,520		14,032
Warrant liabilities	16,109		11,294
Other long-term liabilities	158		4
Total liabilities	150,490		139,327
Commitments and contingencies (Note 12)
MEZZANINE EQUITY
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	5,698		28,201
Redeemable noncontrolling interests	218,160		181,662
SHAREHOLDERS’ DEFICIT

Class A common stock, $0.0001 par value, 500,000,000 shares authorized, 62,469,364 and 22,237,988 shares issued, and 61,219,364 and 20,987,988 outstanding	6		2
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, 66,109,012 shares issued and outstanding	7		7
Treasury stock, at cost, 1,250,000 shares, at cost	(12,825)		(12,825)
Paid-in capital	—		—
Accumulated deficit	(222,203)		(250,466)
Total shareholders’ deficit attributable to the Company	(235,015)		(263,282)
Noncontrolling interests	788		—
Total shareholders’ deficit	(234,227)		(263,282)
Total liabilities, mezzanine equity and shareholders’ deficit	$	140,121	$	85,908

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

INTUITIVE MACHINES, INC.

Condensed Consolidated Statements of Operations

(in thousands, except share and per share amounts)

(Unaudited)


	Three Months Ended June 30,				Six Months Ended June 30,
	2024		2023		2024		2023
Revenue	$	41,408	$	17,993	$	114,476	$	36,229
Operating expenses:
Cost of revenue (excluding depreciation)	57,102		22,481		118,013		45,607
Depreciation	423		319		837		615

General and administrative expense (excluding depreciation)	12,057		8,376		29,200		17,153
Total operating expenses	69,582		31,176		148,050		63,375
Operating loss	(28,174)		(13,183)		(33,574)		(27,146)
Other income (expense), net:
Interest income (expense), net	20		(274)		—		(553)

Change in fair value of earn-out liabilities	22,109		28,756		(488)		25,030
Change in fair value of warrant liabilities	21,009		—		(2,955)		—
Change in fair value of SAFE Agreements	—		—		—		(2,353)
Gain (loss) on issuance of securities	596		—		(68,080)		—
Other income (expense), net	421		(50)		422		39
Total other income (expense), net	44,155		28,432		(71,101)		22,163
Income (loss) before income taxes	15,981		15,249		(104,675)		(4,983)
Income tax benefit	—		3,528		—		313
Net income (loss)	15,981		18,777		(104,675)		(4,670)
Net loss attributable to Intuitive Machines, LLC prior to the Business Combination	—		—		—		(5,751)
Net income (loss) (post Business Combination)	15,981		18,777		(104,675)		1,081
Net loss attributable to redeemable noncontrolling interest	(3,088)		(10,744)		(26,379)		(19,080)
Net income attributable to noncontrolling interest	789		—		1,761		—
Net income (loss) attributable to the Company	18,280		$	29,521	(80,057)		20,161
Less: Preferred dividends	(137)		(655)		(608)		(983)
Net income (loss) attributable to Class A common shareholders	$	18,143	$	28,866	$	(80,665)	$	19,178

Net income (loss) per share (1)
Net income (loss) per share of Class A common stock - basic	$	0.33	$	1.84	$	(1.76)	$	1.23
Net income (loss) per share of Class A common stock - diluted	0.29		1.52		(1.76)		0.83
Weighted-average common shares outstanding
Weighted average shares outstanding - basic	55,093,365		15,705,265		45,844,343		15,543,800
Weighted average shares outstanding - diluted	62,275,592		19,383,601		45,844,343		24,191,853

(1)As a result of the Business Combination, the capital structure changed and the net loss per share information for 2023 represents results after the Closing Date of the Business Combination, for the period from February 13, 2023 through June 30, 2023. See Note 1 - Business Description and Note 11 - Net Income (Loss) per Share for additional information.

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

INTUITIVE MACHINES, INC.

Condensed Consolidated Statements of Mezzanine Equity

(In thousands except per share data)

(Unaudited)


Three Months Ended June 30, 2024
	Series A Preferred Stock			Redeemable Noncontrolling Interest
	Shares	Amount
Balance, March 31, 2024	5,000	$	5,560	$	443,181




Cumulative preferred dividends	—	137		—
Accretion of preferred stock discount	—	1		—

Subsequent remeasurement of redeemable noncontrolling interests	—	—		(221,933)
Net loss attributable to redeemable noncontrolling interests	—	—		(3,088)
Balance, June 30, 2024	5,000	$	5,698	$	218,160

Six Months Ended June 30, 2024
	Series A Preferred Stock			Redeemable Noncontrolling Interest
	Shares	Amount
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	—	608		—
Accretion of preferred stock discount	—	9		—

Subsequent remeasurement of redeemable noncontrolling interests	—	—		62,877
Net loss attributable to redeemable noncontrolling interests	—	—		(26,379)
Balance, June 30, 2024	5,000	$	5,698	$	218,160


Three Months Ended June 30, 2023
	Series A Preferred Stock			Redeemable Noncontrolling Interests
	Shares	Amount
Balance, March 31, 2023	26,000	$	26,155	$	736,028




Cumulative preferred dividends	—	655		—
Accretion of preferred stock discount	—	13		—

Subsequent remeasurement of redeemable noncontrolling interests	—	—		(146,654)
Net loss attributable to redeemable noncontrolling interests	—	—		(10,744)
Balance, June 30, 2023	26,000	$	26,823	$	578,630

Six Months Ended June 30, 2023
	Series A Preferred Stock			Redeemable Noncontrolling Interest
	Shares	Amount
Balance, December 31, 2022	—	—		—
Issuance of Series A preferred stock	26,000	25,827		—



Cumulative preferred dividends	—	983		—
Accretion of preferred stock discount	—	13		—
Establishment of redeemable noncontrolling interests	—	—		(85,865)
Subsequent remeasurement of redeemable noncontrolling interests	—	—		683,575
Net loss attributable to redeemable noncontrolling interests	—	—		(19,080)
Balance, June 30, 2023	26,000	$	26,823	$	578,630

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

INTUITIVE MACHINES, INC.

Condensed Consolidated Statements of Shareholders’ Deficit

(In thousands except per share data)

(Unaudited)


Three Months Ended June 30, 2024
	Common Stock Class A			Common Stock Class C		Treasury Stock			Paid-in Capital		Accumulated Deficit		Shareholders’ Deficit attributable to the Company		NCI		Total Shareholders’ Deficit
	Shares	Amount			Shares			Amount
Balance, March 31, 2024	52,496,932	$	5		70,909,012	$	7		$	(12,825)	$	—	$	(480,837)	$	(493,650)	$	972	$	(492,678)
Share-based compensation expense	—	—			—	—			—		1,969		—		1,969		—		1,969

Cumulative preferred dividends	—	—			—	—			—		(137)		—		(137)		—		(137)
Accretion of preferred stock discount	—	—			—	—			—		(1)		—		(1)		—		(1)
Class A common stock issued for warrants exercised	300,000	—			—	—			—		1,369		—		1,369		—		1,369

Class A common stock issued for stock options exercised	2,969	—			—	—			—		295		—		295		—		295
Class A common stock issued for vested RSUs and PSUs	1,286,880	—			—	—			—		(2,118)		—		(2,118)		—		(2,118)

Class A common stock issued for Class C canceled	4,800,000	—			(4,800,000)	—			—		—		—		—		—		—
Distribution to noncontrolling interests	—	—			—	—			—		—		—		—		(973)		(973)
Issuance of Class A Common Stock related to the ATM Program (Note 7)	3,582,583	1			—	—			—		17,044		—		17,045		—		17,045


Subsequent remeasurement of redeemable noncontrolling interests	—	—			—	—			—		(18,421)		240,354		221,933		—		221,933

Net income attributable to noncontrolling interest	—	—			—	—			—		—		—		—		789		789
Net income attributable to the Company	—	—			—	—			—		—		18,280		18,280		—		18,280
Balance, June 30, 2024	62,469,364	$	6		66,109,012	$	7		$	(12,825)	$	—	$	(222,203)	$	(235,015)	$	788	$	(234,227)


Six Months Ended June 30, 2024
	Common Stock Class A			Common Stock Class C		Treasury Stock			Paid-in Capital		Accumulated Deficit		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)	$	—	$	(250,466)	$	(263,282)	$	—	$	(263,282)
Share-based compensation expense	—	—			—	—			—		5,895		—		5,895		—		5,895

Cumulative preferred dividends	—	—			—	—			—		(608)		—		(608)		—		(608)
Accretion of preferred stock discount	—	—			—	—			—		(9)		—		(9)		—		(9)
Conversion of Series A preferred stock (Note 7)	7,738,743	1			—	—			—		23,119		—		23,120		—		23,120


Class A common stock issued for warrants exercised	19,123,633	2			—	—			—		127,579		—		127,581		—		127,581
Class A common stock issued related to loan conversion (Notes 5 and 7)	3,487,278	—			—	—			—		—		—		—		—		—
Class A common stock issued for stock options exercised	170,371	—			—	—			—		295		—		295		—		295
Class A common stock issued for vested RSUs and PSUs	1,286,880	—			—	—			—		(2,118)		—		(2,118)		—		(2,118)

Class A common stock issued for Class C canceled	4,800,000	—			(4,800,000)	—			—		—		—		—		—		—
Distribution to noncontrolling interests	—	—			—	—			—		—		—		—		(973)		(973)
Issuance of Class A Common Stock related to the ATM Program (Note 7)	3,582,583	1			—	—			—		17,044				17,045				17,045


Subsequent remeasurement of redeemable noncontrolling interests	—	—			—	—			—		(171,197)		108,320		(62,877)		—		(62,877)

Net income attributable to noncontrolling interest	—	—			—	—			—		—		—		—		1,761		1,761
Net loss attributable to the Company	—	—			—	—			—		—		(80,057)		(80,057)		—		(80,057)
Balance, June 30, 2024	62,469,364	$	6		66,109,012	$	7		$	(12,825)	$	—	$	(222,203)	$	(235,015)	$	788	$	(234,227)


Three Months Ended June 30, 2023
	Members Units				Common Stock Class A			Common Stock Class B			Common Stock Class C			Treasury Stock		Paid-in Capital		Accumulated Deficit		Total Shareholders’ Deficit
	Units		Amount		Shares	Amount		Shares	Amount		Shares	Amount
Balance, March 31, 2023	—		$	—	16,021,803	$	2	10,566	$	—	68,140,188	$	6	$	(12,825)	$	—	$	(870,511)	$	(883,328)
Share-based compensation expense	—		—		—	—		—	—		—	—		—		985		—		985
Member distributions	—		—		—	—		—	—		—	—		—		—		(4,263)		(4,263)
Cumulative preferred dividends	—		—		—	—		—	—		—	—		—		(655)		—		(655)
Accretion of preferred stock discount	—		—		—	—		—	—		—	—		—		(13)		—		(13)

Class A common stock issued for warrants exercised	—		—		1,183,901	—		—	—		—	—		—		13,615		—		13,615




Recapitalization adjustment	—		—		—	—		—	—		—	—		—		(1,000)		—		(1,000)
Issuance of Class A Common Stock related to the Equity Facility	—		—		95,785	—		—	—		—	—		—		834		—		834
Issuance of Class C common stock related to earn-out awards	—		—		—	—		—	—		2,500,000	1		—		19,375		—		19,376
Subsequent remeasurement of redeemable noncontrolling interests	—		—		—	—		—	—		—	—		—		(33,141)		179,795		146,654
Other	—		—		—	—		—	—		—	—		—		—		2		2
Net income attributable to the Company	—		—		—	—		—	—		—	—		—		—		29,521		29,521
Balance, June 30, 2023	—		$	—	17,301,489	$	2	10,566	$	—	70,640,188	$	7	$	(12,825)	$	—	$	(665,456)	$	(678,272)


Six Months Ended June 30, 2023
	Members Units				Common Stock Class A			Common Stock Class B			Common Stock Class C			Treasury Stock		Paid-in Capital		Accumulated Deficit		Total Shareholders’ Deficit
	Units		Amount		Shares	Amount		Shares	Amount		Shares	Amount
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
Recapitalization	(122,527,000)		(1)		13,736,932	2		10,566	—		68,140,188	6		—		47,438		—		47,445
Conversion of SAFE Agreements	—		—		2,066,666	—		—	—		—	—		—		20,667		—		20,667
Issuance of warrants to preferred shareholders	—		—		—	—		—	—		—	—		—		173		—		173
Transaction costs	—		—		—	—		—	—		—	—		—		(24,445)		—		(24,445)
Establishment of the earn-out liabilities	—		—		—	—		—	—		—	—		—		(99,659)		—		(99,659)
Establishment of redeemable noncontrolling interest	—		—		—	—		—	—		—	—		—		85,865		—		85,865
Activities subsequent to the Business Combination
Share-based compensation expense	—		—		—	—		—	—		—	—		—		1,091		—		1,091
Member distributions	—		—		—	—		—	—		—	—		—		—		(4,263)		(4,263)
Cumulative preferred dividends	—		—		—	—		—	—		—	—		—		(983)		—		(983)
Accretion of preferred stock discount																(13)		—		(13)
Repurchase of common stock	—		—		—	—		—	—		—	—		(12,825)		—		—		(12,825)
Class A common stock issued for warrants exercised	—		—		1,402,106	—		—	—		—	—		—		16,124		—		16,124




Recapitalization adjustment	—		—		—	—		—	—		—	—		—		(1,000)		—		(1,000)
Issuance of Class A Common Stock related to Equity Facility	—		—		95,785	—		—	—		—	—		—		834		—		834
Issuance of Class C common stock related to earn-out awards	—	0	—		—	—		—	—		2,500,000	1		—		19,375		—		19,376
Other	—		—		—	—		—	—		—	—		—		—		2		2
Subsequent remeasurement of redeemable noncontrolling interests	—		—		—	—		—	—		—	—		—		(80,557)		(603,018)		(683,575)
Net income attributable to the Company	—		—		—	—		—	—		—	—		—		—		20,161		20,161
Balance, June 30, 2023	—		$	—	17,301,489	$	2	10,566	$	—	70,640,188	$	7	$	(12,825)	$	—	$	(665,456)	$	(678,272)

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

INTUITIVE MACHINES, INC.

Condensed Consolidated Statements of Cash Flows

(In thousands)

(Unaudited)


	Six Months Ended June 30,
	2024		2023
Cash flows from operating activities:
Net loss	$	(104,675)	$	(4,670)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation	837		615
Bad debt expense	440		124



Share-based compensation expense	5,895		1,192
Change in fair value of SAFE Agreements	—		2,353
Change in fair value of earn-out liabilities	488		(25,030)
Change in fair value of warrant liabilities	2,955		—
Loss on issuance of securities	68,080		—

Other	154		18
Changes in operating assets and liabilities:
Trade accounts receivable, net	(21,821)		(1,091)


Contract assets	(834)		2,272
Prepaid expenses	(172)		(2,154)
Other assets, net	244		358
Accounts payable and accrued expenses	7,145		13,373
Accounts payable – affiliated companies	2,257		559
Contract liabilities – current and long-term	(1,644)		(18,190)
Other liabilities	2,949		14,497
Net cash used in operating activities	(37,702)		(15,774)
Cash flows from investing activities:
Purchase of property and equipment	(3,793)		(20,200)
Net cash used in investing activities	(3,793)		(20,200)
Cash flows from financing activities:
Proceeds from Business Combination	—		8,055
Proceeds from issuance of Series A Preferred Stock	—		26,000
Transaction costs	(437)		(9,371)
Proceeds from borrowings	10,000		—
Repayment of loans	(15,000)		—
Proceeds from issuance of securities	27,481		—
Member distributions	—		(4,263)
Stock option exercises	300		22
Payment of withholding taxes from share-based awards	(2,123)		—
Forward purchase agreement termination	—		12,730
Warrants exercised	51,360		16,124
Distribution to noncontrolling interests	(973)		—

Net cash provided by financing activities	70,608		49,297
Net increase in cash, cash equivalents and restricted cash	29,113		13,323
Cash, cash equivalents and restricted cash at beginning of the period	4,560		25,826
Cash, cash equivalents and restricted cash at end of the period	33,673		39,149
Less: restricted cash	2,042		62
Cash and cash equivalents at end of the period	$	31,631	$	39,087

Supplemental disclosure of cash flow information
Cash paid for interest, net	$	371	$	972
Cash paid for taxes	$	274	$	34

Noncash financing activities:
Transaction costs	$	—	$	15,074
SAFE Agreements	$	—	$	20,667
Class A Common Stock related to Equity Facility (Note 7)	$	—	$	834

Conversion of Series A preferred stock (Note 7)	$	23,120	$	—
Preferred dividends	$	(608)	$	(983)

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

INTUITIVE MACHINES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - BUSINESS DESCRIPTION

Intuitive Machines, Inc. (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. IM is currently headquartered in Houston, Texas.

Intuitive Machines, Inc. 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”).

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, 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. and Intuitive Machines, LLC consummated the previously announced business combination (the “Business Combination”) and related transactions (the “Transactions”) contemplated by the Business Combination Agreement. As a result of the Transactions, all of the issued and outstanding common units of Intuitive Machines, LLC were converted into common stock of Intuitive Machines, Inc. using an exchange ratio of 0.5562 shares of Intuitive Machines, Inc. common stock per each unit of Intuitive Machines, LLC Common Unit. In addition, Intuitive Machines, LLC’s share-based compensation plan and related share-based compensation awards were exchanged or converted, as applicable, into common stock of Intuitive Machines, Inc.

In connection with the Transactions, the Company was reorganized into an Up-C structure, in which substantially all of the assets and business of the Company are held by Intuitive Machines, LLC and continue to operate through Intuitive Machines, LLC and its subsidiaries. Intuitive Machines, Inc. is a holding company whose only material asset is its equity ownership interests of Intuitive Machines, LLC. While Intuitive Machines, LLC became a subsidiary of Intuitive Machines, Inc. and Intuitive Machines, Inc. was appointed as its managing member, Intuitive Machines, LLC was deemed to be the acquirer in the Business Combination for accounting purposes. Accordingly, the Business Combination was accounted for as a reverse recapitalization, in which case the condensed consolidated financial statements of the Company represent a continuation of the Intuitive Machines, LLC and the issuance of common stock in exchange for the net assets of Intuitive Machines, Inc. was recorded at historical cost with no recognition of goodwill or other intangible assets. Operations prior to the Business Combination are those of Intuitive Machines, LLC. In addition, the number of shares subject to, and the exercise price of, the Company’s outstanding options were adjusted to reflect the Business Combination. 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 (the “Public Warrants”) began trading on Nasdaq under the symbols “LUNR” and “LUNRW,” respectively.

NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation and Principles of Consolidation

The Company’s unaudited condensed consolidated financial statements and related notes have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim reporting and pursuant to the rules and regulations of the SEC. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations relating to interim financial statements. Our condensed 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 Solutions”) 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 accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements as of and for the years ended December 31, 2023 and 2022 contained in our Annual Report on Form 10-K, filed with the SEC on March 25, 2024. Operating results for the three months ended June 30, 2024 are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. Management’s opinion is that all adjustments for a fair statement of the results for the interim periods have been made, and all adjustments are of a normal recurring nature or a description of the nature and amount of any adjustments other than normal recurring adjustments have been appropriately disclosed.

Emerging Growth Company

The Company is an emerging growth company (“EGC”), as defined in Section 2(a) of the Securities Act of 1933, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Section 102(b)(1) of the JOBS Act exempts EGCs from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. 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.

Use of Estimates

The preparation of our condensed consolidated financial statements in conformity with GAAP requires us to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and the accompanying notes. Due to the inherent uncertainty involved in making estimates, actual results could differ from those estimates.

The Company bases its estimates and assumptions on historical experience, other factors, including the current economic environment, and various other judgments that it believes to be reasonable under the circumstances. The Company adjusts such estimates and assumptions when facts and circumstances dictate. Changes in those estimates resulting from continuing changes in the economic environment will be reflected in the financial statements in future reporting periods.

Segment Reporting

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.

Concentration of Credit Risks

Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and accounts receivable. By their nature, all such financial instruments involve risks, including the credit risk of nonperformance by counterparties.

The majority of the Company’s cash and cash equivalents are held at major financial institutions. 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 limits its exposure to credit loss by maintaining its cash and cash equivalents with highly rated financial institutions. The Company has not experienced material losses on its deposits of cash and cash equivalents.

The Company monitors the creditworthiness of its customers to whom it grants credit terms in the normal course of its business. The Company evaluates the collectability of its accounts receivable based on known collection risks and historical experience. In circumstances where the Company is aware of a specific customer’s inability to meet its financial obligations to the Company (e.g., bankruptcy filings, substantial downgrading of credit ratings), the Company records a specific allowance for expected credit losses against amounts to reduce the net recognized receivable to the amount it reasonably believes will be collected and revenue recognition is deferred until the amount is collected and the contract is completed. For all other customers, the Company records allowances for credit losses based on the specific analysis of the customer’s ability to pay on an as needed basis.

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 90% and 92%, respectively, of the Company’s total revenue for the three and six months ended June 30, 2024, and accounted for 67% and 70%, respectively, of the Company’s total revenue for the three and six months ended June 30, 2023. The largest customer’s accounts receivable balance was 73% and 80% as of June 30, 2024 and December 31, 2023, respectively.

Major suppliers are defined as those individually comprising more than 10% of the annual goods or services purchased. For the six months ended June 30, 2024 and 2023, there was one major supplier that accounted for 20% and 34%, respectively, of the goods and services purchased, and no major supplier for the three months ended June 30, 2024 and 2023. As of June 30, 2024, there was one major supplier that accounted for 17% of the accounts payable balance and no major supplier as of December 31, 2023 with an accounts payable balance representing more than 10%.

Liquidity and Capital Resources

The unaudited condensed consolidated financial statements as of June 30, 2024 and for the six months ended June 30, 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 June 30, 2024, the Company had cash and cash equivalents of $31.6 million and a working capital deficit of $1.9 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), proceeds from warrant exercises, and proceeds from the issuance of bank debt. For the six months ended June 30, 2024, the Company received approximately $78.8 million in gross proceeds from warrant exercises, sales of stock under our ATM program and other equity transactions, as further described in Notes 7 and 8.

In connection with the Business Combination as discussed in Notes 1 and 7, 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. 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 7. During the second quarter of 2024, the Company raised approximately $17.0 million in net proceeds pursuant to the ATM Program, followed by an additional raise of $4.1 million in net proceeds in early July 2024.

Management believes that the cash and cash equivalents as of June 30, 2024, and the additional liquidity available with the Cantor Purchase Agreement and Controlled Equity Offering Sales Agreement discussed in Note 7, 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.

Transaction Costs

Business Combination

Transaction costs consist of direct legal, consulting, audit and other fees related to the consummation of the Business Combination and related transactions as described further in Note 1. These costs were initially capitalized as incurred and recorded as prepaid expenses in our condensed consolidated balance sheets and totaled $5.3 million as of December 31, 2022. Upon the completion of the Business Combination, transaction costs directly related to the issuance of shares were netted against the proceeds from the merger and recorded as an offset in additional paid-in capital upon consummation of the transactions. Total transaction costs charged to additional paid in capital were approximately $24.4 million during the six months ended June 30, 2023. Approximately, $9.4 million in transaction costs were paid by Intuitive Machines, LLC during the six months ended June 30, 2023. The remaining difference was paid by Intuitive Machines, LLC in 2022 or by IPAX prior to the closing of the Business Combination.

Recent Accounting Pronouncements

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which focuses on the rate reconciliation and income taxes paid. ASU No. 2023-09 requires a public business entity to disclose, on an annual basis, a tabular rate reconciliation using both percentages and currency amounts, broken out into specified categories with certain reconciling items further broken out by nature and jurisdiction to the extent those items exceed a specified threshold. In addition, all entities are required to disclose income taxes paid, net of refunds received disaggregated by federal, state/local, and foreign and by jurisdiction if the amount is at least 5% of total income tax payments, net of refunds received. For public business entities, the new standard is effective for annual periods beginning after December 15, 2024, with early adoption permitted. An entity may apply the amendments in this ASU prospectively by providing the revised disclosures for the period ending December 31, 2025 and continue to provide the pre-ASU disclosures for the prior periods or may apply the amendments retrospectively by providing the revised disclosures for all period presented. The Company is assessing the potential impact of adopting the ASU on its financial statements.

In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires a public entity to disclose significant segment expenses and other segment items on an annual and interim basis and provide in interim periods all disclosures about a reportable segment’s profit or loss and assets that are currently required annually. 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. 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.

Other Current Liabilities

As of June 30, 2024 and December 31, 2023, other current liabilities consisted of the following (in thousands):


	June 30, 2024		December 31, 2023
Payroll accruals	7,005		2,553
Income tax payable	20		20
Professional fees accruals	514		832
Commercial insurance financing	634		493
Commitment shares liability (see Note 7)	334		755
Other accrued liabilities	226		94
Other current liabilities	$	8,733	$

Intuitive Machines, Inc. [LUNRW] Filings
Intuitive Machines, Inc. [LUNR] Filings
10-Q	[2024-08-13]
10-Q	[2024-05-14]
10-K	[2024-03-25]
S-1	[2024-01-26]
10-Q	[2023-11-13]
S-1	[2023-09-21]
10-Q	[2023-08-14]
10-Q	[2023-05-15]
S-1	[2023-03-31]
S-1	[2023-03-31]
10-K	[2023-03-31]
10-Q	[2022-11-10]
10-Q	[2022-08-12]
10-Q	[2022-05-13]
10-K	[2022-04-14]
10-Q	[2021-11-15]
S-1	[2021-03-05]

Intuitive Machines, Inc. [LUNRW] Filings

Intuitive Machines, Inc. [LUNR] Filings