Intuitive Machines(LUNR) - 2024 Q3 - Quarterly Report

Part I – Financial Information This section presents the unaudited condensed consolidated financial statements and notes on key accounting policies and transactions Item 1. Financial Statements This section presents the unaudited condensed consolidated financial statements, including balance sheets, statements of operations, equity, cash flows, and detailed notes Unaudited Condensed Consolidated Balance Sheets This section provides a snapshot of the company's financial position, detailing assets, liabilities, and shareholders' deficit | Metric | September 30, 2024 (in thousands) | December 31, 2023 (in thousands) | | :---------------------------------- | :-------------------------------- | :--------------------------------- | | Cash and cash equivalents | $89,605 | $4,498 | | Total current assets | $168,267 | $31,611 | | Total assets | $224,798 | $85,908 | | Total current liabilities | $95,314 | $81,533 | | Total liabilities | $229,335 | $137,480 | | Total shareholders' deficit | $(495,353) | $(261,435) | - The company experienced a significant increase in cash and cash equivalents, rising from $4.498 million at December 31, 2023, to $89.605 million at September 30, 2024[7] - Total assets more than doubled, from $85.908 million to $224.798 million, while total liabilities also increased substantially from $137.480 million to $229.335 million[7] Unaudited Condensed Consolidated Statements of Operations This section outlines the company's financial performance, including revenue, operating loss, and net income (loss) over specified periods | Metric | Three Months Ended Sep 30, 2024 (in thousands) | Three Months Ended Sep 30, 2023 (in thousands) | Nine Months Ended Sep 30, 2024 (in thousands) | Nine Months Ended Sep 30, 2023 (in thousands) | | :------------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Revenue | $58,478 | $12,731 | $173,338 | $48,960 | | Operating loss | $(13,724) | $(24,004) | $(43,999) | $(53,628) | | Net income (loss) | $(80,411) | $14,311 | $(181,787) | $7,163 | | Net income (loss) attributable to Class A common shareholders | $(55,543) | $32,629 | $(134,966) | $51,678 | | Net income (loss) per share of Class A common stock - basic | $(0.83) | $1.87 | $(2.55) | $3.17 | - Revenue significantly increased by 359% for the three months ended September 30, 2024, and by 254% for the nine months ended September 30, 2024, compared to the respective prior periods[9] - The company reported a net loss of $(80.411) million for the three months and $(181.787) million for the nine months ended September 30, 2024, a substantial decline from net income in the prior year periods, primarily due to unfavorable changes in fair value of earn-out and warrant liabilities[9] Unaudited Condensed Consolidated Statements of Mezzanine Equity This section details changes in mezzanine equity, including Series A Preferred Stock and Redeemable Noncontrolling Interest | Metric | September 30, 2024 (in thousands) | December 31, 2023 (in thousands) | | :------------------------------------------ | :-------------------------------- | :--------------------------------- | | Series A Preferred Stock Amount | $5,843 | $28,201 | | Redeemable Noncontrolling Interest | $484,973 | $181,662 | - Series A Preferred Stock amount decreased significantly from $28.201 million at December 31, 2023, to $5.843 million at September 30, 2024, primarily due to the conversion of 21,000 shares into Class A Common Stock[12][103] - Redeemable Noncontrolling Interests increased substantially from $181.662 million to $484.973 million, driven by subsequent remeasurement[12] Unaudited Condensed Consolidated Statements of Shareholders' Deficit This section presents changes in shareholders' deficit, including common stock shares and accumulated deficit | Metric | September 30, 2024 (in thousands) | December 31, 2023 (in thousands) | | :------------------------------------------ | :-------------------------------- | :--------------------------------- | | Class A Common Stock Shares | 81,351,656 | 22,279,876 | | Class C Common Stock Shares | 60,245,138 | 70,909,012 | | Accumulated Deficit | $(483,998) | $(248,619) |\n| Total Shareholders' Deficit | $(495,353) | $(261,435) | - Class A Common Stock shares increased significantly from 22.28 million to 81.35 million, primarily due to issuances related to warrant exercises and the ATM Program[15][16] - Accumulated deficit nearly doubled from $(248.619) million to $(483.998) million, reflecting the net losses incurred during the period[15][16] Unaudited Condensed Consolidated Statements of Cash Flows This section summarizes cash inflows and outflows from operating, investing, and financing activities | Metric | Nine Months Ended Sep 30, 2024 (in thousands) | Nine Months Ended Sep 30, 2023 (in thousands) | | :------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Net cash used in operating activities | $(55,622) | $(22,933) | | Net cash used in investing activities | $(5,185) | $(27,668) | | Net cash provided by financing activities | $147,894 | $65,489 | | Net increase in cash, cash equivalents and restricted cash | $87,087 | $14,888 | | Cash and cash equivalents at end of the period | $89,605 | $40,652 | - Net cash used in operating activities increased from $(22.933) million in 2023 to $(55.622) million in 2024[19] - Net cash provided by financing activities significantly increased from $65.489 million in 2023 to $147.894 million in 2024, primarily due to proceeds from warrant exercises and stock issuance under the ATM Program[19] Notes to Unaudited Condensed Consolidated Financial Statements This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements NOTE 1 - BUSINESS DESCRIPTION This note describes Intuitive Machines' core business of space products and services, focusing on lunar exploration and infrastructure - Intuitive Machines, Inc. designs, manufactures, and operates space products and services, with a near-term focus on creating and operating space systems and infrastructure on and around the Moon to support scientific and human exploration[21] - The company completed a Business Combination on February 13, 2023, reorganizing into an Up-C structure where Intuitive Machines, Inc. is a holding company and Intuitive Machines, LLC is the operating entity, accounted for as a reverse recapitalization[23][24] NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES This note outlines the key accounting principles and estimates used in preparing the financial statements, including revenue recognition and liquidity assessments - The company operates in one reportable segment, as reviewed by the chief operating decision-maker[32] - One major customer accounted for 90% and 91% of total revenue for the three and nine months ended September 30, 2024, respectively, indicating high customer concentration[37] - The company recorded impairment charges of approximately $5.0 million for the three and nine months ended September 30, 2024, due to non-compliant assets under development by a third-party subcontractor[39] - Management believes current cash and cash equivalents of $89.6 million and working capital of $73.0 million are sufficient to fund short-term liquidity needs for at least the next twelve months[42][44] - The company corrected immaterial errors in previously issued financial statements related to historical estimated contract losses, resulting in an understatement of Net income attributable to the Company by approximately $5.1 million as of June 30, 2024[50][51] NOTE 3 - REVENUE This note details the company's revenue recognition policies and disaggregates revenue by contract type | Contract Type | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :-------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Cost reimbursable | $33,844 (58%) | $0 (0%) | $115,581 (67%) | $0 (0%) | | Fixed price | $23,097 (39%) | $10,259 (81%) | $52,759 (30%) | $42,803 (87%) | | Time and materials | $1,537 (3%) | $2,472 (19%) | $4,998 (3%) | $6,157 (13%) | | Total Revenue | $58,478 (100%) | $12,731 (100%) | $173,338 (100%) | $48,960 (100%) | - Cost reimbursable contracts became a significant revenue source in 2024, accounting for 58% and 67% of total revenue for the three and nine months ended September 30, 2024, respectively, compared to 0% in the prior year[66] - The company recorded net losses related to contracts of $1.7 million and $22.8 million for the three and nine months ended September 30, 2024, respectively, primarily due to increased estimated costs on lunar payload services contracts[71][72][73][74] - Remaining performance obligations for fixed-price contracts totaled $195.5 million as of September 30, 2024, with 10-15% expected to be recognized in the next 3 months and 45-50% in 2025[76] NOTE 4 - PROPERTY AND EQUIPMENT, NET This note provides information on the company's property and equipment, including construction in progress and related impairment charges | Category | September 30, 2024 (in thousands) | December 31, 2023 (in thousands) | | :-------------------------- | :-------------------------------- | :--------------------------------- | | Construction in progress | $11,374 | $13,795 | | Property and equipment, net | $17,170 | $18,349 | - Construction in progress decreased from $13.795 million to $11.374 million, partly due to an impairment charge[79] - An impairment charge of approximately $5.0 million was recorded for the three and nine months ended September 30, 2024, related to non-compliant assets under development by a third-party subcontractor[80] NOTE 5 - DEBT This note details the company's debt instruments, including credit facilities and bridge loans, and their repayment status | Debt Type | September 30, 2024 (in thousands) | December 31, 2023 (in thousands) | | :-------------------------- | :-------------------------------- | :--------------------------------- | | Credit Mobilization Facility | $0 | $8,000 | - The $8.0 million Credit Mobilization Facility was fully repaid by July 2024 and subsequently terminated[83] - A $10.0 million Bridge Loan was entered into on January 10, 2024, and fully repaid on January 29, 2024, through contributions from a guarantor[84][86] NOTE 6 - INCOME TAXES This note explains the company's income tax expense, effective tax rate, and Tax Receivable Agreement liability - The company recognized a combined U.S. federal and state income tax expense of $0.050 million for the three and nine months ended September 30, 2024[88] - The effective tax rate for the three and nine months ended September 30, 2024, was (0.06%) and (0.03%) respectively, differing from the statutory rate primarily due to deferred taxes with no recorded benefit and losses attributable to noncontrolling interest unitholders[88] - A Tax Receivable Agreement (TRA) liability of $0.473 million was recorded as of September 30, 2024, as the 5% exchange threshold for TRA Holders was met[91] NOTE 7 - MEZZANINE EQUITY AND EQUITY This note details changes in mezzanine equity and equity, including preferred stock conversions and common stock issuances - The Series A Preferred Stock conversion price was reduced from $12.00 to $3.00 per share due to the Private Placement Transaction and Warrant Exercise Agreement[102] - 21,000 shares of Series A Preferred Stock were converted into 7,738,743 shares of Class A Common Stock in February 2024, increasing equity by approximately $23.1 million[103] - The Cantor Purchase Agreement, an equity facility for up to $50.0 million in Class A Common Stock sales, contractually terminated on September 1, 2024, with no shares sold under it[99] - Under the Controlled Equity Offering Sales Agreement (ATM Program), the company sold 16,521,612 shares of Class A Common Stock, raising approximately $97.5 million net of fees, as of September 30, 2024[101] NOTE 8 - WARRANTS This note provides details on warrant exercises, issuances, and changes in fair value of warrant liabilities - During the nine months ended September 30, 2024, 101 Public Warrants were exercised, resulting in the issuance of Class A Common Stock[110] - The Initial Series B Warrant was fully exercised in January 2024, generating approximately $11.8 million in cash proceeds and resulting in a $1.3 million gain on issuance of securities[116] - New Series A and B Warrants were issued with an initial fair value of $10.8 million and $5.7 million, respectively, recorded as a $16.6 million loss on issuance of securities[117] - Conversion Warrants (Series A and B) had an initial fair value of $10.0 million and $5.5 million, respectively, resulting in a $5.5 million loss on issuance of securities[122] - As of September 30, 2024, the fair value of Conversion Series A and B Warrants increased to $27.8 million and $22.0 million, respectively, leading to a $34.3 million loss recognized as change in fair value of warrant liabilities[122] NOTE 9 - SHARE-BASED COMPENSATION This note outlines the company's share-based compensation plans, including options, RSUs, and PSUs, and related expenses | Metric | September 30, 2024 | | :------------------------------------------ | :------------------- | | Outstanding Options (2021 Plan) | 1,027,451 | | Exercisable Options (2021 Plan) | 579,903 | | Balance of RSUs and PSUs (2023 Plan) | 3,251,206 | - Share-based compensation expense related to options was $0.298 million for the nine months ended September 30, 2024, and $0.658 million for the same period in 2023[128] - Share-based compensation expense for RSUs was $3.7 million and for PSUs was $3.2 million for the nine months ended September 30, 2024[133] - As of September 30, 2024, $11.4 million in estimated unrecognized share-based compensation costs related to unvested RSUs is expected to be recognized over 2.88 years[133] NOTE 10 - FAIR VALUE MEASUREMENTS This note details the fair value measurements of earn-out and warrant liabilities and their impact on financial results | Liability Type | September 30, 2024 (in thousands) | December 31, 2023 (in thousands) | | :------------------------------------------ | :-------------------------------- | :--------------------------------- | | Earn-out liabilities | $47,848 | $14,032 | | Warrant liabilities | $49,795 | $11,294 | | Total liabilities measured at fair value | $97,643 | $25,326 | - Earn-out liabilities increased from $14.032 million to $47.848 million, with a change in fair value of $33.816 million recognized for the nine months ended September 30, 2024[135][136] - Warrant liabilities significantly increased from $11.294 million to $49.795 million, with a change in fair value of $36.641 million recognized for the nine months ended September 30, 2024[135][136] NOTE 11 - NET INCOME (LOSS) PER SHARE This note presents the calculation of basic and diluted net income (loss) per share for Class A common stock | Metric | Three Months Ended Sep 30, 2024 | Three Months Ended Sep 30, 2023 | Nine Months Ended Sep 30, 2024 | Nine Months Ended Sep 30, 2023 | | :------------------------------------------------ | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Net income (loss) per share of Class A common stock - basic | $(0.83) | $1.87 | $(2.55) | $3.17 | | Net income (loss) per share of Class A common stock - diluted | $(0.83) | $1.27 | $(2.55) | $2.14 | - Basic and diluted net loss per share for Class A common stock were $(0.83) and $(2.55) for the three and nine months ended September 30, 2024, respectively, reflecting the overall net loss[148] - Potentially dilutive securities, including RSUs, options, Series A Preferred Stock, and warrants, were excluded from diluted EPS computation during loss periods as their effect would be anti-dilutive[147][151] NOTE 12 - COMMITMENTS AND CONTINGENCIES This note discloses the company's legal proceedings, purchase obligations, and other contractual commitments - The company is involved in various legal proceedings but management believes the outcome will not have a material adverse effect on financial statements[152] - As of September 30, 2024, the company had remaining purchase obligations under non-cancelable commitments with nine vendors totaling $23.8 million, with $19.0 million due within the next twelve months[153] NOTE 13 - RELATED PARTY TRANSACTIONS This note details transactions with related parties, including revenue and expenses with affiliates and joint venture partners - Revenue from Axiom Space, Inc. (related party) was minimal, $0 and $0.050 million for the three and nine months ended September 30, 2024, respectively[155] - Expenses with IBX, LLC and PTX, LLC (related parties) were $0.030 million and $0.054 million for the three and nine months ended September 30, 2024, respectively, a decrease from prior year[156] - Affiliate revenue from KBR, Inc. (10% owner of SNS) was $0.2 million and $1.5 million for the three and nine months ended September 30, 2024, respectively[157] - SNS incurred $8.5 million and $27.1 million in cost of revenue with KBR for the three and nine months ended September 30, 2024, respectively, related to the OMES III contract[158] NOTE 14 - VARIABLE INTEREST ENTITIES This note explains the company's consolidation of Variable Interest Entities (VIEs), including joint ventures like Space Network Solutions, LLC - The company consolidates Space Network Solutions, LLC (SNS), a joint venture with KBR (90% IM, 10% KBR), as a Variable Interest Entity (VIE) where Intuitive Machines is the primary beneficiary[164] - SNS LLC's total assets increased from $13.7 million at December 31, 2023, to $27.0 million at September 30, 2024[165] - The OMES III JV Agreement within SNS is also a standalone VIE, with Intuitive Machines as the primary beneficiary, holding a 47% profits interest[165] - The IX, LLC joint venture with X-energy is consolidated as a VIE, with Intuitive Machines holding a 51% interest and being the primary beneficiary[166] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's analysis of the company's financial condition, operational results, business model, recent developments, liquidity, and critical accounting policies Overview This section provides a high-level summary of Intuitive Machines' business, recent mission successes, and contract awards - Intuitive Machines is a space infrastructure and services company focused on establishing lunar infrastructure and commerce[171] - On February 22, 2024, the Nova-C lander on the IM-1 mission successfully soft-landed on the lunar surface, marking the first U.S. vehicle to do so since 1972 and validating the company's delivery, data & communications, and autonomous operations capabilities[173] - The company has three remaining Commercial Lunar Payload Services (CLPS) awards (IM-2, IM-3, IM-4) as of September 30, 2024, with IM-4 awarded in August 2024[173] Our Business Model This section describes the company's revenue generation through orbital and lunar access services, data transmission, and infrastructure-as-a-service across its business units - The company generates revenue primarily through orbital and lunar access services and cislunar data transmission for science, technology, and infrastructure[176] - The business operates under three service pillars: delivery services, data transmission & analytic services, and infrastructure-as-a-service, across four business units: Lunar Access Services, Orbital Services, Lunar Data Services, and Space Products and Infrastructure[178] - Lunar Access Services focuses on CLPS contracts for NASA and commercial customers, with three remaining missions on the manifest[179][180] - Lunar Data Services aims to establish a private and secure Lunar Data Network (LDN) for communications, navigation, and imagery to and from the Moon, enhanced by future lander missions and the NASA Near Space Network (NSN) contract[182][183] Recent Developments This section highlights significant recent events, including major contract awards from NASA - In September 2024, NASA awarded the company a Near Space Network (NSN) contract with a maximum potential value of $4.82 billion over five years, including initial Task Orders totaling $150.0 million[186] - In August 2024, NASA awarded a $116.9 million CLPS contract (IM-4) to deliver six science and technology payloads to the Moon's South Pole, marking the company's fourth CLPS award[187] Key Factors Affecting Our Performance This section discusses internal and external factors influencing the company's financial performance, including macroeconomic pressures and growth strategies - The company monitors inflation and macroeconomic pressures, including rising interest rates and supply chain disruptions, which could impact operations, though not yet materially[189][190][191] - Future success depends on expanding lunar mission operations, with three additional funded missions and a backlog of $316.2 million as of September 30, 2024[192] - Growth is tied to expanding product and service offerings, requiring significant investment in lunar and data programs and demonstrating reliability through successful lunar landings[194][195][196] - The company's growth is largely dependent on capitalizing on increased government spending and private investment in the space economy, with U.S. federal government space exploration budgets increasing by approximately 15.8% from 2019 to 2024[198] Components of Results of Operations This section explains the key components of the company's financial results, including revenue recognition, cost of revenue, and operating expenses - Revenue is recognized over time, generally using the cost-to-cost method for long-term contracts, with variable consideration constrained until uncertainty is resolved (e.g., successful mission landing)[201][202] - Cost of revenue is expected to increase in absolute dollars but decrease as a percentage of revenue over time due to growth and cost-optimization initiatives[205] - General and administrative expenses are expected to increase in absolute dollars due to corporate growth and public company operating costs[208] - Changes in fair value of earn-out and warrant liabilities are recognized in other income (expense) on the condensed consolidated statement of operations[210][211] Results of Operations This section provides a detailed analysis of the company's financial performance for the periods presented, including revenue, expenses, and net income (loss) | Metric | Three Months Ended Sep 30, 2024 (in thousands) | Three Months Ended Sep 30, 2023 (in thousands) | Nine Months Ended Sep 30, 2024 (in thousands) | Nine Months Ended Sep 30, 2023 (in thousands) | | :------------------------------------------------ | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Revenue | $58,478 | $12,731 | $173,338 | $48,960 | | Total operating expenses | $72,202 | $36,735 | $217,337 | $102,588 | | Operating loss | $(13,724) | $(24,004) | $(43,999) | $(53,628) | | Total other income (expense), net | $(66,637) | $38,920 | $(137,738) | $61,083 | | Net income (loss) attributable to Class A common shareholders | $(55,543) | $32,629 | $(134,966) | $51,678 | - Revenue increased by $45.7 million (359%) for the three months and $124.4 million (254%) for the nine months ended September 30, 2024, primarily due to the OMES III contract and IM-1 mission completion[227][229][230][232] - Total operating expenses increased by $27.9 million (105%) for the three months and $97.6 million (132%) for the nine months ended September 30, 2024, driven by OMES III contract costs and new contracts[234][235][236][237] - Other income (expense), net, saw an unfavorable change of $105.6 million for the three months and $198.8 million for the nine months ended September 30, 2024, mainly due to unfavorable changes in fair value of earn-out and warrant liabilities[243][244] Key Business Metrics and Non-GAAP Financial Measures This section presents key operational metrics and non-GAAP financial measures used to evaluate the company's performance, such as backlog and Adjusted EBITDA | Metric | September 30, 2024 (in thousands) | December 31, 2023 (in thousands) | | :------- | :-------------------------------- | :--------------------------------- | | Backlog | $316,164 | $268,566 | - Backlog increased by $47.6 million to $316.2 million as of September 30, 2024, driven by new awards like the IM-4 CLPS and NSN contracts[250] - The company expects to recognize 15-20% of its backlog over the remainder of 2024 and 45-50% in 2025[249] | Metric | Three Months Ended Sep 30, 2024 (in thousands) | Three Months Ended Sep 30, 2023 (in thousands) | Nine Months Ended Sep 30, 2024 (in thousands) | Nine Months Ended Sep 30, 2023 (in thousands) | | :-------------------------------- | :--------------------------------------------- | :--------------------------------------------- | :-------------------------------------------- | :-------------------------------------------- | | Net income (loss) | $(80,411) | $14,311 | $(181,787) | $7,163 | | Adjusted EBITDA | $(6,913) | $(22,119) | $(30,456) | $(49,936) | | Metric | Nine Months Ended Sep 30, 2024 (in thousands) | Nine Months Ended Sep 30, 2023 (in thousands) | | :------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Net cash used in operating activities | $(55,622) | $(22,933) | | Free cash flow | $(60,807) | $(50,601) | Liquidity and Capital Resources This section assesses the company's ability to meet its short-term and long-term financial obligations, including cash position and financing activities - As of September 30, 2024, the company had $89.6 million in cash and cash equivalents and $73.0 million in working capital[263] - For the nine months ended September 30, 2024, the company received approximately $161.4 million in gross proceeds from warrant exercises, ATM program sales, and other equity transactions[263] - The $8.0 million Live Oak Credit Mobilization Facility was fully repaid and terminated in July 2024[266] - A $10.0 million Bridge Loan was obtained in January 2024 and fully repaid later that month through a guarantor's contributions[267][269] - The company filed a shelf registration statement for up to $300.0 million in Class A common stock and warrants, having already raised approximately $97.5 million in net proceeds through an at-the-market facility[270] Cash Flows This section analyzes the company's cash flows from operating, investing, and financing activities | Activity | Nine Months Ended Sep 30, 2024 (in thousands) | Nine Months Ended Sep 30, 2023 (in thousands) | | :------------------------------------ | :-------------------------------------------- | :-------------------------------------------- | | Net cash used in operating activities | $(55,622) | $(22,933) | | Net cash used in investing activities | $(5,185) | $(27,668) | | Net cash provided by financing activities | $147,894 | $65,489 | - Operating activities used $55.6 million in cash for the nine months ended September 30, 2024, an increase from $22.9 million used in the prior year[272] - Investing activities used $5.2 million, a favorable change of $22.5 million compared to the prior year, primarily due to reduced capital expenditures on the lunar operations center[273] - Financing activities provided $147.9 million, significantly higher than $65.5 million in the prior year, driven by proceeds from warrant exercises and securities issuance[274] Contractual Obligations and Commitments This section details the company's contractual obligations, including lease agreements and purchase commitments - The company leases real estate for office, administrative, research, marketing, and light manufacturing operations, with operating leases expiring through 2043[277] - The Lunar Production and Operations Center (LPOC) lease commenced in Q3 2023, with $31.3 million in right-of-use assets and $28.4 million in operating lease liabilities as of September 30, 2024[280] - New lease agreements for facilities in Maryland and Arizona were commenced in Q3 2024, adding $3.1 million and $1.2 million, respectively, in right-of-use assets and operating lease liabilities[281] - Remaining purchase obligations under non-cancelable commitments with vendors totaled $23.8 million as of September 30, 2024[283] Off-Balance Sheet Arrangements This section confirms the absence of any off-balance sheet arrangements - The company has no off-balance sheet arrangements[284] Critical Accounting Policies and Estimates This section describes the accounting policies and estimates that require significant judgment and have a material impact on the financial statements - Revenue recognition for long-term contracts involves complex estimations of total revenue and cost at completion, with variable consideration included only when a significant reversal of cumulative revenue is improbable[290][291] - The company is an 'emerging growth company' and has elected to use the extended transition period for complying with new or revised financial accounting standards, which may affect comparability with other public companies[294][295] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Intuitive Machines, Inc. is exempt from providing quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[296] Item 4. Controls and Procedures Management evaluated the effectiveness of disclosure controls and procedures, concluding they were effective with no material changes to internal control over financial reporting - Disclosure controls and procedures were evaluated and deemed effective as of September 30, 2024[297] - No material changes to internal control over financial reporting occurred during the three months ended September 30, 2024[298] Part II – Other Information This part contains additional information not included in the financial statements, such as legal proceedings, risk factors, and exhibits Item 1. Legal Proceedings The company is involved in various legal proceedings, but management anticipates no material adverse effect on financial statements - The company is a party to various lawsuits and claims in the ordinary course of business[300] - Management believes the outcome of these legal matters will not have a material adverse effect on the condensed consolidated financial statements[300] Item 1A. Risk Factors This section refers to previously disclosed risk factors, noting no material changes as of the current report's filing date - No material changes to risk factors have been disclosed as of the date of this Quarterly Report, beyond those in the 2023 Annual Report on Form 10-K and prior Quarterly Reports[301] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds No unregistered sales of equity securities or use of proceeds were reported for the period - No unregistered sales of equity securities or use of proceeds to report[301] Item 3. Defaults Upon Senior Securities No defaults upon senior securities were reported for the period - No defaults upon senior securities to report[302] Item 4. Mine Safety Disclosures Mine safety disclosures are not applicable to the company - Mine safety disclosures are not applicable[302] Item 5. Other Information This section discloses Rule 10b5-1 and Non-Rule 10b5-1 trading arrangements adopted or terminated by officers or directors - Steven Vontur, Chief Accounting Officer and Controller, adopted a trading arrangement on September 13, 2024, for the sale of up to 42,500 shares of Class A common stock by August 11, 2025, with predetermined minimum pricing conditions[302] Item 6. Exhibits This section lists all exhibits filed or incorporated by reference into the Quarterly Report, including certifications and XBRL documents - Includes certifications from the Chief Executive Officer and Chief Financial Officer (Exhibits 31.1, 31.2, 32.1, 32.2)[304] - Includes Inline XBRL Instance Document and Taxonomy Extension Documents (Exhibits 101.INS, 101.SCH, 101.CAL, 101.DEF, 101.LAB, 101.PRE)[304]