LUNR 10-Q: Smart Summary

• Business description: Intuitive Machines, Inc. (IM) is a space technology, infrastructure, and services company headquartered in Houston, Texas, focused on establishing cislunar infrastructure and commerce, where cislunar encompasses objects in orbit in the Earth-Moon system and on the Lunar surface.
• Corporate structure: The Company operates through an Up-C structure in which substantially all assets and business are held by Intuitive Machines, LLC; Intuitive Machines, Inc. is a holding company whose only material asset is its equity ownership interests in Intuitive Machines, LLC.
• Business Combination: On February 13, 2023, IPAX and Intuitive Machines, LLC consummated the Business Combination; all outstanding common units of Intuitive Machines, LLC were converted into common stock at an exchange ratio of 0.5562 shares per unit, and the transaction was accounted for as a reverse recapitalization with no recognition of goodwill or other intangible assets.
• Warrant redemption: Class A Common Stock and Warrants trade on Nasdaq under 'LUNR' and 'LUNRW'; on February 4, 2025, the Company announced redemption of all outstanding publicly issued Warrants, with suspension of trading effective before the market opened on March 6, 2025.

• Consolidation scope: The condensed consolidated financial statements include Intuitive Machines, Lanteris Space Holdings LLC (Lanteris), KinetX Inc. (KinetX), Space Network Solutions, LLC (SNS or Space Network Solutions) a majority-owned subsidiary, and IX, LLC, a variable interest entity (VIE) for which the Company is the primary beneficiary.
• Reclassifications: Certain prior period amounts were reclassified to a separate line item in the condensed consolidated balance sheets and condensed consolidated statement of operations; these reclassifications did not result in any changes to previously reported net income.
• Customer and supplier concentration: For the three months ended March 31, 2026, four major customers accounted for 36%, 26%, 13%, and 13% of total revenue, and one major customer accounted for 78% of total revenue for the three months ended March 31, 2025; as of March 31, 2026, four major customers accounted for 37%, 12%, 19%, and 14% of the accounts receivable balance, while as of December 31, 2025, three major customers accounted for 49%, 23%, and 11%; one major supplier accounted for 11% of goods and services purchased during the three months ended March 31, 2026 and 19% of accounts payable as of March 31, 2026.
• Acquisition of Lanteris and liquidity: On January 13, 2026, the Company acquired 100% of Lanteris for aggregate consideration of $851M ($403.3M cash, $43.7M in transaction bonuses deemed consideration, and 22,991,028 shares of Class A Common Stock valued at $404M at $17.57 per share); on February 27, 2026, the Company sold 11,574,069 shares of Class A Common Stock at $15.12 per share for aggregate proceeds of $175M, incurring $7.5M in related transaction costs; acquisition-related transaction costs for Q1 2026 totaled approximately $20M recorded to general and administrative expenses; as of March 31, 2026, cash and cash equivalents were $231.6M and working capital was $89.8M.
• Warranty and pension liabilities assumed: Warranty and after-sale service liabilities assumed from Lanteris totaled $13.3M at the January 13, 2026 acquisition date, declining to $11.7M as of March 31, 2026, with the $1.6M change attributable to payments and uses; the Company also assumed frozen (since December 31, 2013) defined benefit pension and other postretirement benefit plans from Lanteris, with a current pension liability of $1.9M as of March 31, 2026.

• Company acquired Lanteris Space Holdings LLC (completed January 13, 2026): Total acquisition-date fair value of consideration transferred was approximately $851M, consisting of $403.3M in cash, $43.7M of cash transaction bonuses (included in consideration as they had no required service conditions), and 22,991,028 shares of Class A Common Stock valued at $404M at the acquisition-date closing price of $17.57 per share; the acquisition expands the Company's spacecraft manufacturing and space systems capabilities; goodwill of $361.1M was recorded, primarily representing expected growth synergies, developed workforce, and future opportunities, and is partially deductible for income tax purposes; acquisition-related costs of $29.4M were incurred as of March 31, 2026 ($10.4M in Q4 2025 and $19M in Q1 2026), recorded in general and administrative expense; Lanteris contributed revenues of $141.6M and operating income of $200,000 to the Company's condensed consolidated statement of operations for the three months ended March 31, 2026; all purchase price allocation values remain preliminary.
• Company acquired KinetX (completed October 1, 2025): Total consideration was approximately $31.3M, consisting of cash consideration of $15M, seller payable adjustments of $1.1M treated as consideration transferred, and 1,104,178 shares of Class A Common Stock valued at $11.7M at the acquisition-date closing price of $10.61 per share; approximately 329,827 shares valued at $3.5M were held back in escrow and accounted for as contingent consideration recorded as a liability; KinetX is a privately-held, Arizona-based aerospace company with more than 30 years of experience delivering deep-space navigation, systems engineering, ground software, and constellation mission design to U.S. government and international customers; goodwill of $18.8M was recorded, primarily representing expected synergies, assembled workforce, and future growth opportunities, and is not fully deductible for income tax purposes; KinetX contributed revenues of $1.5M and nil operating loss for the three months ended March 31, 2026; all purchase price allocation values remain preliminary.

• Contract mix shift: Fixed price revenue grew to 87% of total revenue for the three months ended March 31, 2026, up from 61% in the prior-year period, while cost reimbursable fell to 10% from 36%, reflecting a significant change in contract composition.
• Customer mix: Civil customers represented 38% ($71.7M) and Commercial 33% ($61.1M) of the three months ended March 31, 2026 revenue, with National security growing to 27% ($50.9M) from just 1% ($355,000) in the prior-year period; foreign customer revenue was nil for the three months ended March 31, 2026 vs. 8% of total revenues in the prior-year period.
• Contract assets: Unbilled receivables rose to $41.3M as of March 31, 2026 from $12.2M as of December 31, 2025, with approximately $23.5M of the March 31, 2026 balance related to the Lanteris acquisition; deferred contract cost amortization was $7.2M for the three months ended March 31, 2026 vs. $8M in the prior-year period, with no launch delay fees incurred in 2026 vs. $1.4M in Q1 2025.
• Contract liabilities: Total contract liabilities surged to $208.3M as of March 31, 2026 from $63.7M as of December 31, 2025, driven largely by approximately $160.2M in current contract liabilities from the Lanteris acquisition; revenue recognized from opening contract liabilities was $11.2M and $14.9M for the three months ended March 31, 2026 and 2025, respectively.
• Loss contracts and backlog: Net contract losses were $2.7M for the three months ended March 31, 2026 (vs. $1.3M in the prior-year period), primarily driven by IM-3 (89% complete, $5.2M current loss provision as of March 31, 2026) and IM-4 (42% complete, $500,000 current loss provision); remaining fixed price performance obligations totaled $792.3M as of March 31, 2026, with approximately 60-65% expected to be recognized over the remaining 9 months of 2026.

• Receivables composition: Trade and other receivables, net totaled $105.8M as of March 31, 2026, up from $12.2M as of December 31, 2025, driven primarily by the addition of orbital receivables current of $39.3M and growth in trade receivables from $12.6M to $64.6M; grant receivables were $5.6M versus $2.9M at year-end.
• Orbital receivables — acquisition and concentration: Orbital receivables were acquired in connection with the acquisition of Lanteris in January 2026; non-current orbital receivables, net of allowances, were $217.5M as of March 31, 2026, and the Company holds these from 12 customers, with 2 major customers accounting for 33% and 30% of the aggregate current and non-current orbital receivables, net of allowances, respectively.
• Orbital receivables — contractual cash flows: Total expected contractual cash flows (principal and interest) from orbital receivables were $293.8M, with near-term maturities of $37.5M in 2026, $49M in 2027, $38.4M in 2028, $33.6M in 2029, $30.2M in 2030, and $105.1M thereafter.
• Securitization liabilities and credit losses: Securitization liabilities totaled $60.3M as of March 31, 2026 ($24.9M current, $35.4M non-current); the allowance for credit losses on trade receivables increased to $3.7M from a beginning balance of $3.3M after $357,000 of provision for credit losses in the three months ended March 31, 2026 (no comparable balance or provision in the prior-year period).

Acquisition context: Inventory was acquired in connection with the Lanteris acquisition in January 2026, as discussed in Note 3.

• Lanteris acquisition impact: The March 31, 2026 balance includes approximately $158.6M of property and equipment, net (of which $43.3M is for construction in progress) related to Lanteris, acquired on January 13, 2026, which accounts for the majority of the period-over-period increase in gross assets from $76.1M to $259M.
• Depreciation expense: Total depreciation expense was $7.2M for the three months ended March 31, 2026, compared to $600,000 for the three months ended March 31, 2025, reflecting the significant asset base added via the Lanteris acquisition.
• Construction in progress: As of March 31, 2026, construction in progress of $113.9M includes $66.7M in capitalized costs associated with fabrication and development of communications satellites and ground network assets, primarily in support of the NASA Near Space Network (NSN) contract.

• Goodwill roll-forward: Goodwill rose from $18.7M at December 31, 2025 to $379.8M at March 31, 2026, driven by the acquisition of Lanteris which added $361.1M, plus a $58,000 adjustment related to the KinetX acquisition; no impairment has been recorded in either period.
• Intangible assets composition: As of March 31, 2026, gross intangible assets totaled $310.3M (net $304.1M), consisting of trademark/trade name ($5M gross, 1-year weighted average life), customer relationships ($139.9M, 15 years), and developed technology ($165.4M, 14 years); at December 31, 2025 total gross intangibles were only $13.3M (net $13M), reflecting the Lanteris acquisition's impact.
• Amortization: All acquired intangibles are amortized straight-line; amortization expense was $5.8M for the three months ended March 31, 2026 versus zero for the three months ended March 31, 2025; no impairment losses were recognized in either period.
• Future amortization: Estimated future amortization expense is approximately $17.5M for the remainder of 2026 and $18.3M per year for each of the years from 2027 through 2030.

• Lease portfolio: The Company holds operating and finance leases for real estate and equipment with remaining lease terms ranging from 7 months to 271 months; leased space covers administrative offices, research, marketing, and light manufacturing for aerospace-related R&D operations. No restrictions, covenants, or material residual value guarantees are imposed by any lease.
• Lease cost: Total lease cost rose to $4.2M for the three months ended March 31, 2026, from $1.2M in the prior-year period, driven primarily by operating lease cost of $3.3M (vs. $1.2M) and variable lease cost of $688,000 (vs. $0).
• Cash flows and discount rates: Operating lease cash flows from operating activities were $10.5M in Q1 2026 vs. $601,000 in Q1 2025; weighted average remaining term for operating leases was 106 months at a 7.2% discount rate (vs. 202 months at 6.5% in Q1 2025), while finance leases carried a weighted average remaining term of 21 months at an 8.0% rate.
• Future obligations: As of March 31, 2026, total undiscounted operating lease payments were $144.6M (present value $90.5M after $54.1M imputed interest); total undiscounted finance lease payments were $61,000 (present value $57,000 after $4,000 imputed interest).

• Convertible Notes terms: On August 18, 2025, the Company issued $345M aggregate principal amount of 2.500% convertible senior notes due October 1, 2030, bearing interest payable semiannually on April 1 and October 1; as of March 31, 2026, carrying value net of unamortized discount and issuance costs was $335.8M versus $335.3M at December 31, 2025, and aggregate fair value was $607.6M based on Level 2 inputs.
• Conversion and redemption mechanics: The initial conversion rate is 76.2631 shares of Class A Common Stock per $1,000 principal amount (approximately $13.1125 per share); the Company may not redeem prior to October 6, 2028, and any partial redemption must leave at least $75M aggregate principal outstanding; upon conversion the Company may settle in cash, Class A Common Stock, or a combination at its election.
• Interest and accounting: During the three months ended March 31, 2026, the effective interest rate was approximately 3.09% and the Company recognized $2.7M of interest expense, including $500,000 of amortization of debt discount and issuance costs; the conversion feature was not bifurcated as a derivative and the notes are accounted for entirely as a liability.
• Capped Calls and Stifel facility: In connection with the notes issuance, the Company entered into Capped Calls at an aggregate cost of approximately $36.8M, covering approximately 26,310,770 shares of Class A Common Stock with an initial strike price of $13.1125 and initial cap price of $20.9800 per share, classified as equity and excluded from diluted EPS as anti-dilutive; separately, the Stifel Bank revolving credit facility of up to $40M was effectively halted on January 12, 2026 following a waiver related to the Lanteris acquisition, and as of March 31, 2026 there was no outstanding debt under that facility.

• Tax structure: Intuitive Machines, LLC is treated as a partnership for U.S. federal income tax purposes, so it does not pay U.S. federal income tax directly; instead, its unitholders — including the Company — are liable for their respective shares of taxable income, while the LLC is liable for income taxes in states that tax partnerships.
• Current-period tax expense: For the three months ended March 31, 2026, the Company recognized $2,000 in U.S. federal and state income tax expense; for the three months ended March 31, 2025, no such expense was recognized; the effective combined U.S. federal and state income tax rate was 0.00% for both periods.
• TRA obligation: Under the Tax Receivable Agreement (TRA), the Company must pay TRA Holders 85% of cash tax savings realized from certain tax attributes arising from the Business Combination; as of March 31, 2026, management has determined — based primarily on historical losses — that it is more-likely-than-not the Company will be unable to utilize its deferred tax assets subject to the TRA, a full valuation allowance is applied, and no TRA liability is expected to be recorded.
• OBBBA legislation: The One Big Beautiful Bill Act, signed July 4, 2025, makes permanent 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation; the Company assessed the impact and determined it is not material to its condensed consolidated financial statements.

• Capital stock structure: As of March 31, 2026, the Company had 725,000,000 total authorized shares across 4 classes/series: Class A Common Stock (500,000,000 authorized, 162,010,801 issued, 2,191,080 held as treasury, 159,819,721 outstanding at $0.0001 par); Class C Common Stock (100,000,000 authorized, 56,994,367 outstanding); and Series A Preferred Stock (25,000,000 authorized, 5,000 outstanding). Class B Common Stock had no shares issued or outstanding.
• Securities Purchase Agreement: On February 27, 2026, the Company completed the issuance and sale of 11,574,069 shares of Class A Common Stock at $15.12 per share for an aggregate purchase price of $175M.
• Series A Preferred Stock conversion price: Following the Private Placement Transaction on September 5, 2023, the Series A Preferred Stock conversion price was reduced from $12.00 per share to $5.10 per share; it was further reduced to $3.00 per share following the Warrant Exercise Agreement on January 10, 2024.
• Redeemable noncontrolling interests: As of March 31, 2026, prior investors of Intuitive Machines, LLC own 26.3% of its outstanding common units and hold the right to exchange those units (with cancellation of paired Class B or Class C shares) for Class A Common Stock on a one-to-one basis or cash; cash redemption requires Board approval and must be funded through a private or public offering of Class A Common Stock.

• Preferred Investor Warrants: The Company issued 541,667 Preferred Investor Warrants (of which 104,157 are owned by related party Ghaffarian Enterprises, LLC) to purchase Class A Common Stock, initially at $15.00 per share; following the September 5, 2023 Private Placement Transaction, the exercise price was reduced to $11.50 per share and the aggregate shares issuable was proportionally increased to 706,522. These warrants are classified in shareholders' equity, were immediately exercisable upon issuance, expire five years from the closing of the Business Combination, and as of March 31, 2026, no exercises have occurred.
• Conversion Warrants issuance and assignment: In connection with the January 2024 Bridge Loan Conversion, the Company agreed to issue to the Guarantor a Conversion Series A Warrant and a Conversion Series B Warrant, each to purchase up to 4,150,780 shares of Class A Common Stock at $2.57 per share (or formerly Class C Common Stock at $0.0001 per share) with terms of 5 years and 18 months, respectively; on May 31, 2024, the Guarantor assigned the Conversion Warrants to a third-party investor, after which the warrants are no longer exercisable for Class C Common Stock.
• Conversion Series B Warrant exercises: The investor exercised 300,000 Conversion Series B Warrants during June 5–7, 2024, and the remaining 3,850,780 during November 21–29, 2024, each resulting in issuance of an equal number of shares of Class A Common Stock; as of March 31, 2026, no Conversion Series A Warrants have been exercised.
• Fair value remeasurement: The Conversion Series A Warrant is classified as a derivative liability under ASC 815 and measured at fair value with changes recognized in earnings; the Company recognized a loss of $9.4M for the three months ended March 31, 2026 and a gain of $43M for the three months ended March 31, 2025 from the change in fair value.

• 2021 Plan options: As of March 31, 2026, 748,357 Class B Common Units remain authorized under the 2021 Plan, all outstanding at a weighted average exercise price of $4.09 with 5.59 years remaining contractual term and aggregate intrinsic value of $10.8B; 557,883 options were exercisable at a weighted average exercise price of $3.65 with aggregate intrinsic value of $8.3B. No new awards will be granted under the 2021 Plan following the Business Combination.
• 2021 Plan compensation expense: Share-based compensation expense related to options was $33,000 and $47,000 for the three months ended March 31, 2026 and 2025, respectively; unrecognized costs of $100,000 are expected to be recognized over a weighted average period of 1.33 years.
• 2023 Plan activity: Under the 2023 Plan (maximum 12,706,811 shares authorized), 2,784,668 units were granted in Q1 2026 at a weighted average grant date fair value of $17.50, including 1,518,163 RSSs issued at $19.76 per share in connection with the Lanteris acquisition (service-only vesting, vest in one year); the balance outstanding as of March 31, 2026 was 4,871,075 units at a weighted average grant date fair value of $13.32, with approximately 4,872,615 shares remaining available for future grants.
• 2023 Plan compensation expense: Share-based compensation expense related to 2023 Plan awards was $8.8M and $2.8M for the three months ended March 31, 2026 and 2025, respectively; unrecognized costs were $31.3M for unvested RSUs (to be recognized over 3.22 years) and $23.7M for unvested RSSs (to be recognized over 0.79 years).

Acquisition of Lanteris plans: On January 13, 2026, the Company acquired Lanteris and assumed its frozen defined benefit pension and other postretirement plans, recording net liabilities of approximately $56.7M ($1.9M in other current liabilities and $54.8M in non-current liabilities), reflecting plan assets at fair value of $336.1M and a projected benefit obligation of $392.8M; benefits were frozen on December 31, 2013.

• Balance sheet position: As of March 31, 2026, net pension liabilities totaled $53.9M, comprising $1.9M in other current liabilities and $52M in non-current pension and other post-retirement benefits.
• Net periodic benefit cost: For the period January 13, 2026 through March 31, 2026, service cost was $700,000, interest cost was $5M, and expected return on plan assets was ($5.8M), yielding net periodic benefit income of ($47,000); service cost is recorded in operating expenses while other components are recorded in other income (expense), net.
• Contributions: The Company contributed approximately $2.7M to the pension and other postretirement benefit plans during the period from January 13, 2026 to March 31, 2026, consistent with a policy of contributing at least the minimum required by applicable laws and regulations.

• Fair value hierarchy overview: As of March 31, 2026, total liabilities measured at fair value on a recurring basis were $75.7M, comprising $69.8M of Level 3 Warrant liabilities - Conversion Series A and $5.9M of Level 1 contingent consideration liabilities; comparable December 31, 2025 totals were $65.7M ($60.4M Level 3 warrants and $5.4M Level 1 contingent consideration).
• Level 3 warrant roll-forward: The Conversion Series A warrant liability increased from $60.4M at December 31, 2025 to $69.8M at March 31, 2026, driven entirely by a $9.4M unfavorable change in fair value, with no additions or conversions to equity; in the comparable prior-year period (Q1 2025), the Series A warrant liability decreased from $68.8M to $25.8M due to a ($43M) change in fair value.
• Earn-out liabilities: The earn-out liability of $134.2M at December 31, 2024 was fully extinguished in Q1 2025, with 7,500,000 Earn Out Units vesting during the three months ended March 31, 2025 (the remaining units after 2,500,000 vested in 2023), resulting in $167.5M converted to equity, partially offset by a $33.4M change in fair value, bringing the balance to $0 at March 31, 2025.
• Conversion Series A warrant valuation inputs: The Black-Scholes-Merton model as of March 31, 2026 used a Class A Common Stock price of $18.56 per share, dividend yield of 0.0%, risk-free rate of 3.81%, and expected volatility of 108%.
• Contingent consideration (KinetX): Approximately 329,827 shares of Class A Common Stock were placed in escrow at acquisition (October 1, 2025) at $10.61 per share for a $3.5M contingent consideration liability; during Q1 2026, 13,336 shares were released and issued, leaving 316,491 shares in escrow revalued at the March 31, 2026 closing price of $18.56, yielding a fair value of $5.9M.

EPS method: Basic net loss per share is computed using net loss attributable to Class A common shareholders divided by weighted-average Class A shares outstanding; diluted EPS uses the if-converted method for Series A Preferred Stock and Convertible Notes and the treasury method for RSUs, PSUs, options, and warrants — but because both periods are loss periods, diluted EPS equals basic EPS for all periods presented, as inclusion of potentially issuable shares would be anti-dilutive.

• Capped Call exclusion: The Capped Call transactions entered into in connection with the Convertible Notes are excluded from diluted net income (loss) per share calculations as they are designed to reduce potential dilution and are currently anti-dilutive.
• Anti-dilutive securities excluded (Three Months Ended March 31, 2026 vs. 2025): RSU and RSS awards of 5,060,387 vs. 3,214,513; Options of 748,357 vs. 923,173; Series A Preferred Stock (as converted) of 2,224,832 vs. 2,014,443; Warrants (Conversion Warrants and Preferred Investor Warrants) of 4,857,302 vs. 4,857,302; Escrow Shares of 316,491 vs. none; Convertible Notes (as converted) of 26,310,770 vs. none.

Commitments

• Non-cancelable purchase commitments ($122.7M as of March 31, 2026): Remaining obligations to vendors for launch services and component development: ~$47.1M due in 2026, $73.1M in 2027, $2.5M in 2028.

Legal Proceedings

• Aggregate accrual ($2.1M as of March 31, 2026): Management's best estimate of probable losses across all legal matters accrued on the condensed consolidated balance sheet.
• Starlight Strategies IV LLC v. Company (filed November 22, 2024): Breach of contract action in Delaware Chancery Court alleging insufficient common shares issued upon Series A Preferred Stock conversion; summary judgment motions filed April–May 2026, no accrual recorded.
• DOJ Civil Investigative Demand re Lanteris (October 2023): False Claims Act investigation alleging Lanteris submitted false claims related to cybersecurity requirements; seller Vantor Holdings Inc. agreed to indemnify Intuitive Machines; response to DOJ assertions pending in coming months.

• KBR affiliate revenue and costs: KBR, Inc. holds approximately 10% of the equity of Space Network Solutions, LLC (SNS); the Company recognized affiliate revenue from KBR for engineering services of $400,000 and $600,000 for the three months ended March 31, 2026 and 2025, respectively, with affiliate accounts receivable of $400,000 and $300,000 as of March 31, 2026 and December 31, 2025, respectively. SNS also incurred cost of revenue with KBR related to the OMES III contract of $5.4M and $6.3M for the same periods, with affiliate accounts payable of $2.1M and $1.6M as of those same dates.
• ASES affiliate revenue and costs: ASES is a joint venture between Aerodyne and KBR; the Company recognized revenue from ASES for engineering services of $200,000 and $300,000 for the three months ended March 31, 2026 and 2025, respectively, with affiliate accounts receivable of $200,000 at both March 31, 2026 and December 31, 2025. SNS incurred cost of revenue with Aerodyne related to the OMES III contract of $500,000 and $700,000 for the same periods, with affiliate accounts payable of $300,000 and $100,000 as of those dates. Kamal Ghaffarian, the Chairman of the Board and one of the co-founders of Intuitive Machines, LLC, is a current member of management of Aerodyne Industries, LLC.
• X-energy and IBX/PTX: The Company incurred expenses with X-energy, LLC of zero and $300,000 for the three months ended March 31, 2026 and 2025, respectively, with no affiliate accounts payable related to X-energy at either period end; Kamal Ghaffarian is the Executive Chairman of X-Energy Reactor Company, LLC, the parent of X-energy. For IBX/PTX, the Company incurred no expenses for either period, with affiliate accounts payable of zero and $26,000 as of March 31, 2026 and December 31, 2025, respectively; Ghaffarian is a co-founder and current member of management of IBX/PTX.

• VIE consolidation policy: The Company consolidates a VIE when it is the primary beneficiary — meaning it has both the power to direct activities most significantly impacting economic performance and the obligation to absorb losses or right to receive benefits that could be significant to the VIE.
• Space Network Solutions, LLC ownership: The Company holds a 90% interest in Space Network Solutions, LLC (SNS LLC), a joint venture with KBR, which holds the remaining 10%; SNS LLC is a VIE and Intuitive Machines is the primary beneficiary. SNS LLC was formed to provide cyber security and communication & tracking services for lunar space missions, and in Q2 2023 NASA awarded it a cost-plus-fixed-fee indefinite-delivery, indefinite quantity contract related to the Joint Polar Satellite System and NASA's Exploration and In-space Services.
• OMES III silo VIE: Within SNS LLC, Intuitive Machines and KBR entered into the OMES III JV Agreement to execute the OMES III contract, with profits interests of 47% for Intuitive Machines and 53% for KBR; this agreement is treated as a standalone VIE (a silo within SNS LLC), with Intuitive Machines as primary beneficiary based on the governance structure.
• SNS LLC balance sheet: As of March 31, 2026, SNS LLC had total assets of $11.6M and total liabilities of $8.6M; as of December 31, 2025, total assets were $7.8M and total liabilities were $5.5M.

Single segment: 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, which have similar capabilities, customers, and economic characteristics.

• CODM metrics: The chief executive officer (CODM) reviews consolidated Net income (loss) (GAAP), Adjusted Earnings before Interest, Taxes, Depreciation, and Amortization (Adjusted EBITDA) (non-GAAP), and Total assets to evaluate financial performance, allocate resources, and plan for future periods; Net income (loss) is stated as the primary profitability measure.
• Geographic concentration: All long-lived assets are maintained in the U.S., and most revenues are derived from customers in the U.S., with geographic disaggregation based on the customer's country of domicile.

• Agreement date and structure: On May 14, 2026, the Company entered into a Share Purchase Agreement (the 'SPA') with Goonhilly Holdings Limited ('Seller') to acquire all issued and outstanding shares of Goonhilly Earth Station Limited ('Goonhilly Earth Station'), a ground station and satellite communications company incorporated in England and Wales; the SPA also requires Seller to procure Goonhilly Holdings USA Inc. ('GHUI') to enter into a separate Membership Interest Purchase Agreement (the 'MIPA') for acquisition of Goonhilly Inc. (the 'U.S. Target'), to be converted into a Delaware limited liability company ('Goonhilly LLC'), though the MIPA had not been executed as of the filing date.
• UK Consideration: The aggregate consideration for the UK Acquisition is £37,000,000, split equally between stock and cash; the stock portion consists of 960,649 shares of Class A Common Stock priced using the volume weighted average price for the twenty consecutive trading day period ending May 8, 2026, to be issued and immediately transferred to Seller in an offshore transaction pursuant to Regulation S under the Securities Act of 1933, as amended, and the cash component includes a cash escrow deposit of £592,621.50.
• Post-closing adjustments and conditions: The UK Consideration is subject to post-closing adjustment for working capital, cash, debt, intra-company debt, and, to the extent applicable, business-interruption insurance proceeds; certain SPA conditions relate to U.S. operations, including FCC approval, completion of the U.S. reorganization, and specified U.S. property, tax, employee-benefit, and environmental matters.

• Business description: Intuitive Machines is a space infrastructure and services company founded in 2013, focused on enabling sustained infrastructure and human activity beyond Earth across civil, national security, and commercial markets, operating across LEO, GEO, cislunar space, and deep space.
• Operating model: The Company is organized around three integrated capabilities: Build (designing, manufacturing, and delivering spacecraft, landers, satellites, surface systems, propulsion, and avionics); Connect (integrating deployed assets into communications, navigation, command and control, and data relay networks); and Operate (providing mission operations, hosted payload services, data services, navigation and timing capabilities, and other infrastructure-based offerings).
• Strategic positioning: Management states the U.S. is transitioning from episodic space missions to long-duration operations and persistent presence, and that operating deployed systems as infrastructure — rather than concluding at delivery — creates opportunities for longer-duration contracts, recurring revenue, and margin expansion over time.

• Lanteris acquisition: On January 13, 2026, the Company completed the acquisition of 100% of the issued and outstanding membership interests of Lanteris Space Holdings LLC ("Lanteris") pursuant to a Membership Interest Purchase Agreement with Vantor Holdings Inc.; formerly Maxar Space Systems, Lanteris is a spacecraft manufacturer serving national security, commercial and civil customers.

• Stifel Bank waiver: On January 12, 2026, the Company and Stifel Bank entered into a waiver under the loan agreement pursuant to which Stifel Bank consented to the acquisition of Lanteris and halted any borrowing and covenant obligations by the Company under the revolving credit facility.

• Securities Purchase Agreement: On February 27, 2026, the Company completed the issuance and sale of 11,574,069 shares of Class A Common Stock to certain institutional investors or their affiliates at $15.12 per share, generating an aggregate purchase price of $175M and incurring related transaction costs of $7.5M.

• Macroeconomic monitoring: Management is monitoring elevated interest rates, sustained inflation, recession fears, supply chain disruptions, debt-ceiling actions, geopolitical tensions and armed conflicts (including ongoing wars in Ukraine, Israel and Iran), government shutdowns, and policy shifts from the current administration, though rising costs and inflationary pressures have not had a material impact on the business to date.
• Tariff exposure: A significant shift in U.S. trade policy was observed during 2025, with increased and new tariffs that could impact the supply chain; while some wide-reaching tariffs have been paused, the company has some exposure to imported materials and components, though management does not expect a material impact on results of operations or financial condition over the next year given that products and services are sold primarily to U.S. Government customers and suppliers are primarily domestic.
• Government shutdown risk: Any future U.S. government shutdown — or a series of short-term continuing resolutions rather than full-year appropriations — could disrupt program performance and results of operations through risks including funding disruptions, stop work orders, delayed contract awards, delayed new program starts, and delayed payments from U.S. government entities, with the significance of impact primarily dependent on the length of the shutdown and timing of budget resolution.

• Stage of development: The company is in preliminary stages of developing full space infrastructure offerings, targeting cislunar space and lunar surface access at lower price points than previous lunar missions, with additional planned services including far-side data transmission connectivity, orbital servicing, earth reentry, and payload development and manufacture.
• Growth dependencies: Revenue growth depends on winning lunar missions and expanding the services portfolio; management identifies follow-on purchases from existing customers as a key success indicator, and states that a successful lunar landing is required to demonstrate reliability to new and existing customers.
• Investment and capital risk: Management expects to make significant investments in lunar and data programs in the short term and states it believes financial resources will be sufficient to meet capital needs in the short term, but flags substantial uncertainty around timeline and budgeted costs due to U.S. federal export control compliance, political and economic conditions, and the need to negotiate long-term customer agreements; the company acknowledges it may be unable to maintain sufficient cash reserves to service any additional indebtedness incurred.

• Contracted backlog: As of March 31, 2026, the company holds $1.1B in contracted backlog, supported by binding agreements for additional launches, following completion of its first mission in February 2024 and second mission in March 2025.
• Customer pipeline: The company is in active discussions with numerous potential customers, including government agencies and private companies, to add to contracted revenue backlog, with government contract wins in 2026 and beyond cited as a key success factor.
• Execution risks: Pre-mission requirements include internal integration activities and launch vehicle integration with SpaceX; potential delays from launch pad congestion or approval/licensing processes are cited as risks that could adversely impact results and growth plans.
• Growth outlook: Management expects that improving production efficiency, schedule reliability, and deployment of its lunar data network satellites will lead to higher revenue from both volume and mission complexity as well as increased operating leverage.

• Growth dependency: The company states its future growth is largely dependent on capitalizing on increased U.S. federal government spending and private enterprise investment in the space economy, which management says has fueled growth in recent years and enabled securing increasingly valuable contracts.
• Budget risk: Pressures on and uncertainty surrounding the U.S. federal government's budget and potential changes in budgetary priorities could adversely affect funding for individual programs and delay purchasing decisions by customers.
• Program alignment risk: If existing programs and project pursuits are not focused on the federal government's higher priorities, the company's business, prospects, financial condition, and operating results could be adversely affected.

• In-house capabilities: Intuitive Machines designs, builds, and tests landers, satellites, spacecraft, and subsystems internally, with stated focus on composite structures, liquid rocket engines, guidance, navigation and control software, precision landing and hazard avoidance software, and advanced manufacturing techniques.
• R&D investment outlook: The company plans to make substantial investments in R&D for continued enhancements of its landers, lunar data network, and other space systems; management expects R&D expenditures to grow in absolute terms over time but remain consistent or decrease as a % of total revenue as service offerings expand.

• Contract types: Revenue is primarily generated from fixed-price long-term construction contracts to develop satellite systems and long-term service contracts for delivery of payloads to the lunar surface; contracts may also be cost-reimbursable, time-and-materials, or a combination, with pricing based on specific negotiations with each customer.
• Revenue recognition: Under the overtime model, revenue and gross profit are recognized over the contract period as work is performed based on actual costs incurred and an estimate of costs to complete; approximately 10% of the contract price contains variable consideration that is constrained to nil for accounting purposes as it is dependent on a successful mission landing, which may cause fluctuations in future revenue, profits, and cash flows.
• Cost-reimbursable terms: Under cost-reimbursable contracts, price is generally variable based on actual allowable costs for materials, equipment, reimbursable labor hours, overhead, and G&A expenses; profit may be a fixed fee, a cost mark-up, or an incentive/award fee based on performance indicators, milestones, or customer evaluation; contracts with the U.S. government are subject to the Federal Acquisition Regulation (FAR).

• Composition: Cost of revenues (excluding depreciation and amortization) consists primarily of direct material and labor costs, subcontract costs, launch services, manufacturing overhead, freight expense, and other personnel-related expenses (salaries, bonuses, benefits, and stock-based compensation expense).
• Outlook: Management expects cost of revenue to increase in absolute dollars in future periods as more products and services are sold, but expects cost of revenue as a percentage of revenue to decrease over time as the company grows into its current capacity and executes on cost-optimization initiatives.

Depreciation method: Tangible fixed assets (property and equipment) are depreciated on the straight-line method over their useful lives.

• Amortization method: Finite-lived intangible assets — specifically customer relationships and developed technology — are amortized on the straight-line method over their useful lives.

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

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

• Composition: Selling, general and administrative expense (excluding depreciation and amortization) consists primarily of personnel-related expenses for sales, marketing, supply chain, finance, legal, human resources and administrative personnel, as well as costs of customer service, information technology, professional services, insurance, travel, allocated overhead and other marketing, communications and administrative expenses.
• Forward outlook: Management expects to invest in the corporate organization and incur additional expenses associated with growing and operating as a public company, including increased legal and accounting costs, investor relations costs, higher insurance premiums and compliance costs.

Composition: Interest income consists of interest earned on cash and cash equivalent balances held in interest-bearing demand deposit accounts, money market funds, and certificates of deposit.

Sources of interest expense: Interest expense is primarily incurred on the Convertible Notes (as discussed in Note 10 - Debt), in addition to interest expense on finance leases.

Warrant liability classification: Warrants issued in connection with the Private Placement, Warrant Exercise Agreement, and the Bridge Loan Conversion are classified as liabilities on the balance sheet and remeasured to fair value at each period end, with changes recognized in other income (expense) on the condensed consolidated statement of operations.

• Outstanding warrants: As of March 31, 2026, only the Bridge Loan Conversion warrants remain outstanding.

• KinetX acquisition: In connection with the acquisition of KinetX, the purchase price included contingent consideration tied to certain future events or conditions, requiring the Company to holdback shares of Class A Common Stock in escrow; this holdback was recorded as a liability at estimated fair value as of the acquisition date.
• Remeasurement: The contingent consideration liability is remeasured at fair value each period, with changes in fair value recorded in other income (expense) on the condensed consolidated statement of operations.

Corporate structure and tax status: Intuitive Machines, Inc. is subject to U.S. federal, state, and local income taxes as a corporation, while Intuitive Machines, LLC is treated as a partnership for U.S. federal income tax purposes and does not itself pay U.S. federal income tax; instead, its unitholders — including Intuitive Machines, Inc. — are individually liable for U.S. federal income tax on their respective shares of Intuitive Machines, LLC's taxable income.

• State-level LLC taxes: Intuitive Machines, LLC remains liable for income taxes in those states that tax entities classified as partnerships for U.S. federal income tax purposes.

• Structure: Redeemable noncontrolling interest represents the portion of Intuitive Machines, LLC that the Company consolidates but does not own, created as a result of the Business Combination via common units issued to prior investors.
• Allocation basis: Net income or loss is allocated to noncontrolling interest based on weighted average ownership interest during the period, with results reflected in the condensed consolidated statement of operations.
• Current period ownership: As of March 31, 2026, approximately 26.3% of Intuitive Machines, LLC's net loss was allocated to noncontrolling interest.

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

VIE classification: The OMES III JV Agreement has been determined to represent a silo within Space Network Solutions and is classified as a standalone variable interest entity (VIE).

• Revenue mix shift: Total revenues rose $124.2M year-over-year to $186.7M, driven entirely by the addition of $141.6M in product revenue and $3.1M in grant revenue (both $0 in 2025), partially offset by a $20.4M decline in service revenue from $62.5M to $42.1M.
• Operating loss widened: Total operating expenses increased $153.3M to $225.9M, with cost of product revenue ($113.9M), higher G&A ($50.7M vs. $15.2M), and depreciation & amortization ($13M vs. $623,000) as the primary drivers; operating loss expanded $29.1M to ($39.2M).
• Below-the-line volatility: Total other income (expense), net swung ($24.4M) to a net loss of ($13.3M), largely from a $52.4M adverse change in fair value of warrant liabilities (from a $43M gain to a ($9.4M) loss) and $4.9M higher interest expense, partially offset by the absence of the prior-year ($33.4M) earn-out liability loss.
• Net loss attributable to Class A shareholders: Net loss attributable to the Company widened $26M to ($37.4M); after preferred dividends of ($162,000), net loss attributable to Class A common shareholders was ($37.5M) versus ($11.5M) in 2025.

• IM-3 mission: Initial NASA payload contract awarded November 2021 with targeted launch no later than June 2024; total estimated revenue under fixed-price contracts is $91.3M (excluding constrained revenue of $9.7M) as of March 31, 2026, with the mission timeline running through March 2027.
• IM-4 mission: Initial NASA payload contract awarded August 2024 with targeted launch no later than August 2028, though management expects launch during the second half of 2027; total estimated revenue under fixed-price contracts is $124.5M (excluding constrained revenue of $16.2M) as of March 31, 2026.
• IM-5 mission: Initial NASA payload contract awarded March 2026 with targeted launch of mid-year 2030; total estimated revenue under fixed-price contracts is $161.4M (excluding constrained revenue of $18.3M) as of March 31, 2026.

• Lanteris acquisition: Total revenue increased by $124.2M for the three months ended March 31, 2026 compared to the same period in 2025, mostly driven by the January 2026 acquisition of Lanteris, which contributed $141.6M from government and commercial contracts including the Tracking Layer program ($39.5M), Power & Propulsion Element ($30.6M), a government defense contract ($7.7M), EchoStar commercial satellite contracts ($23.7M), a proprietary commercial contract ($23.4M), and SiriusXM ($11.8M).
• CLPS mission revenue: CLPS mission contract revenues declined due to the IM-2 mission completion in March 2025 (which had contributed $12.7M in Q1 2025), partially offset by a $3.6M increase from the IM-4 mission ramping up; IM-3 revenue decreased by $3.6M due to a launch delay.
• Other contract headwinds: OMES III revenue declined by $5.5M following NASA's cancellation of the OSAM task orders, and LTV contract revenue decreased by $6.9M due to its completion in the second quarter of 2025, while various other engineering services contributed a net increase of $600,000.

• Lanteris acquisition impact: Total cost of revenue increased by $100.8M for the three months ended March 31, 2026 vs. the same period in 2025, mostly driven by the January 2026 acquisition of Lanteris, which contributed $113.9M in costs across government contracts (Tracking Layer program $32.2M, NASA Power & Propulsion Element $27.2M, a government defense contract $6.2M) and commercial satellite contracts (EchoStar $20.1M, a proprietary commercial contract $19.7M, SiriusXM $9.6M).
• CLPS mission contracts: Cost of revenues on CLPS mission contracts decreased by $4.7M, with the IM-2 mission down approximately $8.7M (mission completed March 2025) partially offset by a $4M increase on IM-4 as activity ramps up; IM-3 was flat. As of March 31, 2026, both IM-3 and IM-4 are in a loss position, with the IM-3 accrued contract loss increasing approximately $2.5M due to an increase in estimate at completion, while the IM-4 accrued contract loss was relatively flat.
• Other contract movements: Cost of revenue decreased on the OMES III contract by $5.4M due to NASA's cancellation of the OSAM project, and on the LTV contract by $7.6M as that contract was completed in the second quarter of 2025, partially offset by cost of revenue increases on various engineering services of $4.9M.

• R&D increase: Research and development increased by $4.7M for the three months ended March 31, 2026 compared to the same period in 2025, driven by investments in initiatives to expand product and service capabilities.

• G&A increase: G&A (excluding D&A) rose $35.5M for the three months ended March 31, 2026 compared to the same period in 2025, driven by workforce investment to support operations, business infrastructure, business development, and IT optimization, as well as research and development initiatives and the acquisition of Lanteris on January 13, 2026.
• Cost drivers: The $35.5M increase was composed of higher employee compensation and benefits expense of $18.3M, non-cash share-based compensation expense of $6M, and professional services of $13.8M (driven by accounting and legal fees), partially offset by various decreases of $2.7M.

• Net change: Total other income (expense), net reflected an unfavorable change of $24.4M for the three months ended March 31, 2026 compared to the same period in 2025.
• Drivers of unfavorable variance: The change was primarily driven by unfavorable movements in the fair value of warrant liabilities of $52.4M, contingent consideration liabilities of $500,000, and interest expense mostly related to the Convertible Notes of $4.9M.
• Partial offset: These were partially offset by a favorable change in the fair value of earn out liabilities, as the earn out units fully vested during the first quarter of 2025.

• Backlog definition: Backlog is defined as total estimated future revenue from awarded contracts less previously recognized revenue, included when a contract is awarded under a legally binding agreement; it excludes potential future orders under GWACs, agency-specific IDIQ contracts, other multiple-award vehicles, and unexercised option periods.
• Cancellation and termination risk: Nearly all contracts allow customers to terminate at any time for convenience, and certain backlog revenue is subject to budget appropriation or other cancellation clauses, meaning backlog may differ from actual revenue recognized in the financial statements.
• Purpose of metric: Management monitors backlog as a forward-looking indicator of potential sales, which it believes is helpful to investors in evaluating business performance and identifying trends over time.

• Backlog level: Backlog was $1.1B as of March 31, 2026, up from $213.1M as of December 31, 2025, a net increase of $842.4M driven by $612.8M of acquired backlog from the Lanteris acquisition in January 2026 and new awards of $428.9M primarily associated with the IM-5 mission, a government defense contract, and various other contracts, partially offset by $186.7M of continued performance on existing contracts.
• Expected recognition timing: As of March 31, 2026, approximately 60%–65% of backlog is expected to be recognized over the remainder of 2026, approximately 25%–30% over the subsequent twelve months of 2027, and the remainder thereafter.
• Backlog vs. remaining performance obligations: The $1.1B backlog exceeded remaining performance obligations of $792.3M (as reported in Note 4), with the $263.1M difference primarily attributable to $44.3M of variable consideration associated with constrained revenue and $65.9M in backlog related to the funded value of the OMES III contract, the NSN contract, and various other contracts where revenue is recognized when services are performed and contractually billable.

• Adjusted EBITDA definition: Calculated as net income (loss) excluding interest income, interest expense, transaction and integration costs related to acquisitions, share-based compensation, change in fair value instruments, gain or loss on issuance of securities, other income/expense, depreciation, impairment of property and equipment, and provision for income taxes.
• Stated limitations: Adjusted EBITDA excludes share-based compensation (expected to continue as part of compensation strategy), changes in fair value of earn-out, warrant, and contingent consideration liabilities, loss on issuance of securities, impairment of property and equipment, depreciation (without reflecting future capital expenditure requirements), and provisions for income taxes — each of which may represent reductions in cash available.
• Comparability caveat: Other companies, including those in the same industry, may calculate Adjusted EBITDA differently, reducing its usefulness as a comparative measure; management presents it alongside U.S. GAAP results.

Adjusted EBITDA bridge: Adjusted EBITDA swung from ($6.6M) in 2025 to $2.7M in 2026, despite net income (loss) deteriorating from $975,000 to ($52.5M), with the gap driven primarily by non-cash and one-time add-backs.

• Largest add-backs in 2026: Transaction and integration costs related to acquisitions of $20M, change in fair value of warrant liabilities of $9.4M, share-based compensation expense of $8.8M, and depreciation and amortization of $13M (vs. $623,000 in 2025) collectively account for the bulk of the reconciliation.
• Fair value items: The 2025 period was dominated by a $33.4M add-back for change in fair value of earn-out liabilities and a ($43M) deduction for change in fair value of warrant liabilities, neither of which recurred at those magnitudes in 2026 (earn-out was $0; warrant was $9.4M).
• Interest and other: Interest expense rose to $4.9M in 2026 from $26,000 in 2025; interest income was relatively flat at ($1.4M) vs. ($1.4M).

• Definition: Free cash flow is defined as net cash (used in) provided by operating activities less purchases of property and equipment, presented as an indicator of cash generated from operations available for strategic initiatives and balance sheet strengthening after capital expenditures.
• Limitations noted: Management cautions that free cash flow is non-GAAP, may not be comparable to similarly titled metrics of other companies, and may be affected near to medium term by timing of capital investments, fluctuations in growth and the effect of such fluctuations on working capital, and changes in the cash conversion cycle.
• Reconciliation: The filing references a reconciliation table of net cash used in operating activities (the most directly comparable GAAP measure) to free cash flow for the three months ended March 31, but the table data was not included in the provided text.

Free cash flow: Free cash flow swung to ($64.6M) in 2026 from $13.3M in 2025, driven by net cash used in operating activities of ($54.8M) (versus $19.4M provided in 2025) and higher purchases of property and equipment of $9.9M (versus $6.1M in 2025).

• Funding sources: Since inception, operations have been funded through internally generated cash, proceeds from capital stock sales, warrant exercises, bank debt, and Convertible Notes.
• Liquidity position: As of March 31, 2026, cash and cash equivalents were $231.6M and working capital was $89.8M; excess cash is invested in highly-liquid, low-risk interest-bearing demand deposit accounts, money market funds, and certificates of deposits with major financial institutions.
• Primary cash uses: Expected uses include working capital (project execution activities such as materials purchases, subcontracted services, and payroll), capital expenditures (machinery and equipment, computers and software, and leasehold improvements), research and development, and potential mergers and acquisitions.
• Capital expenditure outlook: Construction in progress is expected to continue to increase as the company develops data relay satellites and ground networks associated with its Data Transmission Services business.

• Acquisition close: On January 13, 2026, the Company completed the acquisition of 100% of the issued and outstanding membership interests of Lanteris Space Holdings LLC ("Lanteris"), formerly Maxar Space Systems, a spacecraft manufacturer, from Advent International LLC.
• Consideration: Aggregate consideration totaled $851M, consisting of $403.3M in cash, $43.7M of transaction bonuses deemed part of consideration, and the issuance of 22,991,028 shares of Class A Common Stock valued at $404M based on an acquisition-date closing stock price of $17.57; cash consideration was funded using cash on hand.

• Facility structure: In connection with the Lanteris acquisition, the Company entered into a Waiver, Consent, Amendment and Assignment Agreement with ING Belgium NV/SA ("ING") and certain affiliates of Lanteris, under which the Company became a guarantor under the Amended and Restated Receivables Purchase Agreement (the "Orbital Receivables Purchase Facility"); through December 1, 2026, ING may purchase certain orbital payment receivables of Lanteris on a discretionary, transaction-by-transaction basis, up to an aggregate maximum of $250M.
• Make-whole obligation: If a customer prepays a receivable that has been purchased by ING, Lanteris is required to make a contractual make-whole payment based on a net present value formula.
• Liquidity purpose: Management expects the Orbital Receivables Purchase Facility to continue to support Lanteris' working capital and liquidity needs.

• Securities Purchase Agreement: On February 27, 2026, the Company completed the issuance and sale of 11,574,069 shares of Class A Common Stock at $15.12 per share for an aggregate purchase price of $175M, incurring related transaction costs of $7.5M.
• Liquidity adequacy: Management believes that cash and cash equivalents as of March 31, 2026, combined with proceeds from the Securities Purchase Agreement and the issuance of the Convertible Notes, will be sufficient to fund short-term liquidity needs and execution of the business plan through at least the twelve-month period from the date the financial statements are issued.

Operating cash flow: Swung to an outflow of $54.8M in 2026 from an inflow of $19.4M in 2025, a year-over-year deterioration of $74.2M.

• Investing outflows: Increased sharply to $454.7M in 2026 from $6.1M in 2025, reflecting a roughly 74x increase in cash deployed for investing activities.
• Financing inflows: Modestly higher at $167.4M in 2026 versus $152.3M in 2025.

• Operating cash flow swing: Operating activities used $54.8M of net cash in the three months ended March 31, 2026, compared to $19.4M of net cash provided in the three months ended March 31, 2025, a year-over-year reversal.
• Working capital drivers: Changes in operating assets and liabilities are primarily driven by working capital balances for projects — consisting of trade accounts receivable, contract assets, accounts payable, and contract liabilities — which vary based on stage of completion and contractual terms.
• Acquisition impact: The changes in operating activities were also impacted by the acquisition of Lanteris in January 2026.

• Cash used in investing: Investing activities used $454.7M of net cash in the three months ended March 31, 2026, compared to $6.1M in the three months ended March 31, 2025, a $448.6M increase.
• Lanteris acquisition: The primary driver was the business acquisition of Lanteris in January 2026 for approximately $444.8M, net of cash received.
• Capital expenditures: The remaining $3.8M in capital expenditures was associated primarily with fabrication and development of commercial communications satellites and navigation network, and expansion to a new leased facility at Houston Spaceport.

• 2026 financing cash flows: Financing activities provided $167.4M of net cash in the three months ended March 31, 2026, up from $152.3M in the three months ended March 31, 2025.
• 2026 primary driver: The 2026 period was driven almost entirely by $167.5M in net proceeds from the issuance of securities under the Securities Purchase Agreement.
• 2025 primary drivers: The 2025 period was driven by $176.6M in proceeds from warrant exercises, partially offset by $20.7M for share repurchases and $3.5M in net activity related to share-based awards.

Lease obligations: Operating lease obligations total $144.6M (undiscounted), covering facilities and equipment with expiration dates through 2048, with $22.8M due in the remainder of 2026 and $60.9M due thereafter; finance lease obligations are minimal at $61,000 total.

• Purchase commitments: Non-cancelable purchase commitments of $122.7M relate to vendor agreements for launch services and development of certain components tied to revenue contracts, with $47.2M due in the remainder of 2026 and $73.1M due in 2027, effectively front-loaded.
• Total obligations: Aggregate contractual obligations and commitments as of March 31, 2026 are $267.4M, with $70M payable in the remainder of 2026 and $94.2M in 2027.

• LPOC expansion: In July 2025, the Company amended its ground lease at the Houston Spaceport at Ellington Airport to expand the Lunar Production and Operations Center, requiring an additional investment of approximately $12.6M for construction of new production and testing facilities and support infrastructure to scale lunar lander assembly, Earth-reentry systems, Lunar Terrain Vehicle development, and NASA's Near Space Network Services.
• Lease terms: The amendment adds approximately 3.0 acres to the leased project site, extends the lease term from 20 years to 25 years (ending October 2048) with three optional renewal periods of 5 years each, and reduces right-of-use assets and liabilities by approximately $7.1M; the Company accounted for this as a lease modification by remeasuring right-of-use assets and liabilities as of the effective date.
• Future lease liabilities: The amendment includes lease components not yet commenced; the Company expects to recognize additional lease liabilities of approximately $7.9M as expansion phases are completed in 2026, with any construction costs exceeding the estimated investment to be treated as variable lease payments or, if significant, trigger a remeasurement of the lease liability and right-of-use asset.

• Revenue recognition method: Revenue is primarily generated from long-term construction contracts, long-term lunar mission contracts, and engineering services for aerospace systems, recognized over time using the cost-to-cost method (contract costs incurred to date compared to total estimated contract costs at completion), which the company deems appropriate because it directly measures the value of goods and services transferred to the customer.
• Variable consideration: Contracts may include both fixed and variable amounts; variable consideration is included in the transaction price only to the extent it is probable that a significant reversal of cumulative revenue will not occur, and is reassessed each accounting period with changes recorded as a cumulative catch-up adjustment in the current period.
• Performance incentives and liquidated damages: Satellite construction contracts may include in-orbit performance incentives structured as either warranty paybacks (customer pays upfront, subject to refund) or orbital receivables (paid over satellite life); both are included in revenue during construction to the extent no significant reversal is probable, with financing elements recorded over the incentive period. Liquidated damages, which reduce recognized revenue, are recorded when management believes it is probable they will be incurred and enforced.
• Loss contracts: If estimated total costs exceed estimated total consideration, a provision for the remaining loss is recorded in the period in which the loss becomes evident.

• Accounting method: The Company uses the acquisition method for business combinations, recognizing acquired assets and assumed liabilities at fair value on the acquisition date, with any excess purchase price recorded as goodwill.
• Valuation inputs: Fair value determinations rely on quoted market prices, carrying values, expected future cash flows (including future growth rates, margins, attrition rates, technology changes, brand awareness, and discount rates), with third-party appraisal firms engaged when appropriate for intangible assets.
• Measurement period: Purchase price allocations may be revised during a measurement period not to exceed one year from the acquisition date; the allocation related to the acquisition of KinetX is discussed in Note 3 - Acquisitions in the accompanying condensed consolidated financial statements.

• Recent acquisitions: In connection with the acquisitions of KinetX in October 2025 and Lanteris in January 2026, the Company initially recognized goodwill and intangible assets in its condensed consolidated financial statements.
• Impairment evaluation: The Company evaluated goodwill and intangible assets for impairment as of March 31, 2026 and did not recognize any impairment changes; it will continue to evaluate them annually and during interim periods in which events or circumstances indicate possible impairment.
• Reporting unit structure: The Company currently has one reporting unit encompassing all operations, including new acquisitions, and may first apply a qualitative assessment before proceeding to a quantitative test if the qualitative assessment indicates carrying value likely exceeds fair value.

EGC status and exemptions: The company qualifies as an "emerging growth company" under the JOBS Act and is availing itself of exemptions including relief from the auditor attestation requirements of Section 404 of Sarbanes-Oxley, reduced executive compensation disclosure obligations, and exemptions from nonbinding advisory votes on executive compensation and golden parachute approvals.

• Extended transition period elected: The company has elected to use the extended transition period for new or revised accounting standards, meaning it may adopt standards on the private-company timeline rather than the public-company timeline; this election is irrevocable and may make comparison of its financial statements with other public companies difficult or impossible due to potential differences in accounting standards used.