LUNR 10-K & 10-Q changes, risk factors and insider trading

You should consider carefully the risks and uncertainties described below, together with all of the other information contained in this Annual Report. If any of the following events occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading price of our securities could decline, and you could lose all or part of your investment. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties that we are unaware of, or that we currently believe are not material, may also become important factors that adversely affect our business or results of operations.

These challenges and uncertainties may impair our ability to attract, retain and motivate key personnel. The departure of key employees because of issues related to the uncertainty and difficulty of integration or a desire not to remain with us could have a negative effect on our business, financial conditioncondition, orand results of operations.

If we fail to manage our growth effectively, we may be unable to execute our business plan and our business, financial condition, and results of operations, and financial conditionoperations could be harmed.

If our operations continue to grow as planned, of which there can be no assurance, we will need to expand our sales and marketing, research and development, customer and commercial strategy, products and services, supply, information technology, cybersecurity and manufacturing functions. TheseFor effortsexample, on January 13, 2026, we completed the acquisition of Lanteris, approximately 1,170 employees to the Company. Our future success depends, in part, upon our ability to manage our expanded business, which may pose substantial challenges for our management, increased costs and complexity associated with new operations. There can be no assurances that we will be successful in managing such expanded business or that we will realize the benefits currently anticipated from the acquisition of Lanteris. Future growth will require us to invest significant financial and other resources, including in industries and sales channels in which we have limited experience to date. We will also need to continue to leverage our manufacturing and operational systems and processes, and there is no guarantee that we will be able to scale the business as currently planned or within the planned timeframe. The continued expansion of our business may also require additional manufacturing and operational facilities, as well as space for administrative support, and there is no guarantee that we will be able to find suitable locations for the manufacture of our space vehicles and related equipment.

For the years ended December 31, 20242025 and 2023,2024, approximately 90%78% and 74%90% of our revenuesrevenues, respectively, came from one major customer. To the extent that any large customer were to default or otherwise fail to perform or be delayed in the fulfillment of its contractual obligations to us, changes its ordering patterns or business strategy, or otherwise reduces its purchases or stops purchasing our products or services, or if we experience difficulty in meeting the demand by these customers for our products or services, our revenues and results of operations could be adversely affected.

We operate in highly competitive markets and generally encounter intense competition to win contracts from many other firms, including lower and mid-tier federal contractors with specialized capabilities and the federal government. Additionally, our markets are facing increasing industry consolidation, resulting in larger competitors who have more market share putting more downward pressure on prices and offering a more robust portfolio of products and services. Our primary competitors for satellite manufacturing contracts include the Boeing Company, Lockheed Martin Corporation and Northrop Grumman Corporation in the United States and Thales S.A. and Airbus Defence and Space, a subsidiary of the Airbus Group, in Europe. We may also face competition in the future from more emerging low-cost competitors, some of which could be subsidized or well-funded. Competition in our lunar market is mainly divided between incumbents, such as Lockheed Martin and Blue Origin who pursue larger, more complex contracts such as crewed lunar missions, and next generation players, including our competitors on the CLPS contract such as Astrobotic and Firefly Aerospace. Competitors for the next phases of LTVS include Lunar Outpost and Astrolab Venturi and our competitors for the NSN contract included Kongsberg Satellite Services (“KSAT”), Swedish Space Corporation (“SSC”), and Telespazio. We are subject to competition based upon product designs, performance, pricing, quality, and services. Our product performance, engineering expertise, and product quality have been important factors in our growth. While we try to maintain competitive pricing on those products that are directly comparable to products manufactured by others, in many instances our products will conform to more exacting specifications and carry a higher price than analogous products. Many of our customers and potential customers have the capacity to design and internally manufacture products that are similar to our products. We face competition from research and product development groups and the manufacturing operations of current and potential customers, who continually evaluate the benefits of internal research, product development, and manufacturing versus outsourcing.

We believe our ability to compete successfully in designing, engineering and manufacturing our products and services at significantly reduced cost to customers does and will depend on a number of factors, which may change in the future due to increased competition, our ability to meet our customers’ needs and the frequency and availability of our offerings. If we are unable to compete successfully, our business, financial conditioncondition, and results of operations would be adversely affected.

Disruptions in U.S. government operations and fundingfunding, including government shutdowns, could harm our business, financial condition, and results of operations, and financial conditionoperations could be harmed.

Any disruptions in federal government operationsoperations, including government shutdowns, could have a material adverse effect on our revenues, earnings, and cash flows. A prolonged failure to maintain significant U.S. government operations or delays or cancellations of U.S. programs based on budgetary constraints, particularly those pertaining to our business, could have a material adverse effect on our revenues, earnings, and cash flows. Continued uncertainty related to recent and future government shutdowns, including related to a change in administration, the budget and/or the failure of the government to enact annual appropriations, such as long-term funding under a continuing resolution, could have a material adverse effect on our revenues, earnings and cash flows. Additionally, disruptions in government operations may negatively impact regulatory approvals and guidance that are important to our operations.

Unsatisfactory performance of our spaceflightsatellite and space systems or security incidents at our facilities could have a material adverse effect on our business, financial condition, and results of operations, and financial condition.operations.

We manufacture and operate highly sophisticated spaceflightsatellites and space systems that depend on complex technology. We also work cooperatively with our suppliers, subcontractors, venture partners and other parties (collectively, “Third Parties”). Failures and disruptions or compromises to our or our Third Parties’ systems may be caused by natural disasters, fires (including wildfires), accidents, power disruptions, telecommunications failures, acts of terrorism or war, computer viruses, bugs or vulnerabilities, physical or electronic break-ins, human error, intentional conduct, targeted cyberattacks, or similar events or incidents. While we have built operational processes to ensure that the design, manufacture, performance and servicing of our spaceflightspace systems and our facilities meet rigorous performance goals, there can be no assurance that we will not experience operational or process failures and other problems, including through manufacturing or design defects, pilot error, failure of Third Party safeguards, natural disasters, cyber-attacks, or other intentional acts, that could result in potential safety risks. For example, the IM-2 mission experienced landing anomalies that impacted our ability to complete all mission milestones. There can be no assurance that our preparations, or those of Third Parties, will be able to prevent any such incidents.

Any actual or perceived safety issues may result in significant reputational harm to our businesses, in addition to tort liability, maintenance, increased safety infrastructure and other costs that may arise. Such issues with our spaceflightspace systems, facilities, or customer safety could result in delaying or cancelling planned flights, increased regulation or other systemic consequences. Our inability to meet our safety standards or adverse publicity affecting our reputation as a result of accidents, mechanical failures, damages to customer property or medical complications could have a material adverse effect on our business, financial conditioncondition, and results of operation.

Our costs to adequately counter the risk of cyber-attacks and to comply with contractual and/or regulatory compliance requirements may increase significantly in the future. If there is a security vulnerability, error, or other bug in one of ours or our critical third-party systems or if there is a security exploit targeting them, we could face increased costs, claims, liability, reduced revenue, and harm to our reputation or competitive position. Because we do not maintain cybersecurity insurance, these costs will come directly from us and this could harm our financial condition. Any significant disruption in or unauthorized access to our computer systems or those of third parties that we utilize in our operations, including those relating to cybersecurity or arising from cyber-attacks, and security threats could result in a loss or degradation of service, unauthorized disclosure of data, or theft or tampering of intellectual property, any of which could materially adversely impact our business.

The market for commercial spaceflightspace systems in cislunar and beyond has not been established with precision. It is still emerging and may not achieve the growth potential we expect or may grow more slowly than expected.

The market for commercial spaceflightspace systems in cislunar and beyond has not been established with precision and is still emerging. Our estimates for the total addressable market for commercial spaceflightspace systems are based on a number of internal and third-party estimates, including our current backlog, the number of consumers, assumed flight cadence, our ability to leverage our current manufacturing and operational processes and general market conditions. While we believe our assumptions and the data underlying our estimates are reasonable, these assumptions and estimates may not be correct. The conditions supporting our assumptions or estimates may change at any time, thereby reducing the predictive accuracy of these underlying factors. As a result, our estimates of the annual total addressable market for commercial spaceflight,space systems, as well as the expected growth rate for the total addressable market for that experience, may prove to be incorrect.

We may experience delayed lunar launches, launch failures, failure of lunar landers to reach their planned locations, failure of landers to conduct all mission milestones, significant increases in the costs related to launches of lunar landers, and insufficient capacity available from lunar lander launch providers. Any such issue could result in the loss of our lunar landers or cause significant delays in their deployment, which could harm our business, financial condition, and results of operations and financial condition.operations.

Delays in launching landers are common and can result from manufacturing delays, unavailability of reliable launch opportunities with suppliers, launch supplier schedule delays, delays in obtaining required regulatory approvals, changes in landing coordinates, updates to mission specifications (including mission scope and objectives) and launch failures. If lander manufacturing schedules are not met, a launch opportunity may not be available at the time the landers are ready to be launched. We also share launches with other manufacturers who may cause launch delays that are outside of our control. In addition, launch vehicles may fail, which could result in the destruction of any landers we have in such launch vehicle or an inability for the landers to perform their intended mission. Launch failures also result in significant delays in the deployment of landers because of the need to manufacture replacement parts, which typically takes up to six months or longer, and to obtain another launch opportunity. We also regularly review intended landing coordinates in order to determine the optimal landing site for our landers in consultation with NASA, while also updating mission specifications such as the scope of missions and the mission objectives. As such, from time to time, we have made, and expect to continue to make, material modifications to our missions, each of which may, alone or in the aggregate, cause us to experience material delays. Further, it could be more costly, and potentially prohibitively more costly, for us to launch and deploy our landers in the future due to increases in the cost of launches, launch insurance rates and launch-related services. InWe addition,are anycurrently targeting a mission anomalieslaunch atwindow launch,of duringlate transit,2026 or during landing could limitfor our abilityIM-3 to complete all of our contracted mission milestones.mission. Any launch failure, underperformance, mission anomalies, delay or increased cost on lander launches or related servicesservices, including on our IM-3 mission, could have a material adverse effect on our business, results of operations, business prospects and financial condition.

We may experience delayed satellite launches, failure of our satellites to reach their planned orbital locations, significant increases in production costs of our satellites. Any such issue could harm our business, financial condition, and results of operations and financial condition.operations.

Delays in launching satellites are common and can result from manufacturing delays, updates to mission specifications (including mission scope and objectives) and launch failures. In September 2024, NASA awarded us a verification task order for NSN communication and navigation services for missions in the lunar region. For the Company to begin to have services under the NSN contract, we must successfully launch at least one satellite into a lunar orbit and five satellites to complete the constellation. If satellite schedules are not met, our operations may be materially adversely impacted. In addition, satellite deployment mechanisms may fail, which could result in an inability for the satellites to perform their intended mission. Further, it could be more costly, and potentially prohibitively more costly, for us to build and deploy our satellites in the future due to supplier cost increases. Any satellite failure, underperformance, delay or increase cost could have a material adverse effect on our business, financial condition, and results of operations,operations. businessDelays prospectsin the construction of satellites and the procurement of requisite components, satellite damage or destruction during launch, launch failures, or incorrect orbital placement could have a material adverse effect on our business, financial condition.condition, and results of operations.

The release, unplanned ignition, explosion, or improper handling of dangerous materials used in our business could disrupt and harm our business, financial condition, and results of operations, and financial condition.operations.

We rely on a limited number of suppliers for certain raw materialsmaterials, supplied components and suppliedproduct components.equipment items, many of which particularly in our satellite integrated build capability, are procured or subcontracted on a single or sole-source basis. In addition, we currently rely on a single launch service provider for our lunar missions. We may not be able to obtain sufficient raw materials or supplied components to manage our inventory, meet our manufacturing and operating needs, or obtain such materials on favorable terms, which could impair our ability to fulfill our orders in a timely manner or increase our costs of production.production and could in turn result in reduced sales and profits, contract penalties or terminations and damage to customer relationships and could have a material adverse effect on our operating results, financial condition, or cash flows.

We sell complex and technologically advanced products and services, including rocket launch services, mission services, satellitespacecraft, services, spacecraftsatellites, and spacecraft components. Sophisticated software used in our products and services, including software developed by us, may contain defects that can unexpectedly interfere with the software’s intended operation. Defects may also occur in components and products that we manufacture or purchase from Third Parties. Most of the launch vehicles, spacecraft and spacecraft components we have developed must function under demanding and unpredictable operating conditions and in harsh and potentially destructive environments. Our products and services may not be successfully implemented, pass required acceptance criteria, or operate or give the desired output, or we may not be able to detect and fix all defects in the launch vehicles, spacecraft, spacecraft components and systems we sell and/or use. Failure to do so could result in lost revenue and damage to our reputation and may adversely affect our ability to win new contract awards.

Rising inflation may materially impact our business, financial condition, and results of operations and financial condition.operations.

Inflation has increased recently. Inflation in the economy has resulted in, and may continue to result in, higher interest rates and capital costs, shipping costs, supply shortages, increased costs of labor and other similar effects. As a result of inflation, we have and may continue to experience cost increases. Although we may take measures to mitigate the impact of inflation, if these measures are not effective, our business, financial conditioncondition, and results of operations could be materially adversely affected.

We are subject to counterparty risk on contracts with customers. If a counterparty to one of our contracts were to default or otherwise fail to perform or be delayed in its performance on any of its contractual obligations to us, such default, failure to perform or delay could have a material adverse effect on our business, financial condition, and results of operations and financial condition.operations.

Our budgeted capital expenditures, forecasted growth and strategic plan are based on revenues expected to be generated pursuant to signed contracts existing as of the date such budget, forecast and strategic plan are approved by management and our Board. If a customer were to default or otherwise fail to perform or be delayed in the fulfillment of its contractual obligations to us, we would be required to adjust our budget, forecasts and strategic plans to mitigate the impact of such circumstance, which may negatively affect our business, financial condition, cash flows and/or liquidity. Additionally, if the scope of anticipated work related to any customer contract were to change due to unforeseen circumstances or evolving requirements of one or more of our counterparties, we may be unable to generate revenue on our anticipated timeline or may be required to incur increased costs from those originally estimated for a project, which could cause our budgets, forecasts and plans to be inaccurate. For instance, due to a change in the landing site of the IM-1 mission and an incremental delay in milestone payments, certain revenue associated with this mission shifted from 2023 to 2024. While we endeavor to mitigate this risk by assuming potential delays in revenue generation and estimated contract progress when preparing our budget, forecast and strategic plans, it is not possible to predict with accuracy the impact of any default, failure to perform or delay, which results in our inability to completely mitigate such risks. As such, the counterparty default, failure to perform or delay in performance may have a material adverse impact on our business, financial conditioncondition, and results of operations.

We depend heavily on technology and automated systems to effectively operate our business. Any substantial, extended, or repeated failures of these systems could negatively affect our business, compromise the security of our information or other information stored on, transmitted by, or otherwise processed by these systems, result in the loss of or damage to important data, loss of revenue and increased costs, and generally harm our business. Additionally, loss of key talent required to maintain and advance these systems could have a material impact on our operations. Like other companies, our systems may be vulnerable to disruptions due to events beyond our control, including natural disasters, fire, power disruptions, software or equipment failures, terrorist attacks, cybersecurity incursions, computer viruses and hackers. There can be no assurance that the measures we have taken to reduce the adverse effects of certain potential failures or disruptions are adequate to prevent or remedy disruptions of our systems or prevent or mitigate all attacks. In addition, we will need to continuously make significant investments in technology to periodically upgrade and replace existing systems. If we are unable to make these investments or fail to successfully implement, upgrade or replace our systems, our operations and business could be adversely impacted. For example, in July 2024, certain businesses experienced disruptions related to a software update by a cybersecurity technology company. As of the date hereof, we have not experienced any significant impacts due to software updates, but we could in the future experience similar software-induced interruptions to our operations.

We may incorporate AI solutions into our core offerings,offerings and business, and these applications may become important in our operations over time. For example, we currently use an isolated private instance of a corporate AI chatbox and Gilab DUO. Our competitors or other third parties may incorporate AI into their products or services more quickly or more successfully than we may, which could impair our ability to compete effectively and adversely affect our results of operations. Additionally,There ifare significant risks involved in developing, maintaining and deploying these technologies and there can be no assurance that the content,usage analyses,of such technologies will enhance our offerings or recommendationsbe that AI applications assist in producing are or are allegedbeneficial to be deficient, inaccurate, or biased, our business, financialincluding condition,our efficiency or profitability. In particular, if these artificial intelligence or machine learning models are incorrectly designed or implemented; trained or reliant on incomplete, inadequate, inaccurate, biased or otherwise poor quality data or on data to which we do not have sufficient rights; and/or are adversely impacted by unforeseen defects, technical challenges, cyber security threats or material performance issues, the performance of our products, services, and resultsbusiness, ofas operationswell may be adversely affected. The use of AI applications has resulted in, and may in the future result in, cybersecurity incidents. Any such cybersecurity incidents related to our use of AI applications could adversely affectas our reputation and resultsthe reputations of operations.our customers, could suffer or we could incur liability through the violation of laws, contracts to which we are a party or civil claims. The rapid evolution of AI, including potential government regulation of AI, will require significant resources to develop, test and maintain our platform, offerings, services, and features to help us implement AI ethically in order to minimize unintended, harmful impact.

We act as a subcontractor to prime contractors on multiple government contracts, including NASA’s JETS Program and SDA’s Tracking Layer Program. Our performance as a subcontractor on a government contract, is dependent on the prime contractor’s ability to satisfactorily maintain its relationship with the government and fulfill its obligations under its contracts. A failure by the prime contractors to fulfill their obligations under their contracts could result in the termination of the prime contract or delayed revenue generation and recognition, thereby resulting in either the termination of our subcontract or material modifications to our subcontract. If any significant subcontract is terminated or delayed in this manner, it could cause our actual results to differ materially and adversely from those anticipated.

Global pandemics, epidemics, outbreaks of infectious diseases or public health crises have disrupted our business and could have a material adverse effect on our business, financial condition, and results of operations and financial condition.operations.

If we are unable to protect the confidentiality of our proprietary information, trade secrets and know-how, our business and competitive position may be harmed.

WeTo protect our proprietary rights, we rely uponon unpatenteda combination of patent protections, copyrights, trade secretsecrets, protection,trademark unpatentedlaws, know-howconfidentiality agreements with employees and continuingthird technological innovation to developparties and maintainprotective ourcontractual businessprovisions such as those contained in license agreements with consultants, subcontractors, vendors and competitivecustomers. position, and weWe consider trade secrets and know-how to be our primary form of intellectual property protection. WeAlthough seekwe follow processes to protect our proprietaryintellectual technology,property, inthere part,is byno enteringabsolute intoassurance confidentialitythat agreementsthe withsteps taken to protect our suppliers,technology subcontractors, venture partners, employees and consultants, and other third parties. However, we may not be able towill prevent the unauthorized disclosuremisappropriation or use of information which we consider to be confidential, our technical know-how or other trade secrets by the parties to these agreements, despite the existence generally of confidentiality provisions and other contractual restrictions.infringement. Monitoring unauthorized uses and disclosures is difficult, and we do not know whether the steps we have taken to protect our proprietary technologies will be effective. If any of the suppliers, subcontractors, venture partners, employees and consultants, and other third parties who are parties to these agreements breaches or violates the terms of any of these agreements, we may not have adequate remedies for any such breach or violation, and we could lose our trade secrets as a result. It is also possible that our trade secrets, know-how or other proprietary information could be obtained by third parties as a result of breaches of our physical or electronic security systems. Even where remedies are available, enforcing a claim that a party illegally disclosed or misappropriated our trade secrets, like patent litigation, is expensive and time consuming, and the outcome is unpredictable. In addition, courts outside the United States are sometimes less willing to protect trade secrets.

The U.S. government’s budget deficit and the national debt, as well as any inability of the U.S. government to complete its budget process for any government fiscal year could have an adverse impact on our business, financial condition, and results of operations and financial condition.operations.

Considerable uncertainty exists regarding how future budget and program decisions will unfold, including the defense spending priorities of the U.S. government, what challenges budget reductions will present for the defense industry and whether annual appropriations bills for all agencies will be enacted for U.S. government fiscal year 2024 and thereafter due to many factors, including but not limited to, changes in the political environment, including before or after a change to the leadership within the government administration, and any resulting uncertainty or changes in policy or priorities and resultant funding. The U.S. government’s budget deficit and the national debt could have an adverse impact on our business, financial condition, results of operations and cash flows in a number of ways, including the following:

Use of open source software may entail greater risks than use of third-party commercial software, as open source licensors generally do not provide warranties or other contractual protections regarding infringement claims or the quality of the code, including with respect to security vulnerabilities where open source software may be more susceptible. In addition, certain open source licenses require that source code for software programs that incorporate, use or combine with such open source software be made available to the public at no cost and that any modifications or derivative works to such open source software continue to be licensed under the same terms as the open source software license. The terms of various open source licenses to which we are subject have not or may not have been interpreted by courts in the relevant jurisdictions, and there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to market or provide our software and data. By the terms of certain open source licenses, we could be required to release the source code of our proprietary software, and to make our proprietary software available under open source licenses, if we combine our proprietary software with open source software in a certain manner. In the event that portions of our proprietary software are determined to be subject to an open source license, we could be required to publicly release the affected portions of our source code, re-engineer all or a portion of our solutions, or otherwise be limited in the licensing of our solutions, each of which could reduce or eliminate the value of our solutions. Disclosing our proprietary source code could allow our competitors to create similar products with lower development effort and time and ultimately could result in a loss of sales. Furthermore, any such re-engineering or other remedial efforts could require significant additional research and development resources, and we may not be able to successfully complete any such re-engineering or other remedial efforts. Any of these events could create liability for us and damage our reputation, which could have a material adverse effect on our business, financial condition, and results of operations, and financial conditionoperations and the market price of our shares.

We are required, pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, to furnish a report by management on the effectiveness of our internal control over financial reporting in our Annual Reports on Form 10-K. This assessment, pursuant to Section 404(a) of the Sarbanes-Oxley Act, must include disclosure of any material weaknesses identified by our management in our internal control over financial reporting. Additionally, once we are no longer an emerging growth company, pursuant to Section 404(b) of the Sarbanes-Oxley Act, we will be required to comply with the independent registered public accounting firm attestation requirement on our internal control over financial reporting. If we are unable to establish or maintain appropriate internal control over financial reporting or implement these additional requirements in a timely manner or with adequate compliance, it could result in material misstatements to our consolidated financial statements, failure to meet our reporting obligations on a timely basis, loss of investor confidence in the accuracy and completeness of our financial reports, increases in compliance costs, and subject us to adverse regulatory consequences, all of which may adversely affect investor confidence in, and the value of, our Class A Common Stock.

We are required to comply with U.S. export control laws and regulations, including ITAR, Bureau of Political Military Affairs’ directorate of Defense Trade controls administered by the U.S. Department of State, and the EAR, administered by the U.S. Department of Commerce’s Bureau of Industry and Security. Pursuant to these foreign trade control laws and regulations, we are required, among other things, to (i) maintain a registration under ITAR, (ii) determine the proper licensing jurisdiction and export classification of products, software, and technology, and (iii) obtain licenses or other forms of U.S. government authorization to engage in the conduct of space transport. While our spacepolicies transportmandate business.compliance Violations ofwith applicable international trade, export control laws and relatedfinancial crimes laws, failure by our employees, agents, subcontractors, suppliers and/or existing or future partners to comply with these and similar laws and regulations and our policies could resultimpact us in criminalvarious ways that include, but are not limited to, criminal, civil and administrative penalties,fines includingand/or fines,legal possiblesanctions, denial of export privileges, debarment and debarment,the inability to bid for or enter into contracts or sub-contracts with U.S. government customers and other entities, all of which could have a material adverse impacteffect on our business,reputation, includingoperations, ourand abilityfinancial to enter into contracts or subcontracts for U.S. government customers.results.

In addition, U.S. export control lawslaws, including those applicable to sensitive technologies, continue to change. For example, the control lists under the ITAR and the EAR are periodically updated to reclassify specific types of export-controlled technology. For example, any changes to the jurisdictional assignment of controlled data or hardware used by us could result in the need for different export authorizations, each then subject to a subsequent approval. As a result of any changes, we may, despite our compliance efforts, inadvertently act inconsistently with these laws. In such circumstances, our efforts to investigate and disclose an apparent violation to the relevant U.S. government agency could lead to audits, enforcement actions, fines, penalties, remediation costs, and other consequences that could have a material adverse effect on our business, financial condition, and results of operations.

We depend significantly on U.S. government contracts, which often are only partially funded, subject to immediate termination, and heavily regulated and audited. The termination or failure to fund, or negative audit findings for one or more of these contracts could have an adverse impact on our business, financial condition, and results of operations and financial condition.operations.

Our contracts and services with the U.S. government are also subject to specific procurement regulations and a variety of socioeconomic and other requirements.requirements, including the procurement policies and procedures set forth in the FAR. FAR governs all aspects of government contracting, including contractor qualifications and acquisition procedures. These requirements, although customary in U.S. government contracts, increase our performance and compliance costs. These costs might increase in the future, thereby reducing our margins, which could have an adverse effect on our business, financial condition, results of operations and cash flows. In addition, the U.S. government has and may continue to implement initiatives focused on efficiencies, affordability and cost growth and other changes to its procurement practices. These initiatives and changes to procurement practices may change the way U.S. government contracts are solicited, negotiated and managed, which may affect whether and how we pursue opportunities to provide our products and services to the U.S. government, including the terms and conditions under which we do so, which may have an adverse impact on our business, financial condition, results of operations and cash flows. For example, contracts awarded under the Department of Defense’s Other Transaction Authority for research and prototypes generally require cost-sharing and may not follow, or may follow only in part, standard U.S. government contracting practices and terms, such as the Federal Acquisition Regulation and Cost Accounting Standards.

Uncertain macro-economic and political conditions could materially adversely affect our business, financial condition, and results of operations and financial condition.operations.

Our indebtedness could expose us to risks that could adversely affect our business, financial condition, and results of operations and financial condition.operations.

In the future, we may incur indebtedness. Our indebtedness could have significant negative consequences for our security holders, business, financial condition, and results of operations and financial condition by, among other things:

From time to time, we have released, and may continue to release, guidance in our quarterly earnings releases, quarterly earnings conference calls, or otherwise, regarding our future performance that represents our management’s estimates as of the date of release. This guidance, which includes forward-looking statements, has been and will be based on projections prepared by our management. These projections are not prepared withsolely aby view toward compliance with published guidelines of the American Institute of Certified Public Accountants,management and neitherhave not been compiled, examined, or reviewed by our registered public accountants noror any other independent expertparty, or outside party compiles or examines the projections. Accordingly,and no suchassurance personis expresses any opinion or any other form of assuranceprovided with respect to thesuch projections.information.

As a result of the closing of the Business Combination (as defined in Note 1) on February 13, 2023, which was accounted for as a reverse recapitalization in accordance with U.S. GAAP, the financial statements of Intuitive Machines, LLC, a Delaware limited liability company and our wholly-owned subsidiary, are now the financial statements of the Company. You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and related notes thereto included elsewhere in this Annual Report. Certain of the information contained in this discussion and analysis or set forth elsewhere in this Annual Report, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the sections titled “Cautionary Note Regarding Forward-Looking Statements” and Part I. Item 1A. “Risk Factors” included in this Annual Report, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

We continue to monitor economic conditions and the impact of macroeconomic pressures, including repercussions from the recent banking crisis, risingelevated interest rates, sustained inflation and recession fears, supply chain disruptions, monetary and fiscal policy measures (including future actions or inactions of the United States government related to the “debt-ceiling” or “Department of Government Efficiency” actions), heightened geopolitical tensions (such as the war in Ukraine and Israel), changes to the U.S. federal budget, current or future government shutdowns, and the political and regulatory environment (including changes as a result of policy shifts implemented by the current administration) on our business, customers, suppliers and other third parties. While rising costs and other inflationary pressures have not had a material impact on our business to date, we are monitoring the situation and assessing its impact on our business, including to our partners and customers.

We are in the preliminary stages of developing our full space infrastructure offerings. These services are expected to grant customers access to cislunar space and the lunar surface at lower price points than previous lunar missions. We are also working to provide data transmission services at lunar distance to include far-side connectivity, along with ancillary services that are likely to include orbital servicingservicing, earth reentry, and payload development and manufacture.

Our success will partially depend on our ability to expand our lunar mission operations and win government contracts in 20252026 and beyond. We completed the first mission in February 2024 and completed our second mission in March 2025. We are working to establish a regular cadence of missions. We believe that this will provide our customers with proven and reliable cislunar access, with which to plan their future manifest. With binding agreements for additional launches as of December 31, 2024,2025, we have $328.3$213.1 million in contracted backlog, and we are in active discussions with numerous potential customers, including government agencies and private companies, to potentially add to our contracted revenue backlog.

Prior to commencing missions, we must complete internal integration activities as well as launch vehicle integration with our launch provider, SpaceX. Any delays to our targeted mission launch date or in commencing our missions, including due to congestion at the pad launch site or delays in obtaining various approvals or licenses, could adversely impact our results and growth plans. As we improve production efficiency and schedule reliability and reachbegin to launch our targetsatellites offor multipleour missionslunar perdata year manifested 2-3 years in advance,network, we expect to improve our market penetration, which we believe will lead to higher revenue from both volume and mission complexity as well as increased operating leverage.

Our future growth is largely dependent on our ability to continue to capitalize on increased government spending and private investment in the space economy. U.S. federal government expenditures and private enterprise investment have fueled our growth in recent years, and it has resulted in our continued ability to secure increasingly valuable contracts for products and services in 2024.services. An increased focus on U.S. federal government spending could unfavorably impact the space exploration sector in the future. On January 20, 2025, President Donald J. Trump announced an executive order establishing the “Department of Government Efficiency” to maximize government efficiency and productivity. Pressures on and uncertainty surrounding the U.S. federal government’s budget and potential changes in budgetary priorities, could adversely affect the funding for individual programs and delay purchasing decisions by our customers. If our existing programs and project pursuits are not focused on the federal government’s higher priorities, our business, prospects, financial condition and operating results could be adversely affected.

We design, build, and test our landers, satellites, spacecraft and subsystems in-house and operate at the forefront of composite structures, liquid rocket engines, guidance, navigation and control software, precision landing and hazard avoidance software, and advanced manufacturing techniques. We believe the synergy of these technologies enables greater responsiveness to the commercial and government requirements for lunar exploration. To continue establishing market share and attracting customers, we plan to continue to make substantial investments in research and development for the continued enhancements of our landers, lunar data network, and other space systems. Over time, we expect our research and development expenditures to continue to grow on an absolute basis, but remain consistent or decrease as a percent of our total revenue as we expand our service offerings.

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report, as well as our audited consolidated financial statements as of and for the years ended December 31, 2025 and 2024 which was filed with the Securities and Exchange Commission (the “SEC”) on March 19, 2026. Certain of the information contained in this discussion and analysis or set forth elsewhere in this Quarterly Report, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the sections titled “Cautionary Note Regarding Forward-Looking Statements“ and Part II. Item 1A. “Risk Factors” included in this Quarterly Report and in the section titled Part I. Item 1A. “Risk Factors” in our 2025 Annual Report on Form 10-K filed with the SEC on March 19, 2026, our actual results could differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

SecuritiesShare Purchase Agreement - Goonhilly

We continue to monitor economic conditions and the impact of macroeconomic pressures, including repercussions from elevated interest rates, sustained inflation and recession fears,risks, supply chain disruptions, monetary and fiscal policy measures including future actions or inactions of the United States government related to the “debt-ceiling”, heightened geopolitical tensions and armed conflictsconflicts, (such asincluding the ongoing warswar in Ukraine,the IsraelUkraine and Iran),conflict in the Middle East, the current budgetary and deficit funding environment, future government shutdowns, and the political and regulatory environment (including changes as a result of policy shifts implemented by the current administration) on our business, customers, suppliers and other third parties. While rising costs and other inflationary pressures have not had a material impact on our business to date, we are monitoring the situation and assessing its impact on our business, including to our partners and customers.

During 2025, we observed a significant shift in U.S. trade policy,policy withcontinues increasedto tariffsevolve, andincluding through the imposition of new or increased tariffs that could impact our supply chain and our business. While some of these wide-reaching tariffs have been paused, theseThese trade policy decisions are outside of our control and may have consequences for our business. Changes in trade policies, such as new tariffs or increases in tariffs, or reactionaryresponsive measuresmeasures, including retaliatory tariffs or legal challenges, could have an adverse impact on our business. Even thoughAlthough we primarily sell our products and services to U.S. Government customers and our suppliers are primarily domestic, we have some exposure to imported materials and components. Based on current conditions, we have not experienced to date and do not expect a material impact on our results of operations or financial condition over the next year. We will continue to monitor the evolving trade landscape and assess potential implications on our supply chain and business.

Any future U.S. government shutdown may cause our business, program performance and results of operations to be impacted by the disruptions to federal government offices, workers, and operations, including risks relating to the funding of certain programs, stop workstop-work orders, delay in contract awards,awards and new program starts, payments for work performed from U.S. government entities, and other actions. We may also experience similar impacts in the event of a series of short-term continuing resolutions rather than full-year fiscal year appropriations. Generally, the significance of these impacts will primarily be based on the length of theany shutdown and the timing of passage of a new continuing resolutionsresolution or afull-year full budget.appropriations.

Our success will partially depend on our ability to expand our lunar mission operations and win government contracts in 2026 and beyond. We completed the first mission in February 2024 and completed our second mission in March 2025. With binding agreements for additional launches as of MarchJune 31,30, 2026, we have $1.1$1.76 billion in contracted backlog, and we are in active discussions with numerous potential customers, including government agencies and private companies, to potentially add to our contracted revenue backlog.

Earn Out Units are classified as liabilities transactions at initial issuance which were offset against paid-in capital as of the closing of the Business Combination. At each period end, the Earn Out Units are remeasured to their fair value with the changes during that period recognized in other income (expense) on the condensed consolidated statement of operations. Upon issuance and release of the shares after each Triggering Event is met, the related Earn Out Units will be remeasured to fair value at that time with the changes recognized in other income (expense), and such Earn Out Units will be reclassed to stockholders’ equity (deficit) on the consolidated balance sheet. See Note 16 of the condensed consolidated financial statements for additional information on the earn-out liabilities.

In connection with the Private Placement, Warrant Exercise Agreement, and the Bridge Loan Conversion, the Company has issued warrants which are classified as liabilities on our balance sheet. At each period end, the warrants are remeasured to their fair value with the changes during the period recognized in other income (expense) on our condensed consolidated statement of operations. As of MarchJune 31,30, 2026, only the Bridge Loan Conversion warrants remain outstanding. See Notes 13 and 16 of the condensed consolidated financial statements for additional information on the warrant liabilities.

Other income,income (expense), net

Net income (loss) attributable to redeemable noncontrolling interest

Redeemable noncontrolling interest represents the portion of Intuitive Machines, LLC that the Company controls and consolidates but does not own. The noncontrolling interest was created as a result of the Business Combination and represented the common units issued by Intuitive Machines, LLC to the prior investors. The Company allocates net income or loss attributable to the noncontrolling interest based on the weighted average ownership interest during the period. The net income or loss attributable to noncontrolling interests is reflected in the condensed consolidated statement of operations. As of MarchJune 31,30, 2026, the financial results of Intuitive Machines, LLC were consolidated into Intuitive Machines, Inc. and resulted in the allocation of approximately 26.3%24.8% of Intuitive Machines, LLC’s net loss to noncontrolling interest.

The following table sets forth information regarding our consolidated results of operations for the three months ended MarchJune 31,30, 2026 compared to the three months ended MarchJune 31,30, 2025, and for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

•The initial NASA payload contract for the IM-3 mission was awarded in November 2021 with an initial targeted mission launch date no later than June 2024.2021. Total IM-3 mission estimated revenue under fixed-priced contracts is $91.3 million (excluding constrained revenue of $9.7 million) as of MarchJune 31,30, 2026. The IM-3 missionperiod timelineof performance runs through March 2027.

•The initial NASA payload contract for the IM-5IM-4 mission was awarded in MarchAugust 2026 with an initial targeted mission launch of mid-year 2030.2024. Total IM-5IM-4 mission estimated revenue under fixed-priced contracts is $161.4$124.5 million (excluding constrained revenue of $18.3$16.2 million) as of MarchJune 31,30, 2026. The IM-4 period of performance runs through August 2028.

Comparison of three months ended MarchJune 31,30, 2026 and 2025

Total revenue increased by $124.2$155.9 million for the three months ended MarchJune 31,30, 2026 compared to the same period in 2025, mostly related to our recent acquisition of Lanteris in January 2026 which contributed $141.6$166.7 million driven by revenues from several government contracts, notably the Tracking Layer program for $39.5 million, Power & Propulsion Element for $30.6 million, a government defense contract for $7.7 million, commercial satellite contracts relatedfor to$64.5 EchoStarmillion, national security contracts for $23.7 million, a proprietary commercial contract for $23.4$57.8 million, and SiriusXMcivil contracts for $11.8$44.4 million.

Revenue on the NASA Near Space Network (“NSN”) contract decreased by $7.3 million due to schedule delay and an unfavorable change in the EAC, OMES III contract decreased by $5.5$1.8 million due to NASA’s cancellation of the OSAM task orders, and the LTV contract decreased by $6.9$5.8 million due to completion in the second quarter of 2025. Various other engineering services contributed a net increase in revenue of $0.6$4.8 million.

Comparison of three months ended MarchJune 31,30, 2026 and 2025

Total cost of revenue increased by $100.8$108.1 million, for the three months ended MarchJune 31,30, 2026 compared to the same period in 2025, mostly related to our acquisition of Lanteris in January 2026 which incurred costs of $113.9$119.3 million driven by product costs from several government contracts, notably the Tracking Layer program for $32.2 million, NASA Power & Propulsion Element for $27.2 million, and a government defense contract for $6.2 million, and commercial satellite contracts relatedfor to$46.0 EchoStarmillion, national security contracts for $20.1 million, a proprietary commercial contract for $19.7$46.6 million, and SiriusXMcivil contracts for $9.6$26.7 million.

For the three months ended MarchJune 31,30, 2026 compared to the same period in 2025, the cost of revenues on the CLPS mission contracts decreased by $4.7$3.0 million. The cost of revenue on IM-2the IM-3 mission decreased by approximately $8.7$11.5 million asdriven by higher estimated contract costs in 2025 related to the alignment of the mission wasschedule completedwith the completion of an internally-developed satellite to be placed in Marchlunar 2025,orbit to meet NSN contract obligations partially offset by the IM-4 mission increase of $4.0$8.8 million asdue activityto ramps up. Theunfavorable cost ofadjustment revenueto formeet thepayload IM-3customer mission was flat for the same comparative periods.obligations. As of MarchJune 31,30, 2026, the IM-3 and IM-4 contracts are in a loss position. For the three months ended MarchJune 31,30, 2026 compared to the same period in 2025, the accrued contract loss for IM-3 increaseddecreased by approximately $2.5$14.7 million dueprimarily related to increasethe 2025 increases in estimateestimated atcosts driven by the alignment of the mission schedule with the completion andof an internally-developed satellite to be placed in lunar orbit to meet NSN contract obligations. For the same comparable periods, the accrued contract loss for IM-4 wasincreased relativelyby flat.$13.5 million driven by the cost adjustments as previously discussed.

Cost of revenue decreased on the OMES III contract by $5.4 million due to NASA’s cancellation of the OSAM project and the LTV contract by $7.6$4.9 million as the contract was completed in the second quarter of 2025, offsetthe NSN contract by cost$2.0 million due to schedule delay, the OMES III contract by $1.2 million due to NASA’s cancellation of revenuethe increasesOSAM onproject, various engineering services of $4.9$0.1 million,million.

Research and development increased by $4.7$7.3 million for the three months ended MarchJune 31,30, 20262026, compared to the same period in 20252025, asand increased by $11.9 million for the Companysix investsmonths ended June 30, 2026, compared to the same period in 2025. The increases were primarily attributable to investments in initiatives toaimed expandat ourexpanding the Company’s product and service capabilities.

General and administrative expense (excluding depreciation and amortization) (“G&A”) increased by $35.5$44.8 million for the three months ended MarchJune 31,30, 20262026, compared to the same period in 2025, and increased by $80.2 million for the six months ended June 30, 2026, compared to the same period in 2025. These increases primarily reflect the Company’s investment in its workforce to support our operations and business infrastructure, business development, and information technology to optimize corporate and operational processes and systems, and research and development initiatives to expand our product and service capabilities. Additionally, the increase was driven by the Company’s acquisition of Lanteris on January 13, 2026. These increases are summarized below.

The $35.5$44.8 million increaseincreased for the three months ended MarchJune 31,30, 20262026, compared to the same periods in 20252025, was primarily driven by higher employee compensation and benefits expense of $20.6 million, increased non-cash share-based compensation expense of $8.0 million, higher professional services of $9.2 million driven by accounting, legal and other consulting fees to support, business development expense increase of $3.7 million, and various other administrative costs $3.1 million The $80.2 million increase for the six months ended June 30, 2026, compared to the same periods in 2025, was driven by higher employee compensation and benefits expense of $18.3$38.8 million and non-cash share-based compensation expense of $6.0$14.0 million, andhigher professional services of $13.8$23.0 million driven by accountingaccounting, legal and legalother consulting fees, and business development expense increase of $4.5 million, partially offset by various decreasesother $2.7administrative costs net decrease of $0.3 million.

Total other income (expense), net unfavorable change of $24.4$6.1 million for the three months ended MarchJune 31,30, 2026 compared to the same period in 2025 was primarily due to the unfavorable changes in the fair value of warrant liabilities of $52.4 million and contingent consideration liabilities of $0.5 million,higher interest expense mostly related to the Convertible Notes of $4.9$4.4 millionmillion, reduction in interest income of $2.0 million, and unfavorable change in contingent consideration liabilities of $0.9 million, partially offset by the favorable change in the fair value of earn outwarrant liabilities as the earn out units fully vested during the first quarter of 2025.$1.4 million.