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Fair Value Measurements
 9 Months Ended
Sep. 30, 2024
Fair Value Disclosures [Abstract]  
Fair Value Measurements
NOTE 10 - FAIR VALUE MEASUREMENTS
The following tables summarize the fair value of assets and liabilities that are recorded in the Company’s condensed consolidated balance sheets as of September 30, 2024 and December 31, 2023 at fair value on a recurring basis.

September 30, 2024
Frequency of
Measurement		TotalLevel 1Level 2Level 3
Liabilities
Earn-out liabilitiesRecurring$47,848 $— $— $47,848 
Warrant liabilities - Series ARecurring27,769 — — 27,769 
Warrant liabilities - Series BRecurring22,026 — — 22,026 
  Warrant liabilities49,795 — — 49,795 
Total liabilities measured at fair value$97,643 $— $— $97,643 
December 31, 2023
Frequency of
Measurement		TotalLevel 1Level 2Level 3
Liabilities
Earn-out liabilitiesRecurring$14,032 $— $— $14,032 
Warrant liabilities - Series ARecurring8,612 — — 8,612 
Warrant liabilities - Series BRecurring2,682 — — 2,682 
  Warrant liabilities
11,294 — — 11,294 
Total liabilities measured at fair value$25,326 $— $— $25,326 

The following table provides a roll-forward of the Company’s Level 3 liabilities (in thousands):

Earn-out liabilitiesWarrant liabilities - Series AWarrant liabilities - Series BTotal Warrant liabilities
Balance, December 31, 2023$14,032 $8,612 $2,682 $11,294 
Additions— 20,827 11,262 32,089 
Change in fair value33,816 18,800 17,841 36,641 
Converted to equity— (20,471)(9,758)(30,229)
Balance, September 30, 2024$47,848 27,768 22,027 49,795 

Earn-out Liabilities

The fair value of the earn-out liabilities as of September 30, 2024 was estimated using a Monte Carlo simulation approach that modeled the triggering events including the simulated stock price of the Company over the maturity dates. The
significant assumptions utilized in estimating the fair value of the earn-out liabilities include: (i) Intuitive Machines stock price of $8.05; (ii) a dividend yield of 0.0%; (iii) a risk-free rate of 3.52%; and (iv) expected volatility of 85%.

As a result of the Business Combination, certain Intuitive Machines, LLC members received 10,000,000 earn out units of Intuitive Machines, LLC (“Earn Out Units”) subject to certain triggering events. Upon the vesting of any Earn Out Units, each of the certain Intuitive Machines, LLC members will be issued (i) by Intuitive Machines, LLC an equal number of Intuitive Machines, LLC Common Units and (ii) by Intuitive Machines, an equal number of shares of Class C Common Stock, in exchange for surrender of the applicable Earn Out Units and the payment to Intuitive Machines, Inc. of a per-share price equal to the par value per share of the Class C Common Stock. Under the earn out agreement, Earn Out Units of 2,500,000 vested for the year ended December 31, 2023. For the nine months ended September 30, 2024, there was no vesting of Earn Out Units.

Warrant Liabilities

Initial Warrants

Pursuant to the Warrant Exercise Agreement on January 10, 2024 (as further described in Note 8 and discussed below), the terms of the Initial Warrants were modified, and the Initial Series B Warrant was exercised in full and converted to equity. The pre-modification fair value of the Initial Warrant liabilities was estimated using a Black-Scholes-Merton model. The significant assumptions utilized in estimating the pre-modification fair value of the Series A Warrant liabilities include: (i) a per share price of the Class A Common Stock of $2.83; (ii) a dividend yield of 0.0%; (iii) a risk-free rate of 3.99%; and (iv) expected volatility of 104%. The significant assumptions utilized in estimating the pre-modification fair value of the Series B Warrant liabilities include: (i) a per share price of the Class A Common Stock of $2.83; (ii) a dividend yield of 0.0%; (iii) a risk-free rate of 4.75%; and (iv) expected volatility of 85%.

During February 2024, the investor also fully exercised and converted to equity the Initial Series A Warrant. Refer to Note 8 for more information on the warrant exercises.

New Warrants

Pursuant to the Warrant Exercise Agreement on January 10, 2024 as described further in Note 8, the fair values of the New Series A Warrant and the New Series B Warrant liabilities were estimated at $10.8 million and $5.7 million, respectively, utilizing the Black-Scholes-Merton model. The significant assumptions utilized in estimating the fair value of the New Series A Warrant liabilities include: (i) a per share price of the Class A Common Stock of $2.83; (ii) a dividend yield of 0.0%; (iii) a risk-free rate of 4.00%; and (iv) expected volatility of 105%. The significant assumptions utilized in estimating the fair value of the New Series B Warrant liabilities include: (i) a per share price of the Class A Common Stock of $2.83; (ii) a dividend yield of 0.0%; (iii) a risk-free rate of 4.55%; and (iv) expected volatility of 83%.

During February 2024, the investor fully exercised and converted to equity the New Warrants. Refer to Note 8 for more information on the warrant exercises.

Conversion Warrants

Pursuant to the Letter Agreement and the issuance of warrants on January 29, 2024 as described further in Notes 5 and 8, the fair values of the Conversion Series A Warrant and the Conversion Series B Warrant liabilities were estimated at $10.0 million and $5.5 million, respectively, utilizing the Black-Scholes-Merton model. The significant assumptions utilized in estimating the fair value of the Conversion Series A Warrant liabilities include: (i) a per share price of the Class A Common Stock of $3.05; (ii) a dividend yield of 0.0%; (iii) a risk-free rate of 3.97%; and (iv) expected volatility of 102%. The significant assumptions utilized in estimating the fair value of the Conversion Series B Warrant liabilities include: (i) a per share price of the Class A Common Stock of $3.05; (ii) a dividend yield of 0.0%; (iii) a risk-free rate of 4.53%; and (iv) expected volatility of 76%.
The fair value of the Conversion Series A Warrant and the Conversion Series B Warrant liabilities as of September 30, 2024 was estimated using a Black-Scholes-Merton model. The significant assumptions utilized in estimating the fair value of the Conversion Series A Warrant liabilities include: (i) a per share price of the Class A Common Stock of $8.05; (ii) a dividend yield of 0.0%; (iii) a risk-free rate of 3.58%; and (iv) expected volatility of 87%. The significant assumptions utilized in estimating the fair value of the Conversion Series B Warrant liabilities include: (i) a per share price of the Class A Common Stock of $8.05; (ii) a dividend yield of 0.0%; (iii) a risk-free rate of 4.12%; and (iv) expected volatility of 96%.