v3.26.1
Related Party Transactions
 6 Months Ended
Jun. 30, 2026
Related Party Transactions [Abstract]  
Related Party Transactions
NOTE 12 — Related Party Transactions
The following table summarizes the related party transactions included in the condensed consolidated statements of operations and comprehensive loss:
Three Months Ended June 30,Six Months Ended June 30,
$ in thousands2026202520262025
Master services agreement administrative costs$33 $42 $61 $69 
General and administrative$33 $42 $61 $69 
Master services agreement costs for the La Porte Demonstration Facility$311 $668 $559 $1,254 
BHES JDA
(90)20,178 12,917 38,005 
Research and development$221 $20,846 $13,476 $39,259 
BHES Limited Notice to Proceed— 19,533 $— $19,533 
Project development$— $19,533 $— $19,533 
The Company had $7.0 million and $37.3 million in current liabilities payable to related parties as of June 30, 2026 and December 31, 2025, respectively, on the condensed consolidated balance sheets related to the following services. These related party payables are unsecured and are due on demand.
Master Services Agreements
A significant shareholder provides the Company with patent administration services related to the development of the Oxy-Combustion Cycle technology. These totals are included in general and administrative on the condensed consolidated statements of operations and comprehensive loss.
Another shareholder supports the Company with regard to general business oversight and with the operation of the La Porte Demonstration Facility. On June 30, 2026, this shareholder notified the Company that it is terminating all outstanding work orders under the related master services agreement, effective December 26, 2026. These totals are reflected in research and development on the condensed consolidated statements of operations and comprehensive loss.
BHES JDA
On February 3, 2022, the Company and BHES entered into the Original JDA, which was subsequently amended and restated on June 30, 2022 and December 13, 2022 with BHES to invest in, develop, and deploy the Oxy-Combustion Cycle technology in collaboration with the Company (as amended and restated, the “BHES JDA”). The BHES JDA is settled in cash and issuances of equity in exchange for services related to the development and commercialization of the Oxy-Combustion Cycle technology. The Company records the expense for services provided by BHES within research and development on the condensed consolidated statements of operations and comprehensive loss.
In January 2026, the Company agreed to temporarily suspend development activities under the BHES JDA, which covered joint development of turboexpander equipment for utility-scale application of the Oxy-Combustion Cycle, from the December 31, 2025 effective date through March 31, 2026 (the “BHES JDA Suspension Agreement”), which was subsequently extended through June 30, 2026 pursuant to the BHES JDA Variation Agreement No. 1 and BHES JDA Variation Agreement No. 2. During the suspension period, the Company and BHES engaged in negotiations regarding potential amendments to the BHES JDA. The Company is obligated to reimburse BHES for costs incurred to terminate certain third-party supplier and subcontractor purchase orders and, subject to a $3.0 million cap, for certain other costs resulting or arising from the suspension.
As of June 30, 2026, the terms of the indefinite suspension of the BHES JDA were substantially negotiated, giving rise to the impairment and other effects described in Note 5 — Goodwill and Intangible Assets, Note 6 — Property, Plant, and Equipment, and Note 14 — Commitments and Contingencies. As of the date these condensed consolidated financial statements were issued, the Company and BHES had not executed definitive amendments to the BHES JDA or the related Commercial Agreement or License Agreement. Development activities under the BHES JDA remain suspended, and the parties have continued to operate consistent with the suspension arrangements while negotiating. Baker Hughes’ exclusive rights with respect to the La Porte Demonstration Facility remain in effect.
The portion of BHES JDA costs that the Company pays with Class A OpCo Units and shares of Class B Common Stock is recorded within additional paid-in capital on the condensed consolidated balance sheets and the condensed consolidated statements of shareholders' equity and mezzanine shareholders' equity. The following table displays the expense recognized in the condensed consolidated statements of operations and comprehensive loss for shares distributed as payment for services rendered under the terms of the BHES JDA during the periods described below:
QuantityExpense Recognized
Three Months Ended June 30,Three Months Ended June 30,
in thousands2026202520262025
Class A OpCo Units—1,562$— $10,323 
Class B Common Stock—1,562— — 
Total$— $10,323 
QuantityExpense Recognized
Six Months Ended June 30,Six Months Ended June 30,
in thousands2026202520262025
Class A OpCo Units9092,809$6,011 $18,570 
Class B Common Stock9092,809— — 
Total$6,011 $18,570 

Shares issued as payment under the terms of the BHES JDA were issued at a discount that resulted in inception-to-date losses to the Company of $16.2 million. Following the suspension arrangements, the Company does not
expect to make additional equity issuances under the BHES JDA other than in respect of final billings and other surviving obligations under those arrangements.
During the first quarter of 2026, the Company incurred $9.6 million related to reimbursement of costs incurred by BHES to terminate certain third-party supplier and subcontractor purchase orders entered into by BHES in furtherance of the BHES JDA scope. As of June 30, 2026, the amounts due to BHES related to these reimbursements remained outstanding.
If the volume-weighted average price of the Company’s stock for ten consecutive trading days (“10-Day VWAP”) immediately preceding the payment date for services under the BHES JDA is less than $4.00 per share (the “Floor Price”), an incremental cash payment is required for the difference between the 10-Day VWAP and the Floor Price (the “BHES JDA Make-Whole Payment”). As of June 30, 2026 and December 31, 2025, the Company had $2.1 million and $2.8 million in current liabilities payable to related parties on the condensed consolidated balance sheets related to the BHES JDA Make-Whole Payment. During the three months ended June 30, 2026, the Company did not incur expenses related to the BHES JDA Make-Whole Payment. During the six months ended June 30, 2026, the Company incurred expenses of $2.1 million related to the BHES JDA Make-Whole Payment. During the three and six months ended June 30, 2025, the Company incurred expenses of $1.4 million and $3.9 million related to the BHES JDA Make-Whole Payment.