RELATED PARTY TRANSACTIONS |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Related Party Transactions [Abstract] | |
| Related Party Transactions Disclosure | NOTE. 17 RELATED PARTY TRANSACTIONS For the three and six months ended June 30, 2026, the Company recorded no material gross Revenue—net from related parties. For the three and six months ended June 30, 2025 the Company recorded $0.1 million and $0.3 million of gross Revenue—net from Honeywell, respectively, for research projects and software subscription. The Company purchased $2.2 million and $0.8 million of products and services from related parties for the three months ended June 30, 2026 and 2025, respectively. The Company purchased $4.1 million and $2.5 million of products and services from related parties for the six months ended June 30, 2026 and 2025, respectively. As of June 30, 2026 and December 31, 2025, outstanding balances Due to related parties for all transactions were $0.1 million and $1.3 million, respectively; balances Due from related parties for all transactions were $0.5 million and $0.6 million, respectively. TRANSITION SERVICE AGREEMENT Prior to the Transactions, Honeywell was the controlling majority owner of the Company. Honeywell continues to hold a significant ownership interest in the Company and remains a related party. The Company and Honeywell entered into a transition service agreement (“TSA”) in which certain services performed by Honeywell are cash settled by the Company. For the three months ended June 30, 2026 and 2025, the Company was charged $0.2 million and $0.2 million, respectively, of corporate expenses which are required to be cash-settled to Honeywell. For the six months ended June 30, 2026 and 2025, the Company was charged $0.3 million and $0.3 million, respectively, of corporate expenses which are required to be cash-settled to Honeywell. Upon the occurrence of the IPO the TSA was terminated. STRATEGIC SERVICES AND SUPPLY AGREEMENTS The Company utilizes Honeywell’s facilities for fabrication of ion traps, a component of the quantum computers. In November 2021, the Company entered into a Strategic Services and Supply Agreement with Honeywell to continue the fabrication of ion traps (“the 2021 SSSA”). The agreement term was ten years and included reimbursement of labor and materials upon mutually agreed statements of work throughout the term and a prioritization incentive payment not exceeding 1.5% applied to annual revenues generated by the H-series quantum hardware. The Company incurred no material incentive for the three months ended June 30, 2026 and 2025 and $0.1 million and $0.3 million of incentive for the six months ended June 30, 2026 and 2025, respectively, which are reflected as a reduction of Revenue—net in the Unaudited Condensed Consolidated Statements of Operations. In March of 2026, the 2021 SSSA was terminated and the Company entered into a Strategic Services and Supply Agreement with Honeywell Aerospace Inc. (“AERO”) under which AERO will provide goods, services, and deliverables in relation to the fabrication of ion traps (“the 2026 SSSA”). Prior to AERO’s spin-off from Honeywell on June 29, 2026, AERO was considered a related party as a wholly owned subsidiary of Honeywell. On June 29, 2026, AERO completed its spin-off and ceased to be a related party as of that date. The agreement term is ten years, with automatic five-year renewals, and includes reimbursement of labor and materials plus a 15% markup upon mutually agreed statements of work and purchase orders. The Company is not obligated to purchase any minimum amount of goods, services, or deliverables under the 2026 SSSA and the agreement does not include a prioritization incentive payment. For the three months ended June 30, 2026 and 2025, the Company incurred $2.1 million and $0.6 million, respectively, of fabrication costs which are required to be cash-settled. For the six months ended June 30, 2026 and 2025, the Company incurred $3.7 million and $2.0 million, respectively, of fabrication costs which are required to be cash-settled. As of June 30, 2026 and December 31, 2025, outstanding balances due to Honeywell for fabrication costs were $0.1 million and $0.2 million, which are included in Due to related parties in the Condensed Consolidated Balance Sheets. Since AERO is no longer a related party as of June 29, 2026, the outstanding balance due to AERO for fabrication costs of $1.0 million as of June 30, 2026 is included in Accounts payable in the Condensed Consolidated Balance Sheets. Additionally, in connection with the 2026 SSSA, the Company has a prepayment to AERO balance of $14.1 million as of June 30, 2026 which is included in Prepayment to related parties, non-current in the Condensed Consolidated Balance Sheets and will make additional prepayments of $1.6 million during the remainder of 2026. LEASES In the second quarter of 2026, the Company completed a restructuring of its existing subleased office space in Broomfield, Colorado. As part of this restructuring, the Company's existing sublease arrangement with Honeywell was terminated, the Company assumed the related head lease, and the Company entered into a sublease arrangement with AERO for a portion of the premises. As a result of these transactions, the Company became both the lessee under the head lease and the lessor under the sublease. Accordingly, the Company accounts for the head lease and sublease as separate contracts. The underlying head lease associated with the restructuring was executed with an independent third-party lessor and does not constitute a related party transaction. Additionally, as of June 29, 2026, AERO, the lessee under the sublease agreement, is no longer a related party. Therefore, the related party relationship pertains solely to the terminated original sublease agreement with Honeywell, under which the Company acted as the lessee. In connection with the Company’s original sublease agreement with Honeywell to rent a portion of the building, the Company has included $1.7 million as the right-of-use asset, $0.6 million as the current portion of operating lease liabilities, and $1.2 million, as the non-current portion of operating lease liabilities in the Condensed Consolidated Balance Sheets as of December 31, 2025. Upon termination in the second quarter of 2026, the Company derecognized the right-of-use asset and corresponding lease liability associated with the sublease. For the three months ended June 30, 2026 and 2025, the Company recognized $0.1 million and $0.1 million, respectively, of operating lease cost and $0.5 million and $0.5 million, respectively, of variable lease cost in the Unaudited Condensed Consolidated Statements of Operations. For the six months ended June 30, 2026 and 2025, the Company recognized $0.3 million and $0.2 million, respectively, of operating lease cost and $1.1 million and $1.1 million, respectively, of variable lease cost in the Unaudited Condensed Consolidated Statements of Operations. OTHER RELATED PARTY TRANSACTIONS In connection with a Cooperative Research and Development Agreement with Honeywell Aerospace Technologies, the Company entered into statements of work with National Technology and Engineering Solutions of Sandia (“NTESS”), a wholly owned subsidiary of Honeywell, relating to collaborative research and development activities. Under these arrangements, the Company provides cost‑reimbursable funding for agreed research activities. The Company incurred $0.3 million and $0.1 million of costs related to these arrangements for the three months ended June 30, 2026 and 2025, respectively. The Company incurred $0.5 million and $0.1 million of costs related to these arrangements for the six months ended June 30, 2026 and 2025. Additionally, there were no material amounts payable to or receivable from NTESS as of June 30, 2026 and December 31, 2025. As of June 30, 2026 the Company had an outstanding receivable balance of $2.2 million due from a non-officer vice president of the Company.
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