Group 1 - NET Power Inc. (NPWR) closed at $11.88, with a 13.7% gain over the past four weeks, and a mean price target of $17.60 indicating a 48.2% upside potential [1] - The mean estimate includes five short-term price targets with a standard deviation of $7.89, where the lowest estimate is $9 (24.2% decline) and the highest is $30 (152.5% increase) [2] - Analysts show strong agreement in revising NPWR's earnings estimates higher, which correlates with potential stock price increases [10][11] Group 2 - The Zacks Consensus Estimate for NPWR's current year earnings has increased by 16% over the last 30 days, with no negative revisions [11] - NPWR holds a Zacks Rank 2 (Buy), placing it in the top 20% of over 4,000 ranked stocks based on earnings estimates [12] - While the consensus price target may not be a reliable indicator of the stock's potential gain, it suggests a positive price movement direction [12]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2024 OR (Address of Principal Executive Offices) (Zip Code) Delaware 98-1580612 (I.R.S. Employer Identification No.) 27701 o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission File Number 001-40503 NET ...

Date of report (Date of earliest event reported): May 13, 2024 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 NET POWER INC. FORM 8-K (Exact name of registrant as specified in its charter) CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 (State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.) (Registrant's telephone number, including area code) (Former name or former address, if changed since last ...

Q4 2023 Business Update & Results 1 March 11, 2024 A NETPOWER Important Notice Cautionary Note Regarding Forward-Looking Statements and Projections. Certain statements in this presentation may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995, each as amended. Forward-looking statements provide current expectations of future events and include any ...

Report Overview [FORM 10-K Header](index=1&type=section&id=FORM%2010-K%20Header) This section provides basic identification information for NET Power Inc.'s 10-K annual report as of December 31, 2023, including company name, jurisdiction, address, and registered securities on the NYSE | Metric | Detail | | :--- | :--- | | Registrant Name | NET Power Inc. | | Jurisdiction of Incorporation | Delaware | | Fiscal Year End Date | December 31, 2023 | | Securities Registered | Class A Common Stock (NPWR), Warrants (NPWR-WT) | | Exchange | New York Stock Exchange | - The company is marked as a "non-accelerated filer," "smaller reporting company," and "emerging growth company," and has filed all required reports[5](index=5&type=chunk)[6](index=6&type=chunk) - As of June 30, 2023, the aggregate market value of voting and non-voting common equity held by non-affiliates was approximately **$271.9 million**[6](index=6&type=chunk) - As of March 7, 2024, **71,960,052 shares of Class A common stock** and **141,801,811 shares of Class B common stock** were outstanding[7](index=7&type=chunk) [Documents Incorporated by Reference](index=1&type=section&id=Documents%20Incorporated%20by%20Reference) This section indicates that portions of the company's definitive proxy statement for the 2024 Annual Meeting of Stockholders are incorporated by reference into Part III of this report - Portions of the definitive proxy statement for the 2024 Annual Meeting of Stockholders are incorporated by reference into Part III of this report[9](index=9&type=chunk) [Table of Contents](index=3&type=section&id=Table%20of%20Contents) This section provides a detailed table of contents for the 10-K annual report, listing all major sections and items with corresponding page numbers for easy navigation - The table of contents details various sections of the report, including business, risk factors, and financial statements, with corresponding page numbers[11](index=11&type=chunk)[12](index=12&type=chunk) [Certain Defined Terms](index=5&type=section&id=Certain%20Defined%20Terms) This section defines key terms and abbreviations used throughout the report, including company entities, agreements, security types, and industry terms related to the NET Power Cycle technology, ensuring clarity and consistency - Key entities used in the report, such as 8 Rivers, Baker Hughes, and NET Power Inc., are defined[14](index=14&type=chunk)[16](index=16&type=chunk) - Important agreements and transactions, including the Amended and Restated JDA, Business Combination Agreement, and PIPE Financing, are explained[14](index=14&type=chunk)[16](index=16&type=chunk) - Definitions for industry-specific terms like CO2, MW, and sCO2 are provided to aid understanding of the NET Power Cycle technology[18](index=18&type=chunk) [Cautionary Note Regarding Forward-Looking Statements](index=8&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section warns investors that forward-looking statements in the report involve known and unknown risks, uncertainties, and other factors that could cause actual results to differ materially from expectations, listing various risks that may affect future performance - Forward-looking statements cover the company's technology development, market demand, plant delivery timelines, business strategy, capital needs, and future performance[20](index=20&type=chunk) - Actual results may differ materially due to various risks and uncertainties, including financial projection uncertainties, business integration risks, capital-intensive business model, technology deployment hurdles, supply chain issues, regulatory compliance, intellectual property protection, and cybersecurity risks[21](index=21&type=chunk) - The company assumes no obligation to update forward-looking statements, and investors should not place undue reliance on them[22](index=22&type=chunk)[23](index=23&type=chunk) [Summary Risk Factors](index=9&type=section&id=Summary%20Risk%20Factors) This section outlines numerous key risks and uncertainties that could negatively impact the company's strategic implementation and business growth, including sustained losses, growth management challenges, technology deployment hurdles, supply chain reliance, market competition, and regulatory and public perception risks - The company has incurred significant losses since inception, expects to continue incurring losses, and may not achieve or sustain profitability[25](index=25&type=chunk) - The company faces significant hurdles in deploying and commercializing its technology and may not successfully develop it[25](index=25&type=chunk) - The company heavily relies on relationships with Baker Hughes, OXY, and other strategic investors and partners whose interests may not align with the company's and who may be difficult to replace[25](index=25&type=chunk) - The energy market is highly competitive and evolving, and the development and adoption of competing technologies could materially adversely affect the company's ability to license its technology[27](index=27&type=chunk) - The company's business depends on power plant deployments subject to extensive and evolving government laws and regulations, including environmental laws and regulations[27](index=27&type=chunk) - The company is developing its own intellectual property but heavily relies on licensed intellectual property for its core NET Power Cycle technology, and protecting these patents and proprietary rights may face challenges[27](index=27&type=chunk) PART I [Item 1. Business](index=11&type=section&id=Item%201.%20Business) NET Power Inc. is a clean energy technology company developing the "NET Power Cycle" to produce clean, reliable, low-cost electricity from natural gas while capturing nearly all atmospheric emissions, planning commercialization through licensing its technology [Overview](index=11&type=section&id=Overview) NET Power Inc. developed the NET Power Cycle, a patented technology using oxy-combustion and a supercritical CO2 cycle for zero-emission natural gas power generation, validated at a Texas demonstration plant and planned for commercial licensing - The NET Power Cycle is a clean energy technology that generates electricity from natural gas while capturing almost all atmospheric emissions, including CO2, SOx, NOx, and particulate matter, through oxy-combustion and a supercritical CO2 cycle[29](index=29&type=chunk) - The technology has been tested at a **50 MWth demonstration plant** in La Porte, Texas, accumulating over **1,500 operating hours** as of December 31, 2023, and connected to the grid in Fall 2021[29](index=29&type=chunk) - The company plans to license its technology, offering industrial-scale configurations of **25-115 MW net electrical output** and utility-scale units (Gen1U) up to **300 MW net electrical output**, targeting **≥97% carbon capture** and initial net efficiency of approximately **45%**, with a later goal of **50%**[30](index=30&type=chunk) - NET Power Cycle customers include power companies, oil and gas companies, midstream oil and gas companies, technology companies, and industrial facilities, for baseload power, dispatchable power, and industrial applications[31](index=31&type=chunk)[32](index=32&type=chunk) [Corporate Strategy](index=12&type=section&id=Corporate%20Strategy) NET Power's strategy focuses on three pillars: developing and validating utility-scale technology, building a project pipeline through site identification and partnerships, and preparing for a standardized manufacturing model to reduce costs and risks - The company employs a three-pillar strategy: 1. Developing and validating utility-scale technology, collaborating with Baker Hughes on demonstration plant testing, and advancing the first utility-scale plant (Gen1U) development, targeting first power in **late 2027 to early 2028**[34](index=34&type=chunk)[35](index=35&type=chunk)[36](index=36&type=chunk)[37](index=37&type=chunk) - 2. Building a project pipeline by identifying CO2 sequestration sites, securing plant sites, applying for grid interconnection, and forming strategic partnerships to accelerate technology deployment[38](index=38&type=chunk) - 3. Preparing for a standardized manufacturing model through standardized design, supply chain, and construction to achieve economies of scale, reduce plant capital costs, project risks, and construction timelines[39](index=39&type=chunk) [The Business Combination](index=13&type=section&id=The%20Business%20Combination) NET Power completed its business combination with RONI on June 8, 2023, with RONI renaming to NET Power Inc. and adopting an "Up-C" structure, involving a conversion to a Delaware corporation, Old NET Power becoming a wholly-owned subsidiary, and a **$540 million PIPE financing** - On June 8, 2023, NET Power completed its business combination with RONI, which was renamed NET Power Inc., with Old NET Power becoming its wholly-owned subsidiary[40](index=40&type=chunk)[41](index=41&type=chunk) - Post-merger, Old NET Power's equity was converted into OpCo Class A units and an equal number of Class B common stock[44](index=44&type=chunk) - The company issued and sold **54,044,995 shares of Class A common stock** through PIPE financing, generating **$540.4 million** in gross proceeds[45](index=45&type=chunk) [Government and Regulatory Environment](index=14&type=section&id=Government%20and%20Regulatory%20Environment) Carbon-neutral energy technologies receive significant federal support in the U.S., including loans, grants, and tax credits from the Bipartisan Infrastructure Law and Inflation Reduction Act, with enhanced 45Q tax credits increasing CO2 value to **$85 per ton** and easing eligibility, benefiting NET Power's commercialization - The Bipartisan Infrastructure Law (BIL/IIJA) and the Inflation Reduction Act (IRA) provided additional support for the DOE Loan Programs Office (LPO) Title XVII program and established a **$250 billion 'Energy Infrastructure Reinvestment' fund**[46](index=46&type=chunk)[47](index=47&type=chunk) - The IRA significantly enhanced the 45Q tax credit program, increasing the credit value for permanently geologically sequestered CO2 from **$50 to $85 per ton** and allowing "direct pay" for the first five years, while lowering capture thresholds for qualifying facilities to **75%** for power production units[50](index=50&type=chunk) - Globally, the EU Innovation Fund and UK BEIS Net Zero Innovation Portfolio also offer funding opportunities, which the company is evaluating to support initial projects[48](index=48&type=chunk)[49](index=49&type=chunk) [NET Power Cycle Licenses and Support Services](index=15&type=section&id=NET%20Power%20Cycle%20Licenses%20and%20Support%20Services) NET Power's primary future revenue will come from technology licensing and royalties, offering plant construction, operation, and maintenance licenses, providing pre-qualified EPC companies and equipment suppliers, and offering support services throughout the development process - Future primary revenue sources are expected to be licensing and royalties, with each **300 MWe-class license** projected to generate approximately **$65 million** in discounted present value licensing fees[51](index=51&type=chunk) - The company will provide customers with a list of pre-qualified EPC companies and key equipment suppliers to ensure quality control and mitigate supply chain risks[52](index=52&type=chunk)[53](index=53&type=chunk) - The company will offer support throughout the development process, including feasibility studies, pre-FEED, license packages, FEED execution support, startup and commissioning, and operator training[54](index=54&type=chunk) - The company also plans to originate and develop early-stage projects by identifying sites, securing land and sequestration rights, submitting interconnection and sequestration permit applications, and entering into supply and offtake agreements[55](index=55&type=chunk) [Competition](index=15&type=section&id=Competition) NET Power faces competition in power generation from traditional baseload, advanced nuclear, and renewable energy sources, but believes its technology offers a competitive advantage globally by providing clean, reliable, and low-cost power, combining natural gas reliability with carbon capture - The company's competitors include traditional baseload power (natural gas, coal, oil, large nuclear), advanced nuclear, and renewable energy (wind, solar, hydro)[56](index=56&type=chunk)[57](index=57&type=chunk)[59](index=59&type=chunk)[60](index=60&type=chunk) - The NET Power Cycle combines the reliability of natural gas with the decarbonization capability of carbon capture, aiming to provide clean, reliable, and low-cost electricity, distinguishing it from most competing technologies that achieve only two of these factors[56](index=56&type=chunk)[58](index=58&type=chunk)[60](index=60&type=chunk) - Advanced nuclear technologies (e.g., Small Modular Reactors - SMRs) face regulatory approval and fuel supply infrastructure challenges; renewable energy (wind, solar) has intermittency and non-dispatchability issues[59](index=59&type=chunk)[60](index=60&type=chunk) [Customers](index=16&type=section&id=Customers) NET Power's potential customers include power companies, independent power producers, oil and gas companies, midstream companies, renewable energy companies, clean energy technology companies, and industrial facilities, serving baseload, dispatchable, and industrial applications to meet their clean, reliable, and low-cost power and heat demands - Potential customers include power companies, independent power producers, oil and gas companies, midstream companies, renewable energy companies, clean energy technology companies, and industrial facilities, covering domestic and international markets[61](index=61&type=chunk) - Key end markets are divided into baseload generation (replacement or new clean baseload), dispatchable generation (balancing renewable intermittency), and industrial applications (e.g., direct air capture, steel, chemical, hydrogen production facilities)[61](index=61&type=chunk) - The company's technology aims to provide these customers with clean, reliable, and low-cost electricity and heat to achieve decarbonization goals[61](index=61&type=chunk) [Partnerships](index=16&type=section&id=Partnerships) NET Power leverages strategic partnerships with 8 Rivers, Baker Hughes, and OXY to advance its NET Power Cycle technology development and commercialization, securing core patent rights, supercritical CO2 turbine expander development, and CO2 value chain expertise and site provision for its first utility-scale project - A licensing agreement with 8 Rivers grants permanent, irrevocable, global exclusive rights to NET Power Cycle-related patents for power generation using carbonaceous gaseous fuels[62](index=62&type=chunk) - A Joint Development Agreement (JDA) with Baker Hughes (NPI) tasks NPI with developing supercritical CO2 turbine expanders for the NET Power Cycle, granting NPI limited exclusive manufacturing rights for utility-scale expanders and full exclusive rights for industrial-scale units[63](index=63&type=chunk)[64](index=64&type=chunk) - OXY invested in NET Power in 2019, providing CO2 value chain expertise and a site near Odessa, Texas, for the first utility-scale NET Power plant (Serial Number 1)[65](index=65&type=chunk) [Intellectual Property](index=17&type=section&id=Intellectual%20Property) As of December 31, 2023, NET Power holds **447 granted patents** and **67 pending applications**, primarily through an exclusive licensing agreement with 8 Rivers for the NET Power Cycle technology, supplemented by proprietary know-how from its demonstration plant and intellectual property protection for key equipment via a Baker Hughes licensing agreement - As of December 31, 2023, the company holds **447 granted patents** and **67 pending applications** across **30+ countries** and six continents, primarily through an exclusive, irrevocable right granted by the 2014 licensing agreement with 8 Rivers[66](index=66&type=chunk) - The intellectual property portfolio includes NET Power Cycle-related patent rights, trade secrets and know-how generated from the demonstration plant, and registered trademarks for the NET Power logo and company name[66](index=66&type=chunk)[67](index=67&type=chunk) - Under the BH License Agreement, NPT and its affiliates have limited exclusive manufacturing rights for utility-scale turbine expanders and full exclusive rights for industrial-scale units, with NPI only permitted to sell co-developed turbine expanders to NET Power's licensees[68](index=68&type=chunk) [Human Capital](index=17&type=section&id=Human%20Capital) As of December 31, 2023, NET Power had **43 full-time employees** and **4 contractors**, committed to attracting and retaining top talent through competitive compensation, continuous training, and Diversity, Equity, Inclusion, and Accessibility (DEIA) policies to support business growth - As of December 31, 2023, the company had **43 full-time employees** and **4 contractors**, headquartered in Durham, North Carolina, with plans to open a Houston office in mid-2024[71](index=71&type=chunk) - The company attracts and retains talent by offering competitive compensation and benefits, including base salary, annual bonuses, and long-term equity incentives, along with comprehensive employee benefits such as insurance, paid time off, and 401(k) plans[72](index=72&type=chunk) - The company encourages lifelong learning, providing continuous learning and leadership training opportunities, and identifies training and development needs through annual performance reviews[73](index=73&type=chunk) - The company is committed to building a diverse workforce, valuing differences in race, ethnicity, religion, nationality, gender, age, ability, and sexual orientation, focusing on inclusive hiring, equitable treatment, and organizational flexibility[74](index=74&type=chunk) [Government Regulations](index=18&type=section&id=Government%20Regulations) NET Power's power plant operations are subject to extensive and evolving federal and state energy, environmental, health, and safety regulations, including FERC, ISO/RTO rules, NERC standards, PUHCA, state utility regulations (e.g., Texas ERCOT), and environmental laws covering air, water, land, and climate change, requiring multiple permits and potentially incurring significant costs and liabilities for non-compliance - Electricity sales and markets are extensively regulated at federal and state levels, including Federal Energy Regulatory Commission (FERC) jurisdiction over interstate wholesale electricity sales and transmission, and state regulation of retail utility rates and new power plant siting[75](index=75&type=chunk)[76](index=76&type=chunk)[77](index=77&type=chunk)[78](index=78&type=chunk) - Company projects must also comply with mandatory reliability standards from the North American Electric Reliability Corporation (NERC), including physical and cybersecurity and information protocols, with non-compliance potentially leading to significant penalties[80](index=80&type=chunk) - The Texas demonstration plant is located in the ERCOT market, regulated by the Public Utility Commission of Texas (PUCT), which oversees market participant operations, registration, reporting, and record-keeping, and can impose substantial fines for violations[83](index=83&type=chunk)[84](index=84&type=chunk) - Environmental regulations cover the Clean Water Act, Bureau of Land Management rights-of-way, environmental reviews (NEPA), Endangered Species Act, Historic Preservation Act, Clean Air Act (including greenhouse gas emissions), underground injection and carbon sequestration, Occupational Health and Safety Act, and local regulations[91](index=91&type=chunk)[92](index=92&type=chunk)[93](index=93&type=chunk)[94](index=94&type=chunk)[96](index=96&type=chunk) - Climate change policies and regulations are increasingly stringent, with the Inflation Reduction Act providing funding and incentives for low-carbon energy production and carbon capture, but future regulatory changes could increase operating costs or limit business development[94](index=94&type=chunk)[95](index=95&type=chunk) [Government Incentives](index=23&type=section&id=Government%20Incentives) U.S. federal, state, and local governments, along with utilities, offer various incentives for emissions reduction technologies, notably the Bipartisan Infrastructure Law and Inflation Reduction Act, which significantly enhanced 45Q tax credits to **$85 per ton** for carbon capture and eased eligibility, with NET Power expecting to benefit from its low-emission and carbon capture advantages - The Bipartisan Infrastructure Law (BIL/IIJA) and the Inflation Reduction Act (IRA) significantly enhanced U.S. government incentives for Carbon Capture, Utilization, and Storage (CCUS) technologies[100](index=100&type=chunk) - The 45Q federal tax credit has increased to **$85 per metric ton** for permanently geologically sequestered CO2 and **$60 per metric ton** for CO2 used in enhanced oil recovery (EOR) or other uses, allowing "direct pay" for the first five years and extending the construction start deadline to January 1, 2033[101](index=101&type=chunk) - The U.S. Department of Energy (DOE) provides funding support, with a FY2023 energy project budget of **$17 billion**, including over **$890 million** for fossil energy and carbon management; global funds like the EU Innovation Fund and European Commission Transition Fund also offer incentives[102](index=102&type=chunk)[103](index=103&type=chunk) - The company believes the NET Power Cycle's advantages in pollutant emissions and carbon capture provide a competitive edge in addressing the Clean Air Act and EPA greenhouse gas emission standards[105](index=105&type=chunk)[106](index=106&type=chunk) [Available Information](index=24&type=section&id=Available%20Information) NET Power uses its official website (www.netpower.com) as a regular channel for important investor information, including press releases, financial data, presentations, and corporate governance, with SEC filings also available there and on www.sec.gov - The company's website, www.netpower.com, serves as a regular channel for disseminating press releases, financial information, presentations, and corporate governance details[107](index=107&type=chunk) - The company's 10-K, 10-Q, and 8-K reports and their amendments are freely available on the company's website and the SEC website, www.sec.gov[107](index=107&type=chunk) [Item 1A. Risk Factors](index=24&type=section&id=Item%201A.%20Risk%20Factors) This section details significant risks NET Power Inc. faces, which could adversely affect its business, operating results, and financial condition, including sustained losses, growth management challenges, technology deployment hurdles, supply chain reliance, potential conflicts with strategic partners, market competition, regulatory changes, intellectual property protection challenges, and specific tax and organizational structure risks [Risks Related to Our Business and Our Industry](index=24&type=section&id=Risks%20Related%20to%20Our%20Business%20and%20Our%20Industry) The company has incurred continuous losses and expects to continue doing so, with uncertain profitability, facing significant hurdles in managing future growth and commercializing complex technology, including reliance on key machinery and supply chains, and potential conflicts with strategic partners like Baker Hughes and OXY Net Loss (Millions USD) | Period | Net Loss (Millions USD) | | :--- | :--- | | June 8 - Dec 31, 2023 (Successor) | 43.1 | | Jan 1 - June 7, 2023 (Predecessor) | 34.2 | | Year Ended Dec 31, 2022 (Predecessor) | 54.8 | - The company expects operating expenses to continue increasing for commercializing the NET Power Cycle, technology improvements, hiring, and R&D, and may not achieve or sustain profitability[110](index=110&type=chunk) - The company faces significant hurdles in deploying and commercializing its complex technology, including not yet fully integrating the combustion system and turbine, and project execution risks (supply chain management, schedule compliance, commissioning, etc.)[114](index=114&type=chunk) - The company relies on NPI to develop and supply turbomachinery and process equipment, and any delays or underperformance of equipment could harm the company's ability to develop, market, and license its technology[122](index=122&type=chunk) - The company heavily relies on relationships with strategic investors and partners like Baker Hughes, OXY, and 8 Rivers, whose interests may not align with the company's and who may be difficult to replace[124](index=124&type=chunk) - The demonstration plant has not yet achieved net positive power output to the commercial grid, and if initial commercial power plants cannot efficiently provide net power output, it will negatively impact the business[140](index=140&type=chunk) - The company is highly dependent on its senior management team, key employees, and other highly skilled personnel, and failure to attract or retain such talent could harm business strategy implementation and competitive ability[147](index=147&type=chunk) [Risks Related to Our Market](index=33&type=section&id=Risks%20Related%20to%20Our%20Market) The energy market is highly competitive and evolving, with the company facing various competing technologies including traditional baseload, renewables, and Small Modular Reactors (SMRs); the NET Power Cycle market is not yet established, and limited CO2 transport and storage infrastructure may restrict its deployment - The company faces intense competition in clean energy production, including combined cycle power plants, renewables with long-duration storage, and Small Modular Reactors (SMRs)[159](index=159&type=chunk)[160](index=160&type=chunk) - The market for the NET Power Cycle is not yet established, and limited CO2 transportation and storage infrastructure may restrict its deployment and growth[163](index=163&type=chunk) - The NET Power Cycle's cost of electricity generation may not be competitive in certain markets, especially in regions with lower electricity prices like the United States[164](index=164&type=chunk) [Risks Related to Government Regulation](index=34&type=section&id=Risks%20Related%20to%20Government%20Regulation) NET Power's business is highly dependent on power plant deployments subject to extensive and evolving government laws and regulations, including environmental regulations, with potential delays or rejections in obtaining approvals and permits, and climate change-related transition risks, including shifting attitudes towards fossil fuels and stricter GHG reduction measures, could adversely affect the business - The company business depends on power plant deployments subject to extensive and evolving government laws and regulations (including environmental laws and regulations), and failure to comply or changes in regulations could have a material adverse effect[165](index=165&type=chunk)[166](index=166&type=chunk)[167](index=167&type=chunk) - Customers must obtain regulatory approvals and permits before constructing power plants using the company's technology, and these approvals may be denied or delayed[168](index=168&type=chunk) - Climate change-related transition risks, including shifting negative sentiment towards fossil fuels from investors, regulators, and the public, and new, more stringent greenhouse gas emission reduction measures, could adversely affect the company's business, reputation, and operations[173](index=173&type=chunk)[174](index=174&type=chunk)[175](index=175&type=chunk)[178](index=178&type=chunk) - Potential changes or reductions in government incentives, such as funding support from the Inflation Reduction Act (IRA), could adversely affect the company's business growth, as it relies on these incentives to support development and commercialization[185](index=185&type=chunk)[186](index=186&type=chunk) [Risks Related to Intellectual Property](index=38&type=section&id=Risks%20Related%20to%20Intellectual%20Property) NET Power heavily relies on core intellectual property licensed from partners, particularly 8 Rivers, and its ability to protect these patents, patent applications, and other proprietary rights may be challenged by licensing agreement obligations, third-party validity challenges, or competitors independently developing similar technologies, leading to loss of competitive advantage, increased litigation costs, and business harm - The company heavily relies on core intellectual property licensed from partners, including 8 Rivers, and any conflicts, disputes, or non-performance under licensing agreements could lead to damages or license termination[187](index=187&type=chunk)[188](index=188&type=chunk)[189](index=189&type=chunk) - The company could lose core intellectual property rights due to licensors failing to pay renewal or maintenance fees, or third parties challenging the validity of intellectual property, leading to competitors entering the market and reduced revenue[192](index=192&type=chunk) - The company's patent applications may not be granted, and granted patents may be challenged, circumvented, invalidated, or limited in scope, affecting its ability to prevent others from interfering with technology commercialization[201](index=201&type=chunk)[202](index=202&type=chunk) - The company relies on trade secrets and proprietary know-how to maintain its competitive position, but third parties may independently develop competing technologies or acquire trade secrets, and intellectual property protection in some foreign jurisdictions is not as robust as in the U.S[203](index=203&type=chunk)[204](index=204&type=chunk)[205](index=205&type=chunk)[207](index=207&type=chunk) [Risks Relating to the Tax Receivable Agreement](index=43&type=section&id=Risks%20Relating%20to%20the%20Tax%20Receivable%20Agreement) Under the Tax Receivable Agreement (TRA), NET Power Inc. must pay certain OpCo unit holders **75%** of the tax savings realized from increases in OpCo's asset tax basis, which could be substantial and materially adversely affect the company's financial condition and liquidity - Under the Tax Receivable Agreement (TRA), NET Power Inc. must pay certain OpCo unit holders **75%** of the tax savings realized from increases in OpCo's asset tax basis, which could be substantial and materially adversely affect the company's financial condition and liquidity[213](index=213&type=chunk)[214](index=214&type=chunk)[215](index=215&type=chunk) - Payments under the TRA may exceed the actual tax savings realized by the company, as the company will not be compensated for overpayments if tax benefits are challenged by tax authorities[217](index=217&type=chunk) - In certain circumstances (e.g., early termination, change of control, failure to make timely payments), obligations under the TRA will accelerate, requiring the company to pay an estimated present value based on future tax benefit projections, which could significantly exceed actual tax benefits[218](index=218&type=chunk) [Risks Relating to Our Organizational Structure](index=45&type=section&id=Risks%20Relating%20to%20Our%20Organizational%20Structure) NET Power Inc., as a holding company, primarily holds an interest in OpCo, so its ability to pay taxes, TRA amounts, and dividends depends on distributions from OpCo and its subsidiaries, and OpCo unit holders may receive benefits not equally extended to Class A common stock holders due to the company's tax obligations - NET Power Inc. is a holding company whose primary asset is its interest in OpCo, and its ability to pay taxes, TRA amounts, and dividends depends on distributions from OpCo and its subsidiaries[220](index=220&type=chunk) - OpCo, as a partnership, distributes its taxable income to unit holders, and NET Power Inc. must pay corporate income tax on its allocated share of OpCo's net taxable income[221](index=221&type=chunk) - OpCo unit holders (including Legacy NET Power Holders) enjoy certain benefits that may not equally extend to Class A common stock holders, as the company must pay taxes, potentially leading to lower per-share dividends for Class A common stock than per-unit distributions for OpCo units[224](index=224&type=chunk) [Risks Related to Governance](index=46&type=section&id=Risks%20Related%20to%20Governance) Concentrated equity ownership by major Legacy NET Power Holders may prevent new investors from influencing significant corporate decisions and could lead to conflicts of interest, while the company's status as an "emerging growth company" and "smaller reporting company" allows disclosure exemptions that may reduce investor appeal - Concentrated equity ownership by major Legacy NET Power Holders may prevent new investors from influencing significant corporate decisions and could lead to conflicts of interest[225](index=225&type=chunk)[226](index=226&type=chunk) - As an "emerging growth company" and "smaller reporting company," the company utilizes certain disclosure exemptions (e.g., auditor attestation requirements, reduced executive compensation disclosure, extended accounting standard transition periods) that may reduce the attractiveness of its securities to investors and make financial statement comparisons difficult[226](index=226&type=chunk)[227](index=227&type=chunk)[228](index=228&type=chunk)[231](index=231&type=chunk) - Failure to establish and maintain effective internal controls over financial reporting and disclosure controls could lead to inaccurate or untimely financial reporting or fraud prevention failures, impacting investor confidence[232](index=232&type=chunk)[233](index=233&type=chunk) - Certain provisions in Delaware law and the company's organizational documents, including anti-takeover provisions (e.g., board's ability to issue preferred stock, restrictions on shareholder written consent, limitations on calling special meetings), may delay or prevent acquisition attempts that shareholders deem favorable[241](index=241&type=chunk)[242](index=242&type=chunk) [Item 1B. Unresolved Staff Comments](index=49&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) This section states that the company has no unresolved staff comments - The company has no unresolved staff comments[243](index=243&type=chunk) [Item 1C. Cybersecurity](index=49&type=section&id=Item%201C.%20Cybersecurity) NET Power Inc. regularly assesses cybersecurity risks, building capabilities to monitor and control information system vulnerabilities and implementing cybersecurity policies and practices, with the Board of Directors overseeing risk management through the Audit Committee - The company regularly assesses cybersecurity risks, builds capabilities to monitor information system vulnerabilities, and implements cybersecurity policies, processes, and practices[244](index=244&type=chunk) - To date, cybersecurity threats have not materially impacted the company's business strategy, operating results, or financial condition, but ongoing risks persist[246](index=246&type=chunk)[247](index=247&type=chunk) - The Board of Directors oversees cybersecurity risk management through the Audit Committee, which regularly reviews the cybersecurity risk profile[249](index=249&type=chunk) - The company's Chief Information Officer is responsible for establishing and managing the cybersecurity program and reports regularly to the Audit Committee[250](index=250&type=chunk) [Item 2. Properties](index=50&type=section&id=Item%202.%20Properties) NET Power's headquarters are in Durham, North Carolina, leasing approximately **12,000 square feet** until December 2028, while its demonstration plant in La Porte, Texas, leases approximately **218,900 square feet** until July 1, 2025, with existing facilities deemed sufficient for current needs but additional facilities anticipated for future growth - The company's headquarters are located in Durham, North Carolina, leasing approximately **12,000 square feet** until December 2028[251](index=251&type=chunk) - The demonstration plant is located in La Porte, Texas, leasing approximately **218,900 square feet** of land until July 1, 2025, or the termination of the oxygen supply agreement[252](index=252&type=chunk) - The company believes existing facilities are sufficient for current needs but anticipates requiring additional facilities to accommodate future growth[253](index=253&type=chunk) [Item 3. Legal Proceedings](index=50&type=section&id=Item%203.%20Legal%20Proceedings) This section states that the company has no legal proceedings - The company has no legal proceedings[254](index=254&type=chunk) [Item 4. Mine Safety Disclosures](index=50&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section states that mine safety disclosures are not applicable - Mine safety disclosures are not applicable[255](index=255&type=chunk) PART II [Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=51&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) NET Power Inc.'s Class A common stock trades on the NYSE under "NPWR," while Class B has no public market; as of March 7, 2024, there were **53 record holders** of common stock, and the company does not plan to pay cash dividends in the foreseeable future - The company's Class A common stock trades on the New York Stock Exchange (NYSE) under the symbol "NPWR"; Class B common stock has no public trading market[257](index=257&type=chunk) - As of March 7, 2024, the company had **53 record holders** of common stock[258](index=258&type=chunk) - The company has never declared or paid any cash dividends and currently does not intend to pay cash dividends in the foreseeable future, expecting to retain future earnings for business development and growth[259](index=259&type=chunk) - On November 1, 2023, the company issued **519,877 shares of Class B common stock** and OpCo Class A units to BHES as payment for costs incurred in Q3 2023 under the Amended and Restated JDA[260](index=260&type=chunk) - The company did not repurchase any equity securities for the year ended December 31, 2023[261](index=261&type=chunk) [Item 6. Reserved](index=51&type=section&id=Item%206.%20Reserved) This section is reserved and contains no content - This section is reserved and contains no content[262](index=262&type=chunk) [Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=52&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides a discussion and analysis of NET Power Inc.'s financial condition and operating results as of December 31, 2023, with financial statements split into "Predecessor" and "Successor" periods due to the June 8, 2023, business combination, making them not directly comparable [Overview](index=52&type=section&id=Overview) NET Power Inc. is a clean energy technology company that developed the NET Power Cycle system, designed to produce clean, reliable, low-cost electricity from natural gas while capturing nearly all atmospheric emissions - NET Power Inc. developed the NET Power Cycle, a unique power generation system designed to produce clean, reliable, low-cost electricity from natural gas while capturing almost all atmospheric emissions[265](index=265&type=chunk) - The NET Power Cycle is designed to inherently capture CO2 and eliminate air pollutants such as SOx, NOx, and particulate matter[265](index=265&type=chunk) [The Business Combination](index=52&type=section&id=The%20Business%20Combination) NET Power completed its business combination with RONI on June 8, 2023, with RONI renaming to NET Power Inc. and adopting an "Up-C" structure, resulting in financial statements being split into "Predecessor" and "Successor" periods that are not directly comparable due to acquisition accounting - On June 8, 2023, NET Power, LLC completed its business combination with RONI, which was renamed NET Power Inc., adopting an "Up-C" structure[265](index=265&type=chunk)[266](index=266&type=chunk) - Post-merger, NET Power Inc. became the sole managing member and primary beneficiary of OpCo, thus consolidating OpCo's financial statements[267](index=267&type=chunk)[369](index=369&type=chunk) - Financial statements are divided into "Predecessor" (up to June 7, 2023) and "Successor" (after June 8, 2023) periods, which are not directly comparable due to the application of acquisition accounting[268](index=268&type=chunk)[370](index=370&type=chunk) [Key Factors Affecting Our Prospects and Future Results](index=52&type=section&id=Key%20Factors%20Affecting%20Our%20Prospects%20and%20Future%20Results) The company's prospects and future success depend on factors such as cost overruns in demonstration plant testing, technical issues with the NET Power Cycle, potential supply chain problems, and the development of competitive clean energy technologies, with public company status adding annual expenses - The company's prospects and future success depend on cost overruns in demonstration plant testing and operations, technical issues with the NET Power Cycle, potential supply chain problems, and the development of competitive clean energy technologies[271](index=271&type=chunk) - Becoming a public company resulted in additional annual expenses, including D&O insurance, director fees, and additional accounting, legal, and administrative resources[269](index=269&type=chunk)[270](index=270&type=chunk) - Supply chain issues could lead to delays in commercialization efforts, thereby impacting operating results[271](index=271&type=chunk) [Commencing Commercial Operations](index=53&type=section&id=Commencing%20Commercial%20Operations) NET Power plans additional research and testing at its demonstration plant and construction of its first utility-scale power plant in the coming years, targeting first power in **late 2027 to early 2028** for a consortium-led project at an OXY site in West Texas, integrating power production with CO2 transport and underground storage - The company plans to conduct additional research and testing at its demonstration plant and construct its first utility-scale power plant in the coming years[272](index=272&type=chunk) - Procurement of long-lead materials for the first utility-scale power plant is expected to begin in **2024**, targeting first power in **late 2027 to early 2028**[272](index=272&type=chunk) - The first utility-scale power plant will be a NET Power-led consortium project located at an OXY site in the Permian Basin of West Texas, aiming to fully integrate power production with CO2 transportation and underground storage[272](index=272&type=chunk) - Key remaining development activities include finalizing site studies, initiating all required permitting, conducting FEED studies, entering into all required supply and offtake contracts, project financing, and facility construction and commissioning[273](index=273&type=chunk) [Key Components of Results of Operations](index=53&type=section&id=Key%20Components%20of%20Results%20of%20Operations) The company is in a development stage, and historical performance is not indicative of future results, thus the drivers and components of future financial performance may not be comparable to historical or future operating results - The company is in a development stage, and historical performance is not indicative of future results, thus the drivers and components of future financial performance may not be comparable to historical or future operating results[274](index=274&type=chunk) [Results of Operations](index=54&type=section&id=Results%20of%20Operations) In 2023, operating results were impacted by the business combination, splitting financial statements into "Successor" and "Predecessor" periods, with total operating expenses significantly increasing due to merger-related costs, option settlement fees, and higher depreciation, amortization, and accrued expenses, leading to an expanded net loss, partially offset by substantial growth in interest income 2023 vs. 2022 Operating Results (Thousands USD) | Metric | June 8 - Dec 31, 2023 (Successor) | Jan 1 - June 7, 2023 (Predecessor) | Year Ended Dec 31, 2022 (Predecessor) | Change Amount (Thousands USD) | Change Percentage | | :--- | :--- | :--- | :--- | :--- | :--- | | Revenue | $0 | $175 | $580 | $(405) | (69.8)% | | Cost of Sales | $0 | $3 | $275 | $(272) | (98.9)% | | Gross Profit (Loss) | $0 | $172 | $305 | $(133) | (43.6)% | | Total Operating Expenses | $193,510 | $34,322 | $50,330 | $177,502 | 352.7% | | Operating Loss | $(193,510) | $(34,150) | $(50,025) | $(177,635) | 355.1% | | Net Other Income (Expense) | $45,987 | $(26) | $(4,753) | $50,714 | 1067.0% | | Net Loss (After Tax) | $(141,816) | $(34,176) | $(54,778) | $(121,214) | 221.3% | | Net Loss Attributable to NET Power Inc. | $(43,056) | $(34,176) | $(54,778) | $(22,454) | 41.0% | - Total operating expenses increased significantly by **352.7%**, primarily due to **$16.644 million** in business combination-related costs, **$1.958 million** in public company costs, **$79.054 million** from option settlement, and a **$37.456 million** increase in depreciation, amortization, and accrued expenses[280](index=280&type=chunk)[285](index=285&type=chunk)[286](index=286&type=chunk) - R&D expenses increased by **111.0%**, primarily due to the initiation of BHES JDA development activities[283](index=283&type=chunk) - Interest income (expense) increased by **$24.268 million**, primarily due to higher interest income from increased cash balances and new short-term investments[287](index=287&type=chunk) - Changes in Earnout Shares liability and warrant liability increased by **$26.515 million**, primarily due to changes in the fair value of private placement warrants[288](index=288&type=chunk) [Liquidity and Capital Resources](index=56&type=section&id=Liquidity%20and%20Capital%20Resources) NET Power's primary liquidity sources are cash and short-term investments, which significantly increased to **$636.9 million** as of December 31, 2023, mainly from **$661.6 million** in cash from the business combination, expected to support operations and R&D for the next 12 months, though additional funding may be needed for future plant construction Liquidity Position (Thousands USD) | Metric | Dec 31, 2023 (Successor) | Dec 31, 2022 (Predecessor) | | :--- | :--- | :--- | | Cash and Cash Equivalents | $536,927 | $5,164 | | Short-term Investments | $100,000 | $0 | | **Total Liquidity** | **$636,927** | **$5,164** | | Current Liabilities | $12,021 | $8,451 | - Liquidity increased primarily due to approximately **$661.6 million** in cash from the business combination[293](index=293&type=chunk) - The company expects existing cash, cash equivalents, and short-term investments to be sufficient to support R&D activities, general and administrative costs, and long-lead procurement items for the first commercial-scale facility for the next **12 months**[294](index=294&type=chunk) - The company may require additional funding to successfully construct the first utility-scale power plant and develop more NET Power plant projects[294](index=294&type=chunk) [Cash Flow Summary](index=57&type=section&id=Cash%20Flow%20Summary) In 2023, operating cash outflows increased due to higher R&D and administrative costs, and public company expenses; investing cash outflows significantly rose for short-term investments and equipment; while financing cash inflows grew substantially, driven by PIPE financing proceeds Cash Flow Summary (Thousands USD) | Cash Flow Type | June 8 - Dec 31, 2023 (Successor) | Jan 1 - June 7, 2023 (Predecessor) | Year Ended Dec 31, 2022 (Predecessor) | | :--- | :--- | :--- | :--- | | Net Cash Outflow from Operating Activities | $(38,379) | $(10,623) | $(16,630) | | Net Cash Outflow from Investing Activities | $(101,269) | $(2,431) | $(115) | | Net Cash Inflow from Financing Activities | $319,556 | $15,836 | $21,467 | - Net cash outflow from operating activities increased by **$32.372 million**, primarily due to higher R&D and administrative costs for salaries, materials, facilities, and professional services, as well as additional costs from becoming a public company[296](index=296&type=chunk) - Net cash outflow from investing activities increased by **$103.585 million**, primarily for short-term investments (**$100 million**) and equipment purchases[297](index=297&type=chunk) - Net cash inflow from financing activities increased by **$313.925 million**, primarily driven by proceeds from PIPE financing[298](index=298&type=chunk) [Commitments and Contractual Obligations](index=58&type=section&id=Commitments%20and%20Contractual%20Obligations) NET Power's commitments include a **$1 per year** demonstration plant land lease expiring July 1, 2025, with asset retirement obligations, a Durham headquarters office lease with **$2.608 million** in future minimum payments until December 2028, and **$140 million** in BHES JDA development cost funding commitments (cash and equity), plus **$26.009 million** in industrial machinery capital commitments - The demonstration plant land lease is **$1 per year**, expiring July 1, 2025, or upon termination of the oxygen supply agreement, and is accompanied by **$2.06 million** in asset retirement obligations[299](index=299&type=chunk) - Future minimum lease payments for the new Durham headquarters office lease total **$2.608 million**, with a term extending to December 2028[301](index=301&type=chunk) - Under the BHES JDA, the company committed to funding a portion of remaining development costs in cash and equity, totaling **$140 million**, with approximately **$11.868 million** in cash expenditures and **$11.868 million** in equity expenditures recognized as of December 31, 2023[302](index=302&type=chunk) - As of December 31, 2023, the company had **$26.009 million** in capital commitments for industrial machinery purchases, of which **$5.191 million** was recognized in the current period[304](index=304&type=chunk) - The company did not engage in any off-balance sheet arrangements as of December 31, 2023, and December 31, 2022[303](index=303&type=chunk) [Critical Accounting Policies and Estimates](index=58&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) NET Power's financial statements rely on critical accounting estimates and assumptions for business combinations (fair value assessment of acquired assets and liabilities), goodwill impairment testing (judgment on future trends), fair value of Earnout Shares and warrants (Monte Carlo simulation and Black-Scholes Merton model with volatility and holding period assumptions), income taxes (recoverability of deferred tax assets), and share-based payments (fair value at grant date and Black-Scholes model) - Business combination accounting is a critical estimate, requiring significant management judgment and assumptions for the fair value of acquired assets and liabilities, particularly intangible assets[306](index=306&type=chunk)[307](index=307&type=chunk)[309](index=309&type=chunk) - Goodwill impairment testing is a critical estimate, requiring management judgment and assumptions about future trends and events, such as economic conditions, financial performance, and market valuations[311](index=311&type=chunk)[312](index=312&type=chunk) - The fair value estimation of Earnout Shares liability and warrant liability (using Monte Carlo simulation and Black-Scholes Merton model) is a critical estimate, involving assumptions about significant unobservable inputs like expected volatility and holding period[313](index=313&type=chunk) - Income tax accounting is a critical estimate, requiring significant judgment regarding the recoverability of deferred tax assets, future taxable income, and uncertain tax positions[314](index=314&type=chunk)[315](index=315&type=chunk) - The estimation of share-based payment costs (using the Black-Scholes option pricing model) is a critical estimate, involving assumptions about expected term, volatility, dividend yield, and risk-free interest rate[316](index=316&type=chunk)[317](index=317&type=chunk) - As an emerging growth company, the company has elected not to opt out of the extended transition period to delay adoption of new or revised financial accounting standards[318](index=318&type=chunk) [Item 7A. Quantitative and Qualitative Disclosures About Market Risk](index=60&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section states that the company, as a smaller reporting company, is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, the company is not required to provide quantitative and qualitative disclosures about market risk[319](index=319&type=chunk) [Item 8. Financial Statements and Supplementary Data](index=60&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section contains NET Power Inc.'s audited consolidated financial statements as of December 31, 2023, including balance sheets, statements of operations and comprehensive loss, statements of shareholders' equity and non-controlling interests, cash flow statements, and related notes, reflecting the company's financial position and performance before and after the business combination [Report of Independent Registered Public Accounting Firm](index=68&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) Grant Thornton LLP, as the independent registered public accounting firm, issued an unqualified opinion on NET Power Inc.'s consolidated financial statements as of December 31, 2023 (Successor) and 2022 (Predecessor), affirming fair presentation in all material respects in accordance with U.S. GAAP - Grant Thornton LLP issued an unqualified opinion on the company's consolidated financial statements as of December 31, 2023 (Successor) and 2022 (Predecessor)[353](index=353&type=chunk) - The auditors concluded that the financial statements fairly present the company's financial position, results of operations, and cash flows in all material respects in accordance with U.S. GAAP[353](index=353&type=chunk) - The company was not required to undergo an internal control audit, and the auditors did not perform such an audit, thus expressing no opinion on internal control effectiveness[355](index=355&type=chunk) [Consolidated Balance Sheets](index=69&type=section&id=Consolidated%20Balance%20Sheets) As of December 31, 2023 (Successor), NET Power Inc.'s total assets significantly increased to **$2,471,050 thousand** from **$78,137 thousand** in 2022 (Predecessor), primarily due to the business combination bringing substantial increases in cash, short-term investments, intangible assets, and goodwill, with total liabilities also rising to **$140,136 thousand** and shareholders' equity to **$785,009 thousand** Consolidated Balance Sheet Summary (Thousands USD) | Metric | Dec 31, 2023 (Successor) | Dec 31, 2022 (Predecessor) | | :--- | :--- | :--- | | **Assets** | | | | Cash and Cash Equivalents | $536,927 | $5,164 | | Short-term Investments | $100,000 | $0 | | Intangible Assets, Net | $1,307,265 | $263 | | Goodwill | $423,920 | $0 | | Property, Plant, and Equipment, Net | $96,856 | $69,595 | | **Total Assets** | **$2,471,050** | **$78,137** | | **Liabilities** | | | | Total Current Liabilities | $12,021 | $8,451 | | Total Long-term Liabilities | $128,115 | $5,284 | | **Total Liabilities** | **$140,136** | **$13,735** | | **Shareholders' Equity** | | | | Redeemable Non-Controlling Interest | $1,545,905 | $0 | | Total Shareholders' Equity | $785,009 | $64,402 | | **Total Liabilities, Mezzanine Equity, and Shareholders' Equity** | **$2,471,050** | **$78,137** | - Total assets significantly increased from **$78,137 thousand** in 2022 to **$2,471,050 thousand** in 2023, primarily influenced by increases in cash, short-term investments, intangible assets, and goodwill from the business combination[358](index=358&type=chunk) - Intangible assets, net, and goodwill in the 2023 Successor period reached **$1,307,265 thousand** and **$423,920 thousand**, respectively, compared to near zero in the Predecessor period, reflecting business combination accounting[358](index=358&type=chunk) - Total liabilities increased from **$13,735 thousand** in 2022 to **$140,136 thousand** in 2023, primarily including Earnout Shares liability, warrant liability, Tax Receivable Agreement liability, and deferred taxes[358](index=358&type=chunk) [Consolidated Statements of Operations and Comprehensive Loss](index=71&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) NET Power Inc. reported a net loss of **$141,816 thousand** for the period June 8 to December 31, 2023 (Successor), compared to **$34,176 thousand** for January 1 to June 7, 2023 (Predecessor) and **$54,778 thousand** for the full year 2022 (Predecessor), with significant increases in operating expenses (especially option settlement, depreciation, amortization, and G&A) leading to an expanded operating loss, partially offset by substantial growth in interest income Consolidated Statements of Operations and Comprehensive Loss Summary (Thousands USD) | Metric | June 8 - Dec 31, 2023 (Successor) | Jan 1 - June 7, 2023 (Predecessor) | Year Ended Dec 31, 2022 (Predecessor) | | :--- | :--- | :--- | :--- | | Revenue | $0 | $175 | $580 | | Cost of Sales | $0 | $3 | $275 | | Gross Profit (Loss) | $0 | $172 | $305 | | Total Operating Expenses | $193,510 | $34,322 | $50,330 | | Operating Loss | $(193,510) | $(34,150) | $(50,025) | | Net Other Income (Expense) | $45,987 | $(26) | $(4,753) | | Net Loss (After Tax) | $(141,816) | $(34,176) | $(54,778) | | Net Loss Attributable to NET Power Inc. | $(43,056) | $(34,176) | $(54,778) | | Net Loss per Share of Class A Common Stock (Successor) or per Unit of Equity (Predecessor) | $(0.62) | $(9.07) | $(14.79) | - During the Successor period (June 8 - December 31, 2023), the company generated no revenue, compared to **$175 thousand** in the Predecessor period (January 1 - June 7, 2023) and **$580 thousand** in 2022[361](index=361&type=chunk) - Total operating expenses in the Successor period amounted to **$193,510 thousand**, primarily comprising **$41,260 thousand** in general and administrative expenses, **$25,022 thousand** in research and development expenses, **$79,054 thousand** in option settlement expense, and **$45,031 thousand** in depreciation, amortization, and accrued expenses[361](index=361&type=chunk) - Interest income (expense) was **$19,473 thousand** in the Successor period, compared to **$4 thousand** in the Predecessor period and **($4,791) thousand** in 2022, indicating significant growth in interest income[361](index=361&type=chunk) [Consolidated Statement of Shareholders' Equity and Non-Controlling Interest (Successor)](index=73&type=section&id=Consolidated%20Statement%20of%20Shareholders%27%20Equity%20and%20Non-Controlling%20Interest%20(Successor)) As of December 31, 2023 (Successor), NET Power Inc.'s total shareholders' equity was **$785,009 thousand**, with **71,277,906 Class A common shares** and **141,787,429 Class B common shares** issued, and **$1,545,905 thousand** in redeemable non-controlling interest recognized, reflecting the impact of the business combination, PIPE financing, equity award vesting, and non-controlling interest adjustments Consolidated Shareholders' Equity and Non-Controlling Interest Summary (Thousands USD) | Metric | Dec 31, 2023 (Successor) | | :--- | :--- | | Class A Common Stock (Shares) | 71,277,906 | | Class A Common Stock (Amount, Thousands USD) | $7 | | Class B Common Stock (Shares) | 141,787,429 | | Class B Common Stock (Amount, Thousands USD) | $14 | | Additional Paid-in Capital (Thousands USD) | $851,841 | | Accumulated Deficit (Thousands USD) | $(66,853) | | Total Shareholders' Equity (Thousands USD) | $785,009 | | Redeemable Non-Controlling Interest (Thousands USD) | $1,545,905 | - As of December 31, 2023, the company had **71,277,906 shares of Class A common stock** and **141,787,429 shares of Class B common stock** outstanding[363](index=363&type=chunk) - The business combination resulted in the conversion of RONI Class A and Class B common stock into NET Power Inc. Class A and Class B common stock, and the issuance of **54,044,995 shares of Class A common stock** to PIPE investors[363](index=363&type=chunk) - Redeemable non-controlling interest of **$1,545,905 thousand** was recognized, primarily consisting of OpCo Class A units[363](index=363&type=chunk) [Consolidated Statement of Members' Equity (Predecessor)](index=74&type=section&id=Consolidated%20Statement%20of%20Members%27%20Equity%20(Predecessor)) As of December 31, 2022 (Predecessor), NET Power, LLC's members' equity was **$64,402 thousand**, comprising **3,722,355 member equity units**, which increased to **$62,723 thousand** by June 7, 2023 (Predecessor) through share issuances to Occidental Petroleum, Constellation, and BHES, and equity award vesting, partially offset by a **$34,176 thousand** comprehensive loss Consolidated Members' Equity Summary (Thousands USD) | Metric | June 7, 2023 (Predecessor) | Dec 31, 2022 (Predecessor) | | :--- | :--- | :--- | | Member Equity Units | 3,803,762 | 3,722,355 | | Member Equity Amount (Thousands USD) | $286,931 | $262,622 | | Additional Paid-in Capital (Thousands USD) | $34,476 | $26,288 | | Accumulated Deficit (Thousands USD) | $(258,701) | $(224,525) | | Total Member Equity (Thousands USD) | $62,723 | $64,402 | - As of December 31, 2022, total member equity was **$64,402 thousand**, comprising **3,722,355 member equity units**[364](index=364&type=chunk) - During the 2023 Predecessor period, member equity increased through share issuances to Occidental Petroleum, Constellation, and BHES, as well as equity award vesting[364](index=364&type=chunk) - A comprehensive loss of **$34,176 thousand** negatively impacted member equity[364](index=364&type=chunk) [Consolidated Statements of Cash Flows](index=75&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) For the period June 8 to December 31, 2023 (Successor), NET Power Inc. reported **$38,379 thousand** net cash outflow from operating activities, **$101,269 thousand** net cash outflow from investing activities, and **$319,556 thousand** net cash inflow from financing activities, with operating outflows driven by net loss and non-cash adjustments, investing outflows by short-term investments and PPE, and financing inflows primarily from PIPE financing Consolidated Cash Flow Summary (Thousands USD) | Cash Flow Type | June 8 - Dec 31, 2023 (Successor) | Jan 1 - June 7, 2023 (Predecessor) | Year Ended Dec 31, 2022 (Predecessor) | | :--- | :--- | :--- | :--- | | Net Cash Outflow from Operating Activities | $(38,379) | $(10,623) | $(16,630) | | Net Cash Outflow from Investing Activities | $(101,269) | $(2,431) | $(115) | | Net Cash Inflow from Financing Activities | $319,556 | $15,836 | $21,467 | | Net Increase in Cash | $179,908 | $2,782 | $4,722 | | Cash and Cash Equivalents, End of Period | $536,927 | $7,946 | $5,164 | - Net cash outflow from operating activities in the 2023 Successor period was **$38,379 thousand**, primarily composed of net loss (**$141,816 thousand**) and several non-cash adjustments (e.g., depreciation, amortization, share-based compensation)[365](index=365&type=chunk) - Net cash outflow from investing activities was **$101,269 thousand**, primarily for the purchase of short-term investments (**$100,000 thousand**) and property, plant, and equipment (**$9,217 thousand**)[365](index=365&type=chunk) - Net cash inflow from financing activities was **$319,556 thousand**, primarily from proceeds of PIPE financing (**$540,451 thousand**), partially offset by repurchases of redeemed Class A common stock (**$218,983 thousand**) and transaction costs (**$11,722 thousand**)[365](index=365&type=chunk) [Notes to Consolidated Financial Statements](index=77&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) This section provides detailed notes to NET Power Inc.'s consolidated financial statements, covering organizational background, business combination accounting, significant accounting policies, balance sheet item details, cash flow information, related party transactions, fair value measur

ewg3D/E+ via Getty Images There has been a lot of buzz about NET Power (NYSE:NPWR) on Seeking Alpha since it SPAC'ed earlier this year. Much of that discussion has revolved around whether it is worth waiting for the company to generate profits. To answer that question, I draw on company reports, analyst research, and conversation with a colleague in the industry to model NPWR's long-term risk-reward profile. NPWR is inherently an ultra-high-risk investment, since its product is not yet commercially availabl ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Table of Contents For the quarterly period ended September 30, 2023 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission file number 001-40503 NET Power Inc. (Exact name of registrant as specified in its charter) Delaware 98-1580 ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission file number 001-40503 NET Power Inc. (Exact name of registrant as specified in its charter) Delaware 98-1580612 ( ...

IPO and Trust Account - The company completed its Initial Public Offering (IPO) on June 18, 2021, raising gross proceeds of $345.0 million from the sale of 34,500,000 units at $10.00 per unit, with offering costs of approximately $19.1 million[130]. - Following the IPO, $345,026,000 of net proceeds were placed in a Trust Account, which will be invested in U.S. government securities until a Business Combination is completed or the Trust Account is distributed[133]. - Public Shareholders will have the opportunity to redeem their shares at a pro rata portion of the Trust Account, initially at $10.00 per share, upon completion of a Business Combination[136]. - If a Business Combination is not completed within 24 months from the IPO closing, the company will redeem Public Shares at a price equal to the amount in the Trust Account, subject to certain conditions[137]. - The company has broad discretion regarding the application of net proceeds from the IPO and Private Placement, primarily intended for consummating a Business Combination[135]. Business Combination - The company entered into a Business Combination Agreement on December 13, 2022, with NET Power, which was unanimously approved by the boards of directors of both parties[139][141]. - The company’s management has indicated that it must complete a Business Combination with an aggregate fair market value of at least 80% of the net assets held in the Trust Account[135]. - The company intends to complete a Business Combination before the mandatory liquidation date of June 18, 2023, using funds for transaction costs and evaluating prospective candidates[152]. Financial Performance and Position - As of March 31, 2023, the company had approximately $0.8 million in its operating bank account and a working capital deficit of approximately $4.8 million[150]. - For the three months ended March 31, 2023, the company reported a net loss of approximately $2.3 million, including $4.4 million in non-operating loss from derivative warrant liabilities[156]. - The company has determined that its liquidity needs raise substantial doubt about its ability to continue as a going concern[152]. - The company will not generate operating revenues until the completion of its initial Business Combination[155]. - The company incurred $30,000 in fees under an administrative services agreement for the three months ended March 31, 2023[160]. Share Issuance and Transactions - An aggregate of 22,545,000 newly issued shares of Class A Common Stock will be sold to investors for a total purchase price of $225.45 million prior to the closing of the Business Combination[147]. - OXY agreed to purchase 25,000,000 shares of Class A Common Stock for $250 million, along with 31,328 NET Power units for $10 million, which will convert into Class A Units of Opco and Class B common stock[148]. - Four trusts subscribed for 2,500,000 shares of Class A Common Stock for a total of $25 million[149]. Accounting and Reporting - The FASB issued ASU 2022-03, effective for fiscal years beginning after December 15, 2023, which clarifies that contractual sales restrictions are not considered in measuring equity securities at fair value[169]. - The company does not anticipate that recently issued accounting pronouncements will materially affect its unaudited condensed consolidated financial statements[170]. - As of March 31, 2023, the company had no off-balance sheet arrangements or commitments[171]. - The company qualifies as an "emerging growth company" under the JOBS Act, allowing it to delay the adoption of new accounting standards[172]. - The company is evaluating the benefits of reduced reporting requirements under the JOBS Act, which may exempt it from certain disclosures for five years post-IPO[173]. - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[174].

IPO and Financial Proceeds - The company completed its initial public offering on June 18, 2021, raising gross proceeds of $345.0 million from the sale of 34,500,000 units at $10.00 per unit, with offering costs of approximately $19.1 million[23]. - A private placement of 10,900,000 warrants was executed simultaneously with the IPO, generating proceeds of $10.9 million at a price of $1.00 per warrant[24]. - The company completed its initial public offering in October 2020, generating aggregate proceeds of $237.25 million[53]. - The company has approximately $345 million in net proceeds from its initial public offering, which are placed in a Trust Account and invested in U.S. government securities[65]. - The net proceeds from the IPO and private placement were placed in a trust account, which will be invested in U.S. government securities or money market funds[149]. - The company incurred offering costs of approximately $19.1 million related to the IPO, including $11.7 million for deferred underwriting commissions[145]. Business Combination and Strategy - The proposed business combination with NET Power involves the exchange of equity interests, resulting in the issuance of 135,698,078 Class A Units of Opco and an equivalent number of shares of Class B Common Stock[31]. - The company is focusing on the energy transition market, particularly in renewable fuels and sustainable chemical production, to capitalize on significant market opportunities[33]. - The management team aims to leverage their extensive network and experience in the renewable energy sector to identify and acquire target businesses that align with their sustainability objectives[38]. - The company plans to evaluate prospective targets based on potential growth, improved capital structure, and thorough due diligence processes[41]. - The company anticipates structuring its initial business combination to control 100% of the equity interests or assets of the target business or businesses[45]. - The company must complete one or more business combinations with an aggregate fair market value of at least 80% of the net assets held in trust at the time of the agreement[43]. - The company will only complete an initial business combination with target businesses that have an aggregate fair market value of at least 80% of the net assets held in trust[73]. - The company entered into a Business Combination Agreement on December 13, 2022, with NET Power and related entities[154]. - RONI will change its name to "NET Power Inc." and convert its Class A and Class B ordinary shares on a one-for-one basis to Class A and Class B common stock respectively[155]. - Following the Business Combination, holders of Class A Units of Opco will have the right to exchange RONI Interests for shares of Class A Common Stock or cash[157]. - The Company entered into Subscription Agreements to issue 22,545,000 newly issued shares of Class A Common Stock for a total of $225,450,000 prior to the closing of the Business Combination[161]. Financial Performance and Reporting - As of December 31, 2022, the company had not commenced any operations and generates non-operating income from interest on investments from IPO proceeds[144]. - For the year ended December 31, 2022, the Company reported a net income of approximately $4.2 million, primarily from non-operating gains and interest earned[169]. - The Company had a net loss of approximately $10.2 million for the period from February 2, 2021, through December 31, 2021, mainly due to non-operating losses and general administrative expenses[170]. - The Company has determined that its liquidity needs raise substantial doubt about its ability to continue as a going concern without completing a Business Combination before June 18, 2023[165]. - The company recognizes changes in the redemption value of its shares immediately, adjusting the carrying value to equal the redemption value at the end of the reporting period[178]. - The diluted net income (loss) per share for the year ended December 31, 2022, is the same as the basic net income (loss) per share due to the anti-dilutive effect of warrants[180]. - The company adopted ASU 2020-06 on January 1, 2021, with no material impact on its financial statements[181]. - As of December 31, 2022, the company had no off-balance sheet arrangements or commitments[184]. Shareholder Rights and Redemptions - The company will provide public shareholders with the opportunity to redeem their Class A ordinary shares at a per-share price initially anticipated to be $10.00[79]. - The company will not redeem public shares if it would cause net tangible assets to fall below $5,000,001, to avoid being subject to SEC's "penny stock" rules[80]. - The company intends to conduct redemptions in conjunction with a proxy solicitation or a tender offer, based on various factors[81]. - Public shareholders are restricted from redeeming more than 15% of the shares sold in the initial public offering without prior consent[88]. - The per-share redemption amount upon dissolution is expected to be approximately $10.00, excluding interest earned on the Trust Account[102]. - If the initial business combination is not completed within 24 months from the IPO closing, the company will redeem public shares at a price equal to the aggregate amount in the Trust Account[97]. - The Trust Account may not guarantee a redemption price of $10.00 per public share due to potential claims from creditors and bankruptcy risks[104]. - The company aims to mitigate indemnification obligations by having business partners waive claims to Trust Account funds[105]. - In the event of bankruptcy, the Trust Account proceeds could be subject to claims from third parties, potentially reducing shareholder returns[106]. - Public shareholders can only access Trust Account funds under specific conditions, including failure to complete a business combination within 24 months[107]. Management and Governance - The company has a team of experienced executives with significant backgrounds in finance and energy sectors[201]. - The board of directors is divided into three classes, with each class serving a three-year term, and the first class's term expiring at the first annual meeting of shareholders[208]. - The audit committee consists of three independent directors, ensuring compliance with NYSE listing standards and SEC rules[218]. - James Lytal is designated as the "audit committee financial expert" as per SEC rules, ensuring financial literacy within the committee[219]. - The audit committee is responsible for pre-approving all audit services and monitoring the independence of the independent registered public accounting firm[220]. - The company has not established any limit on the consulting or management fees that may be paid to directors or management after the initial business combination[214]. - Independent directors will hold regularly scheduled meetings to ensure governance and oversight[212]. - The company does not intend to take actions to guarantee management positions post-business combination, although negotiations for employment may occur[215]. - The audit committee will review and approve all payments made to existing shareholders, executive officers, or directors[220]. Compliance and Reporting Requirements - The company is classified as an "emerging growth company," allowing it to take advantage of certain exemptions from reporting requirements[61]. - The company will remain an emerging growth company until it has total annual gross revenue of at least $1.07 billion or issues more than $1.0 billion in non-convertible debt securities during the prior three-year period[63]. - The company is also a "smaller reporting company," which permits it to provide only two years of audited financial statements[120]. - The company is evaluating the benefits of relying on reduced reporting requirements under the JOBS Act[186]. - The company has no disagreements with accountants on accounting and financial disclosure[189]. - The company is still evaluating the impact of ASU 2022-03 on its consolidated financial statements, effective for fiscal years beginning after December 15, 2023[182]. - The management does not believe that any recently issued accounting pronouncements would have a material effect on consolidated financial statements[183]. - Management assessed the effectiveness of internal control over financial reporting as of December 31, 2022, concluding it was effective[194]. - There were no changes in internal control over financial reporting that materially affected the company during the fiscal quarter ended December 31, 2022[195].