netpower(NPWR) - 2021 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements The unaudited financial statements show a blank check company with assets primarily in a Trust Account and a net loss driven by non-cash warrant charges Condensed Consolidated Balance Sheet Total assets of $350.2 million are primarily comprised of investments held in trust, offset by significant derivative warrant liabilities Condensed Consolidated Balance Sheet Highlights (June 30, 2021) | Category | Amount (USD) | | :--- | :--- | | Assets | | | Cash | $4,107,852 | | Investments held in Trust Account | $345,026,945 | | Total Assets | $350,154,732 | | Liabilities & Equity | | | Total current liabilities | $1,806,672 | | Deferred underwriting commissions | $11,721,500 | | Derivative warrant liabilities | $26,840,250 | | Total Liabilities | $40,368,422 | | Class A ordinary shares subject to possible redemption | $304,786,300 | | Total Shareholders' Equity | $5,000,010 | Condensed Consolidated Statements of Operations The company reported a net loss of $6.5 million, primarily driven by non-cash charges related to derivative warrant liabilities Statement of Operations Summary (Inception to June 30, 2021) | Item | Amount (USD) | | :--- | :--- | | General and administrative expenses | $(181,782) | | Loss from operations | $(181,782) | | Change in fair value of derivative warrant liabilities | $(3,505,250) | | Offering costs associated with derivative warrant liabilities | $(592,641) | | Loss upon issuance of Private Warrants | $(2,175,000) | | Net loss | $(6,453,728) | Condensed Consolidated Statement of Cash Flows Cash flows were dominated by financing inflows from the IPO and investing outflows for the Trust Account deposit Cash Flow Summary (Inception to June 30, 2021) | Cash Flow Category | Amount (USD) | | :--- | :--- | | Net cash used in operating activities | $(26,849) | | Net cash used in investing activities | $(345,026,000) | | Net cash provided by financing activities | $330,634,739 | Notes to Unaudited Condensed Consolidated Financial Statements Notes detail the company's formation, IPO proceeds, accounting policies for warrants, and the 24-month deadline for a Business Combination - The company is a blank check company formed to effect a Business Combination and has not commenced any operations as of June 30, 2021[18][19] - On June 18, 2021, the company consummated its IPO of 34,500,000 units at $10,00 per unit, generating gross proceeds of $345.0 million[20] - Simultaneously with the IPO, the Sponsor purchased 10,900,000 Private Placement Warrants at $1,00 each, generating proceeds of $10.9 million[21] - The company must complete a Business Combination within 24 months from the IPO closing, by June 18, 2023, or it will be required to liquidate[26] - Public and Private Warrants are recognized as derivative liabilities at fair value, which was $26.8 million as of June 30, 2021[46][93] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's blank check status, IPO, net loss drivers, and sufficient liquidity for its merger search - The company's entire activity since inception has been related to its formation and the Initial Public Offering, with no operating revenues generated[98][111] Net Loss Composition (Inception to June 30, 2021) | Item | Amount (USD) | | :--- | :--- | | Change in fair value of derivative warrant liabilities | ~$3,505,000 | | Loss upon issuance of private placement warrants | $2,175,000 | | Offering costs associated with derivative warrant liabilities | ~$593,000 | | General and administrative expenses | ~$182,000 | | Total Net Loss | ~$6,206,000 | - As of June 30, 2021, the company had approximately $4.1 million in its operating bank account and working capital of $3.3 million to fund its search for a Business Combination[108] - The company has elected to use the extended transition period for complying with new accounting standards available to emerging growth companies under the JOBS Act[126] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, the registrant is not required to provide market risk disclosures - As a smaller reporting company, the registrant is not required to provide disclosures about market risk[128] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective with no material changes to internal controls - Management concluded that the company's disclosure controls and procedures were effective as of the end of the period covered by this report[129] - No changes in internal control over financial reporting occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[130] PART II. OTHER INFORMATION Item 1. Legal Proceedings The company reports no involvement in any legal proceedings - The company is not involved in any legal proceedings[133] Item 1A. Risk Factors As a smaller reporting company, this section refers to the risk factors detailed in the IPO prospectus - The company is a smaller reporting company and refers to its IPO prospectus filed on June 17, 2021 for information on risk factors[134] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds This section details unregistered sales to the Sponsor and confirms the use of IPO proceeds as planned - The Sponsor was issued founder shares and Class B units for an aggregate consideration of $26,000 in an unregistered sale[135] - The company consummated a Private Placement of warrants to the Sponsor, generating gross proceeds of $10.9 million in an unregistered sale[137] - The Initial Public Offering of 34,500,000 Units at $10,00 per unit generated gross proceeds of $345.0 million[140] - There has been no material change in the planned use of proceeds from the IPO as described in the final prospectus[142] Item 3. Defaults Upon Senior Securities The company reports no defaults upon its senior securities - None[143] Item 4. Mine Safety Disclosures This disclosure requirement is not applicable to the company - Not applicable[144] Item 5. Other Information The company reports no other material information for this period - None[145] Item 6. Exhibits This section lists all exhibits filed with the report, including key corporate and financial agreements - Lists various agreements and certifications filed as exhibits, such as the Amended and Restated Memorandum and Articles of Association, Warrant Agreement, and CEO/CFO certifications[147]