netpower(NPWR) - 2022 Q4 - Annual Report

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].