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What changed in NET Power Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of NET Power Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+349 added−494 removedSource: 10-K (2026-03-09) vs 10-K (2025-03-10)

Top changes in NET Power Inc.'s 2025 10-K

349 paragraphs added · 494 removed · 210 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

51 edited+66 added−90 removed73 unchanged
Biggest changeAdditionally, because wind and solar are highly sensitive to weather, we believe they are too unreliable to support certain end-use cases, including certain applications that require extensive on-site, always-available power. Our technology allows for the reliability and low-cost nature of natural gas to remain intact while reducing carbon emissions arising from natural gas-fired generation of electricity.
Biggest changeHydropower, while carbon-free, can be seasonal and subject to curtailment and has limited growth in the U.S., where most capable sources have already been developed. Additionally, because wind and solar are highly sensitive to weather, we believe they are too unreliable to support certain end-use cases, including applications that require extensive on-site, always-available power.
At the same time, many state and local leaders have intensified or stated their intent to intensify efforts to support international climate commitments and treaties, in addition to considering or enacting laws requiring the disclosure of climate-related information and developing programs that are aimed at reducing greenhouse gas emissions by means of cap and trade programs, carbon taxes or encouraging the use of renewable energy or alternative low-carbon fuels.
At the same time, many state and local leaders have intensified or stated their intent to intensify efforts to support international climate commitments and treaties, in addition to considering or enacting laws requiring the disclosure 18 of climate-related information and developing programs that are aimed at reducing greenhouse gas emissions by means of cap and trade programs, carbon taxes or encouraging the use of renewable energy or alternative low-carbon fuels.
In addition, we are required to obtain permits under the federal Clean Water Act for water discharges, such as storm water runoff associated with construction activities, and to follow a variety of best management practices to ensure that water quality is protected and effects are minimized. 15 • Bureau of Land Management (“BLM”) Right-of-Way Grants .
In addition, we are required to obtain permits under the federal Clean Water Act for water discharges, such as storm water runoff associated with construction activities, and to follow a variety of best management practices to ensure that water quality is protected and effects are minimized. • Bureau of Land Management (“BLM”) Right-of-Way Grants .
Further, under the Biden Administration, the U.S. rejoined the Paris Agreement treaty on climate change (the “Paris Agreement”), made a commitment under the Paris Agreement to cut U.S. greenhouse gas emissions by 50-52% from 2005 levels by 2030, and participated in the Global Methane Pledge, a pact that aims to reduce global methane emissions at least 30% below 2020 levels by 2030.
Under the Biden Administration, the U.S. rejoined the Paris Agreement treaty on climate change (the “Paris Agreement”), made a commitment under the Paris Agreement to cut U.S. greenhouse gas emissions by 50-52% from 2005 levels by 2030, and participated in the Global Methane Pledge, a pact that aims to reduce global methane emissions at least 30% below 2020 levels by 2030.
Our projects also often require state law-based permits in addition to federal permits. State agencies evaluate similar issues as federal agencies, 17 including a project’s effect on wildlife, historic sites, aesthetics, wetlands and water resources, agricultural operations, and scenic areas. States may impose different or additional monitoring or mitigation requirements than federal agencies.
Our projects also often require state law-based permits in addition to federal permits. State agencies evaluate similar issues as federal agencies, including a project’s effect on wildlife, historic sites, aesthetics, wetlands and water resources, agricultural operations, and scenic areas. States may impose different or additional monitoring or mitigation requirements than federal agencies.
We provide employees with compensation packages that may include various components, such as base salary, annual incentive bonuses, and long-term equity incentive awards. We also offer comprehensive employee benefits, such as life, disability, and health insurance, vision and dental insurance, paid time off, and a 401(k) plan with an employer contribution.
We provide employees with compensation packages that may include various components, such as base salary, annual incentive bonuses, and long-term equity incentive awards. We also offer comprehensive employee benefits, such as life, disability, and health insurance, vision and dental insurance, paid time off, and a 401(k) plan with an employer 13 contribution.
Many states where our projects are or may be located have laws that require state agencies to evaluate a broad array of environmental effects before granting state permits. The state environmental review process often resembles the federal NEPA process and may be more stringent than the federal review.
Many states where our projects are or may be located have laws that require state agencies to evaluate a broad array of environmental effects before granting state permits. The state environmental review process often resembles the federal NEPA process and may be more stringent 19 than the federal review.
At the 27th Conference of the Parties, the U.S. agreed, in conjunction with the 16 European Union and a number of other partner countries, to develop standards for monitoring and reporting methane emissions to help create a market for low methane-intensity natural gas.
At the 27th Conference of the Parties, the U.S. agreed, in conjunction with the European Union and a number of other partner countries, to develop standards for monitoring and reporting methane emissions to help create a market for low methane-intensity natural gas.
Companies like Net Power that are holding companies under PUHCA solely with respect to one or more Exempt Wholesale Generators (“EWGs”) or Qualifying Facilities (“QFs”) are generally exempt from requirements which give FERC access to books and records.
Companies like Net Power that are holding companies under PUHCA solely with respect to one or more Exempt Wholesale 15 Generators (“EWGs”) or Qualifying Facilities (“QFs”) are generally exempt from requirements which give FERC access to books and records.
This jurisdiction may, for certain transactions, extend to entities and assets 13 within ERCOT. Consequently, in certain cases, FERC approval may be required prior to entering into a transaction involving a public utility or for certain holding company transactions involving specified assets.
This jurisdiction may, for certain transactions, extend to entities and assets within ERCOT. Consequently, in certain cases, FERC approval may be required prior to entering into a transaction involving a public utility or for certain holding company transactions involving specified assets.
Such measures are often implemented to occur during the operational phase and may compromise or even require temporary cessation of operations under certain conditions such as seasonal migrations.
Such measures are often implemented to occur during the operational phase and may compromise or even require temporary cessation of operations 17 under certain conditions such as seasonal migrations.
State regulators also regulate the rates that retail utilities can charge and the terms under which they serve retail (end-use) electric customers. Certain states also have authority to regulate mergers, acquisitions, financing, and securities issuances.
State regulators also regulate the rates that retail utilities can charge and the terms under which they serve retail electric customers. Certain states also have authority to regulate mergers, acquisitions, financing, and securities issuances.
Public Utility Holding Company Act of 2005 The Public Utility Holding Company Act of 2005 (“PUHCA”) provides FERC and state regulatory commissions with access to the books and records of public utility holding companies and other companies in public utility holding company systems; it also provides for the review of certain costs.
Public Utility Holding Company Act of 2005 The Public Utility Holding Company Act of 2005 (“PUHCA”) provides FERC and state regulatory commissions with access to the books and records of public utility holding companies and other companies in public utility holding company systems. PUHCA also provides for the review of certain costs.
Accordingly, Net Power’s Demonstration Plant, which is located within the Electric Reliability Council of Texas (“ERCOT”), and other Net Power plants that Net Power may own in the future located in ERCOT and other jurisdictions within the U.S., are subject to substantial energy regulation and may be adversely affected by legislative or regulatory changes, as well as liability under, or any future ability to comply with, existing or future energy regulations or requirements.
Accordingly, the La Porte Demonstration Facility, which is located within the Electric Reliability Council of Texas (“ERCOT”), and other Net Power plants that Net Power may own in the future located in ERCOT and other jurisdictions within the U.S., are subject to substantial energy regulation and may be adversely affected by legislative or regulatory changes, as well as liability under, or any future ability to comply with, existing or future energy regulations or requirements.
Federal Power Act The Federal Power Act (the “FPA”) provides the Federal Energy Regulatory Commission (“FERC”) exclusive federal jurisdiction over the sale of electric energy at wholesale (that is, for resale) in interstate commerce and the transmission of electric energy in interstate commerce, including wholesale markets for electric energy, capacity, ancillary services, and transmission services.
Federal Power Act The Federal Power Act (the “FPA”) provides the Federal Energy Regulatory Commission (“FERC”) exclusive federal jurisdiction over the sale of electric energy at wholesale in interstate commerce and the transmission of electric energy in interstate commerce, including wholesale markets for electric energy, capacity, ancillary services, and transmission services.
Historically, data centers have procured their power directly from the grid, but growing grid constraints across many markets plus growing demand, due in part to the proliferation of artificial intelligence applications, have led data center companies to evaluate co-location of data centers with dedicated power generation facilities, similar to the industrial market segment.
Historically, data centers have procured their power directly from the grid, but growing grid constraints across many markets plus growing demand, due in part to the proliferation of artificial intelligence applications, have led data center companies to evaluate co-location of data centers with dedicated power generation facilities.
If any such effects were to occur, they could have an adverse effect on the construction and operation of our projects. • Underground Injection and Carbon Sequestration . In certain cases, we may be responsible for the underground injection of CO 2 for long-term carbon sequestration.
If any such effects were to occur, they could have an adverse effect on the construction and operation of our projects. • Underground Injection and Carbon Sequestration . In certain cases, we may be responsible directly or via contract for the underground injection of CO 2 for long-term carbon sequestration.
Available Information Our website address is www.netpower.com. We use our website as a routine channel for distribution of information that may be material to investors, including news releases, financial information, presentations and corporate governance information. Information contained or connected to our website is not incorporated by reference in this Annual Report on Form 10-K unless expressly noted.
We use our website as a routine channel for distribution of information that may be material to investors, including news releases, financial information, presentations and corporate governance information. Information contained or connected to our website is not incorporated by reference in this Annual Report on Form 10-K unless expressly noted.
Net Power's Demonstration Plant, which is located within ERCOT, is not generally subject to FERC’s rate-regulation authority under Section 205 of the FPA, but any future Net Power facilities located outside of ERCOT may be. The FPA also provides FERC authority for the regulation of mergers, acquisitions, financings, and securities issuances involving entities subject to its jurisdiction.
Net Power's La Porte Demonstration Facility, which is located within ERCOT, is not generally subject to FERC’s rate-regulation authority under Section 205 of the FPA, but any future Net Power facilities located outside of ERCOT may be. 14 The FPA also provides FERC authority for the regulation of mergers, acquisitions, financings, and securities issuances involving entities subject to its jurisdiction.
Certain states also regulate the acquisition, divestiture, and transfer of some wholesale power projects and financing activities by the owners of such projects. In addition, states and other local agencies require a variety of environmental and other permits. Texas The Demonstration Plant is located in ERCOT.
Certain states also regulate the acquisition, divestiture, and transfer of some wholesale power projects and financing activities by the owners of such projects. In addition, states and other local agencies require a variety of environmental and other permits. Texas The La Porte Demonstration Facility is located in ERCOT.
Partnerships License Agreement with 8 Rivers On August 7, 2014, we entered into a license agreement with 8 Rivers, pursuant to which 8 Rivers granted us perpetual, irrevocable, and worldwide rights under patents relating to the Net Power Cycle (which was invented by 8 Rivers), for the generation of electricity using CO 2 as the primary working fluid.
License Agreement with 8 Rivers On August 7, 2014, we entered into a license agreement with 8 Rivers, pursuant to which 8 Rivers granted us perpetual, irrevocable, and worldwide rights under patents relating to the Oxy-Combustion Cycle (which was invented by 8 Rivers) for the generation of electricity using CO 2 as the primary working fluid.
However, in January 2025, President Trump issued executive orders directing the immediate notice to the United Nations of the United States’ withdrawal from the Paris Agreement and all other agreements made under the United Nations Framework Convention on Climate Change.
However, in January 2025, President Trump issued executive orders directing the immediate notice to the United Nations of the United States’ withdrawal from the Paris Agreement and all other agreements made under the United Nations Framework Convention on Climate Change. In February 2026, the U.S.
In addition, increasing concentrations of greenhouse gases in the Earth ' s atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of storms, floods, droughts, and other extreme climatic events.
In addition, increasing concentrations of greenhouse gases in the Earth's atmosphere may produce climate changes that have significant physical effects, such as increased frequency and severity of storms, floods, droughts, and other extreme climatic events.
For Net Power plants in which we have an ownership interest, these existing and future laws and regulations may affect existing and new projects, require us to obtain and maintain permits and approvals, undergo environmental review processes, and implement EHS programs and procedures to monitor and control risks associated with the siting, construction, operation, and decommissioning of regulated or permitted energy assets, all of which involve a significant investment of time and resources.
For Net Power plants in which we have an ownership interest, these existing and future laws and regulations may affect existing and new projects, require us to obtain and maintain permits and approvals, undergo environmental review processes, and implement EHS programs and procedures to monitor and control risks associated with the siting, construction, operation, and decommissioning of regulated or permitted energy assets, all of which involve a significant investment of time and resources. 16 We also incur costs in the ordinary course of business to comply with these laws, regulations, and permit requirements.
However, with the exception of traditional large-scale nuclear, these resources are carbon-intensive, and we expect them to largely be replaced with lower carbon-intensity generation over time.
However, with the exception of traditional large-scale nuclear, these generation types are carbon-intensive, and we expect them to be supplemented or replaced over time with lower carbon-intensity generation.
Pursuant to this agreement, NPI is developing sCO 2 turbo expanders for use in facilities implementing the Net Power Cycle. These 11 turbo expanders are intended to be compatible with our existing technology and are highly specialized. We and NPI formed a Joint Design Committee to provide oversight and support for program schedule, equipment design and performance.
Pursuant to this agreement, NPI was to develop sCO 2 turbo expanders for use in facilities implementing the Oxy-Combustion Cycle technology . These turbo expanders are intended to be compatible with our existing technology and are highly specialized. We and NPI formed a Joint Design Committee to provide oversight and support for program schedule, equipment design and performance.
Such changes in EHS laws and regulations, or the interpretation or enforcement thereof, could require us to incur materially higher costs, or cause a costly interruption of operations due to delays in obtaining new or amended permits.
EHS laws and regulations frequently change, and may become more stringent or subject to more stringent interpretation or enforcement over time. Such changes in EHS laws and regulations, or the interpretation or enforcement thereof, could require us to incur materially higher costs, or cause a costly interruption of operations due to delays in obtaining new or amended permits.
OLCV Net Power, LLC Investment OXY invested in Net Power in 2019 and provides expertise in the CO 2 value chain and construction of large facilities, like our Demonstration Plant. OXY is expected to play a key role in the development and commercialization of Project Permian should we decide to continue the development of Project Permian as SN1.
OLCV Net Power, LLC Investment OXY invested in Net Power in 2019 and provides expertise in the CO 2 value chain and construction of large facilities, like our La Porte Demonstration Facility. OXY is expected to play a key role in the development and commercialization of Project Permian.
The Net Power Cycle was first demonstrated at our 50 MWth Demonstration Plant in La Porte, Texas, for which construction commenced in 2016 and testing began in 2018. We conducted three testing campaigns over three years and the facility was ultimately synchronized to the Texas grid in the fall of 2021.
The Oxy-Combustion Cycle was first demonstrated at our 50 MWth demonstration facility in La Porte, Texas (the “La Porte Demonstration Facility”), for which construction commenced in 2016 and testing began in 2018. The facility was ultimately synchronized to the Texas grid in the fall of 2021.
We consider our relationship with our employees to be positive. 12 Talent Acquisition and Retention We support business growth by seeking to attract and retain best-in-class talent. We use internal and external resources to recruit highly skilled candidates for open positions.
None of our employees are subject to a collective bargaining agreement. We consider our relationship with our employees to be positive. Talent Acquisition and Retention We support business growth by seeking to attract and retain highly talented employees. We use internal and external resources to recruit highly skilled candidates for open positions.
We are monitoring the global market for other tax credit or carbon tax opportunities, with the belief that any value ascribed to carbon, whether a credit or tax, benefits our technology over other emitting alternatives.
We are monitoring the global market for other tax credit or carbon tax opportunities, with the belief that any value ascribed to carbon, whether a credit or tax, could benefit solutions that materially reduce emissions relative to unabated alternatives.
Such injection may require us to secure permits for the injection activity, which may be costly, time-consuming, and subject to opposition by third parties. Additionally, for long-term carbon sequestration, we will need to control the underground pore-space where carbon is to be stored, which will require legally securing the necessary real property rights for such storage.
Additionally, for long-term carbon sequestration, we or our partners will need to control the underground pore-space where carbon is to be stored, which will require legally securing the necessary real property rights for such storage.
Potential industrial applications, such as direct air capture facilities, steel facilities, chemical plants, and hydrogen production facilities, include those that have significant 24-hour energy needs and desire to utilize low-emission power, which we believe Net Power’s technology can provide. The technology and data center end-market is one of the fastest growing segments in many of our key target geographies.
The behind-the-meter end-market consists of industrial applications, such as direct air capture facilities, steel facilities, chemical plants, and data centers, including those that have significant 24-hour energy needs and desire to utilize low-emission power, which we believe our suite of technologies can provide.
Therefore, in ERCOT, the wholesale electricity market is, for most purposes, considered to be intrastate commerce, and so its rules, as well as the provision of transmission and distribution service in Texas, generally remain regulated by the PUCT. 14 The PUCT, with the help of ERCOT, regulates competitive market participants, including power generation companies (i.e., owners and operators of power plants that make sales into the wholesale electricity and ancillary services markets in ERCOT) and power marketers (i.e., entities that do not own power plants but make sales of electricity at wholesale).
The PUCT, with the help of ERCOT, regulates competitive market participants, including power generation companies (i.e., owners and operators of power plants that make sales into the wholesale electricity and ancillary services markets in ERCOT) and power marketers (i.e., entities that do not own power plants but make sales of electricity at wholesale).
We believe our competitive strengths differentiate us from our competition globally, in part because we expect our technology to achieve clean, reliable, and affordable power generation while we expect most of our competitors only achieve two of these three factors.
Competition Our competitors are other power generation technologies, including traditional baseload generation, advanced nuclear, geothermal, renewables, and other lower-carbon generation and decarbonization solutions. We believe our competitive strengths differentiate us from our competition globally, in part because we expect our solutions can achieve clean, reliable, and affordable power generation, while many alternatives only achieve two of these three factors.
These technologies are designed to be clean, safe, and highly reliable. However, none of these technologies have yet been licensed for commercial use in the U.S., and many of the technologies have not been demonstrated and generally do not have requisite fuel supply infrastructure in place.
Advanced Nuclear —There are several advanced nuclear reactor technologies that are in various stages of development. These technologies are designed to be clean, safe, and highly reliable. However, none have been demonstrated at commercial scale and many have not been licensed for commercial use in the U.S..
We will own intellectual property developed by NPI related to the Net Power Cycle, and NPI can only sell the jointly developed turbo expanders to our licensees. We and NPI will market the technology through a Joint Commercial Committee, leveraging Baker Hughes’ global sales channels.
We will own intellectual property developed by NPI related to the Oxy-Combustion Cycle technology , and NPI can only sell the jointly developed turbo expanders to our licensees.
We are committed to a clean energy future and we believe our business is well-positioned to benefit from growing regulatory and policy support for decarbonization.
While specific long-term climate change policies in the U.S. and abroad are uncertain, we are committed to a clean energy future and we believe our business is well-positioned to benefit from existing and future regulatory, policy, and particularly voluntary customer support for decarbonization.
Net Power began purchasing initial long-lead materials for SN1 in 2024 with the intention of locating SN1 in the Permian Basin of West Texas (“Project Permian”). However, after completing the front-end engineering and design (“FEED”) process in December 2024, the initial cost estimates were higher than originally anticipated.
In 2023, we began the front-end engineering and design (“FEED”) process for our first utility-scale power plant utilizing the Oxy-Combustion Cycle (“SN1”) with the intention of locating SN1 in the Permian Basin of West Texas (“Project Permian”). In 2024, we began purchasing initial long-lead materials for SN1.
Traditional natural gas power plants, while delivering lower carbon electricity than other fossil fuel feedstocks, are not viewed as a permanent solution by certain regulators and policymakers in light of concerns related to climate change. Instead, some view conventional natural gas as a bridge fuel until cleaner sources of energy are available.
Traditional natural gas power plants, while delivering lower carbon electricity than other fossil fuel feedstocks, are not viewed as a permanent solution by certain regulators, policymakers or power customers due to concerns related to climate change. Our solutions combine the reliability of natural gas with a pathway to materially reduce emissions through carbon capture and CO2 management.
A Net Power plant is inherently designed to meet and exceed the CO 2 capture thresholds and minimum capture rate for electric generating units of 75%. To qualify for the 45Q tax credit, eligible facilities like Net Power plants must commence construction by January 1, 2033 and can claim the tax credit for the first 12 years in service.
To qualify for the 45Q tax credit, eligible facilities must commence construction by January 1, 2033 and can claim the tax credit for the first 12 years the facility is in service.
Although these sources generate carbon-free power, wind, and solar can be intermittent and non-dispatchable, unless paired with long duration energy storage. Hydropower, while carbon-free, can be seasonal and subject to curtailment and has limited growth in the U.S., where most capable sources have already been developed.
Renewables —According to the IEA, approximately 32% of U.S. generation in 2024 was wind, solar, hydropower, and other sources of renewable power generation. Although these sources generate carbon-free power, wind and solar can be intermittent and non-dispatchable unless paired with long duration energy storage.
This allows Net Power to serve as a re-powering option for retiring facilities or facilities that cannot secure additional space for capture equipment. Net Power believes that the Net Power Cycle can serve as a key enabling solution for a low-carbon future, addressing shortfalls inherent to alternative options while contributing to an overall lower system-wide cost of decarbonization.
We believe that the combination of natural gas with carbon capture and sequestration solutions can serve as a key enabling solution for a lower-carbon future, addressing shortfalls inherent to alternative options while contributing to an overall lower system-wide cost of decarbonization.
Traditional Unabated Emission Generation— According to the International Energy Agency (the “IEA”), approximately 70% of global electricity supply in 2023 was comprised of natural gas, coal, oil, and large-scale nuclear. These technologies are highly reliable, cost-effective, and dispatchable.
We also believe our Clean Gas Product can be deployed within this decade, unlike many other emerging clean firm power options. Traditional Baseload Generation —According to the International Energy Agency (the “IEA”), natural gas, coal, oil, and large-scale nuclear comprised approximately 64% of global electricity consumption in 2024. These technologies are highly reliable, cost-effective, and dispatchable.
Following the passage of the IRA in August 2022, these tax credits increased for both permanent geological carbon sequestration and EOR to up to $85/metric ton and $60/metric ton, respectively. These tax credits can be monetized through a fully refundable direct payment or transferred to a third-party in exchange for cash payment.
This credit initially provided $20/metric ton for carbon sequestration and $10/metric ton for EOR. Following the passage of the Inflation Reduction Act (“IRA”) in August 2022, these tax credits increased for both permanent geological carbon sequestration and EOR to up to $85/metric ton and $60/metric ton, respectively.
The 45Q federal tax credit, first enacted in 2008 as a part of the Energy Improvement and Extension Act, provides an incentive to capture CO 2 . This credit initially provided $20/metric ton for carbon sequestration and $10/metric ton for EOR.
Set forth below is a summary of various programs and incentives that we expect will apply to our business. Tax Credits 45Q Tax Credit . The 45Q federal tax credit, first enacted in 2008 as a part of the Energy Improvement and Extension Act, provides an incentive to capture CO 2 .
Human Capital As of December 31, 2024, we had 68 full-time employees and six contractors and on-site service employees. Our headquarters are located in Durham, North Carolina. In July 2024, we opened a second corporate office in Houston, Texas to accommodate our growing resource requirements. None of our employees are subject to a collective bargaining agreement.
OXY is the lessor for the site for Project Permian near Midland, Texas. Human Capital As of January 31, 2026, we had 54 full-time employees and 12 contr actors and on-site service employees. Our headquarters are located in Durham, North Carolina, and we maintain a second corporate office in Houston, Texas.
In response, during the first quarter of 2025, Net Power commenced a post-FEED optimization and value engineering process. Further long lead equipment releases have been suspended but 7 value engineering and certain development work remain in progress. Provided we are successful in our value engineering process, the project would come online no earlier than 2029.
However, after completing FEED in December 2024, the indicative cost estimate at that time was higher than originally anticipated. In response, during the first quarter of 2025, we commenced a post-FEED optimization and value engineering process. In March 2025, we suspended further long-lead equipment releases, but value engineering and certain development work continued into the third quarter of 2025.
The deadline to commence construction is January 1, 2033 to qualify for the tax credit, and eligible facilities like Net Power plants can claim the tax credit for up to 12 years. In July 2024, the Internal Revenue Service (the “IRS”) within the U.S. Department of Treasury issued additional guidance to further implement the 45Q tax credit.
These tax credits can be monetized through a fully refundable direct payment or transferred to a third-party in exchange for cash payment. The deadline to commence construction is January 1, 2033 to qualify for the tax credit, and eligible facilities like Net Power plants can claim the tax credit for up to 12 years.
Through these tests, we achieved technology validation, reached critical operational milestones, and accumulated over 1,500 hours of total facility runtime. During 2024, we made significant upgrades to the Demonstration Plant in preparation for validation testing of commercial-scale turbo expander components.
During 2024, we made significant upgrades to the La Porte Demonstration Facility in preparation for validation testing of commercial-scale turbo expander components. The first of four planned phases of this equipment validation program commenced in late 2024.
Energy Information Administration (the “EIA”), there are hundreds of thermal power generation facilities at or nearing their retirement or replacement period through 2050, many of which Net Power believes could serve as potential brownfield site locations for our technology. • Compact footprint —Net Power’s modular design and the inherent energy density of sCO 2 as a working fluid leads to a low surface footprint targeted to be less than 15 acres, equal to 1/100th of the solar PV of a similar electric output.
Energy Information Administration (the “EIA”), there are hundreds of thermal power generation facilities at or nearing their retirement or replacement period through 2050, many of which we believe could serve as potential brownfield site locations for our solutions. • Scalable and modular — Our development approach is intended to support scalable, phased power delivery, enabling projects to expand capacity over time based on customer demand, grid needs, and permitting and infrastructure availability.
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Item 1. Business Overview Net Power is an energy technology company that has developed a novel power generation system (which we refer to as the “Net Power Cycle”) designed to produce reliable and affordable electricity from natural gas while capturing virtually all atmospheric emissions.
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Item 1. Business Overview Net Power is an energy technology and project development company focused on delivering low-carbon gas power solutions. Founded in 2010, our mission is to transform natural gas into the lowest cost form of clean firm power.
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Net Power was founded in 2010 and methodically progressed the technology from a theoretical concept to reality with the construction and commissioning of the Company’s demonstration facility in La Porte, Texas (the “Demonstration Plant”).
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Historically, our sole business has been the development of a novel oxy-combustion power generation system (the “Oxy-Combustion Cycle”) designed to produce reliable and affordable electricity from natural gas while inherently capturing CO 2 and minimizing the production of air pollutants such as SO X , NO X , and other particulates.
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The Net Power Cycle is designed to inherently capture CO 2 while producing virtually no air pollutants such as SO X , NO X , and other particulates. It is configurable to a wide range of local altitude, humidity, and ambient temperatures, all of which can facilitate project siting and operation in a variety of climates.
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During the third quarter of 2025, we completed a market analysis of the Oxy-Combustion Cycle to determine the economic and timing competitiveness of the product. From an economic perspective, the value-engineering efforts on Project Permian identified significant cost reductions, but not to a level that we believed would be economically competitive in the current market on an acceptable timeline.
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It can operate as a traditional baseload power plant, providing reliable electricity to the grid at capacity factors targeted to be above 90%.
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Additionally, given the market’s rapid shift in demand for new reliable power generation solutions that can be deployed as soon as possible, irrespective of their environmental impact, we determined it would be challenging for us to develop and commercialize the Oxy-Combustion Cycle on a timely basis to meet this demand and that other prospective solutions that mitigate emissions from gas generation could be deployed sooner and at lower cost than our initial plants.
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It can also complement intermittent renewables, providing clean dispatchable electricity that can be dispatched on demand at the request of power grid operators and according to market needs, while delivering substantial improvements in operability, affordability, and environmental performance as compared to alternative technologies for power generation.
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Although we believe the Oxy-Combustion Cycle remains a viable, long-term solution for the delivery of low-carbon intensity power, we also believe that the near-term prioritization of gas turbines with post-combustion carbon capture is the optimal approach to meeting current market demands.
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It can leverage existing natural gas infrastructure and can avoid issues of generation capacity and grid transmission overbuild created by other technologies, helping to further reduce system-wide decarbonization costs. The Net Power Cycle is designed to achieve clean, reliable, and affordable electricity generation through Net Power’s patented highly recuperative oxy-combustion process.
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In response to unprecedented demand growth for low-cost, firm power generation solutions with viable pathways to decarbonize, we have broadened the scope of our business to include the development of clean gas power generation using natural gas turbines paired with PCC.
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This process involves the combination of two technologies: • Oxy-combustion, a clean heat generation process in which fuel is mixed with oxygen such that the resulting byproducts from combustion consist of only water and pure CO 2 ; and • Supercritical CO 2 (sCO 2 ) power cycle, a closed or semi-closed loop process that replaces the air or steam used in most power cycles with recirculating CO 2 at high pressure, producing power by expanding sCO 2 continuously through a turbo expander.
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Our go-forward business model is to design, develop, build, own and operate clean gas power plants and monetize the products and attributes they generate, principally electricity, captured CO 2, and environmental attributes, as applicable.
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In the Net Power Cycle, CO 2 produced in oxy-combustion is immediately captured in a sCO 2 cycle that produces electricity. As CO 2 is added through oxy-combustion and recirculated, excess captured CO 2 is siphoned from the cycle at high purity for export to permanent storage or utilization.
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This business model differs from our historical commercialization strategy for the Oxy-Combustion Cycle, which contemplated proving the technology at utility scale and then pursuing broader deployment through licenses, engineering support services, and related fees. In November 2025, Net Power signed a letter of intent with Entropy Inc.
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The first of four planned phases of this equipment validation program commenced in late 2024 and is expected to progress over the next three years. Net Power’s primary business model is to license its technology to customers to enable them to build, own, and operate facilities that utilize the Net Power Cycle.
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(“Entropy”), a provider of carbon capture technology, to negotiate one or more definitive agreements under which Net Power would, among other things, exclusively license and commercialize Entropy’s PCC technology for power generation in the United States and to jointly develop power generation projects.
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We plan to offer multiple plant designs, including a large utility-scale plant that can generate up to 300 MW net electric output capacity, as well as a smaller, industrial-scale plant that can generate 25-115 MW net electric output capacity. We are actively advancing the utility-scale program and intend to commence the industrial-scale program in the future.
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Entropy’s proprietary amine-based solvent technology is designed to reduce CO 2 emissions from natural gas power plants. 8 Entropy’s carbon capture process leverages solvent process expertise and proprietary waste heat integration intended to improve capture efficiency.
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The technology is supported by a portfolio of 485 issued patents (as of December 31, 2024) in-licensed on an exclusive, irrevocable basis (in the applicable field) from 8 Rivers as well as significant know-how and trade secrets generated through experience at the Demonstration Plant and from engineering, design, and development of our first utility-scale plant.
Added
We believe Entropy’s PCC technology is at a high level of technology readiness and can enable Net Power to develop and deliver clean gas power projects on timelines that better align with current market demand. We are developing a modular, standardized clean gas power plant product incorporating Entropy’s PCC technology (the “Clean Gas Product”).
Removed
Net Power’s first-generation utility-scale design (which we refer to as Gen1U) is expected to be a 550 MWth power plant, targeting a CO 2 capture rate of 97% or greater and net LHV efficiency of up to 50% for later Gen1U units.
Added
The development of our first project under this strategy is underway and is expected to be located at our Project Permian site in West Texas. Project Permian is now being designed to accommodate up to 1 GW of clean firm power generation capacity and will be developed in multiple phases.
Removed
Given the nascent nature of this technology, early Gen1U deployments are focused on ensuring a safe, clean, and reliable system targeting a net LHV efficiency of approximately 45% after incorporating learnings from operations of our early plants.
Added
Phase I of this project is expected to deliver approximately 80 MW of net power output. As part of securing the equipment for Phase I, on November 12, 2025 we entered into an agreement to purchase two modular gas turbine generator sets (“Gas Turbine Sets”).
Removed
Net Power intends to incorporate learnings from early deployments to drive improvements in future plants, including increases in net efficiency and reductions in costs to build and operate the plants. Over the next several years, Net Power plans to conduct additional research and equipment validation testing campaigns at its Demonstration Plant and work to develop its first utility-scale plant (“SN1”).
Added
Final investment decision (“FID”) for Phase I is expected in the third quarter of 2026 with targeted commercial operations by early 2029, which would make this project the first operating commercial clean gas power plant in the United States.
Removed
Net Power intends to deploy its technology in the United States (“U.S.”) and around the world by leveraging experience gained from the Demonstration Plant, and SN1, as well as from the support and expertise of Net Power’s current owners, including OXY, BHES, and Constellation.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

111 edited+32 added−127 removed156 unchanged
Biggest changeSome of these factors include, without limitation, the availability of domestic and foreign natural gas production, the marketing of competitive fuels, the proximity and capacity of pipelines, fluctuations in supply and demand, the availability of a ready market, the effect of U.S. federal and state regulation of production, refining, transportation and sales and general national and worldwide economic conditions. 26 We are highly dependent on our senior management team, key employees and other highly skilled personnel, and if we are not successful in attracting or retaining highly qualified personnel, we may not be able to successfully implement our business strategy and our ability to compete may be harmed.
Biggest changeSome of these factors include, without limitation, the availability of domestic and foreign natural gas production, the marketing of competitive fuels, the proximity and capacity of pipelines, fluctuations in supply and demand, the availability of a ready market, the effect of U.S. federal and state regulation of production, refining, transportation and sales and general national and worldwide economic conditions.
Among other things, our governing documents include provisions regarding: • the ability of the Board to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval because such ability could be used to significantly dilute the ownership of a hostile acquirer; • the limitation of the liability of and the indemnification of our directors and officers; • a prohibition on stockholder action by written consent, thereby forcing stockholder action to be taken at an annual or special meeting of stockholders after such date and possibly delaying the ability of stockholders to force consideration of a stockholder proposal or to take action, including the removal of directors; • the requirement that a special meeting of stockholders may be called only by the Chief Executive Officer, the Chairman of the Board or the Board, possibly delaying the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors; • controlling the procedures for the conduct and scheduling of Board and stockholder meetings; • the ability of the Board to amend our Bylaws, possibly allowing the Board to take additional actions to prevent an unsolicited takeover and to inhibit the ability of an acquirer to amend our Bylaws to facilitate an unsolicited takeover attempt; and 43 • advance notice procedures with which stockholders must comply to nominate candidates to the Board or to propose matters to be acted upon at a stockholders’ meeting, possibly precluding stockholders from bringing matters before annual or special meetings of stockholders, delaying changes in the Board and discouraging or deterring a potential acquirer from conducting a solicitation of proxies to elect the acquirer ' s own slate of directors or to otherwise attempt to obtain control of the Company.
Among other things, our governing documents include provisions regarding: • the ability of the Board to issue shares of preferred stock, including “blank check” preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval because such ability could be used to significantly dilute the ownership of a hostile acquirer; • the limitation of the liability of and the indemnification of our directors and officers; • a prohibition on stockholder action by written consent, thereby forcing stockholder action to be taken at an annual or special meeting of stockholders after such date and possibly delaying the ability of stockholders to force consideration of a stockholder proposal or to take action, including the removal of directors; • the requirement that a special meeting of stockholders may be called only by the Chief Executive Officer, the Chairman of the Board or the Board, possibly delaying the ability of stockholders to force consideration of a proposal or to take action, including the removal of directors; • controlling the procedures for the conduct and scheduling of Board and stockholder meetings; • the ability of the Board to amend our Bylaws, possibly allowing the Board to take additional actions to prevent an unsolicited takeover and to inhibit the ability of an acquirer to amend our Bylaws to facilitate an unsolicited takeover attempt; and • advance notice procedures with which stockholders must comply to nominate candidates to the Board or to propose matters to be acted upon at a stockholders’ meeting, possibly precluding stockholders from bringing matters before annual or special meetings of stockholders, delaying changes in the Board and discouraging or deterring a potential acquirer from conducting a solicitation of proxies to elect the acquirer ' s own slate of directors or to otherwise attempt to obtain control of the Company.
We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”), and we may take advantage of certain exemptions and relief from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” In particular, while we are an “emerging growth company,” we will not be required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, we will be exempt from any rules that could be adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotations or requiring a supplement to the auditor’s report on financial statements, we will be subject to reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and we will not be required to hold non-binding advisory votes on executive compensation or stockholder approval of any golden parachute payments not previously approved.
We are an “emerging growth company,” as defined in the Jumpstart Our Business Startups Act (“JOBS Act”), and we may take advantage of certain exemptions and relief from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” In particular, while we are an “emerging growth company,” we will not be required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, we will be exempt from any rules that could be adopted by the Public Company Accounting Oversight Board requiring mandatory audit firm rotations or requiring a supplement to the auditor’s report on financial statements, we will be subject to reduced disclosure obligations 39 regarding executive compensation in our periodic reports and proxy statements, and we will not be required to hold non-binding advisory votes on executive compensation or stockholder approval of any golden parachute payments not previously approved.
More broadly, while we believe our business is well-positioned to benefit from the enactment of climate change-related policies and initiatives across the market at the corporate level and/or investor community level (e.g., clean or renewable energy consumption targets or net zero commitments), such developments may in the future also result in adverse effects on our business, the degree of which may in part depend on the nature of any adverse effects that such developments have on our customers.
More broadly, while we believe our business is well-positioned to benefit from the enactment of climate change-related policies and initiatives across the market at the corporate level and/or investor community level (e.g., clean or renewable energy consumption targets or net zero commitments), such developments may in the future also result in adverse effects on our business, the degree of which may in part depend on the nature of any adverse effects that such developments have on our business.
Should operational risks materialize, it may result in the personal injury to or death of workers, the loss of production equipment, damage to manufacturing facilities, monetary losses, delays, and unanticipated fluctuations in production, environmental damage, administrative fines, increased insurance costs, and potential legal liabilities, all which could have a material and adverse effect on our business, results of operations, cash flows, financial condition, or prospects.
Should operational risks materialize, it may result in the personal injury to or death of workers, the loss of production equipment, damage to manufacturing facilities, monetary losses, delays, and unanticipated fluctuations in production, environmental damage, administrative 23 fines, increased insurance costs, and potential legal liabilities, all which could have a material and adverse effect on our business, results of operations, cash flows, financial condition, or prospects.
Currency fluctuations, inflation, trade barriers, extreme weather (which may be influenced by climate change), war, tariffs, pandemics, or shortages and other general economic or political conditions may limit our ability or our licensees’ ability to obtain key components or significantly increase freight charges, raw material costs and other expenses associated with our business and our licensees’ business, and such increased costs could materially and adversely affect our results of operations, financial condition and prospects.
Currency fluctuations, inflation, trade barriers, extreme weather (which may be influenced by climate change), war, tariffs, pandemics, or shortages and other general economic or political conditions may limit our ability to obtain key components or significantly increase freight charges, raw material costs and other expenses associated with our business, and such increased costs could materially and adversely affect our results of operations, financial condition and prospects.
District Court for the Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder will be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”) and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
District Court for the Southern District of New York (a “foreign action”) in the name of any holder of our warrants, such holder will be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection with any action brought in any such court to enforce the forum provisions (an “enforcement action”) 41 and (y) having service of process made upon such warrant holder in any such enforcement action by service upon such warrant holder’s counsel in the foreign action as agent for such warrant holder.
If an actual or perceived disruption in the availability of our software and services or a breach of our security measures or those of our service providers occurs, it could adversely affect the market perception of our software and services, result in a loss of competitive advantage, have a negative impact on our reputation, result in the loss of 27 customers, channel partners and sales and expose us to the loss or alteration of information, to litigation, to regulatory actions and investigations and to possible liability.
If an actual or perceived disruption in the availability of our software and services or a breach of our security measures or those of our service providers occurs, it could adversely affect the market perception of our software and services, result in a loss of competitive advantage, have a negative impact on our reputation, result in the loss of customers, channel partners and sales and expose us to the loss or alteration of information, to litigation, to regulatory actions and investigations and to possible liability.
We may be unable to manage the risk of volatility in incentive pricing for all or a portion of our revenues, which would expose us to the volatility of commodity prices with respect to all or the portion of the incentives 32 that we are unable to sell through forward contracts, including risks resulting from changes in regulations, general economic conditions and changes in the level of renewable energy generation.
We may be unable to manage the risk of volatility in incentive pricing for all or a portion of our revenues, which would expose us to the volatility of commodity prices with respect to all or the portion of the incentives that we are unable to sell through forward contracts, including risks resulting from changes in regulations, general economic conditions and changes in the level of renewable energy generation.
Adverse public reaction could lead to fewer customers, damage to our reputation, and increased regulatory, legislative, and judicial scrutiny, which may in turn lead to increased regulation or outright prohibition of aspects of our operations, limitations on the activities of our customers or other constituents within our value chain, more onerous operating requirements or other conditions that could have a material adverse impact on our customers’ and on our business.
Adverse public reaction could lead to fewer customers, damage to our reputation, and increased regulatory, legislative, and judicial scrutiny, which may in turn lead to increased regulation or outright prohibition of aspects of our operations, limitations on the activities of constituents within our value chain, more onerous operating requirements or other conditions that could have a material adverse impact on our business.
If our or our third-party vendors’ information technology systems are damaged or cease to be available or function properly for an extended period of time, whether as a result of a significant cyber incident or otherwise, our ability to communicate internally as well as with our retail customers could be significantly impaired, and such impaired ability to communicate may adversely impact our business.
If our or our third-party vendors’ information technology systems are damaged or cease to be available or function properly for an extended period of time, whether as a result of a significant cyber incident or otherwise, our ability to 37 communicate internally as well as with our retail customers could be significantly impaired, and such impaired ability to communicate may adversely impact our business.
See also “— We may be subject to new, stricter measures and/or regulatory requirements for the mitigation or reduction of greenhouse gas emissions that could require radical changes to development models ” for a discussion of how climate change-related regulations and policies may have adverse affects on our business.
See also “— We may be subject to new, stricter measures and/or regulatory requirements for the mitigation or reduction of greenhouse gas emissions that 31 could require radical changes to development models ” for a discussion of how climate change-related regulations and policies may have adverse affects on our business.
However, OpCo’s ability to make such distributions may be subject to various limitations and restrictions including, but not limited to, retention of amounts necessary to satisfy the obligations of OpCo and its subsidiaries and restrictions on distributions that would violate any applicable restrictions contained in OpCo’s debt agreements or any applicable law or that would have the effect of rendering OpCo insolvent.
However, OpCo’s ability to make such distributions may be subject to various limitations and restrictions including, but not limited to, retention of amounts necessary to satisfy the obligations of OpCo and its subsidiaries and restrictions on 38 distributions that would violate any applicable restrictions contained in OpCo’s debt agreements or any applicable law or that would have the effect of rendering OpCo insolvent.
Despite implementing and maintaining industry standard security measures and controls, the website, systems, and data we maintain may be subject to intentional disruption, other security incidents or alleged violations of laws, regulations or other obligations relating to data handling that could result in liability and adversely impact our reputation and future sales.
Despite implementing and maintaining industry standard security measures and controls, the website, systems, and data we maintain may be subject to intentional disruption, other security incidents or alleged 27 violations of laws, regulations or other obligations relating to data handling that could result in liability and adversely impact our reputation and future sales.
While we do not believe that these regulations and contemplated actions have impacted our activities to date, there can be no assurance that these actions, if taken on a wider scale, would not adversely impact our customers’ ability to commercialize our plants in affected areas which, in turn, could impair our ability to generate revenue.
While we do not believe that these regulations and contemplated actions have impacted our activities to date, there can be no assurance that these actions, if taken on a wider scale, would not adversely impact our ability to commercialize our plants in affected areas which, in turn, could impair our ability to generate revenue.
In such circumstances, we may experience prolonged delays, which may materially and adversely affect our results of operations, financial condition, and prospects. 21 We may not be able to control fluctuation in the prices for these materials or negotiate agreements with suppliers on terms that are beneficial to us.
In such circumstances, we may experience prolonged delays, which may materially and adversely affect our results of operations, financial condition, and prospects. We may not be able to control fluctuation in the prices for these materials or negotiate agreements with suppliers on terms that are beneficial to us.
District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated 42 by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.
District Court for the Southern District of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of our warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes with our company.
We face intense competition from independent, technology-driven companies in each of the following areas: • acquiring desirable properties or leases for developing plants; • marketing our licenses; • integrating new technologies; and • acquiring the equipment, personnel and expertise necessary to develop and operate our power plants.
We face intense competition from independent, technology-driven companies in each of the following areas: • acquiring desirable properties or leases for developing plants; • marketing our power plants; • integrating new technologies; and • acquiring the equipment, personnel and expertise necessary to develop and operate our power plants.
Any claims we assert against third parties could provoke these parties to assert counterclaims against us alleging that we infringe, misappropriate, or otherwise violate their patents, trademarks, copyrights or other intellectual property. In addition, our in-licensed patents may become involved in inventorship or priority disputes.
Any claims we assert against third parties could provoke these parties to assert counterclaims against us alleging that we infringe, misappropriate, or otherwise violate their patents, trademarks, copyrights or other intellectual property. In 34 addition, our in-licensed patents may become involved in inventorship or priority disputes.
If we are unable to monetize federal income tax credits generated under Section 45Q or any successor provision, either by 33 transferring these credits or electing to receive a direct payment equal to their value, we would need to offset these credits against our taxable income.
If we are unable to monetize federal income tax credits generated under Section 45Q or any successor provision, either by transferring these credits or electing to receive a direct payment equal to their value, we would need to offset these credits against our taxable income.
While we plan to file new patents, we may be unable to obtain patent protection for the technology covered in our patent applications. In addition, any patents issued in the future may not provide us with competitive advantages or may be successfully challenged by third parties.
While we plan to file new patents, we may be unable to obtain patent protection for the technology covered in our patent applications. In addition, any patents 35 issued in the future may not provide us with competitive advantages or may be successfully challenged by third parties.
Our customers’ operations will be subject to governmental and electric grid regulations in virtually all aspects of our operations, including the amount and timing of electricity generation, the performance of scheduled maintenance and compliance with power grid control and dispatch directives as well as environmental protection regulations.
Our operations will be subject to governmental and electric grid regulations in virtually all aspects, including the amount and timing of electricity generation, the performance of scheduled maintenance and compliance with power grid control and dispatch directives as well as environmental protection regulations.
If there are delays in the development and manufacturing of our technology by our partners or third-party suppliers, it may adversely impact our business and financial condition. Unexpected malfunctions of the plant components may significantly affect our intended operational efficiency.
If there are delays in the development and manufacturing of plant components by our partners or third-party suppliers, it may adversely impact our business and financial condition. Unexpected malfunctions of the plant components may significantly affect our intended operational efficiency.
Changes in laws and regulations and electric market rules and protocols regarding the requirements for interconnection to the electric transmission grid and the commercial operation of our customers’ power generation projects could affect the cost, timing, and economic results of conducting our operations.
Changes in laws and regulations and electric market rules and protocols regarding the requirements for interconnection to the electric transmission grid and the commercial operation of our power generation projects could affect the cost, timing, and economic results of conducting our operations.
Although we use reasonable efforts to protect this internally developed information and technology, our employees, consultants, and other parties (including independent contractors and companies with which we conduct business) may unintentionally or willfully disclose our information or technology to competitors.
Although we use reasonable efforts to protect this internally developed information and technology, our employees, consultants, and other parties (including independent contractors and companies with which we conduct business) may unintentionally or 36 willfully disclose our information or technology to competitors.
Our ability to compete effectively in the future will depend upon our ability to successfully conduct operations, attract qualified employees, implement advanced technologies, evaluate and select suitable properties and consummate transactions in this highly competitive environment.
Our ability to compete effectively in the future will depend upon 29 our ability to successfully conduct operations, attract qualified employees, implement advanced technologies, evaluate and select suitable properties and consummate transactions in this highly competitive environment.
These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in the Board or in its management. Item 1B. Unresolved Staff Comments None.
These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in the Board or in its management. Item 1B. Unresolved Staff Comments None. 42
Any 31 adverse public reaction to our business or the business of our customers or business partners, including any high-profile incident involving fracking, could directly affect our customers and could ultimately affect our business.
Any adverse public reaction to our business or the business of our customers or business partners, including any high-profile incident involving fracking, could directly affect our customers and could ultimately affect our business.
While we believe that natural gas, and particularly natural gas used to produce ultra-low emissions energy using our technology, is an integral part of the global energy transition, these developments may in the future adversely affect the business our customers and the demand for our product while supporting the development of competing technologies and energy sources.
While we believe that natural gas, and particularly natural gas used to produce ultra-low emissions energy, is an integral part of the global energy transition, these developments may in the future adversely affect the business of our customers and the demand for our product while supporting the development of competing technologies and energy sources.
The prices we receive for our licenses depend on numerous factors beyond our control, including, but not limited to, the following: • changes in global supply of, and demand for, natural gas; • worldwide and regional economic conditions impacting the global supply and demand for natural gas; • social unrest, political instability or armed conflict in major natural gas producing regions outside the U.S., such as the conflict between Ukraine and Russia, and acts of terrorism or sabotage; • the ability and willingness of the Organization of the Petroleum Exporting Countries and allied producers (known as OPEC+) to agree and maintain oil price and production controls; • the price and quantity of imports of foreign natural gas; • governmental, scientific, and public concern over the threat of climate change arising from greenhouse gas emissions; • the level of global natural gas exploration and production; • the level of global natural gas inventories; • localized supply and demand fundamentals of regional, domestic and international transportation availability; • weather conditions, natural disasters and seasonal trends; • domestic and foreign governmental regulations, including embargoes, sanctions, tariffs and environmental regulations; • speculation as to the future price of natural gas and the speculative trading of natural gas futures contracts; • technological advances affecting energy consumption; • increasing scrutiny of environmental, social and governance (“ESG”) matters; and • the price, availability and use of alternative fuels and energy sources.
The prices we receive for power depend on numerous factors beyond our control, including, but not limited to, the following: • changes in global supply of, and demand for, natural gas; • worldwide and regional economic conditions impacting the global supply and demand for natural gas; • social unrest, political instability or armed conflict in major natural gas producing regions outside the U.S., such as the conflicts between Ukraine and Russia and in the Middle East, and acts of terrorism or sabotage; • the ability and willingness of the Organization of the Petroleum Exporting Countries and allied producers (known as OPEC+) to agree and maintain oil price and production controls; • the price and quantity of imports of foreign natural gas; • governmental, scientific, and public concern over the threat of climate change arising from greenhouse gas emissions; • the level of global natural gas exploration and production; • the level of global natural gas inventories; 25 • localized supply and demand fundamentals of regional, domestic and international transportation availability; • weather conditions, natural disasters and seasonal trends; • domestic and foreign governmental regulations, including embargoes, sanctions, tariffs and environmental regulations; • speculation as to the future price of natural gas and the speculative trading of natural gas futures contracts; • technological advances affecting energy consumption; • increasing scrutiny of environmental, social and governance (“ESG”) matters; and • the price, availability and use of alternative fuels and energy sources.
Our Demonstration Plant and future facilities and operations could be damaged or otherwise adversely affected as a result of natural disasters and other catastrophic events, and such adverse effects would negatively impact our ability to develop key process equipment and technologies within our anticipated timeline and budget.
Our future facilities and operations could be damaged or otherwise adversely affected as a result of natural disasters and other catastrophic events, and such adverse effects would negatively impact our ability to develop key process equipment and technologies within our anticipated timeline and budget.
Operational performance and costs can be difficult to predict and are often influenced by factors outside of our control, such as, but not limited to, scarcity of natural resources, supply chain issues, environmental hazards and remediation, costs associated with decommissioning of machines, labor disputes and strikes, difficulty or delays in obtaining governmental permits, damages or defects in electronic systems, industrial accidents, pandemics, war, fire, seismic activity and natural disasters.
Operational performance and costs can be difficult to predict and are often influenced by factors outside of our control, including, but not limited to, scarcity of natural resources, supply chain issues, environmental hazards and remediation, costs associated with decommissioning of machines, labor disputes and strikes, difficulty or delays in obtaining governmental permits, damages or defects in electronic systems, industrial accidents, pandemics, war, fire, seismic activity and natural disasters.
Conflicts of interest may arise because several directors on the Board were designated by the Principal Legacy Net Power Holders and Sponsor. Representatives or affiliates of OXY, Constellation, 8 Rivers, and Sponsor designated director nominees for election to the Board pursuant to the Stockholders’ Agreement.
Conflicts of interest may arise because several directors on the Board were designated by the Principal Legacy Net Power Holders and Sponsor. Representatives or affiliates of OXY, Constellation, and Sponsor designated director nominees for election to the Board pursuant to the Stockholders’ Agreement.
The provisions of the IRA are intended to, among other things, incentivize domestic clean energy investment, manufacturing and production. The economics for carbon sequestration will benefit from raising the carbon capture tax credit from $50 per metric ton to $85 per metric ton.
The provisions of the IRA were intended to, among other things, incentivize domestic clean energy investment, manufacturing and production. The economics for carbon sequestration will benefit from raising the carbon capture tax credit from $50 per metric ton to $85 per metric ton.
Lack of availability or increased costs of component raw materials may affect manufacturing processes for plant equipment and increase our overall costs or those of our licensees. Recent global supply chain disruptions have increasingly affected both the availability and cost of raw materials, component manufacturing and deliveries.
Lack of availability or increased costs of component raw materials may affect manufacturing processes for plant equipment and increase our overall costs. Recent global supply chain disruptions have increasingly affected both the availability and cost of raw materials, component manufacturing and deliveries.
There can be no assurance that these regulations will not change in the future in a manner that could adversely affect our business. 30 We and our potential licensees may encounter substantial delays in the design, manufacture, regulatory approval and launch of power plants, and that could prevent us and our licensees from commercializing and deploying our technology on a timely basis, if at all.
There can be no assurance that these regulations will not change in the future in a manner that could adversely affect our business. 30 We may encounter substantial delays in the design, manufacture, regulatory approval and launch of power plants, and that could prevent us from commercializing and deploying our power plants on a timely basis, if at all.
Since the Closing, management has worked to implement controls and procedures required by the increased regulatory compliance and reporting requirements that are applicable to a public company, including the hiring of additional accounting and internal audit resources.
Management has worked to implement controls and procedures required by the increased regulatory compliance and reporting requirements that are applicable to a public company, including the hiring of additional accounting and internal audit resources.
The Net Power Cycle design is actively managed through design reviews, prototyping, involvement of external partners and application of industry lessons, but we could still fail to identify latent manufacturing and construction issues early enough to avoid negative effects on production, fabrication, construction or ultimate performance of our technology, licenses or plants.
The design of our power plants is actively managed through design reviews, prototyping, involvement of external partners and application of industry lessons, but we could still fail to identify latent manufacturing and construction issues early enough to avoid negative effects on production, fabrication, construction or ultimate performance of our technology or plants.
The failure to comply with such laws and regulations, including failing to obtain any necessary permits, could result in substantial fines or enforcement actions, including regulatory or judicial orders enjoining or curtailing operations or requiring our customers to conduct or to fund remedial or corrective measures, to install pollution control equipment or to perform other actions.
The failure to comply with such laws and regulations, including failing to obtain any necessary permits, could result in substantial fines or enforcement actions, including regulatory or judicial orders enjoining or curtailing operations or requiring us to conduct or to fund remedial or corrective measures, to install pollution control equipment or to perform other actions.
If we are unable to efficiently design, develop, commercialize, license, market, and deploy our technology in a cost-effective manner, our margins, profitability and prospects would be materially and adversely affected. We may be unable to manage our future growth effectively, and such inability could make it difficult to execute our business strategy.
If we are unable to efficiently design, develop, commercialize, market, and deploy our projects in a cost-effective manner, our margins, profitability and prospects would be materially and adversely affected. We may be unable to manage our future growth effectively, and such inability could make it difficult to execute our business strategy.
However, there is no guarantee that we will successfully transfer these tax credits, generate taxable income, or otherwise monetize the value of these federal income tax credits. Risks Related to Intellectual Property We are developing Net Power-owned intellectual property, but we rely heavily on the intellectual property we have in-licensed and that is core to the Net Power Cycle.
However, there is no guarantee that we will successfully transfer these tax credits, generate taxable income, or otherwise monetize the value of these federal income tax credits. Risks Related to Intellectual Property We are developing Net Power-owned intellectual property, but we rely heavily on the intellectual property we have in-licensed.
The termination of any license agreement with one of our partners, including 8 Rivers, could adversely affect our ability to utilize the intellectual property that is subject to that license agreement in our discovery and development efforts, our ability to enter into future collaboration, licensing, and/or marketing agreements for one or more of our technologies and our ability to commercialize the affected technology.
The termination of any license agreement with one of our partners could adversely affect our ability to utilize the intellectual property that is subject to that license agreement in our discovery and development efforts, our ability to enter into future collaboration, licensing, and/or marketing agreements for one or more of our technologies and our ability to commercialize the affected technology.
Our estimates for the total addressable market are based on a number of internal and third-party estimates, including the number of potential customers that have expressed interest in licensing our technology, assumed prices and production costs for our plants, our ability to leverage our current logistical and operational processes and general market conditions.
Our estimates for the total addressable market are based on a number of internal and third-party estimates, including the number of potential customers that have expressed interest in our power plants, assumed prices and production costs for our plants, our ability to leverage our current logistical and operational processes and general market conditions.
Additionally, we may encounter delays in obtaining the necessary regulatory approvals or delays in commercializing our technology, including delays in entering into agreements for the supply of component parts and manufacturing tools and supplies. Delays in the launching of our technology would materially and adversely affect our business, prospects, financial condition, and operating results.
Additionally, we may encounter delays in obtaining the necessary regulatory approvals or delays in commercializing our power plants, including delays in entering into agreements for the supply of component parts and manufacturing tools and supplies. Delays in the launching of our power plants would materially and adversely affect our business, prospects, financial condition, and operating results.
We may not be able to accurately estimate the future demand for our technology, and such inability could result in a variety of inefficiencies in our business and could hinder our ability to generate revenue. If we fail to accurately predict market demand, we could incur additional costs or experience delays, adversely impacting our business and financial condition.
We may not be able to accurately estimate the future demand for our power plants, and such inability could result in a variety of inefficiencies in our business and could hinder our ability to generate revenue. If we fail 26 to accurately predict market demand, we could incur additional costs or experience delays, adversely impacting our business and financial condition.
If our operations grow as planned, we may need to expand our sales and marketing, research and development, and supply and manufacturing functions, and there is no guarantee that we will be able to scale the business and the sale of licenses as planned.
If our operations grow as planned, we may need to expand our sales and marketing, research and development, and supply and manufacturing functions, and there is no guarantee that we will be able to scale the business as planned.
While we believe that electricity produced using natural gas through our Net Power Cycle will be an integral part of the global energy transition and help customers remain resilient to or excel under climate-related regulatory and policy pressures, we cannot rule out the possibility that t he adoption of legislation or regulatory programs to reduce emissions of greenhouse gases (including carbon pricing schemes), or the adoption and implementation of regulations that require reporting of greenhouse gas emissions or other climate-related information, could adversely affect our business, including by requiring us or our customers to incur increased operating costs, inhibiting gas-fired electricity generation or otherwise restricting our ability to execute on our business strategy, reducing our access to financial markets, or creating greater potential for governmental investigations or litigation.
While we believe that electricity produced using natural gas paired with carbon capture technology will be an integral part of the global energy transition and help customers remain resilient to or excel under climate-related regulatory and policy pressures, we cannot rule out the possibility that t he adoption of legislation or regulatory programs to reduce emissions of greenhouse gases (including carbon pricing schemes), or the adoption and implementation of regulations that require reporting of greenhouse gas emissions or other climate-related information, could adversely affect our business, including by requiring us or our customers to incur increased operating costs, inhibiting gas-fired electricity generation or otherwise restricting our ability to execute on our business strategy, reducing our access to financial markets, or creating greater potential for governmental investigations or 32 litigation.
We expect that natural gas prices will remain volatile for 23 the near future because of these and other factors. High natural gas prices in isolation or relative to other energy sources are likely to adversely affect the demand for the Net Power Cycle and our potential profitability and cost effectiveness.
We expect that natural gas prices will remain volatile for the near future because of these and other factors. High natural gas prices in isolation or relative to other energy sources are likely to adversely affect the demand for our power plants and our potential profitability and cost effectiveness.
An adverse determination in any such submission, proceeding or litigation could reduce the scope of, invalidate or render unenforceable our potential future owned patents or licensed patent rights, allow third parties to commercialize the Net Power Cycle or related technologies and compete directly with us without payment to us, or such adverse determination could result in our inability to manufacture or commercialize products without infringing third-party patent rights.
An adverse determination in any such submission, proceeding or litigation could reduce the scope of, invalidate or render unenforceable our potential future owned patents or licensed patent rights, allow third parties to commercialize the Oxy-Combustion Cycle technology or related technologies and compete directly with us without payment to us, or such adverse determination could result in our inability to manufacture or commercialize products without infringing third-party patent rights.
Joint venture arrangements may restrict our operational and financial flexibility. Moreover, joint venture arrangements involve various risks and uncertainties, such as committing us to fund operating and/or capital expenditures, the timing and amount of which we may have little or partial control over, and our joint venture partners may not satisfy their obligations to the joint venture.
Moreover, joint venture arrangements involve various risks and uncertainties, such as committing us to fund operating and/or capital expenditures, the timing and amount of which we may have little or partial control over, and our joint venture partners may not satisfy their obligations to the joint venture.
Any delay in the design, manufacture, regulatory approval and launch of power plants or related technology could adversely affect our business because it could delay our ability to generate revenue and could adversely affect the development of customer relationships.
Any delay in the design, manufacture, regulatory approval and launch of power plants could adversely affect our business because it could delay our ability to generate revenue and could adversely affect the development of customer relationships.
We, our licensees, and our partners may not be able to establish supply relationships for necessary components or may be required to pay costs for components that are higher than anticipated, and such inability or increased costs could delay the deployment of our technology and negatively impact our business.
We and our partners may not be able to establish supply relationships for necessary components or may be required to pay costs for components that are higher than anticipated, and such inability or increased costs could delay the deployment of our power plants and negatively impact our business.
The operations and properties of our anticipated partners and customers are subject to a variety of federal, state, local, and foreign environmental, health and safety laws, and regulations governing, among other things, air emissions, wastewater discharges, management and disposal of hazardous and non-hazardous materials and waste and remediation of releases of hazardous materials.
Our operations and properties are subject to a variety of federal, state, local, and foreign environmental, health and safety laws, and regulations governing, among other things, air emissions, wastewater discharges, management and disposal of hazardous and non-hazardous materials and waste and remediation of releases of hazardous materials.
Risks Relating to Our Organizational Structure Net Power Inc. is a holding company and its only material asset is its interest in OpCo, and it is accordingly dependent upon distributions made by OpCo and its subsidiaries to pay taxes, make payments under the Tax Receivable Agreement and pay dividends (it being understood that we do not anticipate paying any cash dividends on the Class A Common Stock in the foreseeable future).
Risks Relating to Our Organizational Structure Net Power Inc. is a holding company and its only material asset is its interest in OpCo, and it is accordingly dependent upon distributions made by OpCo and its subsidiaries to pay taxes and pay dividends (it being understood that we do not anticipate paying any cash dividends on the Class A Common Stock in the foreseeable future).
Our partners and customers are subject to environmental, health, and safety laws and to regulations including, if applicable, remediation matters that could adversely affect our business, results of operation and reputation.
We are subject to environmental, health, and safety laws and to regulations including, if applicable, remediation matters that could adversely affect our business, results of operation and reputation.
We expect the Net Power Cycle to be the first standalone natural gas on-demand ultra-low emissions energy solution, and, as such, the market for our technology has not yet been established. In addition, there is limited infrastructure to efficiently transport and store carbon dioxide, and such limited infrastructure may limit the deployment of the Net Power Cycle.
We expect Project Permian to be the first standalone natural gas on-demand ultra-low emissions energy solution, and, as such, the market for our power plants has not yet been established. In addition, there is limited infrastructure to efficiently transport and store carbon dioxide, and such limited infrastructure may limit the deployment of PCC technology.
Our commercialization strategy relies heavily on our relationship with Baker Hughes, OXY, Constellation, and other strategic investors and partners, who may have interests that diverge from ours and who may not be easily replaced if our relationships terminate, and any such divergent interests or inability to replace could adversely impact our business and financial condition.
Our commercialization strategy relies heavily on our relationship with certain strategic investors and partners, who may have interests that diverge from ours and who may not be easily replaced if our relationships terminate, and any such divergent interests or inability to replace could adversely impact our business and financial condition.
Net Power Inc. intends to cause OpCo to make ordinary distributions on a pro rata basis and to make tax distributions to OpCo Unitholders in amounts sufficient to cover all applicable taxes, relevant operating expenses, payments under the Tax Receivable Agreement and dividends, if any, declared by Net Power Inc.
Net Power Inc. intends to cause OpCo to make ordinary distributions on a pro rata basis and to make tax distributions to OpCo Unitholders in amounts sufficient to cover all applicable taxes, relevant operating expenses, and dividends, if any, declared by Net Power Inc.
Any failure to effectively incorporate updates to the design, construction and operations of power plants using the Net Power Cycle to ensure cost competitiveness could reduce the marketability of the Net Power Cycle and has the potential to impact deployment schedules.
Any failure to effectively incorporate updates to the design, construction and operations of power plants to ensure cost competitiveness could reduce the marketability of these plants and has the potential to impact deployment schedules.
Any of these risk factors could have a material adverse effect on our business. Our customers must obtain regulatory approvals and permits before they construct power plants using our technology, and approvals may be denied or delayed.
Any of these risk factors could have a material adverse effect on our business. We must obtain regulatory approvals and permits before we construct power plants, and approvals may be denied or delayed.
We have not yet commercialized the Net Power Cycle and may never do so successfully, and, as a result, it is difficult for us to predict our future operating results.
We have not yet commercialized our products and may never do so successfully, and, as a result, it is difficult for us to predict our future operating results.
Our ability to pay taxes, make payments under the Tax Receivable Agreement, and pay dividends (if any such dividend were to be paid) will depend on the financial results and cash flows of OpCo and its subsidiaries and on the distributions it receives from OpCo.
Our ability to pay taxes and pay dividends (if any such dividend were to be paid) will depend on the financial results and cash flows of OpCo and its subsidiaries and on the distributions it receives from OpCo.
Similarly, in the future, we expect to rely on trademarks to distinguish the Net Power Cycle or related technologies, and if we assert trademark infringement claims, a court may determine that the marks we have asserted are 35 invalid or unenforceable or that the party against whom we have asserted trademark infringement has superior rights to the marks in question.
Similarly, in the future, we expect to rely on trademarks to distinguish our technology, and if we assert trademark infringement claims, a court may determine that the marks we have asserted are invalid or unenforceable or that the party against whom we have asserted trademark infringement has superior rights to the marks in question.
If we encounter difficulties in scaling our production and delivery capabilities, if we fail to develop and successfully commercialize our technologies, if we fail to develop such technologies before our competitors, or if such technologies fail to perform as expected, are inferior to those of our competitors or are perceived as less safe than those of our competitors, our business, reputation, and financial condition could be materially and adversely impacted.
If we encounter difficulties in scaling our production and delivery capabilities or if our power plants fail to perform as expected, are inferior to those of our competitors or are perceived as less safe than those of our competitors, our business, reputation, and financial condition could be materially and adversely impacted.
We will remain an emerging growth company until the earlier of (i) the last day of the fiscal year (a) following the fifth anniversary of the IPO, which occurred on June 18, 2021, (b) in which we have total annual gross revenue of at least $1.235 billion or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, and (ii) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period. 41 The exact implications of the JOBS Act are subject to interpretation and guidance by the SEC and other regulatory agencies, and we cannot assure you that we will be able to take advantage of all of the benefits of the JOBS Act.
We will remain an emerging growth company until the earlier of (i) the last day of the fiscal year (a) following the fifth anniversary of the IPO, which occurred on June 18, 2021, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, and (ii) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
Our strategic partners may have interests that diverge from our interests, and that may hinder our ability to license our technology to customers. If we lose our agreements with strategic partners, we may need to find new contractors who may have less experience designing and building power plants and complex machinery.
OXY, Entropy and other strategic partners may have interests that diverge from our interests, and that may hinder our ability to successfully develop and commercialize our power plants. If we lose our agreements with strategic partners, we may need to find new contractors who may have less experience designing and building power plants and complex machinery.
Our Certificate of Incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for certain disputes between us and our stockholders, and such provision could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or with our directors, officers or employees.
As a result, the market price of the Class A Common Stock could be materially adversely affected. 40 Our Certificate of Incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for certain disputes between us and our stockholders, and such provision could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or with our directors, officers or employees.
If we are unable to drive commensurate growth, these costs, which include lease commitments, headcount and capital assets, could result in decreased margins, which could have a material adverse effect on our business, financial condition and results of operations. We face significant barriers in our attempts to deploy our technology and may not be able to successfully develop our technology.
If we are unable to drive commensurate growth, these costs, which include lease commitments, headcount and capital assets, could result in decreased margins, which could have a material adverse effect on our business, financial condition and results of operations.
In the event OpCo’s calculations of taxable income are incorrect, OpCo and/or its members, including Net Power Inc., in later years may be subject to material liabilities pursuant to this U.S. federal tax law and its related guidance.
In the event OpCo’s calculations of taxable income are incorrect, OpCo and/or its members, including Net Power Inc., in later years may be subject to material liabilities pursuant to this U.S. federal tax law and its related guidance. We anticipate that the distributions Net Power Inc. will receive from OpCo may, in certain periods, exceed our actual tax liabilities.
Risks Related to Our Market The energy market continues to evolve and is highly competitive, so we may not be successful in competing in this industry or in establishing and maintaining confidence in our long-term business prospects among current partners, 28 future partners and customers.
The energy market continues to evolve and is highly competitive, so we may not be successful in competing in this industry or in establishing and maintaining confidence in our long-term business prospects among current partners, future partners and customers. The development and adoption of competing technology could materially and adversely affect the market for our technology.
The technology we are developing will rely on complex machinery for its operation, and deployment involves a significant degree of risk and uncertainty in terms of operational performance and costs. The Net Power Cycle relies heavily on complex machinery and involves a significant degree of uncertainty and risk in terms of operational performance and costs.
The projects we are developing will rely on complex machinery for their operation, and deployment involves a significant degree of risk and uncertainty in terms of operational performance and costs.
In addition to income taxes, Net Power Inc. also incurs expenses related to its operations, including payment obligations under the Tax Receivable Agreement, which could be significant, and some of which will be reimbursed by OpCo (excluding payment obligations under the Tax Receivable Agreement).
In addition to income taxes, Net Power Inc. also incurs expenses related to its operations, which could be significant, and some of which will be reimbursed by OpCo.
Our largest costs prior to project deployment are expected to be equipment and construction costs. Our current estimates of the costs associated with development and commercialization could prove inaccurate, and that could impact the cost of our technology, our ability to obtain adequate funding at terms acceptable to us (or at all), and our business overall.
Our current estimates of the costs associated with development and commercialization could prove inaccurate, and that could impact the cost of our projects, our ability to obtain adequate funding at terms acceptable to us (or at all), and our business overall.
Accordingly, the prices we eventually receive for our licenses will likely be tied to the prevailing market prices of natural gas. Historically, the price of natural gas has been volatile, and this volatility may continue to increase in the future.
We intend to use natural gas as the fuel source for our power plants. Accordingly, the prices we eventually charge to customers for power will likely be tied to the prevailing market prices of natural gas. Historically, the price of natural gas has been volatile, and this volatility may continue to increase in the future.
The development and adoption of competing technology could materially and adversely affect our ability to license our technology. We operate in the highly competitive area of clean energy production with a substantial number of other companies, including combined cycle power plant assets with post-combustion capture, renewables with long-duration storage and SMRs.
We operate in the highly competitive area of clean energy production with a substantial number of other companies, including combined cycle power plant assets with post-combustion capture, renewables with long-duration storage and SMRs.
If we, our partners or our third-party suppliers experience any delays in the development and manufacturing of turbo expanders, heat exchangers, air separation units, and other key components, our business and financial condition may be adversely impacted.
If we, our partners or our third-party suppliers experience any delays in the development and manufacturing of key components of our power plants, our business and financial condition may be adversely impacted.
Our first utility-scale project is currently in the development stage, and historically we have not generated revenue. Consequently, as of December 31, 2024, our deferred tax assets include federal income tax net operating losses.
We may not be able to utilize any future federal income tax credits. Our first project is currently in the development stage, and historically we have not generated revenue. Consequently, as of December 31, 2025, our deferred tax assets include federal income tax net operating losses.
We do not expect to generate meaningful revenue unless and until we are able to complete our first commercial plant deployment and begin licensing the Net Power Cycle, and we may not be able to accomplish either of these milestones on our ant icipated timetable, if at all.
We do not expect to generate meaningful revenue unless and until we are able to complete our first commercial plant deployment, and we may not be able to accomplish this milestone on our ant icipated timetable, if at all.
Our business requires us to estimate future market demand for electricity and for licenses for our technology. We may be adversely affected to the extent that we overestimate or underestimate such demand. Our future success hinges on how many licenses for our technology we are able to sell.
Our business requires us to estimate future market demand for electricity and we may be adversely affected to the extent that we overestimate or underestimate such demand. Our future success hinges on the power generated by our plants and the volume of such power we are able to sell and at what price.
We, our licensees, and our partners rely on third-party suppliers for components and materials used to develop, and eventually commercialize, the Net Power Cycle.
We and our partners rely on third-party suppliers for components and materials used to develop our power plants.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Company’s Chief Information Officer is responsible for the establishment and maintenance of our cybersecurity program, as well as the assessment and management of cybersecurity risks. The current Chief Information Officer and his team have over 40 years of experience in information security and possess the requisite education, skills, experience, and industry certifications expected of individuals assigned to these duties.
Biggest changeThe Company’s Director of Information Technology is responsible for the establishment and maintenance of our cybersecurity program, as well as the assessment and management of cybersecurity risks. The Director of Information Technology and his team possess the requisite education, skills, experience, and industry certifications expected of individuals assigned to these duties.
“ Risk Factors .”. Governance Our Board oversees our risk management process, including as it pertains to cybersecurity risks, directly and through its committees. The Audit Committee of the Board oversees our risk management program, which focuses on the most significant risks to our business.
“ Risk Factors .”. Governance Our Board oversees our risk management process, including as it pertains to cybersecurity risks, directly and through its committees. The Audit Committee oversees our risk management program, which focuses on the most significant risks to our business.
To protect our information systems from cybersecurity threats, we use various security tools and services that are designed to help identify, escalate, investigate, resolve, and recover from security incidents in a timely manner. In addition, we have a dedicated security operations center that performs 24x7 threat monitoring of our systems and environment.
To protect our information systems from cybersecurity threats, we use various security tools and services that are designed to help identify, escalate, investigate, resolve, and recover from security incidents in a timely manner. In addition, we have a dedicated third-party security operations center that performs 24x7 threat monitoring of our systems and environment.
The Chief Information Officer provides regular updates on our cybersecurity risk profile to the Audit Committee of our Board.
The Director of Information Technology provides regular updates on our cybersecurity risk profile to the Audit Committee.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeMost of the facilities are used for our research and development and corporate operations. 44 Our Demonstration Plant is in La Porte, Texas, where we lease approximately 218,900 square feet of land from Air Liquide under a lease that expires on the earlier of (i) January 31, 2031 and (ii) the termination of our oxygen supply agreement with Air Liquide, pursuant to which Air Liquide supplies oxygen for our use at the Demonstration Plant.
Biggest changeOur La Porte Demonstration Facility is in La Porte, Texas, where we lease approximately 218,900 square feet of land from Air Liquide under a lease that expires on the earlier of (i) January 31, 2031 and (ii) the termination of our oxygen supply agreement with Air Liquide, pursuant to which Air Liquide supplies oxygen for our use at the La Porte Demonstration Facility.
Item 2. Properties Our corporate offices are in Durham, North Carolina, where we lease approximately 12,000 square feet under a lease that expires in December 2028, and in Houston, Texas, where we lease approximately 9,800 square foot under a lease that commenced in July 2024.
Item 2. Properties Our corporate offices are in Durham, North Carolina, where we lease approximately 12,000 square feet under a lease that expires in December 2028, and in Houston, Texas, where we lease approximately 9,800 square feet under a lease that commenced in July 2024.
The term of the oxygen supply agreement is perpetual but may be terminated by us or by Air Liquide upon 30 days’ written notice. We believe these facilities are adequate to meet our current needs. However, in order to accommodate anticipated growth, we may need to seek additional facilities. Item 3. Legal Proceedings None. Item 4.
The term of the oxygen supply agreement is perpetual but may be terminated by us or by Air Liquide upon 30 days’ written notice. 43 We believe these facilities are adequate to meet our current needs. However, in order to accommodate anticipated growth, we may need to seek additional facilities.
The Houston office lease has an initial lease term of 68 months with an option to extend the term for an additional five years.
The Houston office lease has an initial lease term of 68 months with an option to extend the term for an additional five years. Most of the facilities are used for our research and development and corporate operations.
Removed
Mine Safety Disclosures Not applicable. 45 Part II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeThe actual number of holders of our Class A common stock is greater than the number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers or other nominees.
Biggest changeHolders of Common Stock At March 5, 2026 we had 40 stockholders of record of common stock. The actual number of holders of our Class A common stock is greater than the number of record holders, and includes stockholders who are beneficial owners, but whose shares are held in street name by brokers or other nominees.
These transactions did not involve any public offering, any underwriters, any underwriting discounts or commissions, or any general solicitation or advertising. Issuer Purchases of Equity Securities There were no repurchases of equity securities during the year ended December 31, 2024. Item 6. Reserved 46
These transactions did not involve any public offering, any underwriters, any underwriting discounts or commissions, or any general solicitation or advertising. Issuer Purchases of Equity Securities There were no repurchases of equity securities during the year ended December 31, 2025. Item 6. Reserved 45
Unregistered Sales of Equity Securities and Issuer Purchases of Equity Securities Unregistered Sales of Equity Securities On November 20, 2024, we issued 1,030,154 shares of Class B Common stock and OpCo issued 1,030,154 Class A units to BHES as payment for costs incurred pursuant to the Amended and Restated JDA during the third quarter of 2024.
Unregistered Sales of Equity Securities and Issuer Purchases of Equity Securities Unregistered Sales of Equity Securities On October 29, 2025, we issued 1,357,188 shares of Class B Common stock and OpCo issued 1,357,188 Class A units to BHES as payment for costs incurred pursuant to the Amended and Restated JDA during the third quarter of 2025.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Market Information for Common Stock Our Class A Common Stock has been listed and is traded on the New York Stock Exchange (“NYSE”) under the symbol “NPWR” since the closing of the Business Combination.
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities Market Information for Common Stock Our Class A Common Stock is listed and is traded on the New York Stock Exchange (“NYSE”) under the symbol “NPWR.” There is no established public trading market for our Class B Common Stock.
Removed
Prior to the Business Combination, Class A shares of RONI traded on the NYSE under the symbol “RONI.” There is no established public trading market for our Class B Common Stock. Holders of Common Stock At March 6, 2025 we had 50 stockholders of record of common stock.
Added
Additionally, on November 20, 2025, we issued 568,153 shares of Class B Common stock and OpCo issued 568,153 Class A units to BHES in recognition of the reaching of certain agreed upon milestones pursuant to the Amended and Restated JDA.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeAccordingly, the drivers of our future financial results, as well as the components of such results, may not be comparable to our historical or future results of operations Results of Operations Comparison of the Year Ended December 31, 2024 (Successor) to the Periods From January 1, 2023 Through June 7, 2023 (Predecessor) and June 8, 2023 Through December 31, 2023 (Successor) The following table sets forth our condensed results of operations data for the periods presented: Successor Predecessor Period From Period From June 8, 2023 January 1, 2023 Year Ended through through $ in thousands December 31, 2024 December 31, 2023 June 7, 2023 Revenue $ 250 $ — $ 175 Cost of revenue 31 — 3 Gross profit 219 — 172 Operating expenses General and administrative 30,267 41,344 12,861 Sales and marketing 3,865 1,791 869 Research and development 63,853 25,722 14,311 Project development 1,932 625 479 Option settlement - related party — 79,054 — Depreciation, amortization, and accretion 81,623 44,974 5,802 Total operating expenses 181,540 193,510 34,322 Operating loss (181,321) (193,510) (34,150) Other income (expense) Interest income (expense) 31,389 19,473 (30) Change in Earnout Shares liability and Warrant liability (25,656) 26,515 — Other income (expense) 364 (1) 4 Net other income 6,097 45,987 (26) Net loss before income tax (175,224) (147,523) (34,176) Income tax benefit 10,580 5,707 — Net loss after income tax (164,644) (141,816) (34,176) Net loss attributable to non-controlling interests (115,453) (98,760) — Net loss attributable to Net Power Inc. $ (49,191) $ (43,056) $ (34,176) Revenue We have generated small amounts of revenue through various contracts with potential future license customers for access to testing results, other data and feasibility studies.
Biggest changeAccordingly, the drivers of our future financial results, as well as the components of such results, may not be comparable to our historical or future results of operations. 46 Results of Operations Comparison of the Year Ended December 31, 2025 to the Year Ended December 31, 2024 The following table sets forth our consolidated results of operations data for the periods presented: Year Ended December 31, $ in thousands 2025 2024 $ Change % Change Revenue $ — $ 250 (250) (100) % Cost of revenue — 31 (31) (100) % Gross profit — 219 Operating expenses General and administrative 40,345 30,267 10,078 33 % Sales and marketing 4,912 3,865 1,047 27 % Research and development 99,508 63,853 35,655 56 % Project development 72,379 1,932 70,447 3,646 % Impairment and other charges 1,512,217 — 1,512,217 n/a Depreciation, amortization, and accretion 62,387 81,623 (19,236) (24) % Total operating expenses 1,791,748 181,540 Operating loss (1,791,748) (181,321) Other income Interest income 20,297 31,389 (11,092) (35) % Change in Earnout Shares liability and Warrant liability 72,391 (25,656) 98,047 (382) % Change in Tax Receivable Agreement liability 21,317 — 21,317 n/a Other income 11 364 (353) (97) % Net other income 114,016 6,097 Net loss before income tax (1,677,732) (175,224) Income tax benefit 4,305 10,580 (6,275) (59) % Net loss after income tax (1,673,427) (164,644) Net loss attributable to non-controlling interests (1,094,799) (115,453) Net loss attributable to Net Power Inc. $ (578,628) $ (49,191) General and administrative General and administrative expen ses increased by $10.1 million, or 33%, for the year ended December 31, 2025 , as compared to amounts for the year ended December 31, 2024 .
An estimate of the sensitivity to changes in our assumptions is not practicable given the numerous assumptions that can materially affect our estimates. Income Taxes We believe income taxes are critical accounting estimates because significant judgment is required in assessing the recoverability of our deferred tax assets from future taxable income and the timing of reversing temporary differences.
An estimate of the 52 sensitivity to changes in our assumptions is not practicable given the numerous assumptions that can materially affect our estimates. Income Taxes We believe income taxes are critical accounting estimates because significant judgment is required in assessing the recoverability of our deferred tax assets from future taxable income and the timing of reversing temporary differences.
Additionally, accounting for uncertain tax positions requires management to make judgements regarding the likelihood the position will be sustained based on its technical merits. As managing member of OpCo, Net Power Inc. consolidates the financial results of OpCo in its consolidated financial statements. OpCo represents a pass-through entity for income tax purposes.
Additionally, accounting for uncertain tax positions requires management to make judgments regarding the likelihood the position will be sustained based on its technical merits. As managing member of OpCo, Net Power Inc. consolidates the financial results of OpCo in its consolidated financial statements. OpCo represents a pass-through entity for income tax purposes.
We believe that our current sources of liquidity on hand should be sufficient to fund our general corporate operating expenses as we work to commercialize our technology, but certain costs are not reasonably estimable at this time and will likely require additional funding.
We believe that our current sources of liquidity on hand should be sufficient to fund our general corporate operating expenses as we work to develop our products and projects, but certain costs are not reasonably estimable at this time and we may require additional funding.
The underlying lease requires the removal of all equipment and the obligation to restore the land to post-clearing grade level, which has resulted in the recognition of an asset retirement obligation liabilit y of $3.3 million a nd $2.1 million as of December 31, 2024 and 2023, respectively.
The underlying lease requires the removal of all equipment and the obligation to restore the land to post-clearing grade level, which has resulted in the recognition of an asset retirement obligation liabilit y of $3.6 million and $3.3 million as o f December 31, 2025 and 2024, respectively.
Depreciation, amortization, and accretion Our depreciation, amortization, and accretion expenses consist primarily of depreciation on our Demonstration Plant and amortization of intangible assets.
Depreciation, amortization, and accretion Our depreciation, amortization, and accretion expenses consist primarily of depreciation on our La Porte Demonstration Facility and amortization of intangible assets.
In addition, we have an oxygen supply agreement with the lessor to supply oxygen to the Demonstration Plant. The lease expires on the earlier of (i) January 1, 2031 and (ii) the termination of our oxygen supply agreement with the lessor. The term of the oxygen supply agreement expires on January 1, 2030 with automatic 12-month renewal terms.
The lease expires on the earlier of (i) January 1, 2031 and (ii) the termination of our oxygen supply agreement with the lessor. The term of the oxygen supply agreement expires on January 1, 2030 with automatic 12-month renewal terms.
We believe we have the ability to manage our operating costs, including R&D expenses, such that our existing cash, cash equivalents and short-term investments will be sufficient to fund our obligations for the next 12 months following the filing of this Annual Report on Form 10-K.
We believe we have the ability to manage our operating costs such that our existing liquidity will be sufficient to fund our obligations for the next 12 months following the filing of this Annual Report on Form 10-K.
As of December 31, 2024, we recognized approximate ly $31.9 million of inception-to-date cash expenses and approximately $31.9 million of inception-to-date share-based expe nses related to the BHES JDA. The share-based expense excludes $8.0 million of realized loss on share issuance.
The BHES JDA’s total contract value was $140 million as of December 31, 2025. As of December 31, 2025, we recognized approximately $62.0 million of inception-to-date cash expenses and approximately $62.0 million of inception-to-date share-based expenses related to the BHES JDA. The share-based expense excludes $8.0 million of realized loss on share issuance.
An estimate of the sensitivity to changes in our assumptions is not practicable given the numerous assumptions that can materially affect our estimates. 54 Emerging Growth Company Accounting Election Section 102(b)(1) of the JOBS Act exempts emerging growth companies (“EGCs”) from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards.
Emerging Growth Company Accounting Election Section 102(b)(1) of the JOBS Act exempts emerging growth companies (“EGCs”) from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards.
Our net cash used in operating activities to date have been primarily comprised of payroll, material and supplies, facilities expense, and professional services related to R&D and general and administrative activities. In 2023, we experienced an increase in costs associated with achieving and maintaining our public company status.
Our net cash used in operating activities to date have been primarily comprised of payroll, material and supplies, facilities expense, and professional services related to R&D, including the BHES JDA, and general and administrative activities.
Critical Accounting Policies and Estimates Our financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“US GAAP”). Preparation of the financial statements requires our management to make a number of judgments, estimates and assumptions relating to the reported amounts of expenses, assets, and liabilities and the disclosure of contingent assets and liabilities.
Preparation of the financial statements requires our management to make a number of judgments, estimates and assumptions relating to the reported amounts of expenses, assets, and liabilities and the disclosure of contingent assets and liabilities.
The following table summarizes our liquidity position as of the dates indicated: December 31, $ in thousands 2024 2023 Cash and cash equivalents $ 329,230 $ 536,927 Available-for-sale investments 1 100,972 — Short-term investments 100,000 100,000 Total liquidity $ 530,202 $ 636,927 ___________ (1) $22.6 million of these investments are classified as long-term on our consolidated balance sheet.
Our current liquidity needs primarily involve general and administrative costs and costs to develop our projects and procure the equipment necessary for such projects. 49 The following table summarizes our liquidity position as of the dates indicated: December 31, $ in thousands 2025 2024 Cash and cash equivalents $ 199,430 $ 329,230 Short-term investments — 100,000 Available-for-sale investments 1 176,704 100,972 Total liquidity $ 376,134 $ 530,202 ___________ (1) $38.2 million of these investments are classified as long-term on our consolidated balance sheet.
As of December 31, 2024, we had short-term investments tota ling $100 million, which was comprised of a single three -month certificate of deposit custodied by a domestic banking institution. Additionally, our current liabilities were $17.9 million and $12.0 million at December 31, 2024 and December 31, 2023 , respectiv ely.
The short-term investments were comprised of a single 12-month certificate of deposit, held with a domestic banking institution, which matured in June 2025. Additionally, our current liabilities were $47.5 million and $17.9 million at December 31, 2025 and December 31, 2024 , respectiv ely.
A change to future taxable income or tax planning strategies could impact our ability to utilize deferred tax assets, which would increase or decrease our income tax expense and taxes paid.
A change to future taxable income or tax planning strategies could impact our ability to utilize deferred tax assets, which would increase or decrease our income tax expense and taxes paid. An estimate of the sensitivity to changes in our assumptions is not practicable given the numerous assumptions that can materially affect our estimates.
We measure liquidity in terms of our ability to fund the cash requirements of our R&D activities and our near-term business operations, including our contractual obligations and other commitments.
Historically, our sources of liquidity have also included raising additional capital through the sale of ownership interests. We may issue additional equity securities in the future. We measure liquidity in terms of our ability to fund the cash requirements of our R&D activities, project development, and our near-term business operations, including our contractual obligations and other commitments.
In addition, during the fourth quarter of 2024 , the Company made a tax-related partnership distribution of $4.8 million. Commitments and Contractual Obligations Asset Retirement Obligation We hold a lease for the approximately 218,900 square feet of land under the Demonstration Plant from Air Liquide at a rate of one dollar per year.
Commitments and Contractual Obligations Asset Retirement Obligation We hold a lease for the approximately 218,900 square feet of land under the La Porte Demonstration Facility from Air Liquide at a rate of one dollar per year. In addition, we have an oxygen supply agreement with the lessor to supply oxygen to the La Porte Demonstration Facility.
This increase was primarily attributable to increased headcount and engagement of external consultants to support increased marketing activities. Research and development Research and development (“R&D”) expenses consist primarily of labor expenses and fees paid to third parties working on and testing specific aspects of our technology, including testing at our Demonstration Plant and development activities under the BHES JDA.
Research and development R&D expenses consist primarily of labor expenses and fees paid to third parties working on and testing specific aspects of the Oxy-Combustion Cycle technology, including testing at our La Porte Demonstration Facility and development activities under the BHES JDA.
Key Factors Affecting Our Prospects and Future Results We believe that our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges, including, but not limited to, cost over-runs in the testing and operation of the Demonstration Plant and future utility-scale plants, technical problems with the Net Power Cycle, that could impact performance, potential supply chain issues, and development of competing clean-energy technology sooner or at a lesser cost than the Net Power Cycle.
Key Factors Affecting Our Prospects and Future Results We believe that our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges, including, but not limited to, our ability to license PCC technology from Entropy, potential supply chain issues, changes in tax policies and other incentives supporting carbon capture, our access to the capital needed to finance the development of our projects, and development of competing energy technologies sooner or at a lesser cost than our products.
Sales and marketing Sales and marketing expenses consist primarily of personnel-related costs, consultants and information technology costs directly associated with our sales and marketing activities, which include general publicity efforts for the Company.
Sales and marketing Sales and marketing expenses consist primarily of personnel-related costs and consultants costs directly associated with our sales an d marketing activities, which include general publicity efforts for the Company. Sales and marketing expenses increased by $1.0 million, or 27%, for the year ended December 31, 2025, as compared to the year ended December 31, 2024.
Key Components of Results of Operations We are a development stage company and our historical results may not be indicative of our future results.
Key Components of Results of Operations We are a development stage company and our historical results may not be indicative of our future results, particularly considering the recent shift in the anticipated timing of our technology development of the Oxy-Combustion Cycle and the introduction of the Clean Gas Product.
Overview We are a clean energy technology company that has developed a unique power generation system (the “Net Power Cycle”) that can produce clean, reliable, and affordable electricity from natural gas while capturing virtually all atmospheric emissions.
Overview We are an energy technology and project development company focused on delivering low-carbon gas power solutions. Historically, our sole business has been the development of a novel oxy-combustion power generation system designed to produce reliable and affordable electricity from natural gas while capturing virtually all atmospheric emissions (the “Oxy-Combustion Cycle”).
We expect to be an EGC at least through the end of 2025 and will have the benefit of the extended transition period. We intend to take advantage of the benefits of this extended transition period. Item 7A.
We expect to be an EGC through the end of 2026, which is the last day of the fiscal year following the fifth anniversary of our initial public offering. As an EGC, we intend to take advantage of the benefits of this extended transition period. Item 7A.
We believe evaluating the recoverability of goodwill is a critical accounting estimate because it requires management to make judgments and assumptions regarding future trends and events. As a result, both the precision and reliability of our estimates are subject to uncertainty.
Our significant accounting policies are described in Note 2 — Significant Accounting Policies in our consolidated financial statements included in Part II, Item 8 of this Annual Report. Impairment of Long-Lived Assets We believe evaluating the recoverability of long-lived assets is a critical accounting estimate because it requires management to make judgments and assumptions regarding future trends and events.
Off-Balance Sheet Arrangements As of December 31, 2024 and 2023, we have not engaged in any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.
Under the terms of the suspension, we are obligated to pay any invoiced costs incurred in the fourth quarter of 2025 and any costs resulting or arising from the suspension, up to a $3.0 million cap. 51 Off-Balance Sheet Arrangements As of December 31, 2025 and 2024, we have not engaged in any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.
Joint Development Agreement We have committed to funding a portion of the remaining development costs incurred under the BHES JDA through a combination of cash and equity. The BHES JDA’s total value is $140 million.
As of December 31, 2025, future minimum lease payments attributable to our operating and finance lease arrangements are expected to equ al $4.4 million and $0.1 million, res pectively. Joint Development Agreement Under the BHES JDA, we committed to funding a portion of the remaining development costs incurred through a combination of cash and equity.
More specifically, we will likely require additional funding in order to successfully construct our first utility-scale plant and to originate additional Net Power plant opportunities. 50 Cash Flow Summary The following table shows our cash flows from operating activities, investing activities and financing activities for the presented periods: Successor Predecessor Period From Period From June 8, 2023 January 1, 2023 Year Ended through through $ in thousands December 31, 2024 December 31, 2023 June 7, 2023 Net cash used in operating activities $ (31,649) $ (38,379) $ (10,623) Net cash used in investing activities $ (168,673) $ (101,269) $ (2,431) Net cash (used in) provided by financing activities $ (4,929) $ 319,556 $ 15,836 Operating Activities Cash used in operating activitie s decreased by $17.4 million for the year ended December 31, 2024 compared to the combined periods from January 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through December 31, 2023 (Successor).
Cash Flow Summary The following table shows our cash flows from operating activities, investing activities and financing activities for the presented periods: Year Ended December 31, $ in thousands 2025 2024 Net cash used in operating activities $ (120,784) $ (31,649) Net cash used in investing activities $ (8,805) $ (168,673) Net cash used in financing activities $ (230) $ (4,929) Operating Activities Cash used in operating activitie s increased by $89.1 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 .
As we continue to add employees and further advance our technology towards commercialization, we expect our cash used in operating and investing activities to continue to increase before we start to generate any material cash inflows from our operations.
We expect our cash used in operating activities to increase significantly before we start to generate any material cash inflows from our operations. Investing Activities During the year ended December 31, 2025, net cash used in investing activities increased by $159.9 million compared to the year ended December 31, 2024.
Supply chain issues related to the manufacturing and transportation of key equipment may lead to a delay in our commercialization efforts, which could impact our results of operations. Commencing Commercial Operations Over the next several years, Net Power plans to conduct additional research and equipment validation testing campaigns at its Demonstration Plant.
Supply chain issues related to the manufacturing and transportation of key equipment, including as a result of tariffs imposed by the U.S. or other countries or other trade barriers, measures, or conflicts, may lead to a delay in our commercialization efforts, which could impact our results of operations, financial condition and prospects.
Financing Activities Our cash from financing activities decreased by $340 million for the year ended December 31, 2024 compared to the combined periods from January 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through December 31, 2023 (Successor). The decrease was driven by proceeds from the PIPE Financing, less transaction expenses and shareholder redemptions during 2023 .
Financing Activities Our cash from financing activities decreased by $5 million for the year ended December 31, 2025 compared to the year ended December 31, 2024 .
The decrease in our liquidity position is primarily a result of cash used to prepare the Demonstration Facility for the testing campaign that commenced in the fourth quarter 2024, progress on our first commercial-scale facility as we continued FEED and released long-lead items, R&D expenses, and general corporate expenses.
The decrease in our liquidity position is primarily a result of cash used for the development of the Oxy-Combustion Cycle under the BHES JDA, payments related to long-lead equipment and engineering for SN1, testing campaigns and capital expenditures at the La Porte Demonstration Facility, and general corporate expenses.
Our cash used in investing activities for the year ended December 31, 2024 primarily reflects the investment of a portion of the proceeds received from the PIPE financing in investment grade fixed income securities and capital expenditures related to our Demonstration Plant and long-lead items for our first utility scale plant .
Cash used in investing 50 activities for the year ended December 31, 2024 primarily reflects the initial investments in available-for-sale securities as well as capital expenditures related to Project Permian and the La Porte Demonstration Facility during that period.
These changes were partially offset by fewer Earnout Shares outstanding during 2024 as the first two tranches were earned in 2023. Income tax benefit Our income tax benefit increased by $4.9 million for the year ended December 31, 2024 (Successor), as compared to amounts for the period from June 8, 2023 through December 31, 2023 (Successor).
Income tax benefit Our income tax benefit decreased by $6.3 million for the year ended December 31, 2025, as compared to amounts for the year ended December 31, 2024.
Earnout Shares and Public Warrants The fair values of the liabilities for the Earnout Shares and the Public Warrants were determined using Monte Carlo simulations that have various significant unobservable inputs.
Private Placement Warrants The fair value of the Private Placement Warrant liabilities were determined using Black-Scholes Merton Model, which has various significant unobservable inputs.
This decrease is 49 primarily due to the change in the fair value of the Private Placement Warrants and Public Warrants, which was driven by changes in our stock price.
Change in Earnout Shares liability and Warrant liability The Change in Earnout Shares liability and Warrant liability relates to movements in fair value of earnout shares and warrants which have been classified as liability instruments . The changes are primarily due to fluctuations in the market price of our Class A Common Stock and related volatility.
Capital Commitments As of December 31, 2024, we have gross purchase commitments of $134 million related to certain components of industrial machinery for use at our Demonstration Plant and at our first utility-scale plant. We recognize portions of these commitments on our balance sheet as portions become payable per contract milestones.
Capital Commitments As of December 31, 2025, we have committed to purchase certain components of industrial machinery for use at our La Porte Demonstration Facility and our fi rst clean firm power hub at the Project Permian site in West Texas . The total gross commitments totaled $79.6 million.
Removed
The Net Power Cycle is designed to inherently capture CO 2 and eliminate air pollutants such as SO X , NO X , and particulates. The Business Combination On December 13, 2022, Net Power, LLC entered into the Business Combination Agreement with RONI, RONI OpCo, Buyer, and Merger Sub.
Added
Recently, we have broadened the scope of our business to include the generation of power using natural gas turbines paired with PCC technology that we intend to license from Entropy.
Removed
Pursuant to the Business Combination Agreement, Merger Sub merged with and into Net Power, LLC with Net Power, LLC surviving the merger as a wholly owned subsidiary of Buyer. Upon the consummation of the Business Combination on June 8, 2023, RONI was renamed Net Power Inc.
Added
Also, currency fluctuations, inflation, and tariffs and other trade barriers, measures or conflicts may significantly increase freight charges, raw material costs and other expenses associated with our business, and such increased costs could materially and adversely affect our results of operations, financial condition and prospects.
Removed
Following the Closing, Net Power Inc. is considered an umbrella partnership, C corporation or “Up-C” structure, whereby all of the equity interests in Net Power, LLC are held by OpCo, and Net Power Inc.’s only assets are its equity interests in OpCo. OpCo is considered a variable interest entity with Net Power Inc. serving as its primary beneficiary.
Added
Commencing Commercial Operations Net Power is progressing its first clean firm power hub at the Project Permian site in West Texas. The project is being sized to accommodate up to one gigawatt of clean firm power generation capacity. We intend for Phase I of the project to utilize readily available gas turbines paired with Entropy’s PCC technology.
Removed
Net Power Inc. was determined to be the primary beneficiary of Net Power, LLC because it is the sole managing member of OpCo with the power to control the most significant activities of Net Power, LLC, while also having an economic interest that provides it with the ability to participate significantly in Net Power, LLC’s benefits and losses.
Added
On November 12, 2025, we entered into an agreement to purchase two modular gas turbine generator sets with nominal gross power of approximately 30 megawatts each for use at Project Permian.
Removed
As a result, Net Power, LLC was treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the Business Combination represents an acquisition of a business and Net Power, LLC’s identifiable assets acquired, liabilities assumed, and any non-controlling interests were measured at their estimated fair value on the acquisition date.
Added
Final investment decision (“FID”) for Phase I is expected in the third quarter of 2026 with targeted commercial operations by early 2029, which would make it the first commercial clean gas power project in the United States.
Removed
As a result of the Business Combination, the Company’s financial statement presentation distinguishes Net Power, LLC as the “Predecessor” through June 7, 2023 (the “Predecessor Period”) and Net Power Inc. as the “Successor” for periods after the Closing Date (the “Successor Period”).
Added
During the second quarter of 2025, we terminated the employment of our former Chief Operating Officer, our former Chief Financial Officer, our former Chief Accounting Officer, and certain other employees. Such terminations resulted in $3.1 million in severance payments to these employees, as well as $1.1 million of stock-based compensation for related vesting accelerations.
Removed
Revenue and earnings after the date of the Business Combination are shown in the Successor Period on the consolidated statements of operations and comprehensive loss.
Added
T here also was an overall increase of $2.8 million in compensation expense due to growth in employee headcount and stock-based compensation awards granted during 2025. Additionally, we incurred a $3.0 million increase in professional fees, primarily for engineering, tax, and legal services.
Removed
As a result of the application of the acquisition method of accounting in the Successor Period, the consolidated financial statements for the Successor Period are presented on a full step-up basis; therefore, Successor Period consolidated financial statements are not comparable to the consolidated financial statements of the Predecessor Period, which are not presented on the same full step-up basis.
Added
Th is increase was primarily attributable to higher employee 47 headcount as well as severance costs and related accelerated stock-based compensation, partially offset by lower professional fees.
Removed
Additionally, Net Power began purchasing initial long-lead materials for SN1 in 2024 with the intention of locating SN1 in the Permian Basin of West Texas (“Project Permian”).
Added
R&D expenses increased by $35.7 million, or 56%, for the year ended December 31, 2025 , as compared to the year ended December 31, 2024 . This increase was primarily due to $27.9 million associated with development activities under the BHES JDA which includes $7.4 million for t he BHES JDA Make-Whole Payments .
Removed
However, after completing the FEED process in December 2024, the initial cost estimates were higher than originally anticipated, In response, during the first quarter of 2025, Net Power commenced a post-FEED optimization and value engineering process. In March 2025, the 47 Company suspended further long lead equipment releases but value engineering and certain development work remains in progress.
Added
During the fourth quarter of 2025, the Company reversed $3.3 million in previously recognized share-based compensation expense subsequent to the Business Combination related to the BHES Bonus Shares as the milestone targets were no longer probable. The Company also recorded $1.3 million in accelerated share-based compensation expense related to shares issued in connection with signing of the BHES JDA.
Removed
Provided we are successful in our value engineering process, the project would come online no earlier than 2029. We are focused on delivering a project that will catalyze future adoption for utility-scale customers.
Added
A dditionally, plant and utility expenses increased $6.2 million due to the validation testing campaigns at the La Porte Demonstration Facility that began in the fourth quarter of 2024 and was suspended during the fourth quarter of 2025.
Removed
Major remaining development activities relating to completing construction of our first utility-scale plant are similar to the activities we previously undertook to design, build, and commission the Demonstration Plant. These activities include: finalizing all permitting, supply and off-take contracts, and obtaining the financing required to achieve FID, initiating the EPC process, and constructing and commissioning the facility.
Added
The Company also incurred higher engineering consulting fees of $2.0 million and $1.5 million in costs related to expansion of its engineering headcount to support the Oxy-Combustion Cycle technology development efforts. Project development Project development expenses consist of labor expenses and fees paid to third parties developing commercial scale projects.
Removed
We have also generated revenue for conducting syngas testing at our Demonstration Plant.
Added
Project develop ment expenses increased by $70.4 million, or 3,646%, for the year ended December 31, 2025 , as compared the year ended December 31, 2024 . In March 2025, the Company suspended further long-lead equipment releases for the Oxy-Combustion Cycle technology project.
Removed
Revenue increased by $75 thousand, or 43%, for the year ended December 31, 2024 (Successor), as compared to amounts for the combined periods from January 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through December 31, 2023 (Successor) . 48 General and administrative General and administrative expen ses decreased by $23.9 million, or 44%, for the year ended December 31, 2024 (Successor), as compared to amounts for the combined periods from January 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through December 31, 2023 (Successor).
Added
Accordingly, the Company began expensing costs associated with the project as management assessed the Oxy-Combustion Cycle technology project’s feasibility throughout 2025. These c osts were capitalized during the year ended December 31, 2024. For the year ended December 31, 2025, the Company incurred $24.8 million of costs related to Project Permian Oxy-Combustion Cycle technology project.
Removed
This decrease was primarily due to $16.6 million in costs related to the Business Combination along with additional one-time professional service fees as a result of becoming a public company as these costs did not recur in 2024. This decrease was partially offset by an increase in corporate headcount.
Added
Additionally, in the second quarter of 2025, the Company incurred $19.5 million in milestones payments for the purchase of long lead materials with BHES under the Letter of Limited Notice to Proceed (“BHES LNTP”).
Removed
Sales and marketing expens es increased by $1.2 million, or 45%, for the year ended December 31, 2024 (Successor), as compared to amounts for the combined periods from January 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through December 31, 2023 (Successor).
Added
In the fourth quarter of 2025, the Company notified Baker Hughes of its intent to terminate the BHES LNTP in connection with the Company’s suspension of the Amended and Restated JDA, which resulted in $26.1 million of contract termination fees recognized in 2025.
Removed
R&D expenses increased by $23.8 million, or 60%, for the year ended December 31, 2024 (Successor), as compared to amounts for the combined periods from January 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through December 31, 2023 (Successor).
Added
Impairment and other charges During the first quarter of 2025, the Company assessed its goodwill for impairment due to a change in the Company’s business plan and related sustained decrease in the Company’s market capitalization. As a result, the Company fully impaired goodwill for an impairment loss of $359.8 million.
Removed
This increase was primarily due to the timing of development activities under the BHES JDA and increased activity at the Demonstration Plant due to the commencement of testing campaign in the fourth quarter of 2024. Project development Project development expenses consist of labor expenses and fees paid to third parties developing commercial scale projects.
Added
Also in the first quarter of 2025, the Company expensed $56.1 million of costs associated with the construction of SN1 as management initiated a value engineering process to assess the project’s feasibility and optimize its design and temporarily paused further long lead equipment releases.
Removed
Project developme nt expenses increased by $0.8 million, or 75%, for the year ended December 31, 2024 (Successor), as compared to amounts for the combined periods from January 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through December 31, 2023 (Successor).
Added
In the third quarter of 2025, the Company recognized an impairment loss of $1,095.8 million related to its long-lived assets as a result of the responsiveness from potential customers to the Company’s technology and integrated product offering, the estimated cost reductions achieved in Project Permian, and the resulting revisions to the Company’s forecasted future unit deployments and related cash flows based upon the perceived marketability and commercial viability of the Company’s technology.
Removed
This increase was due to increased headcount related to the development of a utility-scale facility and costs related to future projects.
Added
Depreciation, amortization, and accretion ex pense decreased by $19.2 million, or 24%, for the year ended December 31, 2025 , as compared to amounts for the 48 same period in 2024, primarily due to lower depreciation and amortization rates as a result of the long-lived asset impairment during the third quarter of 2025.
Removed
Option settlement - related party Option settlement e xpense of $79.1 million for the period from June 8, 2023 through December 31, 2023 (Successor) was related to a one-time cost for settlement of an option agreement in connection with the close of the Business Combination.
Added
Interest income Interest inco me decreased by $11.1 million, or 35%, for the year ended December 31, 2025, as compared to amounts for the same period in 2024. This decrease was due to lower interest-bearing cash and investment balances, declines in interest rates, and lower investment accretion.
Removed
Depreciation, amortization, and accretion ex pense increased by $30.8 million, or 61%, for the year ended December 31, 2024 (Successor), as compared to amounts for the combined periods from January 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through December 31, 2023 (Successor).
Added
Change in Tax Receivable Agreement liability In March 2025, the Company reduced the Tax Receivable Agreement (“TRA”) liability of $21.3 million to zero as payments related to the TRA were not considered probable.

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