NET Power (NPWR) Q2 2025: $359.8M Goodwill Impairment, $455.6M Loss

Q: What were NET Power (NPWR)'s cash and liquid investments at June 30, 2025?

Cash and cash equivalents were $284.0 million and available-for-sale investments were $188.3 million , giving total liquidity of $472.3 million .

Q: What are NET Powers remaining material contractual commitments?

As of June 30, 2025, the company had $46.4 million remaining BHES purchase obligations and $70.4 million of additional asset purchase commitments through 2026.

[10-Q] NET Power Inc. Quarterly Earnings Report

Filing Impact

(Neutral)

Filing Sentiment

(Neutral)

Form Type

10-Q

Rhea-AI Filing Summary

NET Power Inc. reported a materially altered balance sheet and operating results for the six months ended June 30, 2025. Total assets declined to $1.79 billion from $2.29 billion, driven primarily by a $359.8 million goodwill impairment recognized in March 2025 and the expensing of $56.1 million of construction-in-progress costs related to Project Permian. The company recorded a six-month net loss after tax of $455.6 million, with net loss attributable to NET Power Inc. of $147.5 million. Revenue was immaterial at $0 for the period compared with $238 thousand in the prior year period.

Liquidity remains a key focus: cash and cash equivalents were $284.0 million and available-for-sale investments were $188.3 million, giving $472.3 million of total liquidity. Management states existing liquidity should fund operations for the next 12 months, though Project Permian long-lead releases are paused for a value engineering process and commercial plant timing has been pushed out. The company also reduced its Tax Receivable Agreement liability by $21.3 million and delivered notice to terminate the TRA.

Positive

$472.3 million of total liquidity (cash $284.0M plus available-for-sale investments $188.3M) providing runway for the next 12 months as stated by management
Tax Receivable Agreement (TRA) liability reduced by $21.3 million and subsequently terminated, removing a potential future payment obligation
Available-for-sale investments of $188.3 million are investment-grade fixed income instruments that mature through June 2027
Legislative development (OBBBA) preserved key 45Q tax credit features and the company states this should improve economics for projects capturing CO2, particularly in the Permian Basin

Negative

$359.8 million goodwill impairment recognized in March 2025, fully writing off goodwill and reducing total assets from $2.29B to $1.79B
$56.1 million of construction-in-progress costs for Project Permian expensed after pausing long-lead equipment releases
$455.6 million net loss after tax for the six months ended June 30, 2025, with Net Power Inc. attributable loss of $147.5 million
Operating revenue was effectively $0 for the period compared with $238 thousand in the prior-year period
Company paused commercial project execution; Project Permian long-lead releases suspended and commercial online date pushed out (management notes project would come online no earlier than 2029 if value engineering succeeds)
Pending litigation: a putative securities class action and a derivative suit alleging misleading statements about Project Permian timing and costs; company cannot estimate potential loss
$46.4 million remaining BHES purchase obligations (through Feb 2027) plus $70.4 million additional asset purchase obligations through 2026 create committed outflows

Insights

TL;DR: Large non-cash charges and project delays materially weakened equity while cash supports near-term operations.

The March 2025 full goodwill impairment of $359.8 million and $56.1 million of Project Permian costs expensed are the dominant drivers of the six-month $455.6 million loss. These are largely non-cash and project-specific but eliminate significant intangible book value and reduce reported equity from $655.6 million to $616.2 million. Operating expenses rose substantially due to R&D, project development and severance; revenue remained immaterial. Cash and liquid securities of $472.3 million provide runway management expects will cover the next 12 months, but additional capital will likely be required to execute a commercial plant. The TRA liability reduction of $21.3 million removes a contingent future outflow. Overall, near-term liquidity is adequate but capitalization for commercial deployment remains a material execution risk.

TL;DR: Project pause, legal filings, and sizable contractual commitments raise execution and legal risk despite stated liquidity.

Management paused further long-lead equipment releases for Project Permian to perform value engineering, which delays project timing and triggered expensing of previously capitalized costs. Commitments include $46.4 million remaining BHES purchase obligations through February 2027 and $70.4 million of additional asset purchase obligations through 2026. The company faces a putative securities class action and a derivative suit alleging misleading statements about Project Permian timing and costs; management cannot reasonably estimate potential loss exposure. These factors elevate execution, counterparty and litigation risk despite the companys cash and investments. Investors should note the combination of large non-cash impairments, ongoing cash burn in R&D and concentrated project commitments.

08/11/2025 - 05:09 PM

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


x			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025


o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ______ to ______

Commission File Number 001-40503

NET Power Inc.

(Exact name of registrant as specified in its charter)


Delaware			98-1580612
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)
320 Roney St. Suite 200 Durham, North Carolina			27701
(Address of Principal Executive Offices)			(Zip Code)

(919) 287-4750

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock	NPWR	The New York Stock Exchange
Warrants, each exercisable for one share of Class A Common Stock at a price of $11.50	NPWR-WT	The New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports); and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	o	Accelerated filer	o
Non-accelerated filer	x	Smaller reporting company	x
		Emerging growth company	x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

The registrant had outstanding 77,882,957 shares of Class A Common Stock and 141,340,211 shares of Class B Common Stock as of August 7, 2025.

TABLE OF CONTENTS


		Page
	Certain Defined Terms	1
	Cautionary Note Regarding Forward-Looking Statements	2

PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations and Comprehensive Loss	5
	Condensed Consolidated Statements of Mezzanine Shareholders' Equity and Shareholders' Equity	6
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	10
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	25
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	33
Item 4.	Controls and Procedures	34

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3.	Defaults Upon Senior Securities	35
Item 4.	Mine Safety Disclosures	36
Item 5.	Other Information	36
Item 6.	Exhibits	36
Signatures		37

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Certain Defined Terms

For the definitions of certain defined terms used throughout this Quarterly Report on Form 10-Q (this “Report”), please refer to the section entitled “Certain Defined Terms” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (the “Annual Report”).

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Cautionary Note Regarding Forward-Looking Statements

This Report contains “forward-looking statements” within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Statements that do not relate strictly to historical or current facts are forward-looking and usually identified by the use of words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “future,” “intend,” “may,” “opportunity,” “plan,” “project,” “seek,” “should,” “strategy,” “will,” “will likely result,” “would” and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements may relate to the development of the Company’s technology, the anticipated demand for the Company’s technology and the markets in which the Company operates, the timing of the deployment of plant deliveries, and the Company’s business strategies, capital requirements, potential growth opportunities and expectations for future performance (financial or otherwise). Forward-looking statements are based on current expectations, estimates, projections, targets, opinions and/or beliefs of the Company, and such statements involve known and unknown risks, uncertainties and other factors.

The risks and uncertainties that could cause those actual results to differ materially from those expressed or implied by these forward-looking statements include: (i) risks relating to the uncertainty of the projected financial information with respect to the Company and risks related to the Company’s ability to meet its projections; (ii) the Company’s ability to utilize its net operating loss and tax credit carryforwards effectively; (iii) the capital-intensive nature of the Company’s business model, which will require the Company to raise additional capital in the future; (iv) barriers the Company may face in its attempts to deploy and commercialize its technology; (vi) the complexity of the machinery the Company relies on for its operations and development; (vii) potential changes and/or delays in site selection and construction that result from regulatory, logistical, and financing challenges; (viii) the Company’s ability to establish and maintain supply relationships; (viii) risks related to the Company’s arrangements with third parties for the development, commercialization and deployment of technology associated with the Company’s technology; (ix) risks related to the Company’s other strategic investors and partners; (x) the Company’s ability to successfully commercialize its operations; (xi) the availability and cost of raw materials; (xii) the ability of the Company’s supply base to scale to meet the Company’s anticipated growth; (xiii) the Company’s ability to update the design, construction, and operations of its technology; (xiv) the impact of potential delays in discovering manufacturing and construction issues; (xv) the possibility of damage to the Company’s Texas facilities as a result of natural disasters; (xvi) the ability of commercial plants using the Company’s technology to efficiently provide net power output; (xvii) the Company’s ability to obtain and retain licenses; (xviii) the Company’s ability to establish an initial commercial scale plant; (xix) the Company’s ability to license to large customers; (xx) the Company’s ability to accurately estimate future commercial demand; (xxi) the Company’s ability to adapt to the rapidly evolving and competitive natural and renewable power industry; (xxii) the Company’s ability to comply with all applicable laws and regulations; (xxiii) the impact of public perception of fossil fuel-derived energy on the Company’s business; (xxiv) any political or other disruptions in gas producing nations; (xxv) the Company’s ability to protect its intellectual property and the intellectual property it licenses; (xxvi) risks relating to data privacy and cybersecurity, including the potential for cyberattacks or security incidents that could disrupt our or our service providers’ operations; (xxvii) current and potential litigation that has been and may be instituted against the Company; and (xviii) other risks and uncertainties indicated in Part I, Item 1A of the Annual Report and other documents subsequently filed with the SEC by the Company.

Should one or more of these risks or uncertainties materialize, or should any of the assumptions made by our management prove incorrect, actual results may vary in material respects from those projected in the forward-looking statements contained in this Report. Accordingly, you should not place undue reliance on these forward-looking statements in deciding whether to invest in our securities.

Forward-looking statements speak only as of the date they are made. Except to the extent required by applicable law or regulation, we undertake no obligation to update the forward-looking statements contained herein to reflect events or circumstances after the date of this Report or to reflect the occurrence of unanticipated events. The Company gives no assurance that it will achieve its expectations.

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Part I - Financial Information

Item 1. Financial Statements

NET Power Inc.

Condensed Consolidated Balance Sheets (Unaudited)

In thousands, except par value


	June 30,		December 31,
	2025		2024
ASSETS
Current assets
Cash and cash equivalents	$	284,024	$	329,230
Short-term investments	—		100,000
Investments in securities, available-for-sale	119,374		78,344

Interest receivable	1,728		3,682
Prepaid expenses and other current assets	3,380		1,774
Total current assets	408,506		513,030
Long-term assets
Restricted cash	2,470		2,446
Investments in securities, available-for-sale	68,913		22,628
Intangible assets, net	1,208,295		1,241,343
Goodwill	—		359,847
Property, plant, and equipment, net	96,595		151,470
Operating lease right-of-use assets	4,028		2,699
Other long-term assets	667		652
Total assets	$	1,789,474	$	2,294,115

LIABILITIES, MEZZANINE SHAREHOLDERS' EQUITY, AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable	$	1,045	$	3,092
Accrued liabilities	10,090		7,407
Due to related parties	29,459		6,537
Operating lease liabilities, current portion	1,025		683
Finance lease liabilities, current portion	187		187
Earnout Shares liability	21		—
Total current liabilities	41,827		17,906

Earnout Shares liability	—		1,958
Warrant liability	7,641		81,283
Asset retirement obligation	3,427		3,265
Non-current operating lease liabilities	2,993		2,125
Non-current finance lease liabilities	28		110
Tax Receivable Agreement liability	—		20,974
Deferred taxes	3,079		4,306
Total liabilities	58,995		131,927

Commitments and contingencies (Note 14)

The accompanying notes are an integral part of these condensed consolidated financial statements.

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NET Power Inc.

Condensed Consolidated Balance Sheets (Unaudited) (Continued)

In thousands, except par value


	June 30,		December 31,
	2025		2024
Mezzanine shareholders' equity
Redeemable non-controlling interests in subsidiary	1,114,279		1,506,584

Shareholders' equity
Preferred Stock, $.0001 par value; 1,000 shares authorized; no shares issued or outstanding as of June 30, 2025 and December 31, 2024	—		—
Class A Common Stock, $.0001 par value; 520,000 shares authorized; 77,879 shares issued and outstanding as of June 30, 2025 and 76,760 shares issued and outstanding as of December 31, 2024	8		8
Class B Common Stock, $.0001 par value; 310,000 shares authorized; 141,340 shares issued and outstanding as of June 30, 2025 and 139,691 shares issued and outstanding as of December 31, 2024	14		14
Additional paid-in capital	879,653		771,594
Accumulated other comprehensive loss	61		32
Accumulated deficit	(263,536)		(116,044)
Total shareholders' equity	616,200		655,604
Total liabilities, mezzanine shareholders' equity, and shareholders' equity	$	1,789,474	$	2,294,115

The accompanying notes are an integral part of these condensed consolidated financial statements.

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NET Power Inc.

Condensed Consolidated Statements of Operations and Comprehensive Loss (Unaudited)

In thousands, except per share data


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Revenue	$	—	$	238	$	—	$	238
Cost of revenue	—		30		—		30

Gross profit	—		208		—		208

Operating expenses
General and administrative	13,578		7,787		22,270		14,097
Sales and marketing	1,492		876		2,679		1,628
Research and development	26,618		15,483		49,218		26,751
Project development	27,198		869		31,687		1,291
Goodwill impairment and other charges	—		—		415,897		—
Depreciation, amortization, and accretion	21,669		20,047		43,356		40,079
Total operating expenses	90,555		45,062		565,107		83,846

Operating loss	(90,555)		(44,854)		(565,107)		(83,638)

Other income
Interest income	5,466		9,029		11,345		16,719
Change in Earnout Shares liability and Warrant liability	1,415		16,249		75,580		1,671
Change in Tax Receivable Agreement liability	—		—		21,317		—
Other income	5		6		6		8
Net other income	6,886		25,284		108,248		18,398

Net loss before income tax	(83,669)		(19,570)		(456,859)		(65,240)
Income tax benefit	1,622		2,353		1,226		6,391
Net loss after income tax	(82,047)		(17,217)		(455,633)		(58,849)
Net loss attributable to non-controlling interests	(53,905)		(12,949)		(308,141)		(43,160)
Net loss attributable to NET Power Inc.	$	(28,142)	$	(4,268)	$	(147,492)	$	(15,689)

Other comprehensive income
Unrealized gain (loss) on investments	66		(860)		82		(198)

Total other comprehensive income (loss)	66		(860)		82		(198)

Comprehensive loss	(81,981)		(18,077)		(455,551)		(59,047)
Comprehensive loss attributable to non-controlling interests	(53,862)		(13,518)		(308,141)		(43,291)
Comprehensive loss attributable to NET Power Inc.	$	(28,119)	$	(4,559)	$	(147,410)	$	(15,756)

Loss per share of Class A Common Stock, basic and diluted	$	(0.36)	$	(0.06)	$	(1.91)	$	(0.22)

Weighted average shares of Class A Common Stock, basic and diluted	77,699		72,177		77,350		72,036

The accompanying notes are an integral part of these condensed consolidated financial statements.

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NET Power Inc.

Condensed Consolidated Statements of Mezzanine Shareholders' Equity and Shareholders' Equity (Unaudited)

In thousands


	Class A Common Stock			Class B Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated Deficit		Total Shareholders' Equity		Non-controlling Interests - Mezzanine Equity
	Shares	Amount		Shares	Amount
Balance at December 31, 2024	76,760	$	8	139,691	$	14	$	771,594	$	32	$	(116,044)	$	655,604	$	1,506,584
Redemption of Class B Common Stock	300	—		(300)	—		1,489		—		—		1,489		(1,489)
Issuance of Class A Common Stock	3	—		—	—		41		—		—		41		(14)


Increase in Tax Receivable Agreement liability from qualifying exchanges	—	—		—	—		(343)		—		—		(343)		—
Unrealized gain on investments	—	—		—	—		—		6		—		6		10
Amortization of share-based payments	—	—		1,175	—		1,172		—		—		1,172		9,053
Adjustment of redeemable non-controlling interest to book value	—	—		—	—		98,592		—		—		98,592		(98,592)

Net loss	—	—		—	—		—		—		(119,350)		(119,350)		(254,236)
Balance at March 31, 2025	77,063	$	8	140,566	$	14	$	872,545	$	38	$	(235,394)	$	637,211	$	1,161,316
Redemption of Class B Common Stock	473	—		(474)	—		2,148		—		—		2,148		(2,148)
Issuance of Class A Common Stock	343	—		—	—		1,553		—		—		1,553		(1,559)



Unrealized gain on investments	—	—		—	—		—		23		—		23		43
Amortization of share-based payments	—	—		1,248	—		3,407		—		—		3,407		10,532

Net loss	—	—		—	—		—		—		(28,142)		(28,142)		(53,905)
Balance at June 30, 2025	77,879	$	8	141,340	$	14	$	879,653	$	61	$	(263,536)	$	616,200	$	1,114,279

The accompanying notes are an integral part of these condensed consolidated financial statements.

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NET Power Inc.

Condensed Consolidated Statements of Mezzanine Shareholders' Equity and Shareholders' Equity (Unaudited) (Continued)

In thousands


	Class A Common Stock			Class B Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Income		Accumulated Deficit		Total Shareholders' Equity		Non-controlling Interests - Mezzanine Equity
	Shares	Amount		Shares	Amount
Balance at December 31, 2023	71,278	$	7	141,787	$	14	$	851,841	$	—	$	(66,853)	$	785,009	$	1,545,905
Redemption of Class B Common Stock	680	—		(680)	—		74		—		—		74		(74)
Issuance of Class A Common Stock	13	—		—	—		4,032		—		—		4,032		(4,005)


Tax Receivable Agreement, net of deferred taxes	—	—		—	—		(567)		—		—		(567)		—
Unrealized gain on investments	—	—		—	—		—		224		—		224		438
Amortization of share-based payments	—	—		694	—		647		—		—		647		5,622
Adjustment of redeemable non-controlling interest to redemption value	—	—		—	—		(118,225)		—		—		(118,225)		118,225
Net loss	—	—		—	—		—		—		(11,421)		(11,421)		(30,211)
Balance at March 31, 2024	71,970	$	7	141,802	$	14	$	737,802	$	224	$	(78,274)	$	659,773	$	1,635,900
Redemption of Class B Common Stock	611	—		(611)	—		708		—		—		708		(708)
Issuance of Class A Common Stock	2	—		—	—		29		—		—		29		(3)
Exercise of Warrants	1	—		—	—		10		—		—		10		—
Tax Receivable Agreement, net of deferred taxes	—	—		—	—		674		—		—		674		—
Unrealized loss on investments	—	—		—	—		—		—		(291)		(291)		(568)
Amortization of share-based payments	—	—		650	—		1,114		—		—		1,114		7,417
Adjustment of redeemable non-controlling interest to redemption value, net of deferred taxes	—	—		—	—		72,746		—		—		72,746		(118,225)
Net loss	—	—		—	—		—		(4,268)		—		(4,268)		(12,949)
Balance at June 30, 2024	72,584	$	7	141,841	$	14	$	813,083	$	(82,542)	$	(67)	$	730,495	$	1,510,864

The accompanying notes are an integral part of these condensed consolidated financial statements.

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NET Power Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited)

In thousands


	Six Months Ended June 30,
	2025		2024
Cash flows from operating activities:
Net loss after income tax	$	(455,633)	$	(58,849)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation, amortization, and accretion	43,356		40,079
Goodwill impairment and other charges	415,897		—
Non-cash income	(1,025)		(1,376)



Deferred taxes	(1,227)		(6,391)

Change in fair value of Earnout Shares liability and Warrant liability	(75,580)		(1,671)
Change in Tax Receivable Agreement liability	(21,317)		—

Share-based compensation expense	24,103		14,800
Changes in operating assets and liabilities:
Accounts receivable, net	—		(185)
Interest receivable	2,896		1,611
Prepaid expenses and other current assets	(1,606)		(825)
Other long-term assets	(15)		(420)
Accounts payable	(2,047)		1,367
Accrued liabilities	4,302		935

Due to related parties	22,922		88

Net cash used in operating activities	(44,974)		(10,837)

Cash flows from investing activities:


Purchases of available-for-sale securities	(130,602)		(121,656)
Maturities of available-for-sale securities	43,350		20,750
Maturities of short-term investments	100,000		—
Capitalized software	(834)		(412)
Purchase of property, plant and equipment	(12,023)		(17,273)

Net cash used in investing activities	(109)		(118,591)

Cash flows from financing activities:

Issuance of Class A Common Stock, including exercise of Warrants	—		61





Payments on finance lease obligations	(99)		—




Net cash (used in) provided by financing activities	(99)		61

Net decrease in cash, cash equivalents, and restricted cash	(45,182)		(129,367)


Cash, cash equivalents, and restricted cash, beginning of period	331,676		536,927
Cash, cash equivalents, and restricted cash, end of period	$	286,494	$	407,560

The accompanying notes are an integral part of these condensed consolidated financial statements.

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NET Power Inc.

Condensed Consolidated Statements of Cash Flows (Unaudited) (Continued)

In thousands


	Six Months Ended June 30,
	2025		2024






















Supplemental non-cash investing and financing activities:

Change in accruals for capital expenditures	$	(1,612)	$	120

Operating lease right-of use asset acquired	1,591		—




Reconciliation of cash, cash equivalents, and restricted cash to the consolidated balance sheet:
Cash and cash equivalents	$	284,024	$	405,145
Restricted cash	2,470		2,415
Total cash, cash equivalents, and restricted cash	$	286,494	$	407,560

The accompanying notes are an integral part of these condensed consolidated financial statements.

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NET Power Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

NOTE 1 — Nature of Business and Basis of Presentation

Nature of Business

NET Power Inc. (“Net Power” or the “Company”) is a clean energy technology company that has developed a proprietary process for producing electricity using a predominantly carbon dioxide working fluid that involves the capture and reuse, sale and sequestration of carbon dioxide (the “Net Power Cycle”). The Net Power Cycle is the subject of U.S. and foreign patents, as well as additional applications and provisional applications on file with the United States Patent and Trademark Office and international patent authorities.

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q have been prepared in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) for interim financial information; however, certain information or footnote disclosures normally included in complete financial statements prepared in accordance with US GAAP may have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). In management’s opinion, these unaudited condensed consolidated financial statements have been prepared on the same basis as the annual financial statements for the year ended December 31, 2024 and include all adjustments, which consist of only normal and recurring adjustments, necessary for fair statement. Certain prior period financial information has been reclassified to conform to current period presentation.

The results reported in these unaudited condensed consolidated financial statements are not necessarily indicative of the results to be expected for the entire year. These unaudited condensed consolidated financial statements should be read in conjunction with the annual financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed with the SEC on March 10, 2025 (the “2024 Annual Report”).

NOTE 2 — Significant Accounting Policies

The Company’s significant accounting policies used to prepare these condensed consolidated financial statements, unless otherwise noted below, are consistent with those used for the fiscal year ended December 31, 2024. Accordingly, refer to Note 2 to the consolidated financial statements in the 2024 Annual Report for the Company’s significant accounting policies.

Use of Estimates

The preparation of financial statements in conformity with US GAAP requires management to make certain estimates, judgments and assumptions. The estimates, judgments and assumptions made by the Company when accounting for items and matters such as, but not limited to, depreciation, amortization, asset valuations and share-based compensation were based on information available at the time they were made. These estimates, judgments, and assumptions can affect the reported amounts of assets and liabilities as of the date of the condensed consolidated financial statements, as well as amounts reported on the condensed consolidated statements of operations and comprehensive loss during the periods presented. Actual results could differ from those estimates.

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Segment Reporting

In accordance with ASC Topic 280, Segment Reporting (“ASC 280”), the Company has determined that it has one operating segment and one reportable segment, which includes all of the Company’s consolidated accounts. The Company’s chief operating decision maker (“CODM”) is its Chief Executive Officer. The CODM focuses on consolidated operating income (loss), with a focus on research and development and general and administrative expenses, along with interest income to assess the Company’s performance and allocate resources. Segment expenses and other segment items are provided to the CODM on the same basis as disclosed in the condensed consolidated financial statements. The measure of segment assets is reported on the Company’s condensed consolidated balance sheet as total assets.

Accounting Standards Not Yet Adopted

During December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, Income Taxes (Topic 740)—Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires companies to provide annually a tabular reconciliation of the reported income tax expense (or benefit) from continuing operations to the product of the income (or loss) from continuing operations before income taxes and the applicable statutory federal income tax rate using specified categories and to disclose separately reconciling items within certain categories with absolute values equal to or greater than five percent of the product of the income (or loss) from continuing operations before tax and the applicable statutory tax rate. Additionally, ASU 2023-09 requires a public business entity to disclose the year-to-date amount of income taxes paid, net of refunds received, to federal, state, and foreign jurisdictions. If a payment to a single federal, state or foreign jurisdiction equals or exceeds five percent of total income taxes paid, ASU 2023-09 requires separate disclosure of that payment. Finally, ASU 2023-09 requires a public business entity to disclose income (or loss) from continuing operations before income tax expense (or benefit) disaggregated between domestic and foreign jurisdictions and to disclose income tax expense (or benefit) from continuing operations disaggregated between federal, state, and foreign jurisdictions. ASU 2023-09 removes the requirement to disclose the nature and estimate of the range of reasonably possible increases or decreases in the unrecognized tax benefits balance in the next 12 months, or to make a statement that an estimate of the range cannot be made. ASU 2023-09 is effective for the Company for calendar years beginning after December 15, 2025. Early adoption is permitted. The Company is evaluating the impact to its income tax disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses (“ASU 2024-03”), which requires new tabular disclosures in the notes to consolidated financial statements, disaggregating certain cost and expense categories within relevant captions on the consolidated statements of operations. The prescribed cost and expense categories requiring disaggregated disclosures include purchases of inventory, employee compensation, depreciation, and intangible asset amortization, along with certain other expense disclosures already required by U.S. GAAP that would need to be integrated within the new tabular disaggregated expense disclosures. Additionally, the amendments also require the disclosure of total selling expenses and an entity's definition of those expenses. The amendments in ASU 2024-03 are effective for annual periods beginning after December 15, 2026 and for subsequent interim periods. Early adoption is permitted and the amendments should be applied on a prospective basis, although retrospective application is permitted. The Company is evaluating the impact the new accounting standard will have on its expense disclosures.

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NOTE 3 — Investments

As of June 30, 2025, the Company is only invested in available-for-sale securities. The Company’s $100 million certificate of deposit previously held by the Company matured and the interest receivable on the certificate of deposit was collected in June 2025.

The following tables present the Company’s available-for-sale investments included in the condensed consolidated balance sheets:


$ in thousands	June 30, 2025
Current assets	Amortized Cost		Unrealized Gain (Loss)		Fair Value
Corporate bonds	$	18,462	$	(1)	$	18,461
Commercial paper	28,153		—		28,153
U.S. treasuries	72,698		61		72,760
Total	$	119,313	$	60	$	119,374

Long-term assets	Amortized Cost		Unrealized Gain		Fair Value
Corporate bonds	$	31,772	$	64	$	31,836

U.S. treasuries	36,958		119		37,077
Total	$	68,730	$	183	$	68,913


$ in thousands	December 31, 2024
Current assets	Amortized Cost		Unrealized Gain		Fair Value
Corporate bonds	$	11,006	$	15	$	11,021
Commercial paper	8,629		—		8,629
U.S. treasuries	58,637		57		58,694
Total	$	78,272	$	72	$	78,344

Long-term assets	Amortized Cost		Unrealized Gain		Fair Value


U.S. treasuries	$	22,538	$	90	$	22,628
Total	$	22,538	$	90	$	22,628

The cost of securities sold, if any, is based on the specific-identification method. During the three and six months ended June 30, 2025 and 2024, there were no securities sold. There were no credit losses recognized during the three and six months ended June 30, 2025 and 2024. The Company established no allowances for credit losses as of June 30, 2025 and December 31, 2024. The Company’s long-term available-for-sale investments mature through June 2027.

NOTE 4 — Fair Value Measurements

The following table presents the assets and liabilities that the Company measures at fair value on a recurring basis included in the condensed consolidated balance sheets and indicates the level of the valuation inputs the

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Company utilized to determine the fair value:


		June 30,		December 31,
$ in thousands	Level	2025		2024
Assets
Available-for-sale investments	1	$	188,287	$	100,972
Short-term investments	2	—		100,000
Total assets		$	188,287	$	200,972

Liabilities
Public Warrants	1	$	2,845	$	31,034
Private Placement Warrants	3	4,796		50,249
Earnout Shares	3	21		1,958

Total liabilities		$	7,662	$	83,241

The following table contains a reconciliation of the beginning and ending balances of recurring Level 3 fair value measurements included in the condensed consolidated statements of operations and comprehensive loss:


	Three Months Ended June 30,				Six Months Ended June 30,
$ in thousands	2025		2024		2025		2024
Balance of recurring Level 3 liabilities at beginning of period	$	6,404	$	47,164	$	52,207	$	38,622
Change in Earnout Shares liability	(61)		(743)		(1,937)		(267)
Change in Private Placement Warrant liability	(1,526)		(10,246)		(45,453)		(2,180)



Balance of recurring Level 3 liabilities at end of period	$	4,817	$	36,175	$	4,817	$	36,175

Short-term Investments

Short-term investments are valued at cost, which approximates fair value. The fair value of the short-term investments is considered a Level 2 fair value measurement because cost basis is observable, but not in an active market.

Available-for-sale Securities

The fair value of the available-for-sale investments is classified as a Level 1 fair value measurement, because the investments are valued using the most recent quoted prices for identical assets in active markets.

Warrants

The Public Warrants are exercisable for 8,624,974 shares of Class A Common Stock at a price of $11.50 per share. The Company may redeem the Public Warrants for $0.01 if the last reported trading price of the Company’s Class A Common Stock price equals or exceeds $18.00 per share for any 20 trading days within a 30-trading day period. Additionally, the Public Warrants may be redeemed if the last reported trading price of the Company’s Class A Common Stock equals or exceeds $10.00 and is below $18.00 by paying a make-whole premium. The Public Warrants expire June 8, 2028. The Public Warrants are valued using their quoted and publicly available market prices. Since their fair value is predicated on quoted prices in an active market for identical instruments, the fair value of the Public Warrants is considered a Level 1 fair value measurement.

The Private Placement Warrants are exercisable for 10,900,000 shares of Class A Common Stock at a price of $11.50 per share. The Private Placement Warrants expire June 8, 2028. The Private Placement Warrants are

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exercisable on a cashless basis and are non-redeemable as long as they are held by the initial purchasers or their permitted transferees. The Private Placement Warrants and Class A Common Stock issuable upon exercise of the Private Placement Warrants are entitled to registration rights.

The Company uses a Black-Scholes Merton Model to value the Private Placement Warrants. Key inputs into the Black-Scholes Merton Model include the last Class A Common Stock closing price of $2.47 as of June 30, 2025 with a strike price of $11.50 per share. The volatility assumption is based on a blended average of equity volatility of publicly traded companies within the Company’s peer group, the Company's own historical volatility, and the implied volatility of the Public Warrants. The fair value of the Private Placement Warrants is considered a Level 3 fair value measurement.

The following table contains the key inputs used in the valuations of the Private Placement Warrants:


	June 30, 2025		December 31, 2024
Term (in years)	2.94		3.44
Volatility	79.0	%	59.3	%
Risk-free rate	3.6	%	4.2	%

Earnout Shares

The fair value of the Earnout Shares (as defined in Note 6 to the consolidated financial statements included in the 2024 Annual Report) is estimated using a Monte Carlo simulation. The Monte Carlo simulation considers daily simulated stock prices as a proxy for the Company’s daily volume-weighted average share price. Historically, the volatility assumption is based on a blended average of equity volatility of publicly traded companies within the Company’s peer group, the historical volatility of the Company’s Class A common stock, and the implied volatility of the Public Warrants. For the valuation as of June 30, 2025, the volatility assumption is based on the Company’s own historical volatility, implied volatility on the Company’s own common stock options, and the implied volatility of the Public Warrants.

The following table contains the key inputs used in the valuations of the Earnout Shares:


	June 30, 2025			December 31, 2024

Term (in years)		0.94		1.43
Volatility		85.0	%	59.7	%
Risk-free rate		3.9	%	4.1	%

NOTE 5 — Goodwill and Intangible Assets

Goodwill

Goodwill represented the future economic benefits derived from the Company’s unique market position, the growth attributable to the Net Power Cycle and the Company’s assembled workforce, none of which are individually and separately recognized as intangible assets. Goodwill was allocated to the Company’s sole reportable segment and reporting unit.

The following table presents the changes to goodwill included in the condensed consolidated balance sheets:


	June 30,		December 31,
$ in thousands	2025		2024
Balance at the beginning of the period	$	359,847	$	423,920
Impairment	(359,847)		—
Measurement adjustments	—		(64,073)
Balance at the end of the period	$	—	$	359,847

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In March 2025, the Company assessed its goodwill for impairment. Due to a change in the Company’s business plan, as discussed below, and related sustained decrease in the Company’s market capitalization, the Company concluded that it was more likely than not that the fair value of its goodwill was less than its carrying amount as of March 31, 2025. As a result, the Company fully impaired its goodwill and recognized an impairment of $359.8 million during the six months ended June 30, 2025, which is included in Goodwill impairment and other charges on the condensed consolidated statements of operations and comprehensive loss.

During the second quarter of 2024, the Company completed its estimate of deferred taxes as of the Closing Date and finalized its purchase price allocation, which resulted in a measurement adjustment that reduced goodwill by $64.1 million.

Definite-Lived Intangible Assets

The following tables summarize the Company’s definite-lived intangible assets included in the condensed consolidated balance sheets:


	June 30,						December 31,
	2025						2024
$ in thousands	Gross Amount		Accumulated Amortization		Net Amount		Gross Amount		Accumulated Amortization		Net Amount
Developed technology	$	1,345,000	$	(138,610)	$	1,206,390	$	1,345,000	$	(104,985)	$	1,240,015
Software(1)	2,179		(274)		1,905		1,407		(79)		1,328
Total definite-lived intangible assets	$	1,347,179	$	(138,884)	$	1,208,295	$	1,346,407	$	(105,064)	$	1,241,343

___________

(1) Software includes $0.3 million and $0.6 million related to software work-in-progress as of June 30, 2025 and December 31, 2024.

In March 2025, due to higher-than expected indicative cost estimates for its first utility-scale project, the Company identified a triggering event for evaluation of impairment of its long-term assets. As the Company is in the development stage, focusing on developing and commercializing its technology, it assessed its definite-lived intangible assets, the Demonstration Plant, and other corporate assets for impairment as an asset group. The results of the recoverability test performed in March 2025 indicated that no impairment was required, and the Company did not identify any indicators that the asset group may be impaired as of June 30, 2025.

The following table presents the Company’s amortization expense for the following periods:


	Three Months Ended June 30,				Six Months Ended June 30,
$ in thousands	2025		2024		2025		2024
Amortization expense	$	16,974	$	16,828	$	33,847	$	33,640

The Company does not own or control any intangible assets with indefinite useful lives. The following table presents estimated amortization expense for the next five years and thereafter (in thousands):


Remaining 2025	$	33,857
2026	67,715
2027	67,715
2028	67,715
2029	67,542
2030 and thereafter	903,751
Total	$	1,208,295

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NOTE 6 — Property, Plant, and Equipment

The following table summarizes the key classifications of property, plant, and equipment included in the condensed consolidated balance sheets:


	June 30,		December 31,
$ in thousands	2025		2024
Demonstration Plant	$	122,352	$	122,845
Furniture and equipment	1,173		1,069
Assets acquired under finance lease	349		349
Construction-in-progress	3,326		48,438
Total property, plant, and equipment, gross	127,200		172,701
Accumulated depreciation and amortization (1)	(30,605)		(21,231)
Total property, plant, and equipment, net	$	96,595	$	151,470

___________

(1) As of June 30, 2025 and December 31, 2024, $45 thousand and $18 thousand, respectively, of accumulated depreciation and amortization is related to amortization of the finance lease right-of-use assets.

As of December 31, 2024, Construction-in-progress in the table above includes capitalized costs related to Project Permian, the Company’s first utility-scale facility. During the first quarter of 2025, the Company initiated a value engineering process to assess the project’s feasibility and optimize its design and temporarily paused further long lead equipment releases. Consequently, $56.1 million of costs previously included in Construction-in-progress were expensed during the first quarter of 2025. This amount is included in Goodwill impairment and other charges in the condensed consolidated statements of operations and comprehensive loss.

See discussion of the impairment test performed for the Demonstration Plant in Note 5 — Goodwill and Intangible Assets.

The following table presents the Company’s depreciation expense for the following periods:


	Three Months Ended June 30,				Six Months Ended June 30,
$ in thousands	2025		2024		2025		2024
Depreciation expense	$	4,613	$	3,176	$	9,347	$	6,353

NOTE 7 — Accrued Liabilities

Accrued liabilities in the condensed consolidated balance sheets consist of the following:


	June 30,		December 31,
$ in thousands	2025		2024
Incentive compensation	$	1,596	$	2,916


Capital expenditures	673		2,285
Accrued project expenses	4,743		—

Professional fees	1,832		1,143
Other accrued liabilities	1,246		1,063
Total accrued liabilities	$	10,090	$	7,407

NOTE 8 — Leases

On March 7, 2025, the Company entered into a building lease agreement for a warehouse in La Porte, Texas that commenced in April 2025. The lease has an initial term of 62 months and contains a renewal option of five years. The future minimum lease payments associated with this lease are approximately $2.1 million.

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NOTE 9 — Redeemable Non-Controlling Interests in Subsidiary

The following table presents the Company and the non-controlling interest (“NCI”) ownership percentage of the membership interests in OpCo as of the following periods:


	June 30,		December 31,
	2025		2024
Non-controlling interest holders	64.4	%	64.4	%
NET Power Inc.	35.6	%	35.6	%

The Company measures redeemable NCI each quarter at the higher of its book value or its redemption value. As of June 30, 2025, the Company measured redeemable NCI at book value. As of December 31, 2024, the Company measured redeemable NCI at redemption value. The adjustment to record redeemable NCI at book or redemption value is recorded through Additional paid-in capital on the condensed consolidated statement of mezzanine shareholders' equity and shareholders' equity.

OpCo’s net loss before income tax was attributed to redeemable NCI holders at 64.4% and 66.2% for the three months ended June 30, 2025 and 2024, respectively. OpCo’s net loss before income tax was attributed to redeemable NCI holders at 64.4% and 66.2% for the six months ended June 30, 2025 and 2024, respectively.

NOTE 10 — Share-Based Compensation

The following table presents the aggregate share-based compensation expense, net of forfeitures, for the following periods:


	Three Months Ended June 30,				Six Months Ended June 30,
$ in thousands	2025		2024		2025		2024
Share-based compensation expense	$	13,907	$	8,531	$	24,103	$	14,800

Performance Stock Units

As of June 30, 2025, there was $1.1 million of unrecognized share-based compensation expense related to unvested performance stock units (“PSUs”).

During the second quarter of 2025, there were 524,000 PSUs awarded to certain executives for which the vesting occurs upon the achievement of specific market-based conditions related to the Company’s financial performance over a three-year period, modified based on the Company’s Relative Total Shareholder Return (“TSR”) and subject to final vesting based on the participant’s continued employment through the end of the requisite service period. The amount of awards that will ultimately vest for the PSU can range from 0% to 200% based on the TSR calculated over a three-year period. The fair value of the PSUs was determined using the Monte Carlo Simulation model and is being expensed over the three-year vesting period. The assumptions used to calculate the fair value of these awards were:


Weighted average expected life	3 years
Risk-free interest rates	3.9	%
Expected volatility	80.0	%

The following table presents a summary of PSU activity as of June 30, 2025 and the changes during the six

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months ended June 30, 2025:


In thousands, except per share data	Quantity	Weighted-Average Grant Date Fair Value Per Share

Unvested, beginning of period	128	$	16.24
Granted	524	2.89
Forfeited	(330)	5.03

Unvested, end of period	322	$	6.00

Stock Options

As of June 30, 2025, there was $4.5 million of unrecognized share-based compensation expense related to stock options.

The stock options granted to employees during the second quarter of 2025 vest on the one-year anniversary of the date of grant. The Company will recognize compensation expense from the grant date through the expected vesting date. The fair value of the Company’s stock option grants was estimated utilizing the following assumptions using the Black-Scholes Merton model:


Weighted average expected life	3 years
Risk-free interest rates	3.87	%
Expected volatility	86.0	%

The following table presents a summary of stock option activity during the six months ended June 30, 2025:


In thousands, except per share data	Quantity	Weighted-Average Exercise Price Per Share


Unvested, beginning of period	2,460		$	11.30
Granted	4,076		2.13
Forfeited	(30)		2.13
Unvested, end of period	6,506		$	5.60

Restricted Stock Units

As of June 30, 2025, there was $7.4 million of unrecognized share-based compensation expense related to unvested restricted stock units (“RSUs”), which the Company expects to recognize over a weighted average period of three years.

Generally, RSUs granted to employees and the majority of executives either cliff-vest on the three-year anniversary of the date of grant or vest ratably on each anniversary of the date of grant over a three-year period. Annual awards granted to independent directors cliff-vest on the first anniversary of each award’s grant date.

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The following table presents a summary of RSU activity during the six months ended June 30, 2025:


In thousands, except per share data	Quantity	Weighted-Average Grant Date Fair Value Per Share

Unvested, beginning of period	2,132	$	11.54
Granted	2,114	2.58
Vested	(379)	8.03
Forfeited	(337)	3.61
Unvested, end of period	3,530	$	7.29

Refer to Note 13 — Related Party Transactions for information related to the BHES JDA.

NOTE 11 — Loss per Share

Basic loss per share attributable to shareholders is calculated by dividing net loss attributable to shareholders by the weighted-average number of shares outstanding during the period. Diluted loss per share attributable to shareholders includes the effect of potentially dilutive common shares outstanding.

The following table sets forth the computation of the Company’s basic and diluted loss per share for the following periods:


	Three Months Ended June 30,				Six Months Ended June 30,
In thousands, except per share data	2025		2024		2025		2024
Numerator
Net loss after income tax	$	(82,047)	$	(17,217)	$	(455,633)	$	(58,849)
Net loss attributable to NET Power Inc.	$	(28,142)	$	(4,268)	$	(147,492)	$	(15,689)
Denominator
Weighted-average number shares outstanding, basic and diluted	77,699		72,177		77,350		72,036



Loss per share attributable to shareholders, basic and diluted	$	(0.36)	$	(0.06)	$	(1.91)	$	(0.22)

Only shares of Class A Common Stock participate in the Company’s undistributed earnings. As such, the Company’s undistributed earnings are allocated entirely to the Class A Common Stock based on the weighted-average number of shares of Class A Common Stock outstanding for the three and six months ended June 30, 2025 and 2024.

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Based on the amounts outstanding at June 30, 2025 and 2024, the Company excluded the following financial instruments from the computation of diluted loss per share because their inclusion would be anti-dilutive:


In thousands	June 30,
Anti-Dilutive Instruments	2025	2024
Public Warrants	8,621	8,622
Private Placement Warrants	10,900	10,900
Earnout Shares	329	329
BHES Bonus Shares	2,068	2,068
Unvested Class A OpCo Units	—	242
Vested Class A OpCo Units	142,331	142,476
Unvested RSUs	2,273	933
Unvested PSUs	322	128
Make-Whole Awards	1,257	1,257
Stock Options	6,506	2,460

Total	174,607	169,415

NOTE 12 — Income Taxes

As of June 30, 2025, the Company estimated its annual effective tax rate to be 1.96%, and recorded a deferred income tax benefit of $1.6 million and $1.2 million for the three and six months ended June 30, 2025. The annual effective tax rate varies from the statutory federal income tax rate due to amounts allocated to NCI, changes in the Company’s valuation allowance and other permanent items.

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We are currently assessing its impact on our consolidated financial statements, however, do not expect a material impact to the financial statements at this time.

Tax Receivable Agreement

In March 2025, due to the Company’s decision to pause new purchase commitments for Project Permian’s long-lead equipment and commencement of a value engineering exercise to determine project cost reductions and better understand Project Permian’s expected economic feasibility, the Company determined it was not more likely than not that its deferred tax assets subject to the Tax Receivable Agreement (“TRA”) would be realized and therefore, reduced the TRA liability to zero as payments under the TRA were not considered probable. Accordingly, in March 2025, the Company recognized a $21.3 million reduction in the Tax Receivable Agreement liability, which is recorded in Change in Tax Receivable Agreement liability in the condensed consolidated statements of operations for the six months ended June 30, 2025.

On May 12, 2025, pursuant to its rights under the TRA, the Company delivered to the agent of the TRA holders notice of the Company’s intent to terminate the TRA (the “Early Termination Notice”). No early termination payment was payable for any TRA holder. The Early Termination Notice became final and binding on June 12, 2025.

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NOTE 13 — Related Party Transactions

The following table summarizes the related party transactions included in the condensed consolidated statements of operations and comprehensive loss:


	Three Months Ended June 30,				Six Months Ended June 30,
$ in thousands	2025		2024		2025		2024



Master services agreement administrative costs	$	42	$	27	$	69	$	52


General and administrative	$	42	$	27	$	69	$	52

Master services agreement costs for Demonstration Plant	$	668	$	395	$	1,254	$	662
BHES JDA	20,178		11,819		38,005		20,165
Research and development	$	20,846	$	12,214	$	39,259	$	20,827

BHES Limited Notice to Proceed	19,533		—		19,533		—
Project development	$	19,533	$	—	$	19,533	$	—

The Company had $29.5 million and $6.5 million in current liabilities payable to related parties as of June 30, 2025 and December 31, 2024, respectively, on the condensed consolidated balance sheets related to the following services. These related party payables are unsecured and are due on demand.

Master Services Agreements

A significant shareholder provides the Company with patent administration services related to the development of the Net Power Cycle. These totals are included in General and administrative on the condensed consolidated statements of operations and comprehensive loss.

Another shareholder supports the Company with regard to general business oversight and with the operation of the Demonstration Plant. These totals are reflected in Research and development on the condensed consolidated statements of operations and comprehensive loss.

BHES JDA

On February 3, 2022, the Company entered into the Original JDA, which was subsequently amended and restated on June 30, 2022 and December 13, 2022 with BHES to invest in, develop, and deploy the Net Power Cycle in collaboration with the Company. The BHES JDA is settled in cash and issuances of equity in exchange for services related to the development and commercialization of the technology. The Company records the expense for services provided by BHES within Research and development on the condensed consolidated statements of operations and comprehensive loss. Upon the issuance of shares during the six months ended June 30, 2025, BHES’s ownership interest exceeded 5%; therefore, it is considered a related party for all periods presented.

The portion of BHES JDA costs that the Company pays with Class A OpCo Units and shares of Class B Common Stock is recorded within Additional paid-in capital on the condensed consolidated balance sheets and the condensed consolidated statement of mezzanine shareholders' equity and shareholders' equity. The following tables display the expense recognized in the consolidated statement of comprehensive income for

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shares distributed as payment for services rendered under the terms of the BHES JDA during the periods described below:


	Quantity		Expense Recognized
	Three Months Ended June 30,		Three Months Ended June 30,
in thousands	2025	2024	2025		2024
Class A OpCo Units	1,562	942	$	10,323	$	6,228
Class B Common Stock	1,562	942	—		—
Total			$	10,323	$	6,228


	Quantity	Expense Recognized
	Six Months Ended June 30,	Six Months Ended June 30,
in thousands		2025	2024	2025		2024

Class A OpCo Units		2,809	1,592	$	18,570	$	10,526
Class B Common Stock		2,809	1,592	—		—
Total				$	18,570	$	10,526

Shares issued as payment under the terms of the Amended and Restated JDA are issued at a discount expected to cause a total loss of approximately $17.5 million to the Company over the term of the agreement. The Company has incurred inception-to-date losses of $11.7 million related to such issuances. Additionally, if the volume-weighted average price of the Company’s stock for ten consecutive trading days (“10-Day VWAP”) immediately preceding the payment date for services under the BHES JDA is less than $4.00 per share (the “Floor Price”), an incremental cash payment is required for the difference between the 10-Day VWAP and the Floor Price (the “BHES JDA Make-Whole Payment”). As of June 30, 2025, the Company had $1.3 million in current liabilities payable to related parties on the condensed consolidated balance sheets related to the BHES JDA Make-Whole Payment. For the three and six months ended June 30, 2025, the Company incurred $1.4 million and $3.9 million related to the BHES JDA Make-Whole Payment.

BHES may earn additional shares (“BHES Bonus Shares”) if it meets certain proposed project milestones related to the development of our technology. The Company determined that BHES’s achievement of each of these milestones is probable; therefore, the Company recognizes the compensation cost associated with milestone share-based payments ratably over the expected service period. The following table disaggregates the variable share-based compensation payable to BHES should it meet its milestone objectives:


$ in thousands	Performance Period End Date	Compensation Cost Incurred To Date		Remaining Compensation Cost		Total Compensation Cost
BHES JDA	January 2027	$	24,216	$	3,129	$	27,345

BHES Limited Notice to Proceed

Through June 30, 2025, the Company has incurred $41.5 million under a Letter of Limited Notice to Proceed for the Purchase of KPEP Long Lead Time Items with BHES (the “BHES LNTP”), as amended, for the purchase of long-lead materials necessary for the procurement and manufacture of the turboexpander and related key process equipment and machinery for the Company’s first utility-scale power plant, along with related fees and services.

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NOTE 14 — Commitments and Contingencies

Litigation

From time to time, the Company is party to certain legal actions and claims. Other than any such ordinary routine litigation incidental to the business and except as described below, the Company is not currently a party to, nor is our property currently subject to, any material legal proceedings, and the Company is not aware of any such proceedings contemplated by governmental authorities.

On April 18, 2025, an alleged stockholder of the Company (the “Plaintiff”), individually and on behalf of all others similarly situated, filed a putative class action complaint for violation of federal securities laws against the Company, its Chief Executive Officer, President and Interim Chief Financial Officer, its former Chief Financial Officer and its former President and Chief Operating Officer (collectively, the “Defendants”) in the United States District Court for the Middle District of North Carolina (the “Complaint”). The Complaint purports to bring a federal securities class action on behalf of a class of persons and entities other than the Defendants who acquired the Company’s securities between June 9, 2023 and March 7, 2025 and asserts violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder. The Complaint alleges, among other things, that the Defendants made materially false and misleading statements related to the Company’s business, operations and prospects, including the timing and costs of developing Project Permian. The Plaintiff seeks, among other things, certification of a class, an award of unspecified compensatory damages, interest, costs and expenses, including attorneys’ fees and expert fees.

On May 29, 2025, an alleged stockholder of the Company, filed a derivative suit on behalf of the Company against the Company’s Chief Executive Officer, President and Interim Chief Financial Officer, its former Chief Financial Officer, its former President and Chief Operating Officer and its board of directors in the United States District Court for the Middle District of North Carolina, asserting claims for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, waste of corporate assets, and violations of federal securities laws (the “Derivative Complaint”). These claims are predicated on the same allegedly false and misleading statements regarding the time and capital needed to complete Project Permian that are the subject of the Complaint outlined above.

The Company intends to vigorously defend against the claims brought in both matters. In light of the complexity and ongoing and uncertain nature of the outstanding proceedings and inquiries, at this time we are unable to estimate a reasonably possible financial loss or range of financial loss, if any, that we may incur to resolve or settle these matters.

Asset Retirement Obligation

Under the terms of the lease for the Demonstration Plant, the Company is required to remove the Demonstration Plant and restore the land to post-clearing grade level. During 2024, the Company revised the estimate of its asset retirement obligation as a result of additional construction at the Demonstration Plant. The following table reconciles the beginning and ending balances of the asset retirement obligation as of the dates presented:


	June 30,		December 31,
$ in thousands	2025		2024
Asset retirement obligation, beginning of period	$	3,265	$	2,060
Revision of estimate	—		996
Accretion expense	162		209
Asset retirement obligation, end of period	$	3,427	$	3,265

Unconditional Purchase Obligations

The Company has committed to purchase industrial components for installation at its Demonstration Plant and its first commercial power plant. The Company pays for these components in installments aligned to contractual milestones. In accordance with ASC Topic 440, Commitments, the Company does not recognize these commitments on the condensed consolidated balance sheets.

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As of June 30, 2025, the Company had $46.4 million of remaining purchase obligations through February 2027 related to the BHES JDA, which is expected to be settled 50% in cash and 50% in common stock, plus any incremental cash payments that may be owed for periods where the 10-Day VWAP is less than $4.00 per share in the 10 trading days preceding the date on which shares are to be issued to BHES. In addition, the Company had $70.4 million of additional remaining asset purchase obligations through 2026. Refer to Note 13 — Related Party Transactions for additional information related to the BHES JDA.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following management’s discussion and analysis (“MD&A”) provides information that management believes is relevant to an assessment and understanding of our condensed consolidated results of operations and financial condition and includes forward-looking statements that involve risks, uncertainties and assumptions, including those described in “Cautionary Note Regarding Forward-Looking Statements” included in the forepart of this Quarterly Report on Form 10-Q (our “Quarterly Report”) and included in Part I, Item 1A Risk Factors in our Annual Report on Form 10-K for the year ended December 31, 2024 (our “Annual Report”), as filed with the SEC on March 10, 2025.

The following MD&A should be read in conjunction with our condensed consolidated financial statements and related notes included in Part 1, Item 1 in this Quarterly Report and our audited consolidated financial statements and related notes included in our Annual Report.

Overview

Net Power is a clean 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. The Net Power Cycle is designed to inherently capture CO2 while producing virtually no air pollutants such as SOX, NOX, and other particulates.

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, changes in tax policies and other incentives supporting carbon capture, our access to the capital needed to finance the development of utility and commercial-scale plants, and development of competing energy technologies sooner or at a lesser cost than the Net Power Cycle. 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. 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.

Specifically, on July 4, 2025, President Trump signed into law the One Big Beautiful Bill Act (“OBBBA”), a large piece of tax and spending legislation that has specific material effects for Net Power’s intended SN1 project and future pipeline. The OBBBA preserved the core elements of the 45Q tax credit for carbon sequestration and use, including eligibility for programs to efficiently monetize the credits (i.e., direct pay and transferability). The OBBBA also created parity in 45Q credit value for carbon emissions used in enhanced oil recovery (“EOR”); eligible projects capturing carbon emissions for EOR that would have previously been eligible for a $60/ton credit will now be eligible for the full value of $85/ton. Net Power expects this increase in credit value to materially improve the economics for projects capturing emissions for EOR, strengthening economics for projects specifically in the Permian Basin and improving the pathway for broad commercialization of the Net Power technology, including projects capturing carbon emissions for permanent sequestration. The OBBBA included additional other provisions with expected fewer material effects on Net Power projects and indirect effects on the broader market for clean power; the full implications of those changes are not yet clear.

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Additionally, the Trump Administration has started the process to change regulations on new natural gas-fired power plants. Currently, the U.S. Environmental Protection Agency’s regulations for new gas turbines that run above a 40% capacity factor require such facilities to meet a 90% capture rate by 2032. These regulations were proposed to be repealed on June 11, 2025. The implications of the potential repeal of these regulations are uncertain at this time, but we do not expect such repeal to have a material impact on the market for Net Power’s technology.

Commencing Commercial Operations

Over the next several years, Net Power plans to conduct additional research and equipment validation testing campaigns at its Demonstration Plant. In 2024, Net Power began purchasing initial long-lead materials for its first utility-scale power plant (“SN1”) 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 indicative cost estimate at that time was 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 Company suspended further long-lead equipment releases but value engineering and certain development work remains in progress as of August 2025. 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.

During the second quarter of 2025, alongside ongoing value engineering efforts to lower the cost of Net Power’s core product, we initiated a techno-economic study to assess the integration of combustion gas turbines into Net Power projects. This configuration enhances project economics and accelerates market deployment, aligning with customers’ increasing demand for scalable, reliable power solutions while advancing our mission to provide clean, dependable energy globally. We are exploring the adoption of this configuration for Project Permian and future Net Power projects.

In addition to the value engineering process discussed above, major remaining development activities relating to completing construction of SN1 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, obtaining the financing required to achieve a final investment decision, and constructing and commissioning the facility.

Key Components of Results of Operations

We are a development stage company and our historical results may not be indicative of our future results. Accordingly, 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.

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Results of Operations

Comparison of the Three Months Ended June 30, 2025 to the Three Months Ended June 30, 2024

The following table sets forth our condensed consolidated results of operations data for the periods presented:


	Three Months Ended June 30,				$ Change		% Change
$ in thousands	2025		2024

Revenue	$	—	$	238	$	(238)	(100)	%
Cost of revenue	—		30		(30)		(100)	%
Gross profit	—		208
Operating expenses
General and administrative	13,578		7,787		5,791		74	%
Sales and marketing	1,492		876		616		70	%
Research and development	26,618		15,483		11,135		72	%
Project development	27,198		869		26,329		3,030	%

Depreciation, amortization, and accretion	21,669		20,047		1,622		8	%
Total operating expenses	90,555		45,062
Operating loss	(90,555)		(44,854)
Other income
Interest income	5,466		9,029		(3,563)		(39)	%
Change in Earnout Shares liability and Warrant liability	1,415		16,249		(14,834)		(91)	%

Other income	5		6		(1)		(17)	%
Net other income	6,886		25,284
Net loss before income tax	(83,669)		(19,570)
Income tax benefit	1,622		2,353		(731)		(31)	%
Net loss after income tax	(82,047)		(17,217)
Net loss attributable to non-controlling interests	(53,905)		(12,949)
Net loss attributable to NET Power Inc.	$	(28,142)	$	(4,268)

General and administrative

General and administrative expenses consist primarily of personnel-related expenses associated with our general and administrative organization and professional fees for legal, accounting, information technology, and other consulting services. 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 the payment of severance to these employees, as well as the acceleration of vesting of certain stock-based compensation. We do not expect to incur such costs in future quarters. General and administrative expenses increased by $5.8 million, or 74%, for the three months ended June 30, 2025, as compared to the same period in 2024. This increase was primarily due to $3.1 million of severance costs and $1.1 million of accelerated share-based compensation related to the termination of certain executive management. Additionally, we incurred greater professional fees for engineering and tax consulting as well as higher information technology expenses for the three months ended June 30, 2025, as compared to the same period in 2024.

Sales and marketing

Sales and marketing expenses consist primarily of personnel-related and consultant costs directly associated with our sales and marketing activities, which include general publicity efforts for the Company. Sales and marketing expenses increased by $0.6 million, or 70%, for the three months ended June 30, 2025, as compared

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to the same period in 2024. This increase was primarily attributable to costs associated with growth in employee headcount as well as severance costs and related accelerated stock-based compensation.

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. R&D expenses increased by $11.1 million, or 72%, for the three months ended June 30, 2025, as compared to the same period in 2024. This increase was primarily due to more activity under the BHES JDA and ongoing validation testing campaigns at the Demonstration Plant that began in the fourth quarter of 2024. The Company also expanded its engineering headcount growth to support technology development efforts. Additionally, the Company incurred $1.4 million related to the JDA Make-Whole Payment for the three months ended June 30, 2025; no such payment was incurred for the same period in 2024.

Project development

Project development expenses consist of labor expenses and fees paid to third parties developing commercial scale projects. Project development expenses increased by $26.3 million, or 3,030%, for the three months ended June 30, 2025, as compared to the same period in 2024. Beginning in March 2025, the Company began expensing costs associated with Project Permian as the Company suspended further long lead equipment releases for the project while it performs a value engineering process to evaluate the feasibility of the project. For the three months ended June 30, 2025, the Company incurred $19.5 million under the BHES LNTP related to certain milestones and $7.3 million of costs related to Project Permian.

Depreciation, amortization, and accretion

Depreciation, amortization and accretion expenses consist primarily of depreciation on our Demonstration Plant and amortization of intangible assets. Depreciation, amortization and accretion expense increased by $1.6 million, or 8%, for the three months ended June 30, 2025, as compared to the same period in 2024, primarily due to new additions to the Demonstration Plant.

Interest income

Interest income decreased by $3.6 million, or 39%, for the three months ended June 30, 2025, as compared to the same period in 2024. Interest income decreased due to lower interest-bearing cash and investment balances, decline in interest rates, and lower investment accretion.

Change in Earnout Shares liability and Warrant liability

The change in Earnout Shares liability and Warrant liability decreased by $14.8 million, or 91%, for the three months ended June 30, 2025, as compared to the same period in 2024. The change was primarily due to the changes in the market price of our Class A Common Stock, which correlates to the change in value of our Warrants. The Company’s stock price decreased $0.16 per share during the three months ended June 30, 2025 compared to a decrease of $1.56 per share for the three months ended June 30, 2024.

Income tax benefit

Income tax benefit was $1.6 million for the three months ended June 30, 2025, compared to an income tax benefit of $2.4 million for the same period in 2024. This change was due to an increase in the Company’s valuation allowance, partially offset by a favorable permanent difference related to the change in the value of the Warrant liability as compared to the same period in 2024.

Net loss attributable to non-controlling interests

Net loss attributable to non-controlling interest was 64.4% of net loss before income tax for the three months ended June 30, 2025, as compared to 66.2% of net loss for the three months ended June 30, 2024. The change in

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the non-controlling interests was due to exchanges by OpCo members of Class A OpCo units for Class A PubCo shares, partially offset by the additional issuance of Class A OpCo units under the BHES JDA.

Results of Operations

Comparison of the Six Months Ended June 30, 2025 to the Six Months Ended June 30, 2024

The following table sets forth our condensed consolidated results of operations data for the periods presented:


	Six Months Ended June 30,
$ in thousands	2025		2024		$ Change	% Change
Revenue	$	—	$	238	(238)	(100)	%
Cost of revenue	—		30		(30)	(100)	%
Gross profit	—		208
Operating expenses
General and administrative	22,270		14,097		8,173	58	%
Sales and marketing	2,679		1,628		1,051	65	%
Research and development	49,218		26,751		22,467	84	%
Project development	31,687		1,291		30,396	2,354	%
Goodwill impairment and other charges	415,897		—		415,897	n/m
Depreciation, amortization, and accretion	43,356		40,079		3,277	8	%
Total operating expenses	565,107		83,846
Operating loss	(565,107)		(83,638)
Other income
Interest income	11,345		16,719		(5,374)	(32)	%
Change in Earnout Shares liability and Warrant liability	75,580		1,671		73,909	4,423	%
Change in Tax Receivable Agreement liability	21,317		—		21,317	n/a
Other income	6		8		(2)	(25)	%
Net other income	108,248		18,398
Net loss before income tax	(456,859)		(65,240)
Income tax benefit	1,226		6,391		(5,165)	(81)	%
Net loss after income tax	(455,633)		(58,849)
Net loss attributable to non-controlling interests	(308,141)		(43,160)
Net loss attributable to Net Power Inc.	$	(147,492)	$	(15,689)

General and administrative

General and administrative expenses increased by $8.2 million, or 58%, for the six months ended June 30, 2025, as compared to amounts for the six months ended June 30, 2024. This increase was primarily due to $3.1 million of severance costs and $1.1 million of share-based compensation related to the termination of certain management team members. Growth in employee headcount and higher stock based compensation also contributed to an overall increase in compensation expense. Additionally, we incurred greater professional fees for engineering, accounting, and legal services as well as higher information technology costs in the six months ended June 30, 2025, as compared to the six months ended June 30, 2024.

Sales and marketing

Sales and marketing expenses consist primarily of personnel-related costs and consultants costs directly associated with our sales and marketing activities, which include general publicity efforts for the Company. Sales and marketing expenses increased by $1.1 million, or 65%, for the six months ended June 30, 2025, as

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compared to the six months ended June 30, 2024. This increase was primarily attributable to increased headcount as well as severance costs and related accelerated stock-based compensation.

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. R&D expenses increased by $22.5 million, or 84%, for the six months ended June 30, 2025, as compared to amounts for the six months ended June 30, 2024. This increase was primarily due to the timing of development activities under the BHES JDA and the validation testing campaigns at the Demonstration Plant that began in the fourth quarter of 2024. The Company also expanded its engineering headcount growth to support technology development efforts. Additionally, R&D expenses for the six months ended June 30, 2025 include $3.9 million for the BHES JDA Make-Whole Payments; there was no such payment due for the same period in 2024.

Project development

Project development expenses consist of labor expenses and fees paid to third parties developing commercial scale projects. Project development expenses increased by $30.4 million, or 2,354%, for the six months ended June 30, 2025, as compared the six months ended June 30, 2024. Beginning in March 2025, the Company began expensing costs associated with Project Permian as the Company suspended further long lead equipment releases for the project while it performs a value engineering process to evaluate the feasibility of the project. For the six months ended June 30, 2025, the Company incurred $19.5 million under the BHES LNTP related to certain milestones and $11.1 million of costs related to Project Permian.

Goodwill impairment and other charges

Goodwill impairment and other charges consists of $359.8 million related to goodwill impairment and $56.1 million in construction-in-progress costs associated with Project Permian. The Company fully impaired goodwill during the six months ended June 30, 2025 due to a change in the Company’s business plan and related sustained decrease in the Company’s market capitalization. Additionally, the Company expensed costs associated with the construction of Project Permian 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.

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 expense increased by $3.3 million, or 8%, for the six months ended June 30, 2025, as compared to amounts for the same period in 2024, primarily due to new additions to the Demonstration Plant.

Interest income

Interest income decreased by $5.4 million, or 32%, for the six months ended June 30, 2025, as compared to amounts for the same period in 2024. This decrease was due to lower interest-bearing cash and investment balances, decline in interest rates, and lower investment accretion.

Change in Earnout Shares liability and Warrant liability

The change in Earnout Shares liability and Warrant liability increased by $73.9 million, or 4,423%, for the six months ended June 30, 2025, as compared to the same period in 2024. This increase is primarily due to the change in the fair value of the Private Placement Warrants and Public Warrants, which was driven by changes

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in our stock price. The Company’s stock price decreased $8.12 per share during the six months ended June 30, 2025 compared to a decrease of $0.27 per share for the six months ended June 30, 2024.

Change in Tax Receivable Agreement liability

In March 2025, the Company reduced the TRA liability of $21.3 million to zero as payments related to the TRA were not considered probable. In May 2025, pursuant to its rights under the TRA, the Company delivered to the agent of the TRA holders notice of the Company’s intent to terminate the TRA (the “Early Termination Notice”). No early termination payment was payable to any TRA holder. The Early Termination Notice became final and binding on June 12, 2025.

Income tax benefit

Our income tax benefit decreased by $5.2 million for the six months ended June 30, 2025, as compared to amounts for the six months ended June 30, 2024. This change was due to an increase in the Company’s valuation allowance, partially offset by a favorable permanent difference related to the change in the value of the Warrant liability as compared to the same period in 2024. In addition, the Company finalized deferred taxes as of the Closing Date of the Business Combination in 2024.

Net loss attributable to non-controlling interests

Net loss attributable to non-controlling interest was 64.4% of net loss before income tax for the six months ended June 30, 2025, as compared to 66.2% of net loss for the six months ended June 30, 2024. The change in the non-controlling interests was due to exchanges by OpCo members of Class A OpCo units for Class A PubCo shares, partially offset by the additional issuance of Class A OpCo units under the BHES JDA.

Liquidity and Capital Resources

Our principal sources of liquidity are cash, short-term investments and investments in highly liquid available-for-sale securities. Historically, our sources of liquidity have also included raising capital through the sale of equity. 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 and our near-term business operations, including our contractual obligations and other commitments. Our current liquidity needs primarily involve R&D activities for the ongoing development of our technology, general and administrative costs, and costs to progress certain development activities related to SN1.

The following table summarizes our liquidity position:


	June 30,		December 31,
in thousands	2025		2024
Cash and cash equivalents	$	284,024	$	329,230
Short-term investments	—		100,000
Available-for-sale securities	188,287		100,972
Total liquidity	$	472,311	$	530,202

The available-for-sale securities are comprised of investment grade, fixed income securities, and the short-term investments are comprised of a single 12-month certificate of deposit custodied by a domestic banking institution. Additionally, our current liabilities were $41.8 million at June 30, 2025.

We believe we have the ability to manage our operating costs, including R&D expenditures, such that our existing liquidity will be sufficient to fund our obligations for the next 12 months following the filing of this Report. 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 we may require additional funding. Specifically, we will require additional funding in

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order to successfully construct our first utility-scale plant and to originate additional Net Power plant opportunities.

Cash Flow Summary

The following table shows our cash flows from operating activities, investing activities and financing activities for the periods presented:


	Six Months Ended June 30,
in thousands	2025		2024
Net cash used in operating activities	$	(44,974)	$	(10,837)
Net cash used in investing activities	$	(109)	$	(118,591)
Net cash (used in) provided by financing activities	$	(99)	$	61

Operating Activities

Cash used in operating activities increased $34.1 million for the six months ended June 30, 2025, as compared to the same period in 2024. 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. This change was primarily due to higher R&D costs, including costs incurred under the BHES JDA, as we commenced the validation testing campaigns at our Demonstration Plant during the fourth quarter of 2024, project development costs, and the expansion of the Company’s corporate infrastructure throughout 2024 and into 2025. We expect our cash used in operating activities to increase significantly before we start to generate any material cash inflows from our operations as costs related to Project Permian are being expensed pending the results of the value engineering process.

Investing Activities

During the six months ended June 30, 2025, net cash used in investing activities decreased $118.5 million as compared to the same period in 2024. Cash used in investing activities for the six months ended June 30, 2025 primarily reflects the maturity of the Company’s certificate of deposit and the reinvestment of those funds into available-for-sale securities, along with capital expenditures related to the Demonstration Plant and Project Permian during the period in which costs were capitalized. Cash used in investing activities for the six months ended June 30, 2024 primarily reflects the initial investments in available-for-sale securities as well as capital expenditures related to Project Permian and the Demonstration Plant during that period.

Financing Activities

Our cash provided by financing activities was generally consistent for the six months ended June 30, 2024, as compared to the same period in 2024.

Commitments and Contractual Obligations

Asset Retirement Obligation

We hold a lease for approximately 218,900 square feet of land under the Demonstration Plant. 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 oxygen supply agreement may be terminated by us or by the lessor upon 24 months’ written notice prior to the expiration date of its current term. 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 liability of $3.4 million and $3.3 million as of June 30, 2025 and December 31, 2024, respectively.

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Leases

The Company leases corporate office space in Durham, North Carolina, and Houston, Texas. The Company also leases land in West Texas for Project Permian from a subsidiary of Occidental Petroleum. Additionally, the Company leases two office trailers at the Demonstration Plant, as well as a warehouse, in La Porte, Texas.

As of June 30, 2025, future minimum lease payments attributable to the Company’s operating and finance lease arrangements are approximately $5.0 million and $0.2 million, respectively.

Joint Development Agreement

As of June 30, 2025 and December 31, 2024, 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, which assumes a fixed price per share. As of June 30, 2025, we recognized approximately $46.8 million of inception-to-date cash expenses and approximately $46.8 million of inception-to-date share-based expenses related to the BHES JDA. In addition, the Company may be required to make additional cash payments to BHES during periods when the volume-weighted average price of our Class A Common Stock is less than $4.00 per share in the 10 trading days preceding applicable quarterly share issuances under the terms of the BHES JDA. As of June 30, 2025, the Company had $1.3 million in current liabilities payable to related parties on the condensed consolidated balance sheets related to the BHES JDA Make-Whole Payment. For the three and six months ended June 30, 2025, the Company incurred $1.4 million and $3.9 million related to the BHES JDA Make-Whole Payment.

Off-Balance Sheet Arrangements

As of June 30, 2025 and December 31, 2024, we have not engaged in any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

Purchase Commitments

As of June 30, 2025, we have committed to purchase certain components of industrial machinery for use at our Demonstration Plant and at SN1. The total gross commitments totaled $146.7 million. As of June 30, 2025, there was $70.4 million remaining related to these commitments.

Critical Accounting Policies and Estimates

There have been no material changes to our discussion of critical accounting estimates from those set forth in our Annual Report.

Emerging Growth Company Accounting Election

Section 102(b)(1) of the Jumpstart our Business Startups Act of 2012 (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. The JOBS Act provides that a company can elect not to take advantage of the extended transition period and comply with the requirements that apply to non-EGCs, and any such election to not take advantage of the extended transition period is irrevocable. 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 3. Quantitative and Qualitative Disclosures About Market Risk

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer who is also our principal financial officer, we conducted an evaluation of the effectiveness of our disclosure controls and procedures, as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of the end of the fiscal quarter ended June 30, 2025. Based on this evaluation, our principal executive officer and our principal financial officer concluded that our disclosure controls and procedures were effective as of June 30, 2025.

Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

No changes in our internal control over financial reporting occurred during the fiscal quarter ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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Part II - Other Information

Item 1. Legal Proceedings

From time to time, the Company is party to certain legal actions and claims. Other than any such ordinary routine litigation incidental to the business and except as described below, we are not currently a party to, nor is our property currently subject to, any material legal proceedings, and we are not aware of any such proceedings contemplated by governmental authorities.

On April 18, 2025, an alleged stockholder (the “Plaintiff”), individually and on behalf of all others similarly situated, filed a putative class action complaint for violation of federal securities laws against us, our Chief Executive Officer, President and Interim Chief Financial Officer, our former Chief Financial Officer and our former President and Chief Operating Officer (collectively, the “Defendants”) in the United States District Court for the Middle District of North Carolina (the “Complaint”). The Complaint purports to bring a federal securities class action on behalf of a class of persons and entities other than the Defendants who acquired our securities between June 9, 2023 and March 7, 2025 and asserts violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder. The Complaint alleges, among other things, that the Defendants made materially false and misleading statements related to our business, operations and prospects, including the timing and costs of developing Project Permian. The Plaintiff seeks, among other things, certification of a class, an award of unspecified compensatory damages, interest, costs and expenses, including attorneys’ fees and expert fees.

On May 29, 2025, an alleged stockholder of the Company filed a derivative suit on behalf of the Company against our Chief Executive Officer, President and Interim Chief Financial Officer, our former Chief Financial Officer, our former President and Chief Operating Officer and our board of directors in the United States District Court for the Middle District of North Carolina, asserting claims for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, waste of corporate assets, and violations of federal securities laws (the “Derivative Complaint”). These claims are predicated on the same allegedly false and misleading statements regarding the time and capital needed to complete Project Permian that are the subject of the Complaint outlined above.

We intend to vigorously defend against the claims brought in both matters. In light of the complexity and ongoing and uncertain nature of the outstanding proceedings and inquiries, at this time we are unable to estimate a reasonably possible financial loss or range of financial loss, if any, that we may incur to resolve or settle these matters.

Item 1A. Risk Factors

As a smaller reporting company, we are not required to provide the information called for by this Item. However, for a discussion of the material risks, uncertainties and other factors that could have a material effect on us, please refer to Part I, Item 1A. “Risk Factors” in our Annual Report.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

On May 7, 2025, the Company issued 1,247,582 shares of Class B Common Stock and OpCo issued 1,247,582 Class A units to BHES as payment for costs incurred pursuant to the Amended and Restated JDA during the fourth quarter of 2024. The issuances by the Company and OpCo were exempt from registration under the Securities Act by virtue of Section 4(a)(2) of the Securities Act. These transactions did not involve any public offering, any underwriters, any underwriting discounts or commissions, or any general solicitation or advertising.

Item 3. Defaults Upon Senior Securities

None.

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Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Insider Trading Arrangements

During the three months ended June 30, 2025, none of our directors or “officers” (as such term is defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement” (as each term is defined in Item 408(a) of Regulation S-K).

Item 6. Exhibits


Exhibit Number			Description
2.1+			Business Combination Agreement, dated as of December 13, 2022, by and among Rice Acquisition Corp. II, Rice Acquisition Holdings II LLC, Topo Buyer Co, LLC, Topo Merger Sub, LLC and NET Power, LLC (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on December 14, 2022).
2.2			First Amendment to the Business Combination Agreement, dated as of April 23, 2023, by and among Topo Buyer Co, LLC and NET Power, LLC (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K filed with the SEC on April 24, 2023).
3.1			Certificate of Incorporation of NET Power Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 14, 2023).
3.2			Bylaws of NET Power Inc. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the SEC on June 14, 2023).
31.1			Certification of Principal Executive Officer and Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1			Certification of Chief Executive Officer (Principal Executive Officer and Principal Financial Officer) Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS			Inline XBRL Instance Document.
101.SCH			Inline XBRL Taxonomy Extension Schema Document.
101.CAL			Inline XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF			Inline XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB			Inline XBRL Taxonomy Extension Label Linkbase Document.
101.PRE			Inline XBRL Taxonomy Extension Presentation Linkbase Document.
0.104			Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).


+			Certain schedules or similar attachments to this exhibit have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company agrees to provide a copy of any omitted schedule or similar attachment to the SEC upon request.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: August 11, 2025 NET Power Inc.

By: /s/ Caleb C. Van Dolah

Name: Caleb C. Van Dolah

Title: Controller

(Authorized Officer and Principal

Accounting Officer)

Source:

FAQ

What were NET Power (NPWR)'s cash and liquid investments at June 30, 2025?

Cash and cash equivalents were $284.0 million and available-for-sale investments were $188.3 million, giving total liquidity of $472.3 million.

Why did NET Power record a large goodwill impairment in 2025?

Management concluded a change in the companys business plan and a sustained decrease in market capitalization made it more likely than not that goodwill was impaired, resulting in a $359.8 million impairment.

What is the financial impact of Project Permian actions?

The company paused further long-lead equipment releases and expensed $56.1 million of costs related to Project Permian; the project timeline was deferred pending value engineering.

Did NET Power eliminate any future liabilities?

Yes. The company reduced its Tax Receivable Agreement liability by $21.3 million in March 2025 and delivered notice to terminate the TRA, which became final in June 2025.

Are there legal risks disclosed by NPWR?

Yes. The company disclosed a putative securities class action and a derivative suit alleging false or misleading statements related to Project Permian; management cannot estimate potential loss exposure.

What are NET Powers remaining material contractual commitments?

As of June 30, 2025, the company had $46.4 million remaining BHES purchase obligations and $70.4 million of additional asset purchase commitments through 2026.

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[10-Q] NET Power Inc. Quarterly Earnings Report

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FAQ

What were NET Power (NPWR)'s cash and liquid investments at June 30, 2025?

Why did NET Power record a large goodwill impairment in 2025?

What is the financial impact of Project Permian actions?

Did NET Power eliminate any future liabilities?

Are there legal risks disclosed by NPWR?

What are NET Powers remaining material contractual commitments?

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[10-Q] NET Power Inc. Quarterly Earnings Report

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Financial Analyst negative

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FAQ

What were NET Power (NPWR)'s cash and liquid investments at June 30, 2025?

Why did NET Power record a large goodwill impairment in 2025?

What is the financial impact of Project Permian actions?

Did NET Power eliminate any future liabilities?

Are there legal risks disclosed by NPWR?

What are NET Powers remaining material contractual commitments?

NYSE:NPWR

NPWR Rankings

NPWR Latest News

NPWR Latest SEC Filings

NPWR Stock Data

What are NET Powers remaining material contractual commitments?