PROSPECTUS SUPPLEMENT NO. 1 | Filed pursuant to Rule 424(b)(3) |
(To prospectus dated September 25, 2023) | Registration No. 333-273183 |
NET POWER INC.
204,903,904 SHARES OF CLASS A COMMON STOCK
10,900,000 WARRANTS TO PURCHASE SHARES OF CLASS A COMMON STOCK
This prospectus supplement is being filed to update and supplement the information contained in the prospectus dated September 25, 2023 (the “Prospectus”), with the information contained in our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (the “SEC”) on November 14, 2023 (the “Quarterly Report”). Accordingly, we have attached the Quarterly Report to this prospectus supplement.
The Prospectus and this prospectus supplement relate to the resale from time to time of 204,903,904 shares of our Class A common stock, par value $0.0001 per share (the “Class A Common Stock”), by the selling security holders named in the Prospectus or their permitted transferees, which consist of (i) 54,044,995 shares of Class A Common Stock issued at a purchase price of $10.00 per share in a private placement that closed substantially concurrently with the consummation of the Merger (as defined in the Prospectus), (ii) 2,500 shares of Class A Common Stock issued to Rice Acquisition Sponsor II LLC (“Sponsor”) in a private placement prior to the consummation of the initial public offering (the “IPO”) of Rice Acquisition Corp. II (“RONI”), at an effective price of approximately $0.0036 per share, (iii) 10,900,000 shares of Class A Common Stock issuable upon exercise of the Private Placement Warrants (as defined below), originally acquired at a purchase price of $1.00 per warrant, (iv) 7,432,688 shares of Class A Common Stock issuable upon redemption of the 7,432,688 units of NET Power Operations LLC (f/k/a Rice Acquisition Holdings II LLC) (“Opco”) held by the initial shareholders of RONI or transferees thereof, all of which were issued prior to the consummation of the IPO at an effective price of approximately $0.0036 per unit, (v) 132,205,114 shares of Class A Common Stock issued or issuable upon redemption of the 132,205,114 units of Opco (“Opco Units”) issued as consideration upon consummation of the Merger to certain Legacy NET Power Selling Securityholders (as defined in the Prospectus) at a value of $10.00 per unit, and (vi) 318,607 shares of Class A Common Stock issuable upon the redemption of the 318,607 Opco Units issued to Baker Hughes Energy Services LLC (an affiliate of Baker Hughes Company) for services provided by Nuovo Pignone International, S.r.l. (an affiliate of Baker Hughes Company) pursuant to the Amended and Restated JDA (as defined in the Prospectus). In addition, the Prospectus and this prospectus supplement relates to the resale from time to time of the 10,900,000 warrants (the “Private Placement Warrants”) issued to Sponsor at a purchase price of $1.00 per warrant in a private placement that closed simultaneously with the consummation of the IPO. Each Private Placement Warrant is exercisable to purchase for $11.50 one share of Class A Common Stock, subject to adjustment.
This prospectus supplement updates and supplements the information in the Prospectus and is not complete without, and may not be delivered or utilized except in combination with, the Prospectus, including any other amendments or supplements thereto. This prospectus supplement should be read in conjunction with the Prospectus, and if there is any inconsistency between the information in the Prospectus and this prospectus supplement, you should rely on the information in this prospectus supplement. The information in this prospectus supplement modifies and supersedes, in part, the information in the Prospectus. Any information in the Prospectus that is modified or superseded shall not be deemed to constitute a part of the Prospectus except as modified or superseded by this prospectus supplement.
You should not assume that the information provided in this prospectus supplement or the Prospectus is accurate as of any date other than their respective dates. Neither the delivery of this prospectus supplement and Prospectus, nor any sale made hereunder, shall under any circumstances create any implication that there has been no change in our affairs since the date of this prospectus supplement or that the information contained in this prospectus supplement or the Prospectus is correct as of any time after the date of that information.
The Class A Common Stock and warrants initially sold as part of the units issued in the IPO (the “Public Warrants”) are listed on the New York Stock Exchange (the “NYSE”) under the symbols “NPWR” and “NPWR WS,” respectively. On November 13, 2023, the last sale price of the Class A Common Stock and the Public Warrants as reported on the NYSE were $13.32 per share and $3.84 per warrant, respectively.
Investing in our securities involves certain risks, including those that are described in the section titled “Risk Factors” beginning on page 8 of the Prospectus.
Neither the SEC nor any state securities commission has approved or disapproved of the securities to be issued under the Prospectus or determined if the Prospectus or this prospectus supplement is truthful or complete. Any representation to the contrary is a criminal offense.
The date of this prospectus supplement is November 14, 2023.
x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
o | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 98-1580612 | ||||
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
320 Roney St. Suite 200 Durham, NC | 27701 | ||||
(Address of Principal Executive Offices) | (Zip Code) |
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 WS | The New York Stock Exchange |
Large accelerated filer | o | Accelerated filer | o | ||||||||
Non-accelerated filer | x | Smaller reporting company | x | ||||||||
Emerging growth company | x |
Page | ||||||||
Certain Defined Terms | ||||||||
Cautionary Note Regarding Forward-Looking Statements | ||||||||
Financial Statements (Unaudited) | ||||||||
Consolidated Balance Sheets (Unaudited) | ||||||||
Consolidated Statements of Cash Flows (Unaudited) | ||||||||
September 30, 2023 (Successor) | December 31, 2022 (Predecessor) | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash | $ | 545,248 | $ | 5,164 | ||||
Short term investments | 100,000 | — | ||||||
Trade receivables, net | — | 352 | ||||||
Interest receivable | 2,903 | — | ||||||
Prepaid expenses | 2,662 | 184 | ||||||
Other current assets | 40 | 1,795 | ||||||
Total Current Assets | 650,853 | 7,495 | ||||||
Long Term Assets | ||||||||
Intangible assets, net | 1,324,078 | 263 | ||||||
Goodwill | 423,953 | — | ||||||
Property, plant and equipment, net | 91,758 | 69,595 | ||||||
Lease right-of-use asset | 181 | 784 | ||||||
Total Long Term Assets | 1,839,970 | 70,642 | ||||||
Total Assets | $ | 2,490,823 | $ | 78,137 | ||||
LIABILITIES AND EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ | 1,687 | $ | 577 | ||||
Accrued liabilities | 7,431 | 2,392 | ||||||
Due to related parties | 288 | 178 | ||||||
Lease liability | 3 | 130 | ||||||
Option liability | — | 5,174 | ||||||
Total Current Liabilities | 9,409 | 8,451 | ||||||
Long Term Liabilities | ||||||||
Due to related parties | — | 2,212 | ||||||
Earnout shares liability | 4,546 | — | ||||||
Warrant liability | 140,534 | — | ||||||
Asset retirement obligation | 2,018 | 2,416 | ||||||
Lease liability | — | 656 | ||||||
TRA liability | 9,376 | — | ||||||
Deferred taxes | 63,609 | — | ||||||
Total Long Term Liabilities | 220,083 | 5,284 | ||||||
Total Liabilities | 229,492 | 13,735 | ||||||
Commitments and Contingencies (Note N) | ||||||||
Mezzanine Shareholders' and Members' Equity | ||||||||
Redeemable non-controlling interests in subsidiary | 2,157,310 | — | ||||||
Shareholders’ and Members’ Equity |
Capital stock 4,987,845 units authorized; 3,722,355 units issued and outstanding as of December 31, 2022 (Predecessor) | — | 262,622 | ||||||
Preference shares, $.0001 par value; 1,000,000 shares authorized; no shares issued or outstanding as of September 30, 2023 (Successor) & December 31, 2022 (Predecessor) | — | — | ||||||
Class A Common Stock, $.0001 par value; 520,000,000 shares authorized; 71,014,190 shares issued and outstanding as of September 30, 2023 (Successor) & no shares issued and outstanding as of December 31, 2022 (Predecessor) | 7 | — | ||||||
Class B Common Stock, $.0001 par value; 310,000,000 shares authorized; 141,529,513 shares issued and outstanding as of September 30, 2023 (Successor) & no shares issued and outstanding as of December 31, 2022 (Predecessor) | 14 | — | ||||||
Additional paid-in-capital | 193,361 | 26,288 | ||||||
Accumulated other comprehensive income | — | 17 | ||||||
Accumulated Deficit | ||||||||
Members’ equity | — | (224,525) | ||||||
Shareholders’ equity | (89,361) | — | ||||||
Total Shareholders' and Members' Equity | 104,021 | 64,402 | ||||||
Total Liabilities, Mezzanine Shareholders' and Members' Equity and Shareholders’ and Members’ Equity | $ | 2,490,823 | $ | 78,137 |
Period from | Period from | |||||||||||||||||||
July 1 – September 30, 2023 (Successor) | July 1 – September 30, 2022 (Predecessor) | June 8 – September 30, 2023 (Successor) | January 1 – June 7, 2023 (Predecessor) | January 1 – September 30, 2022 (Predecessor) | ||||||||||||||||
Revenue | ||||||||||||||||||||
Revenue | $ | — | $ | 141 | $ | — | $ | 175 | $ | 574 | ||||||||||
Cost of revenue | 3 | 11 | 3 | 3 | 189 | |||||||||||||||
Cost of revenue - related party | — | 38 | — | — | 79 | |||||||||||||||
Gross Profit (Loss) | (3) | 92 | (3) | 172 | 306 | |||||||||||||||
Operating Expenses | ||||||||||||||||||||
General and administrative | 7,949 | 3,960 | 32,250 | 11,903 | 12,531 | |||||||||||||||
General and administrative – related party | 147 | 162 | 158 | 228 | 383 | |||||||||||||||
Sales and marketing | 931 | 136 | 1,087 | 869 | 504 | |||||||||||||||
Research and development | 8,658 | 590 | 14,401 | 1,643 | 2,264 | |||||||||||||||
Research and development – related party | 346 | 4,173 | 433 | 12,676 | 10,550 | |||||||||||||||
Project development | 582 | — | 698 | 1,191 | — | |||||||||||||||
Option settlement - related party | — | — | 79,054 | — | — | |||||||||||||||
Depreciation, amortization and accretion | 20,052 | 3,325 | 24,978 | 5,812 | 9,974 | |||||||||||||||
Total Operating Expenses | 38,665 | 12,346 | 153,059 | 34,322 | 36,206 | |||||||||||||||
Operating Loss | (38,668) | (12,254) | (153,062) | (34,150) | (35,900) | |||||||||||||||
Other Income (Expense) | ||||||||||||||||||||
Interest income (expense) | 8,675 | — | 10,800 | 4 | (1,470) | |||||||||||||||
Other income (expense) | (61,983) | 34 | (60,970) | (30) | 35 | |||||||||||||||
Net Other Income (Expense) | (53,308) | 34 | (50,170) | (26) | (1,435) | |||||||||||||||
Net Loss before Income Tax | (91,976) | (12,220) | (203,232) | (34,176) | (37,335) | |||||||||||||||
Income tax expense (benefit) | (10) | — | (681) | — | — | |||||||||||||||
Net Loss after Income Tax | (91,966) | (12,220) | (202,551) | (34,176) | (37,335) | |||||||||||||||
Net Loss attributable to non-controlling interests | (61,402) | — | (136,987) | — | — | |||||||||||||||
Net Loss attributable to NET Power Inc. | (30,564) | (12,220) | (65,564) | (34,176) | (37,335) | |||||||||||||||
Other Comprehensive Gain (Loss) | ||||||||||||||||||||
Foreign currency translation gain (loss) | 1 | (5) | — | — | (5) | |||||||||||||||
Total Other Comprehensive Gain (Loss) | 1 | (5) | — | — | (5) | |||||||||||||||
Comprehensive Loss | (91,965) | (12,225) | (202,551) | (34,176) | (37,340) | |||||||||||||||
Comprehensive Loss attributable to non-controlling interests | (61,402) | — | (136,987) | — | — | |||||||||||||||
Comprehensive Loss attributable to NET Power Inc. | $ | (30,563) | $ | (12,225) | $ | (65,564) | $ | (34,176) | $ | (37,340) | ||||||||||
Net Loss per share of Class A Common Stock or per membership interest | $ | (0.44) | $ | (10.69) | $ | (0.96) | $ | (9.07) | $ | (13.15) | ||||||||||
Weighted average shares of Class A Common Stock or membership interests, basic and diluted | 68,966,972 | 1,143,430 | 68,644,032 | 3,766,871 | 2,838,388 |
Class A Common Stock | Class B Common Stock | Class A Ordinary Shares | Class B Ordinary Shares | Additional Paid-in-Capital | Accumulated Deficit | Total Stockholders' Equity | Non-controlling Interests | Class A Ordinary Shares | Total Mezzanine Equity | ||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||
Balance at June 8, 2023 (Successor) | — | $ | — | — | $ | — | 2,500 | $ | — | 8,625,000 | $ | 1 | $ | — | $ | (98,966) | $ | (98,965) | $ | — | 34,500,000 | $ | 356,318 | $ | 356,318 | ||||||||||||||||||||||
Sponsor forfeiture of RONI Class B ordinary shares and reservation of earnout shares | — | — | — | — | — | — | (1,986,775) | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Redemption of Class A ordinary shares by RONI public shareholders | — | — | — | — | — | — | — | — | — | — | — | — | (21,195,224) | (218,983) | (218,983) | ||||||||||||||||||||||||||||||||
Redemption of Class A Common Stock | 3,606,657 | — | (3,606,657) | — | — | — | — | — | 50,526 | — | 50,526 | (50,526) | — | — | (50,526) | ||||||||||||||||||||||||||||||||
Conversion of RONI Class A and Class B ordinary shares into NET Power Inc. Class A and Class B Common Stock, respectively | 13,307,276 | 1 | 6,638,225 | 1 | (2,500) | — | (6,638,225) | (1) | 60,045 | — | 60,046 | 87,094 | (13,304,776) | (137,335) | (50,241) | ||||||||||||||||||||||||||||||||
Issuance of RONI Class A Common Stock to PIPE investors | 54,044,995 | 6 | — | — | — | — | — | — | 540,445 | — | 540,451 | — | — | — | — | ||||||||||||||||||||||||||||||||
Issuance of Class A Common Stock | 52,523 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Equity awards vested due to Business Combination | — | — | 8,356,635 | 1 | — | — | — | — | 542 | (542) | 1 | 109,639 | — | — | 109,639 | ||||||||||||||||||||||||||||||||
Issuance of RONI Class B Common Stock to former NET Power, LLC unitholders | — | — | 129,822,703 | 12 | — | — | — | — | (940) | 75,711 | 74,783 | 1,677,546 | — | — | 1,677,546 | ||||||||||||||||||||||||||||||||
Exercise of warrants | 2,739 | — | — | — | — | — | — | — | 47 | — | 47 | — | — | — | — | ||||||||||||||||||||||||||||||||
Member tax distributions | — | — | — | — | — | — | — | — | — | — | — | (181) | — | — | (181) | ||||||||||||||||||||||||||||||||
Establishment of liabilities under tax receivable agreement | — | — | — | — | — | — | — | — | (2,207) | — | (2,207) | — | — | — | — | ||||||||||||||||||||||||||||||||
Vesting of earnout shares | — | — | — | — | — | — | — | — | — | — | — | 9,055 | — | — | 9,055 | ||||||||||||||||||||||||||||||||
Amortization of share based payments | — | — | 318,607 | — | — | — | — | — | 261 | — | 261 | 6,312 | — | — | 6,312 | ||||||||||||||||||||||||||||||||
Adjustment of redeemable non-controlling interest to redemption value | — | — | — | — | — | — | — | — | (455,358) | — | (455,358) | 455,358 | — | — | 455,358 | ||||||||||||||||||||||||||||||||
Comprehensive Loss | — | — | — | — | — | — | — | — | — | (65,564) | (65,564) | (136,987) | — | — | (136,987) | ||||||||||||||||||||||||||||||||
Balance at September 30, 2023 (Successor) | 71,014,190 | $ | 7 | 141,529,513 | $ | 14 | $ | — | $ | — | $ | — | $ | — | $ | 193,361 | $ | (89,361) | $ | 104,021 | $ | 2,157,310 | — | $ | — | $ | 2,157,310 |
Class A Common Stock | Class B Common Stock | Class A Ordinary Shares | Class B Ordinary Shares | Additional Paid-in-Capital | Accumulated Deficit | Total Stockholders' Equity | Non-controlling Interests | Class A Ordinary Shares | Total Mezzanine Equity | ||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | ||||||||||||||||||||||||||||||||||||||
Balance at July 1, 2023 (Successor) | 67,352,271 | $ | 7 | 142,711,590 | $ | 14 | — | $ | — | — | $ | — | $ | 514,219 | $ | (58,798) | $ | 455,442 | $ | 1,885,319 | — | $ | — | $ | 1,885,319 | ||||||||||||||||||||||
Exercise of warrants | 2,739 | — | — | — | — | — | — | — | 47 | — | 47 | — | — | — | — | ||||||||||||||||||||||||||||||||
Issuance of Class A Common Stock | 52,523 | — | — | — | — | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||
Issuance of RONI Class B Common Stock to former NET Power, LLC unitholders | — | — | 2,105,973 | — | — | — | — | — | (928) | — | (928) | 928 | — | — | 928 | ||||||||||||||||||||||||||||||||
Redemption of Class A Common Stock | 3,606,657 | — | (3,606,657) | — | — | — | — | — | 50,526 | — | 50,526 | (50,526) | — | — | (50,526) | ||||||||||||||||||||||||||||||||
Member tax distributions | — | — | — | — | — | — | — | — | — | — | — | (181) | — | — | (181) | ||||||||||||||||||||||||||||||||
Establishment of liabilities under tax receivable agreement | — | — | — | — | — | — | — | — | (2,207) | — | (2,207) | — | — | — | — | ||||||||||||||||||||||||||||||||
Vesting of earnout shares | — | — | — | — | — | — | — | — | — | — | — | 9,055 | — | — | 9,055 | ||||||||||||||||||||||||||||||||
Amortization of share based payments | — | — | 318,607 | — | — | — | — | — | 261 | — | 261 | 5,560 | — | — | 5,560 | ||||||||||||||||||||||||||||||||
Adjustment of redeemable non-controlling interest to redemption value | — | — | — | — | — | — | — | — | (368,557) | — | (368,557) | 368,557 | — | — | 368,557 | ||||||||||||||||||||||||||||||||
Comprehensive Loss | — | — | — | — | — | — | — | — | — | (30,563) | (30,563) | (61,402) | — | — | (61,402) | ||||||||||||||||||||||||||||||||
Balance at September 30, 2023 (Successor) | 71,014,190 | $ | 7 | 141,529,513 | $ | 14 | — | $ | — | — | $ | — | $ | 193,361 | $ | (89,361) | $ | 104,021 | $ | 2,157,310 | — | $ | — | $ | 2,157,310 |
Membership Interests | Additional Paid-in-Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Total Members’ Equity | ||||||||||||||||
Units | Amount | |||||||||||||||||||
Balance at December 31, 2022 (Predecessor) | 3,722,355 | $ | 262,622 | $ | 26,288 | $ | 17 | $ | (224,525) | $ | 64,402 | |||||||||
Issuance of shares to: | ||||||||||||||||||||
Occidental Petroleum | 37,152 | 11,859 | — | — | — | 11,859 | ||||||||||||||
Constellation | 28,764 | 9,181 | — | — | — | 9,181 | ||||||||||||||
BHES (Bonus Shares) | — | — | 4,690 | — | — | 4,690 | ||||||||||||||
BHES (In-Kind Shares) | 15,491 | 3,269 | 634 | — | — | 3,903 | ||||||||||||||
Vesting of Profits Interest | — | — | 2,864 | — | — | 2,864 | ||||||||||||||
Comprehensive Loss | — | — | — | — | (34,176) | (34,176) | ||||||||||||||
Balance at June 7, 2023 (Predecessor) | 3,803,762 | $ | 286,931 | $ | 34,476 | $ | 17 | $ | (258,701) | $ | 62,723 |
Membership Interests | Additional Paid-in-Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Total Members’ Equity | ||||||||||||||||
Units | Amount | |||||||||||||||||||
Balance at July 1, 2022 (Predecessor) | 3,716,149 | $ | 261,312 | $ | 16,282 | $ | 20 | $ | (194,862) | $ | 82,752 | |||||||||
Issuance of shares to: | ||||||||||||||||||||
BHES (Bonus Shares) | — | — | 2,689 | — | — | 2,689 | ||||||||||||||
BHES (In-Kind Shares) | 2,782 | 587 | 135 | — | — | 722 | ||||||||||||||
Vesting of Profits Interest | — | — | 2,082 | — | — | 2,082 | ||||||||||||||
Comprehensive Loss | — | — | — | (5) | (12,220) | (12,225) | ||||||||||||||
Balance as of September 30, 2022 (Predecessor) | 3,718,931 | $ | 261,899 | $ | 21,188 | $ | 15 | $ | (207,082) | $ | 76,020 |
Membership Interests | Additional Paid-in-Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Total Members’ Equity | ||||||||||||||||
Units | Amount | |||||||||||||||||||
Balance at December 31, 2021 (Predecessor) | 3,555,553 | $ | 227,960 | $ | 9,275 | $ | 20 | $ | (169,747) | $ | 67,508 | |||||||||
Issuance of shares to: | ||||||||||||||||||||
BHES | 142,180 | 30,000 | — | — | — | 30,000 | ||||||||||||||
(Less Equity Issuance Cost) | — | (534) | — | — | — | (534) | ||||||||||||||
BHES (Bonus Shares) | 17,799 | 3,756 | 3,414 | — | — | 7,170 | ||||||||||||||
BHES (In-Kind Shares) | 3,399 | 717 | 722 | — | — | 1,439 | ||||||||||||||
Vesting of Profits Interest | — | — | 7,777 | — | — | 7,777 | ||||||||||||||
Comprehensive Loss | — | — | — | (5) | (37,335) | (37,340) | ||||||||||||||
Balance as of September 30, 2022 (Predecessor) | 3,718,931 | $ | 261,899 | $ | 21,188 | $ | 15 | $ | (207,082) | $ | 76,020 |
Period from | |||||||||||
June 8 – September 30, 2023 (Successor) | January 1 - June 7, 2023 (Predecessor) | January 1 – September 30, 2022 (Predecessor) | |||||||||
Cash Flows from Operating Activities | |||||||||||
Net Loss after Tax | $ | (202,551) | $ | (34,176) | $ | (37,335) | |||||
Adjustments to reconcile net loss to net cash (used in) operating activities: | |||||||||||
Depreciation | 3,972 | 5,700 | 9,797 | ||||||||
Amortization | 20,922 | 9 | 16 | ||||||||
Accretion | 51 | 102 | 161 | ||||||||
Non-cash interest expense | — | 30 | 1,388 | ||||||||
Non-cash lease expense | 87 | 59 | — | ||||||||
Conversion of equity awards | 86,585 | — | — | ||||||||
Allowance for doubtful accounts | — | 352 | — | ||||||||
Deferred taxes | (681) | — | — | ||||||||
Change in fair value of earnout shares liability | 1,497 | — | — | ||||||||
Change in fair value of warrant liability | 58,344 | — | — | ||||||||
Vesting of Profits Interests | — | 2,864 | 7,777 | ||||||||
Vesting of earnout shares | 1,118 | — | — | ||||||||
Amortization of share based payments | 6,572 | 8,593 | 8,609 | ||||||||
Changes in operating assets and liabilities: | |||||||||||
Trade receivables | — | — | (344) | ||||||||
Interest receivable | (2,903) | — | — | ||||||||
Prepaid expenses | (2,026) | (453) | 515 | ||||||||
Other current assets | 91 | 1,765 | (660) | ||||||||
Accounts payable | (887) | 1,768 | (1,478) | ||||||||
Accrued liabilities | (5,796) | (384) | (43) | ||||||||
Lease liabilities | (56) | (55) | — | ||||||||
Due to related parties – short term | 288 | 5,414 | (2,291) | ||||||||
Due to related parties – long term | — | (2,211) | 1,257 | ||||||||
Net Cash (Used in) Operating Activities | (35,373) | (10,623) | (12,631) | ||||||||
Cash Flows from Investing Activities | |||||||||||
Cash acquired as part of Business Combination (Note C) | 7,947 | — | — | ||||||||
Acquisition of short term investments | (100,000) | — | — | ||||||||
Acquisition of property, plant and equipment | (3,875) | (2,431) | — | ||||||||
Net Cash (Used in) Investing Activities | (95,928) | (2,431) | — | ||||||||
Cash Flows from Financing Activities | |||||||||||
Repurchase of redeemed Class A Ordinary Shares | (218,983) | — | — | ||||||||
Issuance of Class A Common Stock from warrant exercise | 47 | — | — | ||||||||
Member tax distributions | (181) | — | — | ||||||||
Proceeds from PIPE financing, net of issuance costs | 540,451 | — | — | ||||||||
Issuance of equity under JDA as a result of Business Combination (Note C) | 9,917 | — | — | ||||||||
Payment of transaction expenses | (11,722) | — | — | ||||||||
Member loan proceeds | — | — | 2,000 | ||||||||
Member loan repayments | — | — | (10,000) | ||||||||
Share issuances | — | 15,836 | 30,000 | ||||||||
(Less equity issuance costs) | — | — | (534) | ||||||||
Net Cash Provided by Financing Activities | 319,529 | 15,836 | 21,466 | ||||||||
Net Increase in Cash | 188,228 | 2,782 | 8,835 | ||||||||
Effect of foreign currency exchange rate changes on cash | 1 | — | (5) | ||||||||
Cash, beginning of period | 357,019 | 5,164 | 445 | ||||||||
Cash, end of period | $ | 545,248 | $ | 7,946 | $ | 9,275 | |||||
Supplemental Disclosures of Cash Flow Information | |||||||||||
Cash paid for interest | $ | — | $ | — | $ | 81 | |||||
Remeasurement of lease liabilities and right of use assets due to lease modification (Note M) | $ | (672) | $ | — | $ | — |
Intangible Asset Classification | Useful Life | |||||||
Developed Technology | 20 |
Asset Classification | Useful Life | |||||||
Furniture and Equipment | 4 – 7 | |||||||
Demonstration Plant | 7 | |||||||
Construction in Progress | — |
Consideration Transferred | Total | |||||||
Pre-combination vesting of modified profits interests | $ | 325 | ||||||
Pre-combination vesting of unmodified profits interests | 651 | |||||||
Consideration Transferred to Sellers | 976 | |||||||
Class A OpCo Units - non-controlling interests | 1,785,283 | |||||||
Fair value of total consideration transferred | $ | 1,786,259 |
Total | ||||||||
Assets Acquired | ||||||||
Current Assets | ||||||||
Cash | $ | 7,946 | ||||||
Prepaid expenses | 637 | |||||||
Other current assets | 30 | |||||||
Total Current Assets | 8,613 | |||||||
Long Term Assets | ||||||||
Intangible assets, net | 1,345,000 | |||||||
Property, plant and equipment | 91,855 | |||||||
Right-of-use assets | 940 | |||||||
Total Long Term Assets | 1,437,795 | |||||||
Total Assets Acquired | $ | 1,446,408 | ||||||
Liabilities Assumed | ||||||||
Current Liabilities | ||||||||
Accounts payable | 2,574 | |||||||
Accrued liabilities | 7,370 | |||||||
Current lease liability | 137 | |||||||
Other current liabilities | 1 | |||||||
Total Current Liabilities | 10,082 | |||||||
Long Term Liabilities | ||||||||
Deferred tax liability | 71,459 | |||||||
Asset retirement obligation | 1,967 | |||||||
Long term lease liability | 594 | |||||||
Total Long Term Liabilities | 74,020 | |||||||
Total Liabilities Assumed | 84,102 | |||||||
Total identifiable net assets | 1,362,306 | |||||||
Goodwill | 423,953 | |||||||
Net assets acquired | $ | 1,786,259 |
Three Months Ended | Nine Months Ended | |||||||||||||||||||
September 30, 2023 | September 30, 2022 | September 30, 2023 | September 30, 2022 | |||||||||||||||||
Pro forma revenue | $ | 125 | $ | 208 | $ | 175 | $ | 574 | ||||||||||||
Pro forma net loss | (91,966) | (28,964) | (266,123) | (87,558) | ||||||||||||||||
Pro forma net loss attributable to non-redeemable controlling interest | (29,981) | (9,442) | (86,756) | (28,544) | ||||||||||||||||
Pro forma net loss attributable to non-redeemable non-controlling interests | (61,985) | (19,522) | (179,367) | (59,014) |
Goodwill | ||||||||
Goodwill at June 30, 2023 (Successor) | $ | 433,736 | ||||||
Measurement Adjustments | (9,783) | |||||||
Goodwill at September 30, 2023 (Successor) | $ | 423,953 |
September 30, 2023 (Successor) | December 31, 2022 (Predecessor) | ||||||||||||||||
Developed Technology, gross | $ | 1,345,000 | $ | 604 | |||||||||||||
Accumulated Amortization | (20,922) | (341) | |||||||||||||||
Developed Technology, net | $ | 1,324,078 | $ | 263 |
Future Amortization Expense | ||||||||
2023 | $ | 16,813 | ||||||
2024 | 67,250 | |||||||
2025 | 67,250 | |||||||
2026 | 67,250 | |||||||
2027 | 67,250 | |||||||
2028 and thereafter | 1,038,265 | |||||||
Total | $ | 1,324,078 |
September 30, 2023 (Successor) | December 31, 2022 (Predecessor) | |||||||||||||
Furniture and Equipment, gross | $ | 253 | $ | 368 | ||||||||||
Accumulated Depreciation | (17) | (216) | ||||||||||||
Furniture and Equipment, net | 236 | 152 | ||||||||||||
Demonstration Plant, gross | 89,240 | 128,013 | ||||||||||||
Accumulated Depreciation | (3,955) | (58,570) | ||||||||||||
Demonstration Plant, net | 85,285 | 69,443 | ||||||||||||
Construction in Progress | 6,237 | — | ||||||||||||
Total Property, Plant and Equipment, net | $ | 91,758 | $ | 69,595 |
December 31, 2022 (Predecessor) | ||||||||
Asset Retirement Obligation, gross | $ | 2,201 | ||||||
Accumulated Depreciation | (348) | |||||||
Asset Retirement Obligation, net | $ | 1,853 |
September 30, 2023 (Successor) | December 31, 2022 (Predecessor) | |||||||||||||
Accrued Incentive Compensation | $ | 1,023 | $ | 1,451 | ||||||||||
Accrued cash-based expense of Original JDA and Amended and Restated JDA | 2,748 | — | ||||||||||||
Accrued Legal Service Provider Fees | 1,731 | 645 | ||||||||||||
Other Accrued Liabilities | 1,929 | 296 | ||||||||||||
Total Accrued Liabilities | $ | 7,431 | $ | 2,392 |
September 30, 2023 (Successor) | December 31, 2022 (Predecessor) | |||||||||||||
Trade Receivables, gross | $ | — | $ | 352 | ||||||||||
Allowance for Doubtful Accounts | — | — | ||||||||||||
Trade Receivables, net | $ | — | $ | 352 |
Assets | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||
Short-term Investments | $ | — | $ | 100,000 | $ | — | $ | 100,000 | ||||||||||||||||||
Total | $ | — | $ | 100,000 | $ | — | $ | 100,000 | ||||||||||||||||||
Liabilities | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||
Public Warrants | $ | 37,420 | $ | — | $ | — | $ | 37,420 | ||||||||||||||||||
Private Placement Warrants | — | — | 103,114 | 103,114 | ||||||||||||||||||||||
Earnout Shares | — | — | 4,546 | 4,546 | ||||||||||||||||||||||
Total | $ | 37,420 | $ | — | $ | 107,660 | $ | 145,080 |
Liabilities | Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||||
Option Liability | $ | — | $ | — | $ | 5,174 | $ | 5,174 | ||||||||||||||||||
Total | $ | — | $ | — | $ | 5,174 | $ | 5,174 |
July 1 – September 30, 2023 (Successor) | July 1 – September 30, 2022 (Predecessor) | June 8 – September 30, 2023 (Successor) | January 1 – June 7, 2023 (Predecessor) | January 1 - September 30, 2022 (Predecessor) | |||||||||||||||||||
Balance of recurring level 3 liabilities at beginning of period | $ | 63,187 | $ | 1,854 | $ | 63,851 | $ | 5,174 | $ | 1,459 | |||||||||||||
Total gains and losses during the period included in Other Income (Expense) | 52,352 | — | 51,688 | — | 395 | ||||||||||||||||||
Issuances | (7,879) | — | (7,879) | — | — | ||||||||||||||||||
Payments | — | — | — | (5,174) | — | ||||||||||||||||||
Transfers into level 3 | — | — | — | — | — | ||||||||||||||||||
Transfers out of level 3 | — | — | — | — | — | ||||||||||||||||||
Balance of recurring level 3 liabilities at end of period | $ | 107,660 | $ | 1,854 | $ | 107,660 | $ | — | $ | 1,854 |
Anti-Dilutive Instrument | September 30, 2023 (Successor) | |||||||
Public Warrants | 8,622,235 | |||||||
Private Placement Warrants | 10,900,000 | |||||||
Earnout Shares | 328,925 | |||||||
BHES Bonus Shares | 2,068,416 | |||||||
Unvested Class A OpCo Units | 972,522 | |||||||
Vested Class A OpCo Units | 140,747,943 | |||||||
Unvested RSU's | 440,423 | |||||||
Total | 164,080,464 |
Class A | |||||||||||
Numerator | |||||||||||
Net loss | $ | (202,551) | |||||||||
Net loss attributable to shareholders | $ | (65,564) | |||||||||
Denominator | |||||||||||
Weighted-average number shares outstanding, basic and diluted | 68,644,032 | ||||||||||
Net loss per share attributable to shareholders, basic and diluted | $ | (0.96) |
Anti-Dilutive Instrument | September 30, 2022 (Predecessor) | |||||||
Profits Interests | 450,013 | |||||||
Member Loan Share Options | 34,588 | |||||||
Occidental Petroleum Share Options | 711,111 | |||||||
Total | 1,195,712 |
Period from July 1 - September 30, 2023 (Successor) | Three Months Ended September 30, 2022 (Predecessor) | Period from June 8 - September 30, 2023 (Successor) | Period from January 1 - June 7, 2023 (Predecessor) | Nine Months Ended September 30, 2022 (Predecessor) | |||||||||||||||||||
Numerator | |||||||||||||||||||||||
Net loss | $ | (30,564) | $ | (12,220) | $ | (65,564) | $ | (34,176) | $ | (37,335) | |||||||||||||
Net loss attributable to membership interest holders | $ | (30,564) | $ | (12,220) | $ | (65,564) | $ | (34,176) | $ | (37,335) | |||||||||||||
Denominator | |||||||||||||||||||||||
Weighted-average number membership interests outstanding, basic and diluted | 68,966,972 | 1,143,430 | 68,644,032 | 3,766,871 | 2,838,388 | ||||||||||||||||||
Net loss per unit attributable to membership interest holders, basic and diluted | $ | (0.44) | $ | (10.69) | $ | (0.96) | $ | (9.07) | $ | (13.15) |
Period from July 1 - September 30, 2023 (Successor) | Period from June 8 - September 30, 2023 (Successor) | |||||||||||||
Net Loss before Income Tax | $ | (91,976) | $ | (203,232) | ||||||||||
Redeemable non-controlling interest percentage - Class A OpCo Units | 67.4 | % | 67.3 | % | ||||||||||
Net Loss before Income Tax attributable to Class A OpCo Units | $ | (61,402) | $ | (136,987) |
Quantity | Calculated Value | |||||||||||||||||||
Period from June 8 - September 30, 2023 (Successor) | Period from January 1 - June 7, 2023 (Predecessor) | Period from June 8 - September 30, 2023 (Successor) | Period from January 1 - June 7, 2023 (Predecessor) | |||||||||||||||||
Unvested, beginning of period | 1,895,122 | 226,494 | $ | 4.95 | $ | 63.25 | ||||||||||||||
Granted | — | — | $ | — | $ | — | ||||||||||||||
Forfeited | (324,568) | — | $ | 5.66 | $ | — | ||||||||||||||
Vested | — | (107,418) | $ | — | $ | 63.18 | ||||||||||||||
Accelerated | (598,032) | — | $ | 4.32 | $ | — | ||||||||||||||
Unvested, end of period | 972,522 | 119,076 | $ | 4.45 | $ | 63.32 |
Quantity | Fair Value | |||||||||||||||||||
Period from June 8 - September 30, 2023 (Successor) | Period from January 1 - June 7, 2023 (Predecessor) | Period from June 8 - September 30, 2023 (Successor) | Period from January 1 - June 7, 2023 (Predecessor) | |||||||||||||||||
Unvested, beginning of period | — | — | $ | — | $ | — | ||||||||||||||
Granted | 440,424 | — | $ | 13.43 | $ | — | ||||||||||||||
Forfeited | — | — | $ | — | $ | — | ||||||||||||||
Vested | — | — | $ | — | $ | — | ||||||||||||||
Accelerated | — | — | $ | — | $ | — | ||||||||||||||
Unvested, end of period | 440,424 | — | $ | 13.43 | $ | — |
Quantity | Total Fair Value | |||||||||||||||||||||||||
Period from June 8 - September 30, 2023 (Successor) | Period from January 1 - June 7, 2023 (Predecessor) | Period from June 8 - September 30, 2023 (Successor) | Period from January 1 - June 7, 2023 (Predecessor) | Equivalent Value per Unit or per Share | ||||||||||||||||||||||
Membership Interests | — | 9,210 | $ | — | $ | 1,943 | $ | 168.75 | ||||||||||||||||||
Class A OpCo Units | 542,324 | 296,160 | 3,585 | 1,958 | $ | 5.29 | ||||||||||||||||||||
Class B Common Stock | 542,324 | 296,160 | — | — | $ | — | ||||||||||||||||||||
Total | $ | 3,585 | $ | 3,901 |
Performance Period End Date | Compensation Cost Incurred To Date | Remaining Compensation Cost | Total Compensation Cost | ||||||||||||||
JDA - variable share-based payments | January, 2027 | $ | 20,557 | $ | 6,788 | $ | 27,345 |
Period from July 1 – September 30, 2023 (Successor) | Three Months Ended September 30, 2022 (Predecessor) | Period from June 8 – September 30, 2023 (Successor) | Period from January 1 – June 7, 2023 (Predecessor) | Nine Months Ended September 30, 2022 (Predecessor) | |||||||||||||||||||
Asset retirement obligation, beginning of period | $ | 1,977 | $ | 2,308 | $ | 1,977 | $ | 2,416 | $ | — | |||||||||||||
Obligation incurred | — | — | — | — | 2,201 | ||||||||||||||||||
Periodic accretion expense | 41 | 54 | 41 | 102 | 161 | ||||||||||||||||||
Asset retirement obligation, end of period | $ | 2,018 | $ | 2,362 | $ | 2,018 | $ | 2,518 | $ | 2,362 |
Commitment | Consideration Type | Gross Commitment | Period from June 8 - September 30, 2023 (Successor) | Period from January 1 - June 7, 2023 (Predecessor) | Prior Predecessor Periods | Remaining Commitment | ||||||||||||||||||||
Asset Purchase Commitment | Cash | $ | 4,700 | $ | — | $ | 1,168 | $ | — | $ | 3,532 | |||||||||||||||
Original JDA and Amended and Restated JDA | Cash | 70,000 | 2,867 | 3,121 | 2,211 | 61,801 | ||||||||||||||||||||
Original JDA and Amended and Restated JDA | Share-Based | 70,000 | 3,585 | 3,902 | 2,765 | 59,748 | ||||||||||||||||||||
Total | $ | 144,700 | $ | 6,452 | $ | 8,191 | $ | 4,976 | $ | 125,081 |
Period from | Period from | ||||||||||||||||||||||
July 1 – September 30, 2023 (Successor) | July 1 – September 30, 2022 (Predecessor) | June 8 – September 30, 2023 (Successor) | January 1 – June 7, 2023 (Predecessor) | January 1 – September 30, 2022 (Predecessor) | |||||||||||||||||||
Cash expense | $ | 2,748 | $ | 578 | $ | 2,867 | $ | 3,121 | $ | 1,256 | |||||||||||||
Plus: Membership Interests Issued | — | 723 | — | 3,902 | 6,934 | ||||||||||||||||||
Plus: Class A OpCo Units Issued | 3,436 | — | 3,585 | — | — | ||||||||||||||||||
Plus: BHES Bonus Share expense | 819 | 2,688 | 6,010 | 4,690 | 1,570 | ||||||||||||||||||
Total research and development attributable to JDA | $ | 7,003 | $ | 3,989 | $ | 12,462 | $ | 11,713 | $ | 9,760 |
June 8 - September 30, 2023 (Successor) | ||||||||
Income tax expense (benefit) | $ | (681) | ||||||
Effective tax rate | 0.3 | % |
Period from | $ Change | % Change | |||||||||||||||
July 1 – September 30, 2023 (Successor) | July 1 – September 30, 2022 (Predecessor) | ||||||||||||||||
Revenue | |||||||||||||||||
Revenue | $ | — | $ | 141 | $ | (141) | (100.0) | % | |||||||||
Cost of revenue | 3 | 49 | 46 | (93.9) | % | ||||||||||||
Gross Profit (Loss) | (3) | 92 | (95) | (103.3) | % | ||||||||||||
Operating Expenses | |||||||||||||||||
General and administration | 8,096 | 4,122 | 3,974 | 96.4 | % | ||||||||||||
Sales and marketing | 931 | 136 | 795 | 584.6 | % | ||||||||||||
Research and development | 9,004 | 4,763 | 4,241 | 89.0 | % | ||||||||||||
Project development | 582 | — | 582 | n/a | |||||||||||||
Depreciation, amortization and accretion | 20,052 | 3,325 | 16,727 | 503.1 | % | ||||||||||||
Total Operating Expenses | 38,665 | 12,346 | 26,319 | 213.2 | % | ||||||||||||
Operating Loss | (38,668) | (12,254) | (26,414) | 215.6 | % | ||||||||||||
Other Income (Expense) | |||||||||||||||||
Interest income (expense) | 8,675 | — | 8,675 | n/a | |||||||||||||
Other income (expense) | (61,983) | 34 | (62,017) | (182402.9) | % | ||||||||||||
Net Other Income (Expense) | (53,308) | 34 | (53,342) | 156888.2 | % | ||||||||||||
Net Loss before Income Tax | (91,976) | (12,220) | (79,756) | 652.7 | % | ||||||||||||
Income tax expense (benefit) | (10) | — | (10) | n/a | |||||||||||||
Net Loss after Income Tax | (91,966) | (12,220) | |||||||||||||||
Other Comprehensive Loss | |||||||||||||||||
Foreign currency translation gain (loss) | 1 | (5) | 6 | 120.0 | % | ||||||||||||
Comprehensive Loss | (91,965) | (12,225) | (79,750) | 652.4 | % | ||||||||||||
Comprehensive Loss attributable to non-controlling interests | (61,402) | — | (136,987) | — | % | ||||||||||||
Comprehensive Loss attributable to NET Power Inc. | $ | (30,563) | $ | (12,220) | $ | 57,231 | (468.3) | % |
Period from | $ Change | % Change | ||||||||||||||||||
June 8 – September 30, 2023 (Successor) | January 1 – June 7, 2023 (Predecessor) | January 1 – September 30, 2022 (Predecessor) | ||||||||||||||||||
Revenue | ||||||||||||||||||||
Revenue | $ | — | $ | 175 | $ | 574 | $ | (399) | (69.5) | % | ||||||||||
Cost of revenue | 3 | 3 | 268 | (262) | (97.8) | % | ||||||||||||||
Gross Profit (Loss) | (3) | 172 | 306 | (137) | (44.8) | % | ||||||||||||||
Operating Expenses | ||||||||||||||||||||
General and administration | 32,408 | 12,131 | 12,914 | 31,625 | 244.9 | % | ||||||||||||||
Sales and marketing | 1,087 | 869 | 504 | 1,452 | 288.1 | % | ||||||||||||||
Research and development | 14,834 | 14,319 | 12,814 | 16,339 | 127.5 | % | ||||||||||||||
Project development | 698 | 1,191 | — | 1,889 | n/a | |||||||||||||||
Option settlement | 79,054 | — | — | 79,054 | n/a | |||||||||||||||
Depreciation, amortization and accretion | 24,978 | 5,812 | 9,974 | 20,816 | 208.7 | % | ||||||||||||||
Total Operating Expenses | 153,059 | 34,322 | 36,206 | 151,175 | 417.5 | % | ||||||||||||||
Operating Loss | (153,062) | (34,150) | (35,900) | (151,312) | 421.5 | % | ||||||||||||||
Other Income (Expense) | ||||||||||||||||||||
Interest income (expense) | 10,800 | 4 | (1,470) | 12,274 | 835.0 | % | ||||||||||||||
Other income (expense) | (60,970) | (30) | 35 | (61,035) | (174385.7) | % | ||||||||||||||
Net Other Income (Expense) | (50,170) | (26) | (1,435) | (48,761) | (3398.0) | % | ||||||||||||||
Net Loss before Income Tax | (203,232) | (34,176) | (37,335) | (200,073) | 535.9 | % | ||||||||||||||
Income tax expense (benefit) | (681) | — | — | (681) | n/a | |||||||||||||||
Net Loss after Income Tax | (202,551) | (34,176) | (37,335) | (199,392) | 534.1 | % | ||||||||||||||
Other Comprehensive Loss | ||||||||||||||||||||
Foreign currency translation gain (loss) | — | — | (5) | 5 | (100.0) | % | ||||||||||||||
Total Other Comprehensive Loss | — | — | (5) | 5 | (100.0) | % | ||||||||||||||
Comprehensive Loss | (202,551) | (34,176) | (37,340) | (199,387) | 534.0 | % | ||||||||||||||
Comprehensive Loss attributable to non-controlling interests | (136,987) | — | — | 136,987 | n/a | |||||||||||||||
Comprehensive Loss attributable to NET Power Inc. | $ | (65,564) | $ | (34,176) | $ | (37,340) | $ | (199,387) | 534.0 | % |
Period from | |||||||||||
(in thousands) | June 8 – September 30, 2023 (Successor) | January 1 - June 7, 2023 (Predecessor) | January 1 – September 30, 2022 (Predecessor) | ||||||||
Net cash provided by (used in) | |||||||||||
Operating activities | $ | (35,373) | $ | (10,623) | $ | (12,631) | |||||
Investing activities | $ | (95,928) | $ | (2,431) | $ | — | |||||
Financing activities | $ | 319,529 | $ | 15,836 | $ | 21,466 |
Exhibit Number | Description | ||||
2.1+ | |||||
2.2 | |||||
3.1 | |||||
3.2 | |||||
10.1 | |||||
10.2 | |||||
31.1 | |||||
31.2 | |||||
32.1 | |||||
32.2 | |||||
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. | ||||
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 |