NET Power Inc

Certain Defined Terms

Unless otherwise expressly stated or, unless the context otherwise requires, references in this Annual Report on Form 10-K (this "Report") to:

•"8 Rivers" means 8 Rivers Capital, LLC, a Delaware limited liability company (a company controlled by SK Energy);

•"Amended and Restated JDA" means the Amended and Restated Joint Development Agreement, dated December 13, 2022, by and among Old NET Power, RONI, RONI OpCo, NPI and NPT, as amended, supplemented or otherwise modified from time to time in accordance with its terms;

•"Baker Hughes" or "BH" means Baker Hughes Company, a Delaware corporation;

•"BHES" means Baker Hughes Energy Services LLC, a Delaware limited liability company and affiliate of Baker Hughes;

•"BHES JDA" means collectively, the Original JDA and the Amended and Restated JDA

•"Board" or "Board of Directors" means the board of directors of the Company;

•"Business Combination Agreement" means the Business Combination Agreement, dated as of December 13, 2022, by and among RONI, RONI OpCo, Buyer, Merger Sub and Old NET Power, as amended by the First Amendment to the Business Combination Agreement, dated as of April 23, 2023, by and between Buyer and Old NET Power;

•"Business Combination" means the Domestications, the Merger and other transactions contemplated by the Business Combination Agreement, collectively, including the PIPE Financing;

•"Buyer" means Topo Buyer Co, LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of OpCo (following the Domestications) or of RONI OpCo (prior to the Domestications);

•"Class A Common Stock" means the Class A common stock, par value $0.0001 per share, of NET Power;

•"Class B Common Stock" means the Class B common stock, par value $0.0001 per share, of NET Power;

•"Clean," in relation to the energy generated through the Net Power Cycle, refers to the NET Power Cycle’s capability to significantly reduce direct CO 2 emissions and emissions of other air pollutants in comparison to energy generated with conventional gas-fired technology;

•"Closing" means the consummation of the Business Combination contemplated by the Business Combination Agreement;

•"Closing Date" means June 8, 2023, the date on which the Closing occurred;

•"Common Stock" means the Class A Common Stock and Class B Common Stock;

•"Company," "our," "we" or "us" means, prior to the Business Combination, RONI or Old NET Power, as the context suggests, and, following the Business Combination, NET Power Inc., in each case, with its consolidated subsidiaries;

•"Constellation" means Constellation Energy Generation, LLC, a Pennsylvania limited liability company formerly known as Exelon Generation Company, LLC;

•"Demonstration Plant" means the facility located in La Porte, Texas used to demonstrate the viability of the NET Power Cycle;

•"DOE" means the United States Department of Energy;

•"Domestication" means the change of RONI’s jurisdiction of registration by deregistering as a Cayman Islands exempted company and continuing and domesticating as a corporation registered under the laws of the State of Delaware, upon which RONI changed its name to NET Power Inc.;

•"Domestications" means the Domestication and the OpCo Domestication;

•"Exchange Act" means the Securities Exchange Act of 1934, as amended;

•"Gen1U" means the Company’s first commercial-scale power plant;

•"IPO" means RONI’s initial public offering, which was consummated on June 18, 2021;

•"Legacy NET Power Holders" means the holders of equity securities of Old NET Power prior to the consummation of the Merger;

•"Merger" means the merger of Merger Sub with and into Old NET Power pursuant to the Business Combination Agreement, in which Old NET Power survived and became a direct, wholly owned subsidiary of Buyer;

•"Merger Sub" means Topo Merger Sub, LLC, a Delaware limited liability company and a direct, wholly owned subsidiary of Buyer;

•"NET Power" means NET Power Inc., a Delaware corporation (f/k/a Rice Acquisition Corp. II), with its consolidated subsidiaries (unless the context otherwise indicates), upon and after the Domestication;

•"NPI" means Nuovo Pignone International, S.r.l., an Italian limited liability company and affiliate of Baker Hughes;

•"NPT" means Nuovo Pignone Tecnologie S.r.l., an Italian limited liability company and affiliate of Baker Hughes;

•"NYSE" means the New York Stock Exchange;

•"Old NET Power" means, prior to the consummation of the Merger, NET Power, LLC, a Delaware limited liability company;

•"OpCo" means NET Power Operations LLC, a Delaware limited liability company (f/k/a Rice Acquisition Holdings II LLC), upon and after the OpCo Domestication;

•"OpCo Domestication" means the change of RONI OpCo’s jurisdiction of registration by deregistering as a Cayman Islands exempted company and continuing and domesticating as a limited liability company registered under the laws of the State of Delaware, upon which RONI OpCo changed its name to NET Power Operations LLC;

•"OpCo LLC Agreement" means the Second Amended and Restated Limited Liability Company Agreement of OpCo, dated as of June 8, 2023, which was entered into in connection with the Closing;

•"OpCo Unitholder" means a holder of OpCo Units;

•"OpCo Units" means the units of OpCo;

•"Original JDA" means the Joint Development Agreement, dated February 3, 2022, by and among Old NET Power, NPI and NPT, as amended by the First Amendment to Joint Development Agreement, dated effective June 30, 2022, by and among the same parties;

•"OXY" means OLCV NET Power, LLC, a Delaware limited liability company;

•"PIPE Financing" means the issuance and sale of 54,044,995 shares of Class A Common Stock for aggregate consideration of $540,449,950 in private placements pursuant to subscription agreements that RONI entered into with certain qualified institutional buyers and accredited investors, which was consummated immediately prior to the Merger;

•"PIPE Investors" means the investors who participated in the PIPE Financing;

•"Predecessor Period" means the period presented in the consolidated financial statements contained in this Report or the accompanying footnotes that relates to Predecessor, as defined and described in Note 3 to the consolidated financial statements contained in this Report;

•"Preferred Stock" means shares of NET Power preferred stock, par value $0.0001;

•"Principal Legacy NET Power Holders" means OXY, Constellation and 8 Rivers (through NPEH);

•"Private Placement Warrants" means the 10,900,000 warrants to purchase shares of Class A Common Stock that were issued and sold to Sponsor in a private placement in connection with the IPO;

•"Public Warrants" means the warrants to purchase shares of Class A Common Stock that were issued and sold as part the units of RONI in the IPO;

•"RONI" means Rice Acquisition Corp. II, a Cayman Islands exempted company, prior to the Domestication;

•"RONI OpCo" means Rice Acquisition Holdings II LLC, a Cayman Islands limited liability company and direct subsidiary of RONI, prior to the Domestications;

•"SEC" means the U.S. Securities and Exchange Commission;

•"Securities Act" means the Securities Act of 1933, as amended;

•"Sponsor" means Rice Acquisition Sponsor II LLC, a Delaware limited liability company;

•"Successor Period" means the period presented in the consolidated financial statements contained in this Report or the accompany footnotes that relates to Successor, as defined and described in Note 3 to the consolidated financial statements contained in this Report;

•"Tax Receivable Agreement" or "TRA" means the Tax Receivable Agreement, dated June 8, 2023, entered into by NET Power and OpCo with OpCo Unitholders who received OpCo Units pursuant to the Business Combination Agreement as consideration for equity interests in Old NET Power and the Agent (as defined therein);

•"Up-C" means umbrella partnership, C corporation, which describes a corporate structure in which an ultimate c corporation parent consolidates a partnership or partnership structure treated as a pass-through entity for US state and federal purposes tax;

•"Warrant Agreement" means the Warrant Agreement, dated as of June 15, 2021, by and among RONI, RONI OpCo and Continental Stock Transfer & Trust Company as it may be amended and/or restated from time to time in accordance with its terms;and

•"Warrants" means, collectively, the Public Warrants and Private Placement Warrants.

In addition, the following is a glossary of key industry terms used herein:

•"CO 2" means carbon dioxide;

•"CO 2 e" means the number of metric tons of CO 2 emissions with the same global warming potential as on metric ton of another greenhouse gas

•"MW" means megawatt;

•"MWe" means megawatt electrical which refers to the electricity output capability of a plant;

•"MWth" means megawatt thermal which refers to the input energy required;

•"NOX" means nitrogen oxides;

•"sCO 2" means supercritical carbon dioxide; and

•"SOX" means sulfur oxides.

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, but are not limited to: (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 ability to recognize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition, the ability of the Company to grow and manage growth profitably and the ability of the Company retain its management and key employees; (iii) the Company's ability to utilize its net operating loss and tax credit carryforwards effectively; (iv) the capital-intensive nature of the Company's business model, which may require the Company to raise additional capital in the future; (v) 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) 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 expand internationally; (xiv) the Company's ability to update the design, construction and operations of its technology; (xv) the impact of potential delays in discovering manufacturing and construction issues; (xvi) the possibility of damage to the Company's Texas facilities as a result of natural disasters; (xvii) the ability of commercial plants using the Company's technology to efficiently provide net power output; (xviii) the Company's ability to obtain and retain licenses; (xix) the Company's ability to establish an initial commercial scale plant; (xx) the Company's ability to license to large customers; (xxi) the Company's ability to accurately estimate future commercial demand; (xxii) the Company's ability to adapt to the rapidly evolving and competitive natural and renewable power industry; (xxiii) the Company's ability to comply with all applicable laws and regulations; (xxiv) the impact of public perception of fossil fuel-derived energy on the Company's business; (xxv) any political or other disruptions in gas producing nations; (xxvi) the Company's ability to protect its intellectual property and the intellectual property it licenses; (xxvii) risks relating to data privacy and cybersecurity, including the potential for cyberattacks or security incidents that could disrupt our or our service providers' operations; (xxviii) potential litigation that may be instituted against the Company; and (xxix)other risks and uncertainties indicated in Part I, Item 1A of this 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.

Summary Risk Factors

Our business is subject to numerous risks and uncertainties, including those highlighted in Item 1A, "Risk Factors," that represent challenges that we face in connection with the successful implementation of our strategy and the growth of our business. In particular, the following risks, among others, may offset our competitive strengths or have a negative effect on our business strategy:

•Old NET Power has incurred significant losses since inception, and we anticipate that we will continue to incur losses in the future, and we may not be able to achieve or maintain profitability.

•We may be unable to manage our future growth effectively.

•We face significant barriers in our attempts to deploy our technology and may not be able to successfully develop our technology.

•The technology we are developing will rely on complex machinery for its operation and deployment involves a significant degree of risk and uncertainty in terms of operational performance and costs.

•We, our partners or our third-party suppliers may experience delays in the development and manufacturing of turbo expanders, heat exchangers and other implementing technology.

•Suppliers of key equipment to our customers may not be able to scale to the production levels necessary to meet the anticipated growth in demand for our technology.

•We, our licensees, and our partners may not be able to establish supply relationships for necessary components or may be required to pay costs for components that are higher than anticipated.

•Our deployment plans rely on the development and supply of turbomachinery and process equipment by NPI pursuant to a joint development agreement.

•Our commercialization strategy relies heavily on our relationship with Baker Hughes, OXY, and other strategic investors and partners, who may have interests that diverge from ours and who may not be easily replaced if our relationships terminate.

•Our partners have not yet completed development of, and finalized schedules for, delivery of key process equipment to customers, and any setbacks we may experience during our first commercial delivery and other demonstration and commercial missions could have material adverse effects on our business, financial condition and results of operations and could harm our reputation.

•Manufacturing and transportation of key equipment may be dependent on open global supply chains.

•Manufacturing and construction issues not identified prior to design finalization, long-lead procurement and/or module fabrication could potentially be realized during production, fabrication or construction and may impact plant deployment cost and schedule.

•Our Demonstration Plant and future facilities and operations could be damaged or otherwise adversely affected as a result of natural disasters and other catastrophic events, and such adverse effects would negatively impact our ability to develop key process equipment and technologies within our anticipated timeline and budget.

•If we cannot extend the lease for our Demonstration Plant, which is currently set to expire in 2025, then we may need to remove, rebuild and relocate our equipment to a suitable facility elsewhere and resume development activities thereafter.

•The Demonstration Plant has not yet overcome all power loads to provide net positive power delivery to the commercial grid during its operation.

•We may encounter difficulty in attracting licensees prior to the deployment of an initial full-scale commercial plant.

•We expect a consortium led by NET Power to undertake the first commercial plant deployment to establish our technology. Such a deployment will require significant capital expenditures.

•Our future growth and success depend on our ability to license to customers and their ability to secure suitable sites. We have not yet entered into a binding contract with a customer to license the NET Power Cycle, and we may not be able to do so.

•Conflicts of interest may arise because several directors on the Board are designated by certain of our largest stockholders.

•The energy market continues to evolve and is highly competitive. The development and adoption of competing technology could materially and adversely affect our ability to license our technology.

•The market for power plants implementing the NET Power Cycle is not yet established and may not achieve the growth potential we expect and may grow more slowly than we expect.

•There is limited infrastructure to efficiently transport and store carbon dioxide, which may limit deployment of the NET Power Cycle.

•The cost of electricity generated from the NET Power Cycle may not be cost competitive with other electricity generation sources in some markets.

•Our business relies on the deployment of power plants that are subject to a wide variety of extensive and evolving government laws and regulations, including environmental laws and regulations.

•We and our potential licensees may encounter substantial delays in the design, manufacture, regulatory approval and launch of power plants. Regulatory approvals and permits may also be denied.

•Any potential changes or reductions in available government incentives promoting greenhouse gas emissions projects, such as the Inflation Reduction Act of 2022’s financial assistance program funding installation of zero-emission technology, may adversely affect our ability to grow our business.

•We and our customers operate in a politically sensitive environment, and the public perception of fossil fuel derived energy can affect our customers and us. Our future growth and success are dependent upon consumers’ willingness to develop natural-gas-fueled power generation facilities.

•The ability to license and deploy natural gas power plants may be limited due to conflict, war or other political disagreements between gas-producing nations and potential customers, and such disagreements may adversely impact our business plan.

•We are developing NET Power-owned intellectual property, but we rely heavily on the intellectual property we have in-licensed and that is core to the NET Power Cycle. The ability to protect these patents, patent applications, and other proprietary rights may be challenged or may be faced with our inability or failure to obtain, maintain, protect, defend and enforce.

•We may lose our rights to some or all of the core intellectual property that is in-licensed by way of either the licensor not paying renewal fees or maintenance fees, or by way of third parties challenging the validity of the intellectual property, thereby resulting in competitors easily entering into the same market and decreasing the revenue that we receive from our customers.

•Our patent applications may not result in issued patents and our patent rights may be contested, circumvented, invalidated or limited in scope, any of which could have a material adverse effect on our ability to prevent others from interfering with commercialization of our technology.

•The information technology systems and data that we maintain may be subject to intentional or inadvertent disruption or other security incidents that could result in regulatory investigations or actions, litigation, fines and penalties, disruptions of our business operations, reputational harm, and other adverse business consequences.