NET Power Inc

Previous wording

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, technical problems with the Net Power Cycle, potential supply chain issues, and development of competing clean-energy technology sooner or at a lesser cost than the Net Power Cycle. Supply chain issues related to the manufacturing and transportation of key equipment may lead to a delay in our commercialization efforts, which could impact our results of operations.

Current wording

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, technical problems with the Net Power Cycle, potential supply chain issues, our ability to finance the construction of our first utility-scale plant, and development of competing clean-energy technology sooner or at a lesser cost than the Net Power Cycle. Supply chain issues related to the manufacturing and transportation of key equipment may lead to a delay in our commercialization efforts, which could impact our results of operations.

Previous wording

Over the next several years, the Company plans to conduct additional research and testing campaigns at its Demonstration Plant and construct its first utility-scale plant. Net Power began purchasing and expects to make additional purchases of initial long-lead materials for the first utility-scale plant in 2024 and targets initial power generation between the second half of 2027 and the first half of 2028. We expect that the 300 MWe class plant will be a Net Power-led consortium project located at an OXY-hosted site in the Permian Basin of West Texas. We also continue to evaluate other sites in North

Current wording

Over the next several years, the Company plans to conduct additional research and testing campaigns at its Demonstration Plant and construct its first utility-scale plant. Net Power began purchasing and expects to make additional purchases of initial long-lead materials for the first utility-scale plant in 2024 and 2025 and targets initial power generation between the second half of 2027 and the first half of 2028. We expect that the plant will be a Net Power-led consortium project located at a site hosted by Occidental Petroleum in the Permian Basin of West Texas. We also continue to evaluate other sites in

Previous wording

America for Net Power plants. We expect that the project will fully integrate power production with transportation and underground storage of carbon dioxide. We are focused on delivering a project that will catalyze future adoption for utility-scale customers.

Current wording

North America for Net Power plants. We expect that the project will fully integrate power production with transportation and underground storage of carbon dioxide. We are focused on delivering a project that will catalyze future adoption for utility-scale customers.

Previous wording

Major remaining development activities relating to completing construction of our first utility-scale plant are similar to the activities we previously undertook to design, build, and commission the Demonstration Plant. These activities include but are not limited to: finalizing a siting study, initiating all permitting required, conducting a front-end engineering design (“FEED”) study, originating all required supply and off-take contracts, structuring the project to attract any required third party equity and debt financing and achieving final investment decision, initiating the engineering, procurement and construction (“EPC”) process, and constructing and commissioning the facility.

Current wording

Major remaining development activities relating to completing construction of our first utility-scale plant are similar to the activities we previously undertook to design, build, and commission the Demonstration Plant. These activities include but are not limited to: finalizing a siting study, completion of permitting, conducting a front-end engineering design (“FEED”) study, originating all required supply and off-take contracts, structuring the project to attract any required third party equity and debt financing and achieving final investment decision, initiating the engineering, procurement and construction (“EPC”) process, and constructing and commissioning the facility.

Previous wording

Comparison of the Six Months Ended June 30, 2024 (Successor) to the Periods from January 1, 2023 Through June 7, 2023 (Predecessor) and June 8, 2023 Through June 30, 2023 (Successor)

Current wording

Comparison of the Three Months Ended September 30, 2024 (Successor) to the Three Months Ended September 30, 2023 (Successor)

Previous wording

Revenue increased by $113, or 90%, for the three months ended June 30, 2024 (Successor), as compared toamounts for the combined periods from April 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through June 30, 2023 (Successor). Revenue during these periods was not significant. During the three months ended June 30, 2024, we generated revenue for test data sales at our Demonstration Plant. We have historically generated revenue through various contracts with potential future license customers for access to testing results, other data and feasibility studies.

Current wording

We have not generated material revenue to date. We have generated revenue through various contracts with potential future license customers for access to testing results, other data and feasibility studies. We have also generated revenue for conducting syngas testing at our Demonstration Plant. Revenue increased by $12, or 100%, for the three months ended September 30, 2024 (Successor), as compared to three months ended September 30, 2023 (Successor).

Previous wording

General and administrative expenses consist primarily of personnel-related expenses associated with our general and administrative organization and professional fees for legal, accounting, and other consulting services. Our general and administrative expenses decreased by $23,810, or 75%, for the three months ended June 30, 2024 (Successor), as compared toamounts for the combined periods from April 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through June 30, 2023 (Successor). This decreasewas primarily attributable to $16,644 in costs related to the Business Combination and $1,958 in costs incurred as a result of becoming a public company during 2023. This decrease was also due to decreased amounts paid for professional services partially offset by an increase in corporate headcount.

Current wording

General and administrative expenses consist primarily of personnel-related expenses associated with our general and administrative organization and professional fees for legal, accounting, and other consulting services. Our general and administrative expenses increased by $59, or 1%, for the three months ended September 30, 2024 (Successor), as compared to the three months ended September 30, 2023 (Successor). This increase was due to increases in corporate headcount and information technology costs, partially offset by lower SEC filing fees and insurance costs.

Previous wording

Our sales and marketing expenses consist primarily of personnel-related costs, consultants and information technology costs directly associated with our sales and marketing activities, which include general publicity efforts for the Company. Sales and marketing expenses increased by $192, or 28%, for the three months ended June 30, 2024 (Successor), as compared toamounts for the combined periods from April 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through June 30, 2023 (Successor). This increase was primarily attributable to costs associated with growth in employee headcount.

Current wording

Our sales and marketing expenses consist primarily of personnel-related costs, consultants and information technology costs directly associated with our sales and marketing activities, which include general publicity efforts for the Company. Sales and marketing expenses increased by $101, or 11%, for the three months ended September 30, 2024 (Successor), as compared tothe three months ended September 30, 2023 (Successor). This increase was primarily attributable to costs associated with growth in employee headcount, partially offset by lower information technology costs and conference fees.

Previous wording

Our 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 $2,889, or 23%, for the three months ended June 30, 2024(Successor), as compared to amounts for the combined periods from April 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through June 30, 2023 (Successor). This increase was primarily due to activities under the BHES JDA and increased activity at the Demonstration Plant.

Current wording

Our 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 $8,301, or 92%, for the three months ended September 30, 2024(Successor), as compared to the three months ended September 30, 2023 (Successor). This increase was primarily due to activities under the BHES JDA and increased activity at the Demonstration Plant in preparation for testing which is scheduled to commence in the fourth quarter of 2024.

Previous wording

Project development expenses consist of labor expenses and fees paid to third parties developing commercial scale projects. Our project development expenses increased by $568 or 189%, for the three months ended June 30, 2024 (Successor), as compared toamounts for the combined periods from April 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through June 30, 2023 (Successor). This increase was due to the initiation of activities related to the development of a utility-scale facility.

Current wording

Project development expenses consist of labor expenses and fees paid to third parties developing commercial scale projects. Our project development expe nses were fairly consistent, for the three months ended September 30, 2024 (Successor), as compared to the three months ended September 30, 2023 (Successor).

Previous wording

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 $12,651, or 171%, for the three months ended June 30, 2024 (Successor), as compared to amounts for the combined periods from April 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through June 30, 2023 (Successor). As a result of the Business Combination, we adjusted the value of acquired assets to fair value, which resulted in a significant increase in intangible assets for internally developed technology and the fair value of our Demonstration Plant. These increases resulted in an increase in related amortization and depreciation expense in the Successor Period.

Current wording

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 $183, or 1%, for the three months ended September 30, 2024 (Successor), as compared to the three months ended September 30, 2023 (Successor).

Previous wording

Comparison of the Three Months Ended June 30, 2024 (Successor) to the Periods from April 1, 2023 Through June 7, 2023 (Predecessor)and June 8, 2023 Through June 30, 2023 (Successor)

Current wording

Comparison of the Nine Months Ended September 30, 2024 (Successor) to the Periods from January 1, 2023 Through June 7, 2023 (Predecessor) and June 8, 2023 Through September 30, 2023 (Successor)

Previous wording

We have not generated material revenue to date. We have generated revenue through various contracts with potential future license customers for access to testing results, other data and feasibility studies. We have also generated revenue for conducting syngas testing at our Demonstration Plant. Revenue increased by $63, or 36%, for the six months ended June 30, 2024 (Successor), as compared to amounts for the combined periods from January 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through June 30, 2023 (Successor). Revenue during these two periods was not significant.

Current wording

We have not generated material revenue to date. We have generated revenue through various contracts with potential future license customers for access to testing results, other data and feasibility studies. We have also generated revenue for conducting syngas testing at our Demonstration Plant. Revenue increased by $75, or 43%, for the nine months ended September 30, 2024 (Successor), as compared to amounts for the combined periods from January 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through September 30, 2023 (Successor).

Previous wording

General and administrative expenses decreased by $23,173, or 62%, for the six months ended June 30, 2024 (Successor), as compared toamounts for the combined periods from January 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through June 30, 2023 (Successor). This decrease was primarily due to $16,644 in costs related to the Business Combination and $1,958 in costs incurred in the Successor Period as a result of becoming a public company during the six months ended June 30, 2023. This decrease was also due to decreased amounts paid for professional services partially offset by an increase in corporate headcount.

Current wording

General and administrative expenses decreased by $23,105, or 51%, for the nine months ended September 30, 2024 (Successor), as compared to amounts for the combined periods from January 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through September 30, 2023 (Successor). This decrease was primarily due to$16,644 in costs related to the Business Combination and $1,958 in costs incurred in the Successor Period as a result of becoming a public company during the nine months ended September 30, 2023. This decrease was also due to decreased amounts paid for professional services, partially offset by an increase in corporate headcount.

Previous wording

Our sales and marketing expenses consist primarily of personnel-related costs, consultants and information technology costs directly associated with our sales and marketing activities, which include general publicity efforts for the Company. Sales and marketing expenses increased by $603, or 59%, for the six months ended June 30, 2024 (Successor), as compared toamounts for the combined periods from January 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through June 30, 2023 (Successor). This increase was primarily attributable to increased headcount and engagement of external consultants to support increased marketing activities.

Current wording

Our sales and marketing expenses consist primarily of personnel-related costs, consultants and information technology costs directly associated with our sales and marketing activities, which include general publicity efforts for the Company. Sales and marketing expenses increased by $704, or 36%, for the nine months ended September 30, 2024 (Successor), as compared toamounts for the combined periods from January 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through September 30, 2023 (Successor). This increase was primarily attributable to increased headcount and engagement of external consultants to support increased marketing activities.

Previous wording

Our R&D expenses consist primarily of labor expenses and fees paid to third parties working on and testing specific aspects of our technology, including testing at our Demonstration Plant and development activities under the BHES JDA. Research and devel opment increased by $6,604, or 33%, for the six months ended June 30, 2024 (Successor), as compared to amounts for the combined periods from January 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through June 30, 2023 (Successor). This increase was primarily due to timing of development activities under the BHES JDA.

Current wording

Our 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 increased by $14,902, or 51%, for the nine months ended September 30, 2024 (Successor), as compared to amounts for the combined periods from January 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through September 30, 2023 (Successor). This increase was primarily due to timing of development activities under the BHES JDA.

Previous wording

Project development expenses consist of labor expenses and fees paid to third parties developing commercial scale projects. Project development increased by $794, or 160%, for the six months ended June 30, 2024 (Successor), as compared to amounts for the combined periods from January 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through June 30, 2023 (Successor). This increase was due to the initiation of activities related to development of a utility-scale facility and costs related to future projects.

Current wording

Project development expenses consist of labor expenses and fees paid to third parties developing commercial scale projects. Project development expenses increased by $728, or 104%, for the nine months ended September 30, 2024 (Successor), as compared to amounts for the combined periods from January 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through September 30, 2023 (Successor). This increase was due to the initiation of activities related to development of a utility-scale facility and costs related to future projects.

Previous wording

Option settlement expense of $79,054 for thethe period from June 8, 2023 through June 30, 2023 (Successor) was due to a one-time cost for settlement of an option agreement in connection with the close of the Business Combination.

Current wording

Option settlement expense of $79,054 forthe period from June 8, 2023 through September 30, 2023 (Successor) was due to a one-time cost for settlement of an option agreement in connection with the close of the Business Combination.

Previous wording

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 $29,357, or 274%, for the six months ended June 30, 2024 (Successor), as compared to amounts for the combined periods from January 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through June 30, 2023 (Successor). As a result of the Business Combination, we adjusted the value of acquired assets to fair value, which resulted in a significant increase in intangible assets for internally developed technology and the Demonstration Plant. These increases resulted in an increase in related amortization and depreciation expense in the Successor Period.

Current wording

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 $29,542, or 96%, for the nine months ended September 30, 2024 (Successor), as compared to amounts for the combined periods from January 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through September 30, 2023 (Successor). As a result of the Business Combination, we adjusted the value of acquired assets to fair value, which resulted in a significant increase in intangible assets for internally developed technology and the Demonstration Plant. These increases resulted in an increase in related amortization and depreciation expense in the Successor Period.

Previous wording

Interest income (expense) increased by $14,623, or 698%, for the six months ended June 30, 2024 (Successor), as compared toamounts for the combined periods from January 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through June 30, 2023 (Successor). Interest income increaseddue to the deployment of cash into fixed income securities and interest-bearing short-term investments subsequent to the Business Combination.

Current wording

Interest income (expense) increased by $13,942, or 129%, for the nine months ended September 30, 2024 (Successor), as compared to amounts for the combined periods from January 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through September 30, 2023 (Successor). Interest income increased due to the deployment of cash into fixed income securities and interest-bearing short-term investments subsequent to the Business Combination.

Previous wording

The change in Earnout Shares liability and Warrant liability was $15,240, or 1,510%, for the three months ended June 30, 2024 (Successor), as compared toamounts for the combined periods from April 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through June 30, 2023 (Successor). The change in Earnout Shares liability and Warrant liability was predominately due to the change in the fair value of the Private Placement Warrants and Public Warrants which were issued in connection with the closing of the Business Combination.

Current wording

The change in Earnout Shares liability and Warrant liability was $90,336, for the nine months ended September 30, 2024 (Successor), as compared to amounts for the combined periods from January 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through September 30, 2023 (Successor). 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 in our stock price.

Previous wording

Our income tax benefit increased by$5,719 for the six months ended June 30, 2024, as compared to amounts for the combined periods from January 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through June 30, 2023 (Successor). The increase is due to a cumulative tax benefit of$1,647 related to finalizing deferred taxes as of the Closing Date of the Business Combination in the six months ended June 30, 2024 and a lower effective tax rate for the period from June 8, 2023 through June 30, 2023 (Successor) due to permanent differences for expenses associated with the closing of the Business Combination.

Current wording

Our income tax benefit increased by $10,456 for the nine months ended September 30, 2024, as compared to amounts for the combined periods from January 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through September 30, 2023 (Successor). The increase is due to favorable permanent items and a cumulative tax benefit of $1,647 related to finalizing deferred taxes as of the Closing Date of the Business Combination in the nine months ended September 30, 2024 (Successor) and a lower effective tax rate for the nine months ended September 30, 2024 (Successor) due to unfavorable permanent differences for expenses associated with the closing of the Business Combination.

Previous wording

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 additional 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 expenditures to purchase long-lead items related to our first commercial scale facility.

Current wording

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 expenditures to purchase long-lead items related to our first commercial scale facility.

Previous wording

The following table summarizes our liquidity position as of the dates indicated:

Current wording

The following table summarizes our liquidity position:

Previous wording

As of June 30, 2024, we had short-term investments totaling $100,000, which was comprised of a single six-month certificate of deposit custodied by a domestic banking institution and available-for-sale securities comprised of investment grade, fixed income securities totaling $101,653. Additionally, our current liabilities were $14,557 and $12,021 at June 30, 2024 (Successor) and December 31, 2023 (Successor), respectively.

Current wording

As of September 30, 2024, we had short-term investments totaling $100,000, which was comprised of a single six-month certificate of deposit custodied by a domestic banking institution and available-for-sale securities comprised of investment grade, fixed income securities totaling $91,279. Additionally, our current liabilities were $26,915 at September 30, 2024 (Successor).

Previous wording

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 Quarterly 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. More specifically, we may require additional funding in order to successfully construct our first utility-scale plant and to originate additional Net Power plant opportunities.

Current wording

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. More specifically, we will require additional funding in order to successfully construct our first utility-scale plant and to originate additional Net Power plant opportunities.

Previous wording

Cash used in operating activities was$10,837 for the six months ended June 30, 2024 compared to $46,115 for the six months ended June 30, 2023. 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 costs associated with the completion of the Business Combination and our corresponding transition to operating as a public company during thesix months ended June 30, 2023, As we continue to increase hiring and build out the Company, we expect our cash used in operating activities to increase significantly before we start to generate any material cash inflows from our operations.

Current wording

Cash used in operating activities decreased 59.4% for the nine months ended September 30, 2024 as compared to thecombined periods from January 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through September 30, 2023 (Successor). 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 costs associated with the completion of the Business Combination and our corresponding transition to operating as a public company during the combined periods from January 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through September 30, 2023 (Successor). As we continue to increase hiring and build out the Company, we expect our cash used in operating activities to increase significantly before we start to generate any material cash inflows from our operations.

Previous wording

During the six months ended June 30, 2024, net cash used in investing activities was$118,591 compared to cash provided by investing activities of $5,023 for the six months ended June 30, 2023. Our cash used in investing activities for the six months ended June 30, 2024 primarily reflects theinvestment of a portion of the proceeds received from the PIPE Financing in investment grade fixed income securities and capital expenditures related to our Demonstration Plant and long-lead items for our first utility scale plant.

Current wording

During the nine months ended September 30, 2024 (Successor), net cash used in investing activities increased 31.6% as compared to thecombined periods from January 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through September 30, 2023 (Successor). Our cash used in investing activities for the nine months ended September 30, 2024 (Successor) primarily reflects theinvestment of a portion of the proceeds received from the PIPE Financing in investment grade fixed income securities and capital expenditures related to our Demonstration Plant and long-lead items for our first utility scale plant.

Previous wording

Our cash provided by financing activities was $61 for the six months ended June 30, 2024 compared to$335,499 for the six months ended June 30, 2023. This changewas driven by proceeds from the PIPE Financing , less transaction expenses and shareholder redemptions duringthe six months ended June 30, 2023.

Current wording

Our cash provided by financing activities decreased 100.0% for the nine months ended September 30, 2024 (Successor) compared to the combined periods from January 1, 2023 through June 7, 2023 (Predecessor) and June 8, 2023 through September 30, 2023 (Successor). This changewas driven by proceeds from the PIPE Financing, fewer transaction expenses, and a reduction in the number of shareholder redemptions duringthe period from June 8, 2023 through September 30, 2023 (Successor).

Previous wording

We hold a lease for the 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 $2,146 and $2,060 as of June 30, 2024 and December 31, 2023, respectively.

Current wording

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 $2,191 and $2,060 as of September 30, 2024 and December 31, 2023, respectively.

Previous wording

As of June 30, 2024, future minimum lease payments attributable to the Company's lease arrangements are approximately$2,378.

Current wording

As of September 30, 2024, future minimum lease payments attributable to the Company's operating and finance lease arrangements are appr oximately $3,447 and $382, respectively.

Previous wording

The Company leases corporate office space in Durham, North Carolina, and Houston, Texas. The lease for the Company's corporate office space in Houston, Texas, commenced July 11, 2024. The Company also entered into a land lease agreement with OXY, a related party, on March 8, 2024, for land in West Texas with commencement of the lease to occur no later than December 31, 2024. The term of the Company's land lease has not yet commenced.

Current wording

The Company leases corporate office space in Durham, North Carolina, and Houston, Texas. The lease for the Company's corporate office space in Houston, Texas, commenced July 11, 2024. The Company also entered into a land lease agreement with a subsidiary of Occidental Petroleum, a related party, on March 8, 2024, for land in West Texas with commencement of the lease to occur no later than December 31, 2024. The term of the Company's land lease has not yet commenced.

Previous wording

As of June 30, 2024 and December 31, 2023, 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 $140,000. As of June 30, 2024, we recognized approximately $20,287 of inception-to-date cash expenses and approximately $20,287 of inception-to-date share-based expenses related to the BHES JDA. The share-based expense excludes$5,079 of realized loss on share issuance.

Current wording

As of September 30, 2024 and December 31, 2023, 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 $140,000. As of September 30, 2024, we recognized approximately $25,733 of inception-to-date cash expenses and approximately $25,932 of inception-to-date share-based expenses related to the BHES JDA. The share-based expense excludes $6,442 of realized loss on share issuance.

Previous wording

As of June 30, 2024, we have committed to purchase certain components of industrial machinery for use at our Demonstration Plant and at our first utility-scale plant. The total gross commitments, which were initially unrecognized on our balance sheet, totaled $80,035. As of June 30, 2024, there was $55,635 remaining related to these commitments.

Current wording

As of September 30, 2024, we have committed to purchase certain components of industrial machinery for use at our Demonstration Plant and at our first utility-scale plant. The total gross commitments, which were initially unrecognized on our balance sheet, totaled$133,780. As of September 30, 2024, there was $106,831 remai ning related to these commitments.