NET Power Inc.

Previous wording

Net Power is an energy technology company focused on delivering low-carbon gas power solutions. Historically, our sole business has been the development of a novel oxy-combustion power generation system (which we refer to as the “Net Power Cycle”) designed to produce reliable and affordable electricity from natural gas while capturing virtually all atmospheric emissions. The Net Power Cycle is designed to inherently capture CO 2 while producing virtually no air pollutants such as SOX, NOX, and other particulates. Recently, we have broadened the scope of our business to potentially include the development of low-carbon gas power solutions using more standard natural gas turbines paired with post-combustion carbon capture technology.

Current wording

We are an energy technology and project development company focused on delivering low-carbon gas power solutions. Historically, our sole business has been the development of a novel oxy-combustion power generation system designed to produce reliable and affordable electricity from natural gas while capturing virtually all atmospheric emissions (the “Oxy-Combustion Cycle”). Recently, we have broadened the scope of our business to include the generation of power using natural gas turbines paired with post-combustion carbon capture (“PCC”) technology that we intend to license from Entropy, Inc. (“Entropy”).

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, potential supply chain issues, changes in tax policies and other incentives supporting carbon capture, our access to the capital needed to finance the development of our projects, and development of competing energy technologies sooner or at a lesser cost than our products. Supply chain issues related to the manufacturing and transportation of key equipment, including as a result of tariffs imposed by the U.S. or other countries or other trade barriers, measures, or conflicts, may lead to a delay in our commercialization efforts, which could impact our results of operations, financial condition and prospects. Also, currency fluctuations, inflation, and tariffs and other trade barriers, measures or conflicts may significantly increase freight charges, raw material costs and other expenses associated with our business, and such increased costs could materially and adversely affect our results of operations, financial condition and prospects.

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, our ability to license PCC technology from Entropy, potential supply chain issues, changes in tax policies and other incentives supporting carbon capture, our access to the capital needed to finance the development of our projects, and development of competing energy technologies sooner or at a lesser cost than our products. Supply chain issues related to the manufacturing and transportation of key equipment, including as a result of tariffs imposed by the U.S. or other countries or other trade barriers, measures, or conflicts, including the ongoing conflicts in the Middle East, may lead to a delay in our commercialization efforts, which could impact our results of operations, financial condition and prospects. Also, currency fluctuations, inflation, and tariffs and other trade barriers, measures or conflicts may significantly increase freight charges, raw material costs and other expenses associated with our business, and such increased costs could materially and adversely affect our results of operations, financial condition and prospects.

Previous wording

We are a development stage company and our historical results may not be indicative of our future results. Accordingly, the drivers of our future financial results, as well as the components of such results, may not be comparable to our historical or future results of operations.

Current wording

We are a development stage company and our historical results may not be indicative of our future results, particularly considering the recent shift in the anticipated timing of our technology development of the Oxy-Combustion Cycle and the introduction of the clean gas power plant product incorporating Entropy’s post-combustion carbon capture technology (the “Clean Gas Product”). Accordingly, the drivers of our future financial results, as well as the components of such results, may not be comparable to our historical or future results of operations.

Previous wording

General and administrative expenses consist primarily of personnel-related expenses associated with our general and administrative organiz ation and professional fees for legal, accounting, information technology, and other consulting services. General and administrative expenses increased by $0.7 million, or 8%, for the three months ended September 30, 2025, as compared to the same period in 2024. This increase was primarily due to greater professional fees for engineering and tax consulting and legal fees. Additionally, we incurred higher compensation expense due to stock-based compensation awards granted during 2025 and growth in employee headcount for the three months ended September 30, 2025, as compared to the same period in 2024.

Current wording

General and administrative expenses consist primarily of personnel-related expenses associated with our general and administrative organiz ation and professional fees for legal, accounting, information technology, and other consulting services. General and administrative expenses increased by $0.2 million, or 2%, for the three months ended March 31, 2026, as compared to the same period in 2025. During the first quarter of 2026, the Company terminated certain employees resulting in severance costs of $2.2 million and accelerated stock-based compensation of $0.7 million. In addition, there were lower professional fees related to legal costs and engineering consulting, partially offset by higher independent audit fees and recruiting costs.

Previous wording

Sales and marketing expenses consist primarily of personnel-related and consultant costs directly associated with our sales and marketing activities, which include general publicity efforts for the Company. Sales and marketing expenses increased by $0.4 million, or 35%, for the three months ended September 30, 2025, as compared to the same period in 2024. This increase was due to higher professional fees and growth in employee headcount.

Current wording

Sales and marketing expenses consist primarily of personnel-related and consultant costs directly associated with our sales and marketing activities, which include general publicity efforts for the Company. Sales and marketing expenses were generally consistent for the three months ended March 31, 2026, as compared to the same period in 2025. During the first quarter of 2026, the Company recognized $0.4 million in employee termination costs, partially offset by a $0.3 million decrease in salary and wages due to a reduction in headcount.

Previous wording

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 $7.2 million, or 42%, for the three months ended September 30, 2025, as compared to the same period in 2024. This increase was primarily due to more activity under the BHES JDA and ongoing validation testing campaigns at the Demonstration Plant that began in the fourth quarter of 2024. The Company also expanded its engineering headcount to support technology development efforts. Additionally, the Company incurred $1.0 million related to the JDA Make-Whole Payments for the three months ended September 30, 2025; no such expense was incurred for the same period in 2024.

Current wording

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 La Porte Demonstration Facility and development activities under the BHES JDA. R&D expenses decreased by $2.9 million, or 13%, for the three months ended March 31, 2026, as compared to the same period in 2025. This decrease was primarily due to the Company suspending the development activities under the BHES JDA in December 2025 resulting in a decrease of $4.8 million. Additionally, plant expenses were lower due to the suspension of R&D at the La Porte Demonstration Facility in December 2025. This decrease was offset by higher engineering consulting costs of $2.2 million, primarily related to the development of the Clean Gas Product, and employee termination costs of $1.2 million.

Previous wording

Project development expenses consist of labor expenses and fees paid to third parties developing commercial scale projects. Project development expenses increased by $9.8 million, or 4,206%, for the three months ended September 30, 2025, as compared to the same period in 2024. Beginning in March 2025, the Company began expensing costs associated with Project Permian as the Company suspended further long lead equipment releases for the project while it performed a value engineering process to evaluate the feasibility of the project. These costs were capitalized during thethree months ended September 30, 2024. For the three months ended September 30, 2025, the Company incurred $9.9 million of costs related to Project Permian.

Current wording

Project development expenses consist of labor expenses and fees paid to third parties developing commercial scale projects. Project development expenses decreased by $3.5 million, or 78%, for the three months ended March 31, 2026, as compared to the same period in 2025. The decrease was due to the Company pausing all development work and related expenditures for our first utility-scale power plant utilizing the Oxy-Combustion Cycle (“SN1”) during the fourth quarter of 2025. The Company incurred $3.8 million of costs related to SN1 for the three months ended March 31, 2025.

Previous wording

During the first quarter of 2025, the Company assessed its goodwill for impairmentdueto a change in the Company’s business plan and related sustained decrease in the Company’s market capitalization. As a result, the Company fully impaired goodwill for an impairment loss of $359.8 million. Also in the first quarter of 2025, the Company expensed $56.1 million of costs associated with the construction of Project Permian as management initiated a value engineering process to assess the project’s feasibility and optimize its design and temporarily paused further long lead equipment releases. In the third quarter of 2025, the Company recognized an impairment loss of $1,095.8 million related to its long-lived assets as a result of the responsiveness from potential customers to the Company’s technology and integrated product offering, the estimated cost reductions achieved in Project Permian, and the resulting revisions to the Company’s forecasted future unit deployments and related cash flows based upon the perceived marketability and commercial viability of the Company’s technology.

Current wording

The Company fully impaired goodwill and recognized an impairment of $359.8 million during thethree months ended March 31, 2025 dueto a change in the Company’s business plan and related sustained decrease in the Company’s market capitalization. Additionally, the Company expensed costs of $56.1 million associated with the construction of SN1 as management initiated a value engineering process to assess the project’s feasibility and optimize its design and temporarily paused further long lead equipment releases.

Previous wording

Depreciation, amortization and accretion expenses consist primarily of depreciation on our Demonstration Plant and amortization of intangible assets. Depreciation, amortization and accretion expense decreased by $4.6 million, or 23%, for the three months ended September 30, 2025, as compared to the same period in 2024, primarily due to lower depreciation and amortization rates as a result of the long-lived assets impairment recognized during the three months ended September 30, 2025.

Current wording

Depreciation, amortization and accretion expenses consist primarily of depreciation on our La Porte Demonstration Facility and amortization of intangible assets. Depreciation, amortization and accretion expense decreased by $18.3 million, or 84%, for the three months ended March 31, 2026, as compared to the same period in 2025, primarily due to lower depreciation and amortization rates as a result of the long-lived assets impairment recognized during the third quarter of 2025.

Previous wording

Interest income decreased by $3.2 million, or 40%, for the three months ended September 30, 2025, as compared to the same period in 2024. Interest income decreased due to lower interest-bearing cash and investment balances, declines in interest rates, and lower investment accretion.

Current wording

Interest income decreased by $2.5 million, or 43%, forthe three months ended March 31, 2026, as compared to the same period in 2025. Interest income decreased due to lower interest-bearing cash and investment balances and declines in interest rates.

Previous wording

Net loss attributable to non-controlling interest was 64.5% of net loss before income tax for the three months ended September 30, 2025, as compared to 66.0% of net loss for the three months ended September 30, 2024. The change in the non-controlling interests was due to exchanges by OpCo members of Class A OpCo units for Class A PubCo shares, partially offset by the additional issuance of Class A OpCo units under the BHES JDA.

Current wording

Net loss attributable to non-controlling interestwas 61.8% of net loss before income tax for the three months ended March 31, 2026, as compared to 64.4% of net loss for the same period in 2025. The change in the non-controlling interests was due to exchanges by OpCo members of Class A OpCo units for Class A PubCo shares, partially offset by the additional issuance of Class A OpCo units under the BHES JDA.

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 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 general and administrative costs and costs to develop our projects and procure the equipment necessary for such projects.

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 general and administrative costs and costs to develop and procure the equipment necessary for our projects.

Previous wording

Theavailable-for-sale securities are comprised of investment grade, fixed income securities. Theshort-term investments are comprised of a single 12-month certificate of deposit, held with a domestic banking institution, which matured in June 2025. Additionally, our current liabilities were $22.3 million at September 30, 2025.

Current wording

Theavailable-for-sale securities are comprised of investment grade, fixed income securities. Additionally, our current liabilities were$13.1 million at March 31, 2026.

Previous wording

We believe we have the ability to manage our operating costs such that our existing liquidity will be sufficient to fund our obligations for the next 12 months following the filing of this 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 develop our products and projects, but certain costs are not reasonably estimable at this time and we may require additional funding. Specifically, we may require additional funding in order to successfully fund the projects we intend to develop.

Current wording

We believe we have the ability to manage our operating costs such that our existing liquidity will be sufficient to fund our obligations for the next 12 months following the filing of this 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 develop our products and projects, but certain costs are not reasonably estimable at this time and we may require additional funding. Specifically, we will require additional funding in order to successfully fund the projects we intend to develop.

Previous wording

Cash used in operating activities increased $74.3 million for the nine months ended September 30, 2025, as compared to the same period in 2024. Our net cash used in operating activities to date have been primarily comprised of payroll, material and supplies, facilities expense, and professional services related to R&D, including the BHES JDA, and general and administrative activities. This change was primarily due to higher R&D costs, including costs incurred under the BHES JDA, as we commenced the validation testing campaigns at our Demonstration Plant during the fourth quarter of 2024, project development costs, and the expansion of the Company’s corporate infrastructure throughout 2024 and into 2025. We expect our cash used in operating activities to increase significantly before we start to generate any material cash inflows from our operations.

Current wording

Cash used in operating activities increased $30.7 millionfor the three months ended March 31, 2026, as compared to the same period in 2025. 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 payment of $26.1 million in contract cancellation costs resulting from the Company terminating the BHES LNTP during the fourth quarter of 2025. In addition, the Company suspended the development activities under the BHES JDA and suspended testing at our La Porte Demonstration Facility. 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 nine months ended September 30, 2025, net cash used in investing activities decreased $122.7 million as compared to the same period in 2024. Cash used in investing activities for thenine months ended September 30, 2025 primarily reflects the maturity of the Company’s certificate of deposit and the reinvestment of those funds into available-for-sale securities, along with capital expenditures related to the Demonstration Plant and Project Permian during the period in which costs were capitalized. Cash used in investing activities for the nine months ended September 30, 2024 primarily reflects the initial investments in available-for-sale securities as well as capital expenditures related to Project Permian and the Demonstration Plant during that period.

Current wording

During the three months ended March 31, 2026, net cash used in investing activ ities increased $7.6 million as compared to the same period in 2025. Cash used in investing activities for the three months ended March 31, 2026 primarily reflects the investments in available-for-sale securities, along with capital expenditures related to Project Permian Phase I. Cash used in investing activities for the three months ended March 31, 2025 primarily reflects the initial investments in available-for-sale securities as well as capital expenditures related to SN1 and the La Porte Demonstration Facility during that period.

Previous wording

Our cash used in financing activ ities was generally consistent for the nine months ended September 30, 2024, as compared to the same period in 2024. Cash used in financing activities for thenine months ended September 30, 2025 consists of finance lease obligation payments, income tax payments on vested share-based compensation awards, and issuance of Class A Common Stock.

Current wording

Our cash used in financing activ ities was materially consistent forthe three months ended March 31, 2026, as compared to the same period in 2025. Cash used in financing activities for thethree months ended March 31, 2026 consists of finance lease obligation payments, income tax payments on vested share-based compensation awards, and issuance of Class A Common Stock.

Previous 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 $3.5 million and $3.3 millionas of September 30, 2025 and December 31, 2024, respectively.

Current wording

We hold a lease for approximately 218,900 square feet of land under the La Porte Demonstration Facility. In addition, we have an oxygen supply agreement with the lessor to supply oxygen to the La Porte Demonstration Facility. The lease expires on the earlier of (i) January 1, 2031 and (ii) the termination of our oxygen supply agreement with the lessor. The term of the oxygen supply agreement expires on January 1, 2030 with automatic 12-month renewal terms. The oxygen supply agreement may be terminated by us or by the lessor upon 24 months’ written notice prior to the expiration date of its current term. The underlying lease requires the removal of all equipment and the obligation to restore the land to post-clearing grade level, which has resulted in the recognition of an asset retirement obligation liability of$3.7 million and $3.6 millionas of March 31, 2026 and December 31, 2025, respectively.

Previous wording

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

Current wording

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

Previous wording

As of September 30, 2025, future minimum lease payments attributable to the Company’s operating and finance lease arrangements are appr oximately $4.7 million and $0.2 million, resp ectively.

Current wording

As of March 31, 2026, future minimum lease payments attributable to the Company’s operating and finance lease arrangements are appr oximately$4.1 million and $0.1 million, resp ectively.

Previous wording

As of September 30, 2025 and December 31, 2024, we have committed to funding a portion of the remaining development costs incurred under the BHES JDA through a combination of cash and equity. The BHES JDA’s total value is $140 million, which assumes a fixed price per share. As of September 30, 2025, we recognized approximately $54.0 million of inception-to-date cash expenses and approximately $54.0 million of inception-to-date share-based expenses related to the BHES JDA. In addition, the Company may be required to make additional cash payments to BHES during periods when the volume-weighted average price of our Class A Common Stock is less than $4.00 per share in the 10 trading days preceding applicable quarterly share issuances under the terms of the BHES JDA. As of September 30, 2025, the Company had $0.5 million in current liabilities payable to related parties on thecondensed consolidated balance sheets related to the BHES JDA Make-Whole Payment. For the three and nine months ended September 30, 2025, the Company incurred expenses of $1.0 million and $4.9 million related to the BHES JDA Make-Whole Payments.

Current wording

As of March 31, 2026 and December 31, 2025, we have committed to funding a portion of the remaining development costs incurred under the BHES JDA through a combination of cash and equity. The BHES JDA’s total value is $140 million, which assumes a fixed price per share. As of March 31, 2026, we recognized approximately $62.0 million of inception-to-date cash expenses and approximately $62.0 million of inception-to-date share-based expenses related to the BHES JDA. In addition, the Company may berequired to make additional cash payments to BHES during periods when the volume-weighted average price of our Class A Common Stock is less than $4.00 per share in the 10 trading days preceding applicable quarterly share issuances under the terms of the BHES JDA. As of March 31, 2026, the Company had$2.2 million in current liabilities payable to related parties on thecondensed consolidated balance sheets related to the BHES JDA Make-Whole Payment. For the three months ended March 31, 2026 and 2025, the Company incurred expenses of $2.2 million and $2.5 million related to the BHES JDA Make-Whole Payments.

Previous wording

As of September 30, 2025, we have committed to purchase certain components of industrial machinery for use at our Demonstration Plant and at SN1. The total gross commitments totaled$149.1 million. As of September 30, 2025, there was $66.8 million remaining related to these commitments.

Current wording

As of March 31, 2026, we have committed to purchase certain components of industrial machinery for use at Project Permian Phase 1. The gross commitments totaled $79.6 million. As of March 31, 2026, there was $55.8 million remaining related to these commitments.

Previous wording

Our financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. Preparation of the financial statements requires our management to make a number of judgments, estimates and assumptions relating to the reported amounts of expenses, assets, and liabilities and the disclosure of contingent assets and liabilities. We consider an accounting judgment, estimate or assumption to be critical when (1) the estimate or assumption is complex in nature or requires a high degree of judgment and (2) the use of different judgments, estimates, and assumptions could have a material impact on our financial statements. Our significant accounting policies are described in Note 2 — Significant Accounting Policies in our consolidated financial statements included in Part II, Item 8 in our Annual Report.

Current wording

Our financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“US GAAP”). Preparation of the financial statements requires our management to make a number of judgments, estimates and assumptions relating to the reported amounts of expenses, assets, and liabilities and the disclosure of contingent assets and liabilities. We consider an accounting judgment, estimate or assumption to be critical when (1) the estimate or assumption is complex in nature or requires a high degree of judgment and (2) the use of different judgments, estimates, and assumptions could have a material impact on our financial statements. Our significant accounting policies are described in Note 2 — Significant Accounting Policies in our consolidated financial statements included in Part II, Item 8 in our Annual Report.

Previous wording

Section 102(b)(1) of the Jumpstart our Business Startups Act of 2012 (the “JOBS Act”) exempts emerging growth companies (“EGCs”) from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect not to take advantage of the extended transition period and comply with the requirements that apply to non-EGCs, and any such election to not take advantage of the extended transition period is irrevocable. We expect to be an EGC at least through the end of 2025 and will have the benefit of the extended transition period. We intend to take advantage of the benefits of this extended transition period.

Current wording

Section 102(b)(1) of the Jumpstart our Business Startups Act of 2012 (the “Jumpstart our Business Startups Act of 2012 (the “JOBS Act”) exempts emerging growth companies (“EGCs”) from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect not to take advantage of the extended transition period and comply with the requirements that apply to non-EGCs, and any such election to not take advantage of the extended transition period is irrevocable. We expect to be an EGC until December 31, 2026, which is the last day of the fiscal year following the fifth anniversary of our initial public offering. As an EGC, we intend to continue to take advantage of the benefits of this extended transition period.