Company: NPWR-WT
Filing Date: 2025-03-10
Form Type: 10-K
Source: 0001845437-25-000008
Chunk: 48

Company: NET Power Inc.
Filing Date: 2025-03-10
Form: 10-K
Item: Item 16
Chunk 48
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 tax net operating loss carryforwards of $22.9 million, $22.9 million, and $192 thousand. The Company recorded a $4.8 million deferred tax asset for the federal net operating loss which will carry forward indefinitely. The Company recorded a $551 thousand deferred tax asset for state net operating loss and a $73 thousand deferred tax asset for foreign net operating loss, which was offset by a $477 thousand valuation allowance based on the determination that a portion of these losses is not more likely than not to be realized.  State and foreign net operating loss carryforwards will begin to expire in 2043. The Company also recognized $1.3 million of R&D credit carryforward which will begin to expire in 2043. As of December 31, 2024, the Company recorded no unrecognized tax benefits that, if recognized, would decrease the Company’s effective tax rate. The measurement of unrecognized tax benefits is not expected to significantly change during the twelve months following the date of the consolidated balance sheets. Management evaluated the Company’s tax positions and concluded that the Company had taken no uncertain tax positions that require adjustment to comply with applicable accounting guidance.The Company and its subsidiaries file U.S. federal income tax returns as well as tax returns in various state jurisdictions. OpCo files U.S. federal and state tax returns. Generally, tax years between 2020 and 2023 remain open to examination by the tax authorities in these jurisdictions.Although the outcomes of tax examination are uncertain, management believes that adequate provisions for income taxes have been made. If outcomes differ materially from management’s estimates, those outcomes could have a material impact 

F-33

Audited Financial Statements of NET Power Inc. - Table of Contents

on the Company’s financial condition and results of operations. Differences between actual results and assumptions or changes in assumptions in future periods are recorded in the period they become known. To the extent additional information becomes available prior to resolution, such accruals are adjusted to reflect probable outcomes.Tax Receivable Agreement

As of December 31, 2024, the Company recorded a liability of $21.0 million related to its projected obligations under the TRA, which is recorded as Tax Receivable Agreement liability on the Company’s consolidated balance sheets. This obligation arose because of qualifying exchanges of Class A OpCo Units. 

NOTE 15 — Related Party TransactionsThe following table summarizes the related party transactions included in the consolidated statements of operations and comprehensive loss:SuccessorPredecessorPeriod FromPeriod FromJune 8,