Company: NPWR-WT
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001845437-25-000027
Chunk: 16

Company: NET Power Inc.
Filing Date: 2025-05-12
Form: 10-Q
Item: Part I, Item 1
Chunk 16
---
-lead equipment and commencement of a value engineering exercise to determine project cost reductions and better understand the project’s expected economic feasibility, the Company has determined it was not more likely than not that its deferred tax assets subject to the TRA would be realized. Therefore, in March 2025, the Company reduced the TRA liability of $21.3 million to zero as payments related to the TRA are not considered probable as of March 31, 2025.  The reduction is recorded in Change in Tax Receivable Agreement liability in the condensed consolidated statements of operations and comprehensive loss. If utilization of the Company’s deferred tax assets subject to the TRA become more likely than not in the future, the Company will reassess the probability of payments under the TRA and any such liability will be recognized as an expense in the condensed consolidated statements of operations and comprehensive loss.

NOTE 13 — Related Party TransactionsThe following table summarizes the related party transactions included in the condensed consolidated statements of operations and comprehensive loss:Three Months Ended March 31,$ in thousands20252024Master services agreement administrative costs$27 $26 General and administrative$27 $26 Master services agreement costs for Demonstration Plant$708 $267 BHES JDA17,827 8,346 Research and development$18,535 $8,613 The Company had $9.5 million and $6.5 million in current liabilities payable to related parties as of March 31, 2025 and December 31, 2024, respectively, on the condensed consolidated balance sheets related to the following services. These related party payables are unsecured and are due on demand.Master Services AgreementsA significant shareholder provides the Company with patent administration services related to the development of the Net Power Cycle. These totals are included in General and administrative on the condensed consolidated statements of operations and comprehensive loss.Another shareholder supports the Company with regard to general business oversight and with the operation of the Demonstration Plant. These totals are reflected in Research and development on the condensed consolidated statements of operations and comprehensive loss. BHES JDAOn February 3, 2022, the Company entered into the Original JDA, which was subsequently amended and restated on June 30, 2022 and December 13, 2022 with BHES to invest in, develop, and deploy the Net Power Cycle in collaboration with the Company. The BHES JDA is settled in cash and issuances of equity in exchange for services related to the development and commercial