Company: NPWR-WT
Filing Date: 2025-08-11
Form Type: 10-Q
Source: 0001845437-25-000053
Chunk: 50

Company: NET Power Inc.
Filing Date: 2025-08-11
Form: 10-Q
Item: Part I, Item 1
Chunk 50
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As of June 30, 2025, the Company estimated its annual effective tax rate to be 1.96%, and recorded a deferred income tax benefit of $1.6 million and $1.2 million for the three and six months ended June 30, 2025. The annual effective tax rate varies from the statutory federal income tax rate due to amounts allocated to NCI, changes in the Company’s valuation allowance and other permanent items. On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We are currently assessing its impact on our consolidated financial statements, however, do not expect a material impact to the financial statements at this time.Tax Receivable Agreement In March 2025, due to the Company’s decision to pause new purchase commitments for Project Permian’s long-lead equipment and commencement of a value engineering exercise to determine project cost reductions and better understand Project Permian’s expected economic feasibility, the Company determined it was not more likely than not that its deferred tax assets subject to the Tax Receivable Agreement (“TRA”) would be realized and therefore, reduced the TRA liability to zero as payments under the TRA were not considered probable. Accordingly, in March 2025, the Company recognized a $21.3 million reduction in the Tax Receivable Agreement liability, which is recorded in Change in Tax Receivable Agreement liability in the condensed consolidated statements of operations for the six months ended June 30, 2025.On May 12, 2025, pursuant to its rights under the TRA, the Company delivered to the agent of the TRA holders notice of the Company’s intent to terminate the TRA (the “Early Termination Notice”). No early termination payment was payable for any TRA holder. The Early Termination Notice became final and binding on June 12, 2025.

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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 June 30,Six Months Ended June 30,$ in thousands2025202420252024Master services agreement administrative costs$