Company: NPWR-WT
Filing Date: 2025-03-10
Form Type: 10-K
Source: 0001845437-25-000008
Chunk: 120

Company: NET Power Inc.
Filing Date: 2025-03-10
Form: 10-K
Item: Item 1A
Chunk 120
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 our or our consumers’ data. As a result, we are subject to the risk that cyberattacks on, or other security incidents affecting, our third-party vendors may adversely affect our business, even if an attack or breach does not directly impact our systems. 

Risks Relating to the Tax Receivable Agreement 

Pursuant to the Tax Receivable Agreement, Net Power Inc. is required to pay to certain OpCo Unitholders 75% of the tax savings that Net Power Inc. realizes as a result of increases in tax basis in OpCo’s assets resulting from the exchange of OpCo Units for shares of Class A Common Stock (or cash) pursuant to the OpCo LLC Agreement as well 

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as certain other tax benefits, including tax benefits attributable to payments under the Tax Receivable Agreement, and those payments may be substantial. 

OpCo Unitholders may exchange their OpCo Units for shares of Class A Common Stock or, upon the election of Net Power Inc., cash pursuant to the OpCo LLC Agreement, subject to certain conditions and transfer restrictions as set forth therein. These exchanges are expected to result in increases in Net Power Inc.’s allocable share of the tax basis of the tangible and intangible assets of OpCo, and such share may increase (for income tax purposes) depreciation and amortization deductions to which Net Power Inc. is entitled. 

In connection with the Business Combination, Net Power Inc. entered into the Tax Receivable Agreement, which generally provides for the payment by Net Power Inc. of 75% of certain tax benefits, if any, that Net Power Inc. realizes (or in certain cases is deemed to realize) as a result of these increases in tax basis and for the payment of certain other tax benefits, including tax benefits attributable to payments under the Tax Receivable Agreement. These payments are the obligation of Net Power Inc. and not of OpCo. The actual increase in Net Power Inc.’s allocable share of OpCo’s tax basis in its assets, as well as the amount and timing of any payments under the Tax Receivable Agreement, will vary depending upon a number of factors, including the timing of exchanges, the market price of the Class A Common Stock at the time of the exchange, the extent to which such exchanges are taxable, and the amount and timing of the recognition of Net Power Inc.’s income. While many of the factors that will determine the amount of payments that Net Power Inc. will make under the Tax Receivable Agreement are outside of its control, Net