Company: NPWR-WT
Filing Date: 2025-03-10
Form Type: 10-K
Source: 0001845437-25-000008
Chunk: 110

Company: NET Power Inc.
Filing Date: 2025-03-10
Form: 10-K
Item: Item 1A
Chunk 110
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, the law lowers the threshold for eligibility as a “qualified facility” to include any CCUS facility placed on an electric generating facility that captures 18,750 tons of carbon annually and has a capture rate of at least 75%, as measured by an applicable electric generating unit’s baseline carbon oxide production. We believe that a project utilizing the Net Power Cycle can meet the criteria for a “qualified facility” under this definition, and, as such, we intend to apply for tax credits under Section 45Q of the Code. 

We view the enactment of the IRA as favorable for our development and commercialization efforts. However, we are continuing to evaluate the overall impact and applicability of the IRA to our development and commercialization efforts. It is unclear how this legislation will be implemented by the U.S. Department of Treasury and what, if any, impact it will have on our tax rate. Additionally, in January 2025, President Trump issued an executive order directing an immediate pause on the disbursement of funds appropriated through the IRA, and the IRA may be subject to amendment or repeal through Congressional budget reconciliation. If the IRA or any current or future similar legislation is amended or repealed, or if it is interpreted by courts or implemented by regulatory agencies differently than we expect, then this could adversely affect our anticipated timelines, projected financials and ability to grow our business. 

We may not be able to utilize any future federal income tax credits.

Our first utility-scale project is currently in the development stage, and historically we have not generated revenue. Consequently, as of December 31, 2024, our deferred tax assets include federal income tax net operating losses. If we are unable to monetize federal income tax credits generated under Section 45Q or any successor provision, either by 

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transferring these credits or electing to receive a direct payment equal to their value, we would need to offset these credits against our taxable income. However, there is no guarantee that we will successfully transfer these tax credits, generate taxable income, or otherwise monetize the value of these federal income tax credits.

Risks Related to Intellectual Property 

We are developing Net Power-owned intellectual property, but we rely heavily on the intellectual property we have in-licensed and that is core to the Net Power Cycle. The ability to protect these patents, patent applications, and other proprietary rights may be challenged by our inability or failure to obtain, maintain, protect, defend, and enforce, exposing us to possible material adverse impacts on our business, competitive position, and operating