Company: NPWR-WT
Filing Date: 2025-03-10
Form Type: 10-K
Source: 0001845437-25-000008
Chunk: 149

Company: NET Power Inc.
Filing Date: 2025-03-10
Form: 10-K
Item: Item 7
Chunk 149
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 and the Net Power, LLC board of directors' assessment of additional objective and subjective factors that the Net Power, LLC board believed were relevant and that may have changed from the date of the most recent valuation through the date of grant. We engaged an independent third-party valuation specialist to perform contemporaneous valuations of our equity. The valuations were performed in accordance with the guidance outlined in the American Institute of Certified Public Accountants (“AICPA”), Practice Aid, Valuation of Privately-Held Company Equity Securities Issued as Compensation. The independent third-party valuation specialist considered all objective and subjective factors that it believed to be relevant for each valuation conducted in accordance with AICPA’s Practice Aid, including our best estimate of our business condition, prospects, and operating performance at each valuation date. Other significant factors included:

•Our results of operations and financial position;

•Our stage of development and business strategy and the material risks related to our business and industry;

•The lack of liquidity of our equity;

•The valuation of publicly traded peer companies; and

•The likelihood of achieving a liquidity event for the holders of our ownership shares and equity awards, given prevailing market conditions.

An estimate of the sensitivity to changes in our assumptions is not practicable given the numerous assumptions that can materially affect our estimates.

Successor Period

We measure share-based awards at their grant-date fair value and record compensation expense on a straight-line basis over the vesting periods of the awards. Share-based compensation expense is adjusted for actual forfeitures of unvested awards as they occur. 

The estimated grant date fair value of our stock options and market-based awards are determined using the Monte Carlo Simulation. The assumptions used to calculate the fair value of these awards were:

•Expected Term—We used the expected term to liquidity, which was generally the vesting period of the award.

•Expected Volatility—Volatility was based on a benchmark of comparable companies.

•Risk-Free Interest Rate—The interest rates used were based on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent remaining term equal to the expected life of the award.

An estimate of the sensitivity to changes in our assumptions is not practicable given the numerous assumptions that can materially affect our estimates.

54

Emerging Growth Company Accounting Election

Section 102(b)(1) of the JOBS Act exempts emerging growth companies (“EGCs”) from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JO