Company: NPWR-WT
Filing Date: 2025-03-10
Form Type: 10-K
Source: 0001845437-25-000008
Chunk: 47

Company: NET Power Inc.
Filing Date: 2025-03-10
Form: 10-K
Item: Item 16
Chunk 47
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%(3.8)%     Change in investment in OpCo— %(2.5)%     Valuation allowance— %3.7 %Warrants(3.0)%— %R&D Credit0.5 %— %Other1.2 %(0.5)%Effective tax rate6.0 %3.9 %

F-32

Audited Financial Statements of NET Power Inc. - Table of Contents

The following table presents the effects of temporary differences arising from deferred income taxes:December 31,$ in thousands20242023Deferred tax assets     Federal net operating losses$4,808 $1,976      State net operating losses551 186      Investment in OpCo10,816 62,972 R&D credit carryforward1,308 — Other74 — Deferred tax assets, gross17,557 65,134 Valuation allowance(11,293)(62,972)Deferred tax assets, net6,264 2,162 Deferred tax liabilities     Property, plant, and equipment and developed technology— (59,881)Warrants(10,570)— Deferred tax liabilities, gross(10,570)(59,881)Deferred tax liabilities, net$(4,306)$(57,719)As of December 31, 2024, the Company recorded a deferred tax asset of $17.6 million, which was partially offset by a valuation allowance of $11.3 million. The change in the valuation allowance of $51.7 million for the year ended December 31, 2024 is primarily due to the change in the balance of the deferred tax asset attributable to Net Power Inc.’s investment in OpCo. The Company considered sources of income and determined that the deferred tax assets in the amount of $11.3 million and $63.0 million were more-likely-than-not to be realized as of December 31, 2024 and 2023 and therefore established a valuation allowance as of the respective dates. During 2024, the Company completed its estimate of deferred taxes as of the Closing Date and finalized its purchase price allocation, which resulted in a measurement adjustment that reduced the deferred tax liability on property, plant, and equipment along with a corresponding reduction to goodwill. Refer to Note 7 — Goodwill and Intangible Assets for additional information.As of December 31, 2024, the Company has federal, state, and foreign income