Net Power Inc.

Previous wording

We may be unable to negotiate and enter into binding power offtake agreements on acceptable terms, on our anticipated timeline, or at all, which would adversely affect our ability to reach a final investment decision and obtain project financing for Project Permian Phase I.

Current wording

We may be unable to negotiate and enter into binding energy services or power offtake agreements on acceptable terms, on our anticipated timeline, or at all, which would adversely affect our ability to reach a final investment decision and obtain project financing for our Initial Project.

Previous wording

We are engaged in a process intended to result in one or more power offtake agreements for Project Permian Phase I. Discussions, indications of interest, requests for proposals, term sheets, memoranda of understanding and similar instruments do not constitute binding commitments unless and until definitive agreements are executed. If we are unable to execute binding power offtake agreements at prices and on terms sufficient to support project economics and financing, our final investment decision, construction commencement, and commercial operation dates could be delayed or may not occur, and our liquidity and capital requirements would be adversely affected. We also expect that any power offtake agreement we enter into would require us to provide substantial reciprocal credit support, in the form of cash, letters of credit or guarantees, scaled to the capacity committed and maintained through development, construction and operations, which would further reduce the liquidity available to us for other purposes.

Current wording

We are negotiating an energy services agreement for our Initial Project with a prospective customer, a leading developer of frontier artificial intelligence models, and are pursuing power offtake arrangements for other projects. Discussions, indications of interest, requests for proposals, term sheets, memoranda of understanding, and similar instruments do not constitute binding commitments unless and until definitive agreements are executed. If we are unable to execute binding energy services or power offtake agreements at prices and on terms sufficient to support project economics and financing, our final investment decision, construction commencement, and commercial operation dates could be delayed or may not occur, and our liquidity and capital requirements would be adversely affected. We also expect that any energy services or power offtake agreement we enter into would require us to provide substantial reciprocal credit support, in the form of cash, letters of credit or guarantees, scaled to the capacity committed and maintained through development, construction and operations, which would further reduce the liquidity available to us for other purposes.

Previous wording

Our offtake process for Project Permian Phase I is directed primarily at data center developers, computing infrastructure providers and other large-load customers whose electricity requirements reflect sustained capital investment in computing capacity. That investment is concentrated among a limited number of counterparties and is discretionary. A reduction, deferral or geographic reallocation of capital spending by these counterparties (whether resulting from changes in expected returns on computing investment, financing conditions, technological developments that reduce power intensity per unit of computing output, siting, permitting or community opposition constraints, regulatory or governmental restrictions on the development or interconnection of data centers, including in ERCOT, or general economic conditions) could reduce the number of potential offtakers, extend negotiation timelines, or reduce the pricing, contract tenor or capacity commitments available to us. Because we expect to rely on long-term offtake agreements to support project-level financing, the concentration, contract tenor and creditworthiness of our counterparties will also affect our ability to obtain financing on acceptable terms. We may be unable to identify alternative customers for capacity developed in reliance on this demand.

Current wording

Our offtake efforts are directed primarily at data center developers, computing infrastructure providers and other large-load customers whose electricity requirements reflect sustained capital investment in computing capacity. That investment is concentrated among a limited number of counterparties and is discretionary. A reduction, deferral, or geographic reallocation of capital spending by these counterparties (whether resulting from changes in expected returns on computing investment, financing conditions, technological developments that reduce power intensity per unit of computing output, siting, permitting, or community opposition constraints, regulatory or governmental restrictions on the development or interconnection of data centers, including in ERCOT, or general economic conditions) could reduce the number of potential offtakers, extend negotiation timelines, or reduce the pricing, contract tenor, or capacity commitments available to us. Because we expect to rely on long-term offtake agreements to support project-level financing, the concentration, contract tenor, and creditworthiness of our counterparties will also affect our ability to obtain financing on acceptable terms. We may be unable to identify alternative customers for capacity developed in reliance on this demand. Our Initial Project is being developed to serve a single prospective customer on a data center campus being developed by a third party, and its development depends on the commitments of both. Developments affecting that customer, including changes in its plans for computing capacity, its other infrastructure commitments, its financing and legal or governmental actions directed at it, could cause it to delay or decline the commitments the Initial Project requires, and could make lenders, suppliers or contractors less willing to support a project that serves it. We expect lenders to evaluate the Initial Project largely by reference to that customer’s creditworthiness. If they require more credit support than the customer agrees to provide, or price the project debt at levels the project cannot support, we may be unable to finance the Initial Project on acceptable terms or at all.

Previous wording

We have repositioned our business to focus on natural gas power generation for co-located large-load customers, initially without carbon capture, and we have indefinitely suspended development of the Oxy-Combustion Cycle. We do not currently expect the initial phase of Project Permian to include carbon capture, and any later deployment of carbon capture would depend on definitive technology, customer and financing arrangements. This repositioning reflects, among other things, current market conditions in which many prospective customers prioritize the speed and quantity of reliable power over carbon abatement and may be unwilling to pay a premium for lower-carbon power in the near term. The configuration, capacity and carbon capture scope of each phase of our projects, including Project Permian Phase I, will depend on our ability to in-license any necessary post-combustion carbon capture technology, customer requirements, commercial arrangements, equipment availability and financing, and may include natural gas generation deployed in advance of, or without, carbon capture. Our ability to deploy carbon capture technology at our projects is dependent on our ability to negotiate and enter into definitive commercial arrangements to license post-combustion carbon capture technology from Entropy or another provider. If we are unable to reach such definitive agreements, we may be unable to offer carbon capture at our projects, which would materially and adversely affect our business prospects.

Current wording

We have repositioned our business to focus on natural gas power generation for co-located large-load customers, initially without carbon capture, and we have indefinitely suspended development of the Oxy-Combustion Cycle. We do not currently expect our Initial Project to include carbon capture, and we are not designing it to accommodate the later addition of carbon capture. Any deployment of carbon capture at later projects or phases would depend on definitive technology, customer and financing arrangements. This repositioning reflects, among other things, current market conditions in which many prospective customers prioritize the speed and quantity of reliable power over carbon abatement and may be unwilling to pay a premium for lower-carbon power in the near term. The configuration, capacity and carbon capture scope of each of our projects will depend on customer requirements, commercial arrangements, site rights, permits, equipment availability and financing, and may include natural gas generation deployed in advance of, or without, carbon capture.

Previous wording

During the second quarter of 2026, we recognized a full impairment of the Developed Technology Asset Group, and those assets are carried at no value. We have no current plans to resume development of the Oxy-

Current wording

During the second quarter of 2026, we recognized a full impairment of the Developed Technology Asset Group, and those assets are carried at no value. We have no current plans to resume development of the Oxy-Combustion Cycle, and any recovery of value would depend on a sale, license, or other disposition of all or part of the Oxy-Combustion Cycle intellectual property and our improvements, equipment, and lease interests at the La Porte Demonstration Facility, or on a royalty under our license agreement with affiliates of Baker Hughes. The value that a counterparty would ascribe to the intellectual property may be limited because our license from 8 Rivers is exclusive only in the field of carbonaceous gas fuels other than those derived from certain solid fuel sources, and because several of the licensed patents expire beginning in 2030. In September 2026, we entered into agreements with affiliates of Baker Hughes that indefinitely suspend our joint development and commercial agreements with them and amend our license agreement with them. Under those agreements, Baker Hughes’ rights of access to, and exclusivity over, the La Porte Demonstration Facility ended, but Baker Hughes retains its exclusive license to manufacture and sell utility-scale equipment packages for the Oxy-Combustion Cycle. Further, the provision under which that exclusivity could be lost is suspended and would not revive automatically if the joint development agreement is reinstated. Baker Hughes also holds a royalty-free license, exclusive subject to rights we retained, to manufacture and sell industrial-scale products incorporating the technology, and a license to install and operate industrial plants incorporating those products, for which the royalty has not been agreed and, absent agreement, would be determined by an independent expert. Baker Hughes is not obligated to deploy any plant, and we may never receive a royalty. These licenses, and our obligation to use commercially reasonable efforts to disclose technical information to Baker Hughes at no charge, may reduce the value of the intellectual property to other counterparties and limit the transactions available to us. We have not entered into any binding agreement for a disposition, and there can be no assurance that any transaction will be agreed or consummated, or as to its terms or timing. In addition, we are evaluating alternatives for the La Porte Demonstration Facility, including a sale of all or part of the facility or its equipment and an early termination of the land lease. Depending on the outcome, the timing and cost of decommissioning the facility, which we currently expect to occur by June 2027, and the treatment of those obligations in any sale or other disposition may differ from our current estimates.

Previous wording

We are pursuing the development of power generation projects for co-located large-load facilities such as data centers. Activities of this type are new to us and may expose us to risks we have not previously borne including land acquisition and site-control risk, construction and counterparty risk, contractual performance risk, regulatory risk, and additional capital requirements at a time when we do not have sufficient committed capital to fund Project Permian Phase I through commercial operation. If a co-located facility requires grid-supplied power, whether as a supplement or as backup, we or our customer would be subject to large-load interconnection processes and to competition for available capacity, either of which could delay the project. We may also face competition for sites, interconnection positions, and end users from parties with substantially greater resources and relevant experience. We currently hold only a portion of the land rights required for the contemplated co-located configuration and broader build-out at Project Permian, and we have not obtained the additional land or development rights that configuration would require. If we do not obtain those rights on acceptable terms, Project Permian may be limited in size, delayed, reconfigured or not developed. To preserve schedule, we may also commit material capital to power generation equipment and related engineering before binding offtake, land, partner and project-financing arrangements are in place, and if a project does not proceed, a portion of those expenditures may not be recoverable. If these activities are unsuccessful, we could incur costs without corresponding benefit, and our results of operations, liquidity, and project timelines could be materially and adversely affected.

Current wording

We are pursuing the development of power generation projects for co-located large-load facilities such as data centers. Activities of this type are new to us and expose us to risks we have not previously borne, including land acquisition and site-control risk, construction and counterparty risk, contractual performance risk, regulatory risk, and additional capital requirements at a time when we do not have sufficient committed capital to fund our Initial Project through commercial operation. If a co-located facility requires grid-supplied power, whether as a supplement or as backup, our customer or we would be subject to large-load interconnection processes and to competition for available capacity, either of which could delay the project. We may also face competition for sites, interconnection positions and end users from parties with substantially greater resources and relevant experience. We have not obtained the land or development rights that our Initial Project and the broader contemplated build-out at Project Permian would require, and we may change the site, configuration or sequencing of our projects in response to customer, land, permitting and other developments, as we have done for our Initial Project. Our Initial Project depends on site rights that we would obtain from a third-party data center developer and on that developer’s progress in developing its campus. If we do not obtain the necessary rights on acceptable terms, our projects may be limited in size, delayed, reconfigured, or not developed. To preserve our schedule, we have committed, and expect to continue to commit, material capital to power generation equipment and related engineering before binding offtake, land, partner, and project-financing arrangements are in place, including through our acquisition in August 2026 of the owner’s position under the EPC Agreement. If a project does not proceed, a portion of those expenditures may not be recoverable, and we may incur cancellation or other costs. If these activities are unsuccessful, we could incur costs without corresponding benefit, and our results of operations, liquidity, and project timelines could be materially and adversely affected.

Previous wording

These processes are also subject to intervention by Texas state officials. On August 3, 2026, the Governor of Texas directed the Public Utility Commission of Texas and ERCOT to conduct a comprehensive verification and audit of all data center projects advancing through ERCOT’s interconnection process before any additional data center projects are approved to move forward, and directed that any project failing to comply with applicable requirements be denied connection to the Texas grid. The directive requires the collection of information from each data center project regarding public financial assistance received or expected, projected electricity consumption and any on-site generation, projected water consumption and cooling technology, measures to mitigate impacts on neighboring communities, and project ownership and control. The Governor has also indicated that he intends to work with the Texas legislature to address concerns regarding data centers.

Current wording

These processes are also subject to intervention by Texas state officials. On August 3, 2026, the Governor of Texas directed the Public Utility Commission of Texas and ERCOT to conduct a comprehensive verification and audit of all data center projects advancing through ERCOT’s interconnection process before any additional data center projects are approved to move forward, and directed that any project failing to comply with applicable requirements be denied connection to the Texas grid. The directive requires the collection of information from each data center project regarding public financial assistance received or expected, projected electricity consumption and any on-site generation, projected water consumption and cooling technology, measures to mitigate impacts on neighboring communities, and project ownership and control. The Governor also indicated that he intended to work with the Texas legislature to address concerns regarding data centers. On September 14, 2026, the Governor directed the Texas Water Development Board to seek penalties against data centers that do not respond to the state’s annual water use survey. On September 21, 2026, the Governor directed the Texas Commission on Environmental Quality (“TCEQ”) to pause the issuance of all permits related to data center projects until ERCOT completes its review. The directive does not expressly exclude generation that serves a data center without a connection to the ERCOT grid. On October 19, 2026, TCEQ informed the Governor that it had paused the issuance of all permits related to the construction or development of infrastructure directly supporting data centers, that it was screening pending applications and had paused those subject to the directive, and that it was suspending, where possible, authorizations for data center activities claimed without an affirmatively issued permit. ERCOT has stated that it intends to publish its report on or before December 10, 2026, but no date has been set for the pause to end. On November 3, 2026, Texas voters elected a new Governor, who will take office in January 2027 and who called during the campaign for a moratorium on new data center approvals until the Texas legislature adopts statewide rules governing them and has reaffirmed that position since the election. Whether a moratorium or other restrictions will be adopted, and their scope and timing, are uncertain. The directive contemplates that TCEQ will use information from the audits to review proposed permits, so the completion of ERCOT’s review will not by itself determine when permits for data center projects will be issued.

Previous wording

We cannot predict the scope, duration, or outcome of this process, the requirements the Public Utility Commission of Texas or ERCOT may adopt in response, or any resulting legislation. The process may delay or prevent the interconnection of data centers and other large loads that we expect to serve, extend the timelines on which prospective customers are prepared to commit to power offtake, alter the criteria on which customers select sites, or reduce the number of prospective customers able to proceed in ERCOT. Any of these outcomes could delay or prevent our reaching a final investment decision for Project Permian Phase I, delay or prevent project-level financing, and adversely affect our business, financial condition, results of operations, and prospects.

Current wording

Our projects require air permits, and we expect the pause to apply to those required for our Initial Project. On October 21, 2026, TCEQ announced that it had temporarily shut down its electronic permitting system, through which applications are ordinarily submitted, so that its staff could review applications to determine whether they relate to data centers. On November 9, 2026, TCEQ confirmed that electronic submissions were available for applications under its Construction, Multi-Sector and Concrete Production General Permits. Those applications require staff review to determine whether they relate to data centers and no longer receive automatic approval or provisional coverage. The restoration of electronic submissions does not lift the permitting pause for data center projects or establish when applications for our Initial Project will be processed or authorizations issued. If TCEQ does not accept an application submitted during the outage, we may be required to resubmit it, which could delay review. TCEQ has also begun suspending, where possible, authorizations for data center activities claimed without an affirmatively issued permit, and any authorization we obtain could be suspended. We cannot predict the scope, duration, or outcome of these processes, the requirements the Public Utility Commission of Texas, ERCOT, or TCEQ may adopt in response, the policies of the new administration, or any resulting legislation, including any moratorium on new data centers or the generation that serves them. These processes may delay or prevent the permitting of our projects or the interconnection or permitting of data centers and other large loads that we expect to serve, extend the timelines on which prospective customers are prepared to commit to energy services or power offtake, alter the criteria on which customers select sites, or reduce the number of prospective customers able to proceed in Texas. Our prospective customer for the Initial Project has indicated that it may defer its commitment, or pursue sites outside Texas, if permits are not obtained on its timeline or it expects further restrictions in Texas, and that it expects to decide before the end of 2026 whether to proceed with its plans in Texas. Any of these outcomes could delay or prevent our reaching a final investment decision for our Initial Project, delay or prevent project-level financing, and adversely affect our business, financial condition, results of operations, and prospects.

Previous wording

Grid interconnection and related regulatory processes, including ERCOT’s recently adopted batch framework for interconnecting large loads, may delay or restrict our projects.

Current wording

Grid interconnection and related regulatory processes, including ERCOT’s batch framework for interconnecting large loads, may delay or restrict our projects.

Previous wording

Our projects may require timely interconnection to the ERCOT grid and, for behind-the-meter configurations, may depend on the large-load interconnection processes applicable to co-located loads, whether those loads are developed, owned, or contracted for by our customers, our partners, or us. These processes are new, evolving, and subject to eligibility criteria, timelines, financial-security requirements, and allocation decisions outside of our control. Delays or adverse outcomes could delay project development, increase project costs, reduce the attractiveness of our projects to customers, and adversely affect our results.

Current wording

Our Initial Project is being designed to serve co-located load without a connection to the ERCOT grid, and we are no longer pursuing the generation interconnection request we previously submitted for Project Permian. Our projects and our customers’ facilities may nonetheless depend on the large-load interconnection processes applicable to co-located loads, including for supplemental or backup grid-supplied power, whether those loads are developed, owned, or contracted for by our customers, our partners, or us, and future projects or phases, including at Project Permian, may require interconnection to the ERCOT grid. These processes are new, evolving and subject to eligibility criteria, timelines, financial-security requirements and allocation decisions outside of our control. Delays or adverse outcomes could delay project development, increase project costs, reduce the attractiveness of our projects to customers and adversely affect our results.

Previous wording

Manufacturer backlogs for power generation equipment, including gas turbines, and related equipment currently extend multiple years. Although we have contracted for certain turbine equipment for Project Permian Phase I, changes in delivery schedules, cost escalation, supplier performance or the loss of reserved manufacturing slots could delay our projects and increase their cost, and replacement equipment may not be available on acceptable terms or timelines, or at all. Prevailing market prices for equipment comparable to the units we have contracted have increased materially since we contracted for them, and any additional equipment we procure is likely to cost more than the equipment we hold.

Current wording

Manufacturer backlogs for power generation equipment, including gas turbines and reciprocating engines, and related equipment currently extend multiple years. We have contracted for certain gas turbine equipment and, through our acquisition in August 2026 of the owner’s position under the EPC Agreement, for reciprocating engine generating units and related equipment. The configuration we are evaluating for our Initial Project would require additional generating capacity that we have not secured, and we may be unable to secure it on acceptable terms or timelines, or at all. Changes in delivery schedules, cost escalation, supplier or contractor performance, or the loss of reserved manufacturing slots could delay our projects and increase their cost, and replacement equipment may not be available on acceptable terms or timelines, or at all. Prevailing market prices for equipment comparable to the units for which we have contracted have increased materially since we contracted for them, and any additional equipment we procure is likely to cost more than the equipment we hold.

Previous wording

We do not have a binding agreement for the post-combustion carbon capture technology, which is an important pillar of our long-term strategy.

Current wording

We do not have a binding agreement for post-combustion carbon capture technology, and we may not deploy carbon capture at our projects.

Previous wording

Our prior letter of intent with Entropy has expired by its terms and has not been replaced, and our discussions with Entropy are continuing on a non-binding basis. Either party may discontinue negotiations at any time, and any framework we agree is not expected to provide for exclusivity or an equity investment by us in Entropy. We have not agreed on the structure, scope, economics or timing of any definitive arrangement, and any definitive arrangement may require capital commitments, licensing fees or other payments in amounts and on timing that have not been determined. If we are unable to enter into definitive agreements on commercially acceptable terms, we would need to identify and qualify an alternative technology provider, which would require additional time and expense, may not be available on terms or timelines supporting our project schedules, and could prevent or delay carbon capture in later phases.

Current wording

Our prior letter of intent with Entropy expired by its terms and has not been replaced, and we have not entered into definitive agreements with Entropy or any other provider of post-combustion carbon capture technology. Any definitive arrangement may require capital commitments, licensing fees, or other payments in amounts and on schedules that have not been determined. If we elect to deploy carbon capture at later phases or projects and are unable to enter into definitive agreements on commercially acceptable terms, we would need to identify and qualify an alternative technology provider, which would require additional time and expense, may not be available on terms or timelines supporting our project schedules, and could prevent or delay carbon capture at those phases or projects.

Previous wording

Our project economics depend in part on carbon capture tax credits, which are subject to availability, transferability, monetization and other restrictions.

Current wording

The economics of any carbon capture we deploy would depend in part on carbon capture tax credits, which are subject to availability, transferability, monetization and other restrictions.

Previous wording

The economics of projects incorporating carbon capture depend in part on federal tax credits, including the credit under Section 45Q of the Internal Revenue Code, the value, transferability and monetization of which are subject to statutory and regulatory requirements, including restrictions relating to foreign entities of concern. The credit value available with respect to any project will depend on, among other things, when the applicable facility or equipment is placed in service, whether prevailing wage and apprenticeship requirements are satisfied, and the manner in which captured CO₂ is stored, used, or otherwise disposed of, and legislation enacted in 2025 that increased certain credit values, including for CO₂ used in enhanced oil recovery, may be amended or repealed. If such credits are unavailable, reduced, restricted or cannot be efficiently monetized, our project economics and offtake pricing could be adversely affected.

Current wording

The economics of projects incorporating carbon capture depend in part on federal tax credits, including the credit under Section 45Q of the Internal Revenue Code, the value, transferability and monetization of which are subject to statutory and regulatory requirements, including restrictions relating to foreign entities of concern. The credit value available with respect to any project will depend on, among other things, whether construction begins before January 1, 2033, when the applicable facility or equipment is placed in service, whether prevailing wage and apprenticeship requirements are satisfied, and the manner in which captured CO₂ is stored, used, or otherwise disposed of. In addition, legislation enacted in 2025 that increased certain credit values, including for CO₂ used in enhanced oil recovery, may be amended or repealed. If such credits are unavailable, reduced, restricted, or cannot be efficiently monetized, our project economics and offtake pricing could be adversely affected.

Previous wording

Our long-term strategy contemplates that some customers may eventually value, and pay for, power generated with carbon capture. Our near-term strategy does not assume that customers will pay a premium for lower-carbon power, and the initial phase of Project Permian is not currently expected to include carbon capture. Recent development activity in our target markets has emphasized speed to power, available capacity and price, and certain large purchasers of electricity have modified or extended timelines associated with previously announced emissions commitments. In addition, federal greenhouse gas emission standards applicable to fossil fuel-fired electric generating units, and related greenhouse gas reporting requirements, are subject to pending regulatory action. If applicable emissions requirements are reduced or eliminated and customers do not independently attribute value to carbon capture, pricing available for lower-carbon power may not exceed pricing for conventional generation by an amount sufficient to recover the incremental capital and operating costs of carbon capture. In that event, we may deploy generation without carbon capture, defer carbon capture investment, or realize returns below those we currently anticipate.

Current wording

Our long-term strategy contemplates that some customers may eventually value, and pay for, power generated with carbon capture. Our near-term strategy does not assume that customers will pay a premium for lower-carbon power, and our Initial Project is not currently expected to include carbon capture. Recent development activity in our target markets has emphasized speed to power, available capacity, and price, and certain large purchasers of electricity have modified or extended timelines associated with previously announced emissions commitments. In September 2026, the EPA finalized a partial repeal of the 2024 greenhouse gas standards for fossil fuel-fired electric generating units, including the carbon-capture-based Phase 2 standards for new baseload stationary combustion turbines. The final rule is scheduled to become effective on November 16, 2026. The EPA has separately proposed broader rescission of remaining greenhouse gas requirements for these generating units. These actions could reduce regulatory incentives for customers to select generation incorporating carbon capture. If applicable emissions requirements are reduced or eliminated and customers do not independently attribute value to carbon capture, pricing available for lower-carbon power may not exceed pricing for conventional generation by an amount sufficient to recover the incremental capital and operating costs of carbon capture. In that event, we may deploy generation without carbon capture, defer carbon capture investment, or realize returns below those we currently anticipate.

Previous wording

Following the repositioning of our business, we compete directly with integrated energy companies, independent power producers, equipment manufacturers and developers pursuing natural gas generation for large-load customers, including projects incorporating carbon capture. Many of these participants have greater financial resources, lower costs of capital, established customer relationships, existing carbon dioxide transportation and sequestration infrastructure, priority access to constrained equipment manufacturing capacity, and the ability to commit capital in advance of securing offtake. We may be unable to compete successfully on schedule, price or credit terms.

Current wording

Following the repositioning of our business, we compete directly with integrated energy companies, independent power producers, equipment manufacturers and developers pursuing natural gas generation for large-load customers, including projects incorporating carbon capture. Many of these market participants have greater financial resources, lower costs of capital, established customer relationships, existing carbon dioxide transportation and sequestration infrastructure, priority access to constrained equipment manufacturing capacity, and the ability to commit capital in advance of securing offtake. We may be unable to compete successfully on schedule, price, or credit terms.

Previous wording

We may be unable to obtain the capital required to develop our projects, and our share price, public float, and changed asset base may limit our access to capital, result in substantial dilution, and affect the continued listing of our securities.

Current wording

We will need substantial additional capital to develop our projects, which may not be available on acceptable terms or at all, and our share price, public float, and changed asset base may limit our access to capital and result in substantial dilution.

Previous wording

Following the impairment of the Developed Technology Asset Group, our assets consist primarily of cash, cash equivalents and investments, and deposits on gas turbine equipment for Project Permian Phase I. We have no revenue, no binding power offtake agreement, and have not made a final investment decision for Project Permian Phase I, and we do not have sufficient committed capital to fund the project through commercial operation.

Current wording

Following the impairment of the Developed Technology Asset Group and our acquisition in August 2026 of the owner’s position under the EPC Agreement, our assets consist primarily of cash, cash equivalents and investments, and equipment deposits and other capitalized costs for our projects. We have no revenue and no binding energy services or power offtake agreement; we have not made a final investment decision for our Initial Project, and we do not have sufficient committed capital to fund the project through commercial operation. The capital required to bring the Initial Project to commercial operation substantially exceeds our cash and investments. In addition to the remaining payments under the EPC Agreement and our other equipment commitments, the Initial Project will require additional generating capacity, balance-of-plant, electrical and fuel-supply equipment and infrastructure, credit support under any energy services agreement, and project-level debt and equity, none of which has been committed. Costs that our prospective customer has not approved in advance are not covered by the Cost Reimbursement Agreement. Those costs currently include engineering and other work for the Initial Project, including work under the limited notice to proceed we are negotiating with Saulsbury, and we have incurred, and may continue to incur, such costs to maintain the project schedule. If we cannot obtain the capital we need on acceptable terms and on a timeline that meets our prospective customer’s requirements, we may have to delay, reduce the scope of, or abandon the Initial Project, and we may be unable to recover the amounts we have spent on it. Our Board of Directors may also consider strategic alternatives, which could include partnerships, project-level or corporate transactions, a sale of assets or a reduction or discontinuation of some or all of our development activities, and there can be no assurance that any alternative would be available on acceptable terms or at all or would preserve value for our stockholders.

Previous wording

Our ability to raise equity capital depends on the market price of our Class A Common Stock and on the aggregate market value of our common equity held by non-affiliates. If and for so long as that value is below $75 million as of the applicable measurement dates under the instructions to Form S-3, the amount of securities we may sell in primary offerings under an effective shelf registration statement during any 12-month period is limited to a portion of that value. A decline in the market price of our Class A Common Stock would further reduce the capital available to us through such offerings, increase the dilution to existing stockholders resulting from any equity issuance, and could make equity financing unavailable on acceptable terms or at all. In addition, share-settled payments under the BHES JDA made when the ten-day volume-weighted average price of our Class A Common Stock is below $4.00 per share require incremental cash payments, as described in Note 12.

Current wording

Our ability to raise equity capital depends on the market price of our Class A Common Stock and on the aggregate market value of our common equity held by non-affiliates. If we rely on General Instruction I.B.6 of Form S-3 for primary offerings while our public float is below $75 million, the aggregate value of securities sold under that instruction during the applicable rolling 12-month period generally may not exceed one-third of our public float, calculated under the instruction. Prior sales under that instruction reduce the capacity available for additional sales. A decline in the market price of our Class A Common Stock would further reduce the capital available to us through such offerings, increase the dilution to existing stockholders resulting from any equity issuance, and could make equity financing unavailable on acceptable terms or at all. In addition, the remaining consideration for work performed under the BHES JDA through December 31, 2025 is payable partly in shares of our Class B Common Stock and Class A OpCo Units, and share-settled payments made when the ten-day volume-weighted average price of our Class A Common Stock is below $4.00 per share require incremental cash payments, as described in Note 12 to our condensed consolidated financial statements.

Previous wording

Our Class A Common Stock and warrants are listed on the New York Stock Exchange and are subject to itscontinued listing standards, including a requirement that the average closing price of a listed security not fall below $1.00 over a consecutive 30 trading-day period. The market price of our Class A Common Stock has been volatile. If we fail to satisfy applicable continued listing standards and do not cure the deficiency within the applicable period, our securities could be suspended from trading and delisted, which would further impair our access to capital and reduce the liquidity of our securities.

Current wording

The market price of our Class A Common Stock has been below $1.00, and our securities could be delisted from the New York Stock Exchange.

Previous wording

We are an energy technology and project development company. We are not primarily engaged in the business of investing, reinvesting or trading in securities, and we do not hold ourselves out as being engaged in those activities; our historical development, our public representations and the activities of our officers and directors support the conclusion that we are an operating company. Under the Investment Company Act of 1940, as amended (the “ICA”), however, a company may be deemed an investment company if the value of its investment securities exceeds 40% of its total assets (excluding government securities and cash items) and no exception or safe harbor applies. Pending its use in our primary business, we invest cash, including cash obtained in connection with our 2023 merger, in highly liquid available-for-sale securities, including corporate bonds, to conserve capital and liquidity, and as a result of recently recognized impairment losses those securities constitute a larger portion of our total assets than previously. To maintain compliance with the ICA, we monitor the value of our investments, and we may need to divest securities, make investments that are less advantageous than if we did not have ICA concerns, or forgo otherwise desirable investments or transactions.

Current wording

We are an energy technology and project development company. We are not primarily engaged in the business of investing, reinvesting or trading in securities, and we do not hold ourselves out as being engaged in those activities; our historical development, our public representations and the activities of our officers and directors support the conclusion that we are an operating company. Under Section 3(a)(1)(C) of the Investment Company Act of 1940, as amended (the “ICA”), an issuer may be an investment company if it owns or proposes to acquire investment securities exceeding 40% of the value of its total assets, excluding Government securities and cash items, determined on an unconsolidated basis, unless an applicable exclusion or exemption is available. Pending its use in our primary business, we hold cash, including cash obtained in connection with our 2023 merger, in bank deposits, United States Treasury securities and government money market funds to conserve capital and liquidity. United States Treasury securities are excluded from the numerator and denominator of the statutory asset test. The treatment of any money market fund shares as cash items depends on the characteristics of the funds and the applicability of SEC staff positions. If those positions do not apply to our holdings, or if our asset composition changes, we could exceed the 40% threshold unless an exclusion or exemption is available. As a result of recently recognized impairment losses, these holdings constitute a larger portion of our total assets than previously, and to maintain compliance with the ICA, we monitor the composition of our assets and may need to make investments that are less advantageous than if we did not have ICA concerns, or forgo otherwise desirable investments or transactions.

Previous wording

We are subject to a pending securities class action and a related stockholder derivative action, and may become subject to additional litigation or regulatory proceedings, any of which could result in substantial costs and divert management’s attention.

Current wording

We are subject to a pending securities class action, and may become subject to additional litigation or regulatory proceedings, any of which could result in substantial costs and divert management’s attention.

Previous wording

We are a defendant in a putative federal securities class action and a related stockholder derivative action, in each case arising from alleged misstatements concerning the timing and costs of developing Project Permian. These matters are described in Part II, Item 1, “Legal Proceedings,” and in Note 14 to our condensed consolidated financial statements. We intend to defend these matters vigorously, but we cannot predict their outcome, and we are unable to estimate a reasonably possible loss or range of loss.

Current wording

We are a defendant in a putative federal securities class action arising from alleged misstatements concerning the timing and costs of developing our first planned utility-scale power plant incorporating the Oxy-Combustion Cycle, which we then referred to as Project Permian. This matter is described in Part II, Item 1, “Legal Proceedings,” and in Note 14 to our condensed consolidated financial statements. We intend to defend this matter vigorously, but we cannot predict the outcome, and we are unable to estimate a reasonably possible loss or range of loss. We are also a nominal defendant in two stockholder derivative actions, described in the same places, that assert claims on our behalf against certain of our current and former directors and officers based on the same alleged misstatements.