NET Power Inc.NPWR
NET Power Inc. Leases Disclosure
NOTE 8 — Leases
The following is a summary of leases on the consolidated balance sheets:
| December 31, | ||||||||||||||||||||
| $ in thousands | Line item | 2025 | 2024 | |||||||||||||||||
| Assets | ||||||||||||||||||||
| Operating leases | Operating lease right-of-use assets | $ | 551 | $ | 2,699 | |||||||||||||||
| Property, plant, and equipment, net | 43 | 331 | ||||||||||||||||||
| Total assets | $ | 594 | $ | 3,030 | ||||||||||||||||
| Liabilities | ||||||||||||||||||||
| Current | ||||||||||||||||||||
| Operating leases | Operating lease liabilities, current portion | $ | 1,074 | $ | 683 | |||||||||||||||
| Financing leases | Finance lease liabilities, current portion | 127 | 187 | |||||||||||||||||
| Non-current | ||||||||||||||||||||
| Operating leases | Non-current operating lease liabilities | 2,584 | 2,125 | |||||||||||||||||
| Financing leases | Non-current finance lease liabilities | — | 110 | |||||||||||||||||
| Total liabilities | $ | 3,785 | $ | 3,105 | ||||||||||||||||
The following table presents the Company’s lease costs by period presented and the classification on the consolidated statements of operations and comprehensive loss:
| Year Ended December 31, | ||||||||||||||||||||
| $ in thousands | Line item | 2025 | 2024 | |||||||||||||||||
| Operating lease costs | General and administrative | $ | 1,016 | $ | 624 | |||||||||||||||
| Financing lease costs: | ||||||||||||||||||||
| Amortization of right-of-use assets | Depreciation, amortization, and accretion | $ | 39 | $ | 18 | |||||||||||||||
| Interest on lease liabilities | Interest income, net | 29 | 15 | |||||||||||||||||
| Total finance lease costs | $ | 68 | $ | 33 | ||||||||||||||||
The following is a summary of the weighted-average lease term and discount rate:
| December 31, | ||||||||||||||
| 2025 | 2024 | |||||||||||||
| Weighted-average remaining lease term - operating leases | 3.9 years | 4.3 years | ||||||||||||
| Weighted-average remaining lease term - finance leases | 0.7 years | 1.7 years | ||||||||||||
| Weighted-average discount rate - operating leases | 10.0% | 9.1% | ||||||||||||
| Weighted-average discount rate - finance leases | 14.0% | 14.0% | ||||||||||||
The following table presents the future minimum lease payments that the Company expects to make under its operating and finance leases as of December 31, 2025:
| $ in thousands | Operating leases | Finance leases | ||||||||||||
| 2026 | $ | 1,124 | $ | 133 | ||||||||||
| 2027 | 1,160 | — | ||||||||||||
| 2028 | 1,170 | — | ||||||||||||
| 2029 | 735 | — | ||||||||||||
| 2030 | 236 | — | ||||||||||||
| Total lease payments | $ | 4,425 | $ | 133 | ||||||||||
| Less: imputed interest | (767) | (6) | ||||||||||||
| Present value of lease liabilities | $ | 3,658 | $ | 127 | ||||||||||
Refer to Note 5 — Goodwill and Intangible Assets for discussion of impairments related to the Developed Technology Asset Group recognized during the year ended December 31, 2025.
Office Space and Building Leases
On June 6, 2022, the Company entered into an office space lease agreement for commercial office space in Durham, North Carolina (the “Measurement Building Lease”), which became effective on November 1, 2022 and had an original lease term of 60 months from the signing date. On August 11, 2023, the Company agreed to terminate the Measurement Building Lease effective October 6, 2023 and entered into a new office lease agreement (the “Roney St. Lease”). The Roney St. Lease commenced on October 6, 2023 and has an original lease term of 62 months from the commencement date. The lessors of the Measurement Building Lease and the Roney St. Lease have common ownership and are considered related parties to each other; therefore, the simultaneous termination of the Measurement Building Lease and execution of the Roney St. Lease represent a single transaction accounted for as a modification of the Measurement Building Lease. As such, the Company remeasured the lease liabilities and right-of-use asset associated with the Measurement Building Lease and recognized those balances over the amended, remaining lease term. In addition, the Roney St. Lease includes an early termination option that enables the Company to end the lease on or after its 50th month.
On February 28, 2024, the Company entered into an office space lease agreement for commercial office space in Houston, Texas (the “Atlas Tower Lease”), which became effective in July 2024. The Atlas Tower Lease has an original lease term of 68 months from the commencement date and includes an early termination option that enables the Company to end the lease at the end of its 44th month. The Company measured the lease liabilities and right-of-use asset associated with the Atlas Tower Lease upon commencement of the lease and recognized those balances over the lease term. As of December 31, 2025, the Company determined that it is unlikely to
exercise the termination option associated with the Atlas Tower Lease; therefore, the above minimum lease payments do not consider the effects of the termination option on the lease term.
On March 7, 2025, the Company entered into a building lease agreement for a warehouse in La Porte, Texas that commenced in April 2025. The lease has an initial term of 62 months and contains a renewal option of five years.
Land Leases
On March 8, 2024, the Company entered into a land lease with a subsidiary of Occidental Petroleum, a related party, which became effective on December 1, 2024. The lease has an initial term of 60 months from the commencement date and may be extended for up to three consecutive periods of ten years. Additionally, the lease contains an option to purchase the land during the lease term. As of December 31, 2025, the Company has determined it is not probable that the purchase option or the lease extensions will be exercised and, therefore, these cash flows were excluded from the initial measurement of the lease obligation.
The Company leases the land under the La Porte Demonstration Facility. During the second quarter of 2024, the Company entered into a lease amendment extending the lease term. The amended lease expires on the earlier of (i) January 1, 2031 or (ii) the termination of the Company’s oxygen supply agreement with the lessor. Lease payments for the land equal one dollar per year.
Refer to Note 14 — Commitments and Contingencies for discussion on the Company’s asset retirement obligations related to the La Porte Demonstration Facility.
Office Trailer Leases
On June 26, 2024, the Company entered into a lease agreement for two office trailers at the La Porte Demonstration Facility with an effective date of September 1, 2024. The lease has a term of 24 months and contains a purchase option where the Company may purchase the trailers at the end of the lease term. Therefore, the Company classified the lease as a finance lease and recorded the right-of lease asset within Property, plant, and equipment, net in the consolidated balance sheets.Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Mar 9, 2026 | Showing above |
| 2024 | Mar 10, 2025 | |
| 2023 | Mar 11, 2024 | |
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.