Business context and reporting period
Entity mismatch: The supplied filing is Rice Acquisition Corp. II’s Form 10-Q, not a filing under the name Net Power Inc. It covers the quarter ended September 30, 2021; the company was a newly formed SPAC and had not begun operating or identified a completed business combination.
Rice Acquisition Corp. II raised capital to pursue a business combination. Its IPO closed June 18, 2021, with 34.5 million units sold at $10 each. The filing reports no operating revenue and no completed combination.
Key financial metrics
| Metric | Three months ended September 30, 2021 | Inception through September 30, 2021 |
|---|---|---|
| Revenue | None | None |
| Net loss attributable to Rice Acquisition Corp. II | $5.35 million | $11.56 million |
| Basic and diluted loss per share, Class A and Class B | $0.12 per share | $0.49 per share |
| Interest earned on trust investments | $8,698 | $9,643 |
At September 30, cash outside the trust was $2.81 million, prepaid expenses were $882,044, and working capital was approximately $3.1 million. Trust investments totaled $345.04 million. Total liabilities were $44.51 million, including $32.15 million of warrant liabilities and $11.72 million of deferred underwriting commissions. Redeemable Class A shares of $345.0 million were classified as temporary equity; shareholders’ deficit was $40.78 million.
For the period from inception, operating cash use was $1.26 million, investing cash use was $345.03 million, and financing cash provided was $349.10 million. These flows left $2.81 million in cash outside the trust.
Changes, outlook, and risks
- The quarterly loss was driven mainly by a $5.31 million noncash increase in the fair value of warrant liabilities; general and administrative expenses were $261,939. Inception-to-date loss also included a $2.18 million loss on issuance of private warrants and $592,641 of warrant-related offering costs.
- The company revised its accounting presentation to classify all 34.5 million redeemable public shares as temporary equity. The change increased accumulated deficit by approximately $28.7 million and reclassified 3,663,181 shares out of permanent equity. Previously issued financial statements were not amended; the revised presentation is prospective.
- Management expected available working capital and potential, but not committed, sponsor or affiliate loans to fund needs through a business combination or one year from the filing. The SPAC’s 24-month combination deadline was June 18, 2023. Failure to complete a deal would require winding up and redeeming public shares; warrants could expire worthless.
- COVID-19 could adversely affect the company’s financial position or target search, but the impact was not quantifiable. The filing gives no operating guidance or business-level forecast.
- The filing marks “No” for having filed all required reports during the preceding 12 months. It reports no legal proceedings and no off-balance-sheet arrangements.
Important facts for investors to verify
- Confirm the intended issuer: this filing is for Rice Acquisition Corp. II, not Net Power Inc.
- Reconcile the related-party note disclosure: the balance sheet reports $166,587 payable and Note 4 says it remained outstanding and due on demand, while the liquidity discussion says the note was fully repaid at the IPO.
- Review the prospective accounting revision and its effects on previously reported equity and share classifications.
- Check the SPAC’s transaction status, redemption terms, deadline, and potential dilution from warrants and founder shares in relevant subsequent filings.