Business Context and Reporting Period
Rice Acquisition Corp. II (RONI), a special purpose acquisition company, filed this Current Report on Form 8-K regarding its proposed business combination with NET Power, LLC. The report covers events occurring on April 23, 2023, and was signed and filed on April 24, 2023. Upon closing, NET Power is expected to become a wholly owned subsidiary of RONI Buyer, a subsidiary of RONI Opco.
Key Financial and Transaction Metrics
- 2022 PIPE Financing: Previously announced subscription for 22,545,000 RONI Class A shares for aggregate proceeds of $225.45 million.
- OXY PIPE Financing: OLCV NET Power, LLC agreed to purchase 25,000,000 RONI Class A shares for $250.0 million.
- OXY interim financing: OXY agreed to purchase 31,328 NET Power units for $10.0 million. These are expected to convert into 1,000,000 RONI Opco Class A units and an equivalent number of RONI Class B shares at closing.
- Additional 2023 PIPE Financing: Four Rice-family trusts agreed to purchase an aggregate of 2,500,000 RONI Class A shares for $25.0 million.
- Total newly described April 23 commitments: $285.0 million, consisting of the $250.0 million OXY PIPE investment, the $10.0 million OXY interim financing, and the $25.0 million trust investments. This excludes the previously announced $225.45 million 2022 PIPE Financing.
- The filing does not provide operating revenue, profit, cash flow, margins, debt, liquidity balances, or other historical financial results for RONI or NET Power.
Material Changes Versus the Prior Comparable Disclosure
- RONI entered into the OXY PIPE Subscription Agreement and the OXY Interim Financing Subscription Agreement.
- Four Rice-family trusts entered into subscription agreements for the additional $25.0 million PIPE investment.
- RONI Buyer and NET Power amended the business combination agreement.
- The proposed combined-company board increased from an expected nine directors to ten directors, subject to potential increases for independence requirements.
- OXY’s proposed board designation rights increased from two directors to three, and the related forms of RONI’s charter and stockholders agreement were revised.
- The support agreement was amended to reflect the revised stockholders agreement.
Guidance, Outlook, Risks, and Unusual Items
- The transactions remain subject to customary closing conditions, including completion of the business combination and applicable shareholder and regulatory processes.
- The 2023 PIPE shares will be issued without registration under the Securities Act, relying on Section 4(a)(2) and/or Regulation D.
- The proposed business combination remains subject to SEC review of the Form S-4 registration statement and distribution of a definitive proxy statement/prospectus. The preliminary materials may change.
- Investors are directed to review the registration statement, definitive proxy statement/prospectus, amendments, and related SEC filings before voting or investing.
- The filing includes forward-looking transaction information and solicitation disclosures. It does not provide operational guidance or a detailed outlook for NET Power.
Important Facts for Investors to Verify
- Whether the Form S-4 becomes effective and whether RONI shareholders approve the proposed business combination.
- Whether the 2022 and 2023 PIPE commitments close and the actual amount of cash delivered at closing.
- The final transaction structure, share counts, ownership dilution, conversion terms, and post-closing capitalization.
- The final board composition and OXY’s exercise of its three director designation rights.
- NET Power’s historical and projected revenue, profitability, cash requirements, debt, liquidity, technology commercialization status, and material contingencies, which are not provided in this 8-K.
- The complete terms of the amended business combination agreement, stockholders agreement, and support agreement.