Key Takeaways:

  • Energy technology company Net Power announced in a press release and securities filing on Tuesday that its Chief Financial Officer Akash Patel and President and Chief Operating Officer Brian Allen are no longer serving in their respective rolesand have beenrelieved of their day-to-day duties. According to the press release, the two executives will officially depart on May 1.
  • On the same day, a filing with the U.S. Securities and Exchange Commission from the Durham, North Carolina-based company showed that its Chief Executive Officer Daniel J. Rice has been appointed as President and interim Chief Financial Officer. The company said that Marc Horstman, head of product development, will assume the role of Chief Operating Officer effective immediately.
  • The executive changes come as the energy technology company seeks to address ongoing cash challenges. According to a March 10 earnings presentation, the companyreported a significant decline in cash and cash equivalents, falling from $386 million in the third quarter of fiscal 2024 to $329 million in the fourth quarter (ending December 31). The company also expects operating costs to continue rising in the coming years as it works to complete construction of its first commercial-scale plant in West Texas.

Deep Dive:

According to Patel's LinkedIn profile, he had served as the company's Chief Financial Officer since May 2020. Before joining the company, he spent nearly a decade at Barclays, holding positions such as Director, Senior Vice President, and Investment Banking roles, and previously held executive positions at Citibank.

According to Allen's LinkedIn profile, he had served as Chief Operating Officer and President since April 2022, and previously worked at companies including Mitsubishi Power Americas and GE Energy.

According to the securities filing, upon departure, Allen and Patel will receive cash severance equal to "the sum of (A) their current base salary and (B) the average of their actual annual bonuses for fiscal years 2023 and 2024," plus a pro-rata portion of their respective target bonuses for 2025, and compensation equivalent to one year of health insurance premiums. They will also receive stock unit grants as part of the severance arrangement.

The company has not yet filed its 2024 proxy statement, but according to theproxy statementfiled in April 2024, in fiscal 2023, Allen received total compensation of $646,157 as President and Chief Operating Officer, including an annual base salary of $380,000 and non-incentive compensation of $218,325. Patel received total compensation of $587,578, including an annual base salary of $395,000 and non-incentive compensation of $191,813. According to that proxy statement, neither Patel nor Allen received annual bonuses or stock awards in 2023.

"Delivering a breakthrough solution like Net Power requires ongoing evaluation and adjustment along the way. Changes like these, while difficult, are essential to ensuring we can fully realize the enormous potential of our proprietary technology," said Rice, who became the company's top executive in 2023 and now serves as CEO and interim CFO, in a statement in Tuesday's press release. "I want to thank Brian and Akash for their valuable contributions to Net Power and wish them all the best in their future endeavors. Looking ahead, I am confident that we have the right leadership team in place to meet the growing global demand for clean, reliable power."

Patel and Allen's departures come as Net Power continues to struggle to gain momentum. Founded in 2010, the company focuses on developing its "Net Power Cycle" technology, which aims to convert natural gas into clean energy, but the company has faced persistent cash concerns throughout its 15-year history.

In its financial results for the fourth quarter and full year ended December 31, 2024, the company noted in its latest 10-K filing that it "has incurred significant losses since inception and expects to continue incurring losses in the future, and maynot be able to achieve or sustain profitability”。

Net Power has also repeatedly delayed its plans to build itsfirstcommercial-scale plantin the Permian Basin of West Texas, with the plant's commissioning date reportedly pushed from 2026 to 2027, and most recently to 2029. In the most recent quarter, the company also revised its cost guidance for the plant known as "Project Permian," withnew total installed cost estimatesranging between $1.7 billion and $2 billion, according to the latest earnings presentation. The project's initial cost range was $750 million to $950 million when it was first announced in 2022, according to a March report from E&E News by Politico.

Losses are also widening. According to financial data, for the fiscal year ended December 31, 2024, Net Power reported a net loss of $49.2 million, following a net loss of $43.1 million for the period from June 8, 2023 to December 31, 2023. In addition to ongoing losses, the company expects its operating expenses to continue climbing as it advances the commercialization of the Net Power Cycle and streamlines the technology.

"If we are unable to grow our revenue sufficiently to keep pace with our expenses, it could hinder our ability to achieve or sustain profitability or positive cash flow," the company stated in its 10-K filing. "Additionally, if our future growth and operating results fail to meet the expectations of investors or analysts, or if we incur future negative cash flows or losses as a result of investing in customer acquisition or expanding our operations, it could have a material adverse effect on our business and financial condition."

Net Power did not immediately respond to a request for comment.