Net Power Inc. (NPWR) FY 2021 MD&A

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Overview

We are a blank check company incorporated as a
Cayman Islands exempted company on February 2, 2021. As used herein, “we” refers to Rice Acquisition Corp. II and our majority-owned
and controlled operating subsidiary, Rice Acquisition Holdings II LLC (“OpCo”), unless the context indicates otherwise. We
were formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar
business combination with one or more businesses (the “Business Combination”). We are an early stage and emerging growth company
and, as such, we are subject to all of the risks associated with early stage and emerging growth companies.

As of December 31, 2021, we had not commenced
any operations. All activity for the period from February 2, 2021 (inception) through December 31, 2021 relates to our formation and the
preparation for initial public offering (the “Initial Public Offering”), described below. We will not generate any operating
revenues until after the completion of our initial Business Combination, at the earliest. We will generate non-operating income in the
form of interest income on investments from the proceeds derived from the Initial Public Offering (as defined below). We have selected
December 31 as its fiscal year end.

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Our sponsor is Rice Acquisition Sponsor II LLC,
a Delaware limited liability company (the “Sponsor”). The registration statement for our Initial Public Offering was declared
effective on June 15, 2021. On June 18, 2021, we consummated our Initial Public Offering of 34,500,000 units (the “Units”
and, with respect to the Class A ordinary shares included in the Units being offered, the “Public Shares”), which included
the full exercise of the underwriters’ option to purchase an additional 4,500,000 Units to cover over-allotments, at $10.00 per
Unit, generating gross proceeds of $345.0 million, and incurring offering costs of approximately $19.1 million, of which approximately
$11.7 million and approximately $593,000 was for deferred underwriting commissions and offering costs allocated to the derivative warrant
liabilities, respectively.

Simultaneously with the closing of the Initial
Public Offering, we consummated the private placement (“Private Placement”) of 10,900,000 warrants (each, a “Private
Placement Warrant” and collectively, the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant
to our Sponsor, generating proceeds of $10.9 million. Each Private Placement Warrant is exercisable to purchase one of our Class A ordinary
shares or one Class A Unit of OpCo together with our corresponding non-economic Class B ordinary share.

Following the Initial Public Offering, the Public
Shareholders (as defined below) hold a direct economic equity ownership interest in us in the form of Class A ordinary shares, and an
indirect ownership interest in Opco through our ownership of Class A Units of Opco. By contrast, the holders of our Founder Shares and
Sponsor Shares (each as defined below), including our officers and directors to the extent they hold such shares (the “Initial Shareholders”),
own direct economic interests in Opco in the form of Class B Units and a corresponding non-economic voting equity interest in us in the
form of Class B ordinary shares, as well as a small direct interest through the Sponsor Shares.

Upon the closing of the Initial Public Offering
and the Private Placement, $345,026,000 of the net proceeds of the sale of the Units in the Initial Public Offering and of the Private
Placement Warrants in the Private Placement were placed in a trust account (“Trust Account”) located in the United States
with Continental Stock Transfer & Trust Company acting as trustee, and will be invested only in U.S. “government securities”
within the meaning of Section 2(a)(16) of the Investment Company Act having a maturity of 185 days or less or in money market funds meeting
certain conditions under Rule 2a-7 promulgated under the Investment Company Act of 1940, as amended (the “Investment Company Act”),
which invest only in direct U.S. government treasury obligations, as determined by us, until the earlier of: (i) the completion of a Business
Combination and (ii) the distribution of the Trust Account as described below.

Our management has broad discretion with respect
to the specific application of the net proceeds of the Initial Public Offering and the sale of the Private Placement Warrants, although
substantially all of the net proceeds are intended to be applied generally toward consummating a Business Combination. There is no assurance
that we will be able to complete a Business Combination successfully. We must complete one or more initial Business Combinations having
an aggregate fair market value of at least 80% of the net assets held in the Trust Account (net of amounts disbursed to management for
working capital purposes, if permitted, and excluding the amount of any deferred underwriting discount held in the Trust Account) at the
time of the agreement to enter into the initial Business Combination. However, we will only complete a Business Combination if the post-business
combination company owns or acquires 50% or more of the voting securities of the target or otherwise acquires a controlling interest in
the target sufficient for it not to be required to register as an investment company under the Investment Company Act.

We will provide the holders of our outstanding
Class A ordinary shares, par value $0.0001 per share (the “Public Shareholders”) with the opportunity to redeem all or a portion
of their Public Shares upon the completion of a Business Combination either (i) in connection with a shareholder meeting called to approve
the Business Combination or (ii) by means of a tender offer. The decision as to whether we will seek shareholder approval of a Business
Combination or conduct a tender offer will be made by us, solely in our discretion. The Public Shareholders will be entitled to redeem
their Public Shares for a pro rata portion of the amount then held in the Trust Account (initially at $10.00 per Public Share, plus any
pro rata interest earned on the funds held in the Trust Account and not previously released to us to pay our tax obligations). The per-share
amount to be distributed to Public Shareholders who redeem their Public Shares will not be reduced by the deferred underwriting commissions
we will pay to the underwriters. These Public Shares were recorded at a redemption value and classified as temporary equity upon the completion
of the Initial Public Offering in accordance with the Financial Accounting Standards Board’s (“FASB”) Accounting Standards
Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” We will proceed with a Business Combination
if a majority of the shares voted are voted in favor of the Business Combination. We will not redeem the Public Shares in an amount that
would cause its net tangible assets to be less than $5,000,001. If a shareholder vote is not required by law and we do not decide to hold
a shareholder vote for business or other reasons, we will, pursuant to its amended and restated memorandum and articles of association,
conduct the redemptions pursuant to the tender offer rules of the SEC and file tender offer documents with the SEC prior to completing
a Business Combination. If, however, shareholder approval of the transaction is required by law, or we decide to obtain shareholder approval
for business or legal reasons, we will offer to redeem shares in conjunction with a proxy solicitation pursuant to the proxy rules and
not pursuant to the tender offer rules. Additionally, each Public Shareholder may elect to redeem their Public Shares irrespective of
whether they vote for or against the proposed transaction. If we seek shareholder approval in connection with a Business Combination,
the Initial Shareholders agreed to vote their Founder Shares and any Public Shares purchased during or after the Initial Public Offering
in favor of a Business Combination. In addition, the Initial Shareholders agreed to waive their redemption rights with respect to their
Founder Shares and Public Shares in connection with the completion of a Business Combination.

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If we are unable to complete a Business Combination
within 24 months from the closing of the Initial Public Offering, or June 18, 2023 (the “Combination Period”), we will (i)
cease all operations except for the purpose of winding up; (ii) as promptly as reasonably possible but not more than ten business days
thereafter, redeem the Public Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust
Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our or Opco’s
taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then-outstanding Public Shares
and Class A Units of Opco (other than those held by us), which redemption will completely extinguish Public Shareholders’ rights
as shareholders (including the right to receive further liquidating distributions, if any); and (iii) as promptly as reasonably possible
following such redemption, subject to the approval of our remaining shareholders and our board of directors, liquidate and dissolve, subject
in each case, to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable
law. There will be no redemption rights or liquidating distributions with respect to the warrants, which will expire worthless if we fail
to consummate an initial Business Combination within 24 months from the closing of the Initial Public Offering.

Pursuant to the Opco LLC Agreement and a letter
agreement that our Sponsor and our officers and directors have entered into with us, our Sponsor, and our officers and directors agreed
to waive their rights to liquidating distributions from the Trust Account with respect to any Founder Shares they hold if we fail to consummate
an initial Business Combination within 24 months from the closing of the Initial Public Offering (although they will be entitled to liquidating
distributions from the Trust Account with respect to any Public Shares they hold if we fail to complete an initial Business Combination
within the prescribed time frame).

Liquidity and Capital Resources

As of December 31, 2021, we had approximately
$2.6 million in our operating bank account and working capital of approximately $2.8 million.

Our liquidity needs through December 31, 2021
have been satisfied through a payment of $25,000 from our Sponsor to cover for certain expenses in exchange for the issuance of the Founder
Shares, the loan of approximately $126,000 from our Sponsor pursuant to the Note, and the proceeds from the consummation of the Private
Placement not held in the Trust Account. We fully repaid the Note balance upon closing of the Initial Public Offering. In addition, in
order to finance transaction costs in connection with a Business Combination, our Sponsor or an affiliate of our Sponsor, or certain of
our officers and directors may, but are not obligated to, provide us with Working Capital Loans. As of December 31, 2021, there were no
amounts outstanding under any Working Capital Loan.

Based on the foregoing, our management believes
that we will have sufficient working capital and borrowing capacity from our Sponsor or an affiliate of our Sponsor, or certain of our
officers and directors to meet our needs through the earlier of the consummation of a Business Combination or one year from this filing.
Over this time period, we will be using these funds for paying existing accounts payable, identifying and evaluating prospective initial
Business Combination candidates, performing due diligence on prospective target businesses, paying for travel expenditures, selecting
the target business to merge with or acquire, and structuring, negotiating and consummating the Business Combination.

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Our management continues to evaluate the impact
of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect
on our financial position, results of its operations, and/or search for a target company, the specific impact is not readily determinable
as of the date of the consolidated financial statements. The consolidated financial statements do not include any adjustments that might
result from the outcome of this uncertainty.

Results of Operations

Our entire activity from February 2, 2021 (inception)
through December 31, 2021 was in preparation for our formation and the Initial Public Offering, and, subsequent to the Initial Public
Offering, identifying a target company for a Business Combination. We will not be generating any operating revenues until the closing
and completion of our initial Business Combination at the earliest.

For the period from February 2, 2021 (inception) through December 31,
2021, we had net loss of approximately $9.8 million, which consisted of approximately $6.7 million non-operating loss resulting from the
change in fair value of derivative warrant liabilities, approximately $2.2 million in loss upon issuance of private placement warrants,
approximately $593,000 in offering costs associated with derivative warrant liabilities, and approximately $697,000 in general and administrative
expenses, partially offset by approximately $18,000 of interest earned on investments held in the trust account.

Contractual Obligations

Related Party Loans

On February 10, 2021, our Sponsor agreed to loan
us an aggregate of up to $300,000 to cover expenses related to the Initial Public Offering pursuant to a promissory note (the “Note”).
This Note was non-interest bearing and payable upon the completion of the Initial Public Offering. As of June 16, 2021, we borrowed approximately
$167,000 under the Note. We repaid the Note in full on December 14, 2021 and borrowing is no longer available.

Administrative Services Agreement

Commencing on the date that our securities were first listed on the
New York Stock Exchange, we agreed to pay our Sponsor a total of $10,000 per month for office space, secretarial and administrative services
provided to us. Upon completion of the initial Business Combination or our liquidation, we will cease paying these monthly fees. As of
December 31, 2021, there were $65,000 in fees incurred and paid under this agreement.

Critical Accounting Policies and Estimates

This management’s discussion and analysis
of our financial condition and results of operations is based on our consolidated financial statements, which have been prepared in accordance
with U.S. GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the
reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities in our consolidated
financial statements. On an ongoing basis, we evaluate our estimates and judgments, including those related to fair value of financial
instruments and accrued expenses. We base our estimates on historical experience, known trends and events and various other factors that
we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values
of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different
assumptions or conditions. We have identified the following as our critical accounting policies:

Derivative Warrant Liabilities

We do not use derivative instruments to hedge
exposures to cash flow, market, or foreign currency risks. We evaluate all of its financial instruments, including issued stock purchase
warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480
and FASB ASC Topic 815, “Derivatives and Hedging” (“ASC 815”). The classification of derivative instruments, including
whether such instruments should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period.

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The Public Warrants and the Private Placement Warrants are recognized
as derivative liabilities in accordance with ASC 815. Accordingly, we recognize the warrant instruments as liabilities at fair value and
adjusts the carrying value of the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at
each balance sheet date until exercised, and any change in fair value is recognized in our consolidated statements of operations. The
initial fair value of the Public Warrants and the Private Placement Warrants were estimated using a Black-Scholes option pricing model
with the volatility calculated by back solving in a Monte Carlo simulation. While the fair value of the Private Placement Warrants continues
to be measured under Black-Scholes, subsequent to the Public Warrants being traded on an active market, the fair value of the Public Warrants
has since been based on the observable listed prices for such warrants. The determination of the fair value of the warrant liability may
be subject to change as more current information becomes available and accordingly the actual results could differ significantly. Derivative
warrant liabilities are classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current
assets or require the creation of current liabilities.

Class A Ordinary Shares Subject to Possible
Redemption

We account for our ordinary shares subject to
possible redemption in accordance with the guidance in ASC 480. Class A ordinary shares subject to mandatory redemption (if any) are classified
as liability instruments and are measured at fair value. Conditionally redeemable Class A ordinary shares (including Class A ordinary
shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of
uncertain events not solely within our control) are classified as temporary equity. At all other times, Class A ordinary shares are classified
as shareholders’ equity. Our Class A ordinary shares feature certain redemption rights that are considered to be outside of our
control and subject to occurrence of uncertain future events. Although we did not specify a maximum redemption threshold, our amended
and restated memorandum and articles of association provides that currently, we will not redeem our Public Shares in an amount that would
cause its net tangible assets (shareholders’ equity) to be less than $5,000,001. Accordingly, as of the Initial Public Offering,
34,500,000 Class A ordinary shares subject to possible redemption at the redemption amount were presented at redemption value as temporary
equity, outside of the shareholders’ equity section of our consolidated balance sheet.

Under ASC 480-10-S99, we have elected to recognize
changes in the redemption value immediately as they occur and adjust the carrying value of the security to equal the redemption value
at the end of the reporting period. This method would view the end of the reporting period as if it were also the redemption date of the
security. Effective with the closing of the Initial Public Offering, we recognized the accretion from initial book value to redemption
amount, which resulted in charges against additional paid-in capital (to the extent available) and accumulated deficit.

Net Income (Loss) per Ordinary Share

We comply with accounting and disclosure requirements of FASB ASC Topic
260, “Earnings Per Share.” We have two classes of shares, which are referred to as Class A ordinary shares and Class B ordinary
shares. Income and losses are shared pro rata between the two classes of shares. This presentation assumes a Business Combination as the
most likely outcome. Net income (loss) per ordinary share is calculated by dividing the net income (loss) by the weighted average shares
of ordinary shares outstanding for the respective period.

The calculation of diluted net income (loss) per
ordinary share does not consider the effect of the warrants issued in connection with the Initial Public Offering and the Private Placement
to purchase an aggregate of 19,525,000 ordinary shares in the calculation of diluted income (loss) per share, because their exercise is
contingent upon future events and their inclusion would be anti-dilutive under the treasury stock method. As a result, diluted net income
(loss) per share is the same as basic net income (loss) per share for the period from February 2, 2021 (inception) through December 31,
2021. Accretion associated with the redeemable Class A ordinary shares is excluded from earnings per share as the redemption value approximates
fair value.

Recent accounting standards

In August 2020, the FASB issued ASU No. 2020-06, Debt-Debt with
Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting
for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies accounting
for convertible instruments by removing major separation models required under current GAAP. The ASU also removes certain settlement conditions
that are required for equity-linked contracts to qualify for the derivative scope exception, and it simplifies the diluted earnings per
share calculation in certain areas. We adopted ASU 2020-06 on January 1, 2021, with no material impact upon adoption.

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Our management does not believe that any recently
issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect on our consolidated financial
statements.

Off-Balance Sheet Arrangements

As of December 31, 2021, we did not have any off-balance
sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K and did not have any commitments or contractual obligations.

JOBS Act

On April 5, 2012, the JOBS Act was signed into
law. The JOBS Act contains provisions that, among other things, relax certain reporting requirements for qualifying public companies.
We will qualify as an “emerging growth company” and under the JOBS Act will be allowed to comply with new or revised accounting
pronouncements based on the effective date for private (not publicly traded) companies. We are electing to delay the adoption of new or
revised accounting standards, and as a result, we may not comply with new or revised accounting standards on the relevant dates on which
adoption of such standards is required for non-emerging growth companies. As such, our consolidated financial statements may not be comparable
to companies that comply with public company effective dates.

Additionally, we are in the process of evaluating
the benefits of relying on the other reduced reporting requirements provided by the JOBS Act. Subject to certain conditions set forth
in the JOBS Act, if, as an “emerging growth company,” we choose to rely on such exemptions we may not be required to, among
other things, (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to
Section 404, (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank
Wall Street Reform and Consumer Protection Act, (iii) comply with any requirement that may be adopted by the Public Company Accounting
Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information
about the audit and the consolidated financial statements (auditor discussion and analysis) and (iv) disclose certain executive compensation
related items such as the correlation between executive compensation and performance and comparisons of the CEO’s compensation to
median employee compensation. These exemptions will apply for a period of five years following the completion of the Initial Public Offering
or until we are no longer an “emerging growth company,” whichever is earlier.