NET Power Inc. — financial distress indicators
Financial-health summary
NET Power Inc.'s reported numbers place it in the 'Watch' financial-health band (distress score 48/100). The main indicators are losses in each of the last 3 years, revenue collapse and operations consume cash. In its favour: high insider/promoter ownership (47%) aligns management with survival.
Stress by dimension
Share price — last 12 months
Indicators behind the score
Each red flag shows the evidence from the company’s own filings and the financial or legal principle behind it. Points add to the 0–100 score.
Net income negative in 3 of 3 fiscal years.
Persistent losses erode equity and the capacity to absorb shocks.
Revenue changed -100% year over year.
A >30% sales drop typically breaches leverage covenants and starves fixed-cost coverage.
Operating cash flow negative in 3 of the last 3 years.
A business that cannot fund itself from operations depends on external capital to survive.
Cash covers ~20 months of free-cash-flow burn.
Funding needs within two years make the company dependent on capital-market access.
Price is -74% from its 52-week high.
For financial firms a share-price run often precedes a deposit or funding run (confidence channel).
Revenue vs net income
Cash generation
Debt vs cash vs equity
✅ Mitigating factors
- High insider/promoter ownership (47%) aligns management with survival.
📰 Recent news scan
- All-In Summit: NET Power CEO Danny Rice on Nat Gas as Key Source for AI PowerYahoo Finance · 2026-10-01
- Net Power Signs Agreements for Additional Power Generation to Advance its Power-First StrategyYahoo Finance · 2026-08-24
- NET Power Inc (NPWR) (Q2 2026) Earnings Call Highlights: Strategic Pivot to Unabated Gas Power ...Yahoo Finance · 2026-08-17
- Net Power Schedules Second Quarter 2026 Earnings Release and Conference CallYahoo Finance · 2026-07-27
- NET Power Leads The Charge With 2 Other Penny StocksYahoo Finance · 2026-05-27
- NET Power Inc (NPWR) Q1 2026 Earnings Call Highlights: Strong Financial Position and Strategic ...Yahoo Finance · 2026-05-12
⚖️ U.S. legal pathway — Title 11, U.S. Code
Which chapter would apply?
- Chapter 11 — reorganisation. Management usually stays in control as debtor-in-possession; the automatic stay (§362) halts collection; a plan must meet the best-interests test (§1129(a)(7)) and the absolute priority rule (§1129(b)) — creditors are paid before shareholders, who are frequently wiped out.
- Chapter 7 — liquidation. A trustee sells assets and distributes proceeds by statutory priority (§§507, 726).
- Subchapter V (“Chapter 5”) is a fast track for small-business debtors under a statutory debt cap, but SEC-reporting companies are excluded (§101(51D)) — so it rarely applies to listed companies.
What typically triggers a filing
- Payment default or covenant breach lenders will not waive; a debt maturity that cannot be refinanced.
- Auditor going-concern doubt (ASC 205-40 / PCAOB AS 2415) — often itself a default trigger in loan agreements.
- Creditors can force a case with an involuntary petition (§303) if debts are not paid as they come due.
- Delisting after sustained sub-$1 prices or equity deficits cuts off equity funding.
Transactions shortly before filing can be clawed back (preferences — 90 days, §547; fraudulent transfers — 2 years, §548).
Frequently asked questions
What do NET Power Inc.'s financial-health indicators show?
As of 2026-10-08, NET Power Inc.'s public financial data places it in the 'Watch' band with a distress score of 48/100, driven by losses in each of the last 3 years, revenue collapse and operations consume cash. This is a statistical screen of reported numbers — it does not mean the company is insolvent, has defaulted or will enter insolvency proceedings.
What is NET Power Inc.'s financial distress score?
48/100 ('Watch').
What works in NET Power Inc.'s favour?
High insider/promoter ownership (47%) aligns management with survival.
How are shareholders treated if a company enters insolvency?
In a Chapter 11 reorganisation the absolute priority rule pays secured lenders, then unsecured creditors, before shareholders — so existing shares are usually cancelled or heavily diluted. In Chapter 7 the company is liquidated and shareholders rarely recover anything.
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Methodology
Score = capped sum of rule-based red flags across seven dimensions (liquidity, solvency, profitability, cash flow, sales trend, market signal, news). Ohlson O-score (1980) gives an accounting-based 1-year failure probability; Merton distance-to-default (Bharath & Shumway 2008) gives a market-implied probability. Financial institutions use a capital-based rule set. Recalculated every trading day from the latest filings, prices and news.