[PART I FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) This section presents the unaudited condensed consolidated financial information of Verde Clean Fuels, Inc. for the reported periods [ITEM 1. FINANCIAL STATEMENTS](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) This section presents Verde Clean Fuels, Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, statements of stockholders' equity, and statements of cash flows, along with comprehensive notes detailing accounting policies, related party transactions, commitments, contingencies, and other financial disclosures for the periods ended June 30, 2025, and December 31, 2024 [CONDENSED CONSOLIDATED BALANCE SHEETS](index=4&type=section&id=CONDENSED%20CONSOLIDATED%20BALANCE%20SHEETS) This section provides a snapshot of the company's financial position, detailing assets, liabilities, and equity at specific points in time **Condensed Consolidated Balance Sheets (Unaudited):** | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :---------------- | :------------------ | | Cash and cash equivalents | $62,054,765 | $19,044,067 | | Total current assets | $63,973,280 | $20,174,410 | | Total assets | $68,726,638 | $23,572,306 | | Total current liabilities | $2,933,046 | $2,810,585 | | Total liabilities | $2,978,788 | $2,888,830 | | Total stockholders' equity | $65,747,850 | $20,683,476 | - Cash and cash equivalents significantly increased by approximately **$43 million** from December 31, 2024, to June 30, 2025, primarily due to the PIPE Investment[12](index=12&type=chunk) - Total assets more than doubled, from **$23.6 million to $68.7 million**, driven by the increase in cash and cash equivalents[12](index=12&type=chunk) [CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS](index=5&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS) This section outlines the company's financial performance over specific periods, detailing revenues, expenses, and net loss **Condensed Consolidated Statements of Operations (Unaudited):** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | General and administrative expenses | $3,094,320 | $2,988,774 | $6,091,842 | $5,778,150 | | Research and development expenses | $145,242 | $173,020 | $328,548 | $258,855 | | Total operating loss | $3,239,562 | $3,161,794 | $6,420,390 | $6,037,005 | | Other (income) | $(665,363) | $(316,208) | $(1,195,606) | $(662,336) | | Net loss | $(2,545,999) | $(2,831,720) | $(5,249,584) | $(5,360,803) | | Net loss attributable to Verde Clean Fuels, Inc. | $(1,260,130) | $(903,707) | $(2,506,841) | $(1,676,078) | | Loss per share of Class A common stock | $(0.07) | $(0.14) | $(0.15) | $(0.27) | - Net loss attributable to Verde Clean Fuels, Inc. increased by **39.4%** for the three months ended June 30, 2025, compared to the same period in 2024, from **$(903,707) to $(1,260,130)**[14](index=14&type=chunk) - Loss per share of Class A common stock improved from **$(0.14) to $(0.07)** for the three months ended June 30, 2025, despite a higher net loss, due to a significant increase in weighted average shares outstanding[14](index=14&type=chunk) [CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY](index=6&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20STOCKHOLDERS%27%20EQUITY) This section details changes in the company's equity accounts, including common stock, additional paid-in capital, and noncontrolling interest **Key Changes in Stockholders' Equity (Six Months Ended June 30, 2025 vs. December 31, 2024):** | Metric | December 31, 2024 | June 30, 2025 | Change | | :-------------------------------- | :---------------- | :---------------- | :----- | | Class A Common Stock Shares | 9,549,621 | 22,049,621 | +12,500,000 | | Additional Paid In Capital | $37,502,903 | $62,797,055 | +$25,294,152 | | Noncontrolling Interest | $10,434,454 | $32,710,267 | +$22,275,813 | | Total Stockholders' Equity | $20,683,476 | $65,747,850 | +$45,064,374 | - The issuance of **12,500,000 Class A common stock shares** to Cottonmouth for **$50,000,000** significantly increased additional paid-in capital and total stockholders' equity during the six months ended June 30, 2025[19](index=19&type=chunk) - Noncontrolling interest increased substantially, reflecting a rebalancing of ownership percentage due to the issuance of Class A shares[19](index=19&type=chunk) [CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS](index=9&type=section&id=CONDENSED%20CONSOLIDATED%20STATEMENTS%20OF%20CASH%20FLOWS) This section presents the cash inflows and outflows from operating, investing, and financing activities over specific periods **Condensed Consolidated Statements of Cash Flows (Unaudited):** | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(5,883,483) | $(5,016,976) | | Net cash used in investing activities | $(551,927) | $(552,300) | | Net cash provided by financing activities | $49,446,108 | $- | | Net change in cash, cash equivalents and restricted cash | $43,010,698 | $(5,569,276) | | Cash, cash equivalents and restricted cash, end of period | $62,154,765 | $23,309,901 | - Net cash provided by financing activities was **$49.4 million** for the six months ended June 30, 2025, primarily from the issuance of Class A common stock to Cottonmouth, compared to **$0** in the prior year period[23](index=23&type=chunk) - The company experienced a significant positive net change in cash, cash equivalents, and restricted cash of **$43 million** for the six months ended June 30, 2025, a substantial improvement from a net decrease of **$5.6 million** in the same period of 2024[23](index=23&type=chunk) [NOTE 1 – THE COMPANY](index=10&type=section&id=NOTE%201%20%E2%80%93%20THE%20COMPANY) This note provides an overview of Verde Clean Fuels, Inc., its business focus, stock listings, and significant corporate events - Verde Clean Fuels, Inc. is a clean fuels company focused on deploying its proprietary syngas-to-gasoline plus (STG+®) process to convert diverse feedstocks into finished liquid fuels, with a current focus on converting associated natural gas into lower carbon intensity gasoline[24](index=24&type=chunk) - The company's Class A common stock and warrants are listed on Nasdaq under symbols 'VGAS' and 'VGASW', respectively, with primary stockholders being Bluescape Clean Fuels Holdings, LLC and Cottonmouth Ventures, LLC[25](index=25&type=chunk) - The company consummated a business combination on February 15, 2023, with CENAQ Energy Corp., which was subsequently renamed Verde Clean Fuels, Inc., adopting an umbrella partnership C corporation structure[26](index=26&type=chunk)[27](index=27&type=chunk) [NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=10&type=section&id=NOTE%202%20%E2%80%93%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note details the critical accounting policies and estimates used in preparing the financial statements, highlighting the company's development stage and associated risks - The company is in the development stage, has not yet commenced principal operations or generated revenue, and faces risks including permits, regulatory approvals, commodity price fluctuations, and financing availability[30](index=30&type=chunk)[31](index=31&type=chunk) - Significant estimates in financial statements include fair values of equity instruments, impairment of intangible and long-lived assets, and income taxes, which may change as more current information becomes available[32](index=32&type=chunk)[33](index=33&type=chunk) - The company accounts for warrants as either equity-classified or liability-classified based on specific terms and applicable authoritative guidance, with equity-classified warrants recorded in additional paid-in capital and liability-classified warrants remeasured at fair value each period[49](index=49&type=chunk)[50](index=50&type=chunk) [NOTE 3 – RELATIONSHIP WITH COTTONMOUTH AND PERMIAN BASIN PROJECT](index=18&type=section&id=NOTE%203%20%E2%80%93%20RELATIONSHIP%20WITH%20COTTONMOUTH%20AND%20PERMIAN%20BASIN%20PROJECT) This note describes the strategic partnership with Cottonmouth Ventures, LLC, and their joint development of the Permian Basin Project - Cottonmouth Ventures, LLC, a subsidiary of Diamondback Energy, Inc., is Verde's second largest shareholder and is jointly developing the Permian Basin Project to convert associated natural gas into gasoline using Verde's STG+® technology[82](index=82&type=chunk)[84](index=84&type=chunk) - In January 2025, Cottonmouth made a second investment of **$50 million** by purchasing **12,500,000 shares of Class A common stock** at **$4.00 per share**, increasing its ownership and leading to changes in the company's charter and board composition[86](index=86&type=chunk)[89](index=89&type=chunk) - Under the Joint Development Agreement (JDA), Cottonmouth reimburses Verde for **65%** of approved development costs, including Front-End Engineering and Design (FEED) study costs for the Permian Basin Project[85](index=85&type=chunk) [NOTE 4 – PROPERTY, PLANT, AND EQUIPMENT](index=19&type=section&id=NOTE%204%20%E2%80%93%20PROPERTY%2C%20PLANT%2C%20AND%20EQUIPMENT) This note details the company's property, plant, and equipment, including capitalized construction in progress and FEED costs for the Permian Basin Project **Property, Plant, and Equipment, Net:** | Asset Category | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :---------------- | :------------------ | | Construction in progress | $2,245,700 | $1,028,900 | | Property, plant and equipment, net | $2,315,784 | $1,096,270 | - Construction in progress assets more than doubled from **$1,028,900** at December 31, 2024, to **$2,245,700** at June 30, 2025, reflecting ongoing capitalized FEED costs for the Permian Basin Project[90](index=90&type=chunk) - As of June 30, 2025, capitalized FEED costs for the Permian Basin Project totaled **$6,414,100**, with **$4,168,400** reimbursed by Cottonmouth[90](index=90&type=chunk) [NOTE 5 - ACCRUED LIABILITIES](index=19&type=section&id=NOTE%205%20-%20ACCRUED%20LIABILITIES) This note provides a breakdown of the company's accrued liabilities, including compensation, legal fees, and excise tax **Accrued Liabilities:** | Accrued Item | June 30, 2025 | December 31, 2024 | | :-------------------------- | :---------------- | :------------------ | | Accrued compensation | $467,856 | $331,398 | | Accrued legal fees | $253,800 | $467,645 | | Accrued excise tax liability | $- | $978,412 | | Total accrued liabilities | $751,223 | $1,907,165 | - Total accrued liabilities decreased significantly from **$1,907,165** at December 31, 2024, to **$751,223** at June 30, 2025, primarily due to the payment of the accrued excise tax liability[91](index=91&type=chunk)[93](index=93&type=chunk) - The accrued excise tax liability of **$978,412** as of December 31, 2024, was paid in full during the six months ended June 30, 2025[92](index=92&type=chunk)[93](index=93&type=chunk) [NOTE 6 – RELATED PARTY TRANSACTIONS](index=21&type=section&id=NOTE%206%20%E2%80%93%20RELATED%20PARTY%20TRANSACTIONS) This note discloses transactions and relationships with related parties, including Holdings, Cottonmouth, and Chemex Global, LLC - Holdings maintains a majority ownership and control of the Board of Directors, with certain management holding Series A and Founder Incentive Units entitling them to participate in Holdings' earnings and distributions[94](index=94&type=chunk) - Cottonmouth is a related party due to its ownership interest in the Company's Class A common stock and its involvement in the Permian Basin Project[95](index=95&type=chunk) - The Company entered into a contract with Chemex Global, LLC for the Permian Basin Project's FEED study, with Chemex being a related party due to an unrelated preferred equity investment by Holdings' parent in Shaw Group (Chemex's parent) and a shared director[96](index=96&type=chunk) [NOTE 7 – COMMITMENTS AND CONTINGENCIES](index=21&type=section&id=NOTE%207%20%E2%80%93%20COMMITMENTS%20AND%20CONTINGENCIES) This note outlines the company's contractual commitments, including operating leases, and any contingent liabilities **Operating Lease Costs:** | Lease Cost Type | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :---------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Operating lease cost | $94,313 | $84,104 | $188,626 | $163,909 | | Variable lease cost | $45,558 | $34,599 | $93,732 | $73,460 | | Total operating lease cost | $139,871 | $118,703 | $282,358 | $237,369 | - Total operating lease costs increased by **17.8%** for the three months ended June 30, 2025, and by **18.9%** for the six months ended June 30, 2025, compared to the respective prior year periods[100](index=100&type=chunk) - The company maintains a restricted cash balance of **$100,000** as of June 30, 2025, and December 31, 2024, to support a letter of credit[101](index=101&type=chunk) [NOTE 8 – STOCKHOLDERS' EQUITY](index=22&type=section&id=NOTE%208%20%E2%80%93%20STOCKHOLDERS%27%20EQUITY) This note details the components of stockholders' equity, including earn-out shares, stock options, and share-based compensation - Earn out shares for Holdings (**3,500,000 Class C common stock**) and Sponsor (**3,234,375 Class A common stock**) are subject to vesting based on Class A common stock VWAP reaching **$15.00 and $18.00** within five years of the Business Combination[104](index=104&type=chunk)[105](index=105&type=chunk) **Share-based Compensation Expense:** | Period | 2025 | 2024 | | :-------------------------------- | :--------- | :--------- | | Three Months Ended June 30 | $494,959 | $262,627 | | Six Months Ended June 30 | $911,509 | $511,328 | - The company awarded **2,726,306 additional stock options** in 2025 with an exercise price of **$4.76 per share**, increasing total outstanding options to **5,950,499** as of June 30, 2025[110](index=110&type=chunk)[111](index=111&type=chunk) [NOTE 9 – WARRANTS](index=24&type=section&id=NOTE%209%20%E2%80%93%20WARRANTS) This note describes the outstanding warrants, their exercise terms, and conditions for redemption - As of June 30, 2025, there were **15,383,263 warrants** outstanding, each entitling the holder to purchase one share of Class A common stock at **$11.50 per share**, expiring on February 15, 2028[121](index=121&type=chunk)[122](index=122&type=chunk) - Warrants are exercisable for cash only if an effective registration statement and current prospectus are available; otherwise, they may be exercised on a cashless basis under certain conditions[121](index=121&type=chunk) - The company may redeem warrants at **$0.01 per warrant** if the Class A common stock's reported last sale price equals or exceeds **$18.00** for 20 trading days within a 30-trading day period, and a current registration statement is in effect[123](index=123&type=chunk) [NOTE 10 – LOSS PER SHARE](index=25&type=section&id=NOTE%2010%20%E2%80%93%20LOSS%20PER%20SHARE) This note presents the calculation of basic and diluted loss per share for Class A common stock, explaining the impact of various equity instruments **Loss Per Share of Class A Common Stock:** | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net loss attributable to Verde Clean Fuels, Inc. | $(1,260,130) | $(903,707) | $(2,506,841) | $(1,676,078) | | Basic weighted-average shares outstanding | 18,836,078 | 6,297,162 | 16,833,316 | 6,235,439 | | Basic loss per share | $(0.07) | $(0.14) | $(0.15) | $(0.27) | | Diluted loss per share | $(0.07) | $(0.14) | $(0.15) | $(0.27) | - Basic and diluted loss per share for Class A common stock improved from **$(0.14) to $(0.07)** for the three months ended June 30, 2025, and from **$(0.27) to $(0.15)** for the six months ended June 30, 2025, primarily due to a significant increase in weighted-average shares outstanding[126](index=126&type=chunk) - Warrants, Sponsor earn out shares, and stock options were excluded from diluted EPS calculations as their inclusion would be anti-dilutive due to the net loss or exercise price exceeding the average stock price[126](index=126&type=chunk) [NOTE 11 – INCOME TAX](index=26&type=section&id=NOTE%2011%20%E2%80%93%20INCOME%20TAX) This note details the company's income tax position, including effective tax rates and the valuation allowance against deferred tax assets **Effective Tax Rates:** | Period | 2025 | 2024 | | :-------------------------- | :----- | :----- | | Three Months Ended June 30 | 1.1% | 0.5% | | Six Months Ended June 30 | (0.5)% | 0.3% | - The company's effective tax rate for the six months ended June 30, 2025, was **(0.5)%**, compared to **0.3%** in the prior year, differing significantly from the statutory rate due to losses allocated to noncontrolling interest and a full valuation allowance against deferred tax assets[132](index=132&type=chunk)[133](index=133&type=chunk) - The company maintains a full valuation allowance against its deferred tax assets as of June 30, 2025, due to uncertainty regarding their realization[133](index=133&type=chunk) [NOTE 12 - SEGMENT INFORMATION](index=27&type=section&id=NOTE%2012%20-%20SEGMENT%20INFORMATION) This note clarifies that the company operates as a single segment and provides a breakdown of significant expenses - The company operates in one operating segment, as its CEO (Chief Operating Decision Maker) reviews financial information on a combined basis for decision-making[139](index=139&type=chunk) **Significant Segment Expenses:** | Expense Category | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Outside services | $1,041,772 | $1,468,002 | $2,289,389 | $2,942,826 | | Employee compensation-related | $984,279 | $704,948 | $1,742,494 | $1,205,216 | | Share-based compensation | $494,959 | $262,627 | $911,509 | $511,327 | | Total operating loss | $3,239,562 | $3,161,794 | $6,420,390 | $6,037,005 | - Employee compensation-related expenses increased significantly by **39.6%** for the three months and **44.6%** for the six months ended June 30, 2025, compared to the prior year periods, while outside services decreased[140](index=140&type=chunk) [NOTE 13 – SUBSEQUENT EVENTS](index=27&type=section&id=NOTE%2013%20%E2%80%93%20SUBSEQUENT%20EVENTS) This note discloses significant events occurring after the reporting period, including new legislative acts - On July 4, 2025, the 'One Big, Beautiful Bill Act' (OBBBA) was signed into federal law, introducing provisions for bonus depreciation, immediate expensing of research expenditures, and updates to disallowed interest calculations, which the company is currently evaluating for potential impact[141](index=141&type=chunk) [ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS](index=28&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) This section provides management's perspective on Verde Clean Fuels, Inc.'s financial condition and results of operations for the periods ended June 30, 2025, and June 30, 2024. It covers the company's business overview, recent developments, key factors influencing future results, components of operations, detailed financial comparisons, liquidity, and capital resources [Overview](index=29&type=section&id=Overview) This section provides a high-level summary of Verde Clean Fuels' business model and current operational status - Verde Clean Fuels is a clean fuels company focused on deploying its proprietary STG+® technology to convert syngas from diverse feedstocks into finished liquid fuels, specifically targeting associated natural gas to produce lower carbon intensity gasoline[145](index=145&type=chunk) - As of June 30, 2025, the company is still developing its first commercial production facility and has not yet generated revenue from its principal business activities, operating as a single reportable segment[146](index=146&type=chunk) [Development](index=29&type=section&id=Development) This section outlines the historical development and investment in the company's core STG+® technology - The company acquired its STG+® technology from Primus Green Energy in 2020, which had invested over **$110 million** in its development, including a demonstration plant that operated for over **10,500 hours**[147](index=147&type=chunk)[148](index=148&type=chunk) [Recent Developments](index=30&type=section&id=Recent%20Developments) This section highlights significant corporate and financial events that have occurred recently - In January 2025, Verde Clean Fuels completed a **$50 million PIPE Investment** with Cottonmouth Ventures, LLC, issuing **12,500,000 shares of Class A common stock** at **$4.00 per share**[149](index=149&type=chunk) - Following the PIPE Investment, the company amended its charter to increase authorized Class C common stock and expand its Board of Directors from seven to eight, granting Cottonmouth certain director designation and board observer rights[151](index=151&type=chunk) [Key Factors and Trends Influencing our Prospects and Future Results](index=30&type=section&id=Key%20Factors%20and%20Trends%20Influencing%20our%20Prospects%20and%20Future%20Results) This section discusses the primary drivers and challenges that are expected to shape the company's future financial performance and operational success - A critical factor for future success is the successful construction and operation of the first commercial production plant utilizing the patented STG+® technology[153](index=153&type=chunk) - The Permian Basin Project, a joint development with Cottonmouth, aims to convert associated natural gas from Diamondback's operations into gasoline, mitigating flaring and producing a high-margin product[154](index=154&type=chunk)[155](index=155&type=chunk) - The company is advancing development activities for the Permian Basin Project, including a FEED study, and expects commercial operations within **18-24 months** after achieving Final Investment Decision (FID)[157](index=157&type=chunk)[158](index=158&type=chunk) [Key Components of Results of Operations](index=31&type=section&id=Key%20Components%20of%20Results%20of%20Operations) This section breaks down the main categories of revenues and expenses that constitute the company's financial results - The company is an early-stage entity with no current revenues, expecting future revenue primarily from distributions and operator fees from the proposed Permian Basin Project[161](index=161&type=chunk)[162](index=162&type=chunk) - General and administrative expenses include compensation, business development, legal, accounting, and insurance costs, with an expectation of higher public company compliance costs post-Business Combination[163](index=163&type=chunk) - Research and development expenses cover non-capitalized technology activities, including labor, engineering software, and demonstration plant operations and maintenance[164](index=164&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) This section provides a detailed comparison and analysis of the company's financial performance for the reported periods **Operating Expenses and Other Income (Three Months Ended June 30):** | Metric | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :--------- | :--------- | :--------- | :--------- | | General and administrative expenses | $3,094,320 | $2,988,774 | $105,546 | 3.5% | | Research and development expenses | $145,242 | $173,020 | $(27,778) | -16.1% | | Other (income) | $(665,363) | $(316,208) | $(349,155) | 110.4% | | Net loss | $(2,545,999) | $(2,831,720) | $285,721 | -10.1% | **Operating Expenses and Other Income (Six Months Ended June 30):** | Metric | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :--------- | :--------- | :--------- | :--------- | | General and administrative expenses | $6,091,842 | $5,778,150 | $313,692 | 5.4% | | Research and development expenses | $328,548 | $258,855 | $69,693 | 26.9% | | Other (income) | $(1,195,606) | $(662,336) | $(533,270) | 80.5% | | Net loss | $(5,249,584) | $(5,360,803) | $111,219 | -2.1% | - Other income significantly increased by **110%** for the three months and **81%** for the six months ended June 30, 2025, primarily due to higher interest and dividend income from increased cash and cash equivalents following the PIPE Investment[172](index=172&type=chunk)[177](index=177&type=chunk) [Liquidity and Capital Resources](index=33&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to meet its short-term and long-term financial obligations and its sources of funding - As of June 30, 2025, the company had **$62.1 million** in cash and cash equivalents, expected to fund operations and development for the next **12 months**[180](index=180&type=chunk) - Additional capital will be required to complete the first commercial production plant, likely through equity, debt, or joint ventures, with uncertainty regarding availability and favorable terms[181](index=181&type=chunk)[182](index=182&type=chunk) **Summary Statement of Cash Flows (Six Months Ended June 30):** | Cash Flow Activity | 2025 | 2024 | | :--------------------------------------- | :---------------- | :---------------- | | Net cash used in operating activities | $(5,883,483) | $(5,016,976) | | Net cash used in investing activities | $(551,927) | $(552,300) | | Net cash provided by financing activities | $49,446,108 | $- | | Net change in cash, cash equivalents and restricted cash | $43,010,698 | $(5,569,276) | [Commitments and Contractual Obligations](index=35&type=section&id=Commitments%20and%20Contractual%20Obligations) This section details the company's binding agreements and financial obligations that require future payments - The company maintained a restricted cash balance of **$100,000** as of June 30, 2025, and December 31, 2024, to support a letter of credit[187](index=187&type=chunk) [Off-Balance Sheet Arrangements](index=35&type=section&id=Off-Balance%20Sheet%20Arrangements) This section discloses any financial arrangements that are not recorded on the company's balance sheet but could impact its financial condition - As of June 30, 2025, Verde Clean Fuels has not engaged in any off-balance sheet arrangements[188](index=188&type=chunk) [Critical Accounting Policies and Estimates](index=35&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section outlines the accounting policies and judgments that are most important to the portrayal of the company's financial condition and results - The preparation of financial statements requires management to make significant estimates and assumptions, particularly regarding fair values of equity instruments, impairment of assets, and income taxes, which could differ from actual results[189](index=189&type=chunk) [Recent Accounting Pronouncements](index=35&type=section&id=Recent%20Accounting%20Pronouncements) This section discusses new accounting standards and their potential impact on the company's financial reporting - The company is evaluating the impact of ASU 2023-09 (Income Tax Disclosures) and ASU 2024-03 (Expense Disaggregation Disclosures), effective for fiscal years beginning after December 15, 2024, and December 15, 2026, respectively[77](index=77&type=chunk)[80](index=80&type=chunk)[191](index=191&type=chunk) - The SEC's climate-related disclosure mandate (Release No. 33-11275) is currently under an administrative stay, and its future effectiveness is uncertain, with the company monitoring its status[78](index=78&type=chunk) [ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=35&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) As a smaller reporting company, Verde Clean Fuels, Inc. is not required to provide quantitative and qualitative disclosures about market risk - Verde Clean Fuels, Inc. is exempt from providing quantitative and qualitative disclosures about market risk as it qualifies as a smaller reporting company[192](index=192&type=chunk) [ITEM 4. CONTROLS AND PROCEDURES](index=35&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management, including the principal executive and financial officers, concluded that the company's disclosure controls and procedures were effective as of June 30, 2025. No material changes in internal control over financial reporting were identified during the period - The company's disclosure controls and procedures were evaluated and deemed effective as of June 30, 2025[193](index=193&type=chunk) - No material changes in internal control over financial reporting occurred during the period covered by the report[194](index=194&type=chunk) [PART II OTHER INFORMATION](index=36&type=section&id=PART%20II%20OTHER%20INFORMATION) This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, and exhibits [ITEM 1. LEGAL PROCEEDINGS](index=36&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) Verde Clean Fuels, Inc. is not currently a party to any material pending legal proceedings and has not recognized any provisions for legal proceedings as of June 30, 2025 - The company is not a party to any material pending legal proceedings as of June 30, 2025[196](index=196&type=chunk) - No provisions for legal proceedings were recognized as of June 30, 2025[196](index=196&type=chunk) [ITEM 1A. RISK FACTORS](index=36&type=section&id=ITEM%201A.%20RISK%20FACTORS) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2024 - No material changes to the risk factors disclosed in the Annual Report on Form 10-K for the period ended December 31, 2024, have occurred[197](index=197&type=chunk) [ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS](index=36&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECURITIES%20AND%20USE%20OF%20PROCEEDS) This item is not applicable to the company for the reporting period [ITEM 3. DEFAULTS UPON SENIOR SECURITIES](index=36&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) There have been no defaults upon senior securities during the reporting period [ITEM 4. MINE SAFETY DISCLOSURES](index=36&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company for the reporting period [ITEM 5. OTHER INFORMATION](index=36&type=section&id=ITEM%205.%20OTHER%20INFORMATION) There is no other information to report under this item [ITEM 6. EXHIBITS](index=36&type=section&id=ITEM%206.%20EXHIBITS) This section lists all exhibits filed as part of the Form 10-Q, including organizational documents, certifications, and XBRL-related documents - Exhibits include the Fifth Amended and Restated Certificate of Incorporation, Amended and Restated Bylaws, and certifications from the Principal Executive Officer and Principal Financial Officer[203](index=203&type=chunk) - The report also includes Inline XBRL Instance Document and related taxonomy extension documents[203](index=203&type=chunk) [SIGNATURES](index=38&type=section&id=SIGNATURES) The report is duly signed on behalf of Verde Clean Fuels, Inc. by its Chief Executive Officer, Ernest Miller, and Chief Financial Officer, George Burdette, on August 13, 2025 - The report was signed by Ernest Miller, Chief Executive Officer, and George Burdette, Chief Financial Officer, on August 13, 2025[207](index=207&type=chunk)

Exhibit 99.1 Forward-Looking Statements Verde Clean Fuels, Inc. Reports Q2 2025 Results HOUSTON – August 13, 2025 - Verde Clean Fuels, Inc. ("Verde" or "the Company") (NASDAQ: VGAS) today reported results for the second quarter and first half of 2025. "We continue to advance our plans to deploy our proprietary liquid fuels processing technology through the development of commercial production plants. To this end, we also continue to advance front-end engineering and design ("FEED") for the Permian Basin pro ...

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[PART I FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) [Financial Statements](index=4&type=section&id=ITEM%201.%20FINANCIAL%20STATEMENTS) The development-stage company reported a $2.7 million net loss in Q1 2025, with total assets significantly increasing to $71.3 million due to a $50 million PIPE investment [Consolidated Financial Statements](index=4&type=section&id=Consolidated%20Financial%20Statements) The company's Q1 2025 consolidated financial statements show a $2.7 million net loss and significant balance sheet growth from a $50 million equity issuance Consolidated Balance Sheet Highlights (Unaudited) | Account | March 31, 2025 ($) | December 31, 2024 ($) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $65,280,360 | $19,044,067 | | Total current assets | $67,172,582 | $20,174,410 | | Total assets | $71,289,198 | $23,572,306 | | **Liabilities & Equity** | | | | Total current liabilities | $3,456,938 | $2,810,585 | | Total liabilities | $3,546,295 | $2,888,830 | | Total stockholders' equity | $67,742,903 | $20,683,476 | Consolidated Statement of Operations Highlights (Unaudited) | Account | Three Months Ended March 31, 2025 ($) | Three Months Ended March 31, 2024 ($) | | :--- | :--- | :--- | | Total operating loss | $3,180,828 | $2,875,211 | | Net loss | $(2,703,585) | $(2,529,083) | | Net loss attributable to Verde Clean Fuels, Inc. | $(1,246,711) | $(772,371) | | Loss per share of Class A common stock | $(0.08) | $(0.13) | Consolidated Statement of Cash Flows Highlights (Unaudited) | Activity | Three Months Ended March 31, 2025 ($) | Three Months Ended March 31, 2024 ($) | | :--- | :--- | :--- | | Net cash used in operating activities | $(3,701,761) | $(2,829,250) | | Net cash used in investing activities | $(11,946) | $(8,323) | | Net cash provided by financing activities | $49,950,000 | $0 | | Net change in cash, cash equivalents and restricted cash | $46,236,293 | $(2,837,573) | [Notes to Unaudited Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Notes detail accounting policies, the Cottonmouth partnership, the $50 million PIPE investment, cost-sharing, warrants, and equity structure - The company is focused on deploying its proprietary syngas-to-gasoline (STG+®) process, converting feedstocks like natural gas into finished liquid fuels[23](index=23&type=chunk) - In January 2025, the company closed a **$50 million PIPE Investment** by issuing **12.5 million shares** of Class A common stock to Cottonmouth Ventures, LLC at **$4.00 per share**[88](index=88&type=chunk) - Under the Joint Development Agreement (JDA) for the Permian Basin Project, Cottonmouth reimburses **65%** of the approved development costs, including the Front-End Engineering and Design (FEED) study[87](index=87&type=chunk) - Construction in progress assets as of March 31, 2025, totaled **$1,518,039**, consisting of capitalized FEED costs of **$4,301,267**, net of **$2,783,228** reimbursable by Cottonmouth[91](index=91&type=chunk) - As of March 31, 2025, there were **15,383,263 warrants outstanding**, each entitling the holder to purchase one share of Class A common stock at **$11.50 per share**[121](index=121&type=chunk) - Due to the issuance of stock to Cottonmouth, the ownership interest of Class A common stockholders increased from **29.80%** at year-end 2024 to **49.49%** as of March 31, 2025[128](index=128&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=26&type=section&id=ITEM%202.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) Management discusses the strategic focus on the Permian Basin Project, Q1 2025 results showing increased net loss, and liquidity strengthened by a $50 million PIPE investment [Overview and Recent Developments](index=27&type=section&id=Overview%20and%20Recent%20Developments) Verde, a pre-revenue clean fuels company, closed a **$50 million PIPE investment** with Cottonmouth in January 2025, advancing the Permian Basin Project - The company's core business is the deployment of its STG+® process to convert syngas from diverse feedstocks into finished liquid fuels, with a current focus on converting associated natural gas to gasoline[143](index=143&type=chunk) - On January 29, 2025, the company consummated a **$50 million PIPE Investment** with Cottonmouth, a subsidiary of Diamondback Energy[147](index=147&type=chunk) - The company is advancing the Permian Basin Project with Cottonmouth, which is expected to produce approximately **3,000 barrels per day** of gasoline, with a new site identified in Q1 2025 for better utility access[153](index=153&type=chunk)[154](index=154&type=chunk) [Results of Operations](index=30&type=section&id=Results%20of%20Operations) Q1 2025 total operating loss increased to **$3.2 million** due to higher G&A and R&D expenses, while other income rose to **$0.5 million** Comparison of Operations (Three Months Ended March 31) | Account | 2025 ($) | 2024 ($) | | :--- | :--- | :--- | | General and administrative expenses | $2,997,522 | $2,789,376 | | Research and development expenses | $183,306 | $85,835 | | Total operating loss | $3,180,828 | $2,875,211 | | Other (income) | $(530,243) | $(346,128) | | Net loss | $2,703,585 | $2,529,083 | - General and administrative expenses increased by approximately **$0.2 million (8%)** in Q1 2025 compared to Q1 2024, primarily due to additional headcount[165](index=165&type=chunk) - Research and development expenses increased by approximately **$0.1 million (114%)** in Q1 2025 compared to Q1 2024, mainly due to additional headcount and higher software costs[167](index=167&type=chunk) [Liquidity and Capital Resources](index=31&type=section&id=Liquidity%20and%20Capital%20Resources) As of March 31, 2025, cash and cash equivalents totaled **$65.3 million**, significantly bolstered by a **$50 million PIPE investment**, sufficient for 2025 operations but requiring more capital for plant construction - As of March 31, 2025, the company had cash and cash equivalents of **$65.3 million**[171](index=171&type=chunk) - Current cash is expected to be sufficient to fund requirements through the 2025 fiscal year, but additional capital will be required to complete the first commercial production plant[172](index=172&type=chunk) - Net cash provided by financing activities was **$49.9 million** for Q1 2025, entirely from the net proceeds of the PIPE Investment, compared to **$0** in Q1 2024[177](index=177&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=ITEM%203.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) As a smaller reporting company, Verde Clean Fuels is exempt from providing quantitative and qualitative disclosures about market risk - As a smaller reporting company, Verde Clean Fuels is not required to provide quantitative and qualitative disclosures about market risk[183](index=183&type=chunk) [Controls and Procedures](index=33&type=section&id=ITEM%204.%20CONTROLS%20AND%20PROCEDURES) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - Management concluded that as of March 31, 2025, the company's disclosure controls and procedures are effective[184](index=184&type=chunk) - There were no material changes to the company's internal control over financial reporting during the first quarter of 2025[185](index=185&type=chunk) [PART II OTHER INFORMATION](index=34&type=section&id=PART%20II%20OTHER%20INFORMATION) [Legal Proceedings](index=34&type=section&id=ITEM%201.%20LEGAL%20PROCEEDINGS) As of March 31, 2025, the company is not involved in any material pending legal proceedings - The company is not currently a party to any material pending legal proceedings[188](index=188&type=chunk) [Risk Factors](index=34&type=section&id=ITEM%201A.%20RISK%20FACTORS) No material changes to risk factors were reported since the Annual Report on Form 10-K for the fiscal year ended December 31, 2024 - There have been no material changes to the risk factors disclosed in the Annual Report on Form 10-K for the period ended December 31, 2024[189](index=189&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=ITEM%202.%20UNREGISTERED%20SALES%20OF%20EQUITY%20SECU RITIES%20AND%20USE%20OF%20PROCEEDS) This item is not applicable for the current reporting period - Not applicable[190](index=190&type=chunk) [Defaults Upon Senior Securities](index=34&type=section&id=ITEM%203.%20DEFAULTS%20UPON%20SENIOR%20SECURITIES) No defaults upon senior securities occurred during the reporting period - None[191](index=191&type=chunk) [Mine Safety Disclosures](index=34&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company's operations - Not applicable[192](index=192&type=chunk) [Other Information](index=34&type=section&id=ITEM%205.%20OTHER%20INFORMATION) No other material information is reported for the period - None[193](index=193&type=chunk) [Exhibits](index=34&type=section&id=ITEM%206.%20EXHIBITS) This section lists exhibits filed, including charter documents, Cottonmouth investment agreements, officer certifications, and XBRL data - Exhibits filed include the Fifth Amended and Restated Certificate of Incorporation, an amendment to the Equity Participation Right Agreement with Cottonmouth, the Second Amended and Restated Registration Rights Agreement, and officer certifications required by the Sarbanes-Oxley Act[195](index=195&type=chunk)

Business Development and Operations - Verde Clean Fuels is focused on developing commercial production plants using its proprietary STG+® technology to convert syngas into finished liquid fuels[19]. - The company has not yet derived revenue from its principal business activities as of December 31, 2024, and is still in the process of developing its first commercial production facility[22]. - In February 2024, Verde entered into a joint development agreement with Cottonmouth Ventures for a facility to produce gasoline from natural gas in the Permian Basin, which could serve as a template for future projects[33]. - A $20 million equity investment from Diamondback Energy was made to support the development of facilities utilizing Verde's technology for gasoline production from economically disadvantaged natural gas[31]. - Verde plans to issue 12,500,000 shares of Class A common stock at $4.00 per share, raising $50 million to further develop natural gas-to-gasoline production plants[34]. - The company has identified growth opportunities in producing gasoline from stranded and flared natural gas, as well as renewable gasoline from biomass[37]. - Verde's STG+® process could potentially be applied to produce other fuels, including methanol and renewable diesel[29]. - The demonstration plant has completed over 10,500 hours of operation, showcasing the scalable nature of Verde's technology[24]. - Verde aims to expand internationally, particularly in regions like the European Union and the United Kingdom, to leverage its STG+® process[37]. - The company has established strategic relationships with partners like Chemex Global for engineering and construction services related to its projects[39]. Financial Performance and Projections - Total proceeds from the Business Combination amounted to $51,122,970, with net proceeds of $37,329,178 after accounting for transaction expenses and capital repayments[43]. - As of the Business Combination completion, there were 31,858,620 shares of Common Stock issued and outstanding, including 9,358,620 shares of Class A Common Stock and 22,500,000 shares of Class C Common Stock[43]. - The company holds 28 patents globally, including 8 in the U.S., with a focus on the STG+® process for converting syngas into gasoline[49]. - The U.S. gasoline demand is projected to be at 92-102% of 2022 levels by 2035, despite the growth of electric vehicles[52]. - Utilizing the STG+® process, the company could produce over 25 billion gallons of renewable gasoline annually from waste resources, meeting approximately 19% of the EIA's estimated 2022 gasoline demand[54]. - The company has a Tax Receivable Agreement requiring it to pay TRA Holders 85% of net cash savings from tax basis increases due to the acquisition of Class C OpCo Units[48]. - The company has reserved 2,475,000 shares of Class A Common Stock for issuance upon exercise of Private Placement Warrants[43]. - The Business Combination was accounted for as a common control reverse recapitalization, with no goodwill recorded[45]. - The company aims to leverage its intellectual property rights to maintain a competitive advantage in the renewable gasoline market[50]. Market and Regulatory Environment - The company expects to benefit from the Renewable Fuel Standard (RFS) program, which mandates specific volumes of renewable fuel, with steady growth projected for 2023, 2024, and 2025[65][69]. - The company believes its renewable gasoline will qualify for a D3 renewable identification number (RIN) under the RFS program, potentially providing significant value[74]. - The company has a strategic partnership with Cottonmouth to develop natural gas-to-gasoline facilities in the Permian Basin, aiming to create higher-value sales channels for natural gas producers[62]. - The company anticipates that emerging technologies may present future competition, but its smaller-scale facility design offers logistical advantages[58]. - The company is focused on compliance with stringent environmental regulations, which can be costly and complex, impacting operational costs[66][68]. - The Inflation Reduction Act of 2022 may provide new opportunities for production tax credits and carbon sequestration credits, which could influence the company's operational strategy[70]. - The company is exploring global opportunities for natural gas conversion facilities, not limited to the U.S. market[62]. - The EPA aims to boost long-term goals to 36 billion gallons of renewable fuel by 2022[80]. - Obligated Parties must demonstrate compliance with the Renewable Volume Obligation (RVO) annually through blending renewable fuels or obtaining RINs[81]. - The RFS program's four renewable fuel categories are nested, allowing higher GHG reduction fuels to meet lower standards[83]. Risks and Challenges - The company faces substantial competition from established petroleum-based companies and emerging renewable fuel companies, which may hinder its growth[130]. - Fluctuations in the price of feedstocks, such as natural gas, may adversely affect the company's cost structure and financial condition[125]. - The company has incurred net losses since inception and may not achieve or maintain profitability in the near future[110]. - The construction and operation of commercial production plants require significant capital investment, and the company may need to raise additional funds[113]. - The complexity of customer procurement processes may result in a lengthy customer acquisition and sales process, impacting revenue recognition[123]. - Inflationary pressures may increase costs of feedstock, equipment, and labor, adversely affecting profit margins[129]. - The company faces significant competition from established companies with greater resources, which may hinder its ability to compete effectively[134]. - The company may encounter difficulties in securing third-party financing necessary for constructing and operating its commercial production plants[151]. - The company’s growth projects may not be completed as planned, potentially consuming significant management focus and resources[136]. - The company’s ability to attract and retain qualified personnel is critical, as competition for skilled workers is intense[132]. - The company may be subject to product liability claims related to renewable gasoline, which could adversely affect its financial condition[146]. - The company’s commercial production plants are dependent on third-party energy supplies, making it vulnerable to fluctuations in energy prices[142]. - The company’s actual costs for developing commercial production plants may exceed initial estimates, leading to lower profits or greater losses[157]. - The company’s success in establishing strategic relationships is uncertain, which could impact its growth and operational success[138]. - The company may face challenges in meeting production levels and specifications outlined in supply agreements, which could affect its financial performance[151]. - The company is vulnerable to business interruptions from natural disasters, pandemics, and other catastrophic events, which could adversely impact operations and financial results[159]. - Future disruptions in operations could negatively affect the company's business prospects and financial condition, particularly if facilities are damaged[160]. - The company faces risks related to supply chain disruptions, including increased costs and material shortages, which could significantly impact operations[162]. - The renewable and low-carbon fuels industry is rapidly evolving, and failure to keep pace with technological advancements may result in a competitive disadvantage[163]. - The company plans to invest significantly in research and development to upgrade gasoline production and introduce new products, but these efforts may involve substantial costs and delays[163]. - The success of the company's business model depends on qualifying for federal and state low-carbon fuel credits, which are crucial for future revenue[169]. - Environmental, health, and safety laws may impose increased compliance costs and operational restrictions, potentially impacting financial results[170]. - The company may incur liabilities for environmental contamination, which could lead to substantial costs and adversely affect financial condition[175]. - The company relies on third parties for compliance with environmental laws, and any failures could result in significant liabilities[177]. - Increased focus on sustainability and ESG matters may require changes to business operations to meet customer and financial institution expectations, potentially impacting reputation and demand for products[178]. - Companies face risks of being accused of "greenwashing," which could damage reputation and lead to litigation or regulatory actions, negatively affecting investor sentiment and stock price[179]. - The company anticipates future opportunities for government grants and loans, but the application process is highly competitive, and failure to comply with conditions could adversely affect financial results[181]. - Expansion into global markets will subject the company to complex anti-corruption and trade compliance laws, with non-compliance potentially leading to significant liabilities[182][183]. - Geopolitical uncertainties, including conflicts and evolving trade policies, could materially affect the company's financial condition and operations[184][185]. - Environmental concerns regarding renewable gasoline production may impact public policy and acceptance, potentially harming revenues and operating margins[186]. - The company may face litigation and regulatory actions that could adversely impact financial results and reputation[187][188]. - Changes in tax laws or regulations could significantly affect the company's financial condition and results of operations, including potential increases in corporate tax rates[193][194][195]. - A new 1% federal excise tax on stock repurchases could reduce the value of the company's Class A Common Stock[196]. Corporate Governance and Management - The company qualifies as an "emerging growth company," allowing it to delay compliance with new accounting standards[95]. - The company is classified as a "controlled company," which allows it to opt out of certain Nasdaq corporate governance standards[99]. - The company’s commercial success depends on developing and operating plants for gasoline production and expanding its business through new partnerships[102]. - There is no assurance that the Joint Development Agreement (JDA) with Cottonmouth will lead to a Final Investment Decision (FID) for the proposed project in the Permian Basin[103]. - The company has not generated any revenue to date and does not expect to do so until the first commercial production plant is operational[108]. - Significant operating losses and negative cash flows are expected to continue until the proposed commercial production plants become operational[108]. - The company anticipates requiring additional capital to complete its first commercial production plant, with no assurance of obtaining financing on acceptable terms[109]. - The development of commercial production plants involves a lengthy process, with a FEED study expected to last up to 12 months and engineering, procurement, and construction lasting 18 to 24 months[117][118]. - The management team has limited experience in operating a public company, which may lead to higher legal and consulting costs compared to competitors[200]. - The loss of senior management or technical personnel could materially adversely affect the company's business and financial condition[201]. - The company relies on key personnel for its operations, and losing such personnel could delay development and harm business strategy execution[198][199]. - The company may issue additional shares under an employee incentive plan, which would dilute existing stockholders' interests[206]. - Cottonmouth became the second largest stockholder after the PIPE Investment, gaining significant influence over corporate actions requiring stockholder approval[208]. - The company has no current plans to pay cash dividends on Class A Common Stock, meaning returns on investment depend solely on selling shares at a higher price[214]. - The trading price of the company's securities has been volatile, influenced by factors beyond its control, including the PIPE Investment pricing at $4.00 per share[216]. - Broad market and industry factors may adversely affect the market price of the company's securities, regardless of its operating performance[217]. - The company anticipates fluctuations in quarterly financial results, which may impact market expectations and operating results[218]. - There is a risk that the company's operating results may not meet the expectations of securities analysts or investors in certain periods[218]. - Changes in financial estimates and recommendations by securities analysts could affect the company's market perception[218]. - The company faces competition that may influence its ability to market new or enhanced products and technologies effectively[218]. - Compliance with laws and regulations is critical for the company's operations and may impact financial performance[218]. - The company may experience changes in its capital structure, including future issuances of securities or incurring additional debt[218]. - The volume of shares of Class A Common Stock available for public sale could affect stock price performance[218]. - Any major changes in the company's Board or management could influence investor confidence and stock performance[218]. - Sales of substantial amounts of Class A Common Stock by directors or significant stockholders may create market perception issues[218]. - General economic and political conditions, including recessions and international conflicts, could impact the company's financial results[218].

Financial Performance - For Q4 2024, Verde Clean Fuels, Inc. reported a net loss of $(2.7) million, with a diluted net loss per share of $(0.14) [4] - For the full year 2024, the company recorded a net loss of $(10.5) million, resulting in a diluted net loss per share of $(0.53) [4] - General and administrative expenses for Q4 2024 were $2.7 million, compared to $2.3 million in Q4 2023 [13] - Research and development expenses for the full year 2024 were $451,072, up from $329,194 in 2023 [13] Assets and Equity - As of December 31, 2024, Verde had cash and cash equivalents of $19.0 million and no debt [5] - Total assets decreased from $31.9 million in 2023 to $23.6 million in 2024 [15] - Stockholders' equity decreased from $28.8 million in 2023 to $20.7 million in 2024 [15] Investments and Agreements - The company capitalized $1.0 million in FEED costs related to the proposed Permian Basin project [5] - Verde signed a joint development agreement with Cottonmouth for a natural gas-to-gasoline plant in the Permian Basin [3] - Cottonmouth made a $50 million equity investment in Verde, totaling $70 million over two years, making it the second largest shareholder [6]

Business Operations - Verde Clean Fuels has not generated revenue from its principal business activities as of September 30, 2024[147]. - The company is focused on converting syngas derived from natural gas or biomass into fully finished liquid fuels, including renewable gasoline[142]. - Verde Clean Fuels is evaluating opportunities to deploy its technology in various markets with stranded or flared natural gas[145]. - The company expects to generate significant future revenue from the sale of renewable gasoline primarily in low-carbon fuel credit markets[160]. - The company is still in the process of developing its first commercial production facility[147]. Technology and Development - The company has invested over $110 million in its STG+® technology, which has completed over 10,500 hours of operation producing gasoline or methanol[143]. - A joint development agreement with Cottonmouth Ventures LLC aims to produce approximately 3,000 barrels per day of fully-refined gasoline using Verde's patented STG+® process[152]. - Chemex Global, LLC has been selected as the contractor for the pre-FEED phase, with completion expected by mid-2025[153]. - The company has begun incurring development costs related to the JDA, planning to invest approximately $3 million for FEED costs[178]. Financial Performance - The company incurred a total operating loss of $8,821,798 for the nine months ended September 30, 2024, compared to $8,182,485 in the same period in 2023[172]. - Research and development expenses increased by approximately 42% to $350,158 for the nine months ended September 30, 2024, compared to $246,788 in the same period in 2023[175]. - General and administrative expenses decreased by approximately $0.8 million, or 8%, for the nine months ended September 30, 2024, compared to the same period in 2023[173]. - As of September 30, 2024, the company had cash and cash equivalents of $21.7 million, expected to fund operations for at least the next 12 months[179]. - The net cash used in operating activities decreased by $0.1 million during the nine months ended September 30, 2024, compared to the same period in 2023[181]. Risks and Challenges - Verde Clean Fuels faces risks related to competition, regulatory changes, and the ability to secure financing for future projects[149]. - There was no provision for income taxes for the three months ended September 30, 2024, due to a full valuation allowance[172]. - The preparation of unaudited consolidated financial statements requires management to make estimates and assumptions that could affect reported amounts[185]. - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[187]. Corporate Changes - The business combination completed in February 2023 resulted in the renaming of CENAQ Energy Corp. to Verde Clean Fuels, Inc.[136]. - Diamondback Energy, through Cottonmouth, made a $20 million equity investment in Verde to develop facilities in the Permian Basin[150].

Investment and Development - The Company has invested over $110 million in its technology, including a demonstration facility in New Jersey that has completed over 10,500 hours of operation producing gasoline or methanol [135]. - The Company is focused on developing its first commercial production facility, with potential production of renewable gasoline as early as 2026 [139]. - Diamondback Energy, Inc. made a $20 million equity investment in the Company and entered into an equity participation right agreement for joint development of facilities in the Permian Basin [140]. - A joint development agreement was established with Cottonmouth Ventures LLC for a facility to produce commodity-grade gasoline using natural gas feedstock from Diamondback's operations [141]. - The Company plans to grow its business by building and operating a portfolio of commercial production facilities, with identified opportunities in pipeline-constrained areas [142]. - The proprietary STG+® process converts syngas into reformulated blend-stock for oxygenate blending (RBOB) gasoline, focusing on renewable feedstocks [132]. - The company announced a non-binding carbon dioxide management agreement to construct a renewable gasoline production facility, expected to produce up to 7 million gallons per year, with operations starting in the second half of 2027 [143]. - The company plans to invest approximately $3 million for FEED costs in 2024 for a natural gas-to-gasoline facility in the Permian Basin [163]. Financial Performance - The Company has not derived revenue from its principal business activities as of March 31, 2024, and is still in the development stage [136]. - The company has not generated any revenue to date and expects significant future revenue from the sale of renewable gasoline in markets with low-carbon fuel credit systems [147]. - General and administrative expenses decreased by approximately $1.5 million, or 35%, from $4.3 million in Q1 2023 to $2.8 million in Q1 2024, primarily due to a decrease in share-based payment expenses [154]. - Research and development expenses for Q1 2024 were $85,835, consistent with $82,662 in Q1 2023, indicating stable investment in technology development [156]. - As of March 31, 2024, the company had cash and cash equivalents of $25.9 million and an accumulated deficit of $24.7 million [162]. - The company received approximately $37.3 million in net cash from the Business Combination, which will fund ongoing operations and R&D activities [164]. - Net cash used in operating activities for Q1 2024 was $2,829,250, a slight decrease from $2,846,040 in Q1 2023 [168]. - The company expects to construct only one of the originally planned four production facilities with the proceeds from the Business Combination [165]. - The provision for income taxes was $0 for both Q1 2024 and Q1 2023 due to a full valuation allowance [159]. Risks and Challenges - The Company is subject to risks including competition, changes in low-carbon fuel credit systems, and the ability to secure necessary governmental approvals [123]. - The Company aims to produce renewable gasoline that qualifies under federal and state renewable fuel standards, potentially providing significant value [135].

Financial Performance - For Q1 2024, Verde Clean Fuels reported a GAAP diluted net loss per share of $(0.13), compared to $(0.09) in Q1 2023[2][5] - The total operating loss for Q1 2024 was $2,875,211, a slight decrease from $3,049,302 in Q1 2023[5] - General and administrative expenses for Q1 2024 were $2,789,376, down from $4,265,640 in the same period last year[5] - As of March 31, 2024, Verde's total assets were $30,055,087, a decrease from $31,925,639 at the end of 2023[7] - Cash and cash equivalents as of March 31, 2024, were $25,941,604, down from $28,779,177 at the end of 2023[7] - The accumulated deficit increased to $(24,695,101) as of March 31, 2024, from $(23,922,730) at the end of 2023[7] Project Development - The company is in the process of selecting FEED/EPC services for the Cottonmouth Ventures project in the Permian Basin[3] - Verde is part of a DOE-funded consortium with a total funding of $500,000 to study the production of zero-emission methanol[3] Strategic Initiatives - Verde is engaging in preliminary discussions for long-term offtake arrangements for D3 RINs, LCFS Credits, and gasoline[3] - The company expects methanol to play a vital role in decarbonizing the maritime and chemical industries[3]

Investment and Technology Development - Verde Clean Fuels has invested over $110 million in its STG+® technology and demonstration facility, which has operated for over 10,500 hours producing gasoline or methanol [28]. - The company plans to invest approximately $3 million in 2024 for a new FEED study to support its Permian Basin natural gas-to-gasoline facility, which is expected to take about eight months to complete [64]. - The company has invested over $110 million in developing and patenting its technology and conducted over 10,500 hours of testing at its demonstration facility [64]. - The company plans to develop future commercial production facilities near biomass and natural gas sources to ensure a stable supply of feedstocks [65]. - The company is focused on developing additional intellectual property for lower-carbon diesel and aviation fuel, alongside its renewable gasoline production [41]. Production and Commercialization Plans - The company plans to achieve its first commercial production of renewable gasoline as early as 2026, with a focus on projects that have quicker paths to commercialization [31]. - The anticipated renewable gasoline production facility in Kern County, California, could produce up to 7 million gallons per year, with operations expected to begin in the second half of 2027 [35]. - Verde Clean Fuels has identified opportunities for additional production facilities, including three planned facilities and potential projects in pipeline-constrained areas [34]. - The company expects to produce 1.5 RINs per gallon of gasoline, which can be sold alongside each gallon of renewable gasoline as a separate commodity [70]. - The company anticipates that its renewable gasoline will utilize existing fossil fuel gasoline distribution and retailing infrastructure, making it a drop-in solution [59]. Financial Performance and Projections - As of December 31, 2023, the company has an accumulated deficit of $23.9 million and has not generated any revenue to date [112]. - The company had approximately $28.8 million of cash and cash equivalents on hand as of December 31, 2023, which is expected to cover R&D activities and operating cash needs through 2024 [114]. - The company has incurred significant operating losses and negative operating cash flow during the fiscal years ended December 31, 2023, and 2022 [112]. - The business combination raised total proceeds of $37,329,178, which included $32 million from PIPE financing and $19 million from the CENAQ trust [46]. - The company expects significant expenditures on technology development and operational management, with expenses likely to exceed revenues for the foreseeable future [170]. Regulatory Environment and Compliance - The EPA issued a final rule on July 12, 2023, establishing biofuel volume requirements for 2023 to 2025, indicating steady growth in biofuels during these years [72]. - The RFS program mandates a certain volume of renewable fuel to replace or reduce petroleum-based fuels, with specific categories assigned GHG reduction thresholds [81]. - The company anticipates that its renewable gasoline will qualify under the cellulosic biofuel category, allowing it to benefit from the RFS program [82]. - Compliance with environmental regulations, including the Clean Water Act and the Clean Air Act, is expected to incur significant costs for the company [75]. - The company is evaluating the potential impacts of the Inflation Reduction Act on its business, including opportunities for accessing production tax credits [78]. Risks and Challenges - The company is subject to various risks, including regulatory changes, technological risks, and competition from other fuel producers [107]. - The company may face challenges in obtaining necessary permits for facility operations, which could be impacted by stakeholder opposition [76]. - The company may face significant competition from established companies in the petroleum-based industry, which have greater resources and financial strength [127]. - The company may experience delays in obtaining specialized permitting required for the construction and operation of its facilities, impacting anticipated revenue [120]. - The company faces challenges related to achieving market acceptance of its renewable fuel and recruiting qualified employees in a competitive industry [111]. Intellectual Property and Competitive Advantage - The company has been issued 28 patents globally, including 8 in the U.S., and has 3 pending patent applications, protecting key aspects of its STG+® technology [54]. - The company believes its proprietary manufacturing technology provides a significant competitive advantage, but it may not be able to prevent competitors from replicating this technology, potentially leading to a decrease in revenue [187]. - Intellectual property protection is crucial for competitive advantage, but the company faces risks related to enforcement and potential infringement [180]. - The company may incur significant costs and expenses due to intellectual property claims from incumbent market participants, which could adversely affect its business and financial condition [184]. - Non-compliance with patent protection requirements could result in the abandonment or lapse of patents, harming the company's ability to protect its technology and compete effectively [191]. Management and Governance - The management team has limited experience in operating a public company, which may affect compliance with regulatory obligations [215]. - Holdings owns the majority of the voting stock and can appoint the majority of the Board members [225]. - The concentration of ownership by Holdings limits the influence of other Class A Common Stock holders on company management [225]. - Potential conflicts of interest may arise between Holdings and other stockholders regarding acquisitions and corporate opportunities [225]. - The loss of key personnel could materially adversely affect the company's ability to operate and develop products [221].