Verde Clean Fuels(US:VGAS)2023-08-14 20:32Financial Performance - As of June 30, 2023, the company reported a net loss of $2.55 million for the three months ended June 30, 2023, compared to a net income of $677,708 for the same period in 2022 [176]. - The net loss for the six months ended June 30, 2023, was $5.67 million, compared to a net loss of $747,568 for the same period in 2022 [182]. - Net cash used in operating activities increased by $3.2 million during the six months ended June 30, 2023, primarily due to a higher net loss of $4.9 million compared to 2022 [194]. - The company incurred an accumulated deficit of $22.5 million as of June 30, 2023, with negative operating cash flow during the six months ended June 30, 2023, and 2022 [189]. Revenue Generation - The company has not generated any revenue to date, but expects to generate significant future revenue from the sale of renewable RBOB grade gasoline in markets with low-carbon fuel credit systems [172]. - The company has not generated any revenue to date and does not expect to do so until the commercialization of its first production facility [189]. Expenses - General and administrative expenses increased by approximately $1.3 million, or 115%, from $1.1 million in Q2 2022 to $2.4 million in Q2 2023, primarily due to higher professional fees and insurance costs [177]. - General and administrative expenses increased by approximately $4.2 million, or 172%, from $2.5 million for the six months ended June 30, 2022, to $6.7 million for the same period in 2023 [183]. - Research and development expenses rose by approximately $13 thousand, or 18%, from $73 thousand in Q2 2022 to $86 thousand in Q2 2023, driven by higher consulting fees and contractor billings [179]. - Interest expense for the six months ended June 30, 2023, was $169,268, attributed to the company's finance lease liability [182]. Cash Flow and Financing - Verde Clean Fuels reported a net increase in cash of $37.3 million following the business combination, consisting of $32.0 million in PIPE financing proceeds and $19.0 million from the trust [156]. - The company raised approximately $37.3 million in net cash from the Business Combination on February 15, 2023, after transaction expenses and capital contributions [190]. - The company expects to use the proceeds from the Business Combination to fund ongoing operations and R&D activities, with sufficient funds available to cover these needs through 2024 [190]. Production Facilities - The first commercial production facility in Maricopa, Arizona is expected to be operational as early as 2025, with an initial capacity of approximately 7 million gallons per year of renewable gasoline [160]. - A second phase of the Maricopa facility is anticipated to produce approximately 30 million gallons per year of renewable gasoline by 2026 [160]. - The company has entered into a Carbon Dioxide Management Agreement to construct a new renewable gasoline production facility in Kern County, California, expected to produce approximately 7 million gallons per year [167]. - The project in California is targeted for a final investment decision by mid-2025, with operations expected to begin in the second half of 2027 [168]. Internal Controls and Compliance - The company has identified material weaknesses in its internal control over financial reporting, which have not been fully remediated [199]. - Management believes there is no new accounting guidance issued that would have a material impact on the Company's current financial statements [217]. - The Company is classified as a smaller reporting company and is not required to provide certain market risk disclosures [218]. Share-Based Compensation - The Company accelerated share-based payment expense related to service-based units totaling $2.1 million for the three-month period ended March 31, 2023 [214]. - No service-based or performance-based incentive units were granted during the three-month or six-month period ended June 30, 2023 [214]. - The Company authorized the 2023 Omnibus Incentive Plan, which includes potential future grants of stock appreciation rights, restricted stock, performance awards, and other stock-based awards [215]. Company Classification - Following the Business Combination, the Company expects to be an emerging growth company at least through 2023 [216].