Verde Clean Fuels(VGAS) - 2024 Q3 - Quarterly Report

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].