Financial Performance - Verde Clean Fuels reported a net increase in cash of $37.3 million, consisting of $32.0 million from PIPE Financing, $19.0 million from the trust, and $91 thousand from the CENAQ operating account, offset by $10.0 million in transaction expenses and a $3.75 million capital repayment to Holdings[140]. - The company has not generated any revenue to date and expects to generate significant future revenue from the sale of renewable RBOB grade gasoline in markets with low-carbon fuel credit systems[152]. - The company has an accumulated deficit of $21.8 million as of March 31, 2023, and expects operating losses and negative cash flows to increase due to additional costs related to technology development[161]. - Net cash used in operating activities increased by $2.1 million to $2.8 million for the three months ended March 31, 2023, compared to the same period in 2022, primarily due to higher general and administrative expenses[166]. - Net cash provided by financing activities increased by approximately $36.0 million during the three months ended March 31, 2023, primarily due to the closing of the business combination[168]. Expenses - General and administrative expenses increased by approximately $3 million or 226%, from $1.3 million for the three months ended March 31, 2022, to $4.33 million for the same period in 2023[157]. - Research and development expenses decreased by approximately $15 thousand or 15%, from $97 thousand for the three months ending March 31, 2022, to $83 thousand for the same period in 2023[159]. - The company accelerated share-based payment expense related to service-based units totaling $2.1 million during the three-month period ending March 31, 2023, in connection with the business combination[183]. Production Facilities - The first commercial production facility in Maricopa, Arizona, is expected to be operational as early as 2025, with an initial production capacity of approximately 7 million gallons per year, increasing to 30 million gallons per year in the second phase expected in 2026[144]. - Verde Clean Fuels has three additional production facilities planned and four additional identified potential production facility development opportunities[148]. - The company expects to construct only one of the originally planned four production facilities with the proceeds from the CENAQ transaction, which will contribute to capital expenditure requirements through 2025[163]. - The company entered into a 25-year land lease in Maricopa, Arizona, for the purpose of building a biofuel processing facility, with the lease commencement date in February 2023[169]. Technology and Innovation - Over $110 million has been invested in the company's technology, including a demonstration facility in New Jersey that has completed over 10,500 hours of operation producing gasoline or methanol[145]. - The company aims to protect and continuously develop its patented STG+ technology to maintain a competitive edge in the renewable fuels market[150]. - The gross and carrying amount of the company's intangible asset, consisting of intellectual property and patented technology, was $1,925,151 as of March 31, 2023[175]. - The company did not record any impairment charges for intangible or long-term assets during the three months ended March 31, 2023[177][178]. Internal Controls and Compliance - The company has identified material weaknesses in internal control over financial reporting, particularly related to the understatement of unit-based compensation expense[171]. - The company expects to be classified as an emerging growth company at least through 2023, following the consummation of the business combination[184].
CENAQ ENERGY(CENQ) - 2023 Q1 - Quarterly Report