Financial Performance - Verde Clean Fuels reported a net increase in cash of $37.3 million, consisting of $32.0 million from PIPE Financing proceeds and $19.0 million from the trust, offset by $10.0 million in transaction expenses and a $3.75 million capital repayment [148]. - As of September 30, 2023, the company reported a net loss of $2.6 million compared to a net income of $4.3 million for the same period in 2022 [168]. - The company reported a net loss of $8,299,479 for the nine months ended September 30, 2023, compared to a net income of $3,600,180 for the same period in 2022 [175]. - Net cash used in operating activities increased by $4.5 million during the nine months ended September 30, 2023, primarily due to additional professional fees related to the business combination [188]. - The company has an accumulated deficit of $23.3 million as of September 30, 2023, and expects operating losses and negative cash flows to increase due to additional costs related to technology development [183]. Expenses - For the three months ended September 30, 2023, general and administrative expenses increased by approximately $1.6 million, or 189%, to $2.5 million compared to $868 thousand for the same period in 2022 [169]. - General and administrative expenses rose by approximately $5.9 million, or 177%, from $3.3 million for the nine months ended September 30, 2022, to $9.2 million for the same period in 2023, driven by higher professional fees and share-based compensation [176]. - R&D expenses increased by approximately $6 thousand, or 8%, from $72 thousand in Q3 2022 to $78 thousand in Q3 2023, primarily due to higher operating costs associated with the demonstration plant in New Jersey [171]. - Interest expense increased due to the company's finance lease liability, reflecting higher costs associated with financing arrangements [180]. Revenue Generation and Future Plans - 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 [164]. - Verde Clean Fuels plans to commence commercial production of renewable gasoline as early as 2026, with three additional production facilities planned and four potential development opportunities identified [156][157]. - A Carbon Dioxide Management Agreement was announced with Carbon TerraVault JV HoldCo, LLC, targeting the construction of a renewable gasoline production facility expected to produce approximately 7 million gallons per year [160]. - The first commercial production facility using the patented STG+® technology is expected to be operational as early as 2025 [161]. - The company anticipates that its renewable gasoline will qualify for the Federal Renewable Fuel Standard (RFS) and various state carbon programs, potentially providing significant value through carbon credits [151]. Investment and Technology Development - The company has invested over $110 million in its technology, with its demonstration facility having completed over 10,500 hours of operation producing gasoline or methanol [153]. - Research and development expenses for the company are expected to grow as it continues to develop the STG+® technology and market relationships [166]. - The company expects to construct only one of the originally planned four production facilities with the proceeds from the CENAQ transaction, with the remaining capital requirements expected to be met through project financing [185]. Corporate Governance and Compliance - The company has identified material weaknesses in its internal control over financial reporting, which management is in the early stages of remediating [193]. - The Company does not anticipate paying any cash dividends in the foreseeable future, using an expected dividend yield of zero in the option valuation model [203]. - Management believes there is no new accounting guidance that would materially impact the Company's current consolidated financial statements [210]. - The Company is classified as a smaller reporting company and is not required to provide certain market risk information [211]. Share-Based Compensation - The Company accelerated share-based payment expense related to service-based units totaling $2.1 million during the three-month period ended March 31, 2023 [207]. - No service-based or performance-based incentive units were granted during the three- and nine-month periods ended September 30, 2023 [207]. - The Company authorized and approved the 2023 Plan, which includes potential future grants of stock options, RSUs, and other stock-based awards [208]. - All outstanding unvested Series A Incentive Units and Founders Incentive Units became fully vested upon completion of the Business Combination [206]. - Participants in the Series A Incentive Units now receive 10% of distributions after a specified return to Holdings' Series A Incentive Unit holders, revised from 20% [206]. - Forfeitures of service-based and performance-based units are recognized upon occurrence [204]. - The Company expects to be an emerging growth company at least through 2023 following the consummation of the Business Combination [209].
CENAQ ENERGY(CENQ) - 2023 Q3 - Quarterly Report