Company: VGASW
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001628280-25-052351
Chunk: 26

Company: Verde Clean Fuels, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 1
Chunk 26
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 the interests of the Company’s service providers with those of the stockholders.Stock options represent the contingent right of award holders to purchase shares of the Company’s Class A common stock at a stated price for a limited time. Stock options granted to employees and officers will generally vest at a rate of 25% on each of the first, second, third and fourth anniversaries of the date of grant, subject to continued service through the vesting dates. Stock options granted to non-employee directors will generally vest 100% on the first anniversary of the date of grant, subject to continued service through the vesting date. Forfeitures are recognized as they occur.The Company estimates the fair value of stock options on the date of grant using the Black-Scholes model and the fair value of RSUs on the date of grant based on the value of the stock price on that date. The cost of awarded equity instruments is recognized based on each instrument’s grant-date fair value over the period during which the grantee is required to provide service in exchange for the award. Equity-based compensation is recorded as a general and administrative expense in the unaudited Condensed Consolidated Statements of Operations.

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The determination of fair value of stock options requires significant judgment and the use of estimates, particularly with regard to Black-Scholes assumptions. The key assumptions for the Black-Scholes model include the expected term, risk-free interest rate, volatility, and dividend yield. The Company estimates the key assumptions for the Black-Scholes model as follows: •expected term is based on peer benchmarking and expectations;•risk-free interest rate is based on U.S. Treasury yield curve rates with maturities similar to the expected term; and•volatility is based on the volatility of various publicly traded peer companies. The Company does not anticipate paying cash dividends and therefore uses an expected dividend yield of zero. The Company also assesses whether or not a discount for lack of marketability is applied based on certain liquidity factors.RSUs represent an unsecured right to receive one share of the Company’s Class A common stock equal to the per share value of the Class A common stock on the settlement date. RSUs have a zero-exercise price and vest over time in whole after the first anniversary of the date of grant subject to continuous service through the vesting date. See Note 8 for further information.Noncontrolling InterestFollowing the Business Combination, holders of Class A common stock own a direct controlling interest in the results of the Company, while Holdings own an economic interest