Company: VGASW
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001628280-25-015480
Chunk: 109

Company: Verde Clean Fuels, Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 7
Chunk 109
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 position must be more likely than not to be sustained upon examination by taxing authorities. The Company recognizes accrued interest and penalties related to unrecognized tax benefits as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of December 31, 2024 and December 31, 2023. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position. The Company is subject to income tax examinations by major taxing authorities since inception.

Impairment of Long-Lived Assets

We evaluate the carrying value of long-lived assets when indicators of impairment exist. The carrying value of a long-lived asset is considered impaired when the estimated separately identifiable, undiscounted cash flows from such asset are less than the carrying value of the asset. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair value of the long-lived asset. Fair value is determined primarily using the estimated cash flows discounted at a rate commensurate with the risk involved. There were no impairment charges in any of the periods presented.

Impairment of Intangible Assets

Substantially all of the value of the acquired assets from Primus was attributable to the intellectual property and patented technology. Such technology has remained our core asset since its acquisition and we have continued to develop such technology and expand its application to other feedstocks.

A qualitative assessment of indefinite-lived intangible assets is performed in order to determine whether further impairment testing is necessary. In performing this analysis, we consider macroeconomic conditions, industry and market considerations, current and forecasted financial performance, entity-specific events and changes in the composition or carrying amount of net assets. Following our analysis of qualitative impairment indicators, intellectual property is tested for impairment using certain valuation methods, such as the discounted cash flow or relief-from-royalty methods. If the fair value of an indefinite-lived intangible asset is less than its carrying amount, an impairment loss is recognized equal to the difference.

The Company also considered market transactions (such as the PIPE Investment and Business Combination) in qualitatively assessing impairment. We further determined our estimated enterprise value utilizing a mix of market approach, discounted cash flow and relief from royalty methods (obtained from various analyses including the determination of the grant date fair value of our securities in connection with the share-based compensation awarded in 2024 and 2023), and the estimated enterprise value exceeded the carrying amount of this intangible asset by a substantial amount.

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