Company: VGASW
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001628280-25-025504
Chunk: 28

Company: Verde Clean Fuels, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 1
Chunk 28
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, including the FEED study (each as defined below). See Notes 1, 4, 6 and 10 for further information.Initial InvestmentIn connection with the Closing of the Business Combination, the Company issued and sold to Cottonmouth 2,000,000 shares of its Class A common stock in a private placement for an aggregate purchase price of $20,000,000 and entered into an equity participation right agreement, dated as of February 13, 2023 ("Existing Equity Participation Right Agreement"), by and among the Company and Cottonmouth, pursuant to which Verde granted Cottonmouth the right to participate and jointly develop facilities in the Permian Basin utilizing Verde’s STG+® technology for the production of gasoline derived from economically disadvantaged natural gas feedstocks.Permian Basin ProjectIn February 2024, Verde and Cottonmouth entered into a joint development agreement (“JDA”) for the proposed development, construction, and operation of a commercial production plant to produce commodity-grade gasoline using natural gas feedstock supplied from Diamondback’s operations in the Permian Basin (the “Permian Basin Project”). The JDA provides a pathway forward for the parties to reach final definitive documents and final investment decision (“FID”). The JDA frames the contracts contemplated to be entered into between the parties, including an operating agreement, ground lease agreement, construction agreement, license agreement and financing agreements, as well as conditions precedent to close, such as FID.In June 2024, the Company entered into a contract with Chemex Global, LLC (“Chemex”), a Shaw Group company (“Shaw Group”), for a front-end engineering and design (“FEED”) study related to the Permian Basin Project. In connection with entering into the JDA and the commencement of FEED, the Company began to incur development costs with respect to the project. Under the terms of the JDA, 65% of the approved development costs incurred by the Company (which includes the FEED costs) are reimbursed by Cottonmouth.Second InvestmentIn December 2024, the Company entered into a Class A common stock purchase agreement (the “Purchase Agreement”) with Cottonmouth pursuant to which the Company agreed to issue and sell to Cottonmouth in a private placement an aggregate of 12,500,000 shares of its Class A common stock, par value $0.0001, at a price of $4.00 per share for an aggregate purchase price of $50 million (the “PIPE Investment”). Closing of the PIPE Investment occurred on January 29, 2025.