Company: VGASW
Filing Date: 2025-05-14
Form Type: 10-Q
Source: 0001628280-25-025504
Chunk: 32

Company: Verde Clean Fuels, Inc.
Filing Date: 2025-05-14
Form: 10-Q
Item: Part I, Item 1
Chunk 32
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 November 2023. Office space is leased to provide adequate workspace for all employees.

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Lease costs for the Company’s operating leases are presented below.Statements of OperationsThree Months EndedMarch 31,Lease CostClassification20252024Operating lease costGeneral and administrative expense$94,313 $79,805 Variable lease costGeneral and administrative expense48,174 38,861 Total operating lease cost$142,487 $118,666 Supplemental information related to the Company’s operating lease arrangements was as follows:Three Months EndedMarch 31,Operating lease – supplemental information20252024ROU assets obtained in exchange for operating lease$308,623 $353,162 Remaining lease term – operating lease1.3 years1.7 yearsDiscount rate – operating lease7.50 %7.50 %CommitmentsThe Company had a restricted cash balance of $100,000 as of March 31, 2025 and December 31, 2024. The restricted cash balance is maintained in support of a letter of credit.ContingenciesThe Company is not party to any litigation.

NOTE 8 – STOCKHOLDERS’ EQUITY

Earn Out ConsiderationEarn out shares potentially issuable as part of the Business Combination are recorded within stockholders' equity as the instruments are deemed to be indexed to the Company’s common stock and meet the equity classification criteria under ASC 815-40-25. Earn out shares contain market conditions for vesting and were awarded to eligible stockholders, as described further below, and not to current employees.As consideration for the contribution of the equity interests in Intermediate, Holdings received earn out consideration (“Holdings earn out”) of 3,500,000 shares of Class C common stock and a corresponding number of Class C OpCo Units subject to vesting with the achievement of separate market conditions. One half of the Holdings earn out shares will meet the market condition when the volume-weighted average share price (“VWAP”) of the Class A common stock is greater than or equal to $15.00 for any 20 trading days within any period of 30 consecutive trading days within five years of the Closing Date. The second half will vest when the VWAP of the Class A common stock is greater than or equal to $18.00 over the same measurement period.Additionally, the Sponsor received earn out consideration (“Sponsor earn out” and, together with Holdings earn out, the “Earn Out Equity”) of 3,234,375