Company: VGASW
Filing Date: 2025-03-28
Form Type: 10-K
Source: 0001628280-25-015480
Chunk: 122

Company: Verde Clean Fuels, Inc.
Filing Date: 2025-03-28
Form: 10-K
Item: Item 8
Chunk 122
---
 that is not guaranteed by the FDIC. As of December 31, 2024, the Company has not experienced losses on these accounts, and management believes the Company is not exposed to significant risks on such accounts.Accounts Receivable – OtherAccounts receivable – other primarily consists of amounts to be reimbursed to the Company from Cottonmouth in connection with the terms of the JDA between the Company and Cottonmouth. See Notes 1, 4 and 13 for further information. In accordance with Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments”, the Company’s accounts receivable are required to be presented at the net amount expected to be collected through an allowance for credit losses that are expected to occur over the life of the remaining life of the asset, rather than incurred losses. The Company considers the amounts due from Cottonmouth to be fully collectible and, accordingly, there was no allowance for credit losses recorded by the Company as of December 31, 2024.Other Current AssetsAs of December 31, 2024, other current assets included $469,612 of deferred equity issuance costs that were incurred in connection with the Company’s issuance of shares of its Class A common stock to Cottonmouth in January 2025. See Notes 1 and 15 for further information. Prepaid expenses are also included within other current assets.Fair Value of Financial InstrumentsThe fair value of the Company’s assets and liabilities, which qualify as financial instruments under ASC 820, “Fair Value Measurements and Disclosures” (“ASC 820”), approximates the carrying amounts represented in the balance sheet, primarily due to their short-term nature. The fair values of cash, restricted cash, cash equivalents, receivables, prepaid expenses, accounts payable and accrued expenses are estimated to approximate their respective carrying values as of December 31, 2024 and 2023 due to the short-term maturities of such instruments.In determining fair value, the valuation techniques consistent with the market approach, income approach and cost approach shall be used to measure fair value. ASC 820 establishes a fair value hierarchy for inputs, which represent the assumptions used by the buyer and seller in pricing the asset or liability. These inputs are further defined as observable and unobservable inputs. Observable inputs are those that buyer and seller would use in pricing the asset or liability based on market data obtained from sources independent of the Company. Unobservable inputs reflect the Company’s assumptions