Company: VGASW
Filing Date: 2025-08-13
Form Type: 10-Q
Source: 0001628280-25-040155
Chunk: 27

Company: Verde Clean Fuels, Inc.
Filing Date: 2025-08-13
Form: 10-Q
Item: Part I, Item 1
Chunk 27
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 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 in the Company, which is presented as noncontrolling interest ("NCI"). NCI is classified as permanent equity within the condensed consolidated balance sheets. Income or loss is attributed to NCI based on their contractual distribution rights and the relative percentages of equity interests held during the period. The Company’s equity attributable to NCI and the Class A common stockholders are rebalanced to reflect changes in ownership, as applicable.Recent Accounting StandardsIn December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax