Cover
Cover - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Mar. 28, 2024 | Jun. 30, 2023 | |
Document Information [Line Items] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Transition Report | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
Entity Interactive Data Current | Yes | ||
ICFR Auditor Attestation Flag | false | ||
Amendment Flag | false | ||
Document Period End Date | Dec. 31, 2023 | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Documents Incorporated by Reference [Text Block] | Certain sections of the Registrant’s definitive Proxy Statement for its 2024 Annual Meeting of Stockholders to be filed with the Securities and Exchange Commission (“SEC”) within 120 days of the Registrant’s fiscal year ended December 31, 2023, are incorporated by reference in Part III of this Annual Report on Form 10-K (this “Report”). | ||
Entity Information [Line Items] | |||
Entity Registrant Name | Verde Clean Fuels, Inc. | ||
Entity Central Index Key | 0001841425 | ||
Entity File Number | 001-40743 | ||
Entity Tax Identification Number | 85-1863331 | ||
Entity Incorporation, State or Country Code | DE | ||
Current Fiscal Year End Date | --12-31 | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Shell Company | false | ||
Entity Filer Category | Non-accelerated Filer | ||
Entity Small Business | true | ||
Entity Emerging Growth Company | true | ||
Entity Ex Transition Period | true | ||
Entity Public Float | $ 55.9 | ||
Entity Contact Personnel [Line Items] | |||
Entity Address, Address Line One | 711 Louisiana St | ||
Entity Address, Address Line Two | Suite 2160 | ||
Entity Address, City or Town | Houston | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 77002 | ||
Entity Phone Fax Numbers [Line Items] | |||
City Area Code | (469) | ||
Local Phone Number | 398-2200 | ||
Class A Common Stock, par value $0.0001 per share | |||
Entity Listings [Line Items] | |||
Title of 12(b) Security | Class A Common Stock, par value $0.0001 per share | ||
Trading Symbol | VGAS | ||
Security Exchange Name | NASDAQ | ||
Warrants, each whole warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50 per share | |||
Entity Listings [Line Items] | |||
Title of 12(b) Security | Warrants, each whole warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50 per share | ||
Trading Symbol | VGASW | ||
Security Exchange Name | NASDAQ | ||
Class A Common Stock | |||
Entity Listings [Line Items] | |||
Entity Common Stock, Shares Outstanding | 9,428,797 | ||
Class C Common Stock | |||
Entity Listings [Line Items] | |||
Entity Common Stock, Shares Outstanding | 22,500,000 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Auditor [Table] | |
Auditor Name | Deloitte & Touche LLP |
Auditor Firm ID | 34 |
Auditor Location | Dallas, Texas |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 28,779,177 | $ 463,475 |
Restricted cash | 100,000 | |
Prepaid expenses | 373,324 | 113,676 |
Deferred transaction costs | 3,258,880 | |
Deferred financing costs | 6,277 | |
Total current assets | 29,252,501 | 3,842,308 |
Non-current assets: | ||
Security deposits | 160,669 | 258,000 |
Property, plant and equipment, net | 62,505 | 7,414 |
Operating lease right-of-use assets, net | 524,813 | 323,170 |
Intellectual patented technology | 1,925,151 | 1,925,151 |
Total non-current assets | 2,673,138 | 2,513,735 |
Total assets | 31,925,639 | 6,356,043 |
Current liabilities: | ||
Accounts payable | 184,343 | 2,857,223 |
Accrued liabilities | 1,976,812 | 762,119 |
Operating lease liabilities - current portion | 297,380 | 237,970 |
Notes payable - insurance premium financing | 11,166 | |
Total current liabilities | 2,458,535 | 3,868,478 |
Non-current liabilities: | ||
Contingent consideration | 1,299,000 | |
Operating lease liabilities | 232,162 | 85,200 |
Total non-current liabilities | 641,774 | 1,384,200 |
Total liabilities | 3,100,309 | 5,252,678 |
Stockholders’ equity | ||
Intermediate Member's Equity | 12,775,901 | |
Additional paid in capital | 35,014,836 | |
Accumulated deficit | (23,922,730) | (11,672,536) |
Noncontrolling interest | 17,730,035 | |
Total Stockholders’ Equity | 28,825,330 | 1,103,365 |
Total liabilities and stockholders’ equity | 31,925,639 | 6,356,043 |
Class A Common Stock | ||
Stockholders’ equity | ||
Common stock value | 939 | |
Class C Common Stock | ||
Stockholders’ equity | ||
Common stock value | 2,250 | |
Related Party | ||
Non-current liabilities: | ||
Promissory note – related party | $ 409,612 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parentheticals) | Dec. 31, 2023 $ / shares shares |
Class A Common Stock | |
Common stock, par value (in Dollars per share) | $ / shares | $ 0.0001 |
Common stock, shares issued | 9,387,836 |
Common stock, shares outstanding | 9,387,836 |
Class C Common Stock | |
Common stock, par value (in Dollars per share) | $ / shares | $ 0.0001 |
Common stock, shares issued | 22,500,000 |
Common stock, shares outstanding | 22,500,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
General and administrative expenses | $ 11,515,192 | $ 4,514,994 |
Contingent consideration | (1,299,000) | (7,551,000) |
Research and development expenses | 329,194 | 316,712 |
Total operating loss (income) | 10,545,386 | (2,719,294) |
Other (income) | (447,074) | |
Interest expense | 236,699 | |
Loss (income) before income taxes | 10,335,011 | (2,719,294) |
Provision for income taxes | 166,265 | |
Net (loss) income | (10,501,276) | 2,719,294 |
Net (loss) attributable to noncontrolling interest | (7,757,688) | |
Net (loss) income attributable to Verde Clean Fuels, Inc. | $ (2,743,588) | $ 2,719,294 |
Class A Common Stock | ||
Earnings per share | ||
Weighted average Class A common stock outstanding, basic and diluted (in Shares) | 6,140,529 | |
Loss per Share of Class A common stock (in Dollars per share) | $ (0.45) |
Consolidated Statements of Op_2
Consolidated Statements of Operations (Parentheticals) - Class A Common Stock - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Weighted average Class A common stock outstanding, diluted | 6,140,529 | |
Loss per Share of Class A common stock diluted | $ (0.45) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders’ Equity - USD ($) | Class A Common | Class C Common | Member’s Equity | Accumulated Deficit | Preferred stock | Additional Paid in Capital | Non-Controlling Interest | Total |
Balance at Dec. 31, 2021 | $ 7,605,369 | $ (14,391,830) | $ (6,786,461) | |||||
Capital contribution | 3,750,000 | 3,750,000 | ||||||
Unit-based compensation expense | 1,420,532 | 1,420,532 | ||||||
Net income (loss) | 2,719,294 | 2,719,294 | ||||||
Balance at Dec. 31, 2022 | 12,775,901 | (11,672,536) | 1,103,365 | |||||
Retroactive application of recapitalization | 936 | 2,573 | $ (3,509) | |||||
Adjusted beginning balance | 936 | 2,573 | 12,775,901 | (11,672,536) | (3,509) | 1,103,365 | ||
Reversal of Intermediate original equity | (936) | (2,573) | (12,775,901) | 11,672,536 | 3,509 | (1,103,365) | ||
Recapitalization transaction | $ 936 | $ 2,250 | (4,793,142) | 15,391,286 | $ 25,487,723 | 36,089,053 | ||
Recapitalization transaction (in Shares) | 9,358,620 | 22,500,000 | ||||||
Class A Sponsor earn out shares | (5,792,000) | 5,792,000 | ||||||
Class C earn out shares | (10,594,000) | 10,594,000 | ||||||
Stock-based compensation | 2,901,569 | 2,901,569 | ||||||
Warrant Exercise | $ 3 | 335,981 | 335,984 | |||||
Warrant Exercise (in Shares) | 29,216 | |||||||
Net income (loss) | (2,743,588) | (7,757,688) | (10,501,276) | |||||
Balance at Dec. 31, 2023 | $ 939 | $ 2,250 | $ (23,922,730) | $ 35,014,836 | $ 17,730,035 | $ 28,825,330 | ||
Balance (in Shares) | 9,387,836 | 22,500,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (10,501,276) | $ 2,719,294 |
Adjustments to reconcile net (loss) income to net cash used in operating activities | ||
Contingent consideration | (1,299,000) | (7,551,000) |
Depreciation | 3,497 | 10,034 |
Finance lease amortization | 127,617 | |
Unit-based compensation expense | 2,901,569 | 1,420,532 |
Deferred financing fee write-off | 28,847 | |
Amortization of right-of-use assets | 413,354 | 237,850 |
Changes in operating assets and liabilities | ||
Prepaid expenses | (259,648) | 17,053 |
Security deposits | (10,669) | (108,000) |
Accounts payable | (6,645) | 108,121 |
Accrued liabilities and other | 185,912 | 104,819 |
Operating lease liabilities | (383,778) | (237,850) |
Income taxes payable | (312,446) | |
Net cash used in operating activities | (9,112,666) | (3,279,147) |
Cash flows from investing activities: | ||
Purchases of property, equipment and improvements | (58,588) | (4,411) |
Net cash used in investing activities | (58,588) | (4,411) |
Cash flows from financing activities: | ||
PIPE proceeds | 32,000,000 | |
Cash received from Trust | 19,031,516 | |
Less transaction expenses | (10,043,793) | |
Holdings capital repayment | (3,750,000) | |
Repayments of notes payable - insurance premium financing | (11,166) | (73,987) |
Repayments of the principal portion of finance lease liabilities | (44,469) | |
Deferred transaction costs | (10,341) | |
Deferred financing costs | (22,570) | (6,277) |
Warrant exercises | 335,984 | |
Capital contribution | 3,750,000 | |
Net cash provided by financing activities | 37,495,502 | 3,659,395 |
Net increase in cash | 28,324,248 | 375,837 |
Cash, beginning of year | 463,475 | 87,638 |
CENAQ operating cash balance acquired | 91,454 | |
Cash, Cash Equivalents and Restricted Cash, end of year | 28,879,177 | 463,475 |
Supplemental cash flow information: | ||
Non-cash income tax payable and deferred tax liability obtained from CENAQ | 431,632 | |
Non-cash impact of debt issuance through the Business Combination | 409,612 | |
Non-cash deferred transaction costs | 3,248,539 | |
Cash paid for interest | 236,699 | |
Cash paid for income taxes | $ 431,632 |
The Company
The Company | 12 Months Ended |
Dec. 31, 2023 | |
The Company [Abstract] | |
THE COMPANY | NOTE 1 — THE COMPANY Overview Verde Clean Fuels, Inc. (the “Company”) is a clean energy technology company specializing in the conversion of synthesis gas, or syngas, derived from diverse feedstocks, such as biomass or natural gas and other feedstocks, into liquid hydrocarbons, primarily gasoline, through an innovative and proprietary liquid fuels technology, the STG+® process. Through Verde Clean Fuels’ STG+® process, Verde Clean Fuels converts syngas into Reformulated Blend-stock for Oxygenate Blending (“RBOB”) gasoline. Verde Clean Fuels is focused on the development of technology and commercial facilities aimed at turning waste and other feedstocks into a usable stream of syngas which is then transformed into a single finished fuel, such as gasoline, without any additional refining steps. The availability of biogenic feedstocks and the economic and environmental drivers that divert these materials from landfills will enable us to utilize these waste streams to produce renewable gasoline from modular production facilities. |
Business Combination
Business Combination | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination [Abstract] | |
BUSINESS COMBINATION | NOTE 2 – BUSINESS COMBINATION On February 15, 2023 (the “Closing Date”), the Company finalized a business combination (“Business Combination”) pursuant to that certain business combination agreement, dated as of August 12, 2022 (“Business Combination Agreement”) by and among CENAQ Energy Corp. (“CENAQ”), Verde Clean Fuels OpCo, LLC, a Delaware limited liability company and a wholly owned subsidiary of CENAQ (“OpCo”), Bluescape Clean Fuels Holdings, LLC, a Delaware limited liability company (“Holdings”), Bluescape Clean Fuels Intermediate Holdings, LLC, a Delaware limited liability company (“Intermediate”), and CENAQ Sponsor LLC (“Sponsor”). Immediately upon the completion of the Business Combination, CENAQ was renamed to Verde Clean Fuels, Inc. Prior to the Business Combination, and up to the transaction close on February 15, 2023, Verde Clean Fuels, previously CENAQ Energy Corp., was a special purpose acquisition company (“SPAC”) incorporated for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses. Pursuant to the Business Combination Agreement, (i) (A) CENAQ contributed to OpCo (1) all of its assets (excluding its interests in OpCo and the aggregate amount of cash required to satisfy any exercise by CENAQ stockholders of their redemption rights (the “Redemption Rights”) and (2) the shares of Class C common stock (the “Holdings Class C Shares”) and (B) in exchange therefor, OpCo issued to CENAQ a number of Class A OpCo Units equal to the number of total shares of Class A common stock issued and outstanding immediately after the Closing Date (taking into account the PIPE Financing (as defined below) and following the exercise of Redemption Rights) (such transactions, the “SPAC Contribution”) and (ii) immediately following the SPAC Contribution, (A) Holdings contributed to OpCo 100% of the issued and outstanding limited liability company interests of Intermediate and (B) in exchange therefor, OpCo transferred to Holdings the Holdings OpCo Units and the Holdings Class C Shares. Holdings holds 22,500,000 OpCo Units and an equal number of shares of Class C common stock. Pursuant to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 805, “Business Combinations” (“ASC 805”), the Business Combination is accounted for as a common control reverse recapitalization where Intermediate is deemed the accounting acquirer and the Company is treated as the accounting acquiree, with no goodwill or other intangible assets recorded, in accordance with accounting principles generally accepted in the United States of America (“GAAP”) . The Business Combination is not treated as a change in control of Intermediate. This determination reflects Holdings holding a majority of the voting power of Verde Clean Fuels, Intermediate’s pre-Business Combination operations being the majority post-Business Combination operations of Verde Clean Fuels, and Intermediate’s management team retaining similar roles at Verde Clean Fuels. Further, Holdings continues to have control of the Board of Directors through its majority voting rights. Under ASC 805, the assets, liabilities, and noncontrolling interests of Intermediate are recognized at their carrying amounts on the date of the Business Combination. Following the completion of the Business Combination, the combined company is organized in an “Up-C” structure and the only direct assets of the Company, consists of equity interests in OpCo, whose only direct assets consists of equity interests in Intermediate. Immediately following the Business Combination, Verde Clean Fuels is the sole manager of and controls OpCo. The Business Combination includes: ● Holdings contributing 100% of the issued and outstanding limited liability company interests of Intermediate to OpCo in exchange for 22,500,000 Class C OpCo Units and an equal number of shares of Class C common stock; ● The issuance and sale of 3,200,000 shares of Class A common stock for a purchase price of $10.00 per share, for an aggregate purchase price of $32,000,000 (the “PIPE Financing”); ● Delivery of $19,031,516 of proceeds from CENAQ’s Trust Account related to non-redeeming Holders of 1,846,120 of Class A common stock; and ● Repayment of $3,750,000 of capital contributions made by Holdings since December 2021 and payment of $10,043,793 of transaction expenses including deferred underwriting fees of $1,700,000; The following summarizes the Verde Clean Fuels Class A common stock and Class C common stock (collectively, the “Common Stock”) outstanding as of February 15, 2023. The percentage of beneficial ownership is based on 31,858,620 shares of Company Common Stock issued and outstanding as of February 15, 2023, comprised of 9,358,620 shares of Class A common stock and 22,500,000 shares of Class C common stock. Shares % of CENAQ Public Stockholders (a) 1,846,120 5.79 % Holdings (b) 23,300,000 73.14 % New PIPE Investors (excluding Holdings) (c) 2,400,000 7.53 % Sponsor and Anchor Investors (d) 1,078,125 3.39 % Sponsor Earn Out shares (e) 3,234,375 10.15 % Total Shares of Common Stock at Closing 31,858,620 100.00 % Earn Out Equity shares (f) 3,500,000 Total diluted shares at Closing (including shares above) (g) 35,358,620 (a) CENAQ public stockholders holding 15,403,880 shares of Class A common stock exercised their right to redeem such shares for a pro rata portion of the funds in the Trust Account. Excludes 189,750 underwriters forfeited shares owned by Imperial Capital, LLC and I-Bankers Securities, Inc. that were forfeited as of Closing. (b) Includes (i) 22,500,000 shares of Class C common stock issued to Holdings at Closing, representing 100% of the shares of Class C common stock outstanding as of February 15, 2023, and (ii) 800,000 shares of Class A common stock acquired by Holdings in the PIPE Financing. (c) Excludes 800,000 shares of Class A common stock acquired by Holdings in the PIPE Financing. (d) Includes 253,125 and 825,000 shares of Class A common stock issued to the Sponsor and other investors, respectively, upon conversion of a portion of their current Class B common stock at Closing. (e) Includes 3,234,375 shares of Class A common stock issued to the Sponsor that are subject to forfeiture. These shares will no longer be subject to forfeiture upon the occurrence of the Triggering Events. Excludes 2,475,000 shares of Class A common stock issuable upon the exercise of the Private Placement Warrants held by Sponsor. (f) Includes 3,500,000 shares of Class C common stock issuable to Holdings upon the occurrence of triggering events. (g) Excludes 12,937,479 and 2,475,000 shares of Class A common stock issuable upon the exercise of the Public Warrants and Private Placement Warrants, respectively. Total proceeds raised from the Business Combination were $37,329,178, consisting of $32,000,000 in PIPE Financing proceeds, $19,031,516 from the CENAQ trust, and $91,454 from the CENAQ operating account offset by $10,043,793 in transaction expenses which were recorded as a reduction to additional paid in capital and offset by a $3,750,000 capital repayment to Holdings. As of December 31, 2023, no Class C OpCo units have been exchanged for shares of Class A common stock. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Significant Accounting Policies [Abstract] | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 3 — SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying financial statement is presented in conformity with GAAP and pursuant to the rules and regulations of the SEC. Principles of Consolidation The accompanying audited consolidated financial statements include the accounts of the Company and its subsidiaries for which the Company controls by ownership interest or other contractual rights giving the Company control over the most significant activities of an investee. The consolidated financial statements include the accounts of Verde Clean Fuels, and its subsidiaries OpCo, Intermediate, Bluescape Clean Fuels Employee Holdings, LLC, Bluescape Clean Fuels EmployeeCo., LLC, Bluescape Clean Fuels, LLC, and Maricopa Renewable Fuels I, LLC. All intercompany balances and transactions have been eliminated in consolidation. Risks and uncertainties The Company is currently in the development stage and has not yet commenced principal operations or generated revenue. The development of the Company’s projects are subject to a number of risks and uncertainties including, but not limited to, the receipt of the necessary permits and regulatory approvals, commodity price risk impacting the decision to go forward with the projects, the availability and ability to obtain the necessary financing for the construction and development of projects. The Company’s ability to develop and operate commercial production facilities, as well as expand production at future commercial production facilities, is subject to many risks beyond its control, including regulatory developments, construction risks, and global and regional macroeconomic developments. Inflation Reduction Act of 2022 On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock, in which the cumulative fair market value is greater than $1 million in a calendar year, by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. The amount of repurchases applicable to the excise tax can be reduced by the fair market value of any issuances at the time of issuance that occurred during the year, as well as certain exceptions provided by the U.S. Department of the Treasury (the “Treasury”). The Treasury and the IRS released interim guidance on December 27, 2022, which can be relied upon until the issuance of proposed regulations. In connection with the Business Combination, the Company incurred an excise tax of $1.59 million based on the redemption of $158.9 million at the request of the Common A shareholders. The excise tax is payable in the second quarter of 2024 and is recorded within accrued liabilities on the Consolidated Balance Sheet as of December 31, 2023. Other than the 1% excise tax, the IR Act has not had a material impact on the Company’s consolidated financial statements. Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Additionally, section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable. The Company expects to be an emerging growth company through 2026. Prior to the Business Combination, CENAQ elected to irrevocably opt out of the extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company will adopt the new or revised standard when those standards are effective for public registrants. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. The most significant estimates pertain to the calculations of the fair values of equity instruments, contingent consideration, impairment of intangible and long-lived assets and income taxes. Such estimates may be subject to change as more current information becomes available. Accordingly, the actual results could differ significantly from those estimates. Cash, Cash Equivalents and Restricted Cash As of December 31, 2023 and December 31, 2022, the Company had cash and cash equivalents of $28,779,177 and $463,475, respectively. The Company also had a restricted cash balance of $100,000 and $0 The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. As of December 31, 2023, the Company had cash equivalents of $26,155,789, which were comprised of funds held in a short-term money market fund having investments in high-quality short-term securities that are issued or guaranteed by the U.S. government or by U.S. government agencies and instrumentalities. There were no cash equivalents as of December 31, 2022. Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage limit of $250,000. As of December 31, 2023, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. Fair Value of Financial Instruments The 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. The fair values of cash, restricted cash, cash equivalents, prepaid expenses, and accrued expenses are estimated to approximate their respective carrying values as of December 31, 2023 and December 31, 2022 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 about the inputs that the buyer and seller would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy is categorized into three levels based on the inputs as follows: Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment. Level 2 — Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means. Level 3 — Valuations based on inputs that are unobservable and significant to the overall fair value measurement. Net Loss Per Common Stock Subsequent to the Business Combination, the Company’s capital structure is comprised of shares of Class A common stock, par value $0.0001 per share (the “Class A common stock”) and shares of Class C common stock, par value $0.0001 per share (the “Class C common stock”). Public shareholders, the Sponsor, and the investors in the private offering of securities of Verde Clean Fuels in connection with the Business Combination (the PIPE Financing) hold shares of Class A common stock and warrants, and Holdings owns shares of Class C common stock and Class C units of OpCo (the “Class C OpCo Units”). Class C common stock represents the right to cast one vote per share at the Verde Clean Fuels level, and carry no economic rights, including rights to dividends and distributions upon liquidation. Thus, Class C common stock are not participating securities per ASC 260, “Earnings Per Share” (“ASC 260”). As the Class A common stock represent the only participating securities, the application of the two-class method is not required. Antidilutive instruments including outstanding warrants, stock options, restricted stock units (“RSUs”) and Sponsor earnout shares were excluded from diluted earnings per share for the year ended December 31, 2023 because the inclusion of such instruments would be anti-dilutive. As a result, diluted net loss per common stock is the same as basic net loss per common stock. Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”) and ASC 815, “Derivatives and Hedging” (“ASC 815”). Management’s assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether they meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period-end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, they are recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, they are recorded at their initial fair value on the date of issuance and subject to remeasurement each balance sheet date with changes in the estimated fair value of the warrants to be recognized as a non-cash gain or loss in the statement of operations. See Note 8 for further information. Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer (“CEO”). The Company has determined that it operates in one operating segment, as the CODM reviews financial information presented on a combined basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. Reverse recapitalization The Business Combination was accounted for according to a common control reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP. This determination reflects Holdings holding a majority of the voting power of Intermediate’s pre and post Business Combination operations and Intermediate’s management team retaining similar roles at Verde Clean Fuels. Further, Holdings continues to have control of the Board of Directors through its majority voting rights. Under the guidance in ASC 805, for transactions between entities under common control, the assets, liabilities and noncontrolling interests of CENAQ and Intermediate are recognized at their carrying amounts on the date of the business combination. Under this method of accounting, CENAQ is treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the business combination is treated as the equivalent of Intermediate issuing stock for the net assets of CENAQ, accompanied by a recapitalization. The net assets of Intermediate are stated at their historical value within the financial statements with no goodwill or other intangible assets recorded. Property, Equipment, and Improvements Property, equipment, and improvements are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful life of the related asset. The estimated useful lives of assets are as follows: Computers, office equipment and hardware 3 – 5 years Furniture and fixtures 7 years Machinery and equipment 7 years Leasehold improvements Shorter of the lease term (including estimated renewals) or the estimated useful lives of the improvement Maintenance and repairs are charged to expense as incurred, and improvements are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in the accompanying statements of operations in the period realized. Accrued Liabilities Accrued liabilities consist of the following: As of As of Accrued bonuses $ - $ 86,120 Accrued legal fees 237,839 558,860 Accrued professional fees 143,900 107,022 Other accrued expenses 1,595,073 10,117 Total accrued liabilities $ 1,976,812 $ 762,119 Leases The Company accounts for leases under ASC 842, “Leases” (“ASC 842)”. The core principle of this standard is that a lessee should recognize the assets and liabilities that arise from leases, by recognizing in the consolidated balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset (“ROU asset”) representing its right to use the underlying asset for the lease term. In accordance with the guidance of ASC 842, leases are classified as finance or operating leases, and both types of leases are recognized on the consolidated balance sheet. Certain lease arrangements may contain renewal options. Renewal options are included in the expected lease term only if they are reasonably certain of being exercised by the Company. The Company elected the practical expedient to not separate non-lease components from lease components for real-estate lease arrangements. The Company combines the lease and non-lease component into a single accounting unit and accounts for the unit under ASC 842 where lease and non-lease services are included in the classification of the lease and the calculation of the right-of-use asset and lease liability. In addition, the Company has elected the practical expedient to not apply lease recognition requirements to leases with a term of one year or less. Under this expedient, lease costs are not capitalized; rather, are expensed on a straight-line basis over the lease term. The Company’s leases do not contain residual value guarantees or material restrictions or covenants. The Company uses either the rate implicit in the lease, if readily determinable, or the Company’s incremental borrowing rate for a period comparable to the lease term in order to calculate the net present value of the lease liability. The incremental borrowing rate represents the rate that would approximate the rate to borrow funds on a collateralized basis over a similar term and in a similar economic environment. Impairment of Intangible Assets The Company’s intangible asset consists of its intellectual property and patented technology and is considered an indefinite-lived intangible and is not subject to amortization. As of December 31, 2023 and December 31, 2022, the gross and carrying amount of this intangible asset was $1,925,151. A qualitative assessment of indefinite-lived intangible assets is performed in order to determine whether further impairment testing is necessary. In performing this analysis, macroeconomic conditions, industry and market conditions are considered in addition to current and forecasted financial performance, entity-specific events and changes in the composition or carrying amount of net assets under the quantitative analysis, intellectual property and patents are tested. During the years ended December 31, 2023 and December 31, 2022, the Company did not record any impairment charges. Impairment of Long-Term Assets The Company evaluates 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. During the years ended December 31, 2023 and December 31, 2022, the Company did not record any impairment charges. Equity-Based Compensation The Company applies ASC 718, “Compensation — Stock Compensation” (“ASC 718”), in accounting for its share-based compensation arrangements. Unit-Based Compensation Service-based units compensation cost is measured at the grant date based on the fair value of the equity instruments awarded and is recognized over the period during which an employee is required to provide service in exchange for the award, or the requisite service period, which is usually the vesting period. Performance-based unit compensation cost is measured at the grant date based on the fair value of the equity instruments awarded and is expensed over the requisite service period, based on the probability of achieving the performance goal, with changes in expectations recognized as an adjustment to earnings in the period of the change. If the performance goal is not met, no unit-based compensation expense is recognized and any previously recognized unit-based compensation expense is reversed. Forfeitures of service-based and performance-based units are recognized upon the time of occurrence. 2023 Equity-Based Awards In March 2023, the Company authorized and approved the Verde Clean Fuels, Inc. 2023 Omnibus Incentive Plan (the “2023 Plan”) which authorizes 4,727,112 shares. On April 25, 2023, the Company granted stock options to certain employees and officers and RSUs to non-employee directors, consistent with the terms of the 2023 Plan. 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 granted were determined by the value of the stock price on the date of the award subject to a discount for lack of marketability. Equity-based compensation is measured using a fair value-based method for all equity-based awards. 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. The determination of fair value requires significant judgment and the use of estimates, particularly with regard to Black-Scholes assumptions such as stock price volatility and expected option term. Equity-based compensation is recorded as a general and administrative expense in the Consolidated Statements of Operations. The Company estimates the expected term of options granted based on peer benchmarking and expectations. The Company uses U.S. Treasury yield curve rates for the risk-free interest rate in the option valuation model with maturities similar to the expected term of the options. Volatility is determined by reference to the actual volatility of several publicly traded peer companies that are similar to the Company in its industry sector. The Company does not anticipate paying cash dividends and therefore use an expected dividend yield of zero in the option valuation model. Forfeitures are recognized as they occur. The Company assesses whether a discount for lack of marketability is applied based on certain liquidity factors. All equity-based payment awards subject to graded vesting based only on a service condition are amortized on a straight-line basis over the requisite service periods. There is substantial judgment in selecting the assumptions used to determine the fair value of such equity awards and other companies could use similar market inputs and experience and arrive at different conclusions. See Note 7 for further information. Contingent Consideration Holdings had an arrangement payable to the Company’s CEO and a consultant whereby a contingent payment could become payable in the event that certain return on investment hurdles were met within 5 years of the closing date of the Primus asset purchase. On August 5, 2022, Holdings entered into an agreement with the Company’s management and CEO whereby, if the Business Combination reaches closing, the contingent consideration will be forfeited. As of December 31, 2022, the Company remeasured the liability of this arrangement, and reassessed the probability of the completion of the Business Combination and reversed $7,551,000 of the accrued expense through earnings resulting in a contingent consideration liability of $1,299,000. The Business Combination closed on February 15, 2023, and therefore the contingent consideration arrangement was terminated and no payments were made. Thus, the remaining $1,299,000 of accrued contingent consideration was reversed through earnings for the year ended December 31, 2023. See Note 10 for further information. Deferred Transaction Costs Deferred transaction costs are expenses directly related to the business combination with the SPAC. These costs consist primarily of legal and accounting fees that the Company capitalized. The deferred transaction costs were offset against the business combination proceeds and were reclassified to additional paid-in capital in the period of the completion of the business combination. As of December 31, 2023 and December 31, 2022, deferred transaction costs were $0 Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax 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, 2023 and 2022. 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. Recent Accounting Standards In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”. ASU 2023-07 enhances segment reporting under Topic 280 by expanding the breadth and frequency of segment disclosures. ASU 2023-07 requires disclosure of significant expenses that are regularly provided to an entity’s CODM and included in the reported measure(s) of a segment’s profit or loss. When applying this disclosure requirement, an entity identifies the segment expenses that are regularly provided to the CODM or easily computable from information that is regularly provided to the CODM. Entities are also required to disclose other segment items, i.e., the difference between reported segment revenue less the significant segment expenses and the reported measure(s) of a segment’s profit or loss. ASU 2023-07 also clarifies that single reportable segment entities are subject to Topic 280 in its entirety. ASU 2023-07 is effective for public entities for fiscal years beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024. The amendments in ASU 2023-07 should be adopted retrospectively unless impracticable. Early adoption is permitted. The Company is currently evaluating the impact that ASU 2023-07 will have on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. ASU 2023-09 requires public entities, on an annual basis, to provide: a tabular rate reconciliation (using both percentages and reporting currency amounts) of (1) the reported income tax expense (or benefit) from continuing operations, to (2) the product of the income (or loss) from continuing operations before income taxes and the applicable statutory federal (national) income tax rate of the jurisdiction (country) of domicile using specific categories, and separate disclosure for any reconciling items within certain categories that are equal to or greater than a specified quantitative threshold. For each annual period presented, ASU 2023-09 also requires all reporting entities to disclose the year-to-date amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign. It also requires additional disaggregated information on income taxes paid (net of refunds received) to an individual jurisdiction equal to or greater than 5% of total income taxes paid (net of refunds received). ASU 2023-09 is effective for public entities for fiscal years beginning after December 15, 2024. ASU 2023-09 is to be applied on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. The Company is currently evaluating the impact that ASU 2023-09 will have on its consolidated financial statements. The Company considers the applicability and impact of all ASUs issued by the FASB. There are no other accounting pronouncements which have been issued but are not yet effective that would have a material impact on the consolidated financial statements when adopted. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY TRANSACTIONS | NOTE 4. RELATED PARTY TRANSACTIONS ASC 850, “Related Party Disclosures” (“ASC 850”) provides guidance for the identification of related parties and disclosure of related party transactions. On February 15, 2023, the Company entered into a new promissory note with the Sponsor totaling $409,612 (the “New Promissory Note”). The New Promissory Note canceled and superseded all prior promissory notes. The New Promissory note was non-interest bearing and the entire principal balance of the New Promissory Note was payable on or before February 15, 2024 in cash or shares at the Company’s election. On February 15, 2024, the Company settled the New Promissory Note through the issuance of its Class A common shares at a conversion price of $10.00 per share. As a result, the Company issued 40,961 common shares and recorded an increase to additional paid-in capital of $409,608. The Company has a related party relationship with Holdings whereby Holdings holds a majority ownership in the Company via voting shares and has control of the Board of Directors. Further, Holdings possesses 3,500,000 earn out shares. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
LEASES | NOTE 5. LEASES The Company determines if an arrangement is, or contains, a lease at contract inception based on whether that contract conveys the right to control the use of an identified asset in exchange for consideration for a period of time. Leases are classified as either finance or operating leases where the Company is lessee. This classification dictates whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. For all lease arrangements with a term of greater than 12 months, the Company presents at the commencement date: a lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and a right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term. The Company leases office space and other office equipment under operating lease arrangements with initial terms greater than twelve months. The office lease in Hillsborough, New Jersey was extended until 2025. In August 2023, the Company entered into a 40-month office lease in Houston, Texas commencing in November 2023. Office space is leased to provide adequate workspace for all employees. In October 2022, the Company entered into a 25-year land lease in Maricopa, Arizona with the intent of building a biofuel processing facility. The commencement date of the lease was in February 2023 as control of the identified asset did not transfer to the Company on the effective date of the lease. As such, the Company did not record a ROU asset nor a lease liability as of December 31, 2022, specific to the land lease. On the commencement date, the present value of the minimum lease payments exceeded the fair value of the land, and, accordingly, the lease was classified as a finance lease. On August 31, 2023, the Company terminated the land lease in Maricopa, Arizona. In connection with the termination, the Company incurred a termination fee of three months’ base rent. The termination was effective four months after the termination notice; thus, the Company had a continued right-of-use and obligation to make rental payments for use of the land through December 31, 2023. The Company accounted for the termination with a continued right-of-use as a lease modification resulting in a reclassification of the lease from finance to operating as of the lease modification date. Accordingly, the Company incurred finance lease costs up to the modification date and operating lease costs subsequent to the modification until lease termination. The Company exited the lease as of December 31, 2023. Lease costs for the Company’s operating and finance leases are presented below. Lease Cost Statements of Operations Classification For the For the 2022 Amortization of finance lease right-of-use asset General and administrative expense $ 127,617 $ - Interest on finance lease liability Interest expense 236,699 - Total finance lease cost 364,316 - Operating lease cost General and administrative expense 431,245 237,850 Variable lease cost General and administrative expense 151,731 155,218 Total lease cost $ 947,292 $ 393,068 Maturities of the Company’s operating and finance leases as of December 31, 2023 are presented below. As of December 31, 2023 Maturity of lease liabilities Operating Finance 2024 $ 324,789 $ - 2025 162,409 - 2026 69,531 - 2027 11,822 - Thereafter - - Total future minimum lease payments 568,551 - Less: interest (39,009 ) - Present value of lease liabilities $ 529,542 $ - Supplemental information related to the Company’s operating and finance lease arrangements was as follows: As of As of Operating lease - supplemental information December 31, December 31, Right-of-use assets obtained in exchange for operating lease $ 524,813 $ 323,170 Remaining lease term - operating lease 23 months 16 months Discount rate - operating lease 7.50 % 7.50 % |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY, PLANT AND EQUIPMENT | NOTE 6. PROPERTY, PLANT AND EQUIPMENT Major classes of property, plant, and equipment are as follows: As of As of Computers, office equipment and hardware $ 16,956 $ 11,461 Furniture and fixtures 47,256 1,914 Machinery and equipment 43,799 36,048 Property, plant, and equipment 108,011 49,423 Less: accumulated depreciation 45,506 42,009 Property, plant and equipment, net $ 62,505 $ 7,414 Depreciation expense was $3,497 and $10,034 for the year ended December 31, 2023 and December 31, 2022, respectively. Depreciation expense of $1,662 and $1,835 is included in general and administrative and research and development expense, respectively, for the year ended December 31, 2023. Depreciation expense of $1,355 and $8,679 is included in general and administrative and research and development expense, respectively, for the year ended December 31, 2022. |
Stockholders_ Equity
Stockholders’ Equity | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders’ Equity [Abstract] | |
STOCKHOLDERS’ EQUITY | NOTE 7 — STOCKHOLDERS’ EQUITY Earn-out Consideration Earnout shares potentially issuable as part of the Business Combination are recorded within stockholder’s 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. Earnout shares contain market conditions for vesting and were awarded to eligible shareholders, as described further below, and not to current employees. As consideration for the contribution of the equity interests in Intermediate, Holdings received earnout consideration (“Holdings earnout”) 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 earnout 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 earnout consideration (“Sponsor earnout”) of 3,234,375 shares of Class A common stock subject to forfeiture which will no longer be subject to forfeiture with the achievement of separate market conditions (the “Sponsor Shares”). One half of the Sponsor earnout will no longer be subject to forfeiture if the VWAP of 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 no longer be subject to forfeiture when the VWAP of the Class A common stock is greater than or equal to $18.00 over the same measurement period. Notwithstanding the forgoing, the Holdings earnout and Sponsor earnout shares will vest in the event of a sale of the Company at a price that is equal to or greater than the applicable trigger price payable to the buyer of the Company. The earn out consideration was issued in connection with the Business Combination on February 15, 2023. Holdings earn out shares are neither issued nor outstanding as of December 31, 2023 as the performance requirements for vesting were not achieved. All Sponsor Shares granted in connection with the Business Combination are issued and outstanding as of December 31, 2023. Sponsor Shares subject to forfeiture pursuant to the above terms that do not vest in accordance with such terms shall be forfeited. The grant-date fair value of the Earnout Shares attributable to Holdings and the Sponsor, using a Monte Carlo simulation model, was $10,594,000, and $5,791,677, respectively. The following table provides a summary of key inputs utilized in the valuation of the Earnout Shares on February 15, 2023: Inputs As of Expected volatility 50.00% Expected dividends 0% Remaining expected term (in years) 5.0 years Risk-free rate 4.7% Discount Rate (WACC) 14.7% Payment Probability 12.6% to 18.3% The earnout arrangements are akin to a distribution to our shareholders, similar to the declaration of a pro rata dividend, and the fair value of the shares are a reduction to retained earnings. Based on the Class A common stock trading price the market conditions were not met and no Earnout Shares vested as of December 31, 2023. Share-based Compensation Compensation expense related to share-based compensation arrangements is included within general and administrative expenses. The total compensation expense incurred related to the Company’s equity-based compensation plans was $2,901,569 and $1,420,532 for the years ended December 31, 2023 and December 31, 2022, respectively. As a taxable event has not occurred, there were no income tax benefits recorded for these awards for the year ended December 31, 2023 and December 31, 2022. Incentive Units Prior to closing of the Business Combination, certain subsidiaries of the Company, including Intermediate, were wholly owned subsidiaries of Holdings. Holdings, which was outside of the Business Combination perimeter, had entered into several compensation related arrangements with management of Intermediate. Compensation costs associated with those arrangements were allocated by Holdings to Intermediate as the employees were rendering services to Intermediate. However, the ultimate contractual obligation related to these awards, including any future settlement, rested and continues to rest with Holdings. The Holdings equity compensation instruments consisted of 1,000 authorized and issuable Series A Incentive Units and 1,000 authorized and issuable Founder Incentive Units. Series A Incentive Units refers to 800 incentive units issued by Holdings on August 7, 2020 to certain members of management of Intermediate in compensation for their services. Founder Incentive Units refers to 1,000 incentive units issued by Holdings on August 7, 2020 to certain members of management of Intermediate in compensation for their services. Both Series A Incentive Unit holders and Founders Incentive Unit holders participated in earnings and distributions after a specified return to the Series A Preferred Unit holders. The Series A Incentive Units were deemed to be service-based awards under ASC 718 due to vesting conditions. Vesting of the service-based units was to occur in equal installments of 25% on each of the first through fourth anniversaries of the August 7, 2020 grant date subject to the participant’s continuous service through such dates. The Founder Incentive Units were deemed to be performance-based based units as no vesting conditions existed. The Company classified these units as equity awards and measured their fair value at the grant date. The fair value of each award was estimated on the grant date using a Black-Scholes option valuation model that used the assumptions noted below and other valuation techniques. Expected volatility was based on historical volatility for guideline public companies that operate in the Company’s industry. The expected term of awards granted represents management’s estimate for the number of years until a liquidity event as of the grant date. The risk-free rate for the period of the expected term was based on the U.S. Treasury yield curve in effect at the time of grant. In addition, management considered the distribution priority schedule or “waterfall calculation” in its estimation process. There were 800 Series A Incentive Units granted by Holdings in August of 2020 and 400 were unvested as of December 31, 2022. As the award recipients resided on subsidiaries of Intermediate and provided service to the Company, the Company recognized $1,420,532 of compensation expense related to the awards during the year ended December 31, 2022. There were 1,000 Founder Incentive Units issued in August of 2020 by Holdings and 1,000 were unvested as of December 31, 2022. No compensation expense was recorded related to these awards during the year ended December 31, 2022 as performance conditions had not, and were unlikely to be met. On August 5, 2022, certain amendments to the existing Series A Incentive Units and Founder Incentive Units were made whereby all outstanding unvested Series A Incentive Units and Founders Incentive Units would become fully vested upon completion of the Business Combination. Additionally, as part of the amendment to these agreements, the priority of distributions under the Series A Incentive Units and Founders Incentive Units was also revised such that participants receive 10% of distributions after a specified return to Holdings’ Series A Incentive Unit holders (instead of 20%). The modifications to the Series A Incentive Units and Founders Units did not result in any incremental unit-based compensation expense in connection with the August 2022 modification. In connection with the closing of the Business Combination, and as a result of the August 5, 2022 amendments, all of the outstanding and unvested Series A Incentive Units and Founder Incentive Units became fully vested. As such, the Company accelerated the remaining service-based share-based payment expense related to these awards of $2,146,792. The accelerated share-based payment expense was included in general and administrative expenses for the year ended December 31, 2023. Performance conditions for the performance-based Founder Incentive Units had not and were unlikely to be met as of December 31, 2023. As such, no share-based compensation cost was recorded for these units. 2023 Equity Awards On April 25, 2023, consistent with the terms of the 2023 Plan, the Company granted stock options to certain employees and officers and RSUs to non-employee directors. In addition to stock options and RSUs, the 2023 Plan authorizes for the future potential grant of stock appreciation rights, restricted stock, performance awards, stock awards, dividend equivalents, other stock-based awards, cash awards and substitute awards to certain employees (including executive officers), consultants and non-employee directors, and is intended to align the interests of the Company’s service providers with those of the stockholders. Stock Options Stock options represent the contingent right of award holders to purchase shares of the Company’s common stock at a stated price for a limited time. The stock options granted in 2023 have an exercise price of $11.00 per share and will expire 7 years from the date of grant. Stock options granted vest at a rate of 25% on each of the first, second, third and fourth anniversaries of the date of grant subject to continued service through the vesting dates. The Company estimates the fair value of stock options on the date of grant using the Black-Scholes model and the following underlying assumptions. Expected volatility was based on historical volatility for public company peers that operate in the Company’s industry. The expected term of awards granted represents management’s estimate for the number of years until a liquidity event as of the grant date. The risk-free rate for the period of the expected term was based on the U.S. Treasury yield curve in effect at the time of grant. The fair value of stock options granted for the year ended December 31, 2023 were determined using the following assumptions as of the grant date: Risk-free interest rate 3.4 % Expected term 7 years Volatility 48.2 % Dividend yield Zero Discount for lack of marketability 10 % The weighted average grant date fair value of options granted for the year ended December 31, 2023 was $1.50 per share. The table below presents activity related to stock options awarded for the year ended December 31, 2023: Number of Weighted Weighted Outstanding as of December 31, 2022 - - - Granted 1,236,016 $ 11.00 7.0 Exercised - - - Forfeited / expired - - - Outstanding as of December 31, 2023 1,236,016 $ 11.00 6.3 Vested as of December 31, 2023 - - - Unvested as of December 31, 2023 1,236,016 $ 11.00 6.3 Exercisable as of December 31, 2023 - - - Stock-based compensation expense related to stock options was $334,832 for the year ended December 31, 2023. As of December 31, 2023, unrecognized compensation expense related to unvested stock options was $1,519,191. The remaining compensation cost is expected to be recognized over a weighted-average period of 3.3 years. The weighted average remaining contractual term for all options outstanding at December 31, 2023 is 6.3 years. There were no vested stock options outstanding as of December 31, 2023, thus, there was no cash received for the exercise of stock options for the year ended December 31, 2023. Restricted Stock Units In March 2023, the Company’s Board of Directors approved 141,656 non-employee time-based RSU awards. RSUs represent an unsecured right to receive one share of the Company’s common stock equal to the value of the 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. The fair value of RSUs granted in 2023 were determined by the value of the stock price on the date of the award subject to a discount for lack of marketability of 13% for a per unit value of $4.35. The discount due to lack of marketability was applied because of the limited trading activity of the Company’s public equity. RSU activity for the year ended December 31, 2023 is as follows: Time- Unvested, December 31, 2022 - Granted in the year ended December 31, 2023 141,656 Vested - Forfeited - Unvested December 31, 2023 141,656 The March 2023 RSU awards had an aggregate fair value of $616,204 as of the grant date. RSU compensation expense was $419,945 for the year ended December 31, 2023. As of December 31, 2023, unrecognized compensation expense related to unvested RSUs was $196,259. The remaining compensation cost is expected to be recognized over a weighted-average period of 0.32 years. As of December 31, 2023, the Company had not granted RSUs which vest based on the achievement of certain market or performance metrics. Recast of Intermediate Equity The Business Combination was structured as a reverse merger and recapitalization which results in a common control arrangement where Holdings, the party that controls the reporting entity prior to the Business Combination, continues to control the Company immediately after the Business Combination. As such, there is not a new basis of accounting and the financial statements of the combined company represent a continuation of the financial statements of Intermediate where assets and liabilities of Intermediate continue to be reported at historical value. However, the reverse recapitalization requires a recast of Intermediate’s equity and earnings per share and is adjusted to reflect the par value of the outstanding capital stock of CENAQ. For periods before the reverse recapitalization, shareholders’ equity of Intermediate is presented based on the historical equity of Intermediate restated using the exchange ratio to reflect the equity structure of CENAQ. Management evaluated the impact of the number of shares issued by CENAQ to affect the Business Combination in exchange for the shares of Intermediate (“the exchange ratio”) and concluded the recast of historical equity based on the exchange ratio did not result in a significant impact to historical equity. |
Warrants
Warrants | 12 Months Ended |
Dec. 31, 2023 | |
Warrants [Abstract] | |
WARRANTS | NOTE 8 – WARRANTS There were 15,383,263 warrants outstanding as of December 31, 2023. Warrants were exercised on various dates during the year ended December 31, 2023 whereby the total number of warrants exercised was 29,216, resulting in 29,216 Class A common shares issued. The Company received cash of $335,984 related to the warrant exercises during the year ended December 31, 2023. Each warrant entitles the registered holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment as discussed below, at any time commencing 30 days after the completion of our initial business combination. However, no warrants will be exercisable for cash unless there is an effective and current registration statement covering the shares of Class A common stock issuable upon exercise of the warrants and a current prospectus relating to such shares of Class A common stock. Notwithstanding the foregoing, if a registration statement covering the shares of Class A common stock issuable upon exercise of the warrants is not effective within a specified period following the consummation of our initial business combination, warrant holders may, until such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or another exemption, is not available, holders will not be able to exercise their warrants on a cashless basis. In the event of such cashless exercise, each holder would pay the exercise price by surrendering the warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” for this purpose will mean the average reported last sale price of the shares of Class A common stock for the 5 trading days ending on the trading day prior to the date of exercise. The warrants will expire on the fifth anniversary of our completion of an initial business combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation. The Company may call the warrants for redemption, in whole and not in part, at a price of $0.01 per warrant: ● at any time after the warrants become exercisable; ● upon not less than 30 days’ prior written notice of redemption to each warrant holder; ● if, and only if, the reported last sale price of the shares of Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30-trading day period commencing at any time after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders; and ● if, and only if, there is a current registration statement in effect with respect to the shares of Class A common stock underlying such warrants. If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. |
Income Tax
Income Tax | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax [Abstract] | |
INCOME TAX | NOTE 9 – INCOME TAX As of December 31, 2023, Verde Clean Fuels, Inc. holds 29.38% of the economic interest in OpCo, which is treated as a partnership for U.S. federal income tax purposes. As a partnership, OpCo generally is not subject to U.S. federal income tax under current U.S. tax laws as its net taxable income (loss) and any related tax credits are passed through to its members and included in their tax returns, even though such net taxable income (loss) or tax credits may not have actually been distributed. Verde Clean Fuels, Inc. is subject to U.S. federal income taxes, in addition to state and local income taxes, with respect to its distributive share of the net taxable income (loss) and any related tax credits of OpCo. Intermediate was historically and remains a disregarded subsidiary of a partnership for U.S. Federal income tax purposes with each partner being separately taxed on its share of taxable income or loss. As a direct result of the Business Combination, OpCo became the sole member of Intermediate. As such, OpCo’s distributive share of any net taxable income or loss and any related tax credits of Intermediate are then distributed to the Company. For the days and periods prior to the reverse recapitalization, Intermediate was a disregarded subsidiary of an entity treated as a partnership. As such, its net taxable loss and any related tax credits were allocated to its members. The period as of and for the year ended December 31, 2023 discussed below represents the period beginning January 1, 2023 and ending December 31, 2023. Intermediate had no current or deferred income tax expense for the year ended December 31, 2022 due to its disregarded entity status. The components of income taxes are as follows: For The Year Ended 2023 2022 Current: Federal $ 166,265 $ - State - $ - Total current 166,265 $ - Deferred: Federal - - State - - Total deferred - - Total Income Tax Expense $ 166,265 $ - Income tax expense for the year ended December 31, 2023 consisted of $119,186 of current income taxes, and interest and penalties of $15,701 and $31,377, respectively. As a policy election, the Company records interest and penalties within income tax expense. A reconciliation of income tax expense with amounts computed at the federal statutory tax rate is as follows: For the Computed tax (21%) $ (2,170,352 ) Income attributable to legacy Intermediate holders 516,715 Income tax benefit attributable to noncontrolling interests 1,112,400 Change in valuation allowance 561,578 Other permanent items 36,793 Other items 109,131 Income Tax Expense $ 166,265 Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Noncurrent deferred tax assets (liabilities) were as follows: Deferred Taxes For the Deferred Tax Liabilities: Total deferred tax liabilities $ - Deferred Tax Assets: Start-up costs $ 193,765 Stock-based compensation 46,568 Investment in OpCo 8,168,987 Federal NOL carryforwards 553,497 Total deferred tax assets 8,962,817 Valuation allowance (8,962,817 ) Total net deferred tax assets $ - Net deferred tax asset (liability) $ - The Company has assessed the realizability of the net deferred tax assets, and in that analysis, has considered the relevant positive and negative evidence available to determine whether it is more likely than not that some portion or all of the deferred tax assets will be realized. In making such a determination, the Company considered all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and recent results of operations. After consideration of all available evidence, the Company has recorded a full valuation allowance against the deferred tax assets at Verde Clean Fuels, Inc. as of the Closing Date of the Business Combination and as of December 31, 2023, which will be maintained until there is sufficient evidence to support the reversal of all or some portion of these allowances. The initial recognition of the Company’s deferred tax assets and valuation allowance in connection with the Business Combination was recorded to additional paid-in-capital on the consolidated balance sheet. As noted above, the valuation allowance completely offset the deferred tax assets of Verde Clean Fuels, Inc., which resulted in a net zero impact to the Company’s consolidated balance sheet as of the Closing Date of the Business Combination. As of December 31, 2023, the Company had a U.S. federal net operating loss (“NOL”) carryforward totaling $553,497, which does not expire. The Company recognizes the financial statement effects of uncertain income tax positions when it is more likely than not, based on the technical merits, that the position will be sustained upon examination. To the extent the Company’s assessment of such tax positions changes, the change in estimate will be recorded in the period in which the determination is made. As of December 31, 2023, the Company has not recorded any uncertain tax positions, as well as any accrued interest and penalties on the consolidated balance sheet. The Company’s income tax filings will be subject to audit by various taxing jurisdictions. The Company will monitor the status of U.S. Federal, state and local income tax returns that may be subject to audit in future periods. No U.S. Federal, state and local income tax returns are currently under examination by the respective taxing authorities. Tax receivable agreement On the Closing Date, in connection with the consummation of the Business Combination and as contemplated by the Business Combination Agreement, Verde Clean Fuels entered into a tax receivable agreement (the “Tax Receivable Agreement”) with Holdings (together with its permitted transferees, the “TRA Holders,” and each a “TRA Holder”) and the Agent (as defined in the Tax Receivable Agreement). Pursuant to the Tax Receivable Agreement, Verde Clean Fuels is required to pay each TRA Holder 85% of the amount of net cash savings, if any, in U.S. federal, state and local income and franchise tax that Verde Clean Fuels actually realizes (computed using certain simplifying assumptions) or is deemed to realize in certain circumstances in periods after the Closing as a result of, as applicable to each such TRA Holder, (i) certain increases in tax basis that occur as a result of Verde Clean Fuels’ acquisition (or deemed acquisition for U.S. federal income tax purposes) of all or a portion of such TRA Holder’s Class C OpCo Units pursuant to the exercise of the OpCo Exchange Right, a Mandatory Exchange or the Call Right (each as defined in the Amended and Restated LLC Agreement of OpCo) and (ii) imputed interest deemed to be paid by Verde Clean Fuels as a result of, and additional tax basis arising from, any payments Verde Clean Fuels makes under the Tax Receivable Agreement. Verde Clean Fuels will retain the benefit of the remaining 15% of these net cash savings. The Tax Receivable Agreement contains a payment cap of $50,000,000, which applies only to certain payments required to be made in connection with the occurrence of a change of control. The payment cap would not be reduced or offset by any amounts previously paid under the Tax Receivable Agreement or any amounts that are required to be paid (but have not yet been paid) for the year in which the change of control occurs or any prior years. As of December 31, 2023, the Company did not have a tax receivable balance. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value of Financial Measurements [Abstract] | |
FAIR VALUE MEASUREMENTS | NOTE 10 – FAIR VALUE MEASUREMENTS As of December 31, 2023, the Company had cash equivalents of $26,155,789, which consisted of funds held in a short-term money market fund and are classified as Level 1 in the fair value hierarchy. See Note 3. The Company measured the liability for contingent consideration as of December 31, 2022 using level 3 inputs and valued the contingent consideration at $1,299,000. The following table provides a summary of key inputs utilized in the valuation of the contingent consideration liability as of December 31, 2022: Inputs As of Expected volatility 68.60 % Expected dividends 0 % Remaining expected term (in years) 0.09 Risk-free rate 4.12 % Discount rate (WACC) 27.2 % Payment probability 25 % Internal rate of return hurdle 15 % Excess return allocable to contingent payment 10 % Estimated fair value of contingent consideration $ 1,299,000 There was no liability for contingent consideration as of December 31, 2023 as this liability was reversed and recognized in earnings during the year ended December 31, 2023 as a result of the close of the Business Combination. At December 31, 2023 and December 31, 2022, there were no other assets or liabilities measured at fair value on a recurring basis, as the earnout shares, public warrants, and private placement warrants are equity-classified. |
Loss Per Share
Loss Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Loss Per Share [Abstract] | |
LOSS PER SHARE | NOTE 11 – LOSS PER SHARE Loss per share Prior to the reverse recapitalization in connection with the Business Combination, all net loss was attributable to the noncontrolling interest. For the periods prior to the Closing Date of February 15, 2023, earnings per share was not calculated because net income prior to the Business Combination was attributable entirely to Intermediate. Further, prior to the consummation of the Business Combination, the Intermediate ownership structure included equity interests held solely by Holdings. The Company analyzed the calculation of earnings per share for comparative periods presented and determined that it resulted in values that would not be meaningful to the users of these consolidated financial statements. Therefore, the earnings per share information has not been presented for the year ended December 31, 2022. Basic net loss per share has been computed by dividing net loss attributable to Class A common shareholders for the period subsequent to the Business Combination by the weighted average number of Class A shares of common stock outstanding for the same period. Diluted earnings per share of Class A common stock were computed by dividing net loss attributable to Class A common shareholders by the weighted-average number of Class A shares of common stock outstanding adjusted to give effect to potentially dilutive securities. The Company’s potentially dilutive securities have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share is the same. The following table sets forth the computation of net loss used to compute basic net loss per share of Class A common stock for the year ended December 31, 2023. For the Year Ended Net (loss) attributable to Verde Clean Fuels, Inc. $ (2,743,588 ) Basic weighted-average shares outstanding 6,140,529 Dilutive effect of share-based awards - Diluted weighted-average shares outstanding 6,140,529 Basic (loss) per share $ (0.45 ) Diluted (loss) per share $ (0.45 ) The Company’s stock options, warrants, and earnout shares could have the most significant impact on diluted shares should the instruments represent dilutive instruments. However, securities that could potentially be dilutive are excluded from the computation of diluted earnings per share when a loss from continuing operations exists or when the exercise price exceeds the average closing price of the Company’s common stock during the period, because their inclusion would result in an antidilutive effect on per share amounts. The following amounts were not included in the calculation of net income per diluted share because their effects were anti-dilutive: As of December 31, Warrants 15,383,263 Earnout shares (1) 3,234,375 Convertible debt 40,961 Stock options 1,236,016 Time-based RSUs 141,656 Total antidilutive instruments 20,036,271 (1) Excludes 3,500,000 Class C earnout shares convertible into Class A common shares. Noncontrolling Interests Following the Business Combination, holders of Class A common stock own direct controlling interest in the results of the combined entity, while Holdings own an economic interest in the Company, shown as noncontrolling interests (“NCI”) in stockholders’ equity in the Company’s consolidated financial statements. The indirect economic interests are held by Holdings in the form of Class C OpCo units. Following the completion of the Business Combination, the ownership interests of the Class A common stockholders and the NCI were 29.38% and 70.62%, respectively. As of December 31, 2023, the ownership interests of the Class A common stockholders and the NCI were 29.44% and 70.56%, respectively. The change in ownership interests was due to warrant exercises that resulted in the issuance of an additional 29,216 Class A common shares. See Note 8 for further information. The NCI may further decrease according to the number of shares of Class C common stock and Verde Clean Fuel OpCo LLC Class C units that are exchanged for shares of Class A common stock. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 12 — SUBSEQUENT EVENTS On February 6, 2024, the Company and Cottonmouth Ventures LLC, a subsidiary of Diamondback Energy (“Diamondback”), entered into a joint development agreement (“JDA”) for the proposed development, construction, and operation of a facility to produce commodity-grade gasoline using natural gas feedstock supplied from Diamondback’s operations in the Permian Basin. Diamondback is an independent oil and natural gas company headquartered in Midland, Texas, focused on the acquisition, development, exploration and exploitation of unconventional, onshore oil and natural gas reserves in the Permian Basin in West Texas. 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. The Company is currently evaluating the impact that the JDA will have on its consolidated financial statements. The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date that the consolidated financial statements were issued. Based upon this review, other than as disclosed above, the Company did not identify any other subsequent events that would have required adjustment in these consolidated financial statements. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Pay vs Performance Disclosure | ||
Net Income (Loss) | $ (2,743,588) | $ 2,719,294 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Accounting Policies, by Policy
Accounting Policies, by Policy (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Significant Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying financial statement is presented in conformity with GAAP and pursuant to the rules and regulations of the SEC. |
Principles of Consolidation | Principles of Consolidation The accompanying audited consolidated financial statements include the accounts of the Company and its subsidiaries for which the Company controls by ownership interest or other contractual rights giving the Company control over the most significant activities of an investee. The consolidated financial statements include the accounts of Verde Clean Fuels, and its subsidiaries OpCo, Intermediate, Bluescape Clean Fuels Employee Holdings, LLC, Bluescape Clean Fuels EmployeeCo., LLC, Bluescape Clean Fuels, LLC, and Maricopa Renewable Fuels I, LLC. All intercompany balances and transactions have been eliminated in consolidation. |
Risks and uncertainties | Risks and uncertainties The Company is currently in the development stage and has not yet commenced principal operations or generated revenue. The development of the Company’s projects are subject to a number of risks and uncertainties including, but not limited to, the receipt of the necessary permits and regulatory approvals, commodity price risk impacting the decision to go forward with the projects, the availability and ability to obtain the necessary financing for the construction and development of projects. The Company’s ability to develop and operate commercial production facilities, as well as expand production at future commercial production facilities, is subject to many risks beyond its control, including regulatory developments, construction risks, and global and regional macroeconomic developments. |
Inflation Reduction Act of 2022 | Inflation Reduction Act of 2022 On August 16, 2022, the Inflation Reduction Act of 2022 (the “IR Act”) was signed into federal law. The IR Act provides for, among other things, a new U.S. federal 1% excise tax on certain repurchases of stock, in which the cumulative fair market value is greater than $1 million in a calendar year, by publicly traded U.S. domestic corporations and certain U.S. domestic subsidiaries of publicly traded foreign corporations occurring on or after January 1, 2023. The excise tax is imposed on the repurchasing corporation itself, not its shareholders from which shares are repurchased. The amount of the excise tax is generally 1% of the fair market value of the shares repurchased at the time of the repurchase. The amount of repurchases applicable to the excise tax can be reduced by the fair market value of any issuances at the time of issuance that occurred during the year, as well as certain exceptions provided by the U.S. Department of the Treasury (the “Treasury”). The Treasury and the IRS released interim guidance on December 27, 2022, which can be relied upon until the issuance of proposed regulations. In connection with the Business Combination, the Company incurred an excise tax of $1.59 million based on the redemption of $158.9 million at the request of the Common A shareholders. The excise tax is payable in the second quarter of 2024 and is recorded within accrued liabilities on the Consolidated Balance Sheet as of December 31, 2023. Other than the 1% excise tax, the IR Act has not had a material impact on the Company’s consolidated financial statements. |
Emerging Growth Company | Emerging Growth Company The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act of 1933, as amended, (the “Securities Act”), as modified by the Jumpstart our Business Startups Act of 2012, (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Additionally, section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable. The Company expects to be an emerging growth company through 2026. Prior to the Business Combination, CENAQ elected to irrevocably opt out of the extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company will adopt the new or revised standard when those standards are effective for public registrants. |
Use of Estimates | Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. The most significant estimates pertain to the calculations of the fair values of equity instruments, contingent consideration, impairment of intangible and long-lived assets and income taxes. Such estimates may be subject to change as more current information becomes available. Accordingly, the actual results could differ significantly from those estimates. |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash As of December 31, 2023 and December 31, 2022, the Company had cash and cash equivalents of $28,779,177 and $463,475, respectively. The Company also had a restricted cash balance of $100,000 and $0 The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. As of December 31, 2023, the Company had cash equivalents of $26,155,789, which were comprised of funds held in a short-term money market fund having investments in high-quality short-term securities that are issued or guaranteed by the U.S. government or by U.S. government agencies and instrumentalities. There were no cash equivalents as of December 31, 2022. |
Concentration of Credit Risk | Concentration of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of a cash account in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation coverage limit of $250,000. As of December 31, 2023, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The 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. The fair values of cash, restricted cash, cash equivalents, prepaid expenses, and accrued expenses are estimated to approximate their respective carrying values as of December 31, 2023 and December 31, 2022 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 about the inputs that the buyer and seller would use in pricing the asset or liability developed based on the best information available in the circumstances. The fair value hierarchy is categorized into three levels based on the inputs as follows: Level 1 — Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment. Level 2 — Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means. Level 3 — Valuations based on inputs that are unobservable and significant to the overall fair value measurement. |
Net Loss Per Common Stock | Net Loss Per Common Stock Subsequent to the Business Combination, the Company’s capital structure is comprised of shares of Class A common stock, par value $0.0001 per share (the “Class A common stock”) and shares of Class C common stock, par value $0.0001 per share (the “Class C common stock”). Public shareholders, the Sponsor, and the investors in the private offering of securities of Verde Clean Fuels in connection with the Business Combination (the PIPE Financing) hold shares of Class A common stock and warrants, and Holdings owns shares of Class C common stock and Class C units of OpCo (the “Class C OpCo Units”). Class C common stock represents the right to cast one vote per share at the Verde Clean Fuels level, and carry no economic rights, including rights to dividends and distributions upon liquidation. Thus, Class C common stock are not participating securities per ASC 260, “Earnings Per Share” (“ASC 260”). As the Class A common stock represent the only participating securities, the application of the two-class method is not required. Antidilutive instruments including outstanding warrants, stock options, restricted stock units (“RSUs”) and Sponsor earnout shares were excluded from diluted earnings per share for the year ended December 31, 2023 because the inclusion of such instruments would be anti-dilutive. As a result, diluted net loss per common stock is the same as basic net loss per common stock. |
Warrants | Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in ASC 480, “Distinguishing Liabilities from Equity” (“ASC 480”) and ASC 815, “Derivatives and Hedging” (“ASC 815”). Management’s assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether they meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period-end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, they are recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, they are recorded at their initial fair value on the date of issuance and subject to remeasurement each balance sheet date with changes in the estimated fair value of the warrants to be recognized as a non-cash gain or loss in the statement of operations. See Note 8 for further information. |
Segments | Segments Operating segments are defined as components of an entity for which separate financial information is available and that is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in deciding how to allocate resources to an individual segment and in assessing performance. The Company’s CODM is its Chief Executive Officer (“CEO”). The Company has determined that it operates in one operating segment, as the CODM reviews financial information presented on a combined basis for purposes of making operating decisions, allocating resources, and evaluating financial performance. |
Reverse recapitalization | Reverse recapitalization The Business Combination was accounted for according to a common control reverse recapitalization, with no goodwill or other intangible assets recorded, in accordance with GAAP. This determination reflects Holdings holding a majority of the voting power of Intermediate’s pre and post Business Combination operations and Intermediate’s management team retaining similar roles at Verde Clean Fuels. Further, Holdings continues to have control of the Board of Directors through its majority voting rights. Under the guidance in ASC 805, for transactions between entities under common control, the assets, liabilities and noncontrolling interests of CENAQ and Intermediate are recognized at their carrying amounts on the date of the business combination. Under this method of accounting, CENAQ is treated as the “acquired” company for financial reporting purposes. Accordingly, for accounting purposes, the business combination is treated as the equivalent of Intermediate issuing stock for the net assets of CENAQ, accompanied by a recapitalization. The net assets of Intermediate are stated at their historical value within the financial statements with no goodwill or other intangible assets recorded. |
Property, Equipment, and Improvements | Property, Equipment, and Improvements Property, equipment, and improvements are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful life of the related asset. The estimated useful lives of assets are as follows: Computers, office equipment and hardware 3 – 5 years Furniture and fixtures 7 years Machinery and equipment 7 years Leasehold improvements Shorter of the lease term (including estimated renewals) or the estimated useful lives of the improvement Maintenance and repairs are charged to expense as incurred, and improvements are capitalized. When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in the accompanying statements of operations in the period realized. |
Accrued Liabilities | Accrued Liabilities Accrued liabilities consist of the following: As of As of Accrued bonuses $ - $ 86,120 Accrued legal fees 237,839 558,860 Accrued professional fees 143,900 107,022 Other accrued expenses 1,595,073 10,117 Total accrued liabilities $ 1,976,812 $ 762,119 |
Leases | Leases The Company accounts for leases under ASC 842, “Leases” (“ASC 842)”. The core principle of this standard is that a lessee should recognize the assets and liabilities that arise from leases, by recognizing in the consolidated balance sheet a liability to make lease payments (the lease liability) and a right-of-use asset (“ROU asset”) representing its right to use the underlying asset for the lease term. In accordance with the guidance of ASC 842, leases are classified as finance or operating leases, and both types of leases are recognized on the consolidated balance sheet. Certain lease arrangements may contain renewal options. Renewal options are included in the expected lease term only if they are reasonably certain of being exercised by the Company. The Company elected the practical expedient to not separate non-lease components from lease components for real-estate lease arrangements. The Company combines the lease and non-lease component into a single accounting unit and accounts for the unit under ASC 842 where lease and non-lease services are included in the classification of the lease and the calculation of the right-of-use asset and lease liability. In addition, the Company has elected the practical expedient to not apply lease recognition requirements to leases with a term of one year or less. Under this expedient, lease costs are not capitalized; rather, are expensed on a straight-line basis over the lease term. The Company’s leases do not contain residual value guarantees or material restrictions or covenants. The Company uses either the rate implicit in the lease, if readily determinable, or the Company’s incremental borrowing rate for a period comparable to the lease term in order to calculate the net present value of the lease liability. The incremental borrowing rate represents the rate that would approximate the rate to borrow funds on a collateralized basis over a similar term and in a similar economic environment. |
Impairment of Intangible Assets | Impairment of Intangible Assets The Company’s intangible asset consists of its intellectual property and patented technology and is considered an indefinite-lived intangible and is not subject to amortization. As of December 31, 2023 and December 31, 2022, the gross and carrying amount of this intangible asset was $1,925,151. A qualitative assessment of indefinite-lived intangible assets is performed in order to determine whether further impairment testing is necessary. In performing this analysis, macroeconomic conditions, industry and market conditions are considered in addition to current and forecasted financial performance, entity-specific events and changes in the composition or carrying amount of net assets under the quantitative analysis, intellectual property and patents are tested. During the years ended December 31, 2023 and December 31, 2022, the Company did not record any impairment charges. |
Impairment of Long-Term Assets | Impairment of Long-Term Assets The Company evaluates 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. During the years ended December 31, 2023 and December 31, 2022, the Company did not record any impairment charges. |
Equity-Based Compensation | Equity-Based Compensation The Company applies ASC 718, “Compensation — Stock Compensation” (“ASC 718”), in accounting for its share-based compensation arrangements. Unit-Based Compensation Service-based units compensation cost is measured at the grant date based on the fair value of the equity instruments awarded and is recognized over the period during which an employee is required to provide service in exchange for the award, or the requisite service period, which is usually the vesting period. Performance-based unit compensation cost is measured at the grant date based on the fair value of the equity instruments awarded and is expensed over the requisite service period, based on the probability of achieving the performance goal, with changes in expectations recognized as an adjustment to earnings in the period of the change. If the performance goal is not met, no unit-based compensation expense is recognized and any previously recognized unit-based compensation expense is reversed. Forfeitures of service-based and performance-based units are recognized upon the time of occurrence. 2023 Equity-Based Awards In March 2023, the Company authorized and approved the Verde Clean Fuels, Inc. 2023 Omnibus Incentive Plan (the “2023 Plan”) which authorizes 4,727,112 shares. On April 25, 2023, the Company granted stock options to certain employees and officers and RSUs to non-employee directors, consistent with the terms of the 2023 Plan. 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 granted were determined by the value of the stock price on the date of the award subject to a discount for lack of marketability. Equity-based compensation is measured using a fair value-based method for all equity-based awards. 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. The determination of fair value requires significant judgment and the use of estimates, particularly with regard to Black-Scholes assumptions such as stock price volatility and expected option term. Equity-based compensation is recorded as a general and administrative expense in the Consolidated Statements of Operations. The Company estimates the expected term of options granted based on peer benchmarking and expectations. The Company uses U.S. Treasury yield curve rates for the risk-free interest rate in the option valuation model with maturities similar to the expected term of the options. Volatility is determined by reference to the actual volatility of several publicly traded peer companies that are similar to the Company in its industry sector. The Company does not anticipate paying cash dividends and therefore use an expected dividend yield of zero in the option valuation model. Forfeitures are recognized as they occur. The Company assesses whether a discount for lack of marketability is applied based on certain liquidity factors. All equity-based payment awards subject to graded vesting based only on a service condition are amortized on a straight-line basis over the requisite service periods. There is substantial judgment in selecting the assumptions used to determine the fair value of such equity awards and other companies could use similar market inputs and experience and arrive at different conclusions. See Note 7 for further information. |
Contingent Consideration | Contingent Consideration Holdings had an arrangement payable to the Company’s CEO and a consultant whereby a contingent payment could become payable in the event that certain return on investment hurdles were met within 5 years of the closing date of the Primus asset purchase. On August 5, 2022, Holdings entered into an agreement with the Company’s management and CEO whereby, if the Business Combination reaches closing, the contingent consideration will be forfeited. As of December 31, 2022, the Company remeasured the liability of this arrangement, and reassessed the probability of the completion of the Business Combination and reversed $7,551,000 of the accrued expense through earnings resulting in a contingent consideration liability of $1,299,000. The Business Combination closed on February 15, 2023, and therefore the contingent consideration arrangement was terminated and no payments were made. Thus, the remaining $1,299,000 of accrued contingent consideration was reversed through earnings for the year ended December 31, 2023. See Note 10 for further information. |
Deferred Transaction Costs | Deferred Transaction Costs Deferred transaction costs are expenses directly related to the business combination with the SPAC. These costs consist primarily of legal and accounting fees that the Company capitalized. The deferred transaction costs were offset against the business combination proceeds and were reclassified to additional paid-in capital in the period of the completion of the business combination. As of December 31, 2023 and December 31, 2022, deferred transaction costs were $0 |
Income Taxes | Income Taxes The Company follows the asset and liability method of accounting for income taxes under ASC 740, “Income Taxes.” Deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the consolidated financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. ASC 740 prescribes a recognition threshold and a measurement attribute for the financial statement recognition and measurement of tax positions taken or expected to be taken in a tax return. For those benefits to be recognized, a tax 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, 2023 and 2022. 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. |
Recent Accounting Standards | Recent Accounting Standards In November 2023, the FASB issued Accounting Standards Update (“ASU”) 2023-07, “Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures”. ASU 2023-07 enhances segment reporting under Topic 280 by expanding the breadth and frequency of segment disclosures. ASU 2023-07 requires disclosure of significant expenses that are regularly provided to an entity’s CODM and included in the reported measure(s) of a segment’s profit or loss. When applying this disclosure requirement, an entity identifies the segment expenses that are regularly provided to the CODM or easily computable from information that is regularly provided to the CODM. Entities are also required to disclose other segment items, i.e., the difference between reported segment revenue less the significant segment expenses and the reported measure(s) of a segment’s profit or loss. ASU 2023-07 also clarifies that single reportable segment entities are subject to Topic 280 in its entirety. ASU 2023-07 is effective for public entities for fiscal years beginning after December 15, 2023, and interim periods in fiscal years beginning after December 15, 2024. The amendments in ASU 2023-07 should be adopted retrospectively unless impracticable. Early adoption is permitted. The Company is currently evaluating the impact that ASU 2023-07 will have on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740): Improvements to Income Tax Disclosures”. ASU 2023-09 requires public entities, on an annual basis, to provide: a tabular rate reconciliation (using both percentages and reporting currency amounts) of (1) the reported income tax expense (or benefit) from continuing operations, to (2) the product of the income (or loss) from continuing operations before income taxes and the applicable statutory federal (national) income tax rate of the jurisdiction (country) of domicile using specific categories, and separate disclosure for any reconciling items within certain categories that are equal to or greater than a specified quantitative threshold. For each annual period presented, ASU 2023-09 also requires all reporting entities to disclose the year-to-date amount of income taxes paid (net of refunds received) disaggregated by federal (national), state, and foreign. It also requires additional disaggregated information on income taxes paid (net of refunds received) to an individual jurisdiction equal to or greater than 5% of total income taxes paid (net of refunds received). ASU 2023-09 is effective for public entities for fiscal years beginning after December 15, 2024. ASU 2023-09 is to be applied on a prospective basis with the option to apply the standard retrospectively. Early adoption is permitted. The Company is currently evaluating the impact that ASU 2023-09 will have on its consolidated financial statements. The Company considers the applicability and impact of all ASUs issued by the FASB. There are no other accounting pronouncements which have been issued but are not yet effective that would have a material impact on the consolidated financial statements when adopted. |
Business Combination (Tables)
Business Combination (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination [Abstract] | |
Schedule of Summarizes the Verde Clean Fuels Common Stock Outstanding | The following summarizes the Verde Clean Fuels Class A common stock and Class C common stock (collectively, the “Common Stock”) outstanding as of February 15, 2023. The percentage of beneficial ownership is based on 31,858,620 shares of Company Common Stock issued and outstanding as of February 15, 2023, comprised of 9,358,620 shares of Class A common stock and 22,500,000 shares of Class C common stock. Shares % of CENAQ Public Stockholders (a) 1,846,120 5.79 % Holdings (b) 23,300,000 73.14 % New PIPE Investors (excluding Holdings) (c) 2,400,000 7.53 % Sponsor and Anchor Investors (d) 1,078,125 3.39 % Sponsor Earn Out shares (e) 3,234,375 10.15 % Total Shares of Common Stock at Closing 31,858,620 100.00 % Earn Out Equity shares (f) 3,500,000 Total diluted shares at Closing (including shares above) (g) 35,358,620 (a) CENAQ public stockholders holding 15,403,880 shares of Class A common stock exercised their right to redeem such shares for a pro rata portion of the funds in the Trust Account. Excludes 189,750 underwriters forfeited shares owned by Imperial Capital, LLC and I-Bankers Securities, Inc. that were forfeited as of Closing. (b) Includes (i) 22,500,000 shares of Class C common stock issued to Holdings at Closing, representing 100% of the shares of Class C common stock outstanding as of February 15, 2023, and (ii) 800,000 shares of Class A common stock acquired by Holdings in the PIPE Financing. (c) Excludes 800,000 shares of Class A common stock acquired by Holdings in the PIPE Financing. (d) Includes 253,125 and 825,000 shares of Class A common stock issued to the Sponsor and other investors, respectively, upon conversion of a portion of their current Class B common stock at Closing. (e) Includes 3,234,375 shares of Class A common stock issued to the Sponsor that are subject to forfeiture. These shares will no longer be subject to forfeiture upon the occurrence of the Triggering Events. Excludes 2,475,000 shares of Class A common stock issuable upon the exercise of the Private Placement Warrants held by Sponsor. (f) Includes 3,500,000 shares of Class C common stock issuable to Holdings upon the occurrence of triggering events. (g) Excludes 12,937,479 and 2,475,000 shares of Class A common stock issuable upon the exercise of the Public Warrants and Private Placement Warrants, respectively. |
Significant Accounting Polici_2
Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Significant Accounting Policies [Abstract] | |
Schedule of Property, Plant and Equipment are Stated at Cost, Less Accumulated Depreciation | Property, equipment, and improvements are stated at cost, less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful life of the related asset. The estimated useful lives of assets are as follows: Computers, office equipment and hardware 3 – 5 years Furniture and fixtures 7 years Machinery and equipment 7 years Leasehold improvements Shorter of the lease term (including estimated renewals) or the estimated useful lives of the improvement |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following: As of As of Accrued bonuses $ - $ 86,120 Accrued legal fees 237,839 558,860 Accrued professional fees 143,900 107,022 Other accrued expenses 1,595,073 10,117 Total accrued liabilities $ 1,976,812 $ 762,119 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Schedule of Lease Costs | Lease costs for the Company’s operating and finance leases are presented below. Lease Cost Statements of Operations Classification For the For the 2022 Amortization of finance lease right-of-use asset General and administrative expense $ 127,617 $ - Interest on finance lease liability Interest expense 236,699 - Total finance lease cost 364,316 - Operating lease cost General and administrative expense 431,245 237,850 Variable lease cost General and administrative expense 151,731 155,218 Total lease cost $ 947,292 $ 393,068 |
Schedule of Operating and Finance Leases | Maturities of the Company’s operating and finance leases as of December 31, 2023 are presented below. As of December 31, 2023 Maturity of lease liabilities Operating Finance 2024 $ 324,789 $ - 2025 162,409 - 2026 69,531 - 2027 11,822 - Thereafter - - Total future minimum lease payments 568,551 - Less: interest (39,009 ) - Present value of lease liabilities $ 529,542 $ - |
Schedule of Lease Supplemental Information | Supplemental information related to the Company’s operating and finance lease arrangements was as follows: As of As of Operating lease - supplemental information December 31, December 31, Right-of-use assets obtained in exchange for operating lease $ 524,813 $ 323,170 Remaining lease term - operating lease 23 months 16 months Discount rate - operating lease 7.50 % 7.50 % |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Major Classes of Property, Plant and Equipment | Major classes of property, plant, and equipment are as follows: As of As of Computers, office equipment and hardware $ 16,956 $ 11,461 Furniture and fixtures 47,256 1,914 Machinery and equipment 43,799 36,048 Property, plant, and equipment 108,011 49,423 Less: accumulated depreciation 45,506 42,009 Property, plant and equipment, net $ 62,505 $ 7,414 |
Stockholders_ Equity (Tables)
Stockholders’ Equity (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders’ Equity [Abstract] | |
Schedule of Grant-date Fair Value of Earnout Shares Attributable to Holdings and the Sponsor | The grant-date fair value of the Earnout Shares attributable to Holdings and the Sponsor, using a Monte Carlo simulation model, was $10,594,000, and $5,791,677, respectively. The following table provides a summary of key inputs utilized in the valuation of the Earnout Shares on February 15, 2023: Inputs As of Expected volatility 50.00% Expected dividends 0% Remaining expected term (in years) 5.0 years Risk-free rate 4.7% Discount Rate (WACC) 14.7% Payment Probability 12.6% to 18.3% |
Schedule of Fair Value of Stock Options Granted | The fair value of stock options granted for the year ended December 31, 2023 were determined using the following assumptions as of the grant date: Risk-free interest rate 3.4 % Expected term 7 years Volatility 48.2 % Dividend yield Zero Discount for lack of marketability 10 % |
Schedule of Stock Options | The table below presents activity related to stock options awarded for the year ended December 31, 2023: Number of Weighted Weighted Outstanding as of December 31, 2022 - - - Granted 1,236,016 $ 11.00 7.0 Exercised - - - Forfeited / expired - - - Outstanding as of December 31, 2023 1,236,016 $ 11.00 6.3 Vested as of December 31, 2023 - - - Unvested as of December 31, 2023 1,236,016 $ 11.00 6.3 Exercisable as of December 31, 2023 - - - |
Schedule of RSU Activity | RSU activity for the year ended December 31, 2023 is as follows: Time- Unvested, December 31, 2022 - Granted in the year ended December 31, 2023 141,656 Vested - Forfeited - Unvested December 31, 2023 141,656 |
Income Tax (Tables)
Income Tax (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax [Abstract] | |
Schedule of Components of Income Taxes | The components of income taxes are as follows: For The Year Ended 2023 2022 Current: Federal $ 166,265 $ - State - $ - Total current 166,265 $ - Deferred: Federal - - State - - Total deferred - - Total Income Tax Expense $ 166,265 $ - |
Schedule of Reconciliation of Income Tax Expense | A reconciliation of income tax expense with amounts computed at the federal statutory tax rate is as follows: For the Computed tax (21%) $ (2,170,352 ) Income attributable to legacy Intermediate holders 516,715 Income tax benefit attributable to noncontrolling interests 1,112,400 Change in valuation allowance 561,578 Other permanent items 36,793 Other items 109,131 Income Tax Expense $ 166,265 |
Schedule of Deferred Income Taxes reflect the Net Tax Effects of Temporary | Noncurrent deferred tax assets (liabilities) were as follows: Deferred Taxes For the Deferred Tax Liabilities: Total deferred tax liabilities $ - Deferred Tax Assets: Start-up costs $ 193,765 Stock-based compensation 46,568 Investment in OpCo 8,168,987 Federal NOL carryforwards 553,497 Total deferred tax assets 8,962,817 Valuation allowance (8,962,817 ) Total net deferred tax assets $ - Net deferred tax asset (liability) $ - |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Fair Value of Financial Measurements [Abstract] | |
Schedule of Valuation of the Contingent Consideration Liability | The following table provides a summary of key inputs utilized in the valuation of the contingent consideration liability as of December 31, 2022: Inputs As of Expected volatility 68.60 % Expected dividends 0 % Remaining expected term (in years) 0.09 Risk-free rate 4.12 % Discount rate (WACC) 27.2 % Payment probability 25 % Internal rate of return hurdle 15 % Excess return allocable to contingent payment 10 % Estimated fair value of contingent consideration $ 1,299,000 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Loss Per Share [Abstract] | |
Schedule of Basic and Diluted Net Loss Per Share | The following table sets forth the computation of net loss used to compute basic net loss per share of Class A common stock for the year ended December 31, 2023. For the Year Ended Net (loss) attributable to Verde Clean Fuels, Inc. $ (2,743,588 ) Basic weighted-average shares outstanding 6,140,529 Dilutive effect of share-based awards - Diluted weighted-average shares outstanding 6,140,529 Basic (loss) per share $ (0.45 ) Diluted (loss) per share $ (0.45 ) |
Schedule of Net Income Per Diluted | The following amounts were not included in the calculation of net income per diluted share because their effects were anti-dilutive: As of December 31, Warrants 15,383,263 Earnout shares (1) 3,234,375 Convertible debt 40,961 Stock options 1,236,016 Time-based RSUs 141,656 Total antidilutive instruments 20,036,271 (1) Excludes 3,500,000 Class C earnout shares convertible into Class A common shares. |
Business Combination (Details)
Business Combination (Details) - USD ($) | 12 Months Ended | ||
Feb. 15, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Business Combination [Line Items] | |||
Outstanding percentage | 100% | ||
Proceeds from CENAQ trust (in Dollars) | $ 19,031,516 | ||
Repayment of capital (in Dollars) | 3,750,000 | ||
Transaction expenses (in Dollars) | 10,043,793 | $ 10,043,793 | |
deferred underwriting fees (in Dollars) | 1,700,000 | ||
PIPE Financing proceeds (in Dollars) | 32,000,000 | ||
CENAQ operating account (in Dollars) | $ 91,454 | $ 91,454 | |
Private Placement Warrant [Member] | |||
Business Combination [Line Items] | |||
Common stock, shares issued | 2,475,000 | ||
Verde Clean Fuels [Member] | |||
Business Combination [Line Items] | |||
Common stock, shares outstanding | 22,500,000 | ||
Class C Common Stock [Member] | |||
Business Combination [Line Items] | |||
Outstanding percentage | 100% | ||
Holding shares | 22,500,000 | ||
Common stock, shares issued | 22,500,000 | ||
Common stock, shares outstanding | 22,500,000 | ||
Class C Common Stock [Member] | Verde Clean Fuels [Member] | |||
Business Combination [Line Items] | |||
Common stock, shares issued | 9,358,620 | ||
Class A Common Stock [Member] | |||
Business Combination [Line Items] | |||
Sale of stock | 3,200,000 | ||
Purchase price (in Dollars per share) | $ 10 | ||
Aggregate purchase p[rice (in Dollars) | $ 32,000,000 | ||
Non redeemable common stock | 1,846,120 | ||
Common stock, shares issued | 9,387,836 | ||
Common stock, shares outstanding | 9,387,836 | ||
Number of holding shares | 15,403,880 | ||
Class A Common Stock [Member] | Private Placement Warrant [Member] | |||
Business Combination [Line Items] | |||
Common stock, shares issued | 2,475,000 | ||
Class A Common Stock [Member] | Public Warrants [Member] | |||
Business Combination [Line Items] | |||
Common stock, shares issued | 12,937,479 | ||
Common Stock [Member] | Verde Clean Fuels [Member] | |||
Business Combination [Line Items] | |||
Common stock, shares issued | 31,858,620 | ||
Common stock, shares outstanding | 31,858,620 | ||
CENAQ [Member] | |||
Business Combination [Line Items] | |||
Transaction expenses (in Dollars) | $ 10,043,793 | ||
Holdings [Member] | |||
Business Combination [Line Items] | |||
Repayment of capital (in Dollars) | $ 3,750,000 | ||
Holdings [Member] | Class C Common Stock [Member] | |||
Business Combination [Line Items] | |||
Common stock, shares issued | 22,500,000 | ||
Underwriters [Member] | |||
Business Combination [Line Items] | |||
Underwriters forfeited shares | 189,750 | ||
PIPE [Member] | |||
Business Combination [Line Items] | |||
Proceeds from CENAQ trust (in Dollars) | $ 19,031,516 | ||
Stock issued during period excluding acquisition shares | 800,000 | ||
PIPE [Member] | Class A Common Stock [Member] | |||
Business Combination [Line Items] | |||
Acquired shares | 800,000 | ||
Sponsor [Member] | |||
Business Combination [Line Items] | |||
Common stock, shares issued | 3,234,375 | ||
Sponsor [Member] | Class A Common Stock [Member] | |||
Business Combination [Line Items] | |||
Common stock, shares issued | 253,125 | ||
Anchor Investors [Member] | Class A Common Stock [Member] | |||
Business Combination [Line Items] | |||
Common stock, shares issued | 825,000 | ||
New Pipe Investors (Excluding Holdings) [Member] | Class C Common Stock [Member] | |||
Business Combination [Line Items] | |||
Common stock, shares issued | 3,500,000 | ||
Business Combination [Member] | |||
Business Combination [Line Items] | |||
Outstanding percentage | 100% | ||
Holding shares | 22,500,000 | ||
Proceeds from business combination (in Dollars) | $ 37,329,178 |
Business Combination (Details)
Business Combination (Details) - Schedule of Summarizes the Verde Clean Fuels Common Stock Outstanding | Feb. 15, 2023 shares | |
Business Combination (Details) - Schedule of Summarizes the Verde Clean Fuels Common Stock Outstanding [Line Items] | ||
Shares | 31,858,620 | |
Percentage of Common Stock | 100% | |
Earn Out Equity shares | 3,500,000 | [1] |
Total diluted shares at Closing (including shares above) | 35,358,620 | [2] |
Cenaq Public Stockholders [Member] | ||
Business Combination (Details) - Schedule of Summarizes the Verde Clean Fuels Common Stock Outstanding [Line Items] | ||
Shares | 1,846,120 | [3] |
Percentage of Common Stock | 5.79% | [3] |
Holdings [Member] | ||
Business Combination (Details) - Schedule of Summarizes the Verde Clean Fuels Common Stock Outstanding [Line Items] | ||
Shares | 23,300,000 | [4] |
Percentage of Common Stock | 73.14% | [4] |
New Pipe Investors (Excluding Holdings) [Member] | ||
Business Combination (Details) - Schedule of Summarizes the Verde Clean Fuels Common Stock Outstanding [Line Items] | ||
Shares | 2,400,000 | [5] |
Percentage of Common Stock | 7.53% | [5] |
Sponsor and Anchor Investors [Member] | ||
Business Combination (Details) - Schedule of Summarizes the Verde Clean Fuels Common Stock Outstanding [Line Items] | ||
Shares | 1,078,125 | [6] |
Percentage of Common Stock | 3.39% | [6] |
Sponsor Earn Out shares [Member] | ||
Business Combination (Details) - Schedule of Summarizes the Verde Clean Fuels Common Stock Outstanding [Line Items] | ||
Shares | 3,234,375 | [7] |
Percentage of Common Stock | 10.15% | [7] |
[1] Includes 3,500,000 shares of Class C common stock issuable to Holdings upon the occurrence of triggering events. Excludes 12,937,479 and 2,475,000 shares of Class A common stock issuable upon the exercise of the Public Warrants and Private Placement Warrants, respectively. CENAQ public stockholders holding 15,403,880 shares of Class A common stock exercised their right to redeem such shares for a pro rata portion of the funds in the Trust Account. Excludes 189,750 underwriters forfeited shares owned by Imperial Capital, LLC and I-Bankers Securities, Inc. that were forfeited as of Closing. Includes (i) 22,500,000 shares of Class C common stock issued to Holdings at Closing, representing 100% of the shares of Class C common stock outstanding as of February 15, 2023, and (ii) 800,000 shares of Class A common stock acquired by Holdings in the PIPE Financing. Excludes 800,000 shares of Class A common stock acquired by Holdings in the PIPE Financing. Includes 253,125 and 825,000 shares of Class A common stock issued to the Sponsor and other investors, respectively, upon conversion of a portion of their current Class B common stock at Closing. Includes 3,234,375 shares of Class A common stock issued to the Sponsor that are subject to forfeiture. These shares will no longer be subject to forfeiture upon the occurrence of the Triggering Events. Excludes 2,475,000 shares of Class A common stock issuable upon the exercise of the Private Placement Warrants held by Sponsor. |
Significant Accounting Polici_3
Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Accounting Policies [Line Items] | ||
U.S federal excise tax | 1% | |
Fair market value | $ 1,000,000 | |
Percentage of excise tax on fair market value | 1% | |
Common stock redemption | $ 158,900,000 | |
Percentage of excise tax | 1% | |
Cash and cash equivalents | $ 28,779,177 | $ 463,475 |
Restricted cash current | 100,000 | |
Cash equivalents | 26,155,789 | |
Federal deposit insurance | 250,000 | |
Intangible asset, net | $ 1,925,151 | 1,925,151 |
Investment due | 5 years | |
Contingent consideration | $ (1,299,000) | (7,551,000) |
Consideration liability | 1,299,000 | |
Deferred transaction | $ 3,258,880 | |
Percentage of income taxes | 5% | |
2023 Plan [Member] | ||
Accounting Policies [Line Items] | ||
Authorizes shares (in Shares) | 4,727,112 | |
Class A Common Stock [Member] | ||
Accounting Policies [Line Items] | ||
Excise tax payment | $ 1,590,000 | |
Common stock, par value (in Dollars per share) | $ 0.0001 | |
Class C Common Stock [Member] | ||
Accounting Policies [Line Items] | ||
Common stock, par value (in Dollars per share) | $ 0.0001 |
Significant Accounting Polici_4
Significant Accounting Policies (Details) - Schedule of Property, Plant and Equipment are Stated at Cost, Less Accumulated Depreciation | 12 Months Ended |
Dec. 31, 2023 | |
Computers, office equipment and hardware [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 3 years |
Computers, office equipment and hardware [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Furniture and fixtures [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 7 years |
Machinery and equipment [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 7 years |
Leasehold improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Leasehold improvements | Shorter of the lease term (including estimated renewals) or the estimated useful lives of the improvement |
Significant Accounting Polici_5
Significant Accounting Policies (Details) - Schedule of Accrued Liabilities - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Schedule of Accrued Liabilities [Abstract] | ||
Accrued bonuses | $ 86,120 | |
Accrued legal fees | 237,839 | 558,860 |
Accrued professional fees | 143,900 | 107,022 |
Other accrued expenses | 1,595,073 | 10,117 |
Total accrued liabilities | $ 1,976,812 | $ 762,119 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | |||
Feb. 15, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | ||
Related Party Transaction [Line Items] | ||||
New promissory note | $ 11,166 | |||
Number of earn out shares | [1] | 3,500,000 | ||
Class A Common Stock [Member] | ||||
Related Party Transaction [Line Items] | ||||
Conversion price per share | $ 10 | |||
Common stock, shares issued | 9,387,836 | |||
Related Party [Member] | ||||
Related Party Transaction [Line Items] | ||||
New promissory note | $ 409,612 | |||
Common stock, shares issued | 40,961 | |||
Number of earn out shares | 3,500,000 | |||
Related Party [Member] | Common Stock [Member] | ||||
Related Party Transaction [Line Items] | ||||
Other Additional Capital | $ 409,608 | |||
[1] Includes 3,500,000 shares of Class C common stock issuable to Holdings upon the occurrence of triggering events. |
Leases (Details)
Leases (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Lease agreement, description | In October 2022, the Company entered into a 25-year land lease in Maricopa, Arizona with the intent of building a biofuel processing facility. The commencement date of the lease was in February 2023 as control of the identified asset did not transfer to the Company on the effective date of the lease. As such, the Company did not record a ROU asset nor a lease liability as of December 31, 2022, specific to the land lease. On the commencement date, the present value of the minimum lease payments exceeded the fair value of the land, and, accordingly, the lease was classified as a finance lease. |
Leases (Details) - Schedule of
Leases (Details) - Schedule of Lease Costs - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Lease Costs [Line Items] | ||
Amortization of finance lease right-of-use asset | $ 127,617 | |
Total finance lease cost | 364,316 | |
General and Administrative Expense [Member] | ||
Lease Costs [Line Items] | ||
Amortization of finance lease right-of-use asset | 127,617 | |
Operating lease cost | 431,245 | 237,850 |
Variable lease cost | 151,731 | 155,218 |
Total lease cost | 947,292 | 393,068 |
Interest Expense [Member] | ||
Lease Costs [Line Items] | ||
Interest on finance lease liability | $ 236,699 |
Leases (Details) - Schedule o_2
Leases (Details) - Schedule of Operating and Finance Leases | Dec. 31, 2023 USD ($) |
Operating [Member] | |
Leases (Details) - Schedule of Operating and Finance Leases [Line Items] | |
Operating - 2024 | $ 324,789 |
Operating - 2025 | 162,409 |
Operating -2026 | 69,531 |
Operating - 2027 | 11,822 |
Operating - Thereafter | |
Operating - Total future minimum lease payments | 568,551 |
Operating - Less: interest | (39,009) |
Operating - Present value of lease liabilities | 529,542 |
Finance [Member] | |
Leases (Details) - Schedule of Operating and Finance Leases [Line Items] | |
Finance - 2024 | |
Finance - 2025 | |
Finance - 2026 | |
Finance - 2027 | |
Finance - Thereafter | |
Finance - Total future minimum lease payments | |
Finance - Less: interest | |
Finance - Present value of lease liabilities |
Leases (Details) - Schedule o_3
Leases (Details) - Schedule of Lease Supplemental Information - Operating Lease [Member] - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Operating Lease Supplemental Information [Line Items] | ||
Right-of-use assets obtained in exchange for operating lease | $ 524,813 | $ 323,170 |
Remaining lease term - operating lease | 23 months | 16 months |
Discount rate - operating lease | 7.50% | 7.50% |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Property, Plant and Equipment [Line Items] | ||
Depreciation expense | $ 3,497 | $ 10,034 |
General and administrative | 11,515,192 | 4,514,994 |
Research and development expense | 329,194 | 316,712 |
General and Administrative Expense [Member] | ||
Property, Plant and Equipment [Line Items] | ||
General and administrative | 1,662 | 1,355 |
Research and Development Expense [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Research and development expense | $ 1,835 | $ 8,679 |
Property, Plant and Equipment_3
Property, Plant and Equipment (Details) - Schedule of Major Classes of Property, Plant and Equipment - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 108,011 | $ 49,423 |
Less: accumulated depreciation | 45,506 | 42,009 |
Property, plant and equipment, net | 62,505 | 7,414 |
Computers, office equipment and hardware [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 16,956 | 11,461 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 47,256 | 1,914 |
Mach inery and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 43,799 | $ 36,048 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||||
Aug. 05, 2022 | Aug. 07, 2020 | Mar. 31, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | Feb. 15, 2023 | Aug. 31, 2020 | |
Stockholders’ Equity [Line Items] | |||||||
Shares of common stock | 31,858,620 | ||||||
Volume-weighted average share price (in Dollars per share) | $ 15 | ||||||
Earn-out consideration vested price (in Dollars per share) | $ 18 | ||||||
Fair value of earnout shares (in Dollars) | $ 10,594,000 | ||||||
Compensation expense (in Dollars) | $ 2,901,569 | $ 1,420,532 | |||||
Vesting service-based units rate | 25% | ||||||
Compensation expense (in Dollars) | 1,420,532 | ||||||
Founders percentage | 10% | ||||||
Exercise price per share (in Dollars per share) | $ 11 | ||||||
Stock option grant years | 7 years | ||||||
Stock options vested rate | 25% | ||||||
Weighted average grant date fair value (in Dollars per share) | $ 1.5 | ||||||
Share-based compensation (in Dollars) | $ 2,901,569 | $ 1,420,532 | |||||
Unrecognized compensation expense (in Dollars) | $ 1,519,191 | ||||||
Weighted-average period | 3 years 3 months 18 days | ||||||
Class C Common Stock [Member] | |||||||
Stockholders’ Equity [Line Items] | |||||||
Shares of common stock | 3,500,000 | ||||||
Common Stock, Shares, Issued | 22,500,000 | ||||||
Class A Common Stock [Member] | |||||||
Stockholders’ Equity [Line Items] | |||||||
Volume-weighted average share price (in Dollars per share) | $ 15 | ||||||
Earn-out consideration vested price (in Dollars per share) | $ 18 | ||||||
Common Stock, Shares, Issued | 9,387,836 | ||||||
Share-based compensation shares authorized | 1,000 | ||||||
Share-based payment expense (in Dollars) | $ 2,146,792 | ||||||
Series A Incentive Unit [Member] | |||||||
Stockholders’ Equity [Line Items] | |||||||
Share-based compensation shares issued | 1,000 | ||||||
Series A [Member] | |||||||
Stockholders’ Equity [Line Items] | |||||||
Share-based compensation incentive Units percentage | 20% | ||||||
Series A Incentive Units [Member] | |||||||
Stockholders’ Equity [Line Items] | |||||||
Founder incentive units issued | 800 | 800 | |||||
Unvested shares | 400 | ||||||
Founder Incentive Units [Member] | |||||||
Stockholders’ Equity [Line Items] | |||||||
Founder incentive units issued | 1,000 | 1,000 | |||||
Unvested shares | 1,000 | ||||||
Stock Options [Member] | |||||||
Stockholders’ Equity [Line Items] | |||||||
Share-based compensation (in Dollars) | $ 334,832 | ||||||
Weighted-average period | 6 years 3 months 18 days | ||||||
Restricted Stock Units [Member] | |||||||
Stockholders’ Equity [Line Items] | |||||||
Unvested shares | 141,656 | ||||||
Restricted Stock Units (RSUs) [Member] | |||||||
Stockholders’ Equity [Line Items] | |||||||
Shares of common stock | 1 | ||||||
Share-based compensation (in Dollars) | $ 419,945 | ||||||
Fair value percentage | 13% | ||||||
Fair value per share (in Dollars per share) | $ 4.35 | ||||||
APIC, Share-Based Payment Arrangement, Restricted Stock Unit, Increase for Cost Recognition (in Dollars) | $ 616,204 | ||||||
Share-Based Payment Arrangement, Nonvested Award, Excluding Option, Cost Not yet Recognized, Amount (in Dollars) | $ 196,259 | ||||||
Compensation cost to be recognized over a weighted-average period | 3 months 25 days | ||||||
Sponsor Earn Out shares [Member] | Class A Common Stock [Member] | |||||||
Stockholders’ Equity [Line Items] | |||||||
Common Stock, Shares, Issued | 3,234,375 | ||||||
Sponsor [Member] | |||||||
Stockholders’ Equity [Line Items] | |||||||
Fair value of earnout shares (in Dollars) | $ 5,791,677 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) - Schedule of Grant-date Fair Value of Earnout Shares Attributable to Holdings and the Sponsor - Earnout Shares [Member] | Feb. 15, 2023 |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Expected volatility | 50% |
Expected dividends | 0% |
Remaining expected term (in years) | 5 years |
Risk-free rate | 4.70% |
Discount Rate (WACC) | 14.70% |
Minimum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Payment Probability | 12.60% |
Maximum [Member] | |
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |
Payment Probability | 18.30% |
Stockholders_ Equity (Details_2
Stockholders’ Equity (Details) - Schedule of Fair Value of Stock Options Granted - Stock Options [Member] | 12 Months Ended |
Dec. 31, 2023 | |
Stockholders’ Equity (Details) - Schedule of Fair Value of Stock Options Granted [Line Items] | |
Risk-free interest rate | 3.40% |
Expected term | 7 years |
Volatility | 48.20% |
Dividend yield | 0% |
Discount for lack of marketability | 10% |
Stockholders_ Equity (Details_3
Stockholders’ Equity (Details) - Schedule of Stock Options - $ / shares | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2023 | |
Schedule of Stock Options [Abstract] | ||
Number of options, Outstanding Ending | ||
Weighted average exercise price per share, Outstanding Ending | ||
Weighted average remaining contractual life (years), Outstanding Ending | 6 years 3 months 18 days | |
Number of options, Vested | ||
Weighted average exercise price per share, Vested | ||
Number of options, Unvested | 1,236,016 | |
Weighted average exercise price per share, Unvested | $ 11 | |
Weighted average remaining contractual life (years), Unvested | 6 years 3 months 18 days | |
Number of options, Exercisable | ||
Weighted average exercise price per share, Exercisable | ||
Weighted average remaining contractual life (years), Exercisable | ||
Number of options, Granted | 1,236,016 | |
Weighted average exercise price per share, Granted | $ 11 | |
Weighted average remaining contractual life (years), Granted | 7 years | |
Number of options, Exercised | ||
Weighted average exercise price per share, Exercised | ||
Number of options, Forfeited / expired | ||
Weighted average exercise price per share, Forfeited / expired | ||
Number of options, Outstanding Ending | 1,236,016 | |
Weighted average exercise price per share, Outstanding Ending | $ 11 |
Stockholders_ Equity (Details_4
Stockholders’ Equity (Details) - Schedule of RSU Activity - Restricted Stock Units (RSUs) [Member] | 12 Months Ended |
Dec. 31, 2023 shares | |
Stockholders’ Equity (Details) - Schedule of RSU Activity [Line Items] | |
Unvested, December 31, 2022 | |
Granted in the year ended December 31, 2023 | 141,656 |
Vested | |
Forfeited | |
Unvested December 31, 2023 | 141,656 |
Warrants (Details)
Warrants (Details) | 12 Months Ended |
Dec. 31, 2023 USD ($) $ / shares shares | |
Warrant [Line Items] | |
Warrants outstanding | $ | $ 15,383,263 |
Warrants exercised | shares | 29,216 |
Received cash | $ | $ 335,984 |
Warrant [Member] | |
Warrant [Line Items] | |
Warrant redemption price per warrant | $ / shares | $ 0.01 |
Notice of redemption to each warrant holder | 30 days |
Adjusted share price | $ / shares | $ 18 |
Class A Common Stock [Member] | |
Warrant [Line Items] | |
Warrants exercised | shares | 29,216 |
Purchase of shares | shares | 1 |
Price per share | $ / shares | $ 11.5 |
Income Tax (Details)
Income Tax (Details) | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Income Tax [Line Items] | |
Current income taxes | $ 119,186 |
Income tax interest | 15,701 |
Penalties | 31,377 |
Operating loss carryforward | $ 553,497 |
Tax receivable rate | 85% |
Net cash saving percentage | 15% |
Payment cap | $ 50,000,000 |
Verde Clean Fuels, Inc. [Member] | |
Income Tax [Line Items] | |
Ownership percentage | 29.38% |
Income Tax (Details) - Schedule
Income Tax (Details) - Schedule of Components of Income Taxes - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Current: | ||
Federal | $ 166,265 | |
State | ||
Total current | 166,265 | |
Deferred: | ||
Federal | ||
State | ||
Total deferred | ||
Total Income Tax Expense | $ 166,265 |
Income Tax (Details) - Schedu_2
Income Tax (Details) - Schedule of Reconciliation of Income Tax Expense - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Schedule Of Reconciliation Of Income Tax Expense Abstract | ||
Computed tax | $ (2,170,352) | |
Income attributable to legacy Intermediate holders | 516,715 | |
Income tax benefit attributable to noncontrolling interests | 1,112,400 | |
Change in valuation allowance | 561,578 | |
Other permanent items | 36,793 | |
Other items | 109,131 | |
Income Tax Expense | $ 166,265 |
Income Tax (Details) - Schedu_3
Income Tax (Details) - Schedule of Reconciliation of Income Tax Expense (Parentheticals) | 12 Months Ended |
Dec. 31, 2023 | |
Schedule Of Reconciliation Of Income Tax Expense Abstract | |
Computed tax, rate percentage | (21.00%) |
Income Tax (Details) - Schedu_4
Income Tax (Details) - Schedule of Deferred Income Taxes reflect the Net Tax Effects of Temporary | Dec. 31, 2023 USD ($) |
Deferred Tax Liabilities: | |
Total deferred tax liabilities | |
Start-up costs | 193,765 |
Stock-based compensation | 46,568 |
Investment in OpCo | 8,168,987 |
Federal NOL carryforwards | 553,497 |
Total deferred tax assets | 8,962,817 |
Valuation allowance | (8,962,817) |
Total net deferred tax assets | |
Net deferred tax asset (liability) |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Fair Value of Financial Measurements [Abstract] | ||
Cash equivalents | $ 26,155,789 | |
Contingent consideration | $ 1,299,000 |
Fair Value Measurements (Deta_2
Fair Value Measurements (Details) - Schedule of Valuation of the Contingent Consideration Liability | 12 Months Ended |
Dec. 31, 2022 USD ($) | |
Schedule of Valuation of the Contingent Consideration Liability [Abstract] | |
Expected volatility | 68.60% |
Expected dividends | 0% |
Remaining expected term (in years) | 1 month 2 days |
Risk-free rate | 4.12% |
Discount rate (WACC) | 27.20% |
Payment probability | 25% |
Internal rate of return hurdle | 15% |
Excess return allocable to contingent payment | 10% |
Estimated fair value of contingent consideration (in Dollars) | $ 1,299,000 |
Loss Per Share (Details)
Loss Per Share (Details) - shares | 12 Months Ended | |
Dec. 31, 2023 | Feb. 15, 2023 | |
Loss per Share [Line Items] | ||
Earnout shares convertible (in Shares) | 31,858,620 | |
Issuance additional shares (in Shares) | 29,216 | |
Class C Common Stock [Member] | ||
Loss per Share [Line Items] | ||
Earnout shares convertible (in Shares) | 3,500,000 | |
Common Class A Shareholders [Member] | Minimum [Member] | ||
Loss per Share [Line Items] | ||
Ownership interests | 29.44% | 29.38% |
Noncontrolling Interests [Member] | Maximum [Member] | ||
Loss per Share [Line Items] | ||
Ownership interests | 70.56% | 70.62% |
Loss Per Share (Details) - Sche
Loss Per Share (Details) - Schedule of Basic and Diluted Net Loss Per Share - USD ($) | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Loss Per Share (Details) - Schedule of Basic and Diluted Net Loss Per Share [Line Items] | ||
Net (loss) attributable to Verde Clean Fuels, Inc. | $ (2,743,588) | $ 2,719,294 |
Dilutive effect of share-based awards | ||
Diluted weighted-average shares outstanding | 6,140,529 | |
Diluted (loss) per share | $ (0.45) | |
Class A Common Stock [Member] | ||
Loss Per Share (Details) - Schedule of Basic and Diluted Net Loss Per Share [Line Items] | ||
Basic weighted-average shares outstanding | 6,140,529 | |
Diluted weighted-average shares outstanding | 6,140,529 | |
Basic (loss) per share | $ (0.45) | |
Diluted (loss) per share | $ (0.45) |
Loss Per Share (Details) - Sc_2
Loss Per Share (Details) - Schedule of Net Income Per Diluted | 12 Months Ended | |
Dec. 31, 2023 shares | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total antidilutive instruments | 20,036,271 | |
Warrants [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total antidilutive instruments | 15,383,263 | |
Earnout Shares [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total antidilutive instruments | 3,234,375 | [1] |
Convertible debt [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total antidilutive instruments | 40,961 | |
Stock options [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total antidilutive instruments | 1,236,016 | |
Time based RSUs [Member] | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Total antidilutive instruments | 141,656 | |
[1] Excludes 3,500,000 Class C earnout shares convertible into Class A common shares. |