VGAS 10-K & 10-Q changes, risk factors and insider trading

Our commercial success depends on our ability to license our STG+® technology and/or to develop and operate plants for the commercial production of gasoline.gasoline should the Company determine to pursue development and operation of commercial production plants.

Our business strategy includes growth primarily through the licensing of our STG+® technology and, if we so determine to pursue, the construction and development of commercial production plants. ThisHistorically, our focus was on construction and development of commercial production plants but we have recently adopted a capital-lite opportunities growth strategy focusing on licensing our STG+® technology and providing engineering, technical and operational services. Our strategy depends on our ability to contract with and license our technology with well-capitalized third-parties. If we in the future determine to construct and develop facilities, our strategy would depend upon our ability to successfully construct and complete commercial production plants on favorable terms and on our expected schedule, obtain the necessary permits, governmental approvals and carbon credit qualifications needed to operate our commercial production plants and identify and evaluate development and partnership opportunities to expand our business. We cannot guarantee that we will be able to successfully license our STG+® technology or provide necessary engineering, technical and operational services or, if we determine in the future to construct and develop any commercial production plants, obtain necessary approvals, qualifications and permits necessary to operate, identify new opportunities and develop new technologies and commercial production plants, or establish and maintain our relationships with key strategic partners. In addition, we will compete with other companies for these development opportunities, which may increase our costs. We also expect to achieve growth through the expansion of our in-process projects as the facilities are expanded or otherwise begin to produce renewable gasoline, but we cannot assure you that we will be able to reach or renew the necessary agreements to complete these commercial production plants or expansions. If we are unable to successfully identify and consummate future commercial production plant opportunities or complete or expandimplement our plannedbusiness commercial production plants,strategy, it will impede our ability to execute our growth strategy.grow.

There is no assurance that our JDA with Cottonmouth will result in the development of any commercial production plant. As development of the Permian Basin Project was recently suspended, there can be no assurance that this project will ever regain traction, or if it does, that it will result in a FID to proceed and/or entry into final definitive agreements with respect to the proposed project in the Permian Basin. We will be required to expend development costs prior to such determination, whichThe costs we have spent to date will likely not recoupbe if such project does not proceed.recouped.

Our ability to license our STG+® technology and/or to develop and operate commercial production plants,plants if we determine to pursue that strategy, as well as expand production at any future commercial production plants, is subject to many risks beyond our control, including:

•changes in quality standards or other regulatory changeschanges, including roll-back of previously existing environment regulations, that may limit our ability to produce gasoline or increase the costs of processing gasoline, or limit the attractiveness of our technology;

•the ability to establish and maintain our relationships with key strategic partners, including third-party licensees, on favorable terms or at all;

•the ability to obtain financing for a commercial production plant (whether by third-party licensees or us if we decide in the future to construct and develop facilities) on acceptable terms or at all and the need for substantially more capital than initially budgeted by a third-party licensee or us to complete a commercial production plant and exposure to liabilities as a result of unforeseen environmental, construction, technological or other complications;

•global and regional macroeconomic conditions, such as tariffs, high inflation, high interest rates, changes to monetary policy, and military hostilities in multiple geographies (including the ongoing conflict between Ukraine and RussiaRussia, and the conflictongoing hostilities in the Middle EastEast, and the change in government in Venezuela);

•increased geopolitical uncertainty, including as a result of evolving domestic and foreign tariff policies,maypolicies may adversely affect us by increasing costs of our business;

Any of these factors could prevent a third-party licensee or us from developing, operating or expanding our commercial production plants, or otherwise adversely affect our business, financial condition and results of operations.

Although our core syngas-to-gasolineSTG+® technology has been developed and tested since 2007, we have not produced gasoline on a large-scale, commercial level. As a result, we have a limited operating history upon which to evaluate our business and future prospects, which subjects us to a number of risks and uncertainties, including our ability to plan for and predict future growth. SinceTo the acquisition of the STG+® technology,date, we have madenot progressgenerated towardsany constructingrevenue. We do not expect to generate any meaningful revenue unless and until we are able to commercialize our firsttechnology. commercialIn productionFebruary plant,2026, includingwe moresuspended recently focusing on ourthe development of projects that we believe have quicker paths to commercial operations. For example, we anticipate the Permian Basin Project and announced a revised strategy to resultpursue incapital-lite opportunities to deploy our firstSTG+® commercialtechnology productionthrough plant.licensing and providing engineering, technical and operational services. There can be no assurance that our revised strategy will achieve our objective of commercializing our technology.

We have encountered and expect to continue to encounter risks and difficulties experienced by growing companies in rapidly developing and changing industries, including challenges related to achieving market acceptance of our low-carbon or renewable fuels, competing against companies with greater financial and technical resources, competing against entrenched incumbent competitors that have long-standing relationships with our prospective customers in the commercial renewable fuels market, competition from recent market developments potentially providing a higher value outlet for natural gas in regions when natural gas has historically been stranded or flared, recruiting and retaining qualified employees, and making use of our limited resources. We cannot ensure that we will be successful in addressing these and other challenges that we may face in the future, and our business may be adversely affected if we do not manage these risks appropriately. As a result, we may not attain sufficient revenue (if any) to achieve or maintain positive cash flow from operations or profitability in any given future period, if at all.

To date, we have not generated any revenue. We do not expect to generate any meaningful revenue unless and until we are able to commercialize our first production plant. Since inception, we have incurred significant operating losses and negative operating cash flows. We expect that operating losses and negative cash flows will continue to be generated due to ongoing funding of general and administrative expenses and development activities until such time as we are able to commercialize our proposed commercial production plants become operational.technology.

Further, to the extent that we pursue development of a commercial production facility, we expect that additional capital willwould be required in order to complete our first commercial production plant.required. There can be no assurance that we willwould be able to obtain this financing on acceptable terms, or at all, if and when required.

We are a development stagedevelopment-stage company with a history of net losses, we are currently not profitable and we may not achieve or maintain profitability and if we incur substantial losses, we may have to curtail our operations, which may prevent us from successfully operating and expanding our business.

We have incurred net losses since our inception. We are currently in the development stage and have not yet commenced principal operations or generated revenue. Furthermore, we expect to spend significant amountsresources on further development of our technology,technology acquiringin orconnection otherwisewith gainingour accesscurrent strategy of pursuing capital-lite opportunities to commercialdeploy productionour plants,STG+® technology through licensing, engineering, technical and operational service, as well as marketing and general and administrative expenses associated with our planned growth and management of operations as a public company. In some market environments, we may have limited access to incremental financing, which could defer or cancel growth projects, reduce business activity or cause us to default under any debt agreements if we are unable to meet our payment schedules. In addition, the cost of preparing, filing, prosecuting, maintaining and enforcing patent, trademark and other intellectual property rights and defending ourselves against claims by others that we may be violating their intellectual property rights may be significant. As a result, even if we are able to generate revenues in future periods, we expect that our expenses will exceed revenues for the foreseeable future. We do not expect to achieve profitability in the near future, and may never achieve it. If we fail to achieve profitability, or if the time required to achieve profitability is longer than we anticipate, we may not be able to continue our business. Even if we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. As such, we are exposed to the risk of being a development-stage company with a history of losses in an early-stage of operations.

Significant capital investment is required to develop and conduct our operations andoperations, we intend to raise additional fundsfunds, and these funds may not be available with acceptable terms or may not be available when needed.

TheOur current strategy of pursuing capital-lite opportunities to deploy our STG+® technology through licensing, engineering, technical and operational service may not require a substantial capital investment. However, in the future if we determine to pursue a strategy requiring the construction and development of our proposed commercial production plants, includingthis thewould Permian Basin Project, requiresrequire substantial capital investment. WeIn this event, we may be required to raise additional funds to finance such developments or operations, and there can be no assurance that we will be able to obtain financing on acceptable terms, or at all, if and when required for these purposes .purposes.

WeAs part of our prior development strategy, we have been in discussions with banks and other credit counterparties regarding our debt financing options, including project financing, industrial revenue or pollution control bonds, and other debt instruments. While these discussions have led to indications of interest from lenders, there can be no assurance that we will be successful in obtaining such financing. If we are unable to obtain debt financing on favorable terms or at all, ourany development timeline may be delayed, the costs of such financing may be higher than anticipated, or we may be required to raise additional capital by other means.

Notwithstanding the PIPE Investment, weWe will likely be required to raise additional funds through the issuance ofissue equity, equity-related or debt securities, through obtainingobtain credit from government or financial institutions or by engagingengage in joint ventures or other alternative forms of financing. We cannot be certain that additional funds will be available on favorable terms when required, or at all. If we cannot raise additional funds when needed, our financial condition, results of operations, business and prospects could be materially and adversely affected. If we raise funds through the issuance of debt securities or through loan arrangements, the terms of such debt securities or loan arrangements could require significant interest payments, contain covenants that restrict our business, or contain other unfavorable terms. The current high interest rate environment adds additional risk and expense to the issuance of debt securities or loan arrangements to fund capital investment. In addition, to the extent we raise funds through the sale of additional equity securities, our stockholders would experience additional dilution.

InIf orderwe determine to construct new commercial production plants, we typicallylikely would face a long and variable design, fabrication, and construction development cycle that requires significant resource commitments and may create fluctuations in whether and when any revenue is recognized, and may have an adverse effect on our business.

TheIf we determine to construct and develop commercial production plants, the timeframe to develop, design and construct our commercial production plants is uncertain. .In February 2026, we suspended development of the Permian Basin Project with Cottonmouth, after entering into the Cottonmouth JDA in February 2024. The future status of the Permian Basin Project is uncertain. The development process typically begins by conducting a preliminary review and assessment as to whether the commercial production plant is commercially viable based on our expected return on investment, investment payback period, and other operating metrics, as well as the necessary permits to develop such commercial production plant. This extended development process requires the dedication of significant time and resources from our management team, with no certainty of success or recovery of our expenses, which could result in adverse financial consequences for our business.

If the preliminary review and assessment merits moving forward with the proposed project, the next step in development process would be to complete a FEED study for the proposed project. We expect that a FEED study will generally last up to 12 months, on average. Variables such as power and water may impact and extend the duration of a FEED study. In December 2025, we completed a FEED study related to the Permian Basin Project. The learnings from the work completed will continue to be useful as we explore other opportunities to deploy our technology.

If, after completing the FEED study, the project achieves FID, of which there can be no assurance, the next step in the development process would be to complete engineering, procurement and construction. We expect that the engineering, procurement and construction process for our commercial production plants will generally last from 18 to 24 months, on average. Variables such as lead times for essential components and weather may impact and extend the duration of the engineering, procurement and construction process.

OurIf businesswe willdetermine to construct and develop commercial plants, such strategy would require suitable tracts of real property, with access to power and water, upon which to construct and operate the specialized equipment supporting our commercial production plants. We anticipate that such tracts of real property will be predominantly leased from third parties under long-term land leases, but it is possible that some of such tracts may be purchased by us. If we are unable to identify such suitable tracts of real property, or if we are unable to purchase or lease such tracts at commercially reasonable rates and under terms favorable to us, our business may be adversely affected.

The complexity, expense, and nature of customer procurement processes result in a lengthy customer acquisition and sales process. We anticipate that it may take us months to attract, obtain an award from, contract with, and recognize revenue from the production of renewable gasoline by a new commercial production plant, if we are successful at all. There is no assurance that we will ever complete construction and operate any commercial plant and/or generate any revenue therefrom, if a commercial plant is constructed.

The price and availability of natural gas or other feedstocks may be influenced by general economic, market and regulatory factors. These factors include, but are not limited to, changing market conditions driven by increasing demand for natural gas providing producers with a higher value outlet that what we may be able to offer, geopolitical uncertainty, including as a result of evolving domestic and foreign tariff policies, the impact of proposed environmental regulations and other government policies and subsidies with respect to agriculture and global supply and demand. For example, (i) renewable feedstock prices may increase significantly in response to increased demand for biomass for the production of competing renewable fuels.fuels and (ii) natural gas prices may increase significantly due to other opportunities for natural gas that has historically been flared or stranded, such as the rapidly growing AI market segment.

We also may face substantial competition as we developpursue the strategy of licensing our STG+® technology, as well as if we determine to construct and develop commercial production plantsplants, andincluding STG+® technology and seek to work withfrom energy participants, agricultural industry participants, commercial waste companies and landowners to source our renewable feedstocks,feedstocks (including biomass and MSW, and other feedstocks, including natural gas,gas), andor to lease or acquire land to install and operate commercial production plants. Our competitors include established companies and developers with significantly greater resources and financial strength, which may provide them with competitive advantages that we may not be able to overcome in a timely manner, or at all.

We plan to grow our business by pursuing capital-lite opportunities to deploy our STG+® technology through licensing and providing engineering, technical and operational services and, to the extent if we so determine, through building multiple commercial production plants,plants including our first commercial STG+® based production plant inwith the United States, along with our additional planned and identified potential commercial production plants, with which we expectgoal to produce low-carbon or renewable fuels, depending upon feedstocks utilized..utilized. Development projects maywill likely require us to spend significant sums for engineering, permitting, legal, financial advisory and other expenses before we determine whether a development project is feasible, economically attractive or capable of being financed.

OurIf we determine to develop commercial plants, it is expected that any such development projects are typically planned towill be large and complex, and we may not be able to complete them. ThereThe development of our Permian Basin Project with Cottonmouth was suspended in February 2026. Moreover, with any potential project, there can be no assurance that we will be able to negotiate the required agreements, overcome any local opposition, or obtain the necessary approvals, licenses, permits and financing. Failure to achieve any of these elements may prevent the development and construction of a project. If that were to occur, we could lose all of our investment in development expenditures and may be required to write-off project development assets.

We expect that our ability to establish, maintain, and manage strategic relationships, such as our relationships with Cottonmouth, could have a significant impact on the success of our business, although there can be no guarantee that these relationships will provide such impact. It is uncertain as to whether our previous efforts to develop the Permian Basin Project will resume and result in the development of any commercial production plant. While we expect that our STG+® technology will enable us to become a more substantial operating entity in the future, there can be no assurance that we will be able to identify or secure suitable and scalable business relationship opportunities in the future or that our competitors will not capitalize on such opportunities before we do.

Additionally, we cannot guarantee that the companies with which we have developed or will develop strategic relationships will continue to devote the resources necessary to promote mutually beneficial business relationships and grow our business. Our current arrangements are not exclusive, and somechanging market conditions may impact whether any strategic relationship will result in the development of oura commercial production plant. Moreover, it should be assumed that any strategic partnerspartner workhas relationships with our competitors. If we are unsuccessful in establishing or maintaining our relationships with key strategic partners, our overall growth could be impaired, and our business, prospects, financial condition, and operating results could be adversely affected.

We anticipate that ourany commercial production plantsplant will require significant amounts of energy to produce our gasoline. Accordingly, ourthe businesssuccess of any commercial plant is dependent upon energy supplied by third parties. The prices and availability of energy resources are subject to volatile market conditions. These market conditions are affected by factors beyond our control, such as weather conditions, overall economic conditions and governmental regulations. Should the price of energy increase or should access to the required energy sources be unavailable, our business could suffer and have a material adverse impact on our results of operations. In addition, a lack of availability of sufficient amounts of renewable energy to effectively decarbonize our facilities could have a material impact on our business and results of operations.

Failure of third parties to manufacture quality products or provide reliable services in accordance with schedules, prices, quality and volumes that are acceptable to us could cause delays in developing and operating our commercial production plants, which could damage our reputation, adversely affect our partner relationships or adversely affect our growth.

Our success depends on our ability to license our STG+® technology and, if we determine in the future, to develop and operate our commercial production plants in a timely manner, which depends in part on the ability of third parties to provide us with timely and reliable products and services. InIf developingwe license our STG+® technology to third-parties or if and operatingto ourthe extent we determine to develop and operate commercial production plants and technologies,plants, we would rely on products meeting our design specifications and components manufactured and supplied by third parties, and on services performed by contractors and subcontractors. We would also rely on contractors and subcontractors to perform substantially all of the construction and installation work related to our commercial production plants, and we oftenwould need to engage contractors or subcontractors with whom we have no past experience.

If any of our contractors or subcontractors are unable to provide services that meet or exceed our expectations or satisfy our contractual commitments, our reputation, business and operating results could be harmed. In addition, if we are unable to avail ourselves of warranties and other contractual protections with providers of products and services, we may incur liability to our customers or additional costs related to the affected products, which could adversely affect our business, financial condition and results of operations. Moreover, any delays, malfunctions, inefficiencies or interruptions in these products or services could adversely affect the quality and performance of our commercial production plants and require considerable expense to find replacement products and to maintain and repair our facilities. This could cause us or a third-party to experience interruption in our production and distribution of renewable gasoline, difficulty retaining current relationships and attracting new relationships, or harm our brand, reputation or growth.

Our business strategy is for third-party licensees or us (if and to the extent we determine to develop and operate commercial plants) to enter into multiple supply agreements pursuant to which a third-party licensee or we will supply our gasoline to various customers. Under certain of these supply agreements, we expect the purchasers will agree to pay for and receive, or cause to be received by a third party, or pay for even if not taken, the gasoline under contract (a “take-or-pay” arrangement). We anticipate that the timing and volume commitment of certain of these agreements will be conditioned upon, and subject to, ourthe ability to complete the construction of our firsta commercial production plantplant, andthrough ourlicensing additionalarrangements plannedor and identified potential commercial production plants.otherwise. In order to construct and commence operations of commercial production plants, weit mustwill be necessary to secure third-party financing. While we believe that a third-party licensee or we will be able to secure adequate financing in order to commence construction of and complete our commercial production plants and, in turn, perform under these agreements, we cannot assure you that a third-party licensee or we will in the future be able to obtain adequate financing on favorable terms, or at all. Furthermore, weneither havea notthird-party licensee or us has demonstrated that weeither can meet the production levels and specifications contemplated in anticipated or future supply agreements. If our production is slower than we expect,expected, if demand decreases or if wethere encounteris difficultiesdifficulty in successfully completing our firsta commercial production plant and our additional planned and identified potential commercial production plants,plant, the counterparties may terminate the supply agreements and potential customers may be less willing to negotiate definitive supply agreements with a third-party licensee or us, and therefore adversely impact our anticipated financial performance.

In addition, from time to time, a third-party licensee or we may enter into letters of intent, memoranda of understanding and other largely non-binding agreements or understandings with potential customers or partners in order to develop our business and the markets that we serve. We can make no assurance that legally binding, definitive agreements reflecting the terms of such non-binding agreements will be completed with such customers or partners, or at all.

OurThe facilities and processes may fail to produce gasoline at the volumes, rates and costs we expect.

Some, or all, of ourA future commercial production plantsplant may be in locationsa location distant from natural gas, biomass and MSW,municipal solid waste ("MSW"), or other feedstock sources, which could increase our feedstock costs or prevent a third-party licensee or us from acquiring sufficient feedstock volumes for commercial production. General market conditions might also cause increases in feedstock prices, which could likewise increase our production costs.

Even if a third-party licensee or we secure access to sufficient volumes of feedstock, ourthe commercial production plants may fail to perform as expected. The equipment and subsystems that we installinstalled in ourany commercial production plants may never operate as planned. Unexpected problems may force a third-party licensee or us to cease or delay production and the time and costs involved with such delays may prove prohibitive. Any or all of these risks could prevent a third-party licensee or us from achieving the production throughput and yields necessary to achieve our targettargeted annualized production run rates and/or to meet the future volume demands or minimum requirements of our customers, including pursuant to definitive supply or distribution agreements that we may enterentered into, which may subject us to monetary damages. Failure to achieve these rates or meet these minimum requirements, or achieving them only after significant additional expenditures, could substantially harm our commercial performance.

Even if we are successful in completing the firsta commercial production plant and consistently producing renewable gasoline on a commercial scale, we may not be successful in commencing and expanding commercial operations to support the growth of our business.

Our ability to achieve meaningful future revenue will depend in large part upon our ability to license our STG+® technology or, if we determine to construct any commercial plants, to attract customers and enter into contracts on favorable terms. We expect that many of our customers will be large companies with extensive experience operating in the fuels or chemicals markets. We lack significant commercial operating experience and may face difficulties in developing marketing expertise in these fields. Our business model relies upon our ability to either license our STG+® technology or successfully implement the firsta commercial production plant and commence and expand commercial operations and successfully negotiate, structure and fulfill long-term supply agreements for our renewable gasoline. AgreementsIn February 2026, we announced the suspension of development of the Permian Basin Project as a result of changing market conditions driven by increasing demand for natural gas in the Permian Basin. The future status of the Permian Basin Project is uncertain and, as a result, we are currently pursuing a strategy of licensing our STG+® technology to third-parties. Any agreements with potential customers may initially only provide for the purchase of limited quantities from us.us Ouror a third-party licensee.. The ability to increase our sales will depend in large part upon ourthe ability to expand these existing customer relationships into long-term supply agreements. Establishing, maintaining and expanding relationships with customers can require substantial investment without any assurance from customers that they will place significant orders. In addition, many of our potential customers may be more experienced in these matters than any third-party licensee or we are, and a third-party licensee or we may fail to successfully negotiate these agreements in a timely manner or on favorable terms which, in turn, may force any third-party licensee or us to slow our production, dedicate additional resources to increasing our storage capacity and/or dedicate resources to sales in spot markets. Furthermore, should weeither a third-party licensee or us become more dependent on spot market sales, any potential profitability will become increasingly vulnerable to short-term fluctuations in the price and demand for petroleum-based fuels and competing substitutes.

Our actual costs may be greater than expected in developing our commercial production plants orif growthwe projects,pursue that strategy, causing us to realize significantly lower profits, if any, or greater losses.

We generally must estimate the costs of completing a specific commercial production plant or growth project prior to the construction of the facility or project.project if we pursue that strategy. The actual cost of labor and materials may vary from the costs we originally estimated. These variations may cause the gross cost for a commercial production plant or growth project to differ from those we originally estimated. Cost overruns on our commercial production plants and growth projects could occur due to changes in a variety of factors such as:

WeIf and to the extent we pursue the development of commercial plants, we would rely on our suppliers and strategic partners for our business, from feedstocks to materials for our commercial production plants and our STG+® technology. Future delays or interruptions in the supply chain could expose us to the various risks which would likely significantly increase our costs and/or impact our operations or business plans including:

Our business and prospects are dependent on our ability to develop, maintain, and strengthen our brand. Promoting and positioning our brand will depend significantly on our ability or the ability of a third-party licensee to provide high quality clean, renewable gasoline. In addition, we expect that our ability to develop, maintain, and strengthen our brand will also depend heavily on the success of our branding efforts. To promote our brand, we need to incur increased expenses, such as the costs associated with conducting product demonstrations and attending trade conferences. Brand promotion activities may not yield increased revenue, and even if they do, the increased revenue may not offset the expenses we incur in building and maintaining our brand and reputation. If we fail to promote and maintain our brand successfully or to maintain loyalty among our customers, or if we incur substantial expenses in an unsuccessful attempt to promote and maintain our brand, we may fail to attract new customers and partners, or retain our existing customers and partners and our business and financial condition may be adversely affected.

The continued development of carbon credit marketplaces will be crucial for our success, as we expect carbon credits (including, for example, the RFS for the D3 RIN and renewable-fuel credit various state carbon programs such as California’s LCFS) to be a significant source of future revenue. At the same time, the efficiency and integrity of the voluntary carbon credit market is currently subject to pressures and scrutiny relating to a number of factors including insufficiency of credit demand, the risk that carbon credits could be counted multiple times, concerns regarding the additionality or permanence of climate benefits that the credits represent, lack of standardization of and concerns regarding the integrity of credit verification. Additionally, such forces could put negative pressure on the value of voluntary carbon credits or otherwise make it more difficult to monetize any climate benefits that may be associated with our products. More broadly, the value of products produced using our process technologies may be dependent on the value of carbon credits which may fluctuate based on these market forces relevant to regulatory carbon markets or voluntary carbon markets. Under the current RFS regulations, renewable gasoline produced from separated yard waste, crop residue, slash, and pre-commercial thinnings, biogenic components of separated municipal solid waste (“MSW”),MSW, cellulosic components of separated food waste, and cellulosic components of annual cover crops through a gasification and upgrading process qualifies for D3 RINs. We intend for our commercial production plants that utilize our technology to ultimately utilize gasification and upgrading to produce renewable gasoline from one or more of these feedstocks. Accordingly, we believe that the renewable gasoline produced by our commercial production plants willthat utilize our technology may qualify for D3 RINs and intend to register with EPA as a producer of RINs prior to the commercial operation of our first commercial production plant.RINs. However, if our renewable gasoline is unable to qualify under the RFS for the D3 RIN and various state carbon programs, or for the generation of quality voluntary carbon credits that can be sold on registries preferred by consumers, or if changes to regulatory or voluntary standards otherwise limit the potential for such qualification, our financial condition and results of operations could be adversely impacted. Delayed development of carbon credit markets, as well as any decline in the value of carbon credits or other incentives associated with products produced using our process technologies, could also negatively impact the commercial viability of our commercial production plants and could limit the growth of the business and adversely impact our financial condition and future results. There is a risk that the supply of low-carbon alternative materials and products outstrips demand, resulting in the value of carbon credits declining. Any decline in the value of carbon credits or other incentives associated with products produced using our process technologies could harm our results of operations, cash flow and financial condition. The value of carbon credits and other incentives may also be adversely affected by legislative, agency, or judicial determinations.

Our operations, as well as ourthose of third-party licensees, contractors, suppliers, and customers, are subject to certain federal, state, local and foreign environmental, health and safety laws and regulations governing, among other things, the generation, storage, transportation, and disposal of hazardous substances and wastes. We or others in our supply chain may be required to obtain permits and comply with procedures that impose various restrictions and operations that could have adverse effects on our operations. If key permits and approvals cannot be obtained on acceptable terms, or if other operations requirements cannot be met in a manner satisfactory for our operations or on a timeline that meets our commercial obligations, it may adversely impact our business. There are also significant capital, operating and other costs associated with compliance with these environmental, health and safety laws and regulations.

We are committed to a clean energy future and we believe our business is well-positioned to benefit from growing global regulatory and policy support for decarbonization and other trends related to climate change. However, we cannot rule out the possibility that these developments may in the future adversely affect the business, our suppliers, and the demand for our product while supporting the development of competing technologies and energy sources. For example, the adoption of legislation or regulatory programs to reduce emissions of GHGs (including carbon pricing schemes), or the adoption and implementation of regulations that require reporting of GHG emissions or other climate-related information, could adversely affect our business, including by requiring us or our suppliers to incur increased operating costs, stimulating demand for electric vehicles, restricting our ability to execute on our business strategy, reducing our access to financial markets, or creating greater potential for governmental investigations or litigation. See “Item 1. Business—Environmental, Social and Governance—Sustainability” for further discussion of the laws and regulations related to GHGs and climate change. We could incur increased costs and compliance burden relating to the assessment and disclosure of climate-related risks. We may also face increased litigation risks related to disclosures made pursuant to the rule if finalized as proposed.

Companies across all industries arehave facingfaced increasingincreased scrutiny in recent years from a variety of stakeholders, including investor advocacy groups, proxy advisory firms, certain institutional investors, and lenders, investment funds and other influential investors and rating agencies, related to their ESG and sustainability practices. The success of our business in part depends on customers and financial institutions viewing our business and operations as having a positive ESG profile. Increasing attention to, and societal expectations regarding, climate change, human rights, and other ESG topics may require us to make certain changes to our business operations to satisfy the expectations of customers and financial institutions. Additionally, our customers may be driven to purchase our fuel products due to their own sustainability or ESG commitments, which may entail holding their suppliers — including us — to ESG standards that go beyond compliance with laws and regulations and our ability to comply with such standards. Failure to maintain operations that align with such “beyond compliance” standards may negatively impact our reputation, cause potential customers to not do business with us or otherwise hurt demand for our products. More broadly, if we do not adapt to or comply with investor or other stakeholder expectations and standards on ESG and sustainability matters as they continue to evolve, or if we are perceived to have not responded appropriately or quickly enough to growing concern for ESG and sustainability issues, regardless of whether there is a regulatory or legal requirement to do so, we may suffer from reputational damage and our business, prospects, financial condition and operating results could be materially and adversely affected.

WeIt anticipateis thatunclear in the futureif there will be new opportunities for us to apply for grants, loans, and other federal and state incentives. Our ability to obtain funds or incentives from government sources is subject to the availability of funds under applicable government programs and approval of our applications to participate in such programs. The application process for these programs and other incentives is and will remain highly competitive. We may not be successful in obtaining any of these additional grants, loans, and other incentives. We may in the future fail to comply with the conditions of these incentives, which could cause us to lose funding or negotiate with governmental entities to revise such conditions. We may be unable to find alternative sources of funding to meet our planned capital needs, in which case, our business, prospects, financial condition, and operating results could be adversely affected.

As of December 31, 2024,2025, thewe Company isare still in the process of developingdeploying itsour firstSTG+® commercial production facilitytechnology and hashave not derived revenue from itsour principal business activities. The Company is managed as an integrated business and there is only one reportable segment.

On December 18, 2024, the Company entered into common stock purchase agreement (the “Purchase Agreement”) with Cottonmouth,Cottonmouth Ventures, LLC (“Cottonmouth”), a subsidiary of Diamondback,Diamondback Energy, LLC (“Diamondback”), pursuant to which the Company agreed to issue and sell thean PIPEaggregate Sharesof 12,500,000 shares of its Class A common stock, par value $0.0001 (“Class A common stock”) to Cottonmouth at a price of $4.00 per share for an aggregate purchase price of $50 million (the “PIPE Investment”) in a private placement. The Company consummated the transactions contemplated by the Purchase Agreement on January 29, 2025.

In connection with the closing of the PIPE Investment, on January 29, 2025, (i) Cottonmouth and the Company amended that certainan equity participation right agreement, dated February 13, 2023 (the “Existing Equity Participation Right Agreement”), to remove certain preemptive rights with respect to the Company’s equity securities granted to Cottonmouth under the Existing Equity Participation Right Agreement and (ii) the Company entered into that certaina Second Amended and Restated Registration Rights Agreement with Cottonmouth and the other parties thereto, which amended and restated that certain Amended and Restated Registration Rights Agreement, dated February 15, 2023, by and among the Company and certain stockholders named therein (the “Existing Registration Rights Agreement”), to add Cottonmouth as a party to the Existing Registration Rights Agreement.

On December 18, 2024, the holder of a majority of the issued and outstanding shares of Class A Commoncommon Stockstock and Class C Commoncommon Stock,stock, par value $0.0001 (“Class C common stock”) adopted resolutions by written consent, in lieu of a meeting of stockholders to, among other things, amend and restate, immediately prior to and contingent upon the consummation of the closing of the PIPE Investment, our Fourthfourth A&Ramended and restated certificate of incorporation (the “Restated Charter”) to (A) increase the amount of authorized shares of Class C Commoncommon Stockstock from 25,000,000 to 26,000,000 and (B) increase the size of our Board of Directors (the “Board” or "Board of Directors") from seven to eight and to provide Cottonmouth with certain director designation and board observer rights. The Restated Charter was approved and recommended by the Board prior to the stockholder action by written consent.

A critical step in our business strategy will be the successful construction and operationdeployment of the first commercial production plant using our patented STG+® technology.

Concurrent with the Business Combination, DiamondbackDiamondback, through its wholly-owned subsidiary, Cottonmouth, made a $20 million equity investment in Verde and entered into anthe equityExisting participationEquity rightParticipation agreementRight Agreement pursuant to which Verde must grant Cottonmouth the right to participate and jointly develop facilitiesnatural gas-to-gasoline plants in the Permian Basin utilizing Verde’s STG+® technology forand the production of gasoline derived from economically disadvantagedassociated natural gas feedstocks.from Diamondback’s operations. 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 production of gasoline from natural gas sourced from the Permian Basin is designed to allow Diamondback to mitigate the flaring of natural gas while also producing a high-margin product from natural gas streams that are subject to being price disadvantaged compared to other natural gas basins.

In June 2024, the Companywe entered into a contract with Chemex Global, LLC (“Chemex”), a Shaw Group company (“Shaw Group”), for a front-end engineering and design (“FEED”) study related to the Permian Basin Project. In connection with entering into the JDA and the commencement of FEED,the FEED study, we began to incur development costs with respect to the project. Under the terms of the JDA, 65% of the approved development costs that we incur (which includes the FEED costs) are reimbursed by Cottonmouth. The construction in progress balance as of December 31, 2024 is comprised of capitalized FEED costs of $2,937,528 and is net of $1,908,628 of cost reimbursements from Cottonmouth. Upon FEED completion and reaching FID, it is anticipated that engineering, procurement and construction work will then commence. It is expected that commercial operations will be achieved with 18-24 months from commencement of engineering, procurement and construction work.

General and administrative expenses primarily consist of compensation costscosts, including salaries, benefits and share-based compensation expense, for personnel in executive, finance, accounting and other administrative functions. General and administrative expenses also include business development costs, outside service costs, such as legal fees, professional fees paid for accounting, auditing and consulting services, and insurance costs. Following the Business Combination, we incurred and expect to continue to incur higher general and administrative expenses for public company costs such as compliance with the regulations of the SEC and Nasdaq.

Other income primarily consists of interest and dividend income earned on our cash and cash equivalents balances.equivalents.

Comparison of Operations for the yearsYears endedEnded December 31, 20242025 and 20232024

General and Administrative Expenses

R&DGeneral and administrative expenses increased approximately $721, or 6%, for the year ended December 31, 2024 increased approximately $0.1 million, or 37%,2025 as compared to the priorsame year.period in 2024. The increase was primarily due to higheradditional stock options granted during 2025 and additional employee compensation-relatedheadcount, expensewhich attributable to an increase in headcount,was partially offset by lower outside services expense.and insurance expenses.

Other income increased approximatelyby $0.7$1,232, millionor 103%, for the year ended December 31, 20242025 as compared to the priorsame year.period in 2024. The increase was primarily attributabledue to higher interest and dividend income earned ason aour resultcash and cash equivalents resulting from the net proceeds received from the closing of ourthe moneyPIPE marketInvestment investment.in January 2025.

InterestIncome Tax Expense

TheNet provisioncash forused incomein taxesinvesting decreasedactivities approximatelyincreased $0.1$1,531 million forduring the year ended December 31, 20242025 as compared to the priorsame year.period in 2024. The decreaseincrease was primarily due to changeshigher indevelopment estimationscosts related to CENAQ’Sthe fiscalPermian yearBasin 2022Project, taxnet obligations.of amounts reimbursable by Cottonmouth in accordance with the JDA. See NoteNotes 123, to5, and 14 in the accompanying Consolidatedconsolidated Financialfinancial Statementsstatements for further information.

As of December 31, 2024,2025, we are still in the process of developingdeploying our firstSTG+® commercial production planttechnology and have not derived revenue from our principal business activities. We do not expect to generate any meaningful revenue unless and until we are able to commercializedeploy our firstSTG+® production plant.technology. Since inception, we have incurred operating losses and generated negative operating cash flows that were primarily attributabledue to our ongoing general and administrative expenses and development activities.

We measure liquidity in terms of our ability to fund the cash requirements of our development activities and our near-term business operations, including our contractual obligations and other commitments. Our current liquidity needs are primarily involvecomprised of general and administrative expensesexpenses. As of December 31, 2025, we had cash and activitiescash relatedequivalents of $57,215. We expect that our cash and cash equivalents will be sufficient to thefund our cash requirements, including ongoing developmentgeneral ofand ouradministrative firstexpenses, commercialfor productionthe plant.next 12 months from the reporting date.

TheAs Companyof December 31, 2025 and 2024, we had a restricted cash balance of $100,000 as of both December 31, 2024 and December 31, 2023.$100. The restricted cash balance is maintained in support of a letter of credit.

As of December 31, 20242025 and during the year endedthen December 31, 2024,ended, we haddid not engagedengage in any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.U.S. Securities and Exchange Commission (the “SEC”).

References in this Quarterly Report on Form 10-Q (this “Quarterly Report”) to “we,” “our,” “us,” “Verde,” “Verde Clean Fuels” or the “Company” refer to Verde Clean Fuels, Inc. References to our “management” or our “management team” refer to our officers and directors. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto contained elsewhere in this Quarterly Report. The amounts contained herein are presented in thousands,thousands except historical investment, share and per share amounts.amounts and as otherwise noted. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

•litigation and the ability to adequately protect intellectual property rightsrights, (see Part II, Item 1. Legal Proceedings);

As of MarchJune 31,30, 2026, we are still in the process of deploying our STG+® technology and have not derived revenue from our principal business activities.

On March 20, 2026, we announced the appointment of George Burdette as CEO and engagement of Roth Capital Partners as financial advisor to assist the Company in evaluating strategic alternatives. These announcements are part of the Company’s continued advancement of its previously announced restructuring and cost reduction initiatives. Mr. Burdette succeedssucceeded Ernie Miller who has stepped down from his role as CEO to pursue another opportunity. Mr. Miller remains with the Company as a senior advisor. Mr. Burdette, who has served as the Company’s CFO since October 2024, continues to serve in that role.

In June 2024, we entered into a contract with Chemex Global, LLC (“Chemex”), a Shaw Group company (“Shaw Group”), for a front-end engineering and design (“FEED”) study related to the Permian Basin Project. In connection with entering into the JDA and the commencement of the FEED study, we began to incur development costs with respect to the project. Under the terms of the JDA, 65% of the approved development costs that we incur (which include the FEED costs) are reimbursed by Cottonmouth.

The FEED study was completed in December 2025; however, the Permian Basin Project was suspended in February 2026. We believe the FEED study will continue to be useful as we explore other opportunities to deploy the STG+® technology. In the event that the Company desires to obtain ownership rights to the FEED work product prepared by KMPS, such ownership could be obtained upon (i) KMPS being awarded a supply contract for the reaction and distillation modular system for the first commercial production facility utilizing the Company's STG+® technology or (ii) payment to KMPS of $1.0 million.

We have not generated any revenue to date. We expect that future revenue generation opportunities would result from capital-lite opportunities to deploy our STG+® technology.technology, if any. Such opportunities include licensing technology and providing engineering, technical, and operational services. There can be no assurance that we will be successful in this endeavor.

Comparison of the three months ended MarchJune 31,30, 2026 and 2025

For the three months ended MarchJune 31,30, 2026, our general and administrative expenses decreased by $325,$735, or 11%,24%, as compared to the same period in 2025. The decrease was primarily due to implementation of our cost savings initiatives, including a reduction in employee headcount and lower outside services and insurance expenses, which was partially offset by additional share-based compensationcontingency expense.

Of our general and administrative expenses for the three months ended MarchJune 31,30, 2026 and 2025, $17$0 and $66,$7, respectively, were business development costs. The decrease was primarily due to reduced development activities driven by our revised strategy to deploy our technology through capital-lite opportunities.

For the three months ended MarchJune 31,30, 2026, our research and development expenses decreasedincreased by $2,$20, or 1%,14%, as compared to the same period in 2025. The decreaseincrease was primarily due to lower engineering software costs, which were largely offset by higher employee compensation as a portion of the engineers’ and consultants’ time associated with the Permian Basin Project in 2025 was capitalized as construction in progress.progress, which was largely offset by lower engineering software costs.

For the three months ended MarchJune 31,30, 2026, our other income decreased by $23,$187, or 4%,28%, as compared to the same period in 2025. The decrease was primarily due to lower interest and dividend income earned on our cash and cash equivalents resulting from lower cash and cash equivalents.

We have not generated any revenue to date. We expect that any future revenue generation opportunities would result from capital-lite opportunities to deploy our STG+® technology. Such opportunities include licensing technology and providing engineering, technical, and operational services.

As of MarchJune 31,30, 2026, we are still in the process of deploying our STG+® technology and have not derived revenue from our principal business activities. We do not expect to generate revenue unless and until we are able to deploy our STG+® technology.technology and there can be no assurance that we will be successful in this endeavor. Since inception, we have incurred operating losses and generated negative operating cash flows that were primarily attributable to our general and administrative expenses and development activities.

As of MarchJune 31,30, 2026, we had cash and cash equivalents of $54,281.$53,454. We expect that our cash and cash equivalents will be sufficient to fund our cash requirements, including ongoing general and administrative expenses, for the next 12 months from the reporting date.

Comparison of Cash Flows for the ThreeSix Months Ended MarchJune 31,30, 2026 and 2025

For the threesix months ended MarchJune 31,30, 2026, our net cash used in operating activities decreased by $1,085$2,440 as compared to the same period in 2025. The decrease was primarily due to lower working capital requirements,requirements and implementation of our cost savings initiatives, which resulted in lower general administrative and research and development costs, and higher non-cash shared-based compensation expense.expenses.

For the threesix months ended MarchJune 31,30, 2026, our net cash used in investing activities increaseddecreased by $305$234 as compared to the same period in 2025. The increasedecrease was primarily attributable to the timing of payments made related to the Permian Basin Project, net of amounts reimbursable by Cottonmouth in accordance with the JDA. See Notes 3, 4 and 5 in the accompanying unaudited condensed consolidated financial statements for further information.

For the threesix months ended MarchJune 31,30, 2026, our net cash provided by financing activities decreased by $49,950$49,446 as compared to the same period in 2025. The decrease was due to the net proceeds received from the closing of the PIPE Investment in January 2025.

As of MarchJune 31,30, 2026 and December 31, 2025, we had a restricted cash balance of $100 maintained in support of a letter of credit.

As of MarchJune 31,30, 2026, we have not engaged in any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.