Verde Clean Fuels (VGAS) FY2025 10-K Risk Factors: 8 New, 10 Dropped

What the changes say

Suspension of the Permian Basin Project highlights a strategic shift toward capital-lite technology deployment and operational restructuring amid rising natural gas demand.

What changed since the prior 10-K

New

NewRisks Related to Our Business, Operations and Industry
Suspension of Development of Permian Basin Project
The company suspended development of the Permian Basin natural gas-to-gasoline project with Cottonmouth in February 2026 due to rising natural gas demand.
NewRisks Related to Our Business, Operations and Industry
While we are focused on optimizing our costs, deploying our technology through capital-lite opportunities and evaluating strategic alternatives that may be available, there is no assurance that we will be successful in this endeavor
A restructuring and cost optimization program was initiated to reduce expenses and evaluate strategic alternatives like mergers, asset sales, or licensing STG+ technology.
NewRisks Related to Our Business, Operations and Industry
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
Commercial plant construction requires 18 to 24 months, a six-month ramp-up period, and leased real property with water and power access.
NewRisks Related to Our Business, Operations and Industry
enter into exclusive supply contracts, which could limit our ability to further expand our sales to new customers. Likewise, major potential customers may be locked into long-term, exclusive agreements with our competitors, which could inhibit our ability to compete for their business
Hiring and retaining qualified sales and technical personnel is difficult and critical for executing growth projects amidst intense competition.
NewRisks Related to Our Business, Operations and Industry
and it is possible that sufficient insurance coverage may not be available on acceptable terms, if at all. Any losses or damages we incur could have a material adverse effect on our cash flows and success as an overall business
Natural disasters or catastrophic events could disrupt operations and damage STG+ technology testing without sufficient insurance coverage.
NewRisks Related to Our Business, Operations and Industry
our intercompany charges, cross-jurisdictional transfer pricing or other matters and assess additional taxes. If we do not prevail in any such disagreements, our financial results may be affected
Changes in tax laws, rates, or transfer pricing rules could adversely affect after-tax profitability and financial results.
NewRisks Related to Ownership of Our Securities and Our Capital Structure
arrangements, or are otherwise unable to provide such funds, our liquidity and financial condition could be materially adversely affected
The company relies on OpCo distributions to make tax and Tax Receivable Agreement payments, which are subject to legal and debt restrictions.
NewRisks Related to Information Technology, Intellectual Property and Cybersecurity
obligation. Any such claim by a third party, even if without merit, could cause us to incur substantial costs defending against such claim and could distract our management and our development teams from our business
Third-party patent infringement claims could force the company to pay substantial damages, secure costly licenses, or develop non-infringing technology.

Dropped

DroppedRisks Related to Our Business, Operations and Industry
In order to construct new commercial production plants, we typically 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
DroppedRisks Related to Our Business, Operations and Industry
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
DroppedRisks Related to Our Business, Operations and Industry
we may not timely or successfully register our trademarks. If we do not adequately protect our rights in our trademarks from infringement and unauthorized use, any goodwill that we have developed in those trademarks could be lost or impaired, which could harm our brand and our business
DroppedRisks Related to Our Business, Operations and Industry
subject to governmental export and import controls that could impair our ability to compete in international markets or subject us to liability if we violate the controls
DroppedRisks Related to Management and Our Employees
Our management team has limited experience in operating a public company
Uncertain timeframe and variable design and construction development cycles for new commercial production plants.
DroppedRisks Related to Management and Our Employees
The loss of our senior management or technical personnel could adversely affect our ability to successfully operate our business
Specialized permitting challenges and difficulties in acquiring suitable real property for plants.
DroppedRisks Related to Ownership of Our Securities and Our Capital Structure
other stockholders. The significant concentration of stock ownership may adversely affect the per-share trading price of our Class A Common Stock due to investors’ perception that conflicts of interest may exist or arise
DroppedRisks Related to Ownership of Our Securities and Our Capital Structure
restated, modified, supplemented or waived from time to time), (v) any action asserting a claim against us or any director, officer, employee or agent of ours that is governed by the internal affairs doctrine or (vi) any action asserting an “internal corporate claim” as that term is defined in Section 115 of the DGCL
DroppedRisks Related to Financial and Accounting Matters
accurately report our financial results in a timely manner, which may adversely affect investor confidence in us and materially and adversely affect our business and operating results, and we may face litigation as a result
DroppedRisks Related to Information Technology, Intellectual Property and Cybersecurity
adverse effect on our business, financial condition and results of operations. Cyber-attacks are of ever-increasing levels of sophistication, and despite our security measures, our IT and infrastructure may be vulnerable to such attacks or may be breached, including due to employee error or malfeasance

Reworded

86% rewrittenRisks Related to Information Technology, Intellectual Property and Cybersecurity
We may be subject to intellectual property rights claims by third parties, which could be costly to defend, could require us to pay significant damages and, if we are unsuccessful in defending such claims, could limit our ability to use certain technologies and compete
Updated to clarify that third-party intellectual property claims may be asserted against the company or its customers for indemnification.
65% rewrittenRisks Related to Our Business, Operations and Industry
Significant capital investment is required to develop and conduct our operations, we intend to raise additional funds, and these funds may not be available with acceptable terms or may not be available when needed
Shifted focus from mandatory plant construction capital to a capital-lite licensing model, while retaining plant development as a future option.
Was: Significant capital investment is required to develop and conduct our operations and we intend to raise additional funds and these funds may not be available with acceptable terms or may not be available when needed
63% rewrittenRisks Related to Our Business, Operations and Industry
Business interruptions, including those related to the widespread outbreak of an illness, pandemic (such as COVID-19), adverse weather conditions, manmade problems such as terrorism and other catastrophic events, may have an adverse impact on our business and results of operations
Removed specific references to COVID-19 and detailed disaster recovery plan mentions from the business interruption risk.
59% rewrittenRisks Related to Ownership of Our Securities and Our Capital Structure
We are a holding company, and our only material asset is our equity interest in OpCo, and we will accordingly be dependent upon distributions from OpCo to pay taxes, make payments under the Tax Receivable Agreement and cover our corporate and other overhead expenses
Added language noting that OpCo distributions to the holding company may be restricted by current or future financing terms.
58% rewrittenRisks Related to Our Business, Operations and Industry
We may face substantial competition from companies with greater resources and financial strength, which could adversely affect our performance and growth
Minor phrasing updates regarding incumbent petroleum industry advantages and competition in renewable fuels.
58% rewrittenRisks Related to Our Business, Operations and Industry
Our business and prospects depend significantly on our ability to build our brand and we may not succeed in continuing to establish, maintain, and strengthen our brand, and our brand and reputation could be harmed by negative publicity regarding our company or products
Expanded brand protection risk to account for third-party licensees providing clean renewable gasoline.
56% rewrittenRisks Related to Ownership of Our Securities and Our Capital Structure
Cottonmouth owns a significant percentage of our Class A Common Stock and will be able to exert significant control over matters subject to stockholder approval
Updated Cottonmouth's ownership description from post-PIPE investment status to established second-largest stockholder.
Was: Cottonmouth owns a significant percentage of our Class A Common Stock following the consummation of the PIPE Investment and will be able to exert significant control over matters subject to stockholder approval
56% rewrittenRisks Related to Our Business, Operations and Industry
Our proposed growth projects may not be completed or, if completed, may not perform as expected and our project development activities may consume a significant portion of our management’s focus, and if not successful, reduce any anticipated profitability
Incorporated the February 2026 suspension of the Permian Basin Project with Cottonmouth and emphasized the capital-lite licensing strategy.
55% rewrittenRisks Related to Our Business, Operations and Industry
We may not be able to obtain, or comply with terms and conditions for, government grants, loans, and other incentives for which we may apply for in the future, which may limit our opportunities to expand our business
55% rewrittenRisks Related to Our Business, Operations and Industry
Even if we are successful in completing a 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
Was: Even if we are successful in completing the first 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
51% rewrittenRisks Related to Our Business, Operations and Industry
The facilities and processes may fail to produce gasoline at the volumes, rates and costs we expect
Was: Our facilities and processes may fail to produce gasoline at the volumes, rates and costs we expect
51% rewrittenRisks Related to Our Business, Operations and Industry
Our limited history, lack of revenue and limited liquidity makes it difficult to evaluate our business and prospects and may increase the risks associated with your investment
50% rewrittenRisks Related to Our Business, Operations and Industry
We may be unable to successfully perform under future supply and distribution agreements to provide our gasoline, which could harm our commercial prospects
50% rewrittenRisks Related to Our Business, Operations and Industry
From time to time, we may be involved in litigation (including the current claim as discussed in Item 3. Legal Proceedings), regulatory actions or government investigations and inquiries, which could have an adverse impact on our financial results and consolidated financial position
Was: From time to time, we may be involved in litigation, regulatory actions or government investigations and inquiries, which could have an adverse impact on our financial results and consolidated financial position
42% rewrittenRisks Related to Management and Our Employees
If we lose key personnel, including key management personnel, or are unable to attract and retain additional personnel, it could delay our development and harm our research, make it more difficult to pursue partnerships or develop our own products or otherwise have a material adverse effect on our business
42% rewrittenRisks Related to Our Business, Operations and Industry
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 should the Company determine to pursue development and operation of commercial production plants
Was: Our commercial success depends on our ability to develop and operate plants for the commercial production of gasoline
40% rewrittenRisks Related to Ownership of Our Securities and Our Capital Structure
We are a “controlled company” within the meaning of Nasdaq rules and, as a result, qualify for exemptions from certain corporate governance requirements, and as a result, you do not have the same protections afforded to stockholders of companies that are not exempt from such corporate governance requirements
38% rewrittenRisks Related to Our Business, Operations and Industry
We may not be able to develop, maintain and grow strategic relationships, identify new strategic relationship opportunities, or form strategic relationships, in the future
24% rewrittenRisks Related to Our Business, Operations and Industry
Transition risks related to climate change could have a material and adverse effects on us
22% rewrittenRisks Related to Our Business, Operations and Industry
Fluctuations in the price and availability of energy to power our facilities may harm our performance
21% rewrittenRisks Related to Our Business, Operations and Industry
We face risks associated with increased geopolitical uncertainty, including as a result of evolving domestic and foreign tariff policies
20% rewrittenRisks Related to Information Technology, Intellectual Property and Cybersecurity
Our ability to successfully maintain and upgrade our information technology systems, and to respond effectively to failures, disruptions, compromises or breaches of our information technology systems, may adversely affect our competitiveness and profitability

All 71 risk factors

Headings as the filing states them, in filing order.

Risks Related to Our Business, Operations and Industry

01Our commercial success depends on our ability to license our STG+® technology and/or to develop and operate plants for the commercial production of gasoline should the Company determine to pursue development and operation of commercial production plants42% rewritten
02Suspension of Development of Permian Basin ProjectNew
03While we are focused on optimizing our costs, deploying our technology through capital-lite opportunities and evaluating strategic alternatives that may be available, there is no assurance that we will be successful in this endeavorNew
04Our limited history, lack of revenue and limited liquidity makes it difficult to evaluate our business and prospects and may increase the risks associated with your investment51% rewritten
05We are a development-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
06Significant capital investment is required to develop and conduct our operations, we intend to raise additional funds, and these funds may not be available with acceptable terms or may not be available when needed65% rewritten
07procurement 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 processNew
08We have entered into relatively new markets, including renewable natural gas, renewable gasoline and biofuel, and these new markets are highly volatile and have significant risk associated with current market conditions
09Fluctuations in the price of product inputs, including natural gas or renewable feedstocks, may affect our cost structure
10Inflation may adversely affect us by increasing costs of our business
11We may face substantial competition from companies with greater resources and financial strength, which could adversely affect our performance and growth58% rewritten
12enter into exclusive supply contracts, which could limit our ability to further expand our sales to new customers. Likewise, major potential customers may be locked into long-term, exclusive agreements with our competitors, which could inhibit our ability to compete for their businessNew
13Our proposed growth projects may not be completed or, if completed, may not perform as expected and our project development activities may consume a significant portion of our management’s focus, and if not successful, reduce any anticipated profitability56% rewritten
14We may not be able to develop, maintain and grow strategic relationships, identify new strategic relationship opportunities, or form strategic relationships, in the future38% rewritten
15We may acquire or invest in additional companies, which may divert our management’s attention, result in additional dilution to our stockholders, and consume resources that are necessary to sustain our business
16Fluctuations in the price and availability of energy to power our facilities may harm our performance22% rewritten
17We may be subject to liabilities and losses that may not be covered by insurance
18We may be unable to successfully perform under future supply and distribution agreements to provide our gasoline, which could harm our commercial prospects50% rewritten
19The facilities and processes may fail to produce gasoline at the volumes, rates and costs we expect51% rewritten
20Even if we are successful in completing a 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 business55% rewritten
21Our actual costs may be greater than expected in developing our commercial production plants if we pursue that strategy, causing us to realize significantly lower profits, if any, or greater losses
22Business interruptions, including those related to the widespread outbreak of an illness, pandemic (such as COVID-19), adverse weather conditions, manmade problems such as terrorism and other catastrophic events, may have an adverse impact on our business and results of operations63% rewritten
23and it is possible that sufficient insurance coverage may not be available on acceptable terms, if at all. Any losses or damages we incur could have a material adverse effect on our cash flows and success as an overall businessNew
24Disruption in the supply chain, including increases in costs, shortage of materials or other disruption of supply, or in the workforce could materially adversely affect our business
25Our business and prospects depend significantly on our ability to build our brand and we may not succeed in continuing to establish, maintain, and strengthen our brand, and our brand and reputation could be harmed by negative publicity regarding our company or products58% rewritten
26We may be unable to qualify for existing federal and state level low-carbon fuel credits and other carbon credits and the carbon credit markets may not develop as quickly or efficiently as we anticipate or at all
27Transition risks related to climate change could have a material and adverse effects on us24% rewritten
28Liabilities and costs associated with hazardous materials, contamination and other environmental conditions may require us to conduct investigations or remediation or expose us to other liabilities, both of which may adversely impact our operations and financial condition
29Increased focus on sustainability and ESG matters could impact our operations and expose us to additional risks
30Third parties on whom we may rely for transportation services are subject to complex federal, state and other laws that could adversely affect our operations
31We may not be able to obtain, or comply with terms and conditions for, government grants, loans, and other incentives for which we may apply for in the future, which may limit our opportunities to expand our business55% rewritten
32We face risks associated with increased geopolitical uncertainty, including as a result of evolving domestic and foreign tariff policies21% rewritten
33Concerns regarding the environmental impact of renewable gasoline production could affect public policy which could impair our ability to operate at a profit and substantially harm our revenues and operating margins
34From time to time, we may be involved in litigation (including the current claim as discussed in Item 3. Legal Proceedings), regulatory actions or government investigations and inquiries, which could have an adverse impact on our financial results and consolidated financial position50% rewritten
35Changes in laws or regulations, or a failure to comply with any laws or regulations, may adversely affect our business, investments and results of operations
36our intercompany charges, cross-jurisdictional transfer pricing or other matters and assess additional taxes. If we do not prevail in any such disagreements, our financial results may be affectedNew
37Changes in tax laws or the imposition of new or increased taxes may adversely affect our financial condition, results of operations and cash flows
38The new 1% U.S. federal excise tax on repurchases of corporate stock included in the IR Act could cause a reduction in the value of our Class A Common Stock

Risks Related to Management and Our Employees

39If we lose key personnel, including key management personnel, or are unable to attract and retain additional personnel, it could delay our development and harm our research, make it more difficult to pursue partnerships or develop our own products or otherwise have a material adverse effect on our business42% rewritten
40Agreements containing confidentiality provisions and restrictive covenants with employees, contractors, consultants and other third-parties may not adequately prevent disclosures of trade secrets and other proprietary information
41We may be subject to claims that our employees, consultants or independent contractors have wrongfully used or disclosed confidential information or alleged trade secrets of third parties or competitors or are in breach of noncompetition or non-solicitation agreements with our competitors or their former employers

Risks Related to Ownership of Our Securities and Our Capital Structure

42Future sales and issuances of shares of our Class A Common Stock could result in additional dilution of the percentage ownership of our stockholders and could cause our share price to fall
43Future sales of a substantial number of shares of our Class A Common Stock, or the perception in the market that the holders of a large number of shares of Class A Common Stock intend to sell shares, could reduce the market price of our Class A Common Stock
44We may issue additional shares of Class A Common Stock under an employee incentive plan. Any such issuances would dilute the interest of our stockholders and likely present other risks
45Holdings owns the majority of our voting stock and has the right to appoint a majority of our Board members, and its interests may conflict with those of other stockholders
46Cottonmouth owns a significant percentage of our Class A Common Stock and will be able to exert significant control over matters subject to stockholder approval56% rewritten
47There can be no assurance that we will be able to comply with the continued listing standards of Nasdaq
48Because there are no current plans to pay cash dividends on shares of Class A Common Stock for the foreseeable future, you may not receive any return on investment unless you sell your shares of Class A Common Stock for a price greater than that which you paid for it
49The trading price of our securities is limited and volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control
50If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they change their recommendations regarding our Class A Common Stock adversely, the price and trading volume of our Class A Common Stock could decline
51We are a holding company, and our only material asset is our equity interest in OpCo, and we will accordingly be dependent upon distributions from OpCo to pay taxes, make payments under the Tax Receivable Agreement and cover our corporate and other overhead expenses59% rewritten
52arrangements, or are otherwise unable to provide such funds, our liquidity and financial condition could be materially adversely affectedNew
53In the event that payment obligations under the Tax Receivable Agreement are accelerated in connection with certain mergers, other forms of business combinations or other changes of control, the consideration payable to holders of our Class A Common Stock could be substantially reduced
54In certain circumstances, OpCo will be required to make tax distributions to the OpCo unitholders, including us, and the tax distributions that OpCo will be required to make may be substantial. The OpCo tax distribution requirement may complicate our ability to maintain our intended capital structure
55The JOBS Act permits “emerging growth companies” like us to take advantage of certain exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies
56We are a smaller reporting company, and we cannot be certain if the reduced reporting requirements applicable to smaller reporting companies will make our Class A Common Stock less attractive to investors
57We are a “controlled company” within the meaning of Nasdaq rules and, as a result, qualify for exemptions from certain corporate governance requirements, and as a result, you do not have the same protections afforded to stockholders of companies that are not exempt from such corporate governance requirements40% rewritten
58We will be required to make payments under the Tax Receivable Agreement and the amounts of such payments could be significant
59In certain cases, payments under the Tax Receivable Agreement may be accelerated and/or significantly exceed the actual benefits, if any, we realize in respect of the tax attributes subject to the Tax Receivable Agreement
60We will not be reimbursed for any payments made under the Tax Receivable Agreement in the event that any tax benefits are subsequently disallowed

Risks Related to Financial and Accounting Matters

61There are inherent limitations in all control systems, and misstatements due to error or fraud that could seriously harm our business may occur and not be detected
62If our estimates or judgments relating to our critical accounting policies prove to be incorrect or financial reporting standards or interpretations change, our operating results could be adversely affected
63We may in the future use hedging arrangements to mitigate certain risks, but the use of such derivative instruments could have a material adverse effect on our results of operations

Risks Related to Information Technology, Intellectual Property and Cybersecurity

64Failure to protect our intellectual property, inability to enforce our intellectual property rights or loss of our intellectual property rights through costly litigation or administrative proceedings, could adversely affect our ability to compete and our business
65If we fail to comply with our obligations under license or technology agreements with third parties or are unable to license rights to use technologies on reasonable terms, we may be required to pay damages and could potentially lose license rights that are critical to our business
66Obtaining and maintaining our patent protection depends on compliance with various procedural, documentary, fee payment and other requirements imposed by governmental patent agencies, and our patent protection could be reduced or eliminated for non-compliance with these requirements
67Changes in patent law could diminish the value of patents in general, thereby impairing our ability to protect our technology
68We may be subject to intellectual property rights claims by third parties, which could be costly to defend, could require us to pay significant damages and, if we are unsuccessful in defending such claims, could limit our ability to use certain technologies and compete86% rewritten
69obligation. Any such claim by a third party, even if without merit, could cause us to incur substantial costs defending against such claim and could distract our management and our development teams from our businessNew
70Our ability to successfully maintain and upgrade our information technology systems, and to respond effectively to failures, disruptions, compromises or breaches of our information technology systems, may adversely affect our competitiveness and profitability20% rewritten
71Cyber incidents or attacks directed at us could result in information theft, data corruption, operational disruption and/or financial loss

Other Verde Clean Fuels 10-Ks

FY2024 10-K risk factors
73 risks
Verde Clean Fuels faces heavy risks from its lack of revenue, unproven large-scale commercial production, and need for substantial capital.
Filed Mar 28, 2025

About this page

The headings are the filing's own. The one-line readings and the overview are automated and can be wrong: read Item 1A of the 10-K for the exact wording.