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Item 1. Financial Statements

2026-05-12 compared with 2025-11-14 · 166 added, 212 removed, 456 unchanged (45% of the section changed)

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CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts) September 30,

2025 December 31,

(in thousands, except share and per share amounts) March 31, 2026 December 31, 2025

Current assets:

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Stockholders’ equity

Class A common stock, par value $ 0.0001 per share, 22,049,621 and 9,549,621 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively

Class C common stock, par value $ 0.0001 per share, 22,500,000 shares issued and outstanding as of September 30, 2025 and December 31, 2024, respectively

Class A common stock, par value $ 0.0001 per share, 22,049,621 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively

Class C common stock, par value $ 0.0001 per share, 22,500,000 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively

Additional paid in capital 64,666 64,070

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Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands, except share and per share amounts) 2026 2025

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Loss before income taxes ( 2,347 ) ( 2,651 )

Income tax expense (benefit) 104 - 129 ( 14 )

Income tax expense 46 53

Net loss $ ( 2,393 ) $ ( 2,704 )

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CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Condensed Consolidated Statement of Stockholders’ Equity for the Three Months Ended September 30, 2025

(in thousands, except share and per share amounts) Class A

Common Class C

Common Additional

Capital Accumulated

Interest Total

Stockholders’

Shares Values Shares Values

Balance – June 30, 2025 22,049,621 $ 2 22,500,000 $ 2 $ 62,797 $ ( 29,764 ) $ 32,710 $ 65,747

Share-based compensation - - - - 632 - - 632

Net loss - - - - - ( 1,155 ) ( 1,179 ) ( 2,334 )

Balance – September 30, 2025 22,049,621 $ 2 22,500,000 $ 2 $ 63,429 $ ( 30,919 ) $ 31,531 $ 64,045

Condensed Consolidated Statement of Stockholders’ Equity for the Three Months Ended September 30, 2024

Condensed Consolidated Statement of Stockholders’ Equity for the Three Months Ended March 31, 2026

(in thousands, except share and per share amounts) Class A

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Shares Values Shares Values

Balance – June 30, 2024 9,549,621 $ 1 22,500,000 $ 2 $ 36,051 $ ( 25,599 ) $ 13,931 $ 24,386

Balance – December 31, 2025 22,049,621 $ 2 22,500,000 $ 2 $ 64,070 $ ( 34,215 ) $ 28,276 $ 58,135

Share-based compensation - - - - 597 - - 597

Net loss - - - - - ( 1,207 ) ( 1,186 ) ( 2,393 )

Balance – September 30, 2024 9,549,621 $ 1 22,500,000 $ 2 $ 36,452 $ ( 26,377 ) $ 12,215 $ 22,293

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

VERDE CLEAN FUELS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Condensed Consolidated Statement of Stockholders’ Equity for the Nine Months Ended September 30, 2025

Other - - - - ( 1 ) - - ( 1 )

Balance – March 31, 2026 22,049,621 $ 2 22,500,000 $ 2 $ 64,666 $ ( 35,422 ) $ 27,090 $ 56,338

Condensed Consolidated Statement of Stockholders’ Equity for the Three Months Ended March 31, 2025

(in thousands, except share and per share amounts) Class A

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Rebalancing of ownership percentage for issuance of Class A shares - - - - ( 25,019 ) - 25,019 -

Equity offering cost adjustment - - - - 56 - - 56

Net loss - - - - - ( 1,247 ) ( 1,457 ) ( 2,704 )

Balance – September 30, 2025 22,049,621 $ 2 22,500,000 $ 2 $ 63,429 $ ( 30,919 ) $ 31,531 $ 64,045

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

VERDE CLEAN FUELS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

Condensed Consolidated Statement of Stockholders’ Equity for the Nine Months Ended September 30, 2024

(in thousands, except share and per share amounts) Class A

Common Class C

Common Additional

Capital Accumulated

Shares Values Shares Values Total

Stockholders’

Balance – December 31, 2023 9,387,836 $ 1 22,500,000 $ 2 $ 35,015 $ ( 23,923 ) $ 17,730 $ 28,825

Related party promissory note settlement 40,961 - - - 410 - - 410

Conversion of restricted stock units 120,824 - - - - - - -

Share-based compensation - - - - 912 - - 912

Rebalancing of ownership percentage for issuance of Class A shares - - - - 115 - ( 115 ) -

Net loss - - - - - ( 2,454 ) ( 5,400 ) ( 7,854 )

Balance – September 30, 2024 9,549,621 $ 1 22,500,000 $ 2 $ 36,452 $ ( 26,377 ) $ 12,215 $ 22,293

Balance – March 31, 2025 22,049,621 $ 2 22,500,000 $ 2 $ 62,246 $ ( 28,504 ) $ 33,996 $ 67,742

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Nine Months Ended

September 30,

Three Months Ended

(in thousands) 2026 2025

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Amortization of right-of-use assets 99 85

Other non-cash expense 1 -

Changes in operating assets and liabilities

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Accounts receivable for reimbursement of capital expenditures (at period end) $ - $ 639

Equity issuance costs in accounts payable and accrued liabilities (at period end) $ - $ 560

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Verde Clean Fuels, Inc.

(the “Company”, “Verde” and “Verde Clean Fuels”) is a clean fuels company focused on the deployment of its innovative and proprietary liquid fuels processing technology through development of commercial production plants.

Verde’s synthesis gas (“syngas”)-to-gasoline plus (STG+®) process converts syngas, derived from diverse feedstocks, into fully finished liquid fuels that require no additional refining.

Verde is currently focused on opportunities to convert associated natural gas into gasoline, which is expected to provide a market for such natural gas with the added potential benefits of flare mitigation and production of gasoline with a lower carbon intensity than conventional gasoline.

(the “Company”, “Verde” and “Verde Clean Fuels”) owns an innovative and proprietary gas-to-liquids processing technology capable of converting low-value or stranded feedstocks into higher-value clean transportation fuels.

Verde's synthesis gas (“syngas”)-to-gasoline plus (STG+®) process is designed to convert syngas, derived from a variety of feedstocks, including natural gas and biomass, into fully finished liquid fuels that require no additional refining.

The STG+® technology is engineered for industrial-scale deployment and intended to be delivered in standardized modular units.

The technology has been validated through a fully integrated demonstration plant that has completed over 10,000 hours of operation.

The Company is a Delaware corporation headquartered in Houston, Texas.

The Company also has a demonstration plant and office in Hillsborough, New Jersey.

The Company also has an office and demonstration plant in Hillsborough, New Jersey.

See Note 8 for further information.

The Company’s shares of Class A common stock, par value $ 0.0001 per share (the “Class A common stock”), and warrants that were issued in the public offering are listed on Nasdaq under the symbols “VGAS” and “VGASW,” respectively.

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See Notes 3 and 7 for further information.

Recent Developments

On February 6, 2026, the Company announced the suspension of development of the Permian Basin Project (as defined in Note 3) primarily as a result of changing market conditions driven by increasing demand for natural gas in the Permian Basin.

See Notes 3, 4 and 5 for further information.

On February 18, 2026, the Company announced a revised strategy to deploy its innovative and proprietary liquid fuels processing technology through capital-lite opportunities.

The shift in strategy is intended to identify the most effective pathways to commercialize the STG+® technology with a disciplined approach to capital allocation.

Related to its revised strategy, the Company has implemented and intends to continue implementing aggressive cost savings initiatives targeting a 50 % reduction in costs in 2026 as compared to 2025.

On March 20, 2026, the Company announced the appointment of George Burdette as Chief Executive Officer (“CEO”) and engagement of Roth Capital Partners (“Roth”) 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.

Burdette succeeds Ernie Miller who has stepped down from his role as CEO to pursue another opportunity.

Miller remains with the Company as a senior advisor.

Burdette, who has served as the Company’s Chief Financial Officer (“CFO”) since October 2024, continues to serve in that role.

See Notes 7 and 9 for further information.

Business Combination

On February 15, 2023 (the “Closing Date”), the Company consummated (the “Closing”) a business combination (the “Business Combination”) pursuant to that certain Business Combination Agreement, dated as of August 12, 2022 (the “Business Combination Agreement”) by and among CENAQ Energy Corp.

On February 15, 2023 (the “Closing Date”), the Company consummated (the “Closing”) a business combination (the “Business Combination”) pursuant to a Business Combination Agreement, dated as of August 12, 2022 (the “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”), Holdings, Bluescape Clean Fuels Intermediate Holdings, LLC, a Delaware limited liability company (“Intermediate”), and CENAQ Sponsor LLC (“Sponsor”).

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Following the completion of the Business Combination, the combined company is organized under an umbrella partnership C corporation structure, and the direct assets of the Company consist of equity interests in OpCo, whose direct assets consist of equity interests in Intermediate.

Immediately following the Business Combination, Verde Clean Fuels is the sole manager of and controls OpCo.

Immediately following the Business Combination, Verde Clean Fuels is the sole manager of OpCo and controls the same.

Prior to the Business Combination, and up to the Closing Date, 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.

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The results of operations for an interim period may not give a true indication of results for a full year.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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, and 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 plants, as well as expand production at future commercial production plants, is subject to many risks beyond its control, including regulatory developments, construction risks, and global and regional macroeconomic developments.

The Company's ability to deploy its STG+® technology is 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, and the availability and ability to obtain the necessary financing for the construction and development of projects.

The Company’s ability to operate and/or provide services to commercial production plants that utilize the STG+® technology is subject to many risks beyond its control, including regulatory developments, construction risks, and global and regional macroeconomic developments.

Use of Estimates

The preparation of unaudited condensed consolidated financial statements in conformity with U.S.

The preparation of the unaudited condensed consolidated financial statements in conformity with U.S.

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 unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

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All intercompany balances and transactions have been eliminated in consolidation.

Statements of Operations

The Company’s general and administrative expenses primarily consist of compensation costs including salaries, benefits and share-based compensation expense for personnel in executive, finance, accounting, and other administrative functions.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company has not generated any revenue to date.

The Company expects that future revenue generation opportunities would result from capital-lite opportunities to deploy its STG+® technology.

Such opportunities include licensing technology and providing engineering, technical, and operational services.

General and Administrative Expenses

General and administrative expenses primarily consist of compensation costs including salaries, benefits and share-based compensation expense for personnel in executive, finance, accounting, and other administrative functions.

General and administrative expenses also include outside service costs, such as legal fees, professional fees paid for accounting, auditing and consulting services, and insurance costs.

Research and development expenses consist primarily of activities related to the Company’s technology that are not capitalized, including labor (engineers and consultants), engineering software costs, and demonstration plant operations and maintenance costs.

Other income is primarily related to interest and dividend income earned from the Company’s cash balances and money market investments, which are included within cash and cash equivalents in the unaudited Condensed Consolidated Balance Sheets.

Cash, Cash Equivalents and Restricted Cash

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents.

Cash equivalents 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.

The Company also has a restricted cash balance that is included in the determination of cash and restricted cash in the unaudited Condensed Consolidated Statements of Cash Flows.

See Note 7 for further information.

Concentration of Credit Risk

Research and Development Expenses

Research and development expenses primarily consist of activities related to the Company’s technology that are not capitalized, including labor (engineers and consultants), engineering software costs, and demonstration plant operations and maintenance costs.

Other income primarily consists of interest and dividend income earned from the Company's cash and cash equivalents.

Cash and Cash Equivalents

Cash and cash equivalents include bank deposits as well as short-term, highly liquid investments with original maturities of three months or less.

Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in financial institutions, which, at times, may exceed the Federal Deposit Insurance Corporation (“FDIC”) limit of $ 250 .

Additionally, the Company’s investments held in a short-term money market fund are not guaranteed by the FDIC.

As of September 30, 2025 and December 31, 2024, the Company had not experienced losses on these accounts, and management believes the Company is not exposed to significant risks on such accounts.

As of March 31, 2026, the Company had not experienced losses on these accounts, and management believes the Company is not exposed to significant risks on such accounts.

Restricted Cash

The Company has restricted cash, which is maintained in support of a letter of credit.

See Note 8 for further information.

Accounts Receivable – Other

Accounts receivable – other primarily consists of amounts to be reimbursed to the Company from Cottonmouth in connection with the terms of the joint development agreement (“JDA”) between the Company and Cottonmouth.

Accounts receivable – other primarily consists of costs reimbursable by Cottonmouth in accordance with the joint development agreement (“JDA”) between the Company and Cottonmouth.

See Notes 3 and 5 for further information.

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Measurement of Credit Losses on Financial Instruments”, the Company’s accounts receivable are required to be presented at the net amount expected to be collected through an allowance for credit losses that are expected to occur over the life of the remaining life of the asset, rather than incurred losses.

The Company considers the amounts due from Cottonmouth to be fully collectible and, accordingly, there was no allowance for credit losses recorded by the Company as of September 30, 2025 and December 31, 2024.

The Company considers the amounts due from Cottonmouth to be fully collectible and, accordingly, there was no allowance for credit losses recorded by the Company as of March 31, 2026 and December 31, 2025.

Other Current Assets

As of December 31, 2024, other current assets included $ 470 of deferred equity issuance costs in connection with the Company’s issuance of shares of its Class A common stock to Cottonmouth in January 2025.

There were no deferred equity issuance costs as of September 30, 2025, as deferred equity issuance costs were recorded within additional paid-in capital for the nine months ended September 30, 2025 as a reduction to the proceeds received from the issuance of the Class A common stock to Cottonmouth.

Other current assets primarily consist of prepaid expenses.

There were no deferred equity issuance costs as of March 31, 2026 and December 31, 2025 as the deferred equity issuance costs were recorded within additional paid-in capital for the year ended December 31, 2025 as a reduction to the proceeds received from the issuance of the Company's Class A common stock to Cottonmouth.

See Note 3 for further information.

Prepaid expenses are also included within other current assets.

Fair Value of Financial Instruments

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures” (“ASC 820”), approximates the carrying amounts represented in the Condensed Consolidated Balance Sheets, primarily due to their short-term nature.

The fair values of cash, restricted cash, cash equivalents, receivables, prepaid expenses, accounts payable and accrued expenses are estimated to approximate their respective carrying values as of September 30, 2025 and December 31, 2024 due to the short-term maturities of such instruments.

The fair value of the Company’s assets and liabilities, which qualify as financial instruments under Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures” (“ASC 820”), approximates the carrying amounts represented in the unaudited condensed consolidated balance sheets, primarily due to their short-term nature.

The fair values of cash, restricted cash, cash equivalents, receivables, prepaid expenses, accounts payable and accrued expenses are estimated to approximate their respective carrying values as of March 31, 2026 and December 31, 2025 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.

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Diluted loss per share of Class A common stock is computed by dividing net loss attributable to Class A common stockholders by the weighted-average number of shares of Class A common stock outstanding adjusted to give effect to potentially dilutive securities.

Antidilutive instruments, including outstanding warrants, stock options, certain restricted stock units (“RSUs”) and Sponsor earn out shares, were excluded from diluted earnings per share for the three and nine months ended September 30, 2025 and 2024 because the inclusion of such instruments would be anti-dilutive.

Antidilutive instruments, including outstanding warrants, stock options, certain restricted stock units (“RSUs”) and Sponsor earn out shares, were excluded from diluted earnings per share for the three months ended March 31, 2026 and 2025 because the inclusion of such instruments would be anti-dilutive.

As a result, diluted net loss per share of common stock is the same as basic net loss per share of common stock for all periods presented.

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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 September 30, 2025 and December 31, 2024.

There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of March 31, 2026 and December 31, 2025.

The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.

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Fair value is determined primarily using the estimated cash flows discounted at a rate commensurate with the risk involved.

During the three and nine months ended September 30, 2025 and 2024, the Company did not record any impairment charges.

See Notes 4 and 5 for further information.

Intangible Assets

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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.

During the three and nine months ended September 30, 2025 and 2024, the Company did not record any impairment charges.

Following our analysis of qualitative impairment indicators, intellectual property is tested for impairment using certain valuation methods, such as the discounted cash flow or relief-from-royalty methods.

If the fair value of an indefinite-lived intangible asset is less than its carrying amount, an impairment loss is recognized equal to the difference.

See Note 4 for further information.

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 a liability to make lease payments (the lease liability) and a right-of-use asset (“ROU asset”) representing the lessee’s right to use, or control the use of, 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 Condensed Consolidated Balance Sheets.

In accordance with the guidance of ASC 842, leases are classified as finance or operating leases, and both types of leases are recognized in the unaudited condensed consolidated balance sheets.

Certain lease arrangements may contain renewal options.

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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:

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;

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• volatility is based on the volatility of various publicly traded peer companies.

The Company does not anticipate paying cash dividends and therefore uses an expected dividend yield of zero.

The Company currently uses an expected dividend yield of zero.

The Company also assesses whether or not a discount for lack of marketability is applied based on certain liquidity factors.

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Following the Business Combination, holders of Class A common stock own a direct controlling interest in the results of the Company, while Holdings own an economic interest in the Company, which is presented as noncontrolling interest (“NCI”).

NCI is classified as permanent equity within the Condensed Consolidated Balance Sheets.

NCI is classified as permanent equity within the unaudited condensed consolidated balance sheets.

Income or loss is attributed to NCI based on their contractual distribution rights and the relative percentages of equity interests held during the period.

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Recent Accounting Standards

In December 2023, the FASB issued ASU 2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures” (“ASU 2023-09”).

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 the unaudited condensed consolidated financial statements.

In March 2024, the SEC issued Release No.

33-11275, “The Enhancement and Standardization of Climate-Related Disclosures for Investors”, which will mandate detailed disclosure of certain climate-related information, including, among other items, material climate-related risks and related governance, strategy and risk management processes, certain financial statement disclosures, and Scopes 1 and 2 greenhouse gas emissions, if material, for certain public companies.

In April 2024, the SEC issued an administrative stay of the implementation of Release No.

33-11275, pending judicial review.

Prior to the stay, the required disclosures were subject to a phased compliance timeline, with initial disclosures for non-accelerated filers and smaller reporting companies commencing with the fiscal year beginning January 1, 2027.

In addition, in February 2025, the SEC ended its legal defense of Release No.

33-11275 and it is unclear when Release No.

33-11275 will become effective, if ever.

Furthermore, in June 2025, the SEC issued a notice that it was withdrawing several proposed rulemakings, including the SEC’s 2022 proposal titled “Enhanced Disclosures by Certain Investment Advisers and Investment Companies About Environmental, Social, and Governance Investment Practices.” The Company is currently monitoring the status of Release No.

33-11275 and is evaluating the impact that the release would have on the unaudited condensed consolidated financial statements.

In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) – Disaggregation of Income Statement Expenses” (“ASU 2024-03”), which requires additional disclosure about specified categories of expenses included in relevant expense captions presented on the income statement.

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There are no other accounting pronouncements which have been issued but are not yet effective that would have a material impact on the unaudited condensed consolidated financial statements when adopted.

NOTE 3 – RELATIONSHIP WITH COTTONMOUTH AND PERMIAN BASIN PROJECT

Cottonmouth is the Company’s second largest shareholder.

and is a wholly-owned subsidiary of Diamondback, 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.

As of September 30, 2025, the Company and Cottonmouth are advancing development activities related to the Permian Basin Project, including the FEED study (each as defined below).

See Notes 1, 4 and 6 for further information.

NOTE 3 – COTTONMOUTH AND PERMIAN BASIN PROJECT

The Company’s second largest stockholder is Cottonmouth.

Cottonmouth is a wholly-owned subsidiary of Diamondback, 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.

See Note 1 for further information.

Initial Investment

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Permian Basin Project

In February 2024, Verde and Cottonmouth entered into a JDA, which provides a pathway forward for the proposed development, construction, and operation of a natural gas-to-gasoline plant in the Permian Basin utilizing Verde’s STG+® technology and associated natural gas from Diamondback’s operations (the “Permian Basin Project”).

In February 2024, Verde and Cottonmouth entered into a JDA related to the proposed development, construction, and operation of a natural gas-to-gasoline plant in the Permian Basin utilizing Verde’s STG+® technology and associated natural gas from Diamondback’s operations (the “Permian Basin Project”).

The JDA frames the contracts contemplated to be entered into between the parties and outlines the conditions precedent for the parties to enter into definitive documents and achieve final investment decision (“FID”) to proceed with the Permian Basin Project.

The JDA conditions precedent include finalizing applicable project contracts, obtaining necessary permits, obtaining project financing on terms satisfactory to each party, and receiving FID by each party.

In June 2024, the Company 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 June 2024, the Company entered into a contract with Chemex Global, LLC (“Chemex”), a Shaw Group company (“Shaw”), 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, the Company began to incur development costs with respect to the project.

Under the terms of the JDA, 65 % of the approved development costs incurred by the Company (which include costs associated with the FEED study) are reimbursed by Cottonmouth.

The FEED study was completed in December 2025.

On February 6, 2026, the Company announced the suspension of development of the Permian Basin Project primarily as a result of changing market conditions driven by increasing demand for natural gas in the Permian Basin.

For the year ended December 31, 2025, the Company recorded an impairment of property, plant and equipment of $ 3,936 , which represented the full value of the Company's construction in progress assets.

See Notes 1, 4, 5 and 7 for further information.

Second Investment

In December 2024, the Company entered into a Class A common stock purchase agreement (the “Purchase Agreement”) with Cottonmouth pursuant to which the Company agreed to issue and sell to Cottonmouth in a private placement an aggregate of 12,500,000 shares of its Class A common stock, par value $ 0.0001 , at a price of $ 4.00 per share for an aggregate purchase price of $ 50,000 (the “PIPE Investment”).

In December 2024, the Company entered into a Class A common stock purchase agreement (the “Purchase Agreement”) with Cottonmouth pursuant to which the Company agreed to issue and sell to Cottonmouth in a private placement an aggregate of 12,500,000 shares of its Class A common stock at a price of $ 4.00 per share for an aggregate purchase price of $ 50,000 (the “PIPE Investment”).

Closing of the PIPE Investment occurred on January 29, 2025.

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.

In connection with the closing of the PIPE Investment, on January 29, 2025, (i) Cottonmouth and the Company amended 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 a 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.

Additionally, in connection with the consummation of the transactions contemplated by the Purchase Agreement, the Company amended and restated its fourth amended and restated certificate of incorporation (the “Restated Charter”).

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The Restated Charter was approved and recommended by the Board prior to stockholder action by written consent.

NOTE 4 – IMPAIRMENTS

Long-Lived Assets

As of December 31, 2025, the Company evaluated the recoverability of its construction in progress (“CIP”) assets associated with the Permian Basin Project as a result of changing market conditions driven by increasing demand for natural gas in the Permian Basin.

The Company determined that such factors that ultimately led to the suspension of the Permian Basin Project in February 2026 were present as of December 31, 2025.

The Company further determined that the carrying value of its CIP assets related to the Permian Basin Project were not likely to be recoverable.

The Company determined the fair value of its CIP assets using a Level 3 non-recurring fair value measurement based on the Company’s estimate of the assets’ remaining fair value, considering the suspension of the Permian Basin Project and the limited alternative use of the underlying assets.

Accordingly, for the year ended December 31, 2025, the Company recorded an impairment of $ 3,936 , representing 100 % of the carrying value of its CIP assets, reducing the carrying value of such assets to zero as of December 31, 2025.

See Notes 1, 3 and 5 for further information.

Intangible Assets

As of December 31, 2025, the Company also evaluated the recoverability its intellectual property (“IP”) intangible assets in light of changing market conditions driven by increasing demand for natural gas in the Permian Basin.

The Company determined that changing market conditions related to natural gas in the Permian Basin were specific to a particular feedstock and region whereas its IP assets that support the STG+® technology can be applied to produce fully finished liquid fuels from diverse feedstocks in various regions where low-value or stranded feedstocks may be present.

The Company further determined that the fair value of its IP assets exceeded its carrying value and did not record an impairment.

NOTE 5 – PROPERTY, PLANT AND EQUIPMENT

The Company's major classes of property, plant and equipment are as follows:

(in thousands) As of

September 30,

2025 December 31,

Construction in progress, net $ 3,316 $ 1,029

(in thousands) March 31, 2026 December 31, 2025

Computers, office equipment and hardware 41 42

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Property, plant and equipment, net $ 57 $ 62

As of September 30, 2025, the Company’s construction in progress assets were comprised of $ 9,293 of capitalized development costs (which include costs associated with the FEED study) related to the Permian Basin Project, net of $ 5,977 of costs reimbursable by Cottonmouth in accordance with the JDA.

For the year ended December 31, 2025, the Company recorded an impairment for the full value of its CIP assets.

Prior to the impairment, the Company's CIP assets were comprised of capitalized development costs (which include costs associated with the FEED study) related to the Permian Basin Project, net of costs reimbursable by Cottonmouth in accordance with the JDA.

See Notes 1, 4 and 7 for further information.

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The Company’s accrued liabilities are as follows:

(in thousands) As of

September 30, 2025 December 31, 2024

(in thousands) March 31, 2026 December 31, 2025

Accrued compensation $ 468 $ 468

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Accrued professional fees 226 120

Accrued excise tax liability - 978

Accrued income taxes 91 -

Accrued franchise taxes 50 40

Other accrued expenses - 8

Total accrued liabilities $ 786 $ 906

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 occurring on or after January 1, 2023.

The excise tax is imposed on the repurchasing corporation itself, not its stockholders 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.

As of December 31, 2024, the Company had recorded an accrual for an excise tax liability of $ 978 .

During the nine months ended September 30, 2025, the accrued excise tax liability was paid in full.

NOTE 7 – RELATED PARTY TRANSACTIONS

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See Notes 1 and 3 for further information.

In June 2024, the Company entered into a contract with Chemex, a Shaw Group company, for a FEED study related to the Permian Basin Project.

Also in June 2024, the parent organization of Holdings, through a separate subsidiary, made an unrelated preferred equity investment in the Shaw Group and, in connection with the investment, Jonathan Siegler, a Company director, was appointed as a director of the Shaw Group.

The Company’s construction in progress assets are comprised of capitalized development costs related to the Permian Basin Project, net of amounts reimbursable by Cottonmouth in accordance with the JDA.

As of September 30, 2025, the Company’s construction in progress assets were primarily related to costs associated with the FEED study.

In June 2024, the Company entered into a contract with Chemex, a Shaw company, for a FEED study related to the Permian Basin Project.

Also in June 2024, the parent organization of Holdings, through a separate subsidiary, made an unrelated preferred equity investment in Shaw and, in connection with the investment, Jonathan Siegler, a Company director, was appointed as a director of Shaw.

The FEED study was completed in December 2025;

however, the Permian Basin Project was suspended in February 2026.

See Notes 1, 3 and 5 for further information.

Five Star Clean Fuels

A subsidiary of the Company is a party to a letter agreement with Five Star Clean Fuels LLC, formerly known as Arb Clean Fuels Management LLC (“FSCF”).

The letter agreement purports to grant FSCF certain non-exclusive rights to utilize the STG+® technology and reflects an intent to enter into mutually acceptable to be negotiated agreements related to a potential site in Odessa, Texas.

As of September 30, 2025, there have been no material developments with respect to this arrangement, nor has the Company received any consideration from FSCF or incurred any material expense in connection therewith.

Martijn Dekker, a Company director, is an officer and director of FSCF and his affiliate has an ownership interest in FSCF.

A subsidiary of the Company is a party to a letter agreement with Five Star Clean Fuels LLC, formerly known as Arb Clean Fuels Management LLC (“Five Star Clean Fuels”).

The letter agreement purports to grant Five Star Clean Fuels certain non-exclusive rights to utilize the STG+® technology and reflects an intent to enter into mutually acceptable to be negotiated agreements related to a potential site in Odessa, Texas.

Martijn Dekker, a Company director, is an officer and director of Five Star Clean Fuels and his affiliate has an ownership interest in Five Star Clean Fuels.

See Note 8 for further information.

NOTE 8 – COMMITMENTS AND CONTINGENCIES

The Company leases office space and other office equipment under operating lease arrangements with initial terms greater than 12 months.

The office lease in Hillsborough, New Jersey was extended until 2026.

In August 2023, the Company entered into a 40-month office lease in Houston, Texas which commenced in November 2023.

Office space is leased to provide adequate workspace for all employees.

The Company’s operating leases are as follows:

The Company leases its office in Houston, Texas and its office and demonstration plant in Hillsborough, New Jersey.

The Company's lease for its office in Houston is through February 2027.

During the three months ended March 31, 2026, the Company extended its lease for its office and demonstration plant in Hillsborough, New Jersey through April 30, 2027.

See Note 1 for further information.

For the three months ended March 31, 2026 and 2025, the Company determined that the rent portion of such leases qualified as an operating lease under ASC 842.

For the three months ended March 31, 2026 and 2025, the Company had expenses related to its operating leases as follows:

(in thousands) Statements of Operations Three Months Ended

September 30, Nine Months Ended

September 30,

Lease Cost Classification 2026 2025

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Total operating lease cost $ 156 $ 142

Supplemental information related to the Company’s operating lease arrangements are as follows:

(in thousands) Nine Months Ended

September 30,

For the three months ended March 31, 2026 and 2025, supplemental information related to the Company’s operating lease arrangements are as follows:

(in thousands) Three Months Ended

Operating lease – supplemental information 2026 2025

ROU assets obtained in exchange for operating lease $ 365 $ 309

Remaining lease term – operating leases 0.8 years 1.4 years

Weighted average remaining lease term – operating leases 1.1 years 1.3 years

Discount rate – operating leases 7.50 % 7.50 %

As of September 30, 2025 and December 31, 2024, the Company had restricted cash of $ 100 .

The Company's restricted cash is maintained in support of a letter of credit.

As of March 31, 2026 and December 31, 2025, the Company had restricted cash of $ 100 .

See Note 2 for further information.

Contingencies

As of September 30, 2025 and December 31, 2024, the Company was not party to any litigation and has not recorded any contingent liabilities.

On February 27, 2026, Five Star Clean Fuels filed an original petition against the Company seeking a declaratory judgment that a letter agreement between a subsidiary of the Company and a predecessor of Five Star Clean Fuels constituted a binding contract that effectuates a grant to Five Star Clean Fuels of certain non-exclusive rights to utilize the STG+® technology.

The petition primarily seeks non-monetary relief other than court costs and attorney fees.

The Company intends to defend its position against the claim.

At this time, the Company is unable to reasonably estimate a possible financial loss or range of financial loss, if any, that may be incurred to resolve this matter.

As of March 31, 2026 and December 31, 2025, the Company had not recorded any contingent liabilities.

NOTE 9 – STOCKHOLDERS' EQUITY

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As consideration for the contribution of the equity interests in Intermediate, Holdings received earn out consideration (“Holdings earn out”) 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 earn out 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.

One half of the Holdings earn out 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.

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The Earn Out Equity was issued in connection with the Business Combination on February 15, 2023.

Holdings earn out shares are neither issued nor outstanding as of September 30, 2025 as the performance requirements for vesting were not achieved.

All Sponsor Shares granted in connection with the Business Combination were issued and outstanding as of September 30, 2025 and December 31, 2024.

Holdings earn out shares are neither issued nor outstanding as of March 31, 2026 as the performance requirements for vesting were not achieved.

All Sponsor Shares granted in connection with the Business Combination were issued and outstanding as of March 31, 2026 and December 31, 2025.

Sponsor Shares subject to forfeiture pursuant to the above terms that do not vest in accordance with such terms shall be forfeited.

Based on the trading price of the Company's Class A common stock, the market conditions were not met and no shares of Earn Out Equity were vested as of March 31, 2026.

Share-based Compensation

The Company records compensation expense related to share-based compensation arrangements within general and administrative expenses.

The total compensation expense incurred related to the Company’s equity-based compensation plans was $ 632 and $ 1,543 for the three and nine months ended September 30, 2025, respectively, and was $ 401 and $ 912 for the three and nine months ended September 30, 2024, respectively.

No related income tax benefits were recognized during the three and nine months ended September 30, 2025 and 2024.

For the three months ended March 31, 2026 and 2025, the Company had share-based compensation expense of $ 597 and $ 417 , respectively.

Stock Options

On June 2, 2025, the Company awarded additional stock options to certain employees and officers and to non-employee directors, consistent with the terms of the 2023 Plan.

The stock options granted in 2025 have an exercise price of $ 4.76 per share and will expire 7 years from the date of grant.

Stock options granted to employees and executive officers will 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.

Stock options granted to non-employee directors will vest one year from the date of grant, subject to continued service through the vesting date.

The fair value of stock options granted during 2025 was $ 1.43 per option for options granted to both employees and officers and to non-employee directors.

The fair value of stock options granted in 2025 was determined using the following assumptions as of the grant date:

Risk-free interest rate 4.5 %

Expected term 3.5 years

Volatility 40 %

Dividend yield zero

Discount for lack of marketability zero

During the nine months ended September 30, 2025, the Company had changes in stock options as follows:

During the three months ended March 31, 2026, the Company had changes in stock options as follows:

options Weighted

4 unchanged sentences

Forfeited / expired ( 645,242 ) $ 5.68 -

Outstanding as of September 30, 2025 5,921,656 $ 6.47 5.9

Unvested as of September 30, 2025 4,483,397 $ 5.93 6.1

Exercisable as of September 30, 2025 820,253 $ 5.99 5.7

As of September 30, 2025, there were 4,927,397 options granted to employees and officers outstanding, of which 3,929,700 were unvested, and 994,259 options granted to non-employee directors outstanding, of which 553,697 were unvested.

See Note 2 for further information.

Outstanding as of March 31, 2026 5,276,414 $ 6.57 5.0

Unvested as of March 31, 2026 3,641,089 $ 5.94 5.6

Exercisable as of March 31, 2026 965,457 $ 5.86 4.1

As of March 31, 2026, there were 4,282,155 options granted to employees and officers outstanding, of which 3,087,392 were unvested, and 994,259 options granted to non-employee directors outstanding, of which 553,697 were unvested.

As of March 31, 2026, unrecognized compensation expense related to unvested stock options was $ 3,331 , and the remaining compensation cost is expected to be recognized over a weighted-average period of 1.7 years.

For the three months ended March 31, 2026 and 2025, there was no cash received from the exercise of stock options.

As of March 31, 2026, there was no intrinsic value for all stock option awards.

See Notes 2 and 11 for further information.

In April 2023, the Company granted 141,656 RSUs to non-employee directors.

1 unchanged sentence

In May 2024, the Company settled 120,824 of the vested RSUs through issuance of 120,824 shares of Class A common stock.

As of September 30, 2025, the Company has not yet settled 20,832 of the vested RSUs, as the awardee elected to defer receipt.

As of March 31, 2026, the Company has not yet settled 20,832 of the vested RSUs, as the awardee elected to defer receipt.

The Company includes the vested and deferred RSUs within weighted-average shares outstanding for the computation of basic and diluted loss per share.

For the three months ended March 31, 2026 and 2025, the Company did not record any RSU compensation expense.

See Notes 2 and 11 for further information.

11 unchanged sentences

In connection with the Closing of the Business Combination, all of the outstanding and unvested Series A Incentive Units and Founder Incentive Units became fully vested.

For the year ended December 31, 2023, the Company accelerated the remaining share-based payment expense for the Series A Incentive Units and recorded such expense in general and administrative expenses.

For the years ended December 31, 2025, 2024 and 2023, the Company did not record additional share-based compensation expense for the Founder Incentive Units as certain conditions had not been met.

The Company continues to evaluate the conditions related to the Founder Incentive Units.

As of September 30, 2025, such conditions continue to not have been met.

See Note 6 for further information.

As of March 31, 2026, such conditions continue to not have been met.

See Notes 1 and 7 for further information.

NOTE 10 – WARRANTS

There were 15,383,263 warrants outstanding as of September 30, 2025 (the “Warrants”).

There were 15,383,263 warrants outstanding as of March 31, 2026 (the “Warrants”).

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.

11 unchanged sentences

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.

No Warrants were exercised during the three and nine months ended September 30, 2025 and 2024.

During the three months ended March 31, 2026 and 2025, no Warrants were exercised.

NOTE 11 – LOSS PER SHARE

2 unchanged sentences

Three Months Ended

September 30, Nine Months Ended

September 30,

(in thousands, except share and per share amounts) 2026 2025

8 unchanged sentences

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 Class A common stock during the period, because their inclusion would result in an anti-dilutive effect on per share amounts.

As of September 30, 2025, the Company has not yet settled 20,832 of the vested RSUs, as the awardee elected to defer receipt.

As of March 31, 2026, the Company has not yet settled 20,832 of the vested RSUs, as the awardee elected to defer receipt.

The Company includes the vested and deferred RSUs within weighted-average shares outstanding for the computation of basic and diluted loss per share.

See Notes 8 and 10 for further information.

See Note 9 for further information.

The following amounts were not included in the calculation of net loss per diluted share for the periods presented because their effects were anti-dilutive:

As of September 30,

As of March 31,

(in shares) 2026 2025

Warrants 15,383,263 15,383,263

7 unchanged sentences

Noncontrolling Interests

As of December 31, 2024, the ownership interests of the Class A common stockholders and the NCI were 29.80 % and 70.20 %, respectively.

As of September 30, 2025, the ownership interests of the Class A common stockholders and the NCI were 49.49 % and 50.51 %, respectively.

The change in ownership interests was due to the issuance of Class A common stock to Cottonmouth during the nine months ended September 30, 2025.

As of March 31, 2026 and December 31, 2025, the ownership interests of the Class A common stockholders and the NCI were 49.49 % and 50.51 %, respectively.

The ownership interests reflects the issuance of the Company's Class A common stock to Cottonmouth during the year ended December 31, 2025.

See Note 3 for further information.

NOTE 12 – INCOME TAX

As of September 30, 2025, the Company holds 49.49 % of the economic interest in OpCo, which is treated as a partnership for U.S.

As of March 31, 2026, the Company holds 49.49 % of the economic interest in OpCo, which is treated as a partnership for U.S.

federal income tax purposes.

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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.

The Company’s effective tax rate was ( 4.7 )% and ( 1.7 )% for the three and nine months ended September 30, 2025, respectively, and was 0.0 % and 0.2 % for the three and nine months ended September 30, 2024, respectively.

For the three months ended March 31, 2026 and 2025, the Company’s effective tax rate was ( 2.0 )%.

The effective income tax rates for each period differed significantly from the statutory rate primarily due to the losses allocated to NCI and the recognition of a valuation allowance as a result of the Company’s tax structure.

The Company has assessed the realizability of its net deferred tax assets and 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.

As of September 30, 2025, the Company has maintained a full valuation allowance against its deferred tax assets, which will be maintained until there is sufficient evidence to support the reversal of all or some portion of the allowance.

As of March 31, 2026, the Company has maintained a full valuation allowance against its deferred tax assets, which will be maintained until there is sufficient evidence to support the reversal of all or some portion of the allowance.

The Company’s income tax filings will be subject to audit by various taxing jurisdictions.

2 unchanged sentences

Federal, state and local income tax returns are currently under examination by the respective taxing authorities.

On July 4, 2025, the “One Big, Beautiful Bill Act” (“OBBBA”) was signed into federal law.

The OBBBA included multiple provisions applicable to U.S.

On July 4, 2025, the “One Big, Beautiful Bill Act” (“OBBB Act”) was signed into federal law.

The OBBB Act included multiple provisions applicable to U.S.

income tax for businesses, including bonus depreciation for qualified tangible property, immediate expensing of research expenditures, and updates to the calculation of disallowed interest.

For the three and nine months ended September 30, 2025, the Company recognized the provisions of the OBBBA, which did not have a material impact on the unaudited condensed consolidated financial statements.

The Company is continuing to evaluate the potential benefits of the provisions of the OBBBA to its projects, including the Permian Basin Project.

For the three months ended March 31, 2026, the Company recognized the provisions of the OBBB Act in determining its income tax expense, including immediate expensing of research expenditures.

Tax Receivable Agreement

On the Closing Date, in connection with the consummation of the Business Combination and as contemplated by the Business Combination Agreement, the Company 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, the Company 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 the Company actually realizes (computed using certain simplifying assumptions) or is deemed to realize in certain circumstances in periods after the Closing Date as a result of, as applicable to each such TRA Holder, (i) certain

increases in tax basis that occur as a result of the Company’s 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 the Company as a result of, and additional tax basis arising from, any payments the Company makes under the Tax Receivable Agreement.

Pursuant to the Tax Receivable Agreement, the Company is required to pay each TRA Holder 85 % of the amount of realized tax benefit, if any, in 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 the Company as a result of, and additional tax basis arising from, any payments the Company makes under the Tax Receivable Agreement.

The Company will retain the benefit of the remaining 15 % of these net cash savings.

1 unchanged sentence

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 September 30, 2025 and December 31, 2024, the Company did not record a tax receivable balance.

As of March 31, 2026 and December 31, 2025, the Company did not record a tax receivable liability.

NOTE 13 - SEGMENT INFORMATION

3 unchanged sentences

The Company’s segment reporting is consistent with its internal reporting to its CODM.

The operating loss of the segment is the same as the Company’s consolidated operating loss as reported in the unaudited condensed consolidated statements of operations.

The measure of segment assets is reported in the Company’s unaudited condensed consolidated balance sheets as total assets.

The following table presents information about the Company’s significant expenses.

A significant segment expense is an expense that is significant to the segment considering qualitative and quantitative factors, regularly provided or easily computed from information regularly provided to the CODM and is included in the reported measure of segment profit or loss.

The Company’s significant expenses are aggregated and presented as general and administrative and research and development financial statement line items on the unaudited Condensed Consolidated Statements of Operations.

The Company’s significant expenses are aggregated and presented as general and administrative and research and development financial statement line items in the unaudited condensed consolidated statements of operations.

Other segment items represent the difference between reported significant segment expenses and consolidated operating loss.

Significant segment expenses and other segment items are reviewed by the CODM on a disaggregated basis as follows:

Three Months Ended Nine Months Ended

(in thousands) September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024

For the three months ended March 31, 2026 and 2025, the Company's operating loss by significant segment expenses were as follows:

Three Months Ended

(in thousands) March 31, 2026 March 31, 2025

Outside services $ 819 $ 1,248

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NOTE 14 – SUBSEQUENT EVENTS

The Company evaluated subsequent events and transactions that occurred after the balance sheet date, up to the date which the consolidated financial statements were issued.

The Company evaluated subsequent events and transactions that occurred after the balance sheet date, up to the date which the unaudited condensed consolidated financial statements were issued.

There were no subsequent events or transactions.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements