Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended March 31, 2025, for Focus Impact BH3 NewCo, Inc. (NewCo), a Delaware corporation and wholly-owned subsidiary of Focus Impact BH3 Acquisition Company (FI BH3). NewCo was formed on March 6, 2024, solely to consummate a business combination with XCF Global Capital, Inc. (XCF). The company is classified as a shell company, an emerging growth company, and a smaller reporting company. It has no independent operating activities and relies entirely on its parent company for funding.
Key Financial Metrics
| Metric | Q1 2025 | Q1 2024 (Inception) |
|---|---|---|
| Revenue | $0 | $0 |
| Operating Costs | $16,100 | $2,953 |
| Net Loss | $(6,100) | $(2,953) |
| Cash and Cash Equivalents | $0 | $0 |
| Total Assets | $0 | $0 |
| Total Liabilities | $1,283,853 | $2,953 |
| Working Capital Deficit | $(1,283,853) | $(2,953) |
Debt and Liquidity: The company has no cash on hand. Total liabilities consist primarily of a $1,240,000 liability related to Non-Redemption Agreements (a derivative instrument), $39,453 in accounts payable, and $4,400 payable to the parent company. The filing explicitly states there are no sources of funding other than potential distributions from FI BH3.
Material Changes vs. Prior Period
- Operating Costs: Increased from $2,953 in the inception period (March 6–31, 2024) to $16,100 for the three months ended March 31, 2025.
- Net Loss: Net loss for the quarter was $(6,100), compared to $(2,953) in the prior period. The current quarter's loss was partially offset by a $10,000 gain from the change in fair value of the Non-Redemption Agreement.
- Liabilities: Total liabilities increased significantly to $1.28 million, driven by the fair value adjustment of the Non-Redemption Agreement liability, which decreased slightly from $1,250,000 at year-end 2024 to $1,240,000.
- Going Concern: The company continues to report substantial doubt about its ability to continue as a going concern without the consummation of the business combination.
Outlook, Risks, and Management Commentary
Business Combination Status: NewCo is in the final stages of a proposed merger with XCF Global Capital, Inc. The SEC declared the Form S-4 registration statement effective on February 5, 2025, and stockholders approved the transaction on February 27, 2025. Management expects to close the combination in the first half of 2025.
Extensions: The termination date for the business combination has been extended multiple times. As of the filing date, the termination date was extended to May 31, 2025 (via amendment on April 4, 2025) and May 7, 2025 (via stockholder vote on April 7, 2025), with provisions for further monthly extensions.
Risks and Contingencies:
- Liquidity Risk: The company has no cash and a significant working capital deficit. It cannot sustain operations for the next 12 months without additional financing or the closing of the business combination.
- Derivative Liability: The $1.24 million liability is tied to Non-Redemption Agreements. Its fair value is subject to significant judgment and volatility based on the probability of the business combination closing.
- Going Concern: If the business combination is not consummated by the termination date, the company faces mandatory liquidation and dissolution.
Investor Verification Checklist
- Closing Timeline: Verify if the business combination with XCF Global Capital, Inc. closes before the May 2025 termination deadlines.
- Reimbursable Expenses: Confirm that XCF is fulfilling its obligation to reimburse FI BH3/NewCo for transaction costs, as the company currently has no cash to pay its own operating expenses.
- Derivative Liability Valuation: Monitor the fair value of the Non-Redemption Agreement liability, as changes in the probability of the merger closing will directly impact the company's net loss and equity position.
- Extension Provisions: Track any further board resolutions or stockholder votes required to extend the termination date beyond May 2025.