Business Context and Reporting Period
XCF Global, Inc. (SAFX) filed its Quarterly Report on Form 10-Q for the period ended June 30, 2026. The Company is an emerging growth company focused on the production of Sustainable Aviation Fuel (SAF) and renewable fuels. Its primary operating asset is the New Rise Reno facility in Nevada, which is currently in a ramp-up phase. The Company recently terminated its supply and offtake agreement with Phillips 66 (P66) effective May 1, 2026, and has entered into a new tolling agreement with BGN INT US, LLC. The Company is also pursuing a proposed tri-party merger with DevvStream Corp. and Southern Energy Renewables, Inc.
Key Financial Metrics
| Metric | Six Months Ended June 30, 2026 | Six Months Ended June 30, 2025 |
|---|---|---|
| Revenue | $1,039,569 | $6,576,232 |
| Net Loss | $(31,945,434) | $102,800,908 (Net Income) |
| Loss from Operations | $(16,093,624) | $(40,283,826) |
| Cash and Cash Equivalents | $329,084 | $410,891 |
| Total Current Liabilities | $250,934,098 | $249,014,438 |
| Working Capital | $(238,351,910) | Not Reported |
| Notes Payable (Current Portion) | $124,245,105 | $121,915,613 |
| Financial Liability (Long-term) | $132,825,754 | $132,806,188 |
Margin Analysis: The Company reported a gross loss of $(36,050) for the six months ended June 30, 2026, compared to a gross loss of $(1,235,070) in the prior year period. Operating expenses totaled $16,057,574 for the current period.
Material Changes vs. Prior Period
- Revenue Decline: Revenue decreased by approximately 84% year-over-year, dropping from $6.58 million to $1.04 million. This is primarily due to the termination of the Phillips 66 agreement in May 2026 and the cessation of environmental credit sales.
- Net Loss vs. Net Income: The Company swung from a net income of $102.8 million in the prior year to a net loss of $31.9 million. The prior year income was significantly inflated by a non-cash gain of $206.2 million from the change in fair value of warrant liabilities. The current period reflects a loss of $6.3 million on warrant liabilities.
- Inventory Build-up: Inventory increased significantly from $337,971 to $7,361,147, driven by the capitalization of raw materials ($6.37 million) following the termination of the P66 agreement and changes in title transfer accounting.
- Accounts Receivable: Accounts receivable dropped from $24.55 million to $1.71 million, largely due to a $1.66 million bad debt write-off associated with the Phillips 66 termination.
Guidance, Outlook, Risks, and Contingencies
Going Concern: Management has concluded that there is substantial doubt about the Company's ability to continue as a going concern for the next twelve months. This is due to recurring operating losses, a significant working capital deficit, and reliance on future financing or revenue generation from the New Rise Reno facility.
Outlook and Operations:
- The New Rise Reno facility is expected to resume SAF production as early as the fourth quarter of 2026. Currently, it is producing renewable diesel.
- The Company is actively seeking financing to refinance the Greater Nevada Credit Union (GNCU) loan and the Twain Ground Lease, both of which are in default.
- A proposed business combination with Southern Energy Renewables and DevvStream Corp. is pending, subject to closing conditions including revenue and EBITDA targets.
Material Risks and Contingencies:
- Debt Defaults: The Company is in default on its GNCU loan (approx. $32.5 million required to cure) and the Twain Ground Lease (approx. $34.3 million required to cure). Acceleration of these debts could result in foreclosure or cessation of operations.
- Phillips 66 Dispute: The Company is in settlement discussions regarding the termination of the P66 agreement. Disputes remain regarding the title to feedstock and amounts owed.
- Legal Proceedings: Former executives (CEO, CSO, CMO) have filed arbitration claims contesting separation agreements.
- Internal Controls: The Company disclosed material weaknesses in internal controls over financial reporting, including lack of journal entry review and segregation of duties.
Investor Verification Checklist
- Liquidity Runway: Verify the status of the Company's cash balance ($329k) against immediate debt obligations and the timeline for closing the proposed merger or securing new bridge financing.
- Debt Restructuring: Confirm the terms of any forbearance agreements or refinancing deals with GNCU and Twain GL XXVIII, LLC to assess the risk of asset foreclosure.
- Phillips 66 Settlement: Monitor the resolution of the feedstock title dispute and potential liability exposure from the terminated offtake agreement.
- Merger Conditions: Review the specific closing conditions for the Southern Energy/DevvStream transaction, particularly the revenue and EBITDA targets required by June 30, 2026.
- Production Ramp-up: Validate the timeline for the New Rise Reno facility to reach nameplate capacity for SAF production and the commercial viability of the new BGN tolling agreement.