Business Context and Reporting Period
This Form 8-K, filed on May 30, 2025, by Focus Impact BH3 NewCo, Inc. (NewCo) on behalf of XCF Global, Inc. (XCF), details critical developments regarding a pending business combination with Focus Impact BH3 Acquisition Company (BHAC). The filing addresses the extension of the transaction deadline, new financing arrangements, significant defaults on existing debt and lease obligations, and executive personnel changes.
Key Financial Metrics and Capital Structure
The filing does not provide standard revenue, profit, or cash flow statements for a reporting period. Instead, it outlines specific debt instruments and liquidity events:
- Equity Line of Credit (ELOC): NewCo entered an agreement with Helena Global Investment Opportunities I Ltd to issue up to $50,000,000 of Class A Common Stock post-combination.
- Helena Note: A new promissory note for a gross principal of $2,000,000 with $400,000 in interest, due within three months of disbursement or upon a financing event.
- GL Notes:
- February 2025 Note: Gross principal $1.2 million (net proceeds $1.0 million), interest $0.2 million.
- April 2025 Note: Gross principal $2.5 million, interest $0.3 million.
- Innovativ Media Notes: Gross principal $0.5 million, original interest $0.1 million, plus an additional one-time interest payment of $60,000 (12%).
- Narrow Road Note: Gross principal $700,000, interest $140,000.
- Cribb Note: Gross principal $250,000, interest $50,000.
- Greater Nevada Credit Union (GNCU) Loan: Aggregate principal outstanding of $112,580,000 secured by the Reno SAF facility. As of May 15, 2025, the amount required to cure the default is approximately $19.3 million (principal and interest), excluding $2.1 million in penalties.
- Twain Ground Lease: As of May 15, 2025, the amount required to cure the default is $18.5 million ($13.3 million in lease payments and $5.6 million in late fees/penalties).
Material Changes and Operational Status
Business Combination Extension: The Termination Date for the Business Combination Agreement with BHAC was extended from May 31, 2025, to June 30, 2025.
Production Status: The Reno facility began SAF production in February 2025, producing 1 million gallons of neat SAF and renewable naphtha. However, the facility is currently operating at approximately 50% capacity for SAF. Management has temporarily switched to producing renewable diesel at nameplate capacity (approx. 3,000 barrels per day) to optimize operations. SAF production is expected to resume in or before Q3 2025.
Debt Defaults:
- GNCU Loan: An event of default was declared on March 28, 2025, due to missed minimum monthly payments. GNCU demanded cure by May 27, 2025, which has not been met.
- Ground Lease: Twain GL XXVIII, LLC declared a default on April 18 and April 30, 2025, due to missed lease payments. Immediate payment was demanded but not received.
Outlook, Risks, and Management Commentary
Financing Strategy: XCF is in active discussions with GNCU and Twain to seek forbearance or modified payment schedules. The company is evaluating financing alternatives to refinance the GNCU Loan and Ground Lease obligations to resume full SAF production.
Material Risks:
- Operational Cessation: If GNCU or Twain exercise foreclosure or possessory remedies, operations at the Reno facility could cease temporarily or permanently, materially impairing revenue generation.
- Financing Uncertainty: There is no assurance that XCF can resolve the defaults or secure sufficient financing to refinance the $112.6 million loan and lease obligations.
- Production Delays: Delays in resuming SAF production beyond Q3 2025 or failure to reach full capacity will adversely affect revenues and profitability.
Personnel Changes:
- Appointments: Pamela M. Abowd appointed Chief Accounting Officer; Jonathan Seeley appointed Vice President, Treasurer. Gregory Surette and Gregory Savarese received stock addendums.
- Departures: Joseph Cunningham (former CAO/Director) and Stephen Goodwin (former CBO/Director) retired and resigned effective April 2025, receiving separation packages including cash and stock.
Investor Verification Checklist
- Verify the status of negotiations with GNCU and Twain regarding the $19.3 million loan default and $18.5 million lease default.
- Confirm the timeline and feasibility of resuming SAF production in Q3 2025 versus continued renewable diesel production.
- Assess the likelihood of closing the business combination with BHAC by the new June 30, 2025 deadline given the current liquidity constraints.
- Review the terms of the new $50 million ELOC and $2 million Helena Note to understand dilution and repayment triggers.
- Monitor for any acceleration of debt or foreclosure actions that could result in the loss of the Reno production facility.