8-K: Focus Impact BH3 Acquisition Co. and XCF Global Capital Waive Key Conditions to Advance Business Combination

Focus Impact BH3 Acquisition Company and XCF Global Capital, Inc. have mutually agreed to waive several conditions precedent to their business combination, aiming to facilitate the closing of the merger.

Summary

• Focus Impact BH3 Acquisition Company (BHAC) and XCF Global Capital, Inc. (XCF) entered into a Waiver on June 5, 2025, to their Business Combination Agreement, originally dated March 11, 2024, and subsequently amended.
• The Waiver mutually agrees that certain conditions will not cause a failure of the business combination's closing conditions.
• Specifically, the waived conditions include the final composition of the NewCo board of directors, which will consist of six directors (four designated by XCF, one by BHAC, and one mutually independent director).
• Matters previously disclosed in BHAC's June 3, 2025 Form 8-K filing, concerning the Greater Nevada Credit Union Loan, Twain Ground Lease, and SAF Production, are also waived as conditions.
• The Waiver also addresses the Phillips 66 Company's right of first refusal on the Reno, Nevada production facility, stating that its non-permanent waiver will not impede closing.
• Furthermore, the non-execution of the Amended Key Agreement and the non-purchase of the Company Service Level Insurance Coverage prior to closing are waived conditions.
• Any changes or effects directly or indirectly attributable to these waived clauses (i)-(v) are also covered by the Waiver.

Sentiment

Score: 6

Explanation: The sentiment is moderately positive. While the waiver facilitates the closing of the business combination, which is a positive step, the underlying reasons for the waiver (unmet conditions, ongoing disputes) introduce a degree of caution and highlight unresolved issues that the combined entity will inherit.

Positives

• The mutual waiver of several conditions precedent removes potential obstacles, facilitating the consummation of the business combination between BHAC and XCF.
• The agreement on the NewCo board composition, even if different from original terms, provides clarity for post-merger governance.

Negatives

• The necessity of the waiver indicates that several key conditions, such as the execution of the Amended Key Agreement and the purchase of Company Service Level Insurance Coverage, were not met by the anticipated closing date.
• The ongoing nature of disputes related to the Greater Nevada Credit Union Loan and the Twain Ground Lease, as well as the non-permanent waiver of Phillips 66's right of first refusal, remain as underlying issues for the combined entity.

Risks

• Changes in domestic and foreign business, market, financial, political, and legal conditions could impact the business combination.
• The occurrence of any event, change, or circumstances that could lead to the termination of negotiations or agreements related to the business combination or XCF's offtake arrangements.
• Potential legal proceedings against Focus Impact, XCF, NewCo, or others.
• Inability of parties to successfully or timely close the business combination, including delays or unanticipated conditions for regulatory approvals.
• Changes to the proposed transaction structure due to applicable laws or regulations.
• Challenges in meeting stock exchange listing standards post-business combination.
• XCF's ability to integrate New Rise operations and implement its business plan on schedule.
• New Rise's ability to produce anticipated quantities of SAF without interruption or material changes.
• XCF's ability to resolve current disputes with New Rise's landlord regarding the ground lease for the Reno facility.
• XCF's ability to resolve current disputes with New Rise's primary lender regarding outstanding loans for the Reno facility development.
• Disruption to current plans and operations of Focus Impact or XCF due to the announcement and consummation of the proposed transactions.
• Challenges in recognizing anticipated benefits of the proposed transactions, affected by competition, NewCo's ability to grow profitably, maintain customer/supplier relationships, and retain key employees.
• Costs related to the proposed transactions.
• Changes in applicable laws or regulations, and risks related to extensive regulation, compliance obligations, and rigorous enforcement.
• Adverse effects from other economic, business, and/or competitive factors.
• Availability of tax credits and other federal, state, or local government support.
• Risks relating to XCF's and New Rise's key intellectual property rights.
• Various factors beyond management's control, including general economic conditions.

Future Outlook

The document includes forward-looking statements regarding Focus Impact's and XCF's expectations for future performance, anticipated financial impacts of the business combination, estimates and forecasts of financial and performance metrics, projections of market opportunity and share, and the satisfaction and timing of the business combination's closing. These statements are based on assumptions and are subject to risks and uncertainties that could cause actual results to differ materially.

Management Comments

• Carl Stanton, Chief Executive Officer of Focus Impact BH3 Acquisition Company, signed the Waiver on behalf of BHAC, NewCo, Merger Sub I, and Merger Sub II.
• Mihir Dange, Chief Executive Officer of XCF Global Capital, Inc., signed the Waiver on behalf of XCF.

Industry Context

This filing is typical for Special Purpose Acquisition Companies (SPACs) nearing the completion of their de-SPAC transaction, where procedural waivers are sometimes necessary to overcome unforeseen hurdles or unfulfilled conditions to facilitate the merger. The underlying business, XCF Global Capital, Inc., appears to be involved in Sustainable Aviation Fuel (SAF) production, a growing sector within the renewable energy industry.

Corporate Governance

Legal Proceedings

• The document mentions risks related to the 'outcome of any legal proceedings that may be instituted against Focus Impact, XCF, NewCo or others'.
• It also highlights XCF's ability to 'resolve current disputes between New Rise and its landlord with respect to the ground lease for the New Rise Reno facility'.
• Additionally, it notes XCF's ability to 'resolve current disputes between New Rise and its primary lender with respect to loans outstanding that were used in the development of the New Rise Reno facility'.

Stakeholder Impact

• Shareholders: The waiver aims to ensure the business combination proceeds, potentially impacting the value of their holdings in the combined entity. The underlying risks, however, could affect future performance.
• Employees: The successful closing of the merger will impact employees through integration processes and potential changes in corporate structure.
• Customers and Suppliers: The ability of the combined entity to maintain relationships with customers and suppliers is crucial for business continuity and growth.
• Creditors: The resolution of disputes with the primary lender (Greater Nevada Credit Union) and the status of loans will directly impact creditors.

Next Steps

• Consummation of the business combination between Focus Impact BH3 Acquisition Company and XCF Global Capital, Inc.

Key Dates

Keywords

Business Combination Agreement, Waiver, SPAC, Merger, XCF Global Capital, Focus Impact BH3 Acquisition Company, SEC Filing, Corporate Governance, Risk Management, SAF Production, Renewable Energy