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

Focus Impact BH3 Newco, Inc. and XCF Global Capital, Inc. have mutually agreed to waive several critical closing conditions for their business combination, including unresolved loan and lease disputes, and the lack of certain agreements and insurance coverage, to facilitate the merger.

Summary

• On June 5, 2025, Focus Impact BH3 Newco, Inc. (NewCo), a subsidiary of Focus Impact BH3 Acquisition Company (BHAC), and XCF Global Capital, Inc. (XCF) entered into a Waiver to their Business Combination Agreement.
• The Waiver allows the business combination to proceed despite several conditions precedent not being met, which would otherwise have prevented the closing.
• Key waived conditions include: the final composition of NewCo's board of directors, specific matters related to a Greater Nevada Credit Union Loan, a Twain Ground Lease, and SAF Production (as detailed in a June 3, 2025 8-K filing).
• Additionally, the waiver addresses the Phillips 66 Company's right of first refusal on the Reno, Nevada production facility not being permanently waived, the Amended Key Agreement not being executed, and the Company Service Level Insurance Coverage not being purchased prior to closing.
• The NewCo board of directors immediately after the merger will consist of six directors: four designated by XCF (Mihir Dange, Anne Anderson, Sanford Cockrell, Si-Yeon Kim), one by BHAC (Wray Thorn), and one independent director mutually designated (Carter McCain).

Sentiment

Score: 4

Explanation: The sentiment is moderately negative. While the waiver allows the business combination to proceed, it does so by overlooking several significant unfulfilled conditions and unresolved disputes (loan, lease, ROFR, key agreement, insurance). These issues represent substantial risks and potential liabilities that will transfer to the combined entity, indicating underlying challenges rather than a clean path forward.

Positives

• The mutual waiver of conditions indicates a strong commitment from both Focus Impact BH3 Newco and XCF Global Capital to complete the business combination, providing clarity on the deal's progression.
• The agreement on the post-merger board composition, including specific director designations, provides a clear governance structure for the combined entity.

Negatives

• The business combination is proceeding despite significant unresolved issues, including disputes related to a Greater Nevada Credit Union Loan and a Twain Ground Lease, which could pose financial and operational challenges post-merger.
• The Phillips 66 Company's right of first refusal on the Reno production facility has not been permanently waived, potentially limiting future strategic options for the facility.
• The Amended Key Agreement has not been executed, and the Company Service Level Insurance Coverage has not been purchased, introducing unmitigated risks and potential liabilities for the combined entity.

Risks

• Changes in domestic and foreign business, market, financial, political, and legal conditions could adversely affect the combined entity.
• The occurrence of any event, change, or circumstances that could lead to the termination of the business combination or XCF's offtake arrangements.
• Potential legal proceedings against Focus Impact, XCF, NewCo, or others.
• Inability to successfully or timely close the business combination, including delays or unanticipated conditions in regulatory approvals.
• Challenges in meeting stock exchange listing standards post-consummation of the business combination.
• XCF's ability to integrate New Rise's operations and implement its business plan on the anticipated timeline.
• New Rise's ability to produce anticipated quantities of SAF without interruption or material changes to the production process.
• XCF's ability to resolve current disputes between New Rise and its landlord regarding the ground lease for the Reno facility.
• XCF's ability to resolve current disputes between New Rise and its primary lender concerning outstanding loans for the Reno facility's 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 the anticipated benefits of the proposed transactions, affected by competition, growth management, customer/supplier relationships, and employee retention.
• 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 parties anticipate the consummation of the business combination, with expectations for future performance and financial impacts. However, these forward-looking statements are subject to significant risks and uncertainties, including the ability to integrate operations, resolve ongoing disputes, and achieve anticipated SAF production quantities. The combined entity will need to address the waived conditions post-closing.

Management Comments

• Carl Stanton, Chief Executive Officer of Focus Impact BH3 Acquisition Company and Focus Impact BH3 Newco, Inc., signed the waiver on behalf of BHAC and NewCo.
• Mihir Dange, Chief Executive Officer of XCF Global Capital, Inc., signed the waiver on behalf of XCF.

Industry Context

This filing relates to a SPAC (Special Purpose Acquisition Company) business combination in the renewable fuels sector, specifically involving Sustainable Aviation Fuel (SAF) production. The challenges highlighted, such as ground lease disputes, lender issues, and the need for specific agreements and insurance, are common in large-scale industrial projects, particularly in emerging energy sectors that require significant capital and complex operational setups.

Management Changes

Corporate Governance

Legal Proceedings

• The document mentions the outcome of any legal proceedings that may be instituted against Focus Impact, XCF, NewCo, or others as a risk factor.
• It specifically 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.
• It also 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 facilitates the closing of the business combination, which could be seen positively for deal certainty, but the unresolved issues (loans, leases, ROFR, insurance) introduce significant post-merger risks that could impact future share value.
• **Employees:** The completion of the merger will likely lead to integration efforts, potentially affecting employees of both Focus Impact and XCF/New Rise.
• **Customers & Suppliers:** The successful integration and resolution of operational issues (like SAF production and facility disputes) are critical for maintaining relationships and ensuring continuity of supply and service.
• **Creditors:** The ongoing disputes with the Greater Nevada Credit Union and other primary lenders for the Reno facility could impact the combined entity's financial stability and creditworthiness.

Next Steps

• Consummation of the business combination between BHAC/NewCo and XCF Global Capital.
• Resolution of the Greater Nevada Credit Union Loan and Twain Ground Lease disputes by XCF/New Rise post-closing.
• Execution of the Amended Key Agreement post-closing.
• Purchase of the Company Service Level Insurance Coverage post-closing.
• Integration of New Rise's operations and implementation of its business plan.

Key Dates

Keywords

Business Combination Agreement, Waiver, SEC Filing, Form 8-K, SPAC, Merger, Focus Impact BH3 Acquisition Company, XCF Global Capital, NewCo, Renewable Fuels, SAF Production, Corporate Governance, Risk Factors, Phillips 66, Greater Nevada Credit Union, Twain Ground Lease