8-K: XCF Global Secures Up To $7.5 Million in Convertible Note Financing

XCF Global, Inc. has entered into a Convertible Note Purchase Agreement to raise up to $7.5 million, with an initial closing of $2.0 million, involving significant share issuance for principal, interest, and fees.

Summary

• XCF Global, Inc. (the Company) entered into a Convertible Note Purchase Agreement with EEME Energy SPV I LLC to issue and sell up to $7.5 million in aggregate principal amount of convertible promissory notes.
• An initial closing for $2.0 million in principal amount of notes was consummated on July 29, 2025.
• The Company will pay an upfront interest equal to 13.3% of the principal amount of the applicable notes, which will be settled through the issuance of Class A Common Stock (Interest Payment Conversion Shares) in lieu of cash payments.
• The Company also agreed to pay an arrangement fee of 750,000 shares and an advisory fee of 200,000 shares of its Class A Common Stock to EEME Energy.
• The conversion price for the initial closing notes and related interest is calculated as 90% of the average Volume Weighted Average Price (VWAP) over the five trading days ending on the conversion or issuance date.
• For any subsequent closings, the conversion price will be 95% of the average VWAP over the five trading days ending on the conversion or issuance date.
• Based on an illustrative $1.76 per share VWAP, the initial $2.0 million principal conversion would result in 1,262,620 shares, and the $266,000 interest payment would result in 167,930 shares.
• Total shares issuable at the initial closing, including principal, interest, arrangement, and advisory fees, amount to 2,380,550 shares.
• EEME Energy SPV I LLC is affiliated with Majique Ladnier, who is also the sole member of two existing Company shareholders, GL Part SPV I, LLC and GL Part SPV II, LLC (together, the GL Entities).
• On a pro forma basis, after giving effect to the total shares issuable at the time of conversion, EEME Energy and the GL Entities collectively hold 28,499,605 shares of the Company's Class A Common Stock, representing approximately 18.3% of the Company's issued and outstanding shares.

Sentiment

Score: 6

Explanation: The company successfully secured a significant convertible note financing, providing necessary capital. However, the terms involve substantial potential dilution from share conversions for principal, interest, and fees, and the transaction involves a related party who will gain significant influence. While capital is secured, the cost of capital in terms of dilution and governance impact warrants a neutral to slightly positive sentiment.

Positives

• Secured up to $7.5 million in financing, providing capital for operations or strategic initiatives.
• The initial $2.0 million capital infusion strengthens immediate liquidity.
• Interest payments are settled via share conversion, preserving cash resources.

Negatives

• Significant potential for dilution due to the issuance of shares for principal conversion, interest, arrangement fees, and advisory fees.
• The conversion price for notes is at a discount (10% for initial, 5% for subsequent) to the 5-day average VWAP, which could lead to more shares being issued for the same principal amount.
• The transaction involves a related party (EEME Energy SPV I LLC, affiliated with Majique Ladnier), who, along with existing affiliated entities, will collectively hold approximately 18.3% of the Class A Common Stock on a pro forma basis, potentially exerting significant influence.
• The notes are general unsecured obligations of the Company.

Risks

• Dilution Risk: The issuance of Class A Common Stock upon conversion of notes and for fees will dilute the ownership of existing shareholders.
• Influence of Significant Shareholder: Majique Ladnier, through EEME Energy and GL Entities, may be able to exert significant influence over matters submitted to the Company's stockholders due to their collective 18.3% pro forma beneficial ownership.
• Unregistered Securities: The Notes and issuable shares have not been registered under the Securities Act, limiting their immediate liquidity for the holder and requiring specific exemptions for resale.
• Market Price Volatility: The conversion price is tied to VWAP, meaning more shares could be issued if the stock price declines, potentially exacerbating dilution.

Future Outlook

The Company has the option to conduct subsequent closings under the Convertible Note Purchase Agreement, potentially raising an additional $5.5 million in principal amount of convertible notes within one year of the agreement date, subject to mutual agreement with the Purchaser.

Management Comments

• Simon Oxley, Chief Financial Officer, signed the report on behalf of XCF Global, Inc.

Industry Context

This financing event reflects a common strategy for growth-oriented companies to secure capital through convertible debt, which allows for immediate funding while deferring cash interest payments and potentially converting debt to equity, aligning with broader market trends where companies seek flexible financing solutions.

Corporate Governance

Related Party Transactions

• EEME Energy SPV I LLC, the purchaser of the convertible notes, is an entity affiliated with Majique Ladnier.
• Majique Ladnier is also the sole member of two existing Company shareholders, GL Part SPV I, LLC and GL Part SPV II, LLC.
• On a pro forma basis, EEME Energy and the GL Entities collectively hold 28,499,605 shares, representing approximately 18.3% of the Company's issued and outstanding Class A Common Stock, giving Majique Ladnier potential significant influence.

Stakeholder Impact

• Shareholders: Potential for significant dilution due to the issuance of new shares for note conversion, interest payments, and fees. The increased beneficial ownership of a related party (Majique Ladnier) may concentrate voting power.
• Creditors: The convertible notes represent a direct financial obligation, though they are unsecured.

Next Steps

• Potential for subsequent closings to issue additional convertible notes up to the $7.5 million aggregate principal amount within one year of the agreement date.
• Issuance of Class A Common Stock upon conversion of notes and for interest payments at the holder's option or maturity.

Key Dates

Recommendation

While securing up to $7.5 million in financing is positive for XCF Global's liquidity and operational runway, the terms of the convertible notes introduce significant potential dilution for existing shareholders. The issuance of shares for principal, interest, and substantial fees, coupled with conversion prices at a discount to VWAP, could pressure the stock price. Furthermore, the increased influence of a related party (Majique Ladnier) through their pro forma 18.3% ownership introduces a governance consideration. Given the capital infusion balances against the dilutive and governance impacts, a 'hold' recommendation is appropriate, advising investors to monitor the company's use of funds and future dilution events.

Keywords

XCF Global, SAFX, Convertible Note, Financing, Capital Raise, SEC Filing, 8-K, Equity Dilution, Private Placement, EEME Energy, Corporate Finance, Share Issuance, Debt Financing