Delaware | 001-40868 | 86-2249068 |
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification Number) |
1345 Avenue of the Americas, 33rd Floor, New York, NY | 10105 | |
(Address of principal executive offices) | (Zip Code) |
☒ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
Units, each consisting of one share of Class A Common Stock and one-half of one Warrant | BHACU | The Nasdaq Stock Market LLC | ||
Class A Common Stock, par value $0.0001 per share | BHAC | The Nasdaq Stock Market LLC | ||
Warrants, each whole warrant exercisable for one share of Class A Common Stock at an exercise price of $11.50 | BHACW | The Nasdaq Stock Market LLC |
Item 1.01 | Entry into a Material Definitive Agreement. |
(i) | BHAC will merge with and into Merger Sub 1, with Merger Sub 1 being the surviving entity of the NewCo Merger as a direct wholly owned subsidiary of NewCo, and (x) each share of BHAC’s Class A common stock, par value $0.0001 per share (“BHAC Class A Common Stock”) outstanding immediately prior to the effectiveness of the NewCo Merger will be converted into the right to receive one share of NewCo’s Class A common stock, par value $0.0001 per share (“NewCo Common Stock”), (y) each share of BHAC’s Class B common stock, par value $0.0001 per share (“BHAC Class B Common Stock”), outstanding immediately prior to the effectiveness of the NewCo Merger will be converted into the right to receive one share of NewCo Common Stock, and (z) each warrant of BHAC outstanding immediately prior to the effectiveness of the NewCo Merger will be converted into the right to receive one warrant of NewCo (the “NewCo Warrants”), with NewCo assuming BHAC’s rights and obligations under the existing warrant agreement; and |
(ii) | immediately following the NewCo Merger, Merger Sub 2 will merge with and into XCF, with XCF being the surviving corporation of the Company Merger as a direct wholly owned subsidiary of NewCo, and each share of common stock of XCF outstanding immediately prior to the effectiveness of the Company Merger will be converted into the right to receive shares of NewCo Common Stock determined in accordance with the Business Combination Agreement based on a pre-money equity value of XCF of $1,750,000,000, subject to adjustments for net debt and transaction expenses, and a price of $10.00 per share of NewCo Common Stock. |
(i) | the members of XCF management party to the Management Support Agreements have also agreed that they will not transfer shares of NewCo Common Stock held by such parties until the earlier of (x) twelve months after the Closing and (y) the date on which NewCo (or its successor) completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of NewCo’s (or such successor’s) stockholders having the right to exchange their securities for cash, securities or other property; provided that such transfer restrictions will lapse prior to their expiration upon the occurrence of certain events, including the closing price of the shares of NewCo Common Stock equaling or exceeding $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period commencing at least 150 days after the Closing; |
(ii) | each of the XCF stockholders party to the Company Support Agreements and the party to the GL Support Agreement have also agreed that with respect to 90% of shares of NewCo Common Stock held by such parties (the “Lock-up Shares”), they will not transfer such Lock-up Shares until the earlier of (x) twelve months after the Closing and (y) the date on which NewCo (or its successor) completes a liquidation, merger, capital stock exchange, reorganization or other similar transaction that results in all of NewCo’s (or such successor’s) stockholders having the right to exchange their securities for cash, securities or other property; provided that such transfer restrictions will lapse prior to their expiration upon the occurrence of certain events, including the closing price of the shares of NewCo Common Stock equaling or exceeding $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period commencing at least 150 days after the Closing; provided, further, that such parties may transfer (A) on or after 90 days following the first quarterly earnings release published following the Closing, 10% of the Lock-up Shares, (B) on or after 180 days following the closing date of the Business Combination, 30% of the Lock-up Shares and (C) on or after 360 days following the closing date of the Business Combination, 60% of the Lock-up Shares; and |
(iii) | the Soule Support Agreement does not contain any lock-up restrictions following the Closing. |
Item 7.01 | Regulation FD Disclosure. |
Item 9.01. | Financial Statements and Exhibits. |
(d) | Exhibits. |
Exhibit No. | Description | |
Business Combination Agreement dated as of March 11, 2024 | ||
Sponsor Letter Agreement dated as of March 11, 2024 | ||
Soule Support Agreement dated as of March 11, 2024 | ||
10.3 | GL Support Agreement dated as of March 11, 2024 | |
10.4 | Form of Company Support Agreement | |
10.5 | Form of Management Support Agreement | |
Joint Press Release dated as of March 12, 2024 | ||
Investor Presentation, dated March 2024 | ||
Investor Fact Sheet | ||
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
FOCUS IMPACT BH3 ACQUISITION COMPANY | ||
By: | /s/ Carl Stanton | |
Name: | Carl Stanton | |
Title: | Chief Executive Officer |
Page | |||
ARTICLE 1 CERTAIN DEFINITIONS | 4 | ||
Section 1.1 | Definitions | 4 | |
ARTICLE 2 TRANSACTIONS | 24 | ||
Section 2.1 | Closing Transactions | 24 | |
Section 2.2 | Effective Times of the Mergers; Effects of the Mergers | 26 | |
Section 2.3 | Closing | 29 | |
Section 2.4 | Deliverables | 29 | |
Section 2.5 | Withholding | 30 | |
Section 2.6 | Closing Statement | 31 | |
ARTICLE 3 REPRESENTATIONS AND WARRANTIES RELATING TO THE GROUP COMPANIES | 31 | ||
Section 3.1 | Organization and Qualification | 32 | |
Section 3.2 | Capitalization of the Group Companies | 33 | |
Section 3.3 | Authority | 34 | |
Section 3.4 | Financial Statements; Undisclosed Liabilities | 34 | |
Section 3.5 | Consents and Requisite Governmental Approvals; No Violations | 36 | |
Section 3.6 | Permits | 37 | |
Section 3.7 | Material Contracts | 37 | |
Section 3.8 | Absence of Changes | 40 | |
Section 3.9 | Litigation | 40 | |
Section 3.10 | Compliance with Applicable Law | 41 | |
Section 3.11 | Employee Plans | 41 | |
Section 3.12 | Environmental Matters | 43 | |
Section 3.13 | Intellectual Property | 44 | |
Section 3.14 | Labor Matters | 48 | |
Section 3.15 | Insurance | 50 | |
Section 3.16 | Tax Matters | 50 | |
Section 3.17 | Real and Personal Property | 52 | |
Section 3.18 | Transactions with Affiliates | 55 | |
Section 3.19 | Equipment and Other Tangible Property | 55 | |
Section 3.20 | Product Warranties; Product Liability | 55 | |
Section 3.21 | Data Privacy and Security | 56 | |
Section 3.22 | Compliance with International Trade & Anti-Corruption Laws | 56 | |
Section 3.23 | Brokers | 57 | |
Section 3.24 | Information Supplied | 58 | |
Section 3.25 | Government Contracts | 58 | |
Section 3.26 | Investigation; No Other Representations | 58 | |
Section 3.27 | EXCLUSIVITY OF REPRESENTATIONS AND WARRANTIES | 59 | |
ARTICLE 4 REPRESENTATIONS AND WARRANTIES RELATING TO BHAC PARTIES | 59 | ||
Section 4.1 | Organization and Qualification | 60 | |
Section 4.2 | Authority | 60 |
Section 4.3 | Consents and Requisite Governmental Approvals; No Violations | 60 | |
Section 4.4 | Brokers | 61 | |
Section 4.5 | Information Supplied | 61 | |
Section 4.6 | Capitalization of the BHAC Parties | 61 | |
Section 4.7 | SEC Filings | 63 | |
Section 4.8 | Trust Account | 63 | |
Section 4.9 | Transactions with Affiliates | 64 | |
Section 4.10 | Litigation | 64 | |
Section 4.11 | Compliance with Applicable Law | 64 | |
Section 4.12 | Business Activities | 64 | |
Section 4.13 | Internal Controls; Listing; Financial Statements | 65 | |
Section 4.14 | No Undisclosed Liabilities | 66 | |
Section 4.15 | Compliance with International Trade & Anti-Corruption Laws | 67 | |
Section 4.16 | Tax Matters | 67 | |
Section 4.17 | Investigation; No Other Representations | 68 | |
Section 4.18 | EXCLUSIVITY OF REPRESENTATIONS AND WARRANTIES | 69 | |
ARTICLE 5 COVENANTS | 69 | ||
Section 5.1 | Conduct of Business of the Group Companies | 69 | |
Section 5.2 | Efforts to Consummate; Litigation | 75 | |
Section 5.3 | Confidentiality and Access to Information | 76 | |
Section 5.4 | Public Announcements | 77 | |
Section 5.5 | Exclusive Dealing | 78 | |
Section 5.6 | Preparation of Registration Statement / Proxy Statement | 79 | |
Section 5.7 | BHAC Shareholder Approval | 80 | |
Section 5.8 | Shareholder Approvals of NewCo, Merger Sub 1 and Merger Sub 2 | 80 | |
Section 5.9 | Conduct of Business of BHAC | 80 | |
Section 5.10 | Listing | 82 | |
Section 5.11 | Trust Account | 83 | |
Section 5.12 | Company Equityholder Written Consent | 83 | |
Section 5.13 | BHAC Indemnification; Directors’ and Officers’ Insurance | 83 | |
Section 5.14 | Employee Benefits Matters | 84 | |
Section 5.15 | Company Indemnification; Directors’ and Officers’ Insurance | 85 | |
Section 5.16 | Post-Closing Directors and Officers | 86 | |
Section 5.17 | PCAOB Financials | 87 | |
Section 5.18 | NewCo Equity Incentive Plan | 87 | |
Section 5.19 | Treatment of Existing Indebtedness | 87 | |
Section 5.20 | Further Assurances | 88 | |
Section 5.21 | Financing | 88 | |
Section 5.22 | SAF Production | 89 | |
Section 5.23 | Registration Rights Agreement | 90 | |
Section 5.24 | Employment Agreements and Certain IP Assignments | 90 | |
Section 5.25 | Company Service Level Insurance Coverage | 90 | |
Section 5.26 | Certain Related Party Contracts | 91 | |
ARTICLE 6 TAX MATTERS | 91 | ||
Section 6.1 | Certain Tax Matters | 91 |
ARTICLE 7 CONDITIONS TO CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT | 92 | ||
Section 7.1 | Conditions to the Obligations of the Parties | 92 | |
Section 7.2 | Other Conditions to the Obligations of BHAC Parties | 93 | |
Section 7.3 | Other Conditions to the Obligations of the Company | 94 | |
Section 7.4 | Frustration of Closing Conditions | 95 | |
ARTICLE 8 TERMINATION | 95 | ||
Section 8.1 | Termination | 95 | |
Section 8.2 | Effect of Termination | 96 | |
ARTICLE 9 MISCELLANEOUS | 97 | ||
Section 9.1 | Non-Survival | 97 | |
Section 9.2 | Entire Agreement; Assignment | 97 | |
Section 9.3 | Amendment | 97 | |
Section 9.4 | Notices | 97 | |
Section 9.5 | Governing Law | 98 | |
Section 9.6 | Fees and Expenses; Expense Reimbursement | 98 | |
Section 9.7 | Construction; Interpretation | 99 | |
Section 9.8 | Exhibits and Schedules | 100 | |
Section 9.9 | Parties in Interest | 100 | |
Section 9.10 | Severability | 100 | |
Section 9.11 | Counterparts; Electronic Signatures | 101 | |
Section 9.12 | Knowledge of Company; Knowledge of BHAC | 101 | |
Section 9.13 | No Recourse | 101 | |
Section 9.14 | Extension; Waiver | 101 | |
Section 9.15 | Waiver of Jury Trial | 102 | |
Section 9.16 | Submission to Jurisdiction | 102 | |
Section 9.17 | Remedies | 103 | |
Section 9.18 | Trust Account Waiver | 103 |
ANNEXES AND EXHIBITS | |
Annex A | Supporting Company Equityholders |
Exhibit A | Form of Sponsor Letter Agreement |
Exhibit B | Form of Company Support Agreement |
REPRESENTATIONS AND WARRANTIES RELATING TO BHAC PARTIES
COVENANTS
TAX MATTERS
CONDITIONS TO CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT
TERMINATION
MISCELLANEOUS
(a) | If to the Company, to: | |
XCF Global Capital, Inc. | ||
160 Spear Street |
San Francisco, CA 94105 | |||
Attention: | Mihir Dange | ||
E-mail: | [***] | ||
with a copy (which shall not constitute notice) to: | |||
Stradley Ronon Stevens & Young, LLP | |||
2600 One Commerce Square | |||
Philadelphia, PA 19103 | |||
Attention: | Thomas Hanley | ||
Christopher Connell | |||
E-mail: | [***] | ||
(b) | If to any BHAC Party, to: | ||
Focus Impact BH3 Acquisition Company | |||
1345 Avenue of the Americas, 33rd Floor | |||
New York, NY 10105 | |||
Attention: | Carl Stanton, CEO | ||
Email: | [***] | ||
with a copy (which shall not constitute notice) to: | |||
Kirkland & Ellis LLP | |||
300 North LaSalle | |||
Chicago, IL 60654 | |||
Attention: | Lauren M. Colasacco, P.C. | ||
Peter Seligson, P.C. | |||
E-mail: | [***] |
FOCUS IMPACT BH3 ACQUISITION COMPANY | ||
By: | /s/ Carl Stanton |
Name: | Carl Stanton | |
Title: | Chief Executive Officer | |
FOCUS IMPACT BH3 NEWCO, INC. | ||
By: | /s/ Carl Stanton |
Name: | Carl Stanton | |
Title: | Chief Executive Officer | |
FOCUS IMPACT BH3 MERGER SUB 1, LLC | ||
By: | /s/ Carl Stanton |
Name: | Carl Stanton | |
Title: | Chief Executive Officer | |
FOCUS IMPACT BH3 MERGER SUB 2, INC. | ||
By: | /s/ Carl Stanton |
Name: | Carl Stanton | |
Title: | Chief Executive Officer |
XCF GLOBAL CAPITAL, INC. | ||
By: | /s/ Mihir Dange |
Name: | Mihir Dange | |
Title: | Chief Executive Officer |
Notices to SPAC, NewCo or the Sponsor and, following the Closing, the Company: | with a copy to (which shall not constitute notice): |
Focus Impact BH3 Acquisition Company 1345 Avenue of the Americas, 33rd Floor New York, NY 10105 Attention: Carl Stanton Email: [***] | Kirkland & Ellis LLP 601 Lexington Avenue New York, NY 10022 Attention: Lauren M. Colasacco, P.C. Peter Seligson, P.C. |
E-mail: [***] |
SPAC: | ||
FOCUS IMPACT BH3 ACQUISITION COMPANY | ||
By: | /s/ Carl Stanton | |
Name: | Carl Stanton | |
Title: | Authorized Signatory | |
NEWCO: | ||
FOCUS IMPACT BH3 NEWCO, INC. | ||
By: | /s/ Carl Stanton | |
Name: | Carl Stanton | |
Title: | Authorized Signatory | |
SPONSOR: | ||
FOCUS IMPACT BHAC SPONSOR, LLC | ||
By: | /s/ Carl Stanton | |
Name: | Carl Stanton | |
Title: | Authorized Signatory |
1. | If the Company solicits approval of its stockholders of a Business Combination, the undersigned will vote all shares of Common Stock beneficially owned by it, whether acquired before, in or after the IPO, in favor of such Business Combination. |
2. | In the event that the Company does not complete a Business Combination within the time period set forth in the Company’s amended and restated certificate of incorporation, as the same may be further amended from time to time (the “Charter”), the undersigned will, as promptly as possible, take all necessary actions to cause the Company to (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible, but not more than 10 business days thereafter, redeem the IPO Shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of the then outstanding IPO Shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidation distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining stockholders and the Company’s board of directors, liquidate and dissolve, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law. The undersigned hereby waives any and all right, title, interest or claim of any kind in or to any distribution of the Trust Account and any remaining net assets of the Company as a result of such liquidation with respect to the Founder Shares owned by the undersigned. However, if the undersigned has acquired IPO Shares in or after the IPO, it will be entitled to liquidating distributions from the Trust Account with respect to such IPO Shares in the event that the Company does not complete a Business Combination within the time period set forth in the Charter. In the event of the liquidation of the Trust Account, the undersigned agrees that it will be liable to the Company if and to the extent any claims by a third party (other than the Company’s independent registered public accounting firm) for services rendered or products sold to the Company, or a prospective target business with which the Company has discussed entering into a transaction agreement, reduce the amount of funds in the Trust Account to below the lesser of (i) $10.10 per IPO Share and (ii) the actual amount per IPO Share held in the Trust Account as of the date of the liquidation of the Trust Account, if less than $10.10 per IPO Share due to reductions in the value of the assets in the Trust Account, in each case less interest that may be withdrawn to pay the Company’s tax obligations, if any; provided that such liability will not apply to any claims by a third party or prospective target business who executed a waiver of any and all rights to the monies held in the Trust Account (whether or not such waiver is enforceable) nor will it apply to any claims under the Company’s obligation to indemnify the Underwriters against certain liabilities, including liabilities under the Securities Act of 1933, as amended, pursuant to the Underwriting Agreement. The undersigned acknowledges and agrees that there will be no distribution from the Trust Account with respect to any Warrants, all rights of which will terminate on the Company’s liquidation. |
3. | The undersigned acknowledges and agrees that prior to entering into a definitive agreement for a Business Combination with a target business that is affiliated with the undersigned or any other Insiders of the Company or their affiliates, such transaction must be approved by a majority of the Company’s disinterested independent directors and the Company must obtain an opinion from an independent investment banking firm, which is a member of the Financial Industry Regulatory Authority, or an independent accounting firm that such Business Combination is fair to the Company’s unaffiliated stockholders from a financial point of view. |
4. | Neither the undersigned nor any affiliate of the undersigned will be entitled to receive and will not accept any compensation or other cash payment from the Company prior to, or for services rendered in order to effectuate, the completion of the Business Combination; provided that the Company shall be allowed to make the payments set forth in the Registration Statement adjacent to the caption “Prospectus Summary—The Offering—Limited payments to insiders.” |
5. | (a) The undersigned agrees not to Transfer the Founder Shares (or any shares of Common Stock issuable upon conversion thereof) (except to certain permitted transferees as described in the Registration Statement or herein) (the “Lockup”) until the earlier to occur of: (1) one year after the completion of the Company’s initial Business Combination or (2) subsequent to the Company’s initial Business Combination, (x) if the last reported sale price of Common Stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock capitalizations reorganizations, recapitalizations and the like) for any 20 trading days within any 30-trading day period commencing at least 150 days after the Company’s initial Business Combination or (y) the date on which the Company completes a liquidation, merger, capital stock exchange or other similar transaction that results in all of the Company’s public stockholders having the right to exchange their shares of common stock for cash, securities or other property. |
(b) Notwithstanding the provisions set forth in paragraphs 5(a) and 5(c), during the period commencing on the effective date of the Underwriting Agreement and ending 180 days after such date, the undersigned will not, without the prior written consent of the Representatives pursuant to the Underwriting Agreement, (i) sell, offer to sell, contract or agree to sell, hypothecate, pledge, hedge or otherwise dispose of or agree to dispose of (or enter into any transaction that is designed to, or might reasonably be expected to, result in the disposition (whether by actual disposition or effective economic disposition due to cash settlement or otherwise) by the undersigned or any affiliate of the undersigned or any person in privity with the undersigned or any affiliate of the undersigned), directly or indirectly, including the filing (or participation in the filing) of a registration statement with the Securities and Exchange Commission (the “SEC”) in respect of, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) and the rules and regulations of the SEC promulgated thereunder with respect to, any Units, shares of Common Stock, Founder Shares or Warrants or any securities convertible into, or exercisable, or exchangeable for, shares of Common Stock owned by it, him or her, (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Units, shares of Common Stock, Founder Shares, Warrants or any securities convertible into, or exercisable, or exchangeable for, shares of Common Stock owned by it, him or her, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (iii) publicly announce any intention to effect any transaction, including the filing of a registration statement, specified in clause (i) or (ii). The provisions of this paragraph will not apply (i) to the transfer of Founder Shares to any independent director appointed or elected to the Company’s board of directors before or after the IPO or (ii) if the release or waiver is effected solely to permit a transfer not for consideration and, in each case the transferee has agreed in writing to be bound by the same terms described in this Letter Agreement to the extent and for the duration that such terms remain in effect at the time of the transfer. |
(c) The undersigned agrees not to Transfer any Private Placement Warrants (or shares of Common Stock issued or issuable upon the exercise of the Private Placement Warrants), until 30 days after the completion of the Company’s initial Business Combination. |
(d) Notwithstanding the provisions set forth in paragraphs 5(a) and (c), Transfers by the undersigned of the Founder Shares, Private Placement Warrants and shares of Common Stock issued or issuable upon the exercise of the Private Placement Warrants or conversion of the Founder Shares are permitted (i) to the Company’s officers or directors, any affiliates or family members of any of the Company’s officers or directors, any members of the undersigned or their affiliates, any affiliates of the undersigned, or any employees of such affiliates; (ii) in the case of an individual, by gift to a member of the individual’s immediate family or to a trust, the beneficiary of which is a member of one of the individual’s immediate family, an affiliate of such person or to a charitable organization; (iii) in the case of an individual, by virtue of laws of descent and distribution upon death of the individual; (iv) in the case of an individual, pursuant to a qualified domestic relations order; (v) by private sales or transfers made in connection with the completion of the Business Combination at prices no greater than the price at which the Founder Shares, Private Placement Warrants or shares of Common Stock, as applicable, were originally purchased; (vi) by virtue of the laws of the State of Delaware or the undersigned’s organizational documents upon liquidation or dissolution of the undersigned; (vii) to the Company for no value for cancellation in connection with the completion of the Business Combination; (viii) in the event of the Company’s liquidation prior to the completion of a Business Combination; or (ix) in the event of completion of a liquidation, merger, share exchange or other similar transaction which results in all of the Company’s public stockholders having the right to exchange their shares of Common Stock for cash, securities or other property subsequent to the completion of a Business Combination; provided, however, that in the case of clauses (i) through (vi) these permitted transferees must enter into a written agreement agreeing to be bound by the restrictions herein. For the avoidance of doubt, the transfers of Founder Shares, Private Placement Warrants and shares of Common Stock issued or issuable upon the exercise of the Private Placement Warrants or conversion of the Founder Shares shall be permitted regardless of whether a filing under Section 16(a) of the Exchange Act shall be required or shall be voluntarily made with respect to such transfers. |
6. | The Sponsor hereby agrees and acknowledges that: (i) the Underwriters and the Company would be irreparably injured in the event of a breach by the Sponsor of its obligations under paragraphs 1, 2, 3, 4, 5, 8, 9 and 10 of this Letter Agreement, (ii) monetary damages may not be an adequate remedy for such breach and (iii) the non-breaching party shall be entitled to seek injunctive relief, in addition to any other remedy that such party may have in law or in equity, in the event of such breach. |
7. | The undersigned has full right and power, without violating any agreement by which it is bound, to enter into this Letter Agreement. |
8. | To the extent that the Underwriters do not exercise their over-allotment option to purchase up to an additional 3,000,000 Units within 45 days from the date of the Prospectus (and as further described in the Prospectus), the Sponsor agrees to forfeit, at no cost, a number of Founder Shares in the aggregate equal to 750,000 multiplied by a fraction, (i) the numerator of which is 3,000,000 minus the number of Units purchased by the Underwriters upon the exercise of their over-allotment option, and (ii) the denominator of which is 3,000,000. The forfeiture will be adjusted to the extent that the over-allotment option is not exercised in full by the Underwriters so that the Initial Stockholders will own an aggregate of 20% of the Company’s issued and outstanding shares of Common Stock after the IPO (assuming the Initial Stockholders do not purchase any Units in the IPO). |
9. | The undersigned hereby waives any right to exercise redemption rights with respect to any of the Company’s shares of Common Stock owned or to be owned by the undersigned, directly or indirectly, whether such shares be part of the Founder Shares or IPO Shares, and agrees not to seek redemption with respect to such shares (or sell such shares to the Company in any tender offer) in connection with any stockholder vote to approve (x) a Business Combination or (y) an amendment to the Charter that would affect the substance or timing of the Company’s obligation to allow redemption in connection with the Business Combination or to redeem 100% of the shares of Common Stock if the Company has not completed a Business Combination within 18 months from the closing of the IPO (or 21 months or 24 months, as applicable, from the closing of the IPO if the Company extends the period of time to consummate a Business Combination). |
10. | The undersigned hereby agrees to not propose, or vote in favor of, an amendment to Section 9.2(d) of the Charter prior to the completion of a Business Combination unless the Company provides public stockholders with the opportunity to redeem their shares of Common Stock upon such approval in accordance with such Section 9.2(d) thereof. |
11. | This Letter Agreement shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to conflicts of law principles that would result in the application of the substantive laws of another jurisdiction. The undersigned hereby (i) agrees that any action, proceeding or claim against him arising out of or relating in any way to this Letter Agreement shall be brought and enforced in the courts of the State of New York of the United States of America for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive and (ii) waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. |
12. | As used herein, (i) a “Business Combination” shall mean a merger, stock exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities; (ii) “Insiders” shall mean all officers, directors and sponsors of the Company immediately prior to the IPO; (iii) “Founder Shares” shall mean all of the Class B common stock of the Company, par value $0.0001 per share, acquired by an Insider prior to the IPO; (iv) “IPO Shares” shall mean the shares of Common Stock issued in the Company’s IPO; (v) “Private Placement Warrants” shall mean the warrants that are being sold privately by the Company simultaneously with the consummation of the IPO; (vi) “Prospectus” shall mean the final prospectus relating to the IPO, in the form filed with the SEC; (vii) “Transfer” shall mean the (a) sale of, offer to sell, contract or agreement to sell, hypothecate, pledge, grant of any option to purchase or otherwise dispose of or agreement to dispose of, directly or indirectly, or establishment or increase of a put equivalent position or liquidation with respect to or decrease of a call equivalent position within the meaning of Section 16 of the Exchange Act, and the rules and regulations of the Commission promulgated thereunder with respect to, any security, (b) entry into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any security, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, or (c) public announcement of any intention to effect any transaction specified in clause (a) or (b); (viii) “Trust Account” shall mean the trust account into which the net proceeds of the Company’s IPO and a portion of the proceeds from the sale of the Private Placement Warrants will be deposited; and (ix) “Registration Statement” means the Company’s registration statement on Form S-1 (SEC File No. 333-259269) filed with the SEC, as amended. |
13. | This Letter Agreement constitutes the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and supersedes all prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the extent they relate in any way to the subject matter hereof or the transactions contemplated hereby. This Letter Agreement may not be changed, amended, modified or waived (other than to correct a typographical error) as to any particular provision, except by a written instrument executed by all parties hereto. |
14. | The undersigned acknowledges and understands that the Underwriters and the Company will rely upon the agreements, representations and warranties set forth herein in proceeding with the IPO. Nothing contained herein shall be deemed to render any Underwriter a representative of, or a fiduciary with respect to, the Company, its stockholders or any creditor or vendor of the Company with respect to the subject matter hereof. |
15. | This Letter Agreement shall be binding on the undersigned and such person’s respective successors, heirs, personal representatives and assigns. This Letter Agreement shall terminate on the earlier of (i) the completion of a Business Combination and (ii) the liquidation of the Company; provided, that such termination shall not relieve the undersigned from liability for any breach of this agreement prior to its termination. The parties hereto may not assign either this Letter Agreement or any of their rights, interests, or obligations hereunder without the prior written consent of the other party. Any purported assignment in violation of this paragraph shall be void and ineffectual and shall not operate to transfer or assign any interest or title to the purported assignee. |
CRIXUS BH3 SPONSOR, LLC | |||
By: | /s/ Gregory Freedman | ||
Name: | Gregory Freedman | ||
Title: | President | ||
Acknowledged and Agreed: | |||
CRIXUS BH3 ACQUISITION COMPANY | |||
By | /s/ Daniel Lebensohn | ||
Name: | Daniel Lebensohn | ||
Title: | Co-Chief Executive Officer |
XCF GLOBAL CAPITAL, INC. | ||
By: | /s/ Mihir Dange | |
Name: Mihir Dange | ||
Title: Chief Executive Officer | ||
FOCUS IMPACT BH3 ACQUISITION COMPANY | ||
By: | /s/ Carl Stanton | |
Name: Carl Stanton | ||
Title: Chief Executive Officer | ||
FOCUS IMPACT BH3 NEWCO, INC. | ||
By: | /s/ Carl Stanton | |
Name: Carl Stanton | ||
Title: Chief Executive Officer |
CORE COMPANY SECURITYHOLDERS: | ||
By: | /s/ Randy Soule | |
Name: Randy Soule |
CORE COMPANY SECURITYHOLDERS: | ||
RESC RENEWABLES HOLDINGS, LLC | ||
By: | /s/ Randy Soule | |
Name: Randy Soule | ||
Title: Authorized Signatory |
Dated: March 11, 2024 | By: | ||
Name: |
XCF GLOBAL CAPITAL, INC. | ||
By: | /s/ Mihir Dange | |
Name: Mihir Dange | ||
Title: Chief Executive Officer | ||
FOCUS IMPACT BH3 ACQUISITION COMPANY | ||
By: | /s/ Carl Stanton | |
Name: Carl Stanton | ||
Title: Chief Executive Officer | ||
FOCUS IMPACT BH3 NEWCO, INC. | ||
By: | /s/ Carl Stanton | |
Name: Carl Stanton | ||
Title: Chief Executive Officer |
CORE COMPANY SECURITYHOLDERS: | ||
GL PART SPV I, LLC | ||
By: | /s/ Majique Ladnier |
Name: Majique Ladnier | |
Title: Sole Member |
Dated: March 11, 2024 | By: | |
Name: |
GENERAL
VOTING
REPRESENTATIONS AND WARRANTIES
OTHER COVENANTS
MISCELLANEOUS
with a copy to (which shall not constitute notice):
XCF GLOBAL CAPITAL, INC. | ||
By: | ||
Name: | ||
Title: | ||
FOCUS IMPACT BH3 ACQUISITION COMPANY | ||
By: | ||
Name: | ||
Title: | ||
FOCUS IMPACT BH3 NEWCO, INC. | ||
By: | ||
Name: | ||
Title: |
CORE COMPANY SECURITYHOLDERS: | |||
[ ] | |||
By: | |||
Name: | |||
Title: |
Dated: March 11, 2024 | By: | |
Name: |
XCF GLOBAL CAPITAL, INC. | ||
By: | ||
Name: | ||
Title: | ||
FOCUS IMPACT BH3 ACQUISITION COMPANY | ||
By: | ||
Name: | ||
Title: | ||
FOCUS IMPACT BH3 NEWCO, INC. | ||
By: | ||
Name: | ||
Title: |
CORE COMPANY SECURITYHOLDERS: | ||
[__________________] | ||
By: | ||
Name: | ||
Title: |
Dated: March 11, 2024 | By: | |
Name: |
• | The newly formed holding company is expected to be listed on the NYSE or Nasdaq |
• | Strong regulatory and market tailwinds for sustainable fuels, driving supply and demand for Sustainable Aviation Fuel (“SAF”) |
• | XCF Global intends to be a leading producer of SAF in North America |
• | XCF Global will be positioned as a public pure-play SAF producer in the US, distinguishing itself from peers that are predominantly legacy crude oil refiners |
• | Implied pro forma enterprise value of the combined company of $1.84 billion |
• | Strong regulatory and market tailwinds for sustainable fuels – Shift in customer sentiment and new regulatory policies in the US and Europe provide massive tailwinds for both SAF supply and demand, driving a need for additional plants |
• | Early mover advantage – Will be positioned as the sole public, pure-play SAF producer in the US, distinguishing itself from peers that are predominantly legacy crude oil refiners |
• | Outstanding business model with a differentiated design – Strategic use of non-food free fatty acids and modular plant design intended to facilitate rapid expansion to capitalize on robust demand for eco-friendly drop-in fuels |
• | Cash flow visibility – Long-term agreement in place with Fortune 50 company to provide non-food feedstock and offtake of renewable fuels (in process of extending to SAF), providing cash flow visibility and stability |
• | Proven technology and feedstock sourcing – Feedstock-agnostic pretreatment technology combined with non-food feedstock sourcing capabilities enables flexibility, cutting supply costs and mitigating risks from supply volatility by using cost-effective, varied inputs |
• | Experienced management team – The leadership team brings experience in engineering and operations from various sectors including energy and commodities |
FORWARD-LOOKING STATEMENTS
This Presentation includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”, “expect”, “intend”, “will”, “estimate”, “anticipate”, “believe”, “predict”, “potential” or “continue”, or the negatives of these terms or variations of them or similar terminology. These forward-looking statements, including, without limitation, Focus Impact’s and XCF’s expectations with respect to future performance and anticipated financial impacts of the Business Combination and the acquisition of New Rise, estimates and forecasts of other financial and performance metrics, projections of market opportunity and market share, the satisfaction of the closing conditions to the Business Combination and the New Rise acquisition and the timing of the completion of the Business Combination and the New Rise acquisition, are subject to risks and uncertainties, which could cause actual results to differ materially from those expressed or implied by such forward-looking statements. These forward-looking statements are based upon estimates and assumptions that, while considered reasonable by Focus Impact and its management, and XCF and its management, as the case may be, are inherently uncertain and subject to material change. These forward-looking statements are provided for illustrative purposes only and are not intended to serve as and must not be relied on by any investor as, a guarantee, an assurance, a prediction or a definitive statement of fact or probability. New risks and uncertainties may emerge from time to time, and it is not possible to predict all risks and uncertainties. Factors that may cause actual results to differ materially from current expectations include, but are not limited to: (1) changes in domestic and foreign business, market, financial, political, and legal conditions; (2) the amount of redemptions by Focus Impact’s public stockholders in connection with the Business Combination; (3) the occurrence of any event, change or other circumstances that could give rise to the termination of negotiations and any agreements with respect to the Business Combination or the New Rise acquisition or with regard to the Company’ s offtake arrangements; (4) the outcome of any legal proceedings that may be instituted against Focus Impact, XCF, the combined company or others; (5) the inability of the parties to successfully or timely consummate the Business Combination, including the risk that any required regulatory approvals are not obtained, are delayed or are subject to unanticipated conditions that could adversely affect the combined company or the expected benefits of the Business Combination or that the approval of stockholders is not obtained; (6) changes to the proposed structure of the proposed transactions that may be required or appropriate as a result of applicable laws or regulations; (7) the inability of XCF to successfully or timely consummate the New Rise acquisition, including the risk that any required regulatory approvals are not obtained, are delayed or are subject to unanticipated conditions that could adversely affect the combined company or the expected benefits of the Business Combination; (8) the ability to meet stock exchange listing standards following the consummation of the Business Combination; (9) the ability of XCF to integrate the operations of New Rise and implement its business plan on its anticipated timeline, including the inability to launch operations in the New Rise plant in Reno, Nevada in the near future; (10) the risk that the proposed transactions disrupt current plans and operations of Focus Impact or XCF as a result of the announcement and consummation of the proposed transactions; (11) the ability to recognize the anticipated benefits of the proposed transactions, which may be affected by, among other things, competition, the ability of the combined company to grow and manage growth profitably, maintain relationships with customers and suppliers and retain its management and key employees; (12) costs related to the proposed transactions; (13) changes in applicable laws or regulations; (14) risks related to extensive regulation, compliance obligations and rigorous enforcement by federal, state, and non-U.S. governmental authorities; (15) the possibility that Focus Impact, XCF or the combined company may be adversely affected by other economic, business, and/or competitive factors; (16) the availability of tax credits and other federal, state or local government support (17) risks relating to XCF’s and New Rise’s key intellectual property rights; and (18) various factors beyond management’s control, including general economic conditions and other risks, uncertainties and factors set forth in the section entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the final prospectus relating to the initial public offering of Focus Impact BH3 Acquisition Company, dated October 4, 2021, and other filings with the SEC, including the registration statement on Form S-4 to be filed with the SEC by Focus Impact or a successor entity in connection with the transaction (the “Registration Statement”). If any of the risks actually occur, either alone or in combination with other events or circumstances, or Focus Impact’s or XCF’s assumptions prove incorrect, actual results could differ materially from the results implied by these forward-looking statements. There may be additional risks that Focus Impact or XCF does not presently know or that it currently believes are not material that could also cause actual results to differ from those contained in the forward-looking statements. In addition, forward-looking statements reflect Focus Impact’s or XCF’s expectations, plans or forecasts of future events and views as of the date of this Presentation. These forward-looking statements should not be relied upon as representing Focus Impact’s or XCF’s assessments as of any date subsequent to the date of this Presentation. Accordingly, undue reliance should not be placed upon the forward-looking statements. While Focus Impact or XCF may elect to update these forward-looking statements at some point in the future, Focus Impact and XCF specifically disclaim any obligation to do so.
Industry and market data used in this Presentation have been obtained from third-party industry publications and sources as well as from research reports prepared for other purposes. Neither XCF nor Focus Impact has independently verified the data contained from these sources and cannot assure you of the data’s accuracy or completeness. Such data is subject to change. Recipients of this Presentation should not consider its contents, or any prior or subsequent communications from or with XCF or Focus Impact or their respective representatives as investment, legal or tax advice. In addition, this Presentation does not purport to be all-inclusive or to contain all of the information that may be required to make a full analysis of XCF or Focus Impact. Recipients of this Presentation should each consult their own legal adviser, independent financial adviser or tax adviser for legal, financial or tax advice, make their own evaluation of XCF and Focus Impact and of the relevance and adequacy of the information and make such other investigations as they deem necessary.
Some of the data contained herein is derived from various internal and external sources. No representation is made as to the reasonableness of the assumptions made or within or the accuracy or completeness of any projections or modeling or any other information contained herein. Any data on past performance or modeling contained herein is not an indication as to future performance. XCF and Focus Impact assume no obligation to update the information in this Presentation.
Investments in any securities described herein have not been approved or disapproved by the SEC or any other regulatory authority, nor has the SEC or any other regulatory authority passed upon or endorsed the merits of the Business Combination or the accuracy or adequacy of the information contained herein. Any representation to the contrary is a criminal offense.
Trademarks
This Presentation may contain trademarks, service marks, trade names and copyrights of third parties, which are the property of their respective owners. The use or display of third parties’ trademarks, service marks, trade names or products in this Presentation is not intended to, and does not imply, a relationship with XCF or Focus Impact, or an endorsement or sponsorship by or of XCF or Focus Impact. Solely for convenience, the trademarks, service marks, trade names and copyrights of XCF referred to in this Presentation may appear without the TM, SM or © symbols, but such references are not intended to indicate, in any way, that XCF will not assert, to the fullest extent under applicable law, its rights or the right of the applicable licensor to these trademarks, service marks, trade names and copyrights.
Use of Projections
This Presentation contains financial forecasts with respect to XCF’s projected financial results for certain future periods. Neither XCF’s nor Focus Impact’s independent auditors have audited, reviewed, compiled or performed any procedures with respect to the projections for the purpose of their inclusion in this Presentation, and accordingly, they did not express an opinion or provide any other form of assurance with respect thereto for the purpose of this Presentation. These projections should not be relied upon as being necessarily indicative of future results. The assumptions and estimates underlying the prospective financial Information are inherently uncertain, and are subject to a wide variety of significant business, economic and competitive risks and uncertainties that could cause actual results to differ materially from those contained in the prospective financial information. Accordingly, there can be no assurance that the prospective results are indicative of the future performance of XCF or that actual results will not differ materially from those presented in the prospective financial information. Inclusion of the prospective financial information in this Presentation should not be regarded as a representation by any person that the results contained in the prospective financial information will be achieved. See “Forward-Looking Statements” above. The projected financial results reflect numerous assumptions, including assumptions with respect to general business, economic, market, regulatory and financial conditions, and various other factors, all of which are difficult to predict and many of which are beyond XCF’s control, such as the risks and uncertainties set forth in the section entitled “Risk Factors” in the Appendix to this Presentation. Furthermore, the projected financial results do not take into account any circumstances or events occurring after the date on which the projected financial results were prepared, which was on or around March 2024.
Non-GAAP Measures
This Presentation includes certain financial measures not presented in accordance with United States generally accepted accounting principles (“GAAP”). These non-GAAP financial measures are not measures of financial performance in accordance with GAAP and may exclude items are significant in understanding and assessing XCF’s financial results. Therefore, these measures should not be considered in isolation or as an alternative to net income, cash flows from operations or other measures of profitability, liquidity or performance under GAAP. You should be aware that XCF’s presentation of these measures may not be comparable to similarly-titled measures used by other companies. XCF believes these non-GAAP measures of financial results provide useful information to management and investors regarding certain financial and business trends relating to XCF’s financial condition and results of operations. This Presentation also includes certain projections of non-GAAP financial measures. Due to the high variability and difficulty in making accurate forecasts and projections of some of the information excluded from these projected measures, together with some of the excluded information not being ascertainable or accessible, XCF is unable to quantify certain amounts that would be required to be included in the most directly comparable GAAP financial measures without unreasonable effort. Consequently, no disclosure of estimated comparable GAAP measures is included and no reconciliation of the forward-looking non-GAAP financial measures is included.
Additional Information and Where to Find It
In connection with the Business Combination, Focus Impact and XCF intend to prepare, and Focus Impact (or a newly-formed successor entity) intends to file with the SEC a Registration Statement on Form S-4 (the “Registration Statement”) containing a prospectus with respect to the securities to be issued in connection with the Business Combination, a proxy statement with respect to the stockholders’ meeting of Focus Impact to vote on the Business Combination and certain other related documents. Investors, securityholders and other interested persons are urged to read, when available, the preliminary proxy statement/prospectus in connection with Focus Impact’s solicitation of proxies for its special meeting of stockholders to be held to approve the Business Combination (and related matters) and general amendments thereto and the definitive proxy statement/prospectus because the proxy statement/prospectus will contain important information about Focus Impact, XCF and the Business Combination. When available, Focus Impact will mail the definitive proxy statement/prospectus and other relevant documents to its stockholders as of a record date to be established for voting on the Business Combination. This Presentation is not a substitute for the Registration Statement, the definitive proxy statement/prospectus or any other document that Focus Impact will send to its stockholders in connection with the Business Combination. Once the Registration Statement is declared effective, copies of the Registration Statement, including the definitive proxy statement/prospectus and other documents filed by Focus Impact, XCF or a newly formed successor entity with the SEC, may be obtained, free of charge, by directing a request to Focus Impact BH3 Acquisition Company, 1345 Avenue of the Americas, 33rd Floor, New York, NY 10105. The preliminary and definitive proxy statement/prospectus to be included in the Registration Statement, once available, can also be obtained, without charge, at the SEC’s website (www.sec.gov).
Participants in the Solicitation
Focus Impact and its directors, executive officers and other members of management may be deemed to be participants in the solicitation of proxies of Focus Impact’s stockholders in connection with the Business Combination under SEC rules. Information regarding the persons who may, under SEC rules, be deemed participants in the solicitation of Focus Impact’s stockholders in connection with the Business Combination will be in the Registration Statement and the proxy statement/prospectus included therein, when it is filed with the SEC. Investors and security holders may obtain more detailed information regarding the names and interests in the Business Combination of Focus Impact’s directors and officers in Focus Impact’s filings with the SEC and such information will also be in the Registration Statement to be filed with the SEC, which will include the proxy statement/prospectus of Focus Impact for the Business Combination.
XCF and its directors and executive officers may also be deemed to be participants in the solicitation of proxies from the stockholders of Focus Impact in connection with the Business Combination. A list of the names of such directors and executive officers and information regarding their interests in the Business Combination will be included in the proxy statement/prospectus of Focus Impact for the Business Combination when available.
You may obtain free copies of these documents as described in the paragraph “Additional Information and Where to Find It.”
No Offer or Solicitation
This Presentation relates to the Business Combination and is neither an offer to purchase, nor a solicitation of an offer to sell, subscribe for or buy any securities or the solicitation of any vote in any jurisdiction pursuant to the Business Combination or otherwise, nor shall there be any sale, issuance or transfer or securities in any jurisdiction in contravention of applicable law. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, or an exemption therefrom, and otherwise in accordance with applicable law.
• | XCF has not yet completed its acquisition of New Rise, and any delay in closingthe transaction could delay our ability to integrate operations and implement our business plan. |
• | XCF is recently formed, has a limited operating history and its senior management team has limited experience in the renewable fuels industry . |
• | We will rely on service providers, including a related party, to operate our Nevada, Florida and North Carolina plants. |
• | Neither XCF Global nor New Rise has experience commercially producing SAF. |
• | New Rise has not yet completed the conversion of its plant to SAF and has not commenced producing SAF. |
• | XCF does not have a track record of developing SAF or other biofuel plants, and will rely, in part, on service providers, including a related party, to develop additional SAF plants. |
• | Our results of operations will be adversely affected if we are unable to fund the conversion of the New Rise and our Southeast facilities to SAF, or if we experience cost overruns or logistical or other delays in the conversion. |
• | We currently have only one supplier of feedstock and our ability to operate would be adversely affected if there was any disruption in the supplier’s ability to supply us or if our relationship was terminated for some reason. |
• | We currently do not have agreements in place for alternative or additional sources of feedstock. |
• | Our financial results may be materially affected by fluctuations in market prices, including for feedstock and SAF. |
• | We may not be able to achieve our goal of vertically integrating our feedstock sources. |
• | We are currently negotiating with our off-take partner to extend our renewable fuels off-take agreement to include SAF, and if we are unable to extend that agreement to include SAF or enter into alternative off-take arrangements our results of operations will be adversely affected. |
• | We may not be able to secure long-term agreements for feedstock and offtake for future facilities on acceptable terms, or at all. |
• | Unanticipated operational problems at our facilities, includingdowntime and unplanned maintenance, could have a material adverse effect on our results of operations. |
• | Significant differences in prices between SAF and traditional petroleum-based aviation fuel may limit the market for SAF or makeit difficult for us to price our SAF product at a profitable level. |
• | Any failure of ours to accurately forecast demand for SAF could result in unexpected shortfalls or surpluses that could negatively affect our results of operations. |
• | Market acceptance of SAF as a product blended with traditional petroleum-based aviation fuel is uncertain. |
• | Demand for SAF will depend, in part, on the establishment of market standards for blending ratios of SAF and petroleum-based aviation fuel. |
• | We face competition from established SAF producers and expect additional competition from new entrants currently developing SAF production facilities and possible additional entrants in the future, many of whom have greater resources and experience than we do. |
• | Future entrants to the SAF market may quickly dominate the market and erode XCF’s market position due to their having a more established operating history and customer base, greater brand awareness and greater financial and other resources. |
• | Competitors that produce their own supply of feedstocks may have a competitive advantage over us. |
• | Technological innovation in SAF production or in the production of fuel alternatives to SAF could cause our SAF product to become uneconomical or obsolete, or require substantial capital investment to upgrade our production facilities. |
• | Our growth may be limited if we are not able to acquire and develop additional production sites or if we are not able to cost-effectively fund the acquisition and development of such sites. |
• | We may not successfully identify and complete acquisitions on favorable terms or achieve anticipated benefits relating to any acquisitions. |
• | Acquisition and development of additional production sites may not occur on our anticipated timelines or at all. |
• | Acquiring additional production sites or assets involves numerous risks, includingpotential exposure to pre-existing liabilities. |
• | Our acquisitions could result in unforeseen operating difficulties and expenditures and will require significant management resources. |
• | We may experience unanticipated delays in completing development and obtaining necessary regulatory permits for acquired properties and assets. |
• | We expect to need to raise substantialadditional capital to fund our operations and planned growth and our ability to obtainsufficient funding on acceptable terms, or at all, is uncertain. |
• | We plan to incur additional indebtedness in the future to meet our fundingneeds, which could adversely affect our financial and operatingflexibility, financialcondition and competitive position. |
• | We rely on the expertise of our management and other key personnel, and the loss or departure of any could significantly harm our business and prospects. |
• | A shortage of skilled labor or disruptions in our or our plant operations service provider’s labor force may make it difficult to maintain labor productivity. |
• | If we are unable to manage our growth and expand our operations successfully, our reputation and brand may be damaged. |
• | Our management has limited experience in operating a public company. |
• | A significant interruption or casualty loss at any of our production facilities could significantly reduce our revenue. |
• | Our insurance policies do not cover all losses, costs, or liabilities that we may experience. |
• | Successful implementation of our business plan will depend in large part upon tax credits and other government incentives and favorable government policies toward renewable fuels, any of which could change at any time. |
• | Our business will be adversely affected if we experience material delays in regulatory approvals for use of SAF and constructingand operatingour current and future production facilities. |
• | We could incur substantial costs or disruptions in our business if we cannot obtain or maintain necessary permits and authorizations. |
• | We expect to incur substantial capital expenditures and operating costs as a result of our compliance with existingand future health, safety, environmental and other laws and regulations. |
• | Our operations entail inherent safety and environmental risks, which may result in substantial liability to us. |
• | Current or future government regulations and policies may restrict our operations and ability to compete. |
• | We may be subject to product liability claims, which could result in material expense, diversion of management time and attention and damage to our business, reputation and brand. |
• | Concerns regarding the environmental impact of fuel production, includingrenewable fuels, could affect public policy in ways that could adversely affect our business. |
• | We plan to use hedging arrangements to attempt to mitigate certain risks, but the use of such arrangements could have a materialadverse effect on our results of operations. |
• | A cyber-attack on, or other failure of, our technology infrastructure could adversely affect our business and assets. |
• | We depend on certain technologies that are licensed to us. |
• | Inflation may adversely affect our profitability by increasing our costs. |
• | Natural or man-made disasters, social, economic and political instability, pandemics, epidemics or other disease outbreaks, and other similar events may significantly disrupt our and our customers’ businesses. |
• | Followingthe Business Combination, a small number of stockholders will own a substantial majority of our stock, giving them material influence over the outcome of matters requiringa stockholder vote, including the election of directors and the approval of material, matters and their interests may not align with the interest of other stockholders |
• | If Focus Impact fails to comply with the listing requirements of Nasdaq, Focus Impact would face possible delisting, which could limit investors’ ability to make transactions in its securities and subject it to additional trading restrictions. |
• | Focus Impact currently is, and XCF will be, an “emerginggrowth company” within the meaning of the Securities Act of 1933, and if the combined company takes advantage of certain exemptions from disclosure requirements available to emerginggrowth companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with other public companies. |
• | The consummation of the Business Combination is subject to a number of conditions, and if those conditions are not satisfied or waived, the Business Combination may not be completed. |
• | The value of the shares held by Focus Impact’s sponsor following completion of the Business Combination may be substantially higher that the price paid for them. |
• | The Focus Impact officers and directors may have conflicts of interest in connection with the Business Combination distinct from your interests. |
• | If financing is not identified by the parties to the Business Combination or fails to close and sufficient Focus Impact stockholders exercise their redemption rights in connection with the Business Combination, the combined company may lack sufficient funds followingthe Business Combination. |
• | A majority of our total outstandingshares will not be subject to any contractual trading restrictions and may be resold shortly after the consummation of the Business Combination. |
• | Focus Impact’s public stockholders will experience dilution due to the issuance of securities to existing XCF equity holders entitling them to significant voting stake in the combined company. |
• | If a significant number of shares of Focus Impact Class A Common Stock is elected to be redeemed in connection with the Business Combination, the stock ownership of the combined company will be highly concentrated, which will reduce the public “float” and may have a depressive effect on the market price of the common stock of the combined company. |
• | Focus Impact may be unable to continue as a goingconcern if it does not consummate an initial business combination by July 31, 2024. |
• | In connection with the Business Combination, Focus Impact’s sponsor and its officers, directors, advisors or their respectiveaffiliates may elect to purchase Focus Impact Class A common stock from public stockholders, which may reduce the public float of the Focus Impact Class A common stock. |
• | The proceeds held in Focus Impact’s Trust Account could be reduced and the per-share redemption amount received by Focus Impact stockholders may be less than $10.10 per share. |
• | If, after Focus Impact distributes the proceeds in the Trust Account to Focus Impact’s public stockholders that have elected to redeem their shares, Focus Impact files a bankruptcy petition or an involuntary bankruptcy petition is filed against Focus Impact that is not dismissed, a bankruptcy or insolvency court may seek to recover such proceeds, and the members of Focus Impact’s board of directors may be viewed as having breached their fiduciary duties to its creditors, thereby exposingthe members of its board of directors and Focus Impact to claims of punitive damages. |
• | Other risks and uncertainties set forth in the section entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” in the registration statement on Form S-4 to be filed in connection with the Business Combination or in other documents filed by Focus Impact with the SEC. |