SAFX Swings to Profit on Warrant Gains, Begins SAF Production

TL;DR

**SAFX's massive Q2 profit is a mirage of warrant revaluations, but initial SAF production is a real step forward for this high-risk, high-reward green energy play.**

AI Summary

XCF Global, Inc. (SAFX) reported a significant turnaround for the three and six months ended June 30, 2025, posting net income of $110,268,109 and $102,800,908, respectively, compared to net losses of $3,762,154 and $7,782,851 in the prior year periods. This dramatic shift was primarily driven by a $206,166,000 change in the fair value of warrants and a $4,797,980 change in the fair value of notes payable. Revenue for the three and six months ended June 30, 2025, was $6,576,232, with no revenue reported in the comparable 2024 periods, indicating the start of commercial operations. The company incurred a gross loss of $1,235,070 for both periods due to cost of sales totaling $7,811,302. Operating expenses surged to $33,142,471 for the three months and $39,048,756 for the six months, including $13,200,000 in severance expense and $11,277,307 in professional fees for the quarter. Key business changes include the completion of the Business Combination on June 6, 2025, with Focus Impact BH3 Acquisition Company, and the acquisition of New Rise SAF Renewables Limited Liability Company and New Rise Renewables, LLC in January and February 2025. The New Rise Reno facility began initial production of Sustainable Aviation Fuel (SAF) and renewable naphtha in February 2025, with first deliveries in March 2025, and started selling renewable diesel under an agreement with Phillips 66 in May 2025. Risks include the facility not yet reaching nameplate capacity and being classified as under construction until final project acceptance under its license agreement with Axens North America.

Why It Matters

This 10-Q signals a pivotal moment for SAFX, transitioning from a development-stage company to one with initial revenue generation and significant net income, largely due to non-cash warrant revaluations. For investors, the shift to profitability, even if driven by fair value adjustments, could attract attention, but the underlying gross loss and high operating expenses warrant scrutiny. Employees at the New Rise Reno facility are now engaged in production, albeit at 50% capacity, indicating operational progress. Customers, particularly Phillips 66, are now receiving renewable diesel, marking SAFX's entry into the renewable fuels market. The broader market for sustainable aviation fuel (SAF) is highly competitive and driven by regulatory support, making SAFX's operational ramp-up and strategic focus on SAF a key development in the decarbonization of the aviation industry.

Risk Assessment

Risk Level: high — The company reported a gross loss of $1,235,070 for the three and six months ended June 30, 2025, indicating that its cost of sales ($7,811,302) exceeded its revenue ($6,576,232). Furthermore, the New Rise Reno production facility is operating at approximately 50% of nameplate capacity and is not yet deemed an operating facility, classifying as under construction until final project acceptance, highlighting significant operational hurdles and uncertainty.

Analyst Insight

Investors should exercise caution and conduct deep due diligence beyond the headline net income. Focus on the company's ability to scale SAF production, improve gross margins, and manage its substantial operating expenses, particularly the $13,200,000 severance and $11,277,307 professional fees incurred in the quarter. Monitor future filings for progress on the New Rise Reno facility's final project acceptance and sustained profitability from core operations.

Financial Highlights

debt To Equity

N/A

revenue

$6,576,232

operating Margin

N/A

total Assets

N/A

total Debt

N/A

net Income

$110,268,109

eps

N/A

gross Margin

-18.8%

cash Position

N/A

revenue Growth

N/A

Revenue Breakdown

Key Numbers

• $110,268,109 — Net income for three months ended June 30, 2025 (Significant swing from a $3,762,154 net loss in the prior year, primarily due to non-cash gains.)
• $102,800,908 — Net income for six months ended June 30, 2025 (Significant swing from a $7,782,851 net loss in the prior year, primarily due to non-cash gains.)
• $6,576,232 — Revenue for three and six months ended June 30, 2025 (First reported revenue, indicating the start of commercial operations, compared to $0 in 2024.)
• $206,166,000 — Change in fair value of warrants (Primary driver of the reported net income, a non-cash gain.)
• $1,235,070 — Gross loss for three and six months ended June 30, 2025 (Indicates that cost of sales ($7,811,302) exceeded revenue, highlighting operational inefficiency.)
• $13,200,000 — Severance expense for three and six months ended June 30, 2025 (A significant operating expense incurred during the period.)
• $11,277,307 — Professional fees for three months ended June 30, 2025 (A substantial operating expense, likely related to the Business Combination.)
• 159,231,451 — Outstanding shares of common stock as of October 14, 2025 (Reflects the equity structure post-Business Combination.)
• 50% — New Rise Reno production facility operating capacity (Indicates the facility is not yet at full operational efficiency and is still under construction.)
• 2,000 barrels per day — Renewable diesel production capacity (Current production rate for renewable diesel, approximately 20% below nameplate capacity for SAF.)

Key Players & Entities

• XCF Global, Inc. (company) — registrant
• SAFX (company) — ticker symbol
• Focus Impact BH3 NewCo, Inc. (company) — former name of XCF Global, Inc.
• XCF Global Capital, Inc. (company) — wholly-owned subsidiary of New XCF
• New Rise SAF Renewables Limited Liability Company (company) — acquired subsidiary
• New Rise Renewables, LLC (company) — acquired subsidiary
• New Rise Renewables Reno, LLC (company) — owner of the Reno facility
• Phillips 66 (company) — partner for Supply and Offtake Agreement
• Axens North America (company) — licensor for SAF conversion
• Randy Soule (person) — recipient of replacement shares

FAQ

Risk Factors

• Facility Not Yet at Nameplate Capacity [high — operational]: The New Rise Reno facility is operating at 50% capacity and is classified as under construction until final project acceptance. This limits current production output and revenue generation potential.
• Dependence on Key Agreements [medium — operational]: The company relies on agreements with Phillips 66 for renewable diesel sales and Axens North America for its license. Disruptions or unfavorable terms in these agreements could significantly impact operations and profitability.
• Significant Operating Expenses [high — financial]: Operating expenses surged to $33,142,471 for the three months ended June 30, 2025, including substantial severance ($13,200,000) and professional fees ($11,277,307). High costs relative to current revenue create pressure on margins.
• Market Acceptance and Competition [medium — market]: The market for Sustainable Aviation Fuel (SAF) and renewable diesel is evolving. XCF Global faces competition and must establish strong market demand and pricing for its products.
• Environmental and Regulatory Compliance [medium — regulatory]: Production of SAF and renewable fuels is subject to stringent environmental regulations and compliance standards. Failure to meet these could result in penalties or operational shutdowns.

Industry Context

XCF Global operates in the rapidly growing renewable fuels sector, specifically focusing on Sustainable Aviation Fuel (SAF) and renewable diesel. This industry is driven by increasing demand for decarbonization in transportation, particularly aviation, and supportive government policies. Key players are investing heavily in production capacity and technology, facing challenges related to feedstock availability, production costs, and scaling operations to meet market demand.

Regulatory Implications

The production and sale of renewable fuels are subject to evolving environmental regulations and mandates, such as those from the EPA and international bodies. Compliance with these regulations, including emissions standards and sustainability certifications, is critical. Changes in government incentives or mandates could significantly impact the economic viability and market demand for XCF Global's products.

What Investors Should Do

1. Monitor facility ramp-up and capacity utilization.
2. Analyze the sustainability of reported net income.
3. Evaluate the impact of operating expenses.
4. Assess the company's commercial agreements and market penetration.

Key Dates

• 2025-01-01: Acquisition of New Rise SAF Renewables Limited Liability Company — Expanded the company's renewable energy operations and asset base.
• 2025-02-01: Acquisition of New Rise Renewables, LLC — Further consolidated renewable energy assets and capabilities.
• 2025-02-01: New Rise Reno facility began initial production of SAF and renewable naphtha — Marked the commencement of commercial production for key renewable fuels.
• 2025-03-01: First deliveries of SAF and renewable naphtha — Indicated the transition from production to sales and revenue generation.
• 2025-05-01: Began selling renewable diesel under agreement with Phillips 66 — Diversified product sales and secured a significant customer for renewable diesel.
• 2025-06-06: Completion of Business Combination with Focus Impact BH3 Acquisition Company — Became a publicly traded company (Nasdaq: SAFX) and finalized the merger, establishing the current corporate structure.

Glossary

Business Combination

A merger or acquisition transaction where two or more companies combine into one. In this case, Legacy XCF combined with Focus Impact BH3 Acquisition Company. (This transaction resulted in XCF Global, Inc. becoming a publicly traded entity and significantly altered its corporate structure and financial reporting basis.)

Reverse Recapitalization

An accounting treatment where a private company (the acquirer in substance) is treated as issuing stock to a public shell company (the legal acquirer). The private company's financial statements become the basis for the combined entity. (This accounting method was used for the Business Combination, meaning Legacy XCF is considered the accounting acquirer, and its historical financial data is presented as the primary basis for the combined company's results.)

Sustainable Aviation Fuel (SAF)

A type of jet fuel that is produced from sustainable sources, such as used cooking oil, agricultural waste, or forestry residues, aiming to reduce greenhouse gas emissions compared to conventional jet fuel. (This is a key product for XCF Global, Inc., representing a significant portion of their new commercial operations and revenue potential.)

Nameplate Capacity

The maximum output a facility or piece of equipment is designed to produce under ideal conditions. (The New Rise Reno facility is not yet operating at its nameplate capacity, indicating potential for increased production and revenue as it ramps up.)

Warrants

Financial instruments that give the holder the right, but not the obligation, to purchase a company's stock at a specific price (exercise price) before a certain expiration date. (A significant non-cash gain from the change in fair value of warrants ($206,166,000) was the primary driver of the reported net income for the period.)

Year-Over-Year Comparison

Compared to the prior year periods, XCF Global has experienced a dramatic financial turnaround, shifting from net losses to significant net income. This is primarily due to non-cash gains from warrant fair value changes and the commencement of commercial operations, which generated $6,576,232 in revenue compared to zero in the prior year. However, the company is incurring substantial operating expenses and a gross loss, indicating that cost of sales currently exceeds revenue, and the production facility is still in its early stages of operation and not yet at full capacity.

Key Financial Figures

• $0.0001 — tered Class A Common Stock, par value $0.0001 per share SAFX The Nasdaq Stock Mar

Filing Documents

• form10-q.htm (10-Q) — 1889KB
• ex31-1.htm (EX-31.1) — 12KB
• ex31-2.htm (EX-31.2) — 12KB
• ex32-1.htm (EX-32.1) — 7KB
• ex32-2.htm (EX-32.2) — 7KB
• 0001493152-25-018196.txt ( ) — 8166KB
• safx-20250630.xsd (EX-101.SCH) — 61KB
• safx-20250630_cal.xml (EX-101.CAL) — 77KB
• safx-20250630_def.xml (EX-101.DEF) — 283KB
• safx-20250630_lab.xml (EX-101.LAB) — 453KB
• safx-20250630_pre.xml (EX-101.PRE) — 383KB
• form10-q_htm.xml (XML) — 1230KB

Management's Discussion and Analysis of Financial Condition and Results of Operations – XCF Global, Inc

Management's Discussion and Analysis of Financial Condition and Results of Operations – XCF Global, Inc. 29 Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Quantitative and Qualitative Disclosures about Market Risk 44 Item 4.

Controls and Procedures

Controls and Procedures 44 PART II. OTHER INFORMATION 46 Item 1.

Legal Proceedings

Legal Proceedings 46 Item 1A.

Risk Factors

Risk Factors 46 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 73 Item 3. Defaults Upon Senior Securities 74 Item 4. Mine Safety Disclosures 75 Item 5. Other Information 75 Item 6. Exhibits 75

SIGNATURES

SIGNATURES 78 2 PART I. FINANCIAL INFORMATION Item 1. XCF GLOBAL, INC. UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS TABLE OF CONTENTS Unaudited Condensed Consolidated Balance Sheets as of June 30, 2025 and December 31, 2024 4 Unaudited Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2025 and 2024 5 Unaudited Condensed Consolidated Statements of Stockholders' Equity for the three and six months ended June 30, 2025 and 2024 6 Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2025 and 2024 7 Notes to Unaudited Condensed Consolidated Financial Statements 8 - 28 3 XCF GLOBAL, INC. UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS As of June 30, 2025 As of December 31, 2024 ASSETS Current assets Cash and cash equivalents $ 405,575 $ 407,182 Restricted cash 5,316 5,824 Accounts receivable, net 9,852,154 - Related party receivables 739,917 - Other receivable 950,000 950,000 Derivative asset 1,029,997 - Security deposit 1,500,000 1,500,000 Inventory, net 3,350,725 - Other current assets 133,988 62,419 Total current assets 17,967,672 2,925,425 Property, plant and equipment 374,166,216 351,702,307 TOTAL ASSETS $ 392,133,888 $ 354,627,732 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities Accounts payable $ 21,735,711 $ 8,474,052 Related party payable 40,597,432 38,932,248 Professional fees payable 7,890,660 - Loans payable to related party 6,890,158 2,350,000 Notes payable, current portion 115,195,498 110,304,484 Warrant liabilities 4,502,000 - Accrued expenses and other current liabilities 50,450,425 20,364,663 Total current liabilities 247,261,884 180,425,447 Financial liability, net of closing costs 132,786,623 132,767,058 TOTAL LIABILITIES 380,048,507 313,192,505 Commitments and contingencies (Note 10) - - STOCKHOLDERS' EQUITY Pref

Business

Business Combination On March 11, 2024, Legacy XCF entered into a business combination agreement (the "Business Combination Agreement") with Focus Impact BH3 Acquisition Company ("Focus Impact"), Focus Impact BH3 Newco, Inc., ("NewCo") a wholly owned subsidiary of Focus Impact, Focus Impact BH3 Merger Sub 1, LLC, a wholly owned subsidiary of NewCo ("Merger Sub 1"), and Focus Impact BH3 Merger Sub 2, Inc., a wholly owned subsidiary of NewCo ("Merger Sub 2"). The business combination was effected in two steps: (a) Focus Impact merged with and into Merger Sub 1, with Merger Sub 1 being the surviving entity as a wholly owned subsidiary of NewCo; and (b) immediately after, Merger Sub 2 merged with and into Legacy XCF, with Legacy XCF continuing as a wholly-owned subsidiary of NewCo (these transactions, collectively, the "Business Combination"). The Business Combination closed on June 6, 2025 (the "Closing Date"). As a result of the Business Combination, NewCo, subsequently changed its name to XCF Global, Inc. and became a new publicly-traded company on NASDAQ (Nasdaq: SAFX). In connection with the closing of the Business Combination: All shares of Class A common stock of Legacy XCF outstanding as of immediately prior to the Business Combination were cancelled and automatically converted into the right to receive an aggregate 142,130,632 shares of New XCF Class A common stock, par value $ 0.0001 per share. All 651,919 shares outstanding Focus Impact Class A and Class B common stock were cancelled and converted into shares of common stock of New XCF on a one-for-one basis. 11,500,000 redeemable outstanding public warrants and 6,400,000 private placement warrants of Focus Impact representing the right to purchase one share of Focus Impact Class A common stock were adjusted to represent the right to purchase one share of New XCF Class A common stock at $ 11.50 per share. 8 XCF GLOBAL, INC. NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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