XCF Global, Inc. (SAFX)

CIK: 0002019793. SIC: 2860 Industrial Organic Chemicals. Latest 10-K as of: 2026-03-31.

SIC breadcrumb: Manufacturing > Chemicals And Allied Products > SIC 2860 Industrial Organic Chemicals

SEC company page: https://www.sec.gov/edgar/browse/?CIK=2019793. Latest filing source: 0001493152-26-014280.

Selected Fundamentals

Financials

Annual standardized facts from SEC companyfacts as of latest extracted filing date 2026-03-31. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0002019793.json. Derived margins, ratios, and free cash flow are computed from the extracted annual SEC facts.

Flow metrics use full-year FY periods from 10-K/10-K/A filings; balance-sheet metrics use FY-end instants. Free cash flow = operating cash flow - capital expenditures. Missing metrics are omitted rather than fabricated.

Ratios

ROE and ROA use period-end equity/assets. Liabilities / equity uses total liabilities divided by stockholders' equity. Current ratio uses current assets divided by current liabilities when both are reported.

Financial Charts

Quarterly

Quarterly standardized facts from SEC companyfacts as of latest extracted filing date 2026-05-15. Source: https://data.sec.gov/api/xbrl/companyfacts/CIK0002019793.json.

Flow metrics use discrete quarter-length periods from 10-Q/10-Q/A filings. Q4 revenue and net income are derived only when annual FY and nine-month YTD facts exist for the same fiscal year; derived Q4 values are labeled. EPS Q4 is not derived.

Quarterly Charts

Macro Cross-References

• CPIAUCSL - Consumer Price Index for All Urban Consumers: All Items in U.S. City Average
• UNRATE - Unemployment Rate
• FEDFUNDS - Federal Funds Effective Rate
• CES0500000003 - Average Hourly Earnings of All Employees, Total Private
• DFEDTARU - Federal Funds Target Range - Upper Limit
• DFEDTARL - Federal Funds Target Range - Lower Limit
• DGS3MO - Market Yield on U.S. Treasury Securities at 3-Month Constant Maturity
• DGS2 - Market Yield on U.S. Treasury Securities at 2-Year Constant Maturity
• DGS10 - Market Yield on U.S. Treasury Securities at 10-Year Constant Maturity
• DGS30 - Market Yield on U.S. Treasury Securities at 30-Year Constant Maturity
• T10Y2Y - 10-Year Treasury Constant Maturity Minus 2-Year Treasury Constant Maturity
• CPILFESL - Consumer Price Index for All Urban Consumers: All Items Less Food and Energy
• CPIUFDSL - Consumer Price Index for All Urban Consumers: Food
• CPIENGSL - Consumer Price Index for All Urban Consumers: Energy
• CUSR0000SAH1 - Consumer Price Index for All Urban Consumers: Shelter
• PCEPI - Personal Consumption Expenditures: Chain-type Price Index
• PCEPILFE - Personal Consumption Expenditures Excluding Food and Energy: Chain-type Price Index
• PPIACO - Producer Price Index by Commodity: All Commodities
• T10YIE - 10-Year Breakeven Inflation Rate
• U6RATE - Total Unemployed, Plus All Marginally Attached Workers Plus Total Employed Part Time for Economic Reasons
• PAYEMS - All Employees, Total Nonfarm
• CIVPART - Labor Force Participation Rate
• EMRATIO - Employment-Population Ratio
• UNEMPLOY - Unemployed
• CE16OV - Employment Level
• ICSA - Initial Claims
• JTSJOL - Job Openings: Total Nonfarm
• JTSQUR - Quits: Total Nonfarm
• GDPC1 - Real Gross Domestic Product
• A191RL1Q225SBEA - Real Gross Domestic Product: Percent Change from Preceding Period
• INDPRO - Industrial Production: Total Index
• TCU - Capacity Utilization: Total Index
• HOUST - New Privately-Owned Housing Units Started: Total Units
• PERMIT - New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Total Units
• RSAFS - Advance Retail Sales: Retail Trade
• PCE - Personal Consumption Expenditures
• DSPIC96 - Real Disposable Personal Income
• PSAVERT - Personal Saving Rate
• M2SL - M2
• BOPGSTB - U.S. International Trade in Goods and Services: Balance
• MSPUS - Median Sales Price of Houses Sold for the United States
• HSN1F - New One Family Houses Sold: United States
• RHORUSQ156N - Homeownership Rate in the United States
• TTLCONS - Total Construction Spending: Total Construction in the United States
• RRVRUSQ156N - Rental Vacancy Rate in the United States
• TOTALSL - Total Consumer Credit Owned and Securitized
• REVOLSL - Revolving Consumer Credit Owned and Securitized
• DRCCLACBS - Delinquency Rate on Credit Card Loans, All Commercial Banks
• GDP - Gross Domestic Product
• GPDI - Gross Private Domestic Investment
• GCE - Government Consumption Expenditures and Gross Investment
• PCEC - Personal Consumption Expenditures
• NETEXP - Net Exports of Goods and Services
• GFDEBTN - Federal Debt: Total Public Debt
• GFDEGDQ188S - Federal Debt: Total Public Debt as Percent of Gross Domestic Product
• FYFSD - Federal Surplus or Deficit
• FGRECPT - Federal Government Current Receipts
• FGEXPND - Federal Government: Current Expenditures
• MANEMP - All Employees, Manufacturing
• USCONS - All Employees, Construction
• USTRADE - All Employees, Retail Trade
• USFIRE - All Employees, Financial Activities
• USGOVT - All Employees, Government
• AWHAETP - Average Weekly Hours of All Employees, Total Private
• DGORDER - Manufacturers' New Orders: Durable Goods
• NEWORDER - Manufacturers' New Orders: Nondefense Capital Goods Excluding Aircraft
• BUSINV - Total Business Inventories
• EXPGS - Exports of Goods and Services
• IMPGS - Imports of Goods and Services
• IR - Import Price Index (End Use): All Commodities
• PPIFIS - Producer Price Index by Commodity: Final Demand

Latest quarter (10-Q)

Latest 10-Q source: 0001493152-26-023764.

Extracted from Part I Item 2 to the first post-MD&A boundary after HTML sanitization. Confidence: high. Filing date: 2026-05-15. Report date: 2026-03-31.

Item
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION
AND RESULTS OF OPERATIONS OF NEW XCF

Unless
otherwise stated herein or unless the context otherwise requires, the terms “we,” “us,” “our,” “the
Company”, “and “New XCF” refer to XCF Global, Inc. (formerly known as Focus Impact BH3 NewCo, Inc.), a Delaware corporation,
after giving effect to the Business Combination (as defined below) and following the Closing Date, June 6, 2025. In addition, unless
otherwise stated herein or unless the context otherwise requires (i) references to “NewCo” refer to Focus Impact BH3 NewCo,
Inc. prior to the Closing Date, (ii) references to “Legacy XCF” refer to XCF Global Capital, Inc., a Nevada corporation,
prior to the Closing Date and (iii) references to “Focus Impact” refer to Focus Impact BH3 Acquisition Company, a Delaware
corporation. In addition to historical information, this discussion contains forward-looking statements that involve risks, uncertainties,
and assumptions that could cause XCF’s actual results to differ materially from management’s expectations. Factors which
could cause such differences are discussed herein and set forth in the “Risk Factors” section included elsewhere in this
Quarterly Report on Form 10-Q.

Company
Overview

XCF
Global, Inc. (“New XCF” or the “Company”), a Delaware corporation, formerly known as Focus Impact BH3 NewCo,
Inc. was founded on March 6, 2024, for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization
or similar business combination. Subsequent to the Business Combination (as defined below), the name was changed to XCF Global Inc.

In
connection with the completion of the Business Combination, Legacy XCF became a wholly owned subsidiary of New XCF. Legacy XCF was formed
in January 2023, was founded to develop, operate and invest in renewable energy assets and production facilities and will continue those
initiatives and business activities as the primary operating subsidiary of New XCF. Throughout 2023, Legacy XCF identified acquisition
targets in Nevada, Florida, and North Carolina as the foundation for the Company’s first production of sustainable aviation fuel
(“SAF”), a synthetic kerosene derived from waste- and residue-based feedstocks such as waste oils and fats, green and municipal
waste, and non-food crops and, currently, blended with conventional Jet-A fuel. We are committed to reducing the world’s carbon
footprint by meeting the growing demand for renewable fuels and will concentrate on the production of clean-burning, sustainable biofuels,
principally SAF. Though we are focused on promoting and accelerating the decarbonization of the aviation industry through SAF, we may,
opportunistically, produce other renewable products such as renewable diesel, a renewable fuel, and bio-based glycerol, also known as
natural glycerin, which is used in healthcare, food, and cosmetics industries. We believe there is a market opportunity in the aviation
and renewable sectors as a result of a combination of regulatory support, industry-led demand and end-user commitment. The actual market
environment may evolve differently from our expectations and is subject to a variety of external forces such as government regulation
and technological development that may impact the market opportunity. XCF intends to build a nationwide portfolio of SAF and renewable
fuels production facilities that use waste-and residue-based feedstocks at competitive production costs. We also intend to implement
a fully integrated business model from feedstock supply and production to marketing and sales of SAF. XCF is currently one of the few
publicly traded renewable fuels companies primarily focused on SAF and renewable fuels in the United States, with the stated intention
to be a majority SAF producer, distinguishing itself from peers that are predominantly legacy crude oil refiners.

We
intend to scale and operate clean fuel production facilities engineered to the highest levels of compliance, reliability, and
quality. The Company owns New Rise Reno Renewables LLC, which owns and operates a renewable fuels facility, New Rise Reno, in
McCarren, Nevada. In February 2025, New Rise Reno started its ramp-up process and began initial production of SAF and renewable
naphtha (a byproduct in SAF production). First deliveries of near SAF and renewable naphtha began in March 2025. During the initial
phase of production ramp-up, New Rise Reno production facility operated at approximately 50% of nameplate capacity. Until SAF
production is at nameplate capacity, New Rise Reno is not deemed to be an operating facility and classifies as under construction
until final project acceptance under New Rise’s license agreement with Axens North America under the original intention of the
SAF conversion. Such final project acceptance has not yet been completed. While ramp-up processes are being undertaken and until
final plant acceptance, management has made the determination to temporarily produce and sell renewable diesel, a byproduct of SAF
production, which can be achieved at approximately 2,000 barrels per day, which is approximately 20% below nameplate capacity, and
without any additional modifications to the facility. In May 2025, New Rise Reno began selling renewable diesel under its Supply and
Offtake Agreement with Phillips 66 (the “P66 Agreement”). The P66 Agreement was canceled on May 1, 2026 and the Company entered into a a Renewable Fuel Tolling Agreement
with BGN, an independent global energy and commodities group, pursuant to which it is anticipated that the Company will provide the following
services to BGN both at its New Rise Reno facility and, potentially, a second, future XCF facility:

●

Inside-the-Fence Logistics: Receipt, handling, and management of feedstock inventory;

●

Production/Refining: Processing BGN-owned feedstock into Sustainable Aviation Fuel (SAF) and Renewable
Naphtha;

●

Storage and Blending: Provision of tankage for feedstocks and finished products, including blending
services to meet commercial specifications; and,

●

Marketing Support:
Coordination with BGN’s sales and logistics teams per the existing MOU

40

We
also own dormant biodiesel plants located in Fort Myers, Florida and Wilson, North Carolina that we intend to further build-out and reconstruct
into SAF, renewable fuels and/or associated SAF-related infrastructure. The Company is continuing to evaluate the role of each of the
Fort Myers, Florida and Wilson, North Carolina facilities within our broader SAF and biofuels value chain.

Company
Formation and Initial Acquisitions

New
XCF, formerly known as Focus Impact BH3 NewCo, Inc., was founded on March 6, 2024, for the purpose of effecting a merger, share exchange,
asset acquisition, share purchase, reorganization or similar business combination. Subsequent to the Business Combination (as defined
below), the name was changed to XCF Global Inc.

On
October 31, 2023, Legacy XCF entered into an asset purchase agreement with Southeast Renewables, LLC (“Southeast Renewables”)
to acquire its Wilson, North Carolina biodiesel plant assets for an aggregate purchase price of $100,000,000. Legacy XCF issued Southeast
Renewables 7,700,000 shares of Legacy XCF at an agreed conversion price of $10 per share ($77,000,000) and issued a convertible promissory
note (“Southeast Renewables Convertible Note”) in principal amount of $23,000,000, with a maturity date of October 31, 2024.
The Southeast Renewables Convertible Note accrues interest at the per annum rate of 8%. The Southeast Renewables Convertible Note can
be converted into shares of Legacy XCF common stock based on the outstanding principal and interest, divided by the conversion price.
The conversion price prior to a change of control is $10, and subsequent to a change of control is equal to the volume weighted average
price of the shares of common stock for the 20 days prior to the notice of conversion.

On
December 29, 2023, Southeast Renewables exercised its right to convert the Southeast Renewables Convertible Note principal balance of
$23,000,000 plus accrued interest of $297,425 into 2,329,743 shares of Legacy XCF common stock.

At
the closing of the Business Combination, the 7,700,000 shares and 2,329,743 shares of Legacy XCF common stock issued to Southeast Renewables
were automatically converted into shares of New XCF Class A common stock at an exchange ratio of approximately 0.68627. The 7,700,000
and 2,329,743 Legacy XCF shares converted into 5,284,301 and 1,598,839 shares of New XCF Class A common stock upon closing.

On
October 31, 2023, Legacy XCF also entered into an asset purchase agreement with Good Steward Biofuels FL, LLC (“Good Steward”),
to acquire its Fort Myers, Florida biodiesel plant assets. Legacy XCF issued Southeast Renewables, the parent company of Good Steward,
9,800,000 shares of XCF common stock as partial consideration for the purchase, and also assumed certain liabilities, including a $356,426
loan made by GL Part SPV I, LLC (“GL”) to Southeast Renewables. GL was a shareholder of Legacy XCF and owns membership interests
in Southeast Renewables. The purchase price was $100,000,000 less $200,000 in notes payable, and loans assumed by Legacy XCF using a
conversion price of $10 per share.

At
the closing of the Business Combination, the 9,800,000 shares of Legacy XCF common stock issued to Good Steward were automatically converted
into shares of New XCF common stock at an exchange ratio of approximately 0.68627. The 9,800,000 Legacy XCF shares converted into 6,725,474
shares of New XCF Class A common stock upon closing.

The
Wilson, North Carolina plant and Fort Myers, Florida plant have been non-operational for over three years and five years, respectively.

41

On
January 23, 2025, and February 19, 2025, Legacy XCF completed its acquisitions (the “Acquisition”) of New Rise SAF Renewables
Limited Liability Company, (“New Rise SAF”) and New Rise Renewables, LLC. (“New Rise Renewables”) (collectively
the “New Rise Entities”), which became wholly owned subsidiaries of Legacy XCF. New Rise Renewables, a Delaware limited liability
company, was formed on September 23, 2016, for the purpose of owning 100% of New Rise Renewables Reno, LLC (“New Rise Reno”).
New Rise Renewables is focused on producing renewable fuels to lower the world’s carbon footprint by meeting the growing demand
for renewable fuels and will concentrate on the production of clean-burning, sustainable biofuels, principally SAF. The New Rise Reno
facility is built on a 10-acre parcel located within McCarran, Nevada.

Recent
Developments

Transactions
with New Rise

On
December 8, 2023, Legacy XCF entered into the New Rise Renewables MIPA with RESC Renewables Holdings LLC (“RESC”)
to acquire all of the issued and outstanding membership interests of New Rise Renewables for an aggregate purchase price of $1,100,000,000
less acquired liabilities, comprised of incurred indebtedness, of $112,580,000. Consideration for the purchase was paid at closing of
the Acquisitions by delivery of a convertible promissory note (the “New Rise Convertible Note”) in principal amount of $100,000,000
and issuance of 88,750,000 shares of Legacy XCF common stock. The New Rise Convertible Note was non-interest bearing and had a maturity
date of twelve months after the date the note was issued in connection with the closing of the Acquisition. Once issued, the New Rise
Convertible Note can be converted into shares of Legacy XCF common stock based on the outstanding principal, divided by the conversion
price. The New Rise Renewables MIPA provides that the conversion price will be equal to the average price of the shares of common stock
for the 10 days prior to and 10 days subsequent to the notice of conversion. However, in connection with the execution of a Company Support
Agreement by

[Excerpt truncated for page length; source filing is linked above.]

Latest 10-K MD&A

Extracted from Item 7 to the first post-MD&A boundary after HTML sanitization. Confidence: high. Filing date: 2026-03-31. Report date: 2025-12-31.

ITEM
7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

The
following information should be read in conjunction with the Financial Statements, including the notes thereto, included elsewhere in
this Form 10-K. This discussion contains certain forward-looking statements that involve risks and uncertainties. Our actual results
and the timing of certain events could differ materially from those discussed in these forward-looking statements as a result of certain
factors, including, but not limited to, those set forth herein and elsewhere in this Form 10-K.

Company
Overview

XCF,
formerly known as Focus Impact BH3 NewCo, Inc. was founded on March 6, 2024, for the purpose of effecting a merger, share exchange, asset
acquisition, share purchase, reorganization or similar business combination. Subsequent to the Business Combination, the name was changed
to XCF Global, Inc.

In
connection with the completion of the Business Combination, Legacy XCF became a wholly owned subsidiary of XCF. Legacy XCF was formed
in January 2023, was founded to develop, operate and invest in renewable energy assets and production facilities and will continue those
initiatives and business activities as the primary operating subsidiary of XCF. Throughout 2023, Legacy XCF identified acquisition targets
in Nevada, Florida, and North Carolina as the foundation for the Company’s first production of SAF, a synthetic kerosene derived
from waste- and residue-based feedstocks such as waste oils and fats, green and municipal waste, and non-food crops and, currently, blended
with conventional Jet-A fuel. We are committed to reducing the world’s carbon footprint by meeting the growing demand for renewable
fuels and will concentrate on the production of clean-burning, sustainable biofuels, principally SAF. Though we are focused on promoting
and accelerating the decarbonization of the aviation industry through SAF, we may, opportunistically, produce other renewable products
such as renewable diesel, a renewable fuel, and bio-based glycerol, also known as natural glycerin, which is used in healthcare, food,
and cosmetics industries. We believe there is a market opportunity in the aviation and renewable sectors as a result of a combination
of regulatory support, industry-led demand and end-user commitment. The actual market environment may evolve differently from our expectations
and is subject to a variety of external forces such as government regulation and technological development that may impact the market
opportunity. XCF intends to build a nationwide portfolio of SAF and renewable fuels production facilities that use waste-and residue-based
feedstocks at competitive production costs. We also intend to implement a fully integrated business model from feedstock supply and production
to marketing and sales of SAF. XCF is currently one of the few publicly traded renewable fuels companies primarily focused on SAF and
renewable fuels in the United States, with the stated intention to be a majority SAF producer, distinguishing itself from peers that
are predominantly legacy crude oil refiners.

We
intend to scale and operate clean fuel production facilities engineered to the highest levels of compliance, reliability, and quality.
The Company owns New Rise Reno Renewables LLC, which owns and operates a renewable fuels facility, New Rise Reno, in McCarren, Nevada.
In February 2025, New Rise Reno started its ramp-up process and began initial production of SAF and renewable naphtha (a byproduct in
SAF production). First deliveries of near SAF and renewable naphtha began in March 2025. During the initial phase of production ramp-up,
New Rise Reno production facility operated at approximately 50% of nameplate capacity. Until SAF production is at nameplate capacity,
New Rise Reno is not deemed to be an operating facility and classifies as under construction until final project acceptance under New
Rise’s license agreement with Axens North America under the original intention of the SAF conversion, such as meeting ASTM 7566
specifications for synthetic blending component standards to be blended with conventional jet fuel. Such final project acceptance has
not yet been completed.

While ramp-up processes are being undertaken and until final plant acceptance, management has made the determination
to temporarily produce and sell renewable diesel, a byproduct of SAF production, which can be achieved at approximately 2,000 barrels
per day, which is approximately 20% below nameplate capacity, and without any additional modifications to the facility. In May 2025,
New Rise Reno began selling renewable diesel under its Supply and Offtake Agreement with Phillips 66 (the “P66 Agreement”).

We
also own dormant biodiesel plants located in Fort Myers, Florida and Wilson, North Carolina that we are considering whether to further build-out and reconstruct
into SAF, renewable fuels and/or associated SAF-related infrastructure. The Company is continuing to evaluate the role of each of the
Fort Myers, Florida and Wilson, North Carolina facilities within our broader SAF and biofuels value chain.

68

Company
Formation and Initial Acquisitions

XCF,
formerly known as Focus Impact BH3 NewCo, Inc., was founded on March 6, 2024, for the purpose of effecting a merger, share exchange,
asset acquisition, share purchase, reorganization or similar business combination. Subsequent to the Business Combination, the name was
changed to XCF Global, Inc.

On
October 31, 2023, Legacy XCF entered into an asset purchase agreement with Southeast Renewables, LLC (“Southeast Renewables”)
to acquire its Wilson, North Carolina biodiesel plant assets for an aggregate purchase price of $100,000,000. Legacy XCF issued Southeast
Renewables 7,700,000 shares of Legacy XCF at an agreed conversion price of $10 per share ($77,000,000) and issued a convertible promissory
note (“Southeast Renewables Convertible Note”) in principal amount of $23,000,000, with a maturity date of October
31, 2024. The Southeast Renewables Convertible Note accrues interest at the per annum rate of 8%. The Southeast Renewables Convertible
Note can be converted into shares of Legacy XCF common stock based on the outstanding principal and interest, divided by the conversion
price. The conversion price prior to a change of control is $10, and subsequent to a change of control is equal to the volume weighted
average price of the shares of common stock for the 20 days prior to the notice of conversion.

On
December 29, 2023, Southeast Renewables exercised its right to convert the Southeast Renewables Convertible Note principal balance of
$23,000,000 plus accrued interest of $297,425 into 2,329,743 shares of Legacy XCF common stock.

At
the closing of the Business Combination, the 7,700,000 shares and 2,329,743 shares of Legacy XCF common stock issued to Southeast Renewables
were automatically converted into shares of XCF Class A common stock at an exchange ratio of approximately 0.68627. The 7,700,000 and
2,329,743 Legacy XCF shares converted into 5,284,301 and 1,598,839 shares of XCF Class A common stock upon closing.

On
October 31, 2023, Legacy XCF also entered into an asset purchase agreement with Good Steward Biofuels FL, LLC (“Good Steward”),
to acquire its Fort Myers, Florida biodiesel plant assets. Legacy XCF issued Southeast Renewables, the parent company of Good Steward,
9,800,000 shares of XCF common stock as partial consideration for the purchase, and also assumed certain liabilities, including a $356,426
loan made by GL to Southeast Renewables. GL was a shareholder of Legacy XCF and owns membership interests in Southeast Renewables. The
purchase price was $100,000,000 less $200,000 in notes payable, and loans assumed by Legacy XCF using a conversion price of $10 per share.

At
the closing of the Business Combination, the 9,800,000 shares of Legacy XCF common stock issued to Good Steward were automatically converted
into shares of XCF common stock at an exchange ratio of approximately 0.68627. The 9,800,000 Legacy XCF shares converted into 6,725,474
shares of XCF Class A common stock upon closing.

The
Wilson, North Carolina plant and Fort Myers, Florida plant have been non-operational for over three years and five years, respectively.

On
January 23, 2025, and February 19, 2025, Legacy XCF completed its acquisitions (the “Acquisition”) of New Rise SAF
Renewables Limited Liability Company, (“New Rise SAF”) and New Rise Renewables, LLC. (“New Rise Renewables”)
(collectively the “New Rise Entities”), which became wholly owned subsidiaries of Legacy XCF. New Rise Renewables,
a Delaware limited liability company, was formed on September 23, 2016, for the purpose of owning 100% of New Rise Reno. New Rise Renewables
is focused on producing renewable fuels to lower the world’s carbon footprint by meeting the growing demand for renewable fuels
and will concentrate on the production of clean-burning, sustainable biofuels, principally SAF. The New Rise Reno facility is built on
a 10-acre parcel located within McCarran, Nevada.

69

Recent
Developments

Proposed
Transaction with Southern, DEVS and EEME

On
January 26, 2026, XCF, entered into the term sheet with Southern, DEVS, and EEME, which sets forth the principal terms and conditions
of the Proposed Transaction. Pursuant to the Term Sheet, and subject to the finalization of mutually agreeable merger structure and definitive
transaction documents and ultimately the satisfaction of certain closing conditions, it is expected that Southern and DEVS will each
merge with wholly-owned subsidiaries of XCF, with Southern and DEVS surviving, and their respective stockholders receiving shares of
Common Stock of XCF, resulting in Southern and DEVS becoming wholly-owned subsidiaries of XCF.

In
connection with and to support the Proposed Transaction and subject to the terms and conditions set forth in the Term Sheet, XCF
agreed to invest $10 million to convert and build out its New Rise Reno facility for the Plant Conversion, to be funded through the
sale by XCF to EEME of $10 million of Common Stock; provided that in no event shall XCF issue to EEME, nor shall EEME (i) acquire
more than 41,639,170 shares of XCF’s common stock pursuant to this Term Sheet or (ii) acquire or to otherwise become, directly
or indirectly, a “beneficial owner” (within the meaning of Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder) of a number of shares of Common Stock in excess of 19.99% of the issued and outstanding shares
of Common Stock as of the date hereof until such time as XCF has obtain stockholder approval for such issuance (the “Share
Cap”) which XCF obtained on March 6, 2026. Subsequent to the execution of the Term Sheet, EEME has purchased 69,000,000 million shares of Common Stock for
$6,900,000. The issuance and sale to EEME of the remaining 31,000,000 shares of Common Stock is expected to be consummated
periodically during the period ending the week of March 31, 2026, although there can be no assurances in this
regard. EEME is expected to have customary demand and piggy-back registration
rights and will not be subject to any lock-up or other transfer restrictions (other than as imposed by applicable securities laws or
underwriters.) EEME’s obligation to acquire such shares is independent of the remainder of the proposed Transaction
contemplated by the Term Sheet. The offer and sale of the shares of XCF common stock to EEME, will be made in reliance upon Section
4(a)(2) under the Securities Act, or upon such other exemption or exclusion from the registration requirements of the
Securities Act as may be available with respect to any or all of the transactions with the EEME to be made under the Term
Sheet.

On March 6, 2026, XCF held a Special Meeting of Shareholders, at which
the Shareholders approved the potential issuance of 19.99% or more of XCF’s issued and outstanding Common Stock to a single investor,
thus removing the Share Cap. 

The
Term Sheet provides that the Board post-closing will be comprised of four members designated by XCF (including XCF’s Chief Executive
Officer, Chris Cooper, as chair), two members designated by Southern, and one member designated by DEVS.

The
Term Sheet includes customary provisions regarding definitive agreements, including that the business combination agreement and related
agreements will contain customary representations, warranties, covenants, indemnities, limitations on indemnity, termination provisions,
and other terms typical for transactions of this nature.

The
Term Sheet further provides for certain interim covenants and restrictions, including, but not limited to, that (so long as EEME continues
funding under the schedule) XCF will not issue securities under its equity line of credit without EEME’s approval, neither XCF
nor DEVS will effect any reverse split without EEME’s prior written consent, and neither XCF, Southern, nor DEVS (or their affiliates)
will sell shares to brokers for naked short coverage.

The
Term Sheet is governed by Delaware law, contains customary confidentiality provisions, and will remain in effect until the earliest of:
180 days after its date, execution of definitive agreements, mutual written termination, termination by XCF for failure by EEME to timely
fund per the schedule, termination by any party based on unsatisfactory due diligence, or termination by any party to fulfill fiduciary
duties in respect of a superior offer.

70

There
can be no assurance that any of the foregoing conditions will be satisfied or waived, that the definitive agreements necessary to consummate
the Proposed Transaction will be entered into, or that the Proposed Transaction will be consummated on the terms described herein or
at all. The closing the Proposed Transaction, including the satisfaction of the closing conditions, are subject to numerous factors,
many of which are outside the control of XCF, including market conditions, regulatory approvals, the actions of third parties, the ability
of the parties to negotiate and execute definitive agreements, and the achievement of specified operational and financial milestones,
including certain conditions that depend on the business performance and operating results of XCF. Although the Term Sheet provides that
certain provisions are binding on the parties, it does not obligate the parties to consummate the Proposed Transaction, and the Term
Sheet reflects preliminary, non-final terms that remain subject to further negotiation, modification, and approval by the applicable
boards of directors and special committees and may be terminated in accordance with its terms, including in circumstances involving an
alleged breach. Any such termination, or a failure by the parties to agree on definitive documentation, could result in disputes or litigation
relating to the interpretation, enforceability, or performance of the binding provisions of the Term Sheet, which could be costly, time-consuming,
divert management attention, and adversely affect the financial condition or liquidity of one or more of the parties, including their
ability to pursue or defend such claims. Accordingly, investors should not place undue reliance on the consummation of the Proposed Transaction
or on the achievement of any related milestones or financial thresholds. Moreover, even if the Proposed Transaction is consummated, the
parties may never achieve the purpose of the Proposed Transaction and the market value the parties are aiming to achieve may never materialize.

Financial
Overview

Results
of Operations – for the year ended December 31, 2025, and 2024

Year Ended

Year Ended

December
31, 2025

December
31, 2024

Revenue

$

20,815,955

$

-

Cost of sales

24,586,068

-

Gross loss

(3,770,113

)

-

Operating expenses:

Operating expenses

7,010,223

2,987,852

General and administrative expenses

22,385,312

18,186,056

Severance expense

19,162,500

-

Professional fees

15,559,033

-

Total operating expenses

64,117,068

21,173,908

Loss from operations

(67,887,181

)

(21,173,908

)

Other income (expense)

Change in the fair value of note payable

4,567,951

-

Change in the fair value of notes payable
related party

(514,709

)

Change in fair value of warrants

209,916,200

-

Loss on issuance of debt

(138,000

)

-

Loss on issuance of debt to related party

(40,531,000

)

-

ELOC commitment fees

(7,400,000

)

-

Unrealized loss on derivative asset

(16,156,071

)

-

Realized gain on derivative asset

1,316,827

Interest income (expense), net

(9,155,274

)

(2,930,889

)

Other income (expense),
net

(13,975

)

Total other income (expense)

141,891,949

(2,930,889

)

Net income (loss)

$

74,004,768

$

(24,104,797

)

Income
(loss) per common share, basic and diluted(1)

$

0.52

$

-

Weighted average number
of common shares outstanding, basic and diluted(1)

142,298,067

-

1

The
historical common equity structure was in the form of membership percentages, and no shares were issued. As such, reporting periods
prior to the year ended December 31, 2025 will not present share or per share data.

71

Revenue

The
Company’s revenues are generated under an agreement with Phillips 66. Under the Phillips 66 agreement, the Company will sell renewable diesel, sustainable aviation fuel, renewable Naphtha,
(collectively, “renewable fuels”) and transfer Renewable Identification Numbers (“RIN”) and Low Carbon Fuel
Standard credits (“LCFS”) (collectively “environmental credits”) associated with the generation of the
renewable fuels.

Sale
of sustainable aviation fuel and Naphtha

As
discussed in Note 1, the Company is currently in the process of constructing plants to process non-food feedstock into renewable fuels.
While the Company owns several plants, none of the facilities have commenced production operations as of December 31, 2025. As the plants
were in the construction phase, all sales of sustainable aviation fuel and Naphtha are considered activities to bring the plant assets
to operating production; therefore, in accordance with ASC 360-10-30-1, sales of sustainable aviation fuel and Naphtha during the construction
phase before operational commencement occurs are capitalized as a reduction of the cost of the plant. For the years ended December 31,
2025, $2,741,987 of net sales of Naphtha and synthetic blended components were capitalized as a reduction of the cost of the plants,
respectively.

Sale
of renewable diesel and environmental credits

The
Company generates revenue from the sale of renewable diesel and transfer of related environmental credits under the contract with Phillips
66 when control is transferred to the customer. The amount of consideration to which the Company is entitled for the delivery of renewable
diesel and environmental credits is based on pricing established in the contract that is indexed to commodity market prices and quantities
sold. Revenue related to the sale of renewable energy and environmental credits is recognized at a point in time when control is transferred
to the associated customer. During the years ended December 31, 2025, and 2024, $20,815,955 and $0 was recognized from the sales of renewable
diesel, Naphtha and environmental credits.

Cost
of Sales

We
incurred $24,586,068 and $0 of cost of sales for the years ended December 31, 2025, and 2024, respectively. Cost of sales includes those
costs directly associated with the production of revenues, such as raw material consumed, freight costs, factory overhead, personnel
costs, and other direct production costs.

Operating
expenses

We
incurred $7,010,223 and $2,987,852 of operating costs for the years ended December 31, 2025, and 2024, respectively. Operating costs primarily
consist of plant utilities, repairs and maintenance, quality control and testing. The increase in operating costs is attributable to our New Rise facility starting production.

General
and Administrative Expenses

We
incurred $22,385,312 and $18,186,056 of general and administrative expenses during the years ended December 31, 2025, and 2024, respectively.
General and administrative expenses primarily consist of stock-based compensation, professional fees, payroll expenses, rent, and other
expenses. The expenses have increased due to a significant increase in the stock-based compensation and payroll cost during the year
ended December 31, 2025.

Severance
expense

We
incurred $19,162,500 and $0 severance expenses for the years ended December 31, 2025, and 2024, respectively. Severance expenses consist
of stock-based compensation that may be paid to former executives as part of their severance agreement.

Professional
fees

We
incurred $15,559,033 and $0 professional fees for the year ended December 31, 2025, and 2024, respectively. Professional fees primarily
consist of fees payable for transaction cost, consulting fees for transaction closing, legal fees, marketing consultancy, and other consultancy
expenses.

Change
in the fair value of notes payable

Change
in the fair value of note payable was $4,567,951 and $0, respectively, for the year ended December 31, 2025, and 2024. As a result of
the Business Combination that closed June 6, 2025, XCF assumed a note payable from Polar Multi-Strategy Master Fund (“Polar”)
of $1,200,000. The Company elected the fair value option for valuing this loan. From the date of Business Combination to period end,
the Company recognized a $4,567,951 gain due to the change in fair value of the Polar note and several other note payables. This change
is recorded within change in the fair value of note payable in the consolidated statements of operations.

Change
in the fair value of note payable related party was $(514,709) and $0, respectively, for the year ended December 31, 2025, and 2024.

72

Change
in fair value of warrants

Change
in the fair value of warrants was $209,916,200 and $0, respectively, for the year ended December 31, 2025, and 2024. In connection with
the closing of Business Combination, the Company assumed 11,500,000 outstanding public warrants (the “Public Warrants”) to
purchase an aggregate 11,500,000 shares of New XCF common stock at $11.50 and 6,400,000 outstanding private placement warrants (the “Private
Placement Warrants”) to purchase an aggregate 6,400,000 shares of New XCF common stock at $11.50. The total value of the liability
associated with the Public Warrants and Private Warrants was $121,900,000 and $88, 768,000, measured at fair value at the Closing Date.
The company has recognized a gain of $209,916,200 with the revaluation of these warrants.

Loss
on issuance of debt

Loss
on issuance of debt was $138,000 and $0, respectively, for the year ended December 31, 2025, and 2024.

Loss
on issuance of debt to related party

Loss
on issuance of debt to related party was $40,531,000 and $0, respectively, for the year ended December 31, 2025, and 2024. The loss was
recorded on a promissory note issued to GL which has been converted to shares of Class A common stock

ELOC
commitment fees

ELOC
commitment fees were $7,400,000 and $0, respectively, for the year ended December 31, 2025, and 2024. The expenses are paid for commitment
fees in connection with the ELOC Agreement with Helena for $50,000,000.

Unrealized
and Realized loss on derivative asset

On
May 30, 2025, New XCF, Legacy XCF, Randall Soule (“Soule”), in his individual capacity as a shareholder of Legacy XCF, and
Helena Global Investment Opportunities I Ltd (“Helena”) entered into a promissory note (the “Helena Note”) for
gross principal amount of $2,000,000. The Helena Note bears interest of $400,000, is unsecured, and is due at the earlier of (i) the
date that is three months from Helena’s disbursement of the loan, (ii) an event of default (as specified in the Helena Note), if
such note is then declared due and payable in writing by the holder or if a bankruptcy event occurs (in which case no written notice
from the holder is required) or (iii) in connection with future debt or equity issuances by New XCF or its subsidiaries. In connection
with the issuance of the Helena Note, Soule has agreed to transfer 2,840,000 shares of Legacy XCF common stock held by him to Helena,
representing the expected number of shares of Legacy XCF common stock that will be equal to 1,948,862 shares of New XCF Class A common
stock as of the closing of the Business Combination (the “Advanced Shares”). Upon Helena’s receipt of an aggregate
of $2,400,000 in (i) payments from New XCF and (ii) aggregate net proceeds from the sale of Advanced Shares, New XCF’s payment
obligations for principal and interest under the Helena Note will have been satisfied and Helena is obligated to return any remaining
Advanced Shares to Soule. If Helena shall have sold all of the Advanced Shares and not yet received at least $2,400,000 in net proceeds
from the sale thereof and in other payments from New XCF, New XCF shall remain responsible for payment of any shortfall, which shall
be payable as otherwise required under the terms of the Helena Note. As disclosed above with respect to the Helena Note, in connection
with the issuance of the Helena Note, Soule agreed to transfer 2,840,000 shares of Legacy XCF common stock held by him to Helena. The
Company and Soule entered into a letter agreement dated as of May 30, 2025 (the “Side Letter Forward” or “derivative
asset”), pursuant to which the Company agreed to issue Soule 2,840,000 shares of Legacy XCF common stock (“Replacement Shares”)
in consideration for Soule’s transfer of an equal number of shares to Helena. At issuance, the Company recorded the Replacement
Shares and the Side Letter Forward at their fair value. On July 1 and July 16, 2025, the Company received cash payment from Helena totaling
$2,249,381 for the remaining Advanced Shares, and in exchange the Company and Soule waived Helena’s obligation to return the those
remaining Advanced Shares. The Company remeasured the derivate asset and recorded an unrealized gain of $97,443 which was recorded within
unrealized loss on derivative asset in the consolidated statements of operations. The Company derecognized the derivative asset at the
settlement date fair value and recorded $1,316,827 of gain for the difference between the cash received and the fair value of the derivative
asset, which is recorded in realized gain on derivative asset. For the period ended December 31, 2025, the Company recognized a $16,156,071
loss on the Side Letter Forward, which is recorded in unrealized loss on derivative asset in the consolidated statement of operations.
As of December 31, 2025, the fair value of the derivative asset is $0.

73

Interest
income (expense), net

We
incurred $(9,155,274) and $(2,930,889) of interest income (expense), net for the year ended December 31, 2025, and 2024, respectively. Interest
expense consists of interest incurred on our convertible promissory notes and notes payable and late fees on the notes payable. For the
year ended December 31, 2025, the Company entered into additional convertible promissory notes and incurred late fees on financial liability
as compared to the year ended December 31, 2024, resulting in additional interest expense being incurred during the period.

Critical
Accounting Estimates and Policies

Our
financial statements are prepared in accordance with generally accepted accounting principles in the U.S. The preparation of our financial
statements and related disclosures requires us to make estimates and judgments that affect the reported amounts of assets, liabilities,
costs and expenses, and the disclosure of contingent assets and liabilities in our financial statements. We base our estimates on historical
experience, known trends and events and various other factors that we believe are reasonable under the circumstances, the results of
which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other
sources. We evaluate our estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different
assumptions or conditions.

While
our significant accounting policies are described in more detail in the notes to our financial statements, we believe that the following
accounting policies are those most critical to the judgments and estimates used in the preparation of our financial statements.

Inventory

Inventory
valuation requires management to make significant judgments and estimates regarding future demand, selling prices, product obsolescence,
and costs to sell inventory. These estimates are derived from historical results, current sales trends, forecasted demand, and anticipated
market conditions. Management reviews inventory balances periodically and records valuation allowances when inventory carrying amounts
exceed estimated net realizable value. Once recorded, inventory write-downs establish a new cost basis and are not subsequently reversed.

As
of December 31, 2025, the Company reported finished goods inventory of $337,971, net of reserves, and recorded inventory reserves of
$49,277, primarily related to finished goods. The Company did not hold any inventory as of December 31, 2024. Inventory balances and
related reserves may fluctuate in future periods as the Company expands operations and responds to changes in demand and market conditions.

74

Impairment
of Long-Lived Assets

Long-lived
assets, including construction in progress, are reviewed for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. The recoverability of assets to be held and used is measured by a comparison of the
carrying amount of an asset group to future net cash flows expected to be generated by the asset group. If an asset group is determined
not to be recoverable, the asset group’s carrying value is considered to be impaired. The impairment to be recognized is the amount
by which the carrying amount of the assets exceeds the fair market value of the assets and is allocated to individual assets in the asset
group on a relative fair value basis, not to be reduced below an individual asset’s fair value. During the year ended December
31, 2024, no triggering events were identified that would require a quantitative assessment. During the periods ended December 31, 2025,
and December 31, 2024, no impairment expense was recognized.

Income
Taxes

The Company’s accounting
for income taxes is considered a critical accounting policy due to the significant judgment required in evaluating deferred tax assets,
determining the need for valuation allowances, and estimating liabilities for uncertain tax positions. Deferred tax assets are recognized
for temporary differences and tax attributes to the extent management believes it is more likely than not that such assets will be realized.

Management regularly assesses
the realizability of deferred tax assets by evaluating historical and projected taxable income, the timing of future reversals of temporary
differences, and available tax planning strategies. Based on this assessment, valuation allowances are recorded or adjusted as necessary.
The Company also evaluates tax positions taken in filed tax returns and records reserves for uncertain tax positions when it is not more
likely than not that the position will be sustained upon examination. Changes in facts, circumstances, or assumptions underlying these
judgments could materially impact the Company’s income tax expense, effective tax rate, and deferred tax balances in future periods.

Construction
in progress (“CIP”)

We incur costs related to the
development and construction of our projects. Development costs are expensed as incurred. Once management concludes that construction
of a project is probable and sufficient development milestones have been achieved, certain directly attributable costs are capitalized
as construction in progress and depreciated over the useful life of the related asset once placed into service.

Determining whether a project
has reached the point at which construction is considered probable requires significant judgment and depends on factors such as regulatory
approvals, financing availability, project economics, and management’s intent and ability to proceed. If management’s judgments
regarding project viability change, capitalized costs could be written off, which could have a material adverse effect on our financial
results.

New
Accounting Pronouncements

Recently
Issued, Not Yet Adopted Accounting Pronouncements

In
November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income—Expense Disaggregation
Disclosures (Subtopic 220-40) – Disaggregation of Income Statement Expenses,” which requires additional disclosure about
specified categories of expenses included in relevant expense captions presented on the income statement. The amendments are effective
for annual periods beginning after December 15, 2026, and for interim periods within fiscal years beginning after December 15, 2027.
Early adoption is permitted. The amendments may be applied either prospectively or retrospectively. The Company is currently evaluating
this ASU to determine its impact on the Company’s disclosures.

In
November 2024, the FASB issued ASU 2024-04 (“ASU 2024-04”), Debt-Debt with Conversion and Other Options (Subtopic 470-20).
The guidance in ASU 2024-04 clarifies the requirements related to accounting for the settlement of a debt instrument as an induced conversion.
The standard is effective for fiscal years beginning after December 15, 2025, and interim periods within fiscal years beginning after
December 15, 2025, with early adoption permitted as of the beginning of a reporting period if the entity has also adopted ASU 2020-06
for that period. The Company is currently evaluating the impact that the adoption of ASU 2024-04 may have on its disclosures in its consolidated
financial statements.

Recently
Adopted Accounting Pronouncements

In
May 2025, the FASB issued ASU 2025-03 (“ASU 2025-03”), Business Combinations (Topic 805) and Consolidation (Topic 810), which
enhance the comparability of financial statements across entities engaging in acquisition transactions effected primarily by exchanging
equity interests when the legal acquiree meets the definition of a business. Specifically, under the amendments, acquisition transactions
in which the legal acquiree is a VIE will, in more instances, result in the same accounting outcomes as economically similar transactions
in which the legal acquiree is a voting interest entity. The amendments in this Update do not change the accounting for a transaction
determined to be a reverse acquisition or a transaction in which the legal acquirer is not a business and is determined to be the accounting
acquiree. The amendments are effective for fiscal years beginning after December 15, 2026, and interim reporting periods within those
annual reporting periods. The amendment should be applied prospectively to any acquisition transaction that occurs after the initial
application date. Early adoption is permitted as of the beginning of an interim or annual reporting period. The Company early adopted
the ASU 2025-03 as of January 1, 2025. The adoption of ASU 2025-03 did not have a material impact on its consolidated financial statements
as of December 31, 2025.

75

In
December 2023, the FASB issued ASU 2023-09 (“ASU 2023-09”), Income Taxes, which enhances the transparency of income tax disclosures
by expanding annual disclosure requirements related to the rate reconciliation and income taxes paid. The amendments are effective for
fiscal years beginning after December 15, 2024. Early adoption is permitted. The amendments should be applied on a prospective basis.
Retrospective application is permitted. The Company adopted ASU 2023-09 as of January 1, 2025. The adoption did not have a material impact
on its consolidated financial statements.

Liquidity
and Capital Resources

We
continually monitor and manage cash flow to assess the liquidity necessary to fund operations and capital projects. We manage our capital
resources and adjust them to take into account changes in economic conditions and the risk characteristics of the underlying assets.
To maintain or adjust our capital resources, we may, where necessary, control the amount of working capital, pursue financing or manage
the timing of our capital expenditures. As of December 31, 2025, we had a working capital deficit of $221,365,831 (current assets of
$27,648,607, less current liabilities of $249,014,438 These conditions raise substantial doubt about our ability
to continue as a going concern.

The
Company’s ultimate success is dependent on its ability to obtain additional financing and generate sufficient cash flow to
meet its obligations on a timely basis. The Company’s business will require significant capital to sustain operations and
significant investments to execute its long-term business plan. Additionally, the Company anticipates incurring significant expense
in connection with negotiating the Potential Transaction among the Company, DEVS, Southern and EEME, as well as integrating and
operating the combined companies should the Potential Transaction be consummated, of which there can be no assurances. Absent
generation of sufficient revenue from the execution of the Company’s long-term business plan, the Company will need to obtain
debt or equity financing, especially if the Company experiences downturns, delays in production, or other operating disruptions in
its business that are more severe or longer than anticipated, or if the Company experiences significant increases in expense levels
resulting from being a publicly-traded company or from operations. In addition, the Company’s business plan anticipates that
we will grow our business through a combination of acquiring and constructing new production facilities and converting existing
production facilities that we acquire to SAF production, all of which is anticipated to require us to raise capital, of which there
can be no assurances, and may require that we incur debt, assume contingent liabilities or amortize expenses related to intangible
assets, any of which could harm our business

Such additional debt or equity
financing may not be available to the Company on favorable terms, if at all. If we do raise additional capital through public or private
equity or convertible debt offerings, the ownership interest of our existing stockholders will be diluted, and the terms of these securities
may include liquidation or other preferences that adversely affect the rights of holders of our Class A common stock. If we raise additional
capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as
incurring additional debt, making capital expenditures, or paying dividends.

Our
future capital requirements and the adequacy of available funds will depend on many factors, including those set forth in the section
titled “Risk Factors”.

Current
cash and cash equivalents as of December 31, 2025, excluding restricted cash, totaled $154,937. We do not believe cash on hand will be
adequate to satisfy obligations in the ordinary course of business over the next twelve months. Management has assessed the Company’s
ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon its ability to raise
sufficient funds to pay ongoing operating expenditures and meet its obligations over the next twelve months. Based on this assessment,
there are material uncertainties about the business that may cast doubt about the Company’s ability to continue as a going concern.
The Company historically was able to obtain certain bridge financing from a significant shareholder (GL Part SPV I, LLC) and its affiliates
to fund its operations. Pursuant to the Term Sheet in the Proposed Transaction described above
with EEME, Southern, and DEVS, EEME, an affiliate of GL Part SPV I, LLC and GL Part PV II, LLC, has committed to invest $10,000,000 in
the Company. As of March 30, 2026, the Company has issued 69,000,000 shares of Common Stock to
EEME Energy for approximately $6,900,000. While the Company anticipates receiving the balance of such funds during the week of March 31,
2026, there can be no assurances in this regard. The Company is currently
actively seeking new sources of financing, which will enable the Company to meet its obligations for the twelve-month period from the
date the financial statements were available to be issued. The financial statements do not give effect to any adjustments that are required
to realize assets and discharge liabilities in other than the normal course of business and at amounts different from those reflected
in the financial statements. Such adjustments could be material.

76

Our
continuing operations are dependent upon our ability to obtain debt or equity financing until such time that we achieve profitable operations.
There can be no assurance that we will gain adequate market acceptance for our products or be able to generate sufficient gross margins
to reach profitability.

Since
our inception, we have incurred operating losses and have experienced negative cash flows from operations. We do not anticipate that
cash on hand will be adequate to satisfy our obligations in the ordinary course of business over the next 12 months. Based on this assessment,
we have material uncertainties about our business that may cast substantial doubt about our ability to continue as a going concern. Accordingly,
our ability to continue as a going concern is dependent upon our ability to raise sufficient funds to pay ongoing operating expenditures
and to meet our obligations. See further discussion related to our ability to continue as a going concern within “Item 7. Management’s
Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates.”

As
of December 31, 2025 and 2024, we had $159,232 and $413,006 in cash, respectively. We are actively managing current cash flows until
such time that we are profitable. The table below presents our cash flows during the years ended December 31, 2025 and 2024, respectively:

Years
Ended

December
31,

2025

2024

Net cash used in operating activities

$

(17,857,747

)

$

(11,137,519

)

Net cash used in investing activities

(1,563,317

)

(28,918,084

)

Net cash provided by financing
activities

19,167,290

40,292,009

Net increase (decrease)
in cash and cash equivalents

$

(253,774

)

$

236,406

During
the years ended December 31, 2025 and 2024, cash used in operations was $17,857,747 and $11,137,519, respectively. The use of cash in
all periods primarily resulted from our net losses adjusted for non-cash items and changes in operating assets and liabilities.

During
the fiscal years ended December 31, 2025 and 2024, cash used in investing was $1,563,317 and $28,918,084, respectively. This primarily
consisted of purchases of property and equipment.

During
the years ended December 31, 2025 and 2024, cash provided by financing was $19,167,290 and $40,292,009, respectively. The net cash provided
by financing activities for the year ended December 31, 2025, was primarily from proceeds from related party note payable and proceeds
from borrowing.

Additional
details of our financing activities for the periods reflected in this report as well as certain information on our outstanding shares
is provided below:

Financings

We
have funded our business to date primarily from the issuance of our common stock and convertible debentures through private
placements, from proceeds from the exercises of warrants, from sales of renewable fuel and from loans from related
parties.

On
February 14, 2024, Legacy XCF and GL entered into a note purchase agreement pursuant to which $1,210,383 of principal amount of prior
loans were consolidated into one convertible promissory note issued by Legacy XCF in an equivalent principal amount, interest rate and
conversion terms. GL subsequently exercised its right to convert the $1,210,383 of principal and $9,487 in accrued interest into 1,219,870
shares of Legacy XCF common stock. At the closing of the Business Combination, the 1,219,870 Legacy XCF common stock issued to GL were
automatically converted into shares of XCF common stock at an exchange ratio of approximately 0.68627. The 1,219,870 Legacy XCF shares
converted into 837,164 shares of XCF Class A common stock upon closing.

77

On
February 26, 2024, Legacy XCF and GL entered into a note purchase agreement pursuant to which GL agreed to purchase, and XCF agreed to
sell and issue to GL a convertible promissory note in principal amount of $600,000. The unsecured, convertible note provided for an interest
rate of 10% per annum, with the principal amount plus any accrued interest convertible into shares of Legacy XCF common stock at a conversion
price of $1 per share. GL subsequently exercised its right to convert the $600,000 of principal and $164 in accrued interest into 600,164
shares of Legacy XCF common stock. At the closing of the Business Combination, the 600,164 Legacy XCF common stock issued to GL was automatically
converted into shares of XCF common stock at an exchange ratio of approximately 0.68627. The 600,164 Legacy XCF shares converted into
411,876 shares of XCF Class A common stock upon closing.

During
Q4 2024, Legacy XCF entered into four note purchase agreements pursuant to which GL agreed to purchase, and XCF agreed to sell and issue
to GL, four promissory notes in principal amounts of $2,000,000, $1,000,000, $1,090,000, and $250,000. The unsecured convertible notes
provided for an interest rate of 10% per annum, with the principal amount plus any accrued interest convertible into shares of Legacy
XCF common stock at a conversion price of $0.40 per share. GL subsequently exercised its right to convert the principal amounts of each
note into 5,000,000 shares, 2,500,000 shares, 2,725,000 shares, and 625,000 shares of Legacy XCF common stock, respectively, for each
principal amount noted above. No interest was accrued on the principal amounts of the notes. At the closing of the Business Combination,
the 5,000,000 shares, 2,500,000 shares, 2,725,000 shares and 625,000 shares, totaling 10,350,000 of Legacy XCF common stock issued to
GL were automatically converted into shares of XCF common stock at an exchange ratio of approximately 0.68627. The 10,350,000 Legacy
XCF shares converted into 7,102,924 shares of XCF Class A common stock upon closing.

On
January 14, 2025, Legacy XCF entered into two note purchase agreements pursuant to which GL agreed to purchase, and XCF agreed to sell
and issue to GL, two promissory notes in principal amounts of $200,000 and $138,333. The unsecured convertible notes provided for an
interest rate of 10% per annum, with the principal amount plus any accrued interest convertible into shares of Legacy XCF common stock
at a conversion price of $0.40 per share. GL subsequently exercised its right to convert the principal amounts of each note into 500,000
shares and 345,833 shares, respectively, for each principal amount noted above. No interest was accrued on the principal amounts of the
notes. At the closing of the Business Combination, the 500,000 and 345,833 shares, totaling 845,833 of Legacy XCF common stock issued
to GL were automatically converted into shares of XCF common stock at an exchange ratio of approximately 0.68627. The 845,833 Legacy
XCF shares converted into 580,472 shares of XCF Class A common stock upon closing.

On
January 14, 2025, Legacy XCF entered into a note purchase agreement with Sky MD, LLC (“Sky MD”) to which Sky MD agreed to
purchase, and XCF agreed to sell and issue to Sky MD, a promissory note in principal amount of $138,333. The unsecured, convertible note
provided for an interest rate of 10% per annum, with the principal amount plus any accrued interest convertible into shares of Legacy
XCF common stock at a conversion price of $0.40 per share. Sky MD subsequently exercised its right to convert the principal amount of
the note into 345,833 shares. No interest was accrued on the principal amount of the notes. At the closing of the Business Combination,
the 345,833 of Legacy XCF common stock issued to Sky MD were automatically converted into shares of XCF common stock at an exchange ratio
of approximately 0.68627. The 345,833 Legacy XCF shares converted into 237,336 shares of XCF Class A common stock upon closing.

On
January 14, 2025, Legacy XCF entered into a note purchase agreement with Focus Impact Partners, LLC (“Focus Impact Partners”)
pursuant to which Focus Impact Partners agreed to purchase, and Legacy XCF agreed to sell and issue to Focus Impact Partners, a promissory
note in principal amount of $150,000. The unsecured, convertible note provided for an interest rate of 10% per annum, with the principal
amount plus any accrued interest convertible into shares of Legacy XCF common stock at a conversion price of $0.40 per share. Focus Impact
Partners subsequently exercised its right to convert the principal amount of the note into 375,000 shares. No interest was accrued on
the principal amount of the note.

At
the closing of the Business Combination, the 375,000 shares of Legacy XCF common stock issued to Focus Impact Partners were automatically
converted into shares of XCF common stock at an exchange ratio of approximately 0.68627. The 375,000 Legacy XCF shares converted into
257,352 shares of XCF Class A common stock upon closing.

78

On
January 31, 2025, Legacy XCF and Innovativ Media Group, Inc. entered into a promissory note for $500,000. The promissory note bears interest
of $100,000, payable on the earliest of March 31, 2025, unless extended by mutual written consent of XCF and Innovativ Media Group, Inc.,
or upon an event of default. In connection with the issuance of the promissory note, Legacy XCF issued 250,000 shares of its common stock
to Innovativ Media Group, Inc. At the closing of the Business Combination, the 250,000 shares of Legacy XCF common stock issued to Innovativ
were automatically converted into shares of XCF common stock at an exchange ratio of approximately 0.68627. The 250,000 Legacy XCF shares
converted into 171,568 shares of XCF Class A common stock upon closing.

On
April 17, 2025, Legacy XCF and Innovativ entered into a first amendment to the Innovativ Promissory Note (the “Amended Innovativ
Promissory Note”) whereby the payment terms of the note were amended to the earliest of (i) 10 business days from the date
of XCF entering into a Qualified Financing Event and receiving proceeds therefrom, unless extended in writing by mutual consent of Legacy
XCF and Innovativ, or (ii) an event of default (as specified in the Amended Innovativ Promissory Note), if such note is then declared
due and payable in writing by Innovativ. A “Qualified Financing Event” under the Amended Innovativ Promissory Note means
the closing of any transaction or series of related transactions, including without limitation any equity or debt financing, that results
in gross proceeds to the Company of at least $15,000,000, and that directly or indirectly results in the Company’s refinancing,
repayment, or restructuring of any portion of its secured debt obligations, including through a refinancing, recapitalization, debt-for-equity
exchange, secured loan facility, or other similar financing arrangement; provided, however, that any such event shall not be deemed
a Qualified Financing Event unless, following the closing of such transaction(s), XCF maintains a minimum cash balance of at least $3,000,000
in its primary operating bank account, and each of the foregoing conditions is fully satisfied without waiver or modification, except
as may be expressly agreed to in writing by Innovativ and XCF. The Amended Innovativ Promissory Note also provides for additional one-time
interest payment on the note at a fixed rate of 12% or $60,000, which amount is in addition to the interest already payable on the original
note.

On
February 13, 2025, Legacy XCF and GL entered into a promissory note (the “February 2025 Promissory Note”) for the
gross principal amount of $1,200,000 with net proceeds from the note equal to $1,000,000. The February 2025 Promissory Note bears interest
of $200,000, is unsecured, and, under its initial terms, payment of the February 2025 Promissory Note was due at the earlier of (i) 30
days from the date of receipt of any customer payment paid to XCF, unless extended in writing by mutual consent of XCF and GL or (ii)
an event of default (as specified in the February 2025 Promissory Note), if such note is then declared due and payable in writing by
GL. In connection with the issuance of the February 2025 Promissory Note, Legacy XCF issued 200,000 shares of its common stock to GL.
At the closing of the Business Combination, the 200,000 shares of Legacy XCF common stock issued to Innovativ were automatically converted
into shares of XCF common stock at an exchange ratio of approximately 0.68627. The 200,000 Legacy XCF shares converted into 137,255 shares
of XCF Class A common stock upon closing.

On
April 17, 2025, Legacy XCF and GL entered into a first amendment to the February 2025 Promissory Note (the “Amended February
2025 Promissory Note”) whereby the payment terms of the note were amended to the earliest of (i) 10 business days from the
date of XCF entering into a Qualified Financing Event and receiving proceeds therefrom, unless extended in writing by mutual consent
of XCF and GL, or (ii) an event of default (as specified in the Amended February 2025 Promissory Note), if such note is then declared
due and payable in writing by GL. A “Qualified Financing Event” under the Amended February 2025 Promissory Note means the
closing of any transaction or series of related transactions, including without limitation any equity or debt financing, that results
in gross proceeds to the Company of at least $15,000,000 and that directly or indirectly results in the Company’s refinancing,
repayment, or restructuring of any portion of its secured debt obligations, including through a refinancing, recapitalization, debt-for-equity
exchange, secured loan facility, or other similar financing arrangement; provided, however, that any such event shall not be deemed
a Qualified Financing Event unless, following the closing of such transaction(s), XCF maintains a minimum cash balance of at least $3,000,000
in its primary operating bank account, and each of the foregoing conditions is fully satisfied without waiver or modification, except
as may be expressly agreed to in writing by GL and XCF.

79

On
April 17, 2025, Legacy XCF and GL entered into a promissory note (the “April 2025 Promissory Note”) for the gross
principal amount of $2,500,000. The April 2025 Promissory Note bears interest of $300,000, is unsecured, and is due at the earlier of
(i) 10 business days from the date of XCF entering into a Qualified Financing Event and receiving proceeds therefrom unless extended
in writing by mutual consent of XCF and GL, or (ii) an event of default (as specified in the April 2025 Promissory Note), if such note
is then declared due and payable in writing by GL. A “Qualified Financing Event” under the April 2025 Promissory Note means
the closing of any transaction or series of related transactions, including without limitation any equity or debt financing, that results
in gross proceeds to the Company of at least $15,000,000, and that directly or indirectly results in the Company’s refinancing,
repayment, or restructuring of any portion of its secured debt obligations, including through a refinancing, recapitalization, debt-for-equity
exchange, secured loan facility, or other similar financing arrangement; provided, however, that any such event shall not be deemed
a Qualified Financing Event unless, following the closing of such transaction(s), XCF maintains a minimum cash balance of at least $3,000,000
in its primary operating bank account, and each of the foregoing conditions is fully satisfied without waiver or modification, except
as may be expressly agreed to in writing by GL and XCF. In connection with the issuance of the April 2025 Promissory Note, Legacy XCF
issued 5,000,000 shares of its common stock to Innovativ based on assignment from GL. At the closing of the Business Combination, the
5,000,000 shares of Legacy XCF common stock issued to Innovativ were automatically converted into shares of XCF common stock at an exchange
ratio of approximately 0.68627. The 5,000,000 Legacy XCF shares converted into 3,431,364 shares of XCF Class A common stock upon closing.

Narrow
Road Capital Note

On
May 1, 2025, Legacy XCF and Narrow Road Capital, Ltd. entered into a promissory note (the “Narrow Road Note”) for
the gross principal amount of $700,000. The Narrow Road Note bears interest of $140,000, is unsecured, and is due at the earlier of (i)
September 30, 2025, or (ii) an event of default (as specified in the Narrow Road Note), if such note is then declared due and payable
in writing by the holder. In connection with the issuance of the Narrow Road Note, the holder has the right, but not the obligation,
to elect to receive up to 280,000 shares of common stock of the Legacy XCF, at any time on or before the earlier of (x) the repayment
of the Narrow Road Note in full, or (ii) six (6) months from issuance of the Narrow Road Note. This right lapses automatically if not
exercised by such date. If such share issuance occurs after the closing of the Business Combination transaction with Focus Impact, the
shares to be issued will be calculated based on the finalized conversion ratio applicable to shares of Legacy XCF in connection with
the Business Combination closing. Narrow Road elected to receive 500 shares on May 30, 2025. On September 10, 2025 Narrow Road elected
the right to receive the remaining outstanding 279,500 shares associated with the note which were convertible into 191,813 shares of
XCF Class A common stock.

Cribb
Note

On
May 14, 2025, Legacy XCF and Gregory Segars Cribb entered into a promissory note (the “Cribb Note”) for the gross
principal amount of $250,000. The Cribb Note bears interest of $50,000, is unsecured, and is due at the earlier of (i) September 30,
2025, or (ii) an event of default (as specified in the Cribb Note), if such note is then declared due and payable in writing by the holder.
In connection with the issuance of the Cribb Note, the holder has the right, but not the obligation, to elect to receive up to 100,000
shares of common stock of the Company, at any time on or before the earlier of (x) the repayment of the Cribb Note in full, or (ii) six
(6) months from issuance of the Cribb Note. This right lapses automatically if not exercised by such date. If such share issuance occurs
after the closing of the Business Combination transaction with Focus Impact, the shares to be issued will be calculated based on the
finalized conversion ratio applicable to shares of Legacy XCF in connection with the Business Combination closing. Gregory Segars Cribb
elected to receive 500 shares on May 30, 2025. On September 10, 2025 Gregory Segars Cribb elected the right to receive the remaining
outstanding 99,500 shares associated with the note were convertible into 68,214 shares of XCF Class A common stock.

ELOC
Agreement

On
May 30, 2025, Legacy XCF and XCF entered into an equity line of credit purchase agreement (the “ELOC Agreement”) with
Helena Global Investment Opportunities I Ltd (the “Investor”). Pursuant to the ELOC Agreement, following the completion
of the Business Combination, XCF will have the right to issue and to sell to the Investor from time to time, as provided in the ELOC
Agreement, up to $50,000,000 of Class A Common Stock of XCF, subject to the conditions set forth therein. As a commitment fee in connection
with the execution of the ELOC Agreement, Legacy XCF has issued 740,000 shares of Legacy XCF’s common stock to the Investor, representing
the expected number of shares of its common stock that will be equal to 500,000 shares of XCF Class A common stock as of the closing
of the Business Combination.

80

Helena
Note

On
May 30, 2025, Legacy XCF, XCF, Randall Soule, in his individual capacity as a shareholder of XCF (“Soule”), and Helena
Global Investment Opportunities I Ltd (“Helena”) entered into a promissory note (the “Helena Note”)
for gross principal amount of $2,000,000. The Helena Note bears interest of $400,000, is unsecured, and is due at the earlier of (i)
the date that is three months from Helena’s disbursement of the loan evidenced by the Helena Note, (ii) an event of default (as
specified in the Helena Note), if such note is then declared due and payable in writing by the holder or if a bankruptcy event occurs
(in which case no written notice from the holder is required) or (iii) in connection with future debt or equity issuances by XCF or its
subsidiaries. In connection with the issuance of the Helena Note, Soule has agreed to transfer 2,840,000 shares of Legacy XCF common
stock held by him to Helena, representing the expected number of shares of Legacy XCF common stock that will be equal to 2,000,000 shares
of XCF Class A common stock as of the closing of the business combination (the “Advanced Shares”). Upon Helena’s
receipt of an aggregate of $2,400,000 in (i) payments from XCF and (ii) aggregate net proceeds from the sale of Advanced Shares, XCF’s
payment obligations for principal and interest under the Helena Note will have been satisfied and Helena is obligated to return any remaining
Advanced Shares to Soule. If Helena shall have sold all of the Advanced Shares and not yet received at least $2,400,000 in net proceeds
from the sale thereof and in other payments from XCF, XCF shall remain responsible for payment of any shortfall, which shall be payable
as otherwise required under the terms of the Helena Note. As disclosed above with respect to the Helena Note, in connection with the
issuance of the Helena Note, Randall Soule agreed to transfer 2,840,000 shares of Legacy XCF common stock held by him to Helena.

The
Company and Mr. Soule entered into a letter agreement dated as of May 30, 2025 (the “Share Issuance Agreement”), pursuant
to which the Company agreed to issue Mr. Soule 2,840,000 shares of Legacy XCF common stock in consideration for Mr. Soule’s transfer
of an equal number of shares to Helena.

At
the closing of the Business Combination, the 2,840,000 shares of Legacy XCF common stock issued to Mr. Soule were automatically converted
into shares of XCF common stock at an exchange ratio of approximately 0.68627. The 2,840,000 Legacy XCF shares converted into 1,949,015
shares of XCF Class A common stock upon closing.

On
July 10, 2025, XCF and Helena entered into Amendment No. 1 to the Helena Note (“Helena Amendment No. 1”).
Pursuant to Helena Amendment No. 1, in exchange for a cash payment from Helena of $2,249,771, XCF and Soule waived Helena’s
obligation to return certain shares of the Company’s Class A common stock pursuant to Section 11.2 of the original Helena Note
. XCF and Mr. Soule agreed to amend the Share Issuance Agreement. Under the terms of the amendment, Mr. Soule has agreed to return
to XCF for cancellation of certain shares that had been issued to him pursuant to the Shares Issuance Agreement.

EEME
Energy

On
July 29, 2025, XCF and EEME Energy entered into a Convertible Note Purchase Agreement pursuant to which the Company agreed to issue and
sell up to $7,500,000 in aggregate principal amount of convertible promissory notes in one or more closings. In connection with the execution
of the Note Purchase Agreement, the Company also agreed to pay an arrangement fee and advisory fee to EEME Energy, which will be paid
through the issuance of 750,000 shares of the Company’s Class A common stock as it relates to the arrangement fee and 200,000 of
the Company’s Class A common stock as it relates to the advisory fee. EEME Energy has elected to convert in aggregate $6,000,000
of the Convertible Promissory Note (including any interest accrued thereon) into shares of common stock of XCF.

On
November 17, 2025, the Company and EEME Energy consummated a subsequent closing and issued a Note in the aggregate principal amount of
$1.2 million to EEME Energy. Also on November 17, 2025, EEME Energy elected to convert the entire outstanding principal of $1,200,000
and the interest payment conversion amount of $159,600 into Company’s Common stock and assigned the shares to a third-party (Innovativ
Media Group, Inc.). The conversion price was approximately $0.64 per share (5% discount to the 5-day variable weighted average price
of $0.67), resulting in the issuance of 2,131,823 shares of Common stock.

81

On
November 21, 2025, the Company issued 950,000 shares of Class A Common stock to EEME Energy as settlement for the arrangement fee and
advisory fee in connection with the Note Purchase Agreement.

As
of March 31, 2026, in connection with the Proposed Transaction described above and pursuant to the Term Sheet, the Company has issued
69,000,000 shares of Common Stock to EEME Energy for approximately $6,900,000.

Cohen
& Company Securities Note

On
July 7, 2025, Cohen & Company Securities, LLC (“CCS”) converted previously accrued $5,500,000 of success fees into a
promissory note (the “CCS Note”). The CCS Note bears interest of 10% per annum compounded monthly, is unsecured, and is due
December 31, 2026 (“Maturity Date”). Commencing on June 30, 2025, interest is payable in kind or cash at the election of
the Company by accruing such interest in arrears on the last day of each month. Beginning on September 6, 2025, and on each month thereafter
until Maturity Date, the Company shall pay $343,750 (each such payment, an “Amortization Payment”) to CCS. The Company may,
in its sole discretion, elect to pay all or any portion of the Amortization Payments or any interest due and payable on the Maturity
Date in Class A common stock. At the issuance date, the Company determined a fair value of $4,796,223 for the CCS Note. For the year
ended December 31, 2025, and 2024, the Company recognized a gain of $279,334 and $0, respectively, in fair value adjustments which is
recorded in change in the fair value of note payable in the consolidated statements of operations. As of December 31, 2025 the fair value
of the CCS Note was $5,220,666.

Skyfall
Capital and YBR Advisors

On
October 22, 2025, the Company entered into two promissory notes, one with Skyfall Capital Ltd. and another with YBR Advisors Inc.
Each note is in the principal amount of $560,000, for an aggregate principal amount of $1,120,000 (collectively, the
“Notes”). Each note includes an original issue discount of $60,000 resulting in net proceeds of $500,000 for each
note (or $1,000,000 in the aggregate). The Notes bear no interest except upon an event of default, at which point interest accrues
at 12% per annum on overdue amounts. The Notes mature three months from disbursement of the loan proceeds and are now in default. Disbursement is
conditioned upon the filing of a registration statement with the Securities and Exchange Commission registering shares of the
Company’s common stock issuable under the Purchase Agreement dated May 30, 2025, with Helena Global Investment Opportunities 1
Ltd. The Company is required to apply 50% of net proceeds from sales of common stock under the Purchase Agreement to repay the Notes
on a pro rata basis. The Notes also contain mandatory prepayment provisions requiring immediate repayment using proceeds from any
debt issuances other than permitted debt. For the year ended December 31, 2025, and 2024 the Company recognized a gain of $2,128 and
$0 respectively, in fair value adjustments which is recorded in change in the fair value of note payable in the consolidated
statements of operations. As of December 31, 2025 the fair value of the notes was $1,080,131.

Encore
DEC, LLC Payable Settlement

On
November 19, 2025, the Company, New Rise, a subsidiary of the Company, and Encore entered into a payable acknowledgement and
settlement agreement (the “Encore Agreement”), pursuant to which $28,000,000 of the then outstanding accounts
payable due to Encore will be settled through the issuance of shares of the Company’s Class A Common Stock. Encore provides
EPC services to the Company. Encore is 100% owned by Randy Soule, the second largest shareholder of the Company, and has provided
feedstock degumming hydrotreater off gas conservation system construction services and sustainable aviation fuel conversion services
to New Rise Reno.

Under
the Encore Agreement, the conversion price is equal to the higher of: (a) the closing price of the Company’s Class A Common Stock
on the trading day immediately preceding the agreement date, and (b) the average closing price over the five (5) trading days immediately
preceding the agreement date. The conversion price was determined to be $0.7613 per share and 36,779,193 shares of Class A Common Stock
have been issued to Encore. Immediately after the conversion, Randall Soule beneficially owns approximately 53.6% of the Company’s
outstanding Class A Common Stock inclusive of shares held directly, and indirectly through RESC Renewables Holdings and Encore DEC, LLC.
As a result, Ms. Soule may be deemed to have beneficial ownership of such shares and may be able to exert significant influence over
matters submitted to the Company’s stockholders.

82

GL
Part SPV I, LLC

Loan
Acknowledgement and Conversion Agreement

On
November 19, 2025, the Company, New Rise Reno and GL entered into a loan acknowledgement and conversion agreement (the “GL Loan
Agreement”) whereby GL has the right to convert $2,350,000 of the then outstanding loan payable to GL into shares of the Company’s
Class A Common Stock. GL is an existing shareholder of the Company and previously provided debt and loan financing to the Company and
its subsidiaries. Subsequent to the parties’ execution and delivery of the GL Loan Agreement, GL provided notice to the Company
of its intention to exercise its conversion right.

Under
the GL Loan Agreement, the conversion price is equal to the higher of: (a) the closing price of the Company’s Class A Common Stock
on the trading day immediately preceding the agreement date, and (b) the average closing price over the five (5) trading days immediately
preceding the agreement date. The conversion price was determined to be $0.7613 per share and 3,086,825 shares of Class A Common Stock
have been issued to GL.

GL
Amendment No. 1 to Form of Promissory Note

On
November 19, 2025, the Company, XCF Global Capital, Inc. and GL entered into an amendment to the form of promissory note dated April
17, 2025 (the “GL Amendment No. 1”) whereby GL has the right to convert $2,500,000 of the then outstanding principal
amount and $300,000 of interest due to GL into shares of the Company’s Class A Common Stock. Subsequent to the parties’ execution
and delivery of the GL Loan Agreement, GL provided notice to the Company of its intention to exercise its conversion right.

Under
the GL Amendment No. 1, the conversion price is equal to the higher of: (a) the closing price of the Company’s Class A Common Stock
on the trading day immediately preceding the agreement date, and (b) the average closing price over the five (5) trading days immediately
preceding the agreement date. The conversion price was determined to be $0.7613 per share and 3,677,919 shares of Class A Common Stock
have been issued to GL.

GL
Amendment No. 2 to Form of Promissory Note

On
November 19, 2025, the Company, XCF Global Capital, Inc. and GL entered into an amendment to the form of promissory note dated February
13, 2025 (the “GL Amendment No. 2”) whereby GL has the right to convert $1,200,000 of the then outstanding principal
amount and $240,000 of interest due to GL into shares of the Company’s Class A Common Stock. Subsequent to the parties’ execution
and delivery of the GL Loan Agreement, GL provided notice to the Company of its intention to exercise its conversion right.

Under
the GL Amendment No. 2, the conversion price is equal to the higher of: (a) the closing price of the Company’s Class A Common Stock
on the trading day immediately preceding the agreement date, and (b) the average closing price over the five (5) trading days immediately
preceding the agreement date. The conversion price was determined to be $0.7613 per share and 1,891,501 shares of Class A Common Stock
have been issued to GL.

Immediately
after the conversions pursuant to the GL Loan Agreement, the GL Amendment No. 1 and the GL Amendment No. 2, GL Part SPV I, LLC will be
deemed to beneficially own through itself, GL Part SPV II, LLC and EEME Energy SPV I, LLC, approximately 19.9% of the Company’s
outstanding Class A Common Stock.

GL
Part SPV I, LLC, is an entity affiliated with Majique Ladnier. Ms. Ladnier is the sole member of GL Part SPV I, LLC and is also the sole
member of two existing Company shareholders, GL Part SPV II, LLC and EEME Energy SPV I, LLC. On a pro forma basis, after giving effect
to the total shares that will be issuable at the time of conversion and the Proposed Transaction, GL Part SPV I, LLC, GL Part SPV II,
LLC and EEME Energy collectively hold 109,941,520 shares of the Company’s Class A Common Stock, representing approximately 37.3%
of the Company’s issued and outstanding shares of Class A Common Stock as of the date of this filing. As a result, Ms. Ladnier
may be deemed to have beneficial ownership of such shares and may be able to exert significant influence over matters submitted to the
Company’s stockholders.

83

Contractual
Obligations

The
Company has a long-term financial liability of $132,806,188 related to a real estate lease arrangement. There are no other long-term
debt obligations, capital lease obligations, operating lease obligations, purchase obligations, or long-term liabilities.

Off-Balance
Sheet Arrangements

We
have not entered into any material off-balance sheet arrangements such as guarantee contracts, contingent interests in assets transferred
to unconsolidated entities, derivative financial obligations, or with respect to any obligations under a variable interest equity arrangement.

Related
Party Transactions

Parties
are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant
influence over the other party in making financial and operating decisions. Related parties may be individuals or corporate entities.

EEME
Energy; Proposed Transaction

On
January 26, 2026, XCF, entered into the term sheet with Southern, DEVS, and EEME, which sets forth the principal terms and conditions
of the Proposed Transaction. Pursuant to the Term Sheet, and subject to the finalization of mutually agreeable merger structure and definitive
transaction documents and ultimately the satisfaction of certain closing conditions, it is expected that Southern and DEVS will each
merge with wholly-owned subsidiaries of XCF, with Southern and DEVS surviving, and their respective stockholders receiving shares of
Common Stock of XCF, resulting in Southern and DEVS becoming wholly-owned subsidiaries of XCF.

In
connection with and to support the Proposed Transaction and subject to the terms and conditions set forth in the Term Sheet, XCF agreed
to invest $10,000,000 to convert and build out its New Rise Reno facility for the Plant Conversion, to be funded through the sale by
XCF to EEME of $10 million of Common Stock; provided that in no event shall XCF issue to EEME, nor shall EEME (i) acquire more than 41,639,170
shares of XCF’s common stock pursuant to this Term Sheet or (ii) acquire or to otherwise become, directly or indirectly, a “beneficial
owner” (within the meaning of Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder) of a number
of shares of Common Stock in excess of 19.99% of the issued and outstanding shares of Common Stock as of the date hereof until such time
as XCF has obtained stockholder approval for such issuance (the “Share Cap”), which XCF obtained on March 6, 2026. Subsequent
to the execution of the Term Sheet, EEME has purchased 69,000,000 shares of Common Stock for $6,900,000. The issuance and sale to EEME
of the remaining 50,500,000 shares of Common Stock is expected to be consummated periodically. EEME is expected to have customary demand
and piggy-back registration rights and will not be subject to any lock-up or other transfer restrictions (other than as imposed by applicable
securities laws or underwriters.) EEME’s obligation to acquire such shares is independent of the remainder of the proposed Transaction
contemplated by the Term Sheet.

As
of March 30, 2026, in connection with the Proposed Transaction described above, the Company has issued 69,000,000 shares of Common Stock
to EEME Energy for approximately $6,900,000.

EEME Energy is an entity affiliated
with Majique Ladnier. Ms. Ladnier is the sole member of EEME Energy SPV I, LLC and is also the sole member of two of our existing stockholders,
GL Part SPV I, LLC and GL Part SPV II, LLC (together, the “GL Entities”). Immediately after the conversions pursuant
to the GL Loan Agreement, the GL Amendment No. 1 and the GL Amendment No. 2, GL Part SPV I, LLC, will be deemed to beneficially own through
itself, GL Part SPV II, LLC and EEME Energy SPV I, LLC, approximately 37.3% of the Company’s outstanding Class A Common Stock or
approximately 109,941,520 shares as of the date of this filing.

A definitive agreement on the
Proposed Transaction has not been reached as of the time of the filing of this Form 10-K and there can be no assurances in this regard,
as discussed above under “Risk Factors”.

84

Randy
Soule; RESC Renewables Holdings LLC; Encore DEC, LLC

New
Rise Acquisitions

On
December 8, 2023, Legacy XCF entered into the New Rise Renewables MIPA with RESC Renewables to acquire all of the issued and outstanding
membership interests of New Rise Renewables for an aggregate purchase price of $1,100,000,000 less acquired liabilities, comprised of
incurred indebtedness, of $112,580,000. Consideration for the purchase was paid at closing of the Acquisitions by delivery of a convertible
promissory note (the “New Rise Convertible Note”) in principal amount of $100,000,000 and issuance of 88,750,000 shares
of Legacy XCF common stock. The New Rise Convertible Note was non-interest bearing and had a maturity date of twelve months after the
date the note was issued in connection with the closing of the Acquisition. Once issued, the New Rise Convertible Note can be converted
into shares of Legacy XCF common stock based on the outstanding principal, divided by the conversion price. The New Rise Renewables MIPA
provides that the conversion price will be equal to the average price of the shares of common stock for the 10 days prior to and 10 days
subsequent to the notice of conversion. However, in connection with the execution of a Company Support Agreement by RESC and Randy Soule
subsequent to December 31, 2023, it was agreed that the conversion price would be set at $10 per share when the New Rise Convertible
Note is issued.

On
December 8, 2023, Legacy XCF also entered into the New Rise SAF Renewables MIPA with Randy Soule and GL Part SPV I, LLC to acquire all
the issued and outstanding membership interests of New Rise SAF Renewables for an aggregate purchase price of $200,000,000.

On
January 31, 2025, Legacy XCF issued a promissory note with a principal amount of $500,000 to Innovativ Media Group, Inc. as part of a
financing arrangement. Proceeds from the note were provided to New Rise Renewables as a note payable to Legacy XCF and will be included
as indebtedness of New Rise Renewables, which resulted in a reduction of the number of XCF shares issuable upon the closing of the New
Rise Renewables acquisition.

During
Q4 2024, Legacy XCF issued three convertible notes to GL Part SPV I, LLC in the amounts of $1,000,000, $1,090,000, and $250,000. Proceeds
from the convertible notes were utilized to purchase preferred membership units of New Rise SAF Renewables in the amounts of 100,000
preferred membership units, 109,000 preferred membership units, and 25,000 preferred membership units, respectively. On January 14, 2025,
Legacy XCF issued one convertible note to GL Part SPV I, LLC for $200,000. Proceeds from the convertible note were utilized to purchase
preferred membership units of New Rise SAF Renewables in the amount of 20,000 preferred membership units. The preferred membership units
had preferential treatment upon a liquidation event before any amounts are paid to the common membership units and receive five times
the amount contributed as capital. As a result, the total contributed capital of $2,540,000 was netted against the purchase price of
New Rise SAF by $12,700,000 upon closing. The transaction closed on January 23, 2025. At closing, Randy Soule was issued 15,036,170 shares
of Legacy XCF common stock in exchange for his membership units, and GL was issued 3,693,830 shares of Legacy XCF common stock in exchange
for its membership units and after consideration of its five times liquidation preference.

At
the closing of the Business Combination, the 15,036,170 shares of Legacy XCF common stock issued to Randy Soule and the 3,693,830 shares
of Legacy XCF common stock issued to GL were automatically converted into shares of XCF common stock at an exchange ratio of approximately
0.68627.

On
February 19, 2025, Legacy XCF completed the acquisition of New Rise Renewables subject to additional post-closing conditions. On February
19, 2025, the aggregate purchase price of $1.1 billion was reduced by $118,700,000, which represented principal and interest on New Rise
Renewable’s outstanding debt obligations to a financial institution and two notes payable to Legacy XCF. As a result, RESC was
issued 88,126,200 shares of Legacy XCF common stock in exchange for its membership units. In connection with a consulting agreement between
RESC and GL, GL was entitled to receive 4,406,310 shares of the Legacy XCF common stock issued to RESC. In addition, pursuant to the
New Rise Renewables MIPA, Legacy XCF issued a convertible promissory note to RESC in principal amount of $100,000,000, of which $51,746,680
in principal amount was subsequently assigned from RESC to Encore DEC, LLC, an entity 100% owned by Randy Soule, which was subsequently
cancelled on May 30, 2025. The entire principal amount of the promissory note was held by RESC prior to Business Combination.

85

On
May 30, 2025, the aggregate purchase price was updated to reflect actual New Rise liabilities of $126,700,000 compared to $118,700,000
in connection with the initial closing on February 19, 2025. As a result, the total shares issued in connection with the acquisition
were adjusted to be 87,331,951 of Legacy XCF common stock, of which RESC received 82,965,533 and GL received 4,366,598 shares of Legacy
XCF common stock.

At
the closing of the Business Combination the 82,965,533 shares of Legacy XCF common stock issued to RESC and the 4,366,598 shares of Legacy
XCF common stock issued to GL were automatically converted into shares of XCF common stock at an exchange ratio of approximately 0.68627.
The 82,965,533 Legacy XCF shares converted into 56,936,990 shares of XCF common stock and the 4,366,598 shares converted into 2,996,678
shares of XCF common stock upon closing.

Encore
DEC, LLC Payable Settlement

On
November 19, 2025, the Company, New Rise Reno, a subsidiary of the Company, and Encore entered into the Encore Agreement, pursuant to
which $28,000,000 of the then outstanding accounts payable due to Encore will be settled through the issuance of shares of the Company’s
Class A Common Stock. Encore provides EPC services to the Company. Encore is 100% owned by Randy Soule, the majority shareholder of the
Company, and has provided feedstock degumming hydrotreater off gas conservation system construction services and sustainable aviation
fuel conversion services to New Rise Reno.

Under
the Encore Agreement, the conversion price is equal to the higher of: (a) the closing price of the Company’s Class A Common Stock
on the trading day immediately preceding the agreement date, and (b) the average closing price over the five (5) trading days immediately
preceding the agreement date. The conversion price was determined to be $0.7613 per share and 36,779,193 shares of Class A Common Stock
have been issued to Encore. Immediately after the conversion, Randall Soule will beneficially own approximately 53.6% of the Company’s
outstanding Class A Common Stock inclusive of shares held directly, and indirectly through RESC Renewables Holdings and Encore DEC, LLC.

Encore
DEC, LLC Company Support Agreement

On
November 24, 2025, the Company and Encore entered into a Company Support Agreement (the “Encore Company Support Agreement”),
pursuant to which, Encore agreed not to transfer, sell, hedge, pledge, or otherwise dispose of 35% of Encore’s 36,779,193 beneficially
owned shares of Class A Common Stock of the Company (12,872,718 shares) until the earlier to occur of (a) the date the Company waives
the Encore Company Support Agreement and (b) six months from the date in which the registration statement registering the resale of Encore’s
shares became effective under the Securities Act of 1933, as amended. That registration statement became effective on December 2, 2025.

Helena
Note and Share Issuance

On
May 30, 2025, NewCo, Legacy XCF and Randy Soule, in his individual capacity as a shareholder of Legacy XCF
(“Soule”), entered into the Helena Note with Helena for gross principal amount of $2,000,000. In connection with
the issuance of the Helena Note, Randy Soule agreed to transfer 2,840,000 shares of his Legacy XCF common stock held by him to
Helena, representing the expected number of shares of Legacy XCF common stock that equaled to 2,000,000 shares of our common stock
at the closing of the Business Combination (the “Advanced Shares”). Pursuant thereto, upon Helena’s receipt
of an aggregate of $2,400,000 in (i) payments from us and (ii) aggregate net proceeds from the sale of Advanced Shares, our payment
obligations for principal and interest under the Helena Note will have been satisfied and Helena would have been obligated to return
any remaining Advanced Shares to Randall Soule. At the same time, Legacy XCF and Mr. Soule entered into a letter agreement (the
“Soule Agreement”), pursuant to which the Company agreed to issue Mr. Soule 2,840,000 shares of Legacy XCF common
stock in consideration for Mr. Soule’s transfer of an equal number of shares to Helena. However, on July 10, 2025, XCF, Mr.
Soule and Helena entered into Helena Amendment No. 1. Pursuant to Helena Amendment No. 1, in exchange for a cash payment from Helena
to XCF of $2,249,771.14, XCF and Mr. Soule waived Helena’s obligation to return certain shares pursuant to the terms of the
original Helena Note. Also on July 10, 2025, XCF and Mr. Soule agreed to amend the original Soule Agreement, with Mr. Soule agreeing
agreed to return to XCF for cancellation certain shares of our common stock issued to him pursuant to the original Soule
Agreement.

86

GL
Part SPV I, LLC

Convertible
Promissory Notes

During
2023, GL, a Legacy XCF stockholder and current holder of shares of our common stock, agreed to loan $202,383 to Legacy XCF for operating
capital. From January 1, 2024 to February 14, 2024, GL loaned an additional $1,008,000 to Legacy XCF. The loans made pursuant to the
applicable loan agreements were interest bearing at 10% per annum, unsecured, and convertible into shares of Legacy XCF common stock
at a conversion price equal to $1.00 per share. On February 14, 2024, Legacy XCF and GL entered into a note purchase agreement pursuant
to which $1,210,383 of the aggregate principal amount under the prior loans were consolidated into one convertible promissory note issued
by Legacy XCF in an equivalent principal amount, interest rate and conversion terms. GL subsequently exercised its right to convert the
$1,210,383 of principal and $9,487 in accrued interest into 1,219,870 shares of Legacy XCF common stock. On February 26, 2024, Legacy
XCF and GL entered into a note purchase agreement pursuant to which GL agreed to purchase, and Legacy XCF agreed to sell and issue to
GL, a convertible promissory note in the principal amount of $600,000. The convertible note provided for an interest rate of 10% per
annum, unsecured, with the principal amount plus any accrued interest convertible into shares of Legacy XCF common stock at a conversion
price equal to $1.00 per share. GL subsequently exercised its right to convert the $600,000 of principal and $164 in accrued interest
into 600,164 shares of Legacy XCF common stock. GL initially became an Legacy XCF stockholder through its purchase of 20,450,000 shares
of Legacy XCF common stock for an aggregate purchase price of $20,450 pursuant to a stock purchase agreement dated September 14, 2023.

Pursuant
to the transactions described above, GL owned an aggregate of 22,270,034 shares of Legacy XCF common stock.

During
Q4 2024, Legacy XCF and GL entered into four convertible promissory notes for principal amounts of $2 million, $1.0 million, $1.09 million
and $0.3 million. The convertible promissory notes bore interest at 10% per annum on the outstanding principal, were unsecured, and were
convertible into shares of Legacy XCF common stock at a conversion price of $0.40 per share. During Q4 2024, the convertible promissory
notes were converted into 5,000,000 shares, 2,500,000 shares, 2,725,000 shares and 625,000 shares of Legacy XCF common stock, respectively,
for the above principal amounts.

On
January 14, 2025, Legacy XCF and GL entered into two convertible promissory notes for principal amounts of $0.2 million and $0.14 million.
The convertible promissory notes bore interest at 10% per annum on the outstanding principal, were unsecured, and were convertible into
shares of Legacy XCF common stock at a conversion price of $0.40 per share. On January 14, 2025, the convertible promissory notes were
converted into 500,000 shares and 345,833 shares, respectively, for the above principal amounts.

After
conversion of the promissory notes described above, GL owned an aggregate of 33,965,867 shares of Legacy XCF common stock.

On
February 13, 2025, Legacy XCF and GL entered into the February 2025 Promissory Note for the gross principal amount of $1.2 million with
net proceeds from the note equal to $1.0 million. The February 2025 Promissory Note bears interest of $0.2 million, is unsecured, and,
under its initial terms, payment of the February 2025 Promissory Note was due at the earlier of (i) 30 days from the date of receipt
of any customer payment paid to Legacy XCF, unless extended in writing by mutual consent of Legacy XCF and GL or (ii) an event of default
(as specified in the February 2025 Promissory Note), if such note is then declared due and payable in writing by GL. In connection with
the issuance of the February 2025 Promissory Note, Legacy XCF issued 200,000 shares of its common stock to GL.

On
April 17, 2025, Legacy XCF and GL entered into the Amended February 2025 Promissory Note whereby the payment terms of the note were amended
to the earliest of (i) 10 business days from the date of XCF entering into a Qualified Financing Event and receiving proceeds therefrom,
unless extended in writing by mutual consent of Legacy XCF and GL, or (ii) an event of default (as specified in the Amended February
2025 Promissory Note), if such note is then declared due and payable in writing by GL. A “Qualified Financing Event” under
the Amended February 2025 Promissory Note means the closing of any transaction or series of related transactions, including without limitation
any equity or debt financing, that results in gross proceeds to the company of at least $15 million, and that directly or indirectly
results in the company’s refinancing, repayment, or restructuring of any portion of its secured debt obligations, including through
a refinancing, recapitalization, debt-for-equity exchange, secured loan facility, or other similar financing arrangement; provided,
however, that any such event shall not be deemed a Qualified Financing Event unless, following the closing of such transaction(s), Legacy
XCF maintains a minimum cash balance of at least $3 million in its primary operating bank account, and each of the foregoing conditions
is fully satisfied without waiver or modification, except as may be expressly agreed to in writing by GL and Legacy XCF.

87

All
of the Legacy XCF shares received by GL in these transactions were exchanged for shares of our common stock upon closing of the Business
Combination on the same terms as other holders of Legacy XCF common stock.

Loan
Acknowledgement and Conversion Agreement

On
November 19, 2025, the Company, New Rise Reno and GL entered into the GL Loan Agreement whereby GL has the right to convert $2,350,000
of the then outstanding loan payable to GL into shares of the Company’s Class A Common Stock. GL is an existing shareholder of
the Company and previously provided debt and loan financing to the Company and its subsidiaries. Subsequent to the parties’ execution
and delivery of the GL Loan Agreement, GL provided notice to the Company of its intention to exercise its conversion right.

Under
the GL Loan Agreement, the conversion price is equal to the higher of: (a) the closing price of the Company’s Class A Common Stock
on the trading day immediately preceding the agreement date, and (b) the average closing price over the five (5) trading days immediately
preceding the agreement date. The conversion price was determined to be $0.7613 per share and 3,086,825 shares of Class A Common Stock
have been issued to GL.

GL
Amendment No. 1 to Form of Promissory Note

On
November 19, 2025, the Company, XCF Global Capital, Inc. and the GL Amendment No. 1 whereby GL has the right to convert $2,500,000 of
the then outstanding principal amount and $300,000 of interest due to GL into shares of the Company’s Class A Common Stock. Subsequent
to the parties’ execution and delivery of the GL Loan Agreement, GL provided notice to the Company of its intention to exercise
its conversion right.

Under
the GL Amendment No. 1, the conversion price is equal to the higher of: (a) the closing price of the Company’s Class A Common Stock
on the trading day immediately preceding the agreement date, and (b) the average closing price over the five (5) trading days immediately
preceding the agreement date. The conversion price was determined to be $0.7613 per share and 3,677,919 shares of Class A Common Stock
have been issued to GL.

GL
Amendment No. 2 to Form of Promissory Note

On
November 19, 2025, the Company, XCF Global Capital, Inc. and GL entered into an amendment to the form of promissory note dated February
13, 2025 (the “GL Amendment No. 2”) whereby GL has the right to convert $1,200,000 of the then outstanding principal
amount and $240,000 of interest due to GL into shares of the Company’s Class A Common Stock. Subsequent to the parties’ execution
and delivery of the GL Loan Agreement, GL provided notice to the Company of its intention to exercise its conversion right.

Under
the GL Amendment No. 2, the conversion price is equal to the higher of: (a) the closing price of the Company’s Class A Common Stock
on the trading day immediately preceding the agreement date, and (b) the average closing price over the five (5) trading days immediately
preceding the agreement date. The conversion price was determined to be $0.7613 per share and 1,891,501 shares of Class A Common Stock
have been issued to GL.

Certain
Litigation Involving GL’s Sole Member and a GL Related Party

Majique
Ladnier is the sole member of GL Part SPV I, LLC, GL Part SPV II, LLC and EEME Energy SPV I LLC and has sole voting and investment authority
over the shares of our common stock owned by those entities. Ms. Ladnier is a defendant in a pending case in the United States District
Court for the Southern District of New York (FTE Networks, Inc. v. Suneet Singal; TTP8, LLC; First Capital Master Advisor, LLC; Majique
Ladnier; Danish Mir; Khawaja Zargham Bin Aamer; Thomas Coleman; Innovativ Media Group, Inc.; Joseph F. Cunningham; Peter K. Ghishan;
Stephen M. Goodwin; and Bruce M. Fahey). To our knowledge, no trial date has been set, and the defendants are awaiting the court’s
ruling on their motion to dismiss this action. FTE Networks, Inc. (“FTE”) alleges that the defendants engaged in conduct
detrimental to FTE and its shareholders, including fraud, racketeering conspiracy (RICO) and fraudulent inducement in the issuance of
FTE shares to certain of the defendants. We have been informed by Ms. Ladnier that she believes the allegations against her are unfounded
and is vigorously defending herself in this matter.

88

Ms.
Ladnier’s spouse, Suneet Singal, serves as a consultant to the GL entities and was a consultant to New Rise (on behalf of the GL entities). Mr.
Singal was a defendant in a case captioned Securities and Exchange Commission v. Suneet Singal, First Capital Real Estate Investments,
LLC, First Capital Real Estate Advisors LP, and First Capital Real Estate Trust Inc. The SEC’s complaint in this case, filed on
December 13, 2019, alleged that Singal and his entities engaged in two separate frauds relating to two public companies, First Capital
Real Estate Trust Inc. and First Capital Investment Corporation. In final judgments entered on July 23, 2021, without admitting or denying
the allegations in the complaint, Mr. Singal and the other defendants consented to be enjoined from violating the anti-fraud provisions
of Section 17(a) of the Securities Act of 1933 and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934. In addition,
the judgments further enjoin Singal from violating the anti-fraud provisions of Sections 206(1) and 206(2) of the Investment Advisers
Act of 1940, as well as Sections 36(a), 57(a) and Rule 17d-1 of the Investment Company Act of 1940. Mr. Singal and the other defendants
agreed to pay a total of $3.2 million in disgorgement and $676,400 in prejudgment interest, and Mr. Singal individually also agreed to
pay a civil monetary penalty of $3.2 million. Mr. Singal also consented to a bar for a period of 10 years from acting as an officer or
director of a public company.

Mr.
Singal is also a defendant in a pending case in the United States District Court for the Southern District of New York (FTE Networks,
Inc. v. Suneet Singal; TTP8, LLC; First Capital Master Advisor, LLC; Majique Ladnier; Danish Mir; Khawaja Zargham Bin Aamer; Thomas Coleman;
Innovativ Media Group, Inc.; Joseph F. Cunningham; Peter K. Ghishan; Stephen M. Goodwin; and Bruce M. Fahey). To our knowledge, no trial
date has been set, and the defendants are awaiting the court’s ruling on their motion to dismiss this action. FTE alleges that
the defendants engaged in conduct detrimental to FTE and its shareholders, including fraud, racketeering conspiracy (RICO) and fraudulent
inducement in the issuance of FTE shares to certain of the defendants. We have been informed by Mr. Singal that he believes the allegations
against him are unfounded and is vigorously defending himself in this matter.

Mr.
Singal is also a defendant in a case in the United States District Court for the Eastern District of California. The complaint in the
case alleged that Mr. Singal engaged in a scheme to make false representations in 2017 in order to induce financing companies to provide
funds to certain companies in the form of merchant cash advances, which alleged false representations involved Mr. Singal purportedly
claiming that he was the owner of a company that operated a chain of fast-food franchises when he did not, in fact, own that company.
A jury trial with respect to this case was held in June 2025 and the jury returned a verdict of guilty on wire fraud and mail fraud counts.
We understand that Mr. Singal has filed post-trial motions to set aside the verdict or seek a new trial.

New
Rise Acquisitions - Additional Share Acquisitions

GL
also acquired additional shares of Legacy XCF common stock in connection with the closing of the New Rise Acquisitions. Upon the closing
of the transactions contemplated by the New Rise Renewables MIPA, pursuant to an agreement between RESC and GL, GL received 4,435,000
shares of Legacy XCF common stock. Upon the closing of the transactions contemplated by the New Rise SAF Renewables MIPA, pursuant to
the terms of the New Rise SAF Renewables MIPA, GL received 3,693,830 shares of Legacy XCF common stock.

Fort
Myers and Wilson Transactions - Additional Share Acquisitions

GL
also had an indirect ownership interest in additional shares of Legacy XCF common stock through its ownership interest in Southeast Renewables,
LLC (“Southeast Renewables”), which were issued shares of Legacy XCF common stock in connection with XCF’s acquisitions
of certain assets from Southeast Renewables and Good Steward Biofuels FL, LLC (“Good Steward”).

89

On
October 31, 2023, XCF entered into an asset purchase agreement with Southeast Renewables to acquire certain assets related to its Wilson,
NC biodiesel plant for an aggregate purchase price of $100 million. Legacy XCF issued Southeast Renewables 7,700,000 shares of XCF at
an agreed conversion price of $10 per share ($77 million) and issued a convertible promissory note in principal amount of $23 million,
with a maturity date of October 31, 2024. The Southeast Renewables Convertible Note accrues interest at the per annum rate of 8%. The
Southeast Renewables Convertible Note can be converted into shares of Legacy XCF common stock based on the outstanding principal and
interest, divided by the conversion price. The conversion price prior to a change of control is $10, and subsequent to a change of control
is equal to the volume weighted average price of the shares of common stock for the 20 days prior to the notice of conversion.

In
addition, on October 31, 2023, Legacy XCF entered into an asset purchase agreement with Good Steward to acquire certain assets related
to its Fort Myers, FL biodiesel plant. Legacy XCF issued Southeast Renewables, the parent company of Good Steward, 9,800,000 shares of
Legacy XCF common stock as partial consideration for the purchase, and also assumed certain liabilities, including a $356,426 loan made
by GL to Southeast Renewables.

On
December 29, 2023, Southeast Renewables exercised its right to convert the Southeast Renewables Convertible Note principal balance of
$23 million plus accrued interest of $297,425 into 2,329,743 shares of Legacy XCF common stock.

GL
was a shareholder of Legacy XCF and held membership interests in Southeast Renewables. It is our understanding that Southeast Renewables
distributed some or all of the shares of Legacy XCF common stock received in these transactions, and when that distribution was completed,
GL is believed to have received 6,373,796 shares of Legacy XCF common stock from such distribution.

All
of the Legacy XCF shares received by GL in these transactions were exchanged for shares of our common stock upon closing of the Business
Combination on the same terms as other holders of Legacy XCF common stock.

EEME
Energy SPV I LLC Convertible Note Purchase Agreement

On
June 29, 2025, XCF and EEME Energy entered into a Convertible Note Purchase Agreement (the “Note Purchase Agreement”)
pursuant to which we agreed to issue and sell up to $7.5 million in aggregate principal amount of convertible promissory notes in one
or more closings. In connection with the execution of the Note Purchase Agreement, we also agreed to pay an arrangement fee and advisory
fee to EEME Energy, which will be paid through the issuance of 750,000 shares of our common stock as it relates to an arrangement fee
and 200,000 of our common stock as it relates to an advisory fee.

In
connection with our issuance of the notes to EEME Energy, we will pay to EEME Energy upfront interest equal to 13.3% of the principal
amount of the applicable notes. In lieu of our having any obligation to make cash interest payments under such notes, we and EEME Energy
agreed to settle the interest payment through a share conversion pursuant to which we are obligated to issue shares of our common stock
(the “Interest Payment Conversion Shares”) calculated by dividing (x) the amount of interest that would otherwise
be due and payable on the applicable notes at such notes’ maturity date (calculated as 13.3% of the principal amount of the applicable
note) by (y) the applicable conversion price.

EEME
Energy is an entity affiliated with Majique Ladnier. Ms. Ladnier is the sole member of EEME Energy SPV I, LLC and is also the sole
member of the GL Entities. Immediately after the conversions pursuant to the GL Loan Agreement, the GL Amendment No. 1 and the GL
Amendment No. 2, GL Part SPV I, LLC will be deemed to beneficially own through itself, GL Part SPV II, LLC and EEME Energy SPV I,
LLC, approximately 19.9% of the Company’s outstanding Class A Common Stock excluding any stock issued through the Proposed
Transaction mentioned above.

90

Consulting
Agreement with Focus Impact Partners

On
February 19, 2025, Legacy XCF and Focus Impact Partners, LLC (“Focus Impact Partners”) entered into a strategic consulting
agreement (the “Consulting Agreement”), pursuant to which Focus Impact Partners will provide Legacy XCF (and, XCF
following completion of the Business Combination) with certain consulting services. Under the terms of the Consulting Agreement, Focus
Impact Partners will receive an annual consulting fee of $1,500,000, which will be payable in monthly installments of $125,000 starting
with an initial payment on or prior to March 31, 2025 (pro-rated from February 19, 2025 through and including March 31, 2025). In addition
to the annual fee, the Consulting Agreement also provides that Focus Impact Partners is entitled to an additional consulting fee in connection
with any acquisition, merger, consolidation, business combination, sale, divestiture, financing, refinancing, restructuring or other
similar transaction for which Focus Impact Partners provides consulting services, the amount and terms of which will be subject to mutual
agreement between the company and Focus Impact Partners consistent with the market practice for such consulting services.

The
Consulting Agreement has a term of three years unless terminated early with at least 90 days advance notice and will be automatically
extended for successive one year periods at the end of each year unless either party provide a written notice to the other party of its
desire not to automatically extend at least 120 days prior to the end of each year during the term of the Consulting Agreement. If the
Consulting Agreement is terminated by us without “cause,” Focus Impact Partners is entitled to be paid any and all fees that
would be due and payable through the expiration of the then-current term of the Consulting Agreement as if it had not been so terminated.

Carl
Stanton, and Wray Thorn, co-founders of Focus Impact Partners, are founders of Focus Impact, the Sponsor in connection with the Business
Combination and served as directors of Focus Impact. Mr. Thorn currently serves as a member of our board of directors and Mr. Stanton
is a board observer.

Focus
Impact BHAC Sponsor, LLC Company Support Agreement

On
November 24, 2025, the Company and Focus Impact BHAC Sponsor, LLC (“Focus Impact”) entered into a Company Support
Agreement (the “Focus Impact Company Support Agreement”), pursuant to which, Focus Impact agreed not to transfer,
sell, hedge, pledge, or otherwise dispose of 100% of its 3,306,944 beneficially owned shares of Class A Common Stock of the Company until
the earlier to occur of (a) the date the Company waives the Focus Impact Company Support Agreement and (b) June 2, 2026 (six months from
the date on which the Registration Statement registering the resale of Focus Impact’s shares becomes effective under the Securities
Act of 1933, as amended.)

91