XCF Global (SAFX) risk factors, FY2025 10-K

Risks Related to the Helena ELOC

1. 01It is not possible to predict the actual number shares of our common stock, if any, we will sell under the ELOC Agreement to Helena or the gross proceeds we will receive from such sales
2. 02We generally have the right to control the timing and amount of any sales of our common stock to Helena under the ELOC Agreement. Sales of our common stock, if any, to Helena under the ELOC Agreement will depend upon market conditions and other factors to be determined by us
3. 03The sale and issuance of our common stock to Helena will cause dilution to our existing securityholders, and the resale of our common stock acquired by Helena, or the perception that such resales may occur, could cause the price of our common stock to decrease
4. 04We have broad discretion in the use of the net proceeds we receive from the sale of shares to Helena and may not use them effectively

Risks Relating to Our Operations, Business and Industry

1. 05Our management team does not have experience in the construction of SAF production facilities and has only limited experience in the operation of a renewable fuels business, and will depend on services provided by professional and skilled service providers and others in the renewable space
2. 06Our LOIs and MOUs may not result in definitive agreements, commercial projects, or revenue
3. 07Our financial results are largely affected by the relationship, or margin, between the prices at which we sell renewable diesel and SAF and the prices of feedstocks used in manufacturing renewable diesel and SAF
4. 08Our revenues and financial results will be largely affected by the prices at which we sell SAF, and volatility in the market price for SAF could have a material adverse effect on our financial condition and results of operations
5. 09The price of our SAF product relative to the price of petroleum-based conventional jet aviation fuel may affect our revenues and profitability
6. 10If there are decreases in the price of traditional petroleum-based jet aviation fuel or the value ascribed to sustainability or environmental attributes related to SAF decrease, we may be required to reduce our SAF prices to remain competitive in the marketplace which may negatively impact our profitability
7. 11We currently utilize a domestic feedstock sourcing strategy, relying on low carbon triglyceride feedstocks (such as distillers corn oil and soybean oil) to produce SAF, renewable diesel, and renewable naphtha at its New Rise Reno facility
8. 12Our SAF production process depends, in part, on technology that is licensed to us. We do not control this technology, and any loss of our rights to use this technology would adversely affect our ability to produce SAF
9. 13Our revenues and financial results will depend on the continued adoption and use of SAF by airlines
10. 14If SAF turns out to be incompatible with or ineffective for existing aircraft, then demand for SAF could be reduced
11. 15Our failure to accurately forecast demand for our SAF product could result in unexpected shortfalls or surpluses that could negatively affect our results of operations
12. 16Competitiveness of our SAF product for aviation fuel use benefits in part from government economic incentives for renewable energy projects or other related policies that could change
13. 17Negative attitudes toward renewable energy projects from the U.S. government, other lawmakers and regulators, other energy industry participants, and activists could adversely affect our business, financial condition and results of operations
14. 18Attitudes toward SAF from airlines, governments, non-governmental organizations and others could reduce the demand for SAF
15. 19The construction of new production facilities and converting existing production facilities to produce SAF can take significant time to complete and expose us to a variety of risks that may negatively affect our business, results of operations and anticipated returns on those projects
16. 20We continue to rely on the knowledge and involvement of several of our largest shareholders, and any lack of cooperation or failure to perform on their part could adversely affect our operations and strategic flexibility
17. 21If we choose to produce renewable fuels other than, or in addition to, SAF, we may not achieve the financial results we anticipate achieving through producing and selling only SAF
18. 22We compete in an industry characterized by rapidly advancing technologies and increasing competition, and our failure to successfully compete with other companies in our industry may have a material adverse effect on our business, financial condition and results of operations and market share
19. 23Our financial results could vary significantly from quarter to quarter and are difficult to predict
20. 24Economic conditions and trends in the business cycles of the airline industry will impact our business and operating results
21. 25Unanticipated problems at, or downtime impacting our facilities could have a material adverse effect on our results of operations
22. 26Unanticipated problems or delays in building new production facilities or upgrading existing facilities that we acquire to the proper specifications may harm our business and viability
23. 27Improvements in or new discoveries of alternative energy products or production technologies and/or government mandated use of such products or technologies, could have a material adverse effect on our financial condition and results of operations
24. 28Our business is subject to operational and safety risks, including the risk of personal injury to employees and others
25. 29We may be subject to citizen opposition and negative publicity due to public concerns over our operations and planned future operations, which could have a material adverse effect on our business, financial condition or results of operations
26. 30Our insurance policies do not cover all losses, costs or liabilities that we may experience and if we cannot maintain adequate insurance coverage, we will be unable to continue certain operations
27. 31The litigation environment in which we operate poses a significant risk to our businesses
28. 32Our information technology systems and the information technology systems of our service providers could suffer interruptions, failures or breaches and our business operations could be disrupted, adversely affecting results of operations and our reputation
29. 33Competitors that produce part or all of their own supply of feedstocks may have a competitive advantage over us
30. 34Our growth strategy includes pursuing acquisitions of existing facilities, and our potential inability to successfully integrate new and acquired facilities may adversely affect our financial results
31. 35We may not successfully identify and complete acquisitions on favorable terms or achieve anticipated synergies relating to any acquisitions, and such acquisitions could result in unforeseen operating difficulties and expenditures and require significant management resources
32. 36Our ability to construct additional production facilities and acquire existing facilities may be adversely impacted by our outstanding indebtedness and by the price of our stock
33. 37Our acquisitions may expose us to unknown liabilities
34. 38We expect to need to raise additional capital in the future to support our operations, complete acquisitions and grow our business and our ability to obtain the necessary funding is uncertain
35. 39Certain significant stockholders of the Company are involved in litigation which could make it more difficult for the Company to obtain additional funding
36. 40Uncertainty and illiquidity in the capital markets may impair our ability to obtain equity or debt financing
37. 41We have substantial indebtedness and expect that at least part of our future financing needs will involve incurring additional indebtedness, which could adversely affect our financial flexibility and our competitive position
38. 42If we fail to retain our key personnel or if we fail to attract additional qualified personnel, we may not be able to achieve our anticipated level of growth and our business could suffer
39. 43If we are unable to manage our growth and expand our operations successfully, our reputation may be damaged and our business and results of operations may be harmed
40. 44The Company’s international growth strategy includes amongst other things licensing its proprietary modular facility design and intellectual property to third parties
41. 45If we are unable to protect our intellectual property rights, or if others use our technology without authorization, our competitive position could be materially harmed
42. 46We may be negatively impacted by inflation
43. 47Declines in our anticipated profitability could result in the impairment of our assets

Risks Related to Operating as a Public Company

1. 48Our only material assets are our direct and indirect interests in Legacy XCF and its subsidiaries, and we are accordingly dependent upon distributions from Legacy XCF and its subsidiaries to pay dividends and taxes and other expenses
2. 49Our management team has limited experience managing a public company
3. 50We will incur significantly increased costs and devote substantial management time as a result of operating as a public company
4. 51These control deficiencies could result in a misstatement of its accounts or disclosures that would result in a material misstatement of financial results that would not be prevented or detected, and accordingly, Legacy XCF determined that these control deficiencies constitute material weaknesses
5. 52Our business and operations could be negatively affected if we become subject to any securities litigation or shareholder activism, which could cause us to incur significant expense, hinder execution of our business and growth strategy and adversely impact our stock price

Risks Related to Ownership of Our Common Stock

1. 53The price of our securities may be volatile and you could lose all or part of your investment as a result
2. 54These market and industry factors may materially reduce the market price of our securities regardless of our operating performance. Price volatility also may be greater if the public float and trading volume of our Class A common stock is low
3. 55We may fail to meet our publicly announced guidance or other expectations about our business, which could cause the market price of our securities to decline
4. 56If securities or industry analysts do not publish research or reports about our business or publish negative reports about our business, our share price and trading volume could decline
5. 57We do not intend to pay cash dividends for the foreseeable future
6. 58We qualify as an “emerging growth company.” The reduced public company reporting requirements applicable to emerging growth companies may make our common stock less attractive to investors
7. 59Future resales of our Class A common stock may cause the market price of our securities to drop significantly
8. 60Our directors, executive officers and principal stockholders have substantial control over us, which could limit other stockholders’ ability to influence the outcome of corporate matters and key transactions, including a change of control
9. 61We may issue additional shares of our Class A common stock, which would increase the number of shares eligible for future resale in the public market and result in dilution to our stockholders
10. 62Delaware law and our amended and restated certificate of incorporation and amended and restated bylaws contain certain provisions, including anti-takeover provisions, which limit the ability of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable
11. 63These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in the board or management
12. 64The Company’s failure to meet Nasdaq’s continued listing requirements could result in a delisting of its shares

Risks Related to the Proposed Transaction

1. 65Litigation relating to the Proposed Transaction, if any, could delay or prevent the completion of the Proposed Transaction and result in substantial costs to the Company
2. 66Failure to complete the Proposed Transaction could negatively impact the Company
3. 67The Proposed Transaction, regardless of whether it is completed, will continue to divert resources from ordinary operations, which could adversely affect the Company’s business
4. 68The Company has incurred and expects to continue to incur significant costs related to the Proposed Transaction
5. 69Uncertainties associated with the Proposed Transaction could negatively impact the Company’s ability to attract, motivate and retain management personnel and other key employees