XCF Global Inc. (NASDAQ:SAFX), DevvStream Corp. (OTC:DEVSF) and Southern Energy Renewables Inc. have amended their proposed Business Combination Agreement, changing the expected ownership structure, revising certain closing requirements and adding capital support arrangements for XCF. The transaction remains subject to the satisfaction or waiver of the remaining conditions under the amended agreement.
#Revised ownership structure
Under the amended terms, existing XCF shareholders are expected to hold approximately 69.57% of the combined company after closing, compared with 66.7% under the original agreement.
Former DevvStream shareholders are expected to own approximately 10.43%, up from approximately 10.0%. Former Southern shareholders are expected to hold approximately 20.0%, compared with approximately 23.3% previously.
These percentages describe the expected ownership outcome if the proposed combination is completed and are not a completed transaction.
#Changes to closing conditions
The companies agreed to remove or modify certain conditions that had applied to completion. These include previously specified XCF revenue and EBITDA thresholds, as well as the Nasdaq Sweden listing requirement.
Applicable Nasdaq approval requirements remain in place. The announcement does not set out the full amended list of closing conditions; further terms apply.
#Capital arrangements for XCF
GL PART SPV I has made a $1.0 million investment in XCF through the company’s previously announced warrant programme. The warrants are exercisable at $2.50 per share. XCF said it believes the investment reflects GL’s view of the company’s potential future growth in shareholder value.
EEME Energy SPV I LLC and GL PART SPV I, LLC have agreed to fund, or arrange funding for, at least $4.3 million in aggregate additional capital to XCF within the three months following closing.
The two entities have also agreed to use commercially reasonable efforts to invest at least $50 million in aggregate additional capital to XCF during the 12 months following closing. These arrangements are connected to the proposed combination and its closing.
#Proposed structure and operating businesses
If the transaction is completed, Southern and DevvStream would each become wholly owned subsidiaries of XCF, while XCF would remain the publicly traded parent company.
XCF’s renewable fuels platform, Southern’s energy infrastructure and development opportunities, and DevvStream’s environmental-asset development and monetisation capabilities are expected to be brought together through the proposed combination. The companies describe the intended platform as covering renewable fuels, infrastructure and environmental markets for aviation, marine, industrial and other customers.
#XCF’s 2027 outlook
XCF said its previously announced full-year 2027 outlook remains unchanged. The company continues to target gross product sales of $775 - 825 million, net revenue of approximately $110 million to $120 million and EBITDA of approximately $65 million to $70 million for the year ending December 31, 2027.
XCF said the removal of the previous revenue and EBITDA closing condition does not change that outlook. The company’s forward-looking statements are based on estimates and assumptions that are inherently uncertain and subject to material change, and actual results could differ materially.
The company also said its New Rise Renewables Reno facility has a permitted nameplate production capacity of ~38 million gallons per year. XCF’s potential expansion opportunities in Nevada, North Carolina and Florida remain subject to feasibility assessments, financing, regulatory approvals and market conditions.
#Risks and remaining uncertainties
Completion remains subject to the satisfaction or waiver of the remaining closing conditions under the amended Business Combination Agreement. XCF identified risks involving domestic and foreign business, market, financial, political and legal conditions; higher manufacturing, operating and interest expenses; and the possible termination of negotiations or agreements related to its offtake arrangements.
The company also cited possible legal proceedings, Nasdaq continued-listing compliance, integration of New Rise, implementation of its business plan, access to financing and the terms of any financing. Other risks include interruptions or material changes to production at New Rise Reno, disputes concerning the facility’s ground lease and outstanding loans, and fees and other costs associated with the transaction and New Rise acquisitions.
Additional uncertainties identified by XCF include disruption caused by completion of the combination, the ability to realise anticipated transaction benefits, competition, growth management, customer and supplier relationships, employee retention, changes in law or regulation, extensive compliance obligations, economic and competitive conditions, and the availability of tax credits or other government support.
The company further cited intellectual property risks, public-company reporting costs, the possibility that letters of intent and memoranda of understanding may not advance to definitive agreements or commercial deployment, and other factors beyond management’s control. XCF stated that additional risks may exist and that actual results could differ materially from forward-looking statements.
#Key Takeaways
- The proposed XCF, DevvStream and Southern business combination has been amended but remains subject to remaining closing conditions.
- Existing XCF shareholders are expected to own approximately 69.57% of the combined company, while former DevvStream and Southern shareholders are expected to own approximately 10.43% and approximately 20.0%, respectively.
- GL PART SPV I has made a $1.0 million investment through warrants exercisable at $2.50 per share.
- EEME Energy SPV I LLC and GL PART SPV I, LLC have agreed to fund, or cause to be funded, at least $4.3 million in aggregate additional capital within the three months following closing.
- Certain revenue, EBITDA and Nasdaq Sweden listing conditions were removed or revised, while applicable Nasdaq approval requirements remain.
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