XCF Global Inc Class A (SAFX) Risk Analysis

On December 9, 2025, the Company received notice from the Listing Qualifications staff of The Nasdaq Stock Market LLC ("Nasdaq") that, because the closing bid price for the Company's Common Stock had fallen below $1.00 per share for 30 consecutive trading days, the Company no longer complies with the minimum bid price requirement for continued listing on the Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2) because the closing bid price of the Company's Common Stock for the prior 30 consecutive business days was lower than the minimum bid price requirement of $1.00 per share. The Company has until June 8, 2026 to regain compliance with the minimum bid price requirement but could be eligible for an additional 180-day compliance period. There can be no assurance that the Company will be able to regain compliance with the minimum bid price requirement or will otherwise be in compliance with other applicable Nasdaq listing rules. If the Company fails to satisfy Nasdaq's continued listing requirements, such as the corporate governance requirements or the minimum closing bid price requirement, Nasdaq may take steps to delist its Common Stock. Such a delisting would likely have a negative effect on the price of the Company's Common Stock and would impair your ability to sell or purchase the Company's Common Stock when you wish to do so. In the event of a delisting, the Company can provide no assurance that any action taken by it to restore compliance with listing requirements would allow its Common Stock to become listed again, stabilize the market price or improve the liquidity of the Company's Common Stock, prevent its Common Stock from dropping below Nasdaq's minimum bid price requirement or prevent future non-compliance with Nasdaq's listing requirements.

Our amended and restated certificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, (i) any derivative action or proceeding brought on behalf of us, (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer, other employee, agent or stockholder of ours to us or our stockholders, or any claim for aiding and abetting such alleged breach, (iii) any action asserting a claim against us or any current or former director, officer, other employee, agent or stockholder of ours arising pursuant to any provision of the DGCL, our amended and restated certificate of incorporation (as it may be amended or restated from time to time) or our amended and restated bylaws (as may be amended or restated from time to time) or (iv) any action asserting a claim against us or any current or former director, officer, other employee, agent or stockholder of ours governed by the internal affairs doctrine of the law of the State of Delaware or (v) any action to interpret, apply, enforce or determine the validity of our certificate of incorporation shall, as to any action in the foregoing clauses (i) through (v), to the fullest extent permitted by law, be solely and exclusively brought in the Delaware Court of Chancery; provided, however, that the foregoing shall not apply to any claim (a) as to which the Delaware Court of Chancery determines that there is an indispensable party not subject to the jurisdiction of the Delaware Court of Chancery (and the indispensable party does not consent to the personal jurisdiction of the Court of Chancery within ten days following such determination), (b) which is vested in the exclusive jurisdiction of a court or forum other than the Delaware Court of Chancery, or (c) arising under federal securities laws, including the Securities Act as to which the federal district courts of the United States of America shall, to the fullest extent permitted by law, be the sole and exclusive forum. Notwithstanding the foregoing, the provisions of our amended and restated certificate of incorporation will not apply to suits brought to enforce any liability or duty created by the Exchange Act, or any other claim for which the federal district courts of the United States of America shall be the sole and exclusive forum. While Section 22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability created by the Securities Act or the rules and regulations thereunder, Section 27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the Exchange Act or the rules and regulations thereunder. Any person or entity purchasing or otherwise acquiring any interest in any shares of our capital stock shall be deemed to have notice of and to have consented to the forum provisions in our amended and restated certificate of incorporation. If any action the subject matter of which is within the scope of the forum provisions is filed in a court other than a court located within the State of Delaware (a "foreign action") in the name of any stockholder, such stockholder shall be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located within the State of Delaware in connection with any action brought in any such court to enforce the forum provisions (an "enforcement action"); and (y) having service of process made upon such stockholder in any such enforcement action by service upon such stockholder's counsel in the foreign action as agent for such stockholder. This choice-of-forum provision may limit a stockholder's ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, stockholders, agents or other employees, which may discourage such lawsuits. We note that there is uncertainty as to whether a court would enforce this provision, and the enforceability of similar choice of forum provisions in other companies' charter documents has been challenged in legal proceedings. Further, investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. It is possible that a court could find these types of provisions to be inapplicable or unenforceable, and if a court were to find this provision of our amended and restated certificate of incorporation inapplicable or unenforceable with respect to one or more of the specified types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and resources of our management and board of directors.

Our amended and restated certificate of incorporation and amended and restated bylaws include, and the Delaware General Corporation Law ("DGCL") contains, provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition that stockholders may consider favorable, including transactions in which stockholders might otherwise receive a premium for their shares. These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, and therefore depress the trading price of our common stock. These provisions could also make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the incumbent members of the board of directors or taking other corporate actions, including effecting changes in our management. Among other things, our amended and restated certificate of incorporation and amended and restated bylaws include provisions: - establishing a classified board of directors with three-year staggered terms, which could delay the ability of stockholders to change the membership of a majority of the NewCo Board; - authorizing the board of directors to issue shares of preferred stock, including "blank check" preferred stock and to determine the price and other terms of those shares, including preferences and voting rights, without stockholder approval, which could be used to significantly dilute the ownership of a hostile acquirer; - prohibiting, subject to the rights of the holders of any shares of preferred stock, stockholders from taking any action by written consent; - prohibiting, subject to the rights of the holders of any shares of preferred stock, stockholders from calling a special meeting of the stockholders; - prohibiting cumulative voting in the election of directors, which limits the ability of minority stockholders to elect director candidates; - providing that directors may only be removed from the board for cause, upon the affirmative vote of the holders of at least 66 2/3% of the voting power of all of the then outstanding shares of the voting stock, voting together as a single class; - requiring stockholders to follow certain advance notice procedures to nominate candidates for election to the board of directors or to propose matters to be acted upon at a stockholders' meeting, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in the board of directors, and may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer's own slate of directors or otherwise attempting to obtain control of us; - the right of the board to elect a director to fill a vacancy created by the expansion of the board or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on the board; - providing that the board is expressly authorized to make, alter or repeal our bylaws, which may allow the board to take additional actions to prevent an unsolicited takeover and inhibit the ability of an acquirer to amend the bylaws to facilitate an unsolicited takeover attempt; - requiring the affirmative vote of holders of (i) (a) at least 66 2/3%, in case of certain provisions or (b) a majority, in case of other provisions, of the voting power of all of the then outstanding shares of the voting stock, voting together as a single class, to amend, alter, change or repeal certain provisions of the certificate of incorporation; and (ii) (a) at least 66 2/3%, in case of certain provisions, or (b) a majority, in case of other provisions, of the voting power of all of the then outstanding shares of the voting stock, voting together as a single class, to amend, alter, change or repeal certain provisions of the bylaws, which could preclude stockholders from bringing matters before annual or special meetings of stockholders and delay changes in the board and also may inhibit the ability of an acquirer to effect such amendments to facilitate an unsolicited takeover attempt; and - limiting the liability of, and providing for the indemnification of, our directors and officers. These provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in the board or management. Any provision of the certificate of incorporation or bylaws or Delaware law that has the effect of delaying or preventing a change in control could limit the opportunity for stockholders to receive a premium for their shares and could also affect the price that some investors are willing to pay for our Class A common stock.

We may issue additional shares of Class A common stock or other equity securities of equal or senior rank, or securities that are convertible into or exchangeable for our Class A common stock or senior equity securities in the future in connection with, among other things, capital raising initiatives, future investments and acquisitions, or repayment of outstanding indebtedness, in most cases without stockholder approval. In addition, pursuant to the XCF 2025 Equity Incentive Plan and 2025 Employee Stock Purchase Plan, we expect to issue additional shares of Class A common stock, or securities exercisable for shares of Class A common stock. Once shares are issued pursuant to the 2025 Equity Incentive Plan and 2025 Employee Stock Purchase Plan, those shares will become eligible for sale in the public market, subject to any applicable vesting requirements, lockup agreements and other restrictions imposed by law. A total of 10,449,264 shares are reserved for future issuance under the 2025 Equity Incentive Plan. A total of 1,000,000 shares are reserved for future issuance under the 2025 Employee Stock Purchase Plan. We expect to file one or more registration statements on Form S-8 under the Securities Act to register shares of Class A common stock or securities convertible into or exchangeable for our issued Class A common stock pursuant to the 2025 Equity Incentive Plan and 2025 Employee Stock Purchase Plan. Any such Form S-8 registration statements will automatically become effective upon filing. Accordingly, shares registered under such registration statements will be available for sale in the open market. The issuance of additional shares or other equity securities of equal or senior rank would have the following effects: - existing stockholders' proportionate ownership interest in the company will decrease;- the number of shares eligible for resale in the public market will increase;- the amount of cash available per share, including for payment of dividends in the future, may decrease;- the relative voting strength of each share of previously outstanding Class A common stock may be diminished; and - the market price of our Class A common stock may decline.

As of the date of this Annual Report, our executive officers, directors and principal stockholders and their affiliates own approximately 209,328,553 shares of our Class A common stock, or approximately 71% of the outstanding shares of our Class A common stock, with EEME and GL together owning approximately 37.3%. This significant concentration of ownership may have a negative impact on the trading price of our Class A common stock because investors often perceive disadvantages in owning stock in companies with controlling stockholders. In addition, these stockholders will be able to exercise a significant level of control over all matters requiring stockholder approval, including the election of directors and the approval of mergers, acquisitions or other extraordinary transactions. They may also have interests that differ from yours and may vote in a way with which you disagree and which may be adverse to our interests. This concentration of ownership may have the effect of delaying, preventing or deterring a change of control of us, which could deprive our stockholders of an opportunity to receive a premium for their Class A common stock as part of a sale of us and might ultimately affect the market price of our Class A common stock.

A substantial percentage of our outstanding shares are held by a small number of stockholders and our officers and directors and are not subject to any "lock-up" agreement or other restriction on resale, other than certain restrictions imposed by the federal securities laws. Pursuant to certain agreements we have with these and other holders of our securities, we are obligated to register those shares for resale. Once those registration statements permitting such resales have become effective and are available for use, the sale or possibility of sale of these shares could have the effect of increasing the volatility in the price of our Class A common stock or the market price of our Class A common stock could decline if the holders of currently restricted shares sell them or are perceived by the market as intending to sell them.

We currently qualify as an "emerging growth company" under SEC rules. As an emerging growth company, we are permitted and plan to rely on exemptions from certain disclosure requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. As a result, the information we provide to investors will be different than the information that is available with respect to other public companies that are not emerging growth companies. If some investors find our Class A common stock less attractive as a result, there may be a less active trading market for the Class A common stock and the market price may be more volatile. We will remain an "emerging growth company" until the earliest to occur of (i) the last day of the fiscal year (a) following the fifth anniversary of the closing of the Business Combination, (b) in which we have total annual gross revenue of at least $1.235 billion or (c) in which we are deemed to be a "large accelerated filer," which means the market value of our common equity held by non-affiliates exceeds $700,000,000 as of the last business day of our prior second fiscal quarter, and (ii) the date on which we have issued more than $1.0 billion in non-convertible debt during the prior three-year period. We currently intend to take advantage of exemptions summarized above as long as we maintain "emerging growth company" status.

An active trading market for our securities may never develop or, if developed, it may not be sustained. You may be unable to sell your securities unless a market can be established and sustained.

The price of our securities may fluctuate due to a variety of factors, including: - changes in the industry in which we operate; - changes in business or regulatory conditions, including new laws or regulations or new interpretations of existing laws or regulations applicable to our business; - changes in accounting standards, policies, guidelines, interpretations or principles; - results of operations that vary from the expectations of securities analysts and investors, and variations in results of operations of companies that are perceived to be similar to us; - results of operations that vary from those of our competitors; - guidance, if any, that we provide to the public, any changes in this guidance or our failure to meet this guidance; - actual or anticipated changes in estimates as to financial results, development timelines or recommendations by securities analysts; - strategic actions by us or our competitors; - announcements by us or our competitors of significant contracts, acquisitions, joint ventures, other strategic relationships or capital expenditures or commitments; - any significant change in our management; - the development and sustainability of an active trading market for our securities; - actions by institutional or activist securityholders; - additional securities of ours being sold or issued into the market by us or the anticipation of such sales; - sales of substantial amounts of our Class A common stock by our directors, executive officers or significant stockholders or the perception that such sales could occur; - the volume of shares of our Class A common stock available for public sale; - litigation involving us, our industry, or both, or investigations by regulators into our operations or those of our competitors; - general economic, industry and market conditions, such as the effects of the COVID-19 pandemic, recessions, interest rates, inflation, international currency fluctuations, political instability and acts of war or terrorism; and - the other factors described in this "Risk Factors" section. These 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. In addition, companies that have experienced volatility in the market price of their securities have frequently been the subject of securities class action and shareholder derivative litigation. We could be the target of such litigation in the future. Class action and derivative lawsuits, whether successful or not, could result in substantial costs, damage or settlement awards and a diversion of our management resources and attention from running our business, which could materially harm our reputation, financial condition and results of operations.

In the past, following periods of volatility in the market price of a company's securities, securities class action litigation has often been brought against that company. Shareholder activism, which could take many forms or arise in a variety of situations, has been increasing recently. Volatility in the stock price of our Class A common stock or other reasons may in the future cause us to become the target of securities litigation or shareholder activism. Securities litigation and shareholder activism, including potential proxy contests, could result in substantial costs and divert management's and our directors' attention and resources from our business. Additionally, such securities litigation and shareholder activism could give rise to perceived uncertainties as to our future, adversely affect our relationships with customers, suppliers and service providers, and could make it more difficult to attract and retain qualified personnel. Also, we may be required to incur significant legal fees and other expenses related to any securities litigation and activist shareholder matters, and our stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks and uncertainties of any securities litigation and shareholder activism.

The trading market for our Class A common stock will depend on the research and reports that securities or industry analysts publish about us or our business. We currently do not have any analyst coverage and may not obtain analyst coverage in the future. In the event we obtain analyst coverage, we will not have any control over such analysts. The market price of our Class A common stock could decline if our actual results are not consistent with analysts' projections. If one or more of the analysts who cover us downgrade our shares or change their opinion of our Class A common stock, our share price would likely decline. If one or more of these analysts cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which could cause our share price or trading volume to decline.

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 and her husband, Suneet Singal, are defendants to certain litigation discussed below under the heading "Certain Litigation Involving GL's Sole Member and a GL Related Party." While the Company is not a party to or involved in such litigation in any way, the Company may be indirectly affected by such litigation and such litigation could have an adverse impact on the Company's ability to obtain additional funding and/or the terms available to us in connection with any such funding.

We continue to rely on Mr. Randall Soule and EEME, two of our largest shareholders for certain funding, operational support, maintenance activities, and legacy knowledge of our New Rise Reno production facility, which they have gained through historical involvement in its development. Mr. Soule previously owned and operated New Rise Renewables, LLC (the predecessor to XCF Global, Inc.) through his ownership of RESC Renewables, LLC, and his wholly owned entity, Encore DEC, LLC served as the engineering procurement and construction contractor for the construction and subsequent conversion of the facility. As mentioned above, GL Part SPV I, LLC, GL Part SPV II, LLC, and EEME are all owned by Ms. Ladnier. Through the Proposed Transaction with EEME, Southern, and DEVS, EEME has committed to purchase $10 million shares of XCF Common Stock at $0.10 per share. Although Mr. Soule and Mr. Singal do not serve as executive officers, employees, or directors of XCF Global, Inc. or its subsidiaries, we continue to rely on their institutional knowledge, historical relationships with vendors and contractors, and operational familiarity with the New Rise facility in a non-compensatory advisory capacity. Because of this reliance - coupled with their significant equity ownership - both shareholders may continue to exert substantial influence over the Company's operations, strategic decisions, and commercial relationships. If Mr. Soule or Mr. Singal were to withdraw their support, restrict access to institutional knowledge, or pursue business activities that compete with or conflict with the Company's interests, our operations could be disrupted, our ability to manage vendor relationships could be impaired, and our strategic flexibility could be adversely affected. While the Company is actively working to integrate New Rise operations under direct management control and to mitigate this reliance, there can be no assurance that such efforts will fully eliminate the associated risks.

Our management will have broad discretion in the application of the proceeds we receive from Helena and you will not have the opportunity as part of your investment decision to assess whether our management is using the proceeds appropriately. Because of the number and variability of factors that will determine our use of our proceeds from Helena under the ELOC Agreement, their ultimate use may vary substantially from their currently intended use. The failure by our management to apply these funds effectively could result in financial losses that could have a material adverse effect on our business and cause the price of our common stock to decline.

The purchase price per share of our common stock to be paid by Helena for our common stock that we may elect to sell to Helena under the ELOC Agreement, if any, will fluctuate based on the market prices of our common stock at the time we elect to sell our common stock to Helena pursuant to the ELOC Agreement. Depending on market liquidity at the time, resales of such our common stock by Helena may cause the trading price of our common stock to decrease, and any such decrease could be substantial. If and when we elect to sell our common stock to Helena, sales of newly issued common stock by us to Helena will result in dilution to the interests of existing holders of our common stock, which dilution may be substantial. Additionally, the sale of a substantial number of shares of our common stock to Helena, or the anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect sales.