XCF Global, Inc.

NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

For the Three Months Ended March 31, 2025

Note 1.

Organization

Description of Business

Focus Impact BH3 NewCo, Inc. (“NewCo”) was incorporated in Delaware on March 6, 2024, and NewCo’s registered office is at 251 Little Falls Drive, Wilmington, County of New Castle, Delaware 19809. NewCo was formed as a wholly-owned subsidiary of Focus Impact BH3 Acquisition Company (“FI BH3”).

Focus Impact BH3 Merger Sub 1, LLC (“Merger Sub 1”) was incorporated in Delaware on March 6, 2024, and Merger Sub 1’s registered office is at 251 Little Falls Drive, Wilmington, County of New Castle, Delaware 19809. Merger Sub 1 was formed as a wholly-owned subsidiary of NewCo.

Focus Impact BH3 Merger Sub 2, Inc. (“Merger Sub 2”) was incorporated in Delaware on March 6, 2024, and Merger Sub 2’s registered office is at 251 Little Falls Drive, Wilmington, County of New Castle, Delaware 19809. Merger Sub 2 was formed as a wholly-owned subsidiary of NewCo.

Proposed Business Combination

On March 11, 2024, FI BH3 entered into a business combination agreement (the “Business Combination Agreement”) with NewCo, Merger Sub 1, Merger Sub 2, and XCF Global Capital, Inc., a Nevada corporation (“XCF”). Pursuant to the Business Combination Agreement, and subject to the terms and conditions contained therein, the business combination will be effected in two steps: (a) FI BH3 will merge with and into Merger Sub 1 (the “NewCo Merger”), with Merger Sub 1 being the surviving entity of the NewCo Merger as a wholly owned subsidiary of NewCo; and (b) immediately following the NewCo Merger, Merger Sub 2 will merge with and into XCF (the “Company Merger” and, together with the NewCo Merger and all other transactions contemplated by the Business Combination Agreement, the “Business Combination”), with XCF being the surviving corporation of the Company Merger as a wholly owned subsidiary of NewCo. As a result of the Business Combination, NewCo will become a new publicly-traded company.

Reimbursable Expenses

Pursuant to the Business Combination Agreement, XCF has agreed to pay for or reimburse, as the case may be, FI BH3 for all expenses due and payable by FI BH3 in connection with the Business Combination (such expenses, collectively, “Reimbursable Expenses”). Such Reimbursable Expenses include:

any expenses payable to any governmental authority in connection with the Business Combination Agreement, including the Hart-Scott-Rodino Act filing fee and the S-4 filing fee;

registrar, transfer agent and printer expenses;

fees and expenses of third party advisors;

fees and expenses of auditors and accountants;

excise taxes of FI BH3; and

any placement fee and any other fees, costs or expenses incurred in connection with NewCo’s listing on the Applicable Exchange.

In the event that any Reimbursable Expenses become due and payable prior to the closing of the Business Combination, XCF has agreed to pay such Reimbursable Expenses directly on behalf of FI BH3, within five (5) business days of its receipt of a written statement setting forth the amount of such Reimbursable Expenses from FI BH3. Additionally, XCF has agreed to pay any Reimbursable Expenses which are outstanding, or which will become due and payable, as of a termination of the Business Combination Agreement.

On February 5, 2025, the SEC declared effective the registration statement on Form S-4, initially publicly filed by NewCo with the SEC on July 31, 2024. On February 27, 2025, FI BH3’s stockholders approved at a special meeting the Business Combination Agreement and the transactions contemplated thereby. We expect to close the XCF Business Combination in the first half of 2025.

Special Meeting of Stockholders

On July 31, 2024, following approval by FI BH3’s stockholders at a special meeting (the “July 2024 Special Meeting”), FI BH3 effected an amendment to its amended and restated certificate of incorporation to further extend the period of time by which FI BH3 has to consummate an initial business combination (the “Termination Date”) to February 7, 2025 and to allow FI BH3, without the need for another stockholder vote, to elect to extend the Termination Date on a monthly basis for up totwo times, by an additionalone month each time, after February 7, 2025, by resolution of FI BH3’s board of directors. The board of directors subsequently extended the Termination Date to April 7, 2025.

On April 7, 2025, FI BH3 held the April 2025 Special Meeting to amend FI BH3’s amended and restated certificate of incorporation, as amended, to (i) extend the Termination Date from April 7, 2025 to May 7, 2025, and to allow FI BH3, without the need for another stockholder vote, to elect to extend the Termination Date on a monthly basis for up tofive times, by an additionalone month each time, after the Charter Extension Date, by resolution of the FI BH3’s board of directors if requested by FI BH3’s sponsor, and upon five days’ advance notice prior to the applicable Termination Date. The stockholders of the FI BH3 approved the April 2025 Extension Amendment Proposal at the April 2025 Special Meeting.

In connection with the July 2024 Special Meeting, FI BH3 and NewCo entered into non-redemption agreements (“2024 Non-Redemption Agreements”) with certain stockholders of FI BH3 pursuant to which, such stockholders agreed not to redeem (or to validly rescind any redemption requests on) an aggregate of 1,047,399 shares of Class A common stock of FI BH3 in connection with the July 2024 Special Meeting and to hold such shares through the July 2024 Special Meeting. In exchange for the foregoing commitments not to redeem such shares of Class A common stock, NewCo agreed to issue to such stockholders, for no additional consideration, an aggregate of 174,566 shares of Class A common stock of NewCo (and up to an aggregate of 232,750 shares of Class A common stock of NewCo if FI BH3 utilizes thetwo monthly extensions described above), in connection with the consummation of the initial Business Combination. In 2025, FI BH3 utilized thetwo monthly extensions described above and the stockholders holding the non-redemption agreements did not redeem their shares. As a result, NewCo will issue 232,750 shares of its common stock in connection with the closing of the initial Business Combination.

Risks and Uncertainties

NewCo was formed to be the surviving company in connection with a proposed Business Combination between the parent company, FI BH3, and XCF. NewCo has no prior operating activities. NewCo’s only material assets are its direct and indirect interests in FI BH3, and NewCo is accordingly dependent upon distributions from FI BH3 to pay dividends and taxes and other expenses. NewCo’s results of operations and ability to complete the proposed Business Combination may be adversely affected by various factors that could cause economic uncertainty and volatility in the financial markets, many of which are beyond NewCo’s control. NewCo’s plans to consummate the proposed Business Combination could be impacted by, among other things, downturns in the financial markets or in economic conditions, increases in oil prices, inflation, increases in interest rates, supply chain disruptions, declines in consumer confidence and spending and geopolitical instability. NewCo cannot, at this time, fully predict the likelihood of one or more of the above events, their duration or magnitude or the extent to which they may negatively impact our business and NewCo’s ability to complete the proposed Business Combination.

Liquidity, Capital Resources and Going Concern

As of March 31, 2025, NewCo hadno cash, a working capital deficit of $1,283,853 and no sources of funding other than funds that may be obtained from FI BH3.

These conditions raise substantial doubt about NewCo’s ability to continue as a going concern one year from the date that these consolidated condensed financial statements are issued. These consolidated condensed financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should NewCo be unable to continue as a going concern.

As a plan to alleviate its going concern, on March 11, 2024, FI BH3 entered into a proposed Business Combination Agreement with XCF.

Note 2.

Summary of Significant Accounting Policies

Basis of Presentation

NewCo’s unaudited consolidated condensed financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) as determined by the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) and pursuant to the accounting and disclosure rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information or footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted, pursuant to the rules and regulations of the SEC for interim financial reporting. Accordingly, they do not include all the information and footnotes necessary for a complete presentation of financial position, results of operations, or cash flows. In the opinion of management, the accompanying unaudited consolidated condensed financial statements include all adjustments, consisting of a normal recurring nature, which are necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented.

The accompanying unaudited consolidated condensed financial statements should be read in conjunction with the NewCo’s Special Financial Report on Form 10-K for the period ended December 31, 2024, as filed with the SEC on May 6, 2025, which contains the audited financial statements and notes thereto. The interim results for the three months ended March 31, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025 or for any future interim periods.

Principles of Consolidation

The accompanying consolidated condensed financial statements include the accounts of NewCo and its wholly-owned subsidiaries. All intercompany transactions have been eliminated.

Segment Reporting

NewCo complies with ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07), which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses among other disclosure requirements.

Emerging Growth Company

NewCo is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting 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 independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder 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 an emerging growth 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. NewCo has elected not to opt out of such extended transition period, which means that when a standard is issued or revised and it has different application dates for public or private companies, NewCo, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of NewCo’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires NewCo’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.

Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate is the effect of a condition, situation or set of circumstances that existed at the date of the consolidated financial statements, which management considers in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates.

Fair Value of Financial Instruments

The fair value of the NewCo’s assets and liabilities, which qualify as financial instruments under ASC Topic 820, “Fair Value Measurement” (“Topic 820”), approximates the carrying amounts represented in the accompanying financial statements. The carrying amounts of working capital balances approximate their fair values due to the short maturities of these items. Topic 820 establishes a fair value hierarchy that prioritizes and ranks the level of observability of inputs used to measure investments at fair value. The observability of inputs is impacted by a number of factors, including the type of characteristics specific to the financial instruments, market conditions and other factors. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

Financial instruments with readily available quoted prices or for which fair value can be measured from quoted prices in active markets will typically have a higher degree of input observability and a lesser degree of judgment applied in determining fair value. The three levels of the fair value hierarchy under Topic 820 are as follows:

Level 1—Unadjusted quoted prices in active markets for identical financial instruments at the measurement date are used.

Level 2—Pricing inputs are other than quoted prices included within Level 1 that are observable for the investment, either directly or indirectly. Level 2 pricing inputs include quoted prices for similar financial instruments in active markets, quoted prices for identical or similar financial instruments in markets that are not active, inputs other than quoted prices that are observable for the financial instruments and inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3—Pricing inputs are unobservable and include situations where there is little, if any, market activity for the financial instruments. The inputs used in determination of fair value require significant judgment and estimation.

In some cases, the inputs used to measure fair value might fall within different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the financial instrument is categorized in its entirety is determined based on the lowest level input that is significant to the financial instrument.

The carrying amounts of working capital balances approximate their fair values due to the short maturity of these items.

Non-Redemption Agreement

NewCo has determined the 2024 Non-Redemption Agreements entered into in connection with the July 2024 Special Meeting are a liability classified derivative instrument. As such, the 2024 Non-Redemption Agreements were recognized at fair value at inception of the of the agreements and remeasured to fair value at March 31, 2025 and December 31, 2024 with the change in fair value recognized in theconsolidated condensed statements of operations.

Reimbursable Expenses

NewCo recognized the Reimbursable Expenses following ASC 805 in accordance with the nature of the costs originally incurred. As such, expenses reimbursed to the Company or paid for on behalf of the Company are reported as a reduction of expenses incurred by the Company on the consolidated condensed statement of operations. Due to uncertainty in collections of the reimbursable expenses, the Company recognizes a reduction of expenses when received. For the three months ended March 31, 2025 and for the period from March 6, 2024 (inception) through March 31, 2024, the Company is reporting a reduction in operating costs of $0.

Income Taxes

NewCo and its subsidiaries do not file separate company tax returns. Instead, the parent company, FI BH3 will file a consolidated tax return including the financial results of NewCo and its subsidiaries. As of March 31, 2025 and December 31, 2024, there wereno uncertain tax positions related to NewCo or its subsidiaries.

Net Loss Per Share

Basic net loss per share is computed by dividing net loss by the weighted average number of shares of common stock outstanding during the period.

Diluted net loss per share is computed by dividing the net loss attributable to the common stockholder by the weighted-average number of common stock and potentially dilutive securities outstanding for the period. For the purposes of the diluted net loss per share calculation the shares issuable in accordance with the Subscription Agreement are considered to be potentially dilutive securities pursuant to the treasury stock method.

For purposes of calculating diluted loss per common share, the denominator includes both the weighted-average number of shares of common stock outstanding during the period and the number of common stock equivalents if the inclusion of such common stock equivalents is dilutive.

At March 31, 2025,1,320,000 shares of common stock that may be issued in association with the Subscription Agreement are excluded from diluted net loss per share as the conditions for the issuance of the shares has not happened. At March 31, 2024, the Subscription Agreement did not exist. Shares that might be issuable in relation to the proposed Business Combination are excluded from the diluted net loss per share as the conditions for the issuance of the shares has not happened.

Recently Issued Accounting Pronouncements

NewCo has reviewed recently issued accounting pronouncements and plans to adopt those that are applicable to it. NewCo does not expect the adoption of any recently issued pronouncements to have a material impact on its results of operations or financial position.

Note 3.

Related Party Transactions

NewCo’s parent company, FI BH3, has entered into a stock subscription agreement for the acquisition of the shares of common stock issued to FI BH3. As such, at March 31, 2025 and December 31, 2024, FI BH3 owes $100 to NewCo for the payment of NewCo’s common stock.

FI BH3 has paid certain expenses on behalf of NewCo. At March 31, 2025 and December 31, 2024, NewCo has an intercompany payable on the consolidated condensed balance sheets of $4,400 and $0, respectively.

Note 4.

Stockholder’s Deficit

Common stock

NewCo is authorized to issue 100 shares of common stock with par value of $0.01 each. As of March 31, 2025 and December 31, 2024 there were 100 shares of common stock issued and outstanding. Each share of common stock entitles the holder toone vote.

Note 5—Fair Value Measurements

NewCo follows the guidance in ASC 820 for its financial assets and liabilities that are remeasured and reported at fair value at each reporting period. The following table presents information about NewCo’s derivative liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation inputs NewCo utilized to determine such fair value.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Because of the inherent uncertainty of valuation, those estimated values may be materially higher or lower than the values that would have been used had a ready market for the investments existed.

Accordingly, the degree of judgment exercised by NewCo in determining fair value is greatest for investments categorized in Level 3.

The following table presents the changes in the fair value of the NewCo’s financial assets and liabilities:

At March 31, 2025 and December 31, 2024 the 2024 Non-Redemption Agreements were valued using a likelihood-weighted scenario analysis; a Level 3 categorization.

The model used for the 2024 Non-redemption Agreements requires the use of subjective assumptions:

●

The Risk-free rate as of the valuation date was selected based upon a typical equity investor assumed holding period.

●

The expected volatility assumption was based on the implied volatility from NewCo’s common stock and warrants. An increase in the expected volatility, in isolation, would result in an increase in the fair value measurement and vice versa.

●

Probability of an Initial Business Combination as based on the NewCo’s management.

The key inputs into the models for the 2024 Non-Redemption Agreements were as follows:

Note 6.

Commitments and Contingencies

Legal Proceedings

NewCo is not currently party to any material legal proceedings. At each reporting date, NewCo evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. NewCo expenses as incurred the costs related to such legal proceedings.

Note 7.

Segment Information

ASC Topic 280, “Segment Reporting,” establishes standards for companies to report in their financial statement information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by NewCo’s chief operating decision maker (“CODM”), or group, in deciding how to allocate resources and assess performance.

NewCo’s chief operating decision maker has been identified as the Chief Executive Officer, who reviews the operating results for NewCo as a whole to make decisions about allocating resources and assessing financial performance. Accordingly, management has determined that NewCo only hasone operating segment.

The CODM assesses performance for the single segment and decides how to allocate resources based on net income or loss that also is reported on the statements of operations as net income or loss. The measure of segment assets is reported on the consolidated condensed balance sheets as total assets. When evaluating NewCo’s performance and making key decisions regarding resource allocation the CODM reviews operating and formation costs. For the three months ended March 31, 2025 and for the period from March 6, 2024 (inception) through March 31, 2024, NewCo reported operating and formation costs of $16,100 and $2,953, respectively.

The key metric included in segment profit or loss reviewed by the CODM is operating and formation costs. The CODM reviews operating and formation costs to enforce all contractual agreements to ensure costs are aligned with all agreements and budget.

Note 8.

Subsequent events

NewCo evaluated subsequent events and transactions that occurred after the balance sheet date up to the date the consolidated condensed financial statements are issued. NewCo did not identify any subsequent events that would have required adjustment or disclosure in these audited consolidated financial statements.

On April 4, 2025, the Business Combination Agreement was amended to extend the Termination Date from March 31, 2025 to May 31, 2025.

On April 7, 2025, FI BH3 held the April 2025 Special Meeting to amend FI BH3’s amended and restated certificate of incorporation, as amended, to (i) extend the Termination Date from April 7, 2025 to May 7, 2025, and to allow FI BH3, without the need for another stockholder vote, to elect to extend the Termination Date on a monthly basis for up tofive times, by an additionalone month each time, after the Charter Extension Date, by resolution of the FI BH3’s board of directors if requested by FI BH3’s sponsor, and upon five days’ advance notice prior to the applicable Termination Date. The stockholders of the FI BH3 approved the April 2025 Extension Amendment Proposal at the April 2025 Special Meeting.

Item 2.