Focus Impact BH3 (BHAC) Signs LOI with XCF Global Capital

Closing the curtains on 2023, Focus Impact BH3 Acquisition Corp. (NASDAQ: BHAC) announced this morning that it has signed a Letter of Intent (LOI) with XCF Global Capital, Inc., a New York-based sustainable fuels producer.

While specifics about the deal remain under wraps, the disclosed valuation places XCF at $1.75 billion.

XCF controls multiple plants in North America that will produce renewable diesel, sustainable aviation fuel, and other biofuels.

With feedstock and offtake agreements already in place with world-class energy companies, the target has secured long-term and stable cash flows.

Leveraging these agreements, XCF hopes to position itself to capitalize on anticipated shifts in regulatory policies, particularly in the US and Europe. These anticipated changes are expected to generate substantial growth in the demand for biofuels, thereby fostering the expansion of biofuel plant infrastructure.

Focus Impact BH3, previously known as Crixus BH3, sold most of its sponsor shares and warrants to a new sponsor entity back in September, which led to a name change and shift in management.

The agreement was also conditioned upon the SPAC’s underwriters Guggenheim and BTIG waiving their deferred fees and the new team receiving a working capital loan of at least $1.2 million.

In return, BHAC received a reimbursement of $175,440 in expenses it incurred in connection with loaning the funds for an extension in December 2022.

At that time, the SPAC noted that it would need $35 million to $40 million in trust to complete a deal. Its new ownership stated that it would accept a trust balance below $35 million, but not under $20 million.

It currently has about $24.3 million in trust after having seen an aggregate of 89.95% of shares redeemed in earlier votes.

In October, BHAC flirted with the idea of liquidating as it announced that it would liquidate early, but reversed this about one week later. It currently has a completion deadline of July 31, 2024.

The potential merger is subject to the completion of due diligence, negotiation of and entry into definitive documentation and will be subject to customary closing conditions. Since there is no guarantee that this LOI will make it to the definitive agreement stage, Focus Impact BH3’s page will stay in SPACInsider’s searching column for now.