8-K: XCF Global, Southern Energy, DevvStream Plan Merger

XCF Global, Southern Energy Renewables, and DevvStream Corp. have signed a binding term sheet for a three-party merger to create an integrated low-carbon fuels and environmental-asset platform.

Summary

• XCF Global, Southern Energy Renewables, and DevvStream Corp. entered into a binding term sheet on January 26, 2026, for a proposed business combination and related financing transactions.
• Southern and DEVS are expected to merge with wholly-owned subsidiaries of XCF, with their respective stockholders receiving shares of XCF Class A common stock, making Southern and DEVS wholly-owned subsidiaries of XCF.
• The parties aim to build a combined enterprise that could achieve an enterprise value of approximately $3.0 billion.
• XCF agreed to invest $10 million to convert and build out its New Rise Reno facility for sustainable aviation fuel (SAF) blending and related corporate purposes.
• This $10 million investment will be funded through the sale of XCF common stock to EEME Energy SPV I LLC (EEME).
• EEME is expected to purchase 7,000,000 shares of Common Stock for $700,000 contemporaneously with the term sheet execution.
• The issuance and sale of an additional 93,000,000 shares of Common Stock for $9,300,000 to EEME is expected periodically until March 31, 2026, subject to a Share Cap of 41,639,170 shares or 19.99% of outstanding shares without stockholder approval.
• Post-closing, the Board of Directors of XCF will be comprised of four members designated by XCF (including CEO Chris Cooper as chair), two members designated by Southern, and one member designated by DEVS.
• The proposed transaction is subject to the finalization of definitive transaction documents, satisfaction of numerous closing conditions, and various regulatory and stockholder approvals.

Sentiment

Score: 7

Explanation: The filing outlines a significant strategic merger with substantial growth potential in the sustainable energy sector, backed by a $10 million investment. However, it is heavily qualified by numerous forward-looking statements and risks, indicating that the transaction is far from guaranteed and subject to many external factors and approvals. The positive strategic vision is balanced by the inherent uncertainties of a complex, multi-party merger.

Positives

• Formation of an integrated platform for low-carbon fuels, sustainable aviation fuel (SAF) adoption, and environmental-attribute monetization.
• Potential to achieve an enterprise value of approximately $3.0 billion for the combined entity.
• A $10 million investment from EEME Energy SPV I LLC will fund the conversion of XCF's New Rise Reno facility for SAF blending and general corporate purposes.
• Targeted annualized blended fuel product revenues exceeding $1.0 billion and minimum annualized EBITDA of $100 million by June 30, 2026.
• Exploration of integrating small modular reactor (SMR) nuclear power with electro-sustainable aviation fuel (eSAF) and AI data center power.
• Southern Energy Renewables has the potential to be approved by the State of Louisiana to issue up to $400 million in state-supported bonds.

Negatives

• The term sheet, while binding on certain provisions, does not obligate the parties to consummate the Proposed Transaction.
• Consummation of the transaction is subject to the negotiation and execution of definitive agreements and the satisfaction or waiver of numerous closing conditions, which may not be met.
• There is no assurance that definitive agreements will be entered into or that the transaction will be consummated on the terms described or at all.
• The combined enterprise may never achieve the targeted $3.0 billion valuation.
• EEME's share acquisition is subject to a 19.99% Share Cap until stockholder approval is obtained for further issuance, potentially limiting immediate capital infusion.

Risks

• Changes in domestic and foreign business, market, financial, political, regulatory, and legal conditions.
• Risk that the plant conversion specified in the term sheet is delayed, not completed on the anticipated timeline, or requires additional capital beyond current expectations.
• Risk that XCF is unable to achieve the specified annualized revenue ($1.0 billion) and EBITDA ($100 million) thresholds.
• Risk that Southern does not receive authorization to issue up to $400 million of bonds, or that such bonds are delayed, issued on less favorable terms, or not issued at all.
• Risk that XCF is unable to obtain or maintain compliance with applicable Nasdaq continued listing standards, including regaining compliance with the $1.00 minimum bid price requirement, which could result in delisting.
• Risk that negotiations among the parties relating to the term sheet or any contemplated definitive agreements are delayed, modified, suspended, or terminated, including as a result of alleged breaches or differing interpretations of the binding provisions.
• Inability of the parties to agree on mutually acceptable definitive agreements or to satisfy or waive the closing conditions contemplated by the term sheet.
• Occurrence of events, changes, or other circumstances that could give rise to the termination of the term sheet or any related negotiations, or that could result in disputes or litigation.
• The outcome of any legal proceedings that may be instituted against XCF, DEVS, Southern, EEME, or their respective affiliates, which could be costly, time-consuming, divert management attention, and adversely affect liquidity or financial condition.
• Uncertainty with respect to the scope, timing, or completion of due diligence by any party and each party's satisfaction therewith.
• Uncertainty regarding valuations, capital structure, financing arrangements, equity ownership, or the allocation of economic interests contemplated by the term sheet, including the risk that the parties may never achieve their aim of creating a $3.0 billion combined enterprise.
• Changes to the structure, timing, or terms of any proposed transaction that may be required or deemed appropriate as a result of applicable laws, regulations, accounting considerations, stock exchange requirements, or regulatory guidance.
• Risk that required regulatory, governmental, stock exchange, or stockholder approvals are not obtained, are delayed, or are subject to conditions that could adversely affect the parties or the expected benefits.
• Risk that the announcement of the term sheet or the pursuit of the contemplated transactions disrupts current plans, operations, or relationships of XCF, DEVS, or Southern.
• Risk that anticipated benefits of any contemplated transaction are not realized due to competition, execution challenges, market conditions, or the inability to grow and manage operations profitably.
• Costs, expenses, and management distraction associated with the term sheet, negotiations, potential litigation, and any contemplated transactions.
• Changes in applicable laws, regulations, or enforcement priorities, including extensive regulation and compliance obligations applicable to the parties' businesses.
• Other economic, business, competitive, operational, or financial factors beyond management's control.

Future Outlook

The parties aim to build a combined enterprise with an approximate $3.0 billion enterprise value, focused on developing a next-generation low-carbon fuels platform to accelerate SAF adoption, expand domestic capacity, and integrate environmental-attribute monetization. XCF targets annualized blended fuel product revenues exceeding $1.0 billion and minimum annualized EBITDA of $100 million by June 30, 2026. They will also explore integrating small modular reactor (SMR) nuclear power with electro-sustainable aviation fuel (eSAF) and AI data center power.

Management Comments

• "We are excited to formalize a proposed final structure with DevvStream and Southern on what we believe will be a very accretive and excellent opportunity. We believe this combination has the potential to further validate the value XCF brings to the SAF industry while increasing shareholder value and providing alternative clean fuel opportunities. If consummated, this merger has the potential to solidify our footprint in North America as the supreme SAF producer." Chris Cooper, CEO of XCF.
• "We believe the next phase of SAF adoption will favor U.S.-based platforms that can move quickly, operate at scale, and better integrate environmental attributes into the fuel value chain to support project economics and customer confidence. If progressed, this merger would bring together complementary strengths—XCFs scale and speed-to-market, Southerns biomass feedstock focus, and DevvStreams environmental-asset capabilities—with the shared objective of building a globally competitive low-carbon fuels platform grounded in real operating execution." Sunny Trinh, CEO of DevvStream.
• "Southerns approach is centered on sustainable biomass feedstocks and scalable fuel pathways, and we see meaningful potential in combining that focus with XCFs production footprint and ability to accelerate commercialization. Subject to completing the necessary documentation, and approvals, we believe this collaboration could create a U.S.-based platform that can compete globally." Jay Patel, CEO of Southern Energy Renewables.

Industry Context

This proposed merger aligns with the growing global demand for sustainable aviation fuel (SAF) and low-carbon energy solutions. The integration of carbon management (DevvStream) and biomass-to-fuels (Southern) with XCF's SAF production capacity positions the combined entity to capitalize on environmental attribute monetization and expand domestic SAF supply. The exploration of SMR nuclear power for eSAF and AI data centers indicates a strategic move towards advanced, zero-carbon energy solutions, reflecting broader industry trends in decarbonization and energy transition.

Management Changes

Corporate Governance

Legal Proceedings

• Risk of disputes or litigation relating to the interpretation, enforceability, or performance of the binding provisions of the Term Sheet if terminated or if parties fail to agree on definitive documentation.
• Risk of legal proceedings being instituted against XCF, DEVS, Southern, EEME, or their respective affiliates, which could be costly, time-consuming, and divert management attention.
• XCF will use commercially reasonable efforts to cooperate and facilitate any settlement of ongoing disputes between XCF and affiliates of EEME.

Related Party Transactions

• XCF will use commercially reasonable efforts to cooperate and facilitate any settlement of ongoing disputes between XCF and affiliates of EEME, suggesting a pre-existing relationship and potential related party dealings.

Stakeholder Impact

• Shareholders (XCF, Southern, DEVS): Will become stockholders of the combined entity, with XCF stockholders holding approximately 66.67%, Southern stockholders approximately 23.33%, and DEVS stockholders approximately 10% of the outstanding shares post-closing. Potential for increased shareholder value if the $3.0 billion enterprise value is achieved. Risk of dilution from EEME's investment and potential delisting if Nasdaq compliance is not maintained.
• Customers: Expected to benefit from increased SAF supply and a unified customer offering for environmental attributes.
• Creditors: XCF will seek a forbearance agreement with Twain and GNCU regarding New Rise Reno indebtedness. Southern may issue up to $400 million in bonds.

Next Steps

• Finalization of mutually agreeable merger structure and definitive transaction documents.
• Completion of satisfactory due diligence by all parties.
• XCF to invest $10 million into the buildout and conversion of its New Rise Reno facility.
• EEME to complete the funding of $10 million for XCF shares according to the funding schedule by March 31, 2026.
• XCF to make application for its shares to be listed on Nasdaq and Nasdaq Sweden (and/or other mutually agreeable European and Asian securities exchanges).
• Southern and DEVS to terminate their previous Agreement and Plan of Merger dated December 3, 2025.
• Stockholders of Southern, XCF, and DEVS to approve the transaction.
• Insider stockholders of XCF and DEVS to enter into customary support agreements and lock-up agreements.
• XCF and Southern to use commercially reasonable efforts to engage Interlink for expansion sites and make an announcement with ExIm bank.
• XCF to use commercially reasonable efforts to cause New Rise Reno to enter into a forbearance agreement with Twain and GNCU for at least 6 months.
• XCF to engage a mutually agreed upon investment bank for future capital raising and Research and Coverage.
• XCF to cooperate and facilitate any settlement of ongoing disputes with affiliates of EEME.
• The combined company to enter into an updated Consulting Agreement with Focus Impact Partners.
• XCF to enter into a long-term offtake agreement for SAF and make a public announcement.
• XCF and Southern to enter into an agreement for XCF's offtake partner to purchase SAF produced by Southern.
• Southern to complete engagement with an investment bank to sell the bond offering and procure the bond.
• Registration statement on Form S-4 to be declared effective by the SEC.
• Required regulatory, governmental, stock exchange, and stockholder approvals to be obtained.

Key Dates

Recommendation

The proposed three-way merger presents a compelling strategic vision for a leading low-carbon fuels and environmental-asset platform, with significant growth potential and a substantial target enterprise value. The $10 million capital injection for plant conversion and the potential for $400 million in state-supported bonds are positive catalysts. However, the transaction is highly conditional, subject to numerous approvals, definitive agreements, and the achievement of ambitious financial milestones, all of which carry substantial risks. The 'Cautionary Note Regarding Forward-Looking Statements' explicitly details many factors that could prevent the transaction from closing or the anticipated benefits from materializing. Given the binding nature of the term sheet on certain provisions but the non-binding nature of the overall transaction, and the explicit risks of delays, non-completion, and failure to meet targets, a 'hold' recommendation is appropriate. Investors should await further clarity on definitive agreements and progress on closing conditions before making more aggressive investment decisions.

Keywords

Sustainable Aviation Fuel, SAF, Merger, Business Combination, XCF Global, Southern Energy Renewables, DevvStream Corp., Carbon Management, Environmental Attributes, New Rise Reno, Plant Conversion, EEME Energy, SMR Nuclear Power, eSAF, AI Data Centers, Nasdaq, SAFX, DEVS