Latest / WTR Small-Cap Spotlight / XCF Global (SAFX): Chairman & CEO on the Merger Approval, the Reno Ramp, and the Growth Roadmap

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XCF Global (SAFX): Chairman & CEO on the Merger Approval, the Reno Ramp, and the Growth Roadmap · WTR Small-Cap Spotlight

• 0:01
  SPEAKER_02: Welcome to the WTR Small Cap Spotlight Podcast.
• 0:04
  SPEAKER_02: I'm your host, Tim Gerdeman, co-founder of Watertower Research.
• 0:12
  SPEAKER_02: In today's podcast episode, I'm joined by Chris Cooper, Chairman and CEO of XCF Global, NASDAQ ticker symbol SAFX.
• 0:22
  SPEAKER_02: XCF Global is a renewable fuels company that converts waste oils and residues into renewable diesel, sustainable aviation fuel, and NAPTA at its new rise Reno refinery in Nevada.
• 0:34
  SPEAKER_02: Its growth strategy is built on brownfield acquisitions and global licensing.
• 0:39
  SPEAKER_02: WTR last hosted Chris for a fireside chat in July, shortly after the new Reno refinery restarted.
• 0:45
  SPEAKER_02: Today, we follow up on what XTF has executed since then and most importantly, what the recent approval of the three-way combination of Southern Energy Renewables and DevStream means for the company.
• 0:58
  SPEAKER_02: We're also joined by my WTR equity research colleague, Peter Gastrike.
• 1:02
  SPEAKER_02: Good morning, Chris and Peter, and thank you for joining me today.
• 1:04
  SPEAKER_00: Hey, good morning, Tim.
• 1:06
  SPEAKER_00: Peter, great to see you again.
• 1:08
  SPEAKER_00: Good to see you as well, Chris.
• 1:09
  SPEAKER_00: Good morning, Tim.
• 1:10
  SPEAKER_02: Peter, I understand you have an XCF disclaimer to read before we kick things off.
• 1:14
  SPEAKER_01: Uh yes, Tim.
• 1:16
  SPEAKER_01: Uh let me kick that off here.
• 1:17
  SPEAKER_01: So please note that this discussion contains forward-looking statements regarding XCF Global's operations, financial condition, and business strategy.
• 1:25
  SPEAKER_01: Actual results may differ materially from those projected due to risks and uncertainties.
• 1:31
  SPEAKER_01: For a description of factors that could cause actual results to differ, please refer to XEF Global's SEC filings, including the risk factors section of its most recent Form 10Q, available at sec.gov or on the company's investor relations page at www.xec.global.
• 1:50
  SPEAKER_02: So, Chris, great to see you again.
• 1:51
  SPEAKER_02: I want to start things off by asking you to provide a high-level overview of the company for our listeners who may be newer to the XCF Global story, to perhaps include a 30,000-foot overview of the company's business model and also provide an overview of the broader corporate strategy moving forward.
• 2:07
  SPEAKER_00: Yeah, excellent.
• 2:08
  SPEAKER_00: Thanks so much, guys.
• 2:09
  SPEAKER_00: And this really is exciting to uh visit with you again and share what has not only been what we'll discuss later throughout the day on this call, but uh the opportunity is just to help people understand who we are.
• 2:20
  SPEAKER_00: We are a waste to energy business.
• 2:22
  SPEAKER_00: And what that means is while we're in this uh energy transition period, that whether we talk about it, you hear about it, you've always wondered what it's about.
• 2:30
  SPEAKER_00: Well, let me explain.
• 2:31
  SPEAKER_00: What we're doing is we're taking wastes and residues or what otherwise would be garbage, and we're redirecting it through technologies.
• 2:38
  SPEAKER_00: Technologies, some of them are basic, some rather complex, and we're converting that into energy.
• 2:44
  SPEAKER_00: Our energy and our specific expertise has to do with liquid fuels.
• 2:48
  SPEAKER_00: So renewable diesel as an alternative to conventional diesel, sustainable aviation fuel instead of conventional jet fuel.
• 2:55
  SPEAKER_00: And bio naphtha or green naphtha, which is a replacement for a blending component into the gasoline space.
• 3:01
  SPEAKER_00: But what we're able to do is produce a modularly designed facility that gives us the ability to identify and collect these feedstocks domestically.
• 3:10
  SPEAKER_00: We have our Reno Nevada refinery where we're able to collect local feedstocks from the Midwest and production of waste through the uh ag industry, bring those products to the Reno refinery, produce them into those valuable products I described to you, and then distribute them into the marketplace.
• 3:27
  SPEAKER_00: And with today's unfortunately disconnected market and the geopolitical issues, those products swiftly move into the market.
• 3:35
  SPEAKER_00: These are what we call drop-in solutions.
• 3:37
  SPEAKER_00: So they don't require additional transformation of infrastructure.
• 3:41
  SPEAKER_00: They run through pipelines, they drop into airports, they go into truck stops.
• 3:45
  SPEAKER_00: We're seeing it now moving quickly and swiftly as we create three things.
• 3:50
  SPEAKER_00: We create propulsion.
• 3:51
  SPEAKER_00: So our consumers buy the propulsion that need to move, whether trucks or planes or boats, even.
• 3:57
  SPEAKER_00: And then we uh produce an emission reduction, reducing emissions.
• 4:02
  SPEAKER_00: And those emissions are acquired either by consumers, you know, corporations who are buying those emissions specific for their reduction and ambitious goals of carbon reduction, but also energy resilience.
• 4:14
  SPEAKER_00: And that gives us, all of us as a community, the ability to buy product that's derived from American feedstocks, produced in America, and then we distribute it.
• 4:23
  SPEAKER_00: But that footprint allows XCF to grow globally, where other markets that are affected without having uh known reserves of crude oil can actually convert to the waste oil streams that they have.
• 4:35
  SPEAKER_00: So, what we're putting together is a modularly designed solution that allows us to build and build worldwide.
• 4:40
  SPEAKER_00: So it's no longer about major oil driving our energy policy.
• 4:44
  SPEAKER_00: It's about you and me.
• 4:46
  SPEAKER_00: It's about entrepreneurial investment that can become part of the solution in providing these answers to our energy requirements going forward.
• 4:55
  SPEAKER_02: Great.
• 4:55
  SPEAKER_02: Thanks for that overview, Chris.
• 4:56
  SPEAKER_02: I have to say it's been fun to watch the company continue to evolve.
• 4:59
  SPEAKER_02: And with that, I'm going to turn it over to Peter to ask several questions.
• 5:02
  SPEAKER_01: Okay, thanks, Tim.
• 5:03
  SPEAKER_01: So, Chris, we're going to dig into the uh three-way business combination in just a moment because I think that's what investors want to hear about today.
• 5:10
  SPEAKER_01: Uh, but first, just one question to sort of uh, you know, touch up on some important progress since the uh in the time since our July fireside chat with you.
• 5:18
  SPEAKER_01: Um I'll be referring to the uh new rise Reno moving from uh you know startup to commercial operations.
• 5:24
  SPEAKER_01: Uh could you update investors on how that ramp has gone and how you're thinking about the timing of the transition to uh sustainable aviation fuel?
• 5:32
  SPEAKER_00: Yeah, it's been amazing times.
• 5:34
  SPEAKER_00: We really took on uh an opportunity, which has been really the foundation of my career, whether building businesses uh or uh executing on production turnarounds and finding a way to solve solutions that the market finds value from.
• 5:48
  SPEAKER_00: So since I joined XCF, I've really accomplished two major milestones since our last July visit.
• 5:54
  SPEAKER_00: So we've taken our flagship refinery, that's our uh Reno Nevada refinery, and we've restarted through execution of a very methodical process.
• 6:03
  SPEAKER_00: Uh warming up the refinery after all of the upgrades was very critical.
• 6:08
  SPEAKER_00: We made a lot of changes, upgrades, even including the catalyst that I described.
• 6:12
  SPEAKER_00: That's kind of the heart of the function within our reactors.
• 6:15
  SPEAKER_00: But we had to do it methodically.
• 6:17
  SPEAKER_00: We had to be slow and purposeful in every step.
• 6:19
  SPEAKER_00: And so doing that, we were able to provide then the reliability, the safety, and then the continual success as we ramp up.
• 6:28
  SPEAKER_00: And so from June of this year and into July, we began to commercialize.
• 6:31
  SPEAKER_00: And so selling products and growing as we extended the startup and execution of the refinery.
• 6:38
  SPEAKER_00: And that was really filling that first phase.
• 6:40
  SPEAKER_00: And now, second, we've completed this merger with DevStream and Southern Energy Renewables.
• 6:45
  SPEAKER_00: The really cool thing about that is it it broadens our platform, it gives us the ability to reach across renewable fuels from the environmental attribute point of view through DevStream and the next generation technologies that allow us to create additional pathways to creation of these renewable products.
• 7:04
  SPEAKER_00: So I shared with you earlier about the waste and oils.
• 7:08
  SPEAKER_00: Now we're able to use uh hard wastes such as uh uh forestry waste, uh sawmills or lumber mills or even the dried woody biomass.
• 7:19
  SPEAKER_00: We have a method with which we can convert all of that's technology that comes about as a result of Southern Energy.
• 7:25
  SPEAKER_00: So very excited about seeing our future of expanding feedstocks through that acquisition.
• 7:31
  SPEAKER_00: But some of the commercial specifics I'd like to share and really highlighting those operations today about our company is you know, we've reported more than 12 million in September and gross product sales of renewable diesel.
• 7:42
  SPEAKER_00: Renewable diesel, because uh, with what's going on geopolitically, even into our neighbors to the north, have caused restraint of access to conventional diesel, which has thus uh promoted an opportunity where with our partners in the immediate market, we're able to distribute renewable diesel successfully and put it into stations in the neighborhood.
• 8:03
  SPEAKER_00: So we're actually doing a great job with a terrific partner where we're actually able to put the product directly into the market where it's needed the most, really become part of the community that way.
• 8:13
  SPEAKER_00: And the facility of shipped, again, over 1.4 million gallons of renewable diesel just in the month of September.
• 8:20
  SPEAKER_00: But all of that is in that incremental growth and the development of change as we expand and continue to grow in those commercial contracts.
• 8:28
  SPEAKER_00: Those commercial contracts give us the availability to reach, again, throughout the entire western region as we distribute those products.
• 8:35
  SPEAKER_00: But daily production, really, it's approximately about 85,000 gallons uh per day.
• 8:40
  SPEAKER_00: Um, and that will continue to grow as we reach an estimated nameplate capacity of roughly 105 to 110,000 gallons per day of product, ultimately up to our 38 million gallons a year.
• 8:53
  SPEAKER_00: For you guys wanting to do the math, we have to keep in mind that uh we have repairs to do, we have turnarounds.
• 8:59
  SPEAKER_00: And so as you work with us, you'll see that we're growing and expanding, but we're always in keep keeping in mind upgrades that the plant may need as we expand and we grow.
• 9:08
  SPEAKER_00: And so those early mildness stones are really important to us as we grow.
• 9:13
  SPEAKER_00: We started at 55.
• 9:14
  SPEAKER_00: You know, we're moving in our way to producing rins um as an as an addition to that.
• 9:20
  SPEAKER_00: And so with those 886,000 gallons of renewable diesel, you know, we've shipped the 55 to now 85,000 a day.
• 9:27
  SPEAKER_00: Well, those create what are called uh renewable identification numbers, part of the renewable fuel standard.
• 9:33
  SPEAKER_00: Well, that's part of the monetization of the environmental attribute.
• 9:37
  SPEAKER_00: That's the obligation that we have here in the US uh for um replacing uh uh fossil fuels into the end into the uh industry and into the transportation space.
• 9:48
  SPEAKER_00: So we've uh again monetized over 550,000 D4 rins.
• 9:53
  SPEAKER_00: That's about a million uh uh and a quarter dollars worth of RINs we were monetizing.
• 10:00
  SPEAKER_00: So for every gallon we produce, there's a multiplier that we collect these RINs.
• 10:05
  SPEAKER_00: So September Formance demonstrates execution across feedstock sourcing, uh production, quality, logistics, customer delivery, environmental attribute generation, monetization, and commercial contracting.
• 10:19
  SPEAKER_00: All of this was important.
• 10:20
  SPEAKER_00: And I think it really demonstrated what we were able to do as a team as we all came behind this single effort and this single purpose.
• 10:28
  SPEAKER_01: That is great progress.
• 10:30
  SPEAKER_01: Um, and also, yeah, congratulations on the approval of the business combination.
• 10:34
  SPEAKER_01: Let's talk a bit more about that.
• 10:35
  SPEAKER_01: Uh, you know, the strategic logic here, sort of, you know, what does each of XTF uh Southern Energy Renewables and DevStream bring?
• 10:43
  SPEAKER_01: And why why is uh was bringing the three companies together the right path here?
• 10:48
  SPEAKER_00: Well, it's pretty neat because uh what what you guys should realize is we have two very interesting things embedded.
• 10:53
  SPEAKER_00: One, our ticker, uh SAFX.
• 10:56
  SPEAKER_00: That's specific to an ambition we have of being uh the world's largest producer of sustainable aviation fuel.
• 11:02
  SPEAKER_00: But behind that is XCF Global.
• 11:04
  SPEAKER_00: XCF Global is X carbon footprint.
• 11:07
  SPEAKER_00: So I just let you into a little secret there, but want to be creative because that is our mindset of thinking of alternatives in this space and how we provide solutions.
• 11:17
  SPEAKER_00: So we talked previously about our flagship facility in Reno, which is operational as we've started up and moving towards those uh hurdles and growth, that's very important to us, as I just described.
• 11:28
  SPEAKER_00: But completing this transaction with Southern DevStream, you know, this transaction brings together complementary capabilities.
• 11:36
  SPEAKER_00: Some of us think about conventional oil and gas, and we understand the concept of vertical iteration integration.
• 11:43
  SPEAKER_00: Sorry about that.
• 11:44
  SPEAKER_00: Vertical integration that starts all the way from drilling holes in the ground in exploration and production to distribution to refining to marketing.
• 11:52
  SPEAKER_00: Well, in our world, we're not bringing new fossil fuel or carbon into the atmosphere.
• 11:57
  SPEAKER_00: So our business is going to rely on a vertical integration of a different nature, but very similar.
• 12:03
  SPEAKER_00: So working together to be sure that we're securing the feedstocks, working to be sure that we're producing with all of the technologies capable.
• 12:11
  SPEAKER_00: And that's really what Southern Energy brings to us.
• 12:13
  SPEAKER_00: It gives us the ability to identify both today technology for our existing refinery and then future technology.
• 12:20
  SPEAKER_00: So I mentioned woody dried woody biomass.
• 12:23
  SPEAKER_00: It's a pretty exciting proposition.
• 12:25
  SPEAKER_00: But with the low temperature gasification technology that Southern Energy has been developing and working together with its partners to develop to commercial scale, we believe that gives us the longest runway possible to always focus on the feedstocks that are both readily available, continually developing so that we're removing from what otherwise is being waste and wasted to actually creating value from those.
• 12:55
  SPEAKER_00: And we believe that Southern brings us that success as a project.
• 12:58
  SPEAKER_00: It has a few years out as we continue to commercialize and de-risk that technology as we move forward.
• 13:05
  SPEAKER_00: But also the other end, uh, we talk about sales, that's part of our business.
• 13:09
  SPEAKER_00: But the sales and monetization of the carbon attributes, we believe we would find the most value keeping that in-house.
• 13:16
  SPEAKER_00: And for that reason, DevStream became part of this merger.
• 13:20
  SPEAKER_00: The opportunity to now transact with those interested parties or counterparties who are interested in their cap and trade or their compliance to their SBTI goals, we're able to work together with them.
• 13:35
  SPEAKER_00: We're able to help them by either identifying projects external to our production of reduced emissions or actually monetizing the same attributes that we create.
• 13:44
  SPEAKER_00: We create some very important ones within the U.S.
• 13:47
  SPEAKER_00: policy framework, the low-carbon fuel standard credits for the uh California, Oregon, Washington, the federal program, which is the renewable fuel standard, those RINs could be monetized.
• 13:58
  SPEAKER_00: But rather than paying commissions and working through third and fourth party uh distributors, we're able to do that internally through DevStream and actually work to improve our capitalization of those uh values and those very valuable inputs and what they mean to us as an organization.
• 14:16
  SPEAKER_01: And uh you mentioned uh, you know, with DevStream, just to dig a bit deeper here, um, for renewable fuels producers, environmental attributes and credits are of course that you mentioned they're very important to the uh uh to the economics.
• 14:29
  SPEAKER_01: Um, how does DevStream kind of specifically, you know, how does that platform kind of change the way XCF uh captures that value in practice?
• 14:37
  SPEAKER_01: And where do you see the most tangible near-term synergies, Chris?
• 14:40
  SPEAKER_00: Excellent.
• 14:41
  SPEAKER_00: Well, though they devstream unlocks a new revenue stream for XCF.
• 14:44
  SPEAKER_00: Now we we do have the ability, as I've described, we generate our own attributes that can be sold into those markets, uh the state markets that exist in the in the Western US, as well as those developing around the US, um, from uh New Mexico to Tennessee to Illinois.
• 15:02
  SPEAKER_00: And as they continue to grow, we're going to continue continue to see those values.
• 15:06
  SPEAKER_00: They help us optimize that.
• 15:08
  SPEAKER_00: They help us do that in a way we'll be utilizing their systems and infrastructure to be sure that we're producing and distributing with the traceability, the tracking of documentation, so that we monetize a very clean product so that the consumer receives, based on their expectation and understanding of how the attribute was generated, how they received the attribute, and then should they use it for application to any of their uh science-based targets or any of their carbon reduction initiatives, they can do that with a clear, concise understanding of the generation of the attribute and how they use it and can monetize it.
• 15:44
  SPEAKER_00: I think that's really important because it's it's important that we all, through this emerging market, understand that we have a lot of moving parts and transparency is key.
• 15:54
  SPEAKER_00: And so as we work together, I think the dev stream provides that solution for us with both their platforms that they have today and the ability to work through other uh platforms so that we're transacting seamlessly and effectively across these uh this ecosystem that's created around this place.
• 16:10
  SPEAKER_00: But now we get the ability in this new stream of dealing with both physical, the actual products we produce and the attributes attributed to them, but then also those environmental attributes that can be sold in the form of booking claim, or where product is used in market A, and then the attribute can then be consumed in market B.
• 16:31
  SPEAKER_00: And I don't go too deep, Peter, because it's a it's a long story, but it's a fun place that we can now support our customers that may be a customer on the physical side.
• 16:41
  SPEAKER_00: We can now reach them on the environmental side by transacting with them in this other manner, which is a form of booking claim.
• 16:48
  SPEAKER_00: And we're able to do business with them there.
• 16:50
  SPEAKER_00: But this value comes by connecting that physical emission reduction with the environmental attribute market more efficiently and effectively.
• 16:58
  SPEAKER_00: And so we can now offer customers both sides.
• 17:01
  SPEAKER_00: I think that's really important, is we're now creating markets not only in our space, but even with the IRECs and the recs that are created in the marketplaces around solar farms, around wind farms.
• 17:13
  SPEAKER_00: We can actually participate and transact in that space to support our customers, even though it's not a physical product that we're producing.
• 17:21
  SPEAKER_00: So pretty exciting the proposition that DevStream gives us a reach into a transaction that's a much deeper, a much more profound uh reach into our customers' wallets as we transact with them on a daily basis.
• 17:35
  SPEAKER_01: So Southern Energy Renewables brings e-methanol and methanol to jet technology to the combined company.
• 17:41
  SPEAKER_01: How does that technology complement the HEFA platform arena over the long run, uh, including on feedstock diversification?
• 17:49
  SPEAKER_01: And how big an opportunity do you see in marine fuels?
• 17:52
  SPEAKER_00: Oh my goodness, this is where I'm excited because um I use the term and we've thrown the term around between us, Peter, about pathways, but to help everybody understand it's it's basically the recipe or or it's the map.
• 18:04
  SPEAKER_00: It's the it's the route the GPS picks us to move from A to B.
• 18:09
  SPEAKER_00: And so in that transaction, it's what is required in technology of processing and/or what is the feedstock requirement to produce that desired outcome.
• 18:20
  SPEAKER_00: Now we can create renewable fuels through a lot of different streams of feedstock.
• 18:25
  SPEAKER_00: And many have been worried that used cooking oil, although a great feedstock in the hydroprocessing technology that we have currently active in our Reno refinery, that that's limited, that eventually we might not have so much used cooking oil available in the marketplace.
• 18:42
  SPEAKER_00: So we're working aggressively to find alternatives, uh, whether it's novel vegetable oils or in our case, we pull a lot of waste streams from the ethanol industry, but always creating alternatives, finding ways to continue to amplify the availability of feedstocks, but in many ways, more challenging, less expensive.
• 19:02
  SPEAKER_00: There used to be a day, you remember, Peter, where people would pay you to take their used cooking oil out from the back of their restaurant.
• 19:09
  SPEAKER_00: That is no longer what we're doing.
• 19:12
  SPEAKER_00: Uh now we're paying a lot of money, quite a premium for that.
• 19:15
  SPEAKER_00: So as we continue to develop, we need to find solutions for our shareholders.
• 19:19
  SPEAKER_00: I focus on something important for our shareholders, and that is what is the value in 30 years from now, 20, 10, and five, understanding that these pathway decisions are very important to creating and assuring shareholder value long term.
• 19:34
  SPEAKER_00: What we've done by investing and acquiring southern energy renewables is just that finding a way to find even more alternatives for not only novel feedstocks like dried woody biomass.
• 19:47
  SPEAKER_00: You think about it, you can get that from the forestry space.
• 19:50
  SPEAKER_00: Uh, you can get it even from the agricultural space.
• 19:53
  SPEAKER_00: If you think of rice husks, or you think of um, you know, the bagass that comes out of the sugar industry and the mills, there's a lot of really creative things we can bring in.
• 20:03
  SPEAKER_00: But this gives us that long, long runway.
• 20:06
  SPEAKER_00: I don't mean that as a pun, but I mean it gives us that length to look to 30 years uh into the future and say, we have got solutions that will allow us to continue to develop.
• 20:16
  SPEAKER_00: Now that's just the feedstock side.
• 20:18
  SPEAKER_00: Wait till I tell you about the products we can make.
• 20:22
  SPEAKER_00: What Southern Energy produces is a product called e-methanol or green methanol.
• 20:27
  SPEAKER_00: It's known by different names.
• 20:29
  SPEAKER_00: That is fundamentally the building block of carbon that we can produce almost anything.
• 20:35
  SPEAKER_00: So it opens doors to production of gasoline.
• 20:38
  SPEAKER_00: We can use the methanol to jet technology to convert it to jet fuel.
• 20:43
  SPEAKER_00: We can make even rocket fuel by converting it through a methane conversion.
• 20:48
  SPEAKER_00: So that building block of e-methanol opens countless alternatives for the way we can use those products.
• 20:56
  SPEAKER_00: And so it's not just an energy transition towards the basics, the diesels, the jet fuels, the gas links.
• 21:01
  SPEAKER_00: It's amazing how the chemical industry and the petrochemical industry will be able to utilize that e-methanol.
• 21:08
  SPEAKER_00: But that e-methanol also answers another question.
• 21:11
  SPEAKER_00: The shipping industry, as we convert, and we may talk about it in a minute, it's it's a it's a fuel that's already uh utilized, and we can begin to ship directly to the consumers the methanol that could be burned in the ships, transporting our heavy goods around the world today.
• 21:27
  SPEAKER_00: So pretty exciting proposition.
• 21:28
  SPEAKER_00: But that's that's really at the core of the Southern Energy Renewals is the myriad of opportunities that both the feedstock provide us, but more specifically the finished products.
• 21:39
  SPEAKER_00: They reach markets that XCF has never thought of.
• 21:42
  SPEAKER_00: And even the future and the technology that's going to open doors, we uh never considered.
• 21:46
  SPEAKER_00: So pretty creative and amazing place.
• 21:48
  SPEAKER_00: I'm certain you can tell why I'm excited about that part of our acquisition.
• 21:53
  SPEAKER_01: Okay, yeah, that's very exciting.
• 21:54
  SPEAKER_01: Uh let's talk a bit about the the deal terms and the financial impact here.
• 21:58
  SPEAKER_01: So the transaction terms were amended in.
• 22:00
  SPEAKER_01: September in ways that improve the outcome for XCF shareholders.
• 22:04
  SPEAKER_01: Could you walk investors through what changed and why?
• 22:08
  SPEAKER_01: And more broadly, how should investors think about the financial profile of the combined company?
• 22:15
  SPEAKER_00: Yeah, very good.
• 22:16
  SPEAKER_00: Well, I thought a lot, and this was always within management's desire to see the solutions as I just described, see the opportunities.
• 22:23
  SPEAKER_00: But what we did, a little tweaking at the end, uh we amended the uh the approved transaction economics for existing XCF shareholders.
• 22:31
  SPEAKER_00: So working always on their behalf.
• 22:33
  SPEAKER_00: So the ownership increased uh from 69.5, I think 69.5 um uh to 66.7 percent.
• 22:42
  SPEAKER_00: And that company received, we company received an additional million dollar of investment as a result.
• 22:47
  SPEAKER_00: So strengthening our ability just to just to stay moving, keep agile, and keep moving ahead of this.
• 22:53
  SPEAKER_00: But it we believe it was a uh equitable swap, and we were able to do that again to be able to retain more of what our more valuable attribute was, and that's that's again those shares that we had.
• 23:03
  SPEAKER_00: And so the company received that commitment for a balance of 4.3 million in additional capital and with the potential uh for at least 50 million of additional financing as that's being worked, and that's being worked uh diligently and actually coming around at a very rapid pace.
• 23:19
  SPEAKER_00: So very excited for us because that brings a lot for us to be able to discuss and become more open with the market as we share as that advances, and then XCF's uh previously disclosed 2027 outlook, and we'll continue to improve on our expectations to deliver against that.
• 23:36
  SPEAKER_00: But yeah, it was exciting news and an opportunity for us to rework the deal in the favor of our shareholders.
• 23:42
  SPEAKER_01: And so now with this uh combination approved, XCF now has multiple growth avenues.
• 23:48
  SPEAKER_01: Uh you've got Reno 2, you've got potential new domestic sites, uh, the licensing model with New Rise ANZ in Australia as a first step.
• 23:57
  SPEAKER_01: Uh, and now the Southern Energy you know project.
• 23:59
  SPEAKER_01: So you've got a lot of opportunities here.
• 24:02
  SPEAKER_01: Um, how do you you know prioritize prioritize these opportunities and how should investors think about the capital strategy um across them over the next few years?
• 24:12
  SPEAKER_00: Well, investors should realize my history is one of launching the sustainable aviation fuel business around the world and focusing on that success and then ultimately becoming uh uh in a role at Neste in producing uh a business that both collected the fee stocks, uh, created a JV refinery.
• 24:30
  SPEAKER_00: Um, those models, however, I always knew there was a better way.
• 24:35
  SPEAKER_00: I knew a mouse trap existed.
• 24:37
  SPEAKER_00: XCF, I believe we've created that mousetrap.
• 24:40
  SPEAKER_00: We've created the success of producing the right size production vehicle for the right size demand.
• 24:47
  SPEAKER_00: And as we continue to expand, you'll see that that model will begin to extrapolate value as we monetize and transact worldwide.
• 24:55
  SPEAKER_00: So, what we're able to do in simple terms is we're able to take the blueprint of our new rise Reno facility.
• 25:01
  SPEAKER_00: This is a state-of-the-art facility that was produced with energy in mind, energy and emission reduction in mind, and the efficiencies of using just 10 acres of land.
• 25:12
  SPEAKER_00: By using those 10 acres, we are able to bring in the rail facility for inbound outbound, the trucking for inbound, outbound, the production capability with a small modular designed reactor that goes along with a modularly designed uh production of hydrogen facility called a steam methane reformer.
• 25:30
  SPEAKER_00: And then we have feedstock uh purification and processing, all designed modularly.
• 25:36
  SPEAKER_00: So we simply took our engineering, we took our know-how and professionals to gather what we call our blueprint or our ability to license and distribute that footprint worldwide.
• 25:48
  SPEAKER_00: Now, as you guys know, in all projects, a lot of front-end engineering, a lot of time in a lot of failed projects have to do with our ability to not engineer ourselves through the initial design.
• 26:00
  SPEAKER_00: So, what the solution we're providing to the market is the initial plant design.
• 26:06
  SPEAKER_00: They are the blueprints necessary to see your way through the identification of a piece of land with feedstock inputs and local feedstock accessibility.
• 26:15
  SPEAKER_00: What we did in Australia that you mentioned, Peter, is that we identified First Nations uh people's land for the purpose of engaging them in the feedstock production and growth.
• 26:27
  SPEAKER_00: So it was exciting because the Australian government found their way to invest directly into this project where we have three refineries of the same blueprint of the new Rise Reno facility going in in Australia, with one in New Zealand, all around the selection of land with feedstock accessibility, the choice of aligning the technology to the feedstock, and then creating a modular execution.
• 26:53
  SPEAKER_00: So all the blueprints are written, the engineering of everything within what they call battery limits is accomplished, the civil and external is done by our partner.
• 27:02
  SPEAKER_00: And what we're able to do is take equity and then through the process, start up these refineries through fees and services, and then ultimately transacting together as partners so that XCF, through its new rise platform, becomes a global brand and we're able to leverage those benefits and values across all of our organization.
• 27:22
  SPEAKER_00: So today we have the United States, we're strongly focusing on the expansion of this modularly designed facility, Australia, New Zealand, and many more to come.
• 27:32
  SPEAKER_00: But what it enables us to become is that global footprint.
• 27:36
  SPEAKER_00: We want to and believe in the ability of distributing renewable fuels.
• 27:41
  SPEAKER_00: We believe it's renewable when it's leveraging every aspect of carbon and emission reduction.
• 27:47
  SPEAKER_00: And we believe that is a location in market with domestic feedstock for domestic distribution.
• 27:54
  SPEAKER_00: There are a lot of people that believe in one refinery for global distribution, but we don't believe that that speaks towards emission reductions sufficiently.
• 28:03
  SPEAKER_00: We believe it's important to produce the right production for the right demand.
• 28:07
  SPEAKER_00: And we can do that all with this blueprint project.
• 28:10
  SPEAKER_00: And so we're pretty excited to see that grow.
• 28:14
  SPEAKER_01: So, you know, taking all of what we've talked about today into consideration for investors, if you're looking out over, say, the next 12 months, what are the milestones that investors should watch uh as evidence that the combined company is delivering on the strategy?
• 28:29
  SPEAKER_00: Well, the merger's closed.
• 28:32
  SPEAKER_00: It's time to integrate.
• 28:33
  SPEAKER_00: I think what you're going to see is we'll be transacting quickly now that the merger is closed, and we'll be organizing around the integration of the simple functions as I described, namely the uh transactions where Devstream will begin to monetize and work to it with us in connectivity for the monetization of those environmental attributes.
• 28:52
  SPEAKER_00: With Southern, we're organizing the teams so that we can leverage a cross-organizational entity that's able to use expertise from our new rise platform to integrate the Southern energy renewables into that same platform.
• 29:06
  SPEAKER_00: And we begin to leverage the engineering and the support necessary to execute on that project.
• 29:12
  SPEAKER_00: It is a project that will require time, but the integration of our team members has already begun.
• 29:17
  SPEAKER_00: And so integrating that engineering and know-how is going to help us be more efficient and effective in seeing our way through the technology growth and execution of the Southern Energy Renewables as a part of the New Rise platform today.
• 29:31
  SPEAKER_00: So very excited to see the team as already engaged and we've already begun that integration in a very meaningful way.
• 29:39
  SPEAKER_01: All right.
• 29:39
  SPEAKER_01: Well, Chris, uh, thanks for taking the time today and congrats to you and the team on this uh amazing progress.
• 29:45
  SPEAKER_01: Uh, this has been a great conversation today.
• 29:47
  SPEAKER_01: But before we wrap up the podcast, uh, is there anything that we missed today, or would you like to leave any final thoughts with our listening investors?
• 29:55
  SPEAKER_00: Yeah, I would hope the investors would know something important, Peter.
• 29:57
  SPEAKER_00: And I think that's that this is very much part of ag policy, and that's kind of a head scratcher sometimes.
• 30:04
  SPEAKER_00: We don't realize that we're not playing in the space of energy only.
• 30:08
  SPEAKER_00: We're a waste to energy business that's derived from the agriculture industry.
• 30:13
  SPEAKER_00: And so the policies they cross all borders, they cross all aisles.
• 30:20
  SPEAKER_00: And we realize that our administrations are able to work together and they've favorably been producing those inputs that we've needed for a long time that give us the longevity, give us the ability to look further into the future, because we're no longer about uh energy transition or emission reduction as a singular song.
• 30:39
  SPEAKER_00: We're about energy resilience.
• 30:41
  SPEAKER_00: I think that's really cool to realize that we're very much tied to the ag sector, we're very much tied to the ag policy as it helps us grow and scale.
• 30:50
  SPEAKER_00: And it's very important as those rules are developed.
• 30:53
  SPEAKER_00: They're more predictable now, they're more durable, and we can continue to work more uh transparently with the market and help them understand uh what is our story and how we're gonna bring them success moving forward.
• 31:06
  SPEAKER_00: So, again, thank you and your team.
• 31:07
  SPEAKER_00: I appreciate the opportunity to visit with you again and very much look forward to our next occasion.
• 31:12
  SPEAKER_01: Okay, same here, Chris.
• 31:13
  SPEAKER_01: Thank you so much.
• 31:14
  SPEAKER_01: It's great to see the planets aligning really on so many fronts uh you know with your company.
• 31:18
  SPEAKER_01: So that's fantastic.
• 31:19
  SPEAKER_01: So uh Chris Cooper, who is the uh chairman and chief executive officer of XCF Global Incorporated, NASDAQ Ticker SAFX, and also thanks to our host, Tim Gerderman.
• 31:31
  SPEAKER_02: Thank you for listening, and don't forget to subscribe, as well as visiting WW Watertower Research.com to stay up to speed on the company's small cap written research reports, podcasts, fireside chats, industry specific symposiums, and conference schedules.
• 31:47
  SPEAKER_02: We will see you next time for another edition of the WTR Small Cap Spotlight Podcast.
• 31:53
  SPEAKER_02: Finally, a special thanks to the producer and editor of the podcast, Krista Fitzpatrick.