SecProbe.io

United States securities and exchange commission logo
May 28, 2024
Carl Stanton
Chief Executive Officer
Focus Impact BH3 NewCo, Inc.
1345 Avenue of the Americas, 33rd Floor
New York, NY 10105
Re:Focus Impact BH3 NewCo, Inc.
Draft Registration Statement on Form S-4
Submitted April 29, 2024
CIK No. 0002019793
Dear Carl Stanton:
            We have reviewed your draft registration statement and have the following comments.
            Please respond to this letter by providing the requested information and either submitting
an amended draft registration statement or publicly filing your registration statement on
EDGAR. If you do not believe a comment applies to your facts and circumstances or do not
believe an amendment is appropriate, please tell us why in your response.
            After reviewing the information you provide in response to this letter and your amended
draft registration statement or filed registration statement, we may have additional comments.
Draft Registration Statement on Form S-4 Submitted April 29, 2024
Cover Page
1.We note your disclosure that pursuant to the business combination, (a) each share of
Focus Impact’s Class A common stock outstanding immediately prior to the effectiveness
of the NewCo Merger will be converted into the right to receive one share of NewCo’s
Class A common stock, (b) each share of Focus Impact’s Class B common stock
outstanding immediately prior to the effectiveness of the NewCo Merger will be
converted into the right to receive one share of NewCo Class A Common Stock, and (c)
each warrant of Focus Impact outstanding immediately prior to the effectiveness of the
NewCo Merger will be converted into the right to receive one warrant of NewCo. We also
note that each share of common stock of XCF outstanding immediately prior to the
effectiveness of the Company Merger will be converted into the right to receive shares of
NewCo Class A Common Stock. Please revise your cover page to disclose the total
outstanding Focus Impact shares of Class A and Class B common stock and warrants and

 FirstName LastNameCarl Stanton
 Comapany NameFocus Impact BH3 NewCo, Inc.
 May 28, 2024 Page 2
 FirstName LastName
Carl Stanton
Focus Impact BH3 NewCo, Inc.
May 28, 2024
Page 2
XCF shares of common stock as of a recently practicable date. Please also disclose the
number of NewCo Class A common stock and warrants that such shares would convert to
as of a recently practicable date.
2.Please revise your cover page to discuss the terms of the PIPE financing, including
whether your sponsor and/or affiliates intend to participate in the financing.
3.Please revise the prospectus cover page to disclose the expected ownership percentages of
the combined company of the Focus Impact public stockholders, the Sponsor, the Anchor
Investors, XCF stockholders, and PIPE Investors. To the extent applicable, disclose the
total expected ownership of the Sponsor and its affiliates following the transaction
inclusive of any investments the Sponsor plans to make through the financing
transactions, such as the PIPE investment. Please also revise your cover page to disclose
the date by which you must complete the business combination or liquidate.
4.We note that the proxy statement / prospectus is asking Focus Impact stockholders to
consider and vote on two proposals: the business combination proposal and the
adjournment proposal. Please advise why you are not seeking stockholder approval on
NewCo's Amended and Restated Certificate of Incorporation and Bylaws. Please also
revise your cover page disclosure and your notice to stockholders to prominently disclose
that stockholders did not approve the charter and bylaws which will govern the post-
business combination company.
5.We note your disclosure that your "former Sponsor, Sponsor, and directors and officers
have agreed to vote any shares of Focus Impact Common Stock owned by them in favor
of the Business Combination, including their shares of Focus Impact Class B Common
Stock and any Public Shares purchased". Please revise your disclosure in your notice to
stockholders to state whether any compensation was paid to these parties in exchange for
their entry in the Sponsor Letter Agreement.
Market Industry and Data, page 4
6.We note your statement that investors should not give “undue weight" on estimates and
information from third-party sources included in the prospectus. Please revise this
statement to remove any implication that investors are not entitled to rely on disclosure in
your registration statement.
Questions and Answers, page 5
7.Please highlight the material risks to public warrant holders, including those arising from
differences between private and public warrants. Clarify whether recent common stock
trading prices exceed the threshold that would allow the company to redeem public
warrants. Clearly explain the steps, if any, the company will take to notify all
shareholders, including beneficial owners, regarding when the warrants become eligible
for redemption.

 FirstName LastNameCarl Stanton
 Comapany NameFocus Impact BH3 NewCo, Inc.
 May 28, 2024 Page 3
 FirstName LastName
Carl Stanton
Focus Impact BH3 NewCo, Inc.
May 28, 2024
Page 3
8.Please revise to disclose the effective underwriting fees to be paid to the underwriters of
Crixus BH3's IPO on a percentage basis for shares at each redemption level presented in
your sensitivity analysis related to dilution.
Q. What are some of the positive and negative factors that Focus Impact's board of directors
considered when determining to enter ..., page 7
9.We note your disclosure here and elsewhere in the registration statement relating to the
total addressable market of SAF and the renewable fuel industry. Please revise your
disclosure to provide the factual support, material assumptions, and sources for each of the
following statements:

•"The aviation industry’s share of global energy-related carbon emissions has been
growing faster than any other mode of transportation and has more than doubled
between 1990 and 2020. According to some estimates, the global SAF market is
expected to reach approximately $20.0 billion in size by 2030. The number of flights
operated on SAF and the volume of SAF forward purchases were estimated to be 500
and $2.5 billion, respectively, in 2016 and are expected to grow to 1 million and
$330 billion, respectively, by 2025" on page 7;
•"Focus Impact management team anticipates that XCF’s near term expansion pipeline
represents an opportunity to generate more than $300 million in EBITDA within
3 years" on page 8;
•"Up to 80% lower emissions than traditional jet fuel" in the graphic on page 138;
•"Specifically, the aviation industry, which accounted for 2% of global energy-related
CO2 emissions in 2022, is making progress to reduce emissions" on page 138;
•Disclosure relating to feedstock resources on page 144;
•"In 2022, petroleum products accounted for approximately 90% of total U.S.
transportation sector energy use. Biofuels contributed approximately 6%, most of
which were blended with petroleum fuels (gasoline, diesel fuel, and jet fuel).
Gasoline, accounting for 52% of transportation energy use, is the dominant
transportation fuel in the United States, followed by distillate fuels (mostly diesel
fuel) at 23% and jet fuel at 12%" on page 146; and
•Estimates relating to the SAF industry on page 148.
10.Please revise to expand your disclosure here and elsewhere in your prospectus regarding
the due diligence, presentations, metrics and/or projections examined by Focus Impact's
board of directors. In particular, we note your disclosure on page 8 that "[a]s noted in a
presentation submitted by the Focus Impact management team to Focus Impact’s board of
directors, the average multiple of revenue and EBITDA projected for comparable
companies in 2025 is 1.63x and 8.02x, respectively, whereas the multiple of revenue and
EBITDA projected for XCF in 2025 at the implied transaction value is 3.48x and 6.77x,
respectively." Please revise to discuss the material findings of this presentation and the
underlying assumptions relied upon by the Focus Impact management team in calculating
these metrics. Please also ensure that your disclosure throughout the prospectus explains

 FirstName LastNameCarl Stanton
 Comapany NameFocus Impact BH3 NewCo, Inc.
 May 28, 2024 Page 4
 FirstName LastNameCarl Stanton
Focus Impact BH3 NewCo, Inc.
May 28, 2024
Page 4
how, and to what extent, the board considered this and other materials in recommending
that stockholders approve the business combination.
11.Please balance your disclosure by discussing the variety of uncertainties, risks and other
potentially negative factors relevant to the business combination considered by Focus
Impact's board of directors and explain, where appropriate, how each factor was
considered by the board in determining whether to approve the business combination.
Q: Do I have redemption rights?, page 11
12.Quantify the value of warrants, based on recent trading prices, that may be retained by
redeeming stockholders assuming maximum redemptions and identify any material
resulting risks.
Q. What shall be the relative equity stakes of the Public Stockholders and the XCF security
holders in NewCo upon completion ..., page 14
13.We note your disclosure in footnote (6) that the public stockholder shares of common
stock under each redemption scenario exclude 11,500,000 BHAC warrants as the warrants
are not expected to be in the money at closing and includes 389,359 shares of common
stock to be transferred by the sponsor to public shareholders pursuant to certain non-
redemption agreements. Please revise to provide additional detail regarding the transfer of
the 389,359 shares of common stock. Please also revise the tabular disclosure to show the
potential impact of redemptions on the per share value of shares owned by non-redeeming
stockholders at each redemption level.
Q. What interests do the Sponsor and Focus Impact's current officers and directors have in the
Business Combination?, page 17
14.We note your disclosure that "[b]ased on the difference in the purchase price of $0.004
that the Sponsor paid for the Sponsor Shares, as compared to the purchase price of $10.00
per Unit sold in the IPO, the Sponsor may earn a positive rate of return even if the share
price of NewCo after the Closing falls below the price initially paid for the Units in the
IPO and the Public Stockholders experience a negative rate of return following the
Closing". Please revise to disclose the rate of return per share that the sponsor would earn
as of a recently practicable date.
15.Please revise your disclosure to discuss the specific number of Sponsor Shares held by
Ms. Simms and Mr. Carter. Please also revise to discuss that your Sponsor was founded
by affiliates of Focus Impact Partners, LLC, who also serve as officers and directors of
Focus Impact Acquisition Corp. and that members of the Focus Impact management team
and directors, including Messrs. Stanton, Lyles, Thorn and Carter and Ms. Simms are
directors and officers of Focus Impact Acquisition Corp.
16.We note your disclosure on page 214 that NewCo’s Charter waives the corporate
opportunities doctrine. Please address this potential conflict of interest and whether it

 FirstName LastNameCarl Stanton
 Comapany NameFocus Impact BH3 NewCo, Inc.
 May 28, 2024 Page 5
 FirstName LastNameCarl Stanton
Focus Impact BH3 NewCo, Inc.
May 28, 2024
Page 5
impacted your search for an acquisition target.
Summary of the Proxy Statement / Prospectus, page 21
17.Please revise to expand your description of the target, XCF Global Capital, Inc., and
include a discussion of its acquisition, New Rise, and the types of products the companies
provide and how they will generate revenue. Please also balance your disclosure to
include equally prominent disclosure of the limitations and challenges you face in
implementing your business strategy and gaining market acceptance. As examples only,
we note your disclosure on page 148 that SAF makes up only around 0.1% of the fuel
currently in use, that SAF prices have historically been higher than convention jet fuel due
to production costs, that you have not produced any SAF fuel to date and your Fort Myers,
FL and Wilson, NC facilities currently remain non-operational.
18.Please clarify the meaning of scientific or technical terms the first time they are used in
order to ensure that lay readers will understand the disclosure. By way of example only,
please briefly explain what you mean by terms such as SAF, cellulosic,
hydrodeoxygenation, non-feed feedstock, and biomass.
Organizational Structure, page 28
19.Please revise your ownership structure diagram prior to the business combination to
include the ownership percentages of the sponsor and public stockholders in Focus
Impact.
Risk Factors
Our existing New Rise Reno production facility is in the process of being converted to produce
SAF and we currently plan to construct ..., page 34
20.Please expand your disclosure here and elsewhere in the prospectus relating to the
expected timeline for the conversion and completion of renewable biodiesel facilities
into SAF production facilities for your four sites. We refer to your disclosure on page 139
that you expect New Rise Reno 2 to "come online around 2026" and for the recently
acquired Fort Myers and Wilson facilities to begin producing SAF in 2028.
Our financial results are largely affected by the relationship, or margin, between the prices at
which we sell SAF and the prices of ..., page 35
21.We note your disclosure relating to your agreement "with a third party to supply all of
[y]our non-food feedstocks for [y]our New Rise Reno facility." You also disclose on page
140 that you have a "long-term agreement with a Fortune 50 company" for the supply of
all your non-food feedstock for your New Rise Reno and the offtake of renewable fuels
from New Rise Reno. Please revise to address the following:

•Please revise to disclose when you entered into the supply and offtake agreement,
identify the parties to this agreement, briefly describe the material terms of this

 FirstName LastNameCarl Stanton
 Comapany NameFocus Impact BH3 NewCo, Inc.
 May 28, 2024 Page 6
 FirstName LastName
Carl Stanton
Focus Impact BH3 NewCo, Inc.
May 28, 2024
Page 6
agreement, and file the agreement as an exhibit to this registration statement pursuant
to Item 601(b)(10) of Regulation S-K;
•Please also revise your risk factor disclosure to discuss the sources of your non-food
feedstocks;

•With respect to your offtake agreement, we note your disclosure on page 38 that the
"counterparty has the right, but not the obligation, to purchase all of [y]our SAF
production from [y]our existing New Rise Reno facility." Please revise your
disclosures to specify the percentage of your feedstock that is currently purchased by
this third party and whether there are any other suppliers or purchasers with which
you have contracted with. To the extent that you only have one supplier and
purchaser, please revise your disclosures to more prominently highlight this
concentration risk to investors; and
•We note your disclosure on page 141 relating to your intentions that all of your
facilities will have offtake agreements in place before the start of production and that
management is currently engaged in discussions with or has submitted proposals to
multiple partners. Please expand your disclosure relating to the status of these
negotations and confirm that you will update your registration statement once you
enter into any offtake agreements with your potential partners and file such
agreements as exhibits to the registration statement pursuant to Item 601(b)(10) of
Regulation S-K.
The price of our SAF product relative to the price of petroleum-based conventional jet aviation
fuel may affect our revenues ..., page 36
22.We note your disclosure that "[y]our revenue and profitability forecasts include, among
other