- The agreements cover 12 officers, directors, consultants and advisors, with each arrangement based on $240,000 in contractual compensation.
- The preferred-stock terms establish staged conversion eligibility and quarterly limits, potentially providing greater structure around future common-share issuance.
- The $2.88 million figure represents the maximum contractual compensation covered, not a confirmed reduction in recorded liabilities; accounting treatment remains under review.
- The company is transitioning from JV CPA Inc. to prospective successor auditor MBP Global LLP, whose acceptance and onboarding process is still underway.
- The capital restructuring and auditor transition form part of American Fusion’s(TM) preparations for institutional financing and a planned national securities exchange listing.
American Fusion(TM) (OTCBQ: AMFN), a developer of next-generation fusion energy technologies, is restructuring up to $2.88 million in stock-based compensation obligations into long-term preferred equity as it works to organize its capital structure ahead of a planned national securities exchange listing and potential institutional financing.
The company announced on October 7, 2026, that agreements covering 12 officers, directors, consultants and advisors would exchange existing compensation rights for Series C Convertible Preferred Stock. Each agreement has a contractual compensation basis of $240,000, with issuance of up to 288,000 preferred shares subject to applicable earning and exchange provisions (https://ibn.fm/4c2ZM).
According to the company’s announcement, the transaction requires no cash payment from either party. American Fusion(TM) said the restructuring is intended to clarify compensation commitments and establish a defined schedule for conversion into common stock.
The $2.88 million represents the maximum contractual amount covered by the agreements; it is not a stated reduction in liabilities on the company’s balance sheet. The accounting treatment and financial-statement effects remain subject to review.
The Series C structure sets conditions governing when holders may convert preferred shares into common stock. Conversion eligibility begins in the first full calendar quarter after the later of full vesting under the underlying compensation agreement and the earlier of two events: the 20th trading day after a national securities exchange listing, or nine months after the original issue date.
Once eligible, holders may convert up to 30% of their original entitlement in each of the first three quarters. The remaining balance becomes eligible for conversion in the fourth quarter. Unused quarterly allowances do not carry forward.
Each preferred share is initially convertible into one common share, subject to adjustments under the Certificate of Designation. Beneficial ownership restrictions initially limit a holder to 4.99% ownership, although a holder may increase that threshold to no more than 9.99% with at least 61 days’ notice. A separate provision caps voting rights on an as-converted basis at 4.99%.
The preferred shares carry a contractual face value of $10. That figure does not represent a forecast or guarantee of the market price of American Fusion(TM) common stock.
The agreements also provide that holders cannot require the company to redeem the preferred shares. American Fusion(TM) has a limited repurchase option at 125% of face value before the earlier of a national exchange listing or nine months after the original issue date. The agreements specify September 30, 2026, as their effective date. Their eventual impact on the share count will depend on vesting and conversion eligibility.
American Fusion(TM) is also changing its independent registered public accounting firm. JV CPA Inc., a Houston-based accounting firm, resigned effective October 1, 2026, citing health reasons. In its regulatory disclosure, the company stated that there had been no disagreements with JV CPA regarding accounting principles or practices, financial-statement disclosure, or audit scope and procedures during the periods covered.
American Fusion(TM) is working to engage MBP Global LLP as its successor auditor. The prospective firm is registered with the Public Company Accounting Oversight Board and has more than 40 years of operating history, according to the company. The proposed engagement would include an audit of American Fusion’s(TM) consolidated financial statements for the year ending December 31, 2026, as well as a review of interim financial statements for the quarter ended September 30, 2026.
MBP Global’s client acceptance and onboarding procedures remain underway. The firm has not formally accepted the engagement, so completion of the transition should not yet be treated as assured.
“We’re prioritizing the information and coordination MBP Global needs to complete its acceptance process and begin the interim review,” said Brent Nelson, Executive Chairman. “As our operations grow more complex, strong and timely financial reporting is central to preparing for institutional financing and a planned exchange listing.”
American Fusion(TM) is an advanced energy platform company focused on developing fusion technology through its wholly owned subsidiary, Kepler Fusion Technologies. Its principal platform is the Texatron(TM) Fusion Engine(TM), which the company intends to develop for modular deployment in industrial and other energy-intensive applications. The potential commercial opportunity is linked to demand for dependable electricity, including from industrial facilities and other users facing grid constraints.
The company is also developing a proposed direct magnetic-to-electric conversion system. The concept aims to capture energy from charged particles through conversion mechanisms rather than relying solely on conventional approaches to extracting energy from fusion reactions. The system remains under development and has not yet been demonstrated as a commercial power-generation technology.
For more information, visit the company’s website at www.AmericanFusionEnergy.com.
NOTE TO INVESTORS: The latest news and updates relating to AMFN are available in the company’s newsroom at https://ibn.fm/AMFN
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