American Fusion Restructures Up to $2.88 Million of Stock-Based Compensation Obligations into Long-Term, Lock-Up Preferred Equity and Begins Auditor Transition to MBP Global LLP

The company links the cash-free compensation exchange to its planned national exchange listing and institutional financing initiatives.

Rhea-AI Summary

American Fusion (AMFN) signed agreements to exchange up to $2.88 million of stock-based compensation rights for convertible preferred equity. Effective September 30, 2026, the agreements cover twelve officers, directors, consultants and advisors and provide for up to 288,000 Series C shares, subject to earning and exchange provisions. Neither party pays cash. The amount is maximum contractual compensation, not a stated reduction in recorded liabilities; accounting effects remain under review.

Each preferred share initially converts into one common share. Conversion eligibility depends on vesting and listing or elapsed-time thresholds, followed by quarterly limits. Holders cannot require redemption. JV CPA resigned as auditor effective October 1, 2026, citing health reasons. American Fusion is seeking to engage MBP Global LLP for its 2026 audit and September-quarter review, but acceptance and onboarding remain pending.

4 points · 0 major

MixediHow this balance works

How this balance works

Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.

It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.

Rhea-AI Sentiment measures something else, the tone of the wording.

How the balance worksHow Sentiment works

0 major · 4 points

Hollow bars mark forward-looking points. How the balance works

Positive

• Moderate pointCompensation exchange covers up to $2.88 million without cash payment by either party. 1.1% of market cap
• Minor point. Forward-looking: it has not happened yet and may not happen.Conversion limits allow up to 30% in each of the first three eligible quarters; unused allowances expire.
• Minor pointHolder rights include no right to require redemption of the preferred shares.
• Minor point. Forward-looking: it has not happened yet and may not happen.American Fusion plans MBP Global LLP engagement for its 2026 audit and September 2026 interim review.

Negative

• Moderate point. Forward-looking: it has not happened yet and may not happen.Up to 288,000 Series C shares, subject to earning and exchange provisions, initially convert one-for-one into dilutive common shares.
• Minor pointAccounting review remains pending; $2.88 million is not a stated reduction in recorded liabilities.
• Minor pointMBP Global's engagement remains subject to acceptance and onboarding; the firm has not formally accepted.
• Minor point. Forward-looking: it has not happened yet and may not happen.Optional preferred-share repurchases would cost 125% of face value within the specified pre-listing or nine-month window.

News Explained

Series C conversion has 4.99% ownership and voting caps; the company reports no disagreements with JV CPA or reportable events.

Under the agreements effective September 30, 2026, American Fusion sets each holder’s beneficial-ownership cap at 4.99% initially, with an increase to no more than 9.99% after at least 61 days’ notice; voting on an as-converted basis has a separate 4.99% cap.

With one common share initially convertible per preferred share, common shares issued on conversion would increase the share count and reduce existing holders’ percentage ownership, absent offsetting changes. The company reports no disagreements with departing auditor JV CPA on accounting, disclosure, or audit matters, and no reportable events during the periods covered. JV CPA’s letter to the SEC confirms its agreement with those statements.

AI-generated analysis. How Rhea-AI works. Not financial advice.

See more from StockTitan in Google Search and AI answers. Adds StockTitan as a preferred source · opens Google

Add on Google Not now

Series C structure establishes conversion timing and quarterly limits as Company works toward engagement of MBP Global LLP

SOUTHLAKE, Texas, Oct. 07, 2026 (GLOBE NEWSWIRE) -- American Fusion Inc. (OTCQB: AMFN) (“American Fusion” or the “Company”), developer of the proprietary Texatron™ Fusion Engine™, today announced agreements to restructure existing stock-based compensation rights with an aggregate maximum contractual amount of $2.88 million into Series C Convertible Preferred Stock. The exchange is part of the Company’s broader capital restructuring effort in support of its planned national securities exchange listing and institutional financing initiatives.

Preferred Equity Exchange

The agreements cover twelve officers, directors, consultants and advisors, each with an existing contractual compensation basis of $240,000. They provide for issuance of up to 288,000 Series C preferred shares in total, subject to the applicable earning and exchange provisions. The exchange involves no cash payment by either party.

The Series C structure establishes defined conversion eligibility and quarterly limits for shares issued in connection with these compensation arrangements. The $2.88 million represents the maximum contractual compensation covered by the agreements, rather than a stated reduction in recorded liabilities. The amounts recognized in the Company’s financial statements and the resulting balance-sheet effect remain subject to accounting review.

“This restructuring brings greater clarity to our compensation commitments and establishes a defined schedule for conversion into common stock,” said Brent Nelson, Executive Chairman of American Fusion. “We appreciate the support of our team and advisors as we organize our capital structure and advance our financing and planned uplisting initiatives.”

Conversion Timing and Capital Structure

Conversions may begin in the first full calendar quarter following the later of full vesting under the underlying compensation agreement and the earlier of the twentieth 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, with the remaining balance eligible in the fourth quarter. Unused quarterly allowances do not carry forward. These provisions regulate conversion timing and are not a blanket prohibition on transfers.

Each Series C share is initially convertible into one common share, subject to adjustments under the Certificate of Designation. Conversion is also subject to a beneficial ownership limitation initially set at 4.99%, which a holder may increase to no more than 9.99% on at least 61 days’ notice. The certificate separately limits voting on an as-converted basis to 4.99%.

The preferred shares’ $10 face value is a contractual term, not a forecast or guarantee of the common stock’s trading price. Future restructuring events are subject to the adjustment provisions in the governing documents; other changes require the applicable approvals and amendments. Holders have no right to require redemption. The Company has a limited option to repurchase the preferred shares at 125% of face value before the earlier of a national exchange listing or nine months after the original issue date.

The exchange agreements specify September 30, 2026 as their effective date.

Auditor Transition

JV CPA Inc., a boutique Houston-based firm, resigned as American Fusion's independent registered public accounting firm effective October 1, 2026, citing health reasons. The Company's Item 4.01 disclosure states that there were no disagreements with JV CPA on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, and no reportable events, during the periods covered. JV CPA's letter to the SEC confirms its agreement with those statements.

The Company is in the process of engaging MBP Global LLP, a PCAOB-registered firm with over 40 years of operating history and extensive experience serving public companies, as its successor auditor. MBP Global would audit the Company's consolidated financial statements for the year ending December 31, 2026 and review its interim financial statements for the quarter ended September 30, 2026. MBP Global's client acceptance and onboarding procedures are underway. The engagement remains subject to completion of those procedures, and MBP Global has not yet formally accepted the engagement.

“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.”

Additional details are available in the Company's Current Report on Form 8-K filed October 6, 2026, and its exhibits.

About American Fusion Inc.

American Fusion Inc. (OTCQB: AMFN) is an advanced energy platform company focused on the development and commercialization of next-generation fusion energy technologies. The Company is advancing the Texatron™ Fusion Engine™ aneutronic fusion platform, designed for modular, infrastructure-grade deployment across industrial, commercial, defense and grid-constrained applications.

The Company’s development strategy emphasizes system-level engineering, disciplined intellectual-property protection and scalable architectures intended to support long-term commercial operation, while maintaining a focus on capital discipline and transparent corporate governance.

For more information about American Fusion and its Texatron™ platform, please visit: americanfusionenergy.com

View the American Fusion Investor Deck here.

Forward-Looking Statements

This press release contains forward-looking statements regarding the Company’s capital restructuring, anticipated preferred-share issuances and conversions, accounting treatment, planned national securities exchange listing, institutional financing, prospective engagement of MBP Global LLP and timing of financial reporting, as well as the development and commercialization of the Texatron™ Fusion Engine™. Words such as “anticipate,” “believe,” “could,” “expect,” “intend,” “may,” “plan,” “potential,” “should” and “will” identify forward-looking statements.

These statements reflect current expectations and assumptions and are subject to risks and uncertainties, including completion of auditor acceptance procedures, accounting determinations, required approvals, exchange listing requirements, financing availability, market conditions, and scientific, engineering, regulatory and commercialization risks described in the Company’s SEC filings. Actual results may differ materially. Texatron™ remains under development and has not demonstrated fusion ignition, net energy gain or commercial electrical generation. There can be no assurance that the Company will complete its planned financing, uplisting or auditor engagement on anticipated terms or timing, or achieve its development objectives. Readers should not place undue reliance on forward-looking statements. American Fusion undertakes no obligation to update them except as required by law.

Corporate Communications

833-872-2636 ext. 730
ir@americanfusionenergy.com
info@americanfusionenergy.com
americanfusionenergy.com

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

What compensation is American Fusion exchanging for Series C preferred shares?

American Fusion's agreements cover up to $2.88 million of existing contractual stock-based compensation rights. Twelve officers, directors, consultants and advisors each have a $240,000 contractual compensation basis. The agreements provide for up to 288,000 preferred shares, subject to applicable earning and exchange provisions, with no cash payment by either party.

When can American Fusion Series C preferred shares convert into common stock?

Conversions may begin in the first full calendar quarter after the later of full vesting and the earlier of the twentieth trading day after a national securities exchange listing or nine months after original issuance. Holders may convert up to 30% of their original entitlement in each of the first three quarters, with the remaining balance eligible in the fourth. Unused allowances do not carry forward.

What ownership and voting limits apply to American Fusion Series C preferred shares?

Conversion is initially subject to a 4.99% beneficial ownership limit, which a holder may increase to no more than 9.99% with at least 61 days' notice. Voting on an as-converted basis is separately capped at 4.99%. Conversion timing provisions are not a blanket prohibition on transfers.

Can American Fusion redeem or repurchase its Series C preferred shares?

Holders cannot require redemption, but American Fusion has a limited option to repurchase shares at 125% of face value before the earlier of a national exchange listing or nine months after original issuance. Each preferred share has a $10 contractual face value, which is not a forecast or guarantee of the common stock's trading price.

Has MBP Global accepted the American Fusion auditor engagement?

MBP Global has not formally accepted the engagement; client acceptance and onboarding procedures are underway. The proposed engagement would cover the consolidated financial statements for the year ending December 31, 2026 and the interim financial statements for the quarter ended September 30, 2026.