American Fusion: $1.44M Q3 loss, going-concern warning
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
American Fusion, Inc. (AMFN) reported no revenue and a $1,436,076 net loss for the three months ended September 30, 2026. For the nine months, revenue was $58,000, gross profit was $8,000 and net loss was $2,800,078; operating cash outflow was $1,256,872. At quarter-end, cash was $70,633 and the working capital deficit was $1,325,931.
Following the February 27, 2026 reverse recapitalization, nine-month results include Kepler Fusion Technologies Inc.’s results for the full period and AMFN’s from February 27. Recurring losses and an accumulated deficit of approximately $10.8 million raise substantial doubt about AMFN’s ability to continue as a going concern. Disclosure controls were ineffective at September 30 due to a material weakness involving insufficient accounting personnel with knowledge of a one-time complex transaction; remediation is underway.
AMFN’s Texas registration authorizes research and development use of registered industrial radiation machines at its Lubbock location. It covers 12 Texatron Fusion Engine research model classes from 500 kW through 1 GW, remains effective through February 28, 2034, and is not certification of the technology or commercial performance. Brent Nelson was appointed CEO effective immediately on October 26, 2026. Notes issued October 28 and October 29, 2026 yielded net proceeds of $197,000 and $490,000, respectively.
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.
Positive
- None.
Negative
- Major pointGoing-concern warning: approximately $10.8 million accumulated deficit raises substantial doubt.
- Major pointMaterial weakness: disclosure controls were ineffective at September 30, 2026.
Filing Explained
A remaining merger share obligation is intended to give Kepler’s former owners about 89.7% of post-merger common shares, subject to a restructuring event.
The report says AMFN remains obligated to issue additional common shares to Kepler’s former shareholders under the February 27 merger; the shares are subject to a restructuring event and are intended to represent about
As of September 30,
Brent Nelson holds one Series A preferred control share carrying
The October 28 note converts at
Key Figures
Key Terms
reverse recapitalization financial
going-concern basis financial
material weakness financial
derivative liabilities financial
prepaid warrant financing facility financial
beneficial ownership limitation financial
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
How much revenue and net loss did AMFN report for Q3 2026?
What does AMFN’s Texas radiation registration allow?
Why were AMFN’s disclosure controls deemed ineffective?
How much cash did AMFN receive from convertible notes after September 30, 2026?
AI-generated analysis. How Rhea-AI works. Not financial advice.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For the quarterly period
ended
For the transition period from ____________ to ____________
Commission file number
| (Exact name of registrant as specified in its charter) |
| (State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
| (Address of principal executive offices) | (Zip Code) |
| ( |
| (Registrant’s telephone number, including area code) |
Securities registered pursuant to Section 12(g) of the Act: Common stock, par value $0.001 per share
Indicate by check mark
whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes ☐
Indicate by check mark
whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405
of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required
to submit such files.) Yes ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definition of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer ☐ | Accelerated filer ☐ | |
| Smaller reporting company | ||
| Emerging growth company |
If an emerging growth
company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or
revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark
whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐
As of November 13, 2026, there were
AMERICAN FUSION, INC.
Form 10-Q
For the Quarter Ended September 30, 2026
TABLE OF CONTENTS
| Page | ||
| Cautionary Note Regarding Forward-Looking Statements | ii | |
| Part I. Financial Information | ||
| Item 1. | Financial Statements | 1 |
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 22 |
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk | 26 |
| Item 4. | Controls and Procedures | 27 |
| Part II. Other Information | ||
| Item 1. | Legal Proceedings | 28 |
| Item 1A. | Risk Factors | 28 |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 28 |
| Item 3. | Defaults Upon Senior Securities | 28 |
| Item 4. | Mine Safety Disclosures | 28 |
| Item 5. | Other Information | 28 |
| Item 6. | Exhibits | 29 |
| Signatures | 30 | |
i
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical fact are “forward-looking statements” for purposes of these provisions, including any projections of revenue, expenses, earnings, cash flows, or other financial items, any statements of the plans and objectives of management for future operations, any statements concerning proposed new products or services, any statements regarding future economic conditions or performance, and any statement of belief and any statement of assumptions underlying any of the foregoing. Words such as “may,” “will,” “could,” “should,” “would,” “expect,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “project,” “continue,” “forecast,” and similar expressions are intended to identify forward-looking statements.
Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. Such risks are described in greater detail under “Item 1A. Risk Factors” in our Registration Statement on Form 10 filed with the Securities and Exchange Commission on March 16, 2026. All forward-looking statements are expressly qualified in their entirety by such cautionary statements. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as may be required by law.
ii
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
The unaudited condensed consolidated financial statements of American Fusion, Inc. and its subsidiary are listed below:
Index to Unaudited Condensed Consolidated Financial Statements
| • | Unaudited Condensed Consolidated Balance Sheets as of September 30, 2026 and December 31, 2025 (as revised) |
| • | Unaudited Condensed Consolidated Statements of Operations for the three months and nine months ended September 30, 2026 |
| • | Unaudited Condensed Consolidated Statement of Stockholders’ Deficit for the three and nine months ended September 30, 2026 |
| • | Unaudited Condensed Consolidated Statement of Cash Flows for the nine months ended September 30, 2026 |
| • | Notes to Unaudited Condensed Consolidated Financial Statements |
| 1 |
AMERICAN FUSION, INC. AND SUBSIDIARY
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
| September 30, 2026 | December 31, 2025 (as revised) | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | — | |||||
| Accounts receivable | — | |||||||
| Prepaid expenses | — | |||||||
| Total current assets | — | |||||||
| Property and equipment, net | — | |||||||
| Intangible assets, net | — | |||||||
| Total assets | $ | $ | — | |||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accrued expenses | $ | $ | — | |||||
| Convertible notes payable – related party | — | |||||||
| Litigation liability | — | |||||||
| Derivative liabilities | — | |||||||
| Total current liabilities | — | |||||||
| Total liabilities | $ | $ | — | |||||
| Stockholders’ deficit: | ||||||||
| Preferred stock, par $ | ||||||||
| Series A preferred stock, par $ | — | — | ||||||
| Series C preferred stock issuable, par $ | — | |||||||
| Common stock, par $ | ||||||||
| Common stock issuable; | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Treasury stock, | — | — | ||||||
| Total stockholders’ deficit | ( | ) | — | |||||
| Total liabilities and stockholders’ deficit | $ | $ | — | |||||
| (1) |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
| 2 |
AMERICAN FUSION, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended | Nine Months Ended | |||||||
| September 30, 2026 | September 30, 2026 | |||||||
| Revenue | $ | — | $ | |||||
| Cost of revenue | — | |||||||
| Gross profit | — | |||||||
| Operating expenses: | ||||||||
| Selling, general and administrative expenses | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income (expense): | ||||||||
| Interest expense | ( | ) | ( | ) | ||||
| Change in fair value of derivative liabilities | ( | ) | ( | ) | ||||
| Total other expense | ( | ) | ( | ) | ||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Weighted average shares outstanding – basic and diluted | ||||||||
| Net loss per share – basic and diluted | $ | ( | ) | $ | ( | ) | ||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
| 3 |
AMERICAN FUSION, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS’ DEFICIT
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2026
(Unaudited)
| Series A Preferred Stock | Series C Preferred Stock Issuable | Common Stock | Common Stock Issuable | Additional Paid-In Capital | Accumulated Deficit | Treasury Stock | Total | |||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Amount | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||
| Balance, December 31, 2025, as revised | $ | — | — | $ | — | $ | $ | $ | $ | ( | ) | — | $ | — | ||||||||||||||||||||||||||||||||||
| Net liabilities assumed in reverse recapitalization | — | — | — | — | — | — | — | — | ( | ) | — | — | ( | ) | ||||||||||||||||||||||||||||||||||
| Conversion of notes payable – related party | — | — | — | — | — | — | ( | ) | — | — | ||||||||||||||||||||||||||||||||||||||
| Issuance of prepaid warrants | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | — | — | — | ( | ) | — | ( | ) | ||||||||||||||||||||||||||||||||||
| Balance, March 31, 2026 , as revised | $ | — | — | $ | — | $ | $ | $ | $ | ( | ) | — | $ | ( | ) | |||||||||||||||||||||||||||||||||
| Conversion of notes payable – related party | — | — | — | — | — | — | ( | ) | — | — | ||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Issuance of prepaid warrants | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Securities purchase agreements – units | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Issuance of issuable common stock | — | — | — | — | ( | ) | ( | ) | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Treasury stock acquired | — | — | — | — | ( | ) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
| Cancellation of common stock | — | — | — | — | ( | ) | ( | ) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | — | — | — | ( | ) | — | ( | ) | ||||||||||||||||||||||||||||||||||
| Balance, June 30, 2026 , as revised | $ | — | — | $ | — | $ | — | $ | — | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Issuance of prepaid warrants | — | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||
| Securities purchase agreements – units | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Share exchange for Series C Preferred Stock | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | — | — | — | — | ( | ) | — | ( | ) | ||||||||||||||||||||||||||||||||||
| Balance, September 30, 2026 | $ | — | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | ||||||||||||||||||||||||||||||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
| 4 |
AMERICAN FUSION, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
| Nine Months Ended | ||||
| September 30, | ||||
| 2026 | ||||
| Cash flows from operating activities: | ||||
| Net loss | $ | ( | ) | |
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||
| Stock-based compensation | ||||
| Amortization expense | ||||
| Accrued interest on convertible notes payable – related party | ||||
| Accrued interest on litigation liability | ||||
| Change in fair value of derivative liabilities | ||||
| Change in operating assets and liabilities: | ||||
| Accounts receivable | ( | ) | ||
| Prepaid expenses | ( | ) | ||
| Accounts payable and accrued expenses | ||||
| Net cash used in operating activities | ( | ) | ||
| Cash flows from investing activities: | ||||
| Cash acquired in connection with reverse recapitalization | ||||
| Capitalized property and equipment | ( | ) | ||
| Capitalized intangible assets | ( | ) | ||
| Net cash used in investing activities | ( | ) | ||
| Cash flows from financing activities: | ||||
| Proceeds from issuance of prepaid warrants | ||||
| Proceeds from issuance of securities purchase agreements – units | ||||
| Net cash provided by financing activities | ||||
| Net increase in cash and cash equivalents | ||||
| Cash and cash equivalents, beginning of period | — | |||
| Cash and cash equivalents, end of period | $ | |||
| Supplemental disclosures of cash flow information: | ||||
| Cash paid during the period for: | ||||
| Interest | $ | — | ||
| Income taxes | $ | — | ||
| Non-cash investing and financing activities: | ||||
| Net liabilities assumed in connection with reverse recapitalization | $ | |||
| Convertible notes payable – related party conversion to common stock | $ | |||
| Accrued stock-based compensation exchanged for Series C preferred stock issuable | $ | |||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
| 5 |
AMERICAN FUSION, INC. AND SUBSIDIARY
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 – NATURE OF BUSINESS AND BASIS OF PRESENTATION
Organization and Business
American Fusion, Inc. ("AMFN" or the "Company") is a Texas corporation focused on developing advanced fusion energy technologies as of September 30, 2026.
On February 27, 2026, the Company completed its reverse merger with Kepler Fusion Technologies Inc. ("Kepler") under the Master Sales Agreement dated December 16, 2025 and the related Share Exchange Agreement. Kepler became a wholly owned subsidiary of the Company at closing, and Kepler’s former shareholders are to obtain approximately 89.7% of the common voting rights in the combined entity. The transaction was accounted for as a reverse recapitalization. See Note 10.
Redomestication and Name Change
The Company completed its statutory conversion and redomestication from Delaware to Texas effective February 10, 2026, upon filing the applicable conversion and formation documents with the Texas Secretary of State. The Company ceased to be a Delaware corporation and continued as a Texas corporation. The redomestication did not change its business, operations, assets, liabilities, or stockholders’ equity.
Effective March 19, 2026, the Company changed its name from Renewal Fuels, Inc. to American Fusion, Inc., and FINRA processed the related ticker symbol change from RNWF to AMFN. Unless the context requires otherwise, references to the “Company” in these financial statements mean American Fusion, Inc., formerly Renewal Fuels, Inc.
Basis of Presentation and Principles of Consolidation
These unaudited condensed consolidated interim financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information, the instructions to Form 10-Q, and Rule 8-03 of Regulation S-X. They do not include all information and footnotes required by GAAP for complete financial statements. In management’s opinion, all adjustments necessary for a fair presentation, consisting of normal recurring accruals, have been included.
The financial statements reflect the operations and financial position of the Company and its consolidated subsidiary for the three- and nine-month periods ended September 30, 2026. Under ASC 805-40, Kepler Fusion Technologies Inc. is the accounting acquirer. The combined entity’s historical financial statements therefore reflect Kepler’s results for pre-acquisition periods, with AMFN’s identifiable assets and liabilities added at carrying value as of February 27, 2026. Kepler Fusion Technologies Inc., the accounting acquirer in the February 27, 2026 reverse recapitalization, was incorporated on November 21, 2025. Kepler Fusion Technologies Inc. had no accounting predecessor prior to its formation. Accordingly, there are no corresponding predecessor financial statements for the three or nine months ended September 30, 2025, and comparative statements of operations and cash flows for such periods are not presented. All intercompany transactions and balances have been eliminated in consolidation.
The December 31, 2025 consolidated balance
sheet and the consolidated statement of stockholders’ deficit have been retroactively adjusted to reflect the Company’s
legal capital structure:
Revision of Previously Issued Interim Financial Statements
During the preparation of the Company's consolidated financial statements for the nine months ended September 30, 2026, management identified an error related to the recognition of certain expenses of the accounting acquiree around the reverse recapitalization transaction date as well as the retroactive restatement of the stockholders’ equity section of the December 31, 2025, balance sheet, presented for comparative purposes only. As a result, operating expenses and net loss were overstated during the three months ended March 31, 2026 and six months ended June 30, 2026.
| 6 |
AMERICAN FUSION, INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
Management evaluated the error under ASC 250, SAB No. 99 and SAB No. 108. Although the error was quantitatively material to certain financial statement line items for the three months ended March 31, 2026 and six months ended June 30, 2026, management concluded that the error was not material to the previously issued interim financial statements when considering all relevant qualitative and quantitative factors. Accordingly, the Company determined that a restatement of, or amendment to, previously issued financial statements was not required. The error did not affect the Company’s revenues, cash flows, liquidity, debt covenant compliance, capital resources, or management compensation arrangements.
Further, the error did not arise from fraud or intentional misconduct, did not mask changes in operating trends, did not impact compliance with regulatory requirements, and did not affect key operating metrics used by management or investors to evaluate the Company’s performance.
Accordingly, the Company has revised its previously reported results for the three months ended March 31, 2026 and the six months ended June 30, 2026, which are reflected in the accompanying consolidated financial statements for the nine months ended September 30, 2026.
The correction reduced operating expenses by $
The following table presents the effect of the revision on the Company’s previously issued consolidated statements of operations:
| Schedule of error correction | ||||||||||||||||||||||||
| Three Months Ended March 31, 2026 | Six Months Ended June 30, 2026 | |||||||||||||||||||||||
| As Previously Reported | Adjustment | As Revised | As Previously Reported | Adjustment | As Revised | |||||||||||||||||||
| Selling, general and administrative expenses | $ | $ | ( | ) | $ | $ | $ | ( | ) | $ | ||||||||||||||
| Loss from operations | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Interest expense | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Net loss | $ | ( | ) | $ | $ | ( | ) | $ | ( | ) | $ | $ | ( | ) | ||||||||||
| Net loss per share – basic and diluted | $ | ( | ) | $ | — | $ | ( | ) | $ | ( | ) | $ | — | $ | ( | ) | ||||||||
The following table presents the effect of the revision on the retroactively restated December 31, 2025 stockholders’ deficit in the Company’s previously issued consolidated balance sheets:
| March 31, 2026 | June 30, 2026 | |||||||||||||||
December 31, 2025 As Previously Reported | December 31, 2025 As Revised | December 31, 2025 As Previously Reported | December 31, 2025 As Revised | |||||||||||||
| Stockholders’ deficit: | ||||||||||||||||
| Preferred stock, par $0.001; 20,000,001 authorized at December 31, 2025 | — | — | — | — | ||||||||||||
| Series A preferred stock, par $0.001; 1 designated; 1 issued at December 31, 2025 | — | — | — | — | ||||||||||||
| Common stock, par $0.001; 3.0B authorized; 2,954,801,029 issued and outstanding at December 31, 2025 | ||||||||||||||||
| Common stock issuable; 240,000,000 shares issuable at December 31, 2025 | — | — | ||||||||||||||
| Additional paid-in capital | ||||||||||||||||
| Accumulated deficit | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||
| Total stockholders’ deficit | $ | ( | ) | $ | — | $ | ( | ) | $ | — | ||||||
Going Concern
The accompanying consolidated financial statements have been prepared
on a going-concern basis. As of September 30, 2026, the Company had an accumulated deficit of approximately $
Management believes that planned capital-raising activities will provide the resources needed to fund ongoing operations. There can be no assurance that these plans will succeed.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from those estimates.
Cash and Cash Equivalents
The Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents.
| 7 |
AMERICAN FUSION, INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
Accounts Receivable
Accounts receivable are stated at amounts due from customers, net of an allowance for doubtful accounts. The Company generally does not require collateral. In determining the allowance, the Company considers how long receivables are past due, historical losses, customers’ current ability to pay, and general economic and industry conditions. Receivables are written off when they become uncollectible; subsequent collections are credited to the allowance for doubtful accounts.
The Company recorded
Property and Equipment
Property and equipment consists of research and
development testing equipment acquired for future projects. Equipment with alternative future uses is capitalized at cost under ASC 730,
Research and Development. The Company capitalized $
Intangibles and Impairment of Long-Lived Assets
During the nine months ended September 30, 2026, the Company capitalized
$
Website development costs are amortized over three
years beginning July 1, 2026. Amortization expense was $
Under ASC Topic 360, Property, Plant and Equipment, long-lived assets are reviewed for impairment when events or changes in circumstances indicate that their carrying amounts may not be recoverable. An impairment loss is recognized when impairment indicators exist and estimated undiscounted future cash flows are less than the assets’ carrying amounts. In that case, carrying values are adjusted to estimated fair value; assets held for sale are adjusted to estimated fair value less selling expenses. No impairment loss was recorded for the three and nine months ended September 30, 2026.
Reverse Recapitalization
On February 27, 2026, Renewal Fuels, Inc. (RNWF, subsequently renamed American Fusion, Inc., “AMFN” or the “Company”) consummated a share-exchange transaction with Brent Nelson, the sole shareholder of Kepler Fusion Technologies Inc. (“Kepler”), pursuant to which the Company acquired 100% of the issued and outstanding equity interests of Kepler in exchange for newly issued common stock of the Company. See Note 10.
Upon the consummation of the transaction, the holder of the 1,000 shares of Kepler common stock was contemplated to receive 240 million shares of American Fusion, Inc. common stock at a par value $0.001 per share after giving effect to the Conversion ratio of 240,000 (the “Conversion Ratio”). The 240,000,000 shares of common stock issuable in connection with the transaction were issued in April 2026.
Concurrently, Manufacturing 360, LLC, an entity controlled by Richard C. Hawkins, the Company’s then Chief Executive Officer, sold to Earth Sciences Fund I LLC, an entity controlled by Brent Nelson, the one (1) share of Series A Preferred Stock of the Company (the “Control Share”) for $1,000 cash.
The transaction was accounted for as a reverse
recapitalization under U.S. GAAP, with American Fusion, Inc. treated as the acquired company and Kepler as the accounting acquirer. This
treatment was based primarily on the fact that Brent Nelson, who controlled Kepler before the transaction, continued to control American
Fusion, Inc. afterward. Kepler therefore did not undergo a change in control. Accordingly, for accounting purposes, the financial statements
of AMFN represent a continuation of the financial statements of Kepler with the merger being treated as the equivalent of Kepler issuing
shares for the net assets of American Fusion, Inc., accompanied by a recapitalization. The net liabilities of American Fusion, Inc. of
$
| 8 |
AMERICAN FUSION, INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
Fair Value Measurements
The disclosure requirements within Accounting Standards Codification (ASC) Topic 820-10, Fair Value Measurement, require disclosure of estimated fair values of certain financial instruments. For financial instruments recognized at fair value in the Company’s statements of operations, the disclosure requirements of ASC Topic 820-10 also apply. The methods and assumptions are set forth below:
| · | Cash and cash equivalents are carried at cost, which approximates fair value. |
| · | The carrying amounts of receivables approximate fair value due to their short-term maturities. |
| · | The carrying amounts of payables approximate fair value due to their short-term maturities. |
Assets and liabilities measured and reported at fair value are classified and disclosed in one of the following categories based on inputs:
| · | Level 1 — Quoted prices in active markets for identical assets and liabilities that the reporting entity has the ability to access at the measurement date. |
| · | Level 2 — Inputs other than quoted prices included within Level 1 that are observable for the asset and liability or can be corroborated with observable market data for substantially the entire contractual term of the asset or liability. |
| · | Level 3 — Pricing inputs include significant unobservable inputs used in determining the fair value of investments. The types of investments, which would generally be included in this category include equity securities issued by private entities. |
In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the determination of which category within the fair value hierarchy is appropriate for any given investment is based on the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the investment.
The levels of the fair value hierarchy into which the Company’s assets and liabilities fall as of September 30, 2026 are as follows:
| Schedule of fair value, assets and liabilities measured on recurring basic | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Liabilities | ||||||||||||||||
| Derivative liabilities – Securities Purchase Agreements | $ | — | $ | — | $ | $ | ||||||||||
| Total fair value | $ | — | $ | — | $ | $ | ||||||||||
The fair value of applicable derivative liabilities and the change in fair value of derivative liabilities are as follows for the nine months ended September 30, 2026:
| Schedule of fair value of derivative liabilities | ||||
| Fair value – December 31, 2025 | $ | — | ||
| Units sold under Securities Purchase Agreements | ||||
| Change in fair value of derivative liabilities | ||||
| Fair value – September 30, 2026 | $ | |||
There were no Level 3 assets or liabilities at December 31, 2025.
| 9 |
AMERICAN FUSION, INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
Lease Commitment
The Company determines whether an arrangement is a lease at inception by assessing whether it conveys the right to control the use of an explicitly or implicitly identified fixed asset for a period of time in exchange for consideration. Control exists when the Company has the right to direct the asset’s use and obtain substantially all economic benefits from that use. Lease expense for variable lease components is recognized when the obligation is probable.
Operating lease right-of-use (“ROU”) assets and lease liabilities are recognized at commencement based on the present value of lease payments over the lease term. Operating lease payments are expensed on a straight-line basis over the lease term. Under ASC 842, unpaid lease payments are discounted using the implicit interest rate or, if that rate cannot be readily determined, the incremental borrowing rate. Because the implicit rate in the Company’s lease is not readily determinable, the Company uses its incremental borrowing rate based on information available at commencement.
Variable lease payments that do not depend on a rate or index are recognized when the event, activity, or circumstance that triggers payment is probable. They are presented as operating expenses in the same line as fixed lease expense.
In June 2026, the Company entered into three operating
leases for factory and office locations, but commencement was delayed until after September 30, 2026. During the three months ended September
30, 2026, the Company occupied space only under a temporary lease. Rent expense was $
Revenue Recognition
Revenues are recognized in accordance with Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers when performance obligations are satisfied through the transfer of promised goods to the Company’s customers. Control transfers upon shipment of product or when the title has been passed to the customers. This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer acceptance. Revenue is recorded net of sales taxes collected from customers on behalf of taxing authorities.
The Company determines the amount of revenue to be recognized through the application of the following steps:
| • | identification of the contract, or contracts, with a customer; |
| • | identification of the performance obligations in the contract; |
| • | determination of the transaction price; |
| • | allocation of the transaction price to the performance obligations in the contract; and |
| • | recognition of revenue when or as the Company satisfies the performance obligations. |
The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables, and deferred revenue (contract liabilities) on the accompanying balance sheet. On occasion, billing occurs subsequent to revenue recognition, resulting in unbilled receivables. There were no unbilled receivables or deferred revenue recorded as of September 30, 2026 and December 31, 2025.
Share-based Compensation
The Company accounts for share-based awards granted to employees, directors, and third-parties by recording compensation expense based on estimated fair values at the grant date. The portion of an award expected to vest is recognized as expense over the requisite service period in the consolidated statements of operations. Expense is recognized on a straight-line basis over the vesting period, as permitted by ASC 718, Compensation—Stock Compensation. The assumptions used to estimate fair value represent management’s best estimates. Changes in the underlying variables may affect both estimated award values and the resulting compensation expense.
Research and Development Costs
Research and development costs are expensed as incurred. Total research
and development costs amounted to $
| 10 |
AMERICAN FUSION, INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
Contingencies
The Company follows ASC 450, Contingencies, to account for loss contingencies. Liabilities are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated.
Treasury Stock
The Company accounts for treasury stock under the cost method as defined in ASC 505-30. Treasury stock is recorded at the total cost paid to repurchase shares, debited to the treasury stock account, and credited to cash. Treasury stock is presented as a contra-equity account in the stockholders’ equity section of the balance sheet. Reissuance of treasury stock is recorded at the reissuance price, with any excess over cost credited to additional paid-in capital from treasury stock, and any deficiency first charged to additional paid-in capital from treasury stock and then to retained earnings. No gain or loss is recognized in net income; all adjustments are made directly to equity accounts.
Earnings (Loss) Per Share
Basic net earnings or loss per share is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period, excluding shares subject to redemption or forfeiture. Diluted net earnings or loss per share adjusts the weighted-average common shares outstanding for potentially dilutive securities. Securities are excluded from diluted net loss per share when their inclusion would be anti-dilutive. All potentially dilutive securities were anti-dilutive as of September 30, 2026; therefore, diluted net loss per share equals basic net loss per share.
Excluded securities had
The weighted average number of common shares outstanding reflects the Company’s legal capital structure retroactively applied to periods prior to the reverse recapitalization.
Income Taxes
The Company accounts for income taxes under ASC 740, Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts and their respective tax bases. A valuation allowance is established when it is more likely than not that deferred tax assets will not be realized. The Company experienced a change in control on February 27, 2026 in connection with the Kepler reverse recapitalization; accordingly, the utilization of net operating loss carryforwards of the legal acquirer may be limited under IRC Section 382. A Section 382 study is expected to be completed in a future period.
NOTE 3 – INCOME TAXES
The Company accounts for income taxes under ASC 740, Income Taxes. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts and their respective tax bases. A valuation allowance is established when it is more likely than not that deferred tax assets will not be realized. The Company experienced a change in control on February 27, 2026 in connection with the Kepler reverse recapitalization; accordingly, the utilization of net operating loss carryforwards of the legal acquirer may be limited under IRC Section 382. A Section 382 study is expected to be completed in a future period.
NOTE 4 – STOCKHOLDERS’ DEFICIT
Preferred Stock
As of December 31, 2025, the Company had
| 11 |
AMERICAN FUSION, INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
Common Stock
Effective May 1, 2026, the Company filed a Certificate of Amendment
with the Texas Secretary of State reducing its authorized common stock, par value $
During the nine months ended September 30, 2026, 20,000,000 shares were returned by Pinnacle Consulting Services, Inc. and 2,766,666 shares were returned by a third-party shareholder to the Company at no cost. These shares are recorded as Treasury Stock on the Company’s balance sheet at September 30, 2026. See Note 7.
During the nine months ended September 30, 2026,
the Company issued
In January 2026, the Company entered into agreements with third-party
service providers in exchange for compensation of
During the three months ended September 30, 2026,
the Company recorded stock-based compensation of $
Cancellation of Legacy Share Issuances
In March 2026, the Company obtained an amended default judgment in
the Superior Court of Washington, King County, rescinding certain legacy asset purchase agreements and declaring void ab initio the prior
issuance of an aggregate
| 12 |
AMERICAN FUSION, INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
Common Stock Issuable
The Company recorded $
As of September 30, 2026,
Prepaid Warrants
Between January 1, 2026, and May 1, 2026, the Company entered into
a Master Prepaid Common Stock Purchase Warrant Agreement (the “Agreement”) with Pinnacle Consulting Services, Inc. (“Pinnacle”)
establishing a prepaid warrant financing facility of up to $
If the Company, while any warrant is outstanding, (i) pays a stock dividend on the common stock, (ii) subdivides its outstanding common stock into a greater number of shares (including by forward stock split), (iii) combines its outstanding common stock into a smaller number of shares (including by reverse stock split), or (iv) issues any shares in a reclassification or recapitalization of the common stock, then the number of warrant shares issuable on exercise of each warrant and the then-applicable nominal remaining exercise price shall be proportionally adjusted.
If, at any time while any warrant is outstanding, the Company issues or is deemed to issue any shares of common stock (or any securities convertible into, exchangeable for, or exercisable into common stock) at an effective price per share of common stock less than the then-current initial effective purchase price per warrant share, (a “Dilutive Issuance”), then the exercise price shall be reduced, to equal the lower effective price per share.
During the nine months ended September 30, 2026, the Company issued
prepaid warrants to Pinnacle Consulting Services Inc. for aggregate cash proceeds of $
Securities Purchase Agreements
During the nine months ended September 30, 2026, the Company entered
into Securities Purchase Agreements with third-party investors for the sale of equity units (“Units”). Each unit consists
of one share of restricted common stock, $
During the nine months ended September 30, 2026,
the Company sold
The Company evaluated the warrants under ASC 480 and ASC 815-40 and concluded that the warrants qualify for equity classification. Accordingly, the warrants were recorded in additional paid-in capital and are not subsequently remeasured. See Note 9.
| 13 |
AMERICAN FUSION, INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
Certain securities purchase agreements contain dilutive issuance protection provisions that may entitle investors to receive additional shares, warrants or other equivalent securities upon certain future issuances by the Company at prices below $0.05 per share. In addition, certain of the securities purchase agreements contain a one-time price protection true-up provision that may require the Company to issue a variable number of shares if the Company's stock price is below $0.05 on the contractual measurement date.
Management determined that the above-mentioned provisions do not qualify for equity classification under ASC 815-40 and recorded the features as derivative liabilities measured at fair value, with subsequent changes in fair value recognized in earnings. Of the $480,000 proceeds, $59,579 was allocated to derivative liabilities. See Note 8.
Stock Compensation Agreements
During the nine months ended September 30, 2026, the
On the one-year anniversary of the date on which the Initial Valuation Price is determined (the “Valuation Date”), the Company shall determine the lowest closing price of the Company’s common stock during the ten (10) trading days immediately preceding the Valuation Date (the “Anniversary Price”).
If the Anniversary Price is less than the Initial Valuation Price, the Company shall issue to consultant or director, such additional number of shares as are necessary so that the aggregate fair market value of all shares issued calculated using the Anniversary Price, equals the contractual compensation amount. This adjustment shall operate as a hard minimum value backstop and shall apply automatically without the need for further action by the consultant or director.
Vesting of the to-be determined shares and compensation
is over the twelve-month term of each of the agreements. Compensation expense totaling $
During the nine months ended September 30, 2026, the
On the one-year anniversary of the date on which the Initial Valuation Price is determined (the “Valuation Date”), the Company shall determine the lowest closing price of the Company’s common stock during the ten (10) trading days immediately preceding the Valuation Date (the “Anniversary Price”).
If the Anniversary Price is below the Initial Valuation Price, the Company must issue enough additional shares to the consultant or director so that the aggregate fair market value of all shares issued, calculated using the Anniversary Price, equals the contractual compensation amount. This minimum value backstop applies automatically, without further action by the consultant or director.
Vesting on one of these contracts is contingent
upon two vesting conditions as defined. The entirety of the stock-based rights shall vest when both a restructuring event has occurred
and the consultant shall have (i) remained continuously engaged under this agreement through the date on which the restructuring event
condition is satisfied, or (ii) completed the initial twelve (12) month term of service prior to the restructuring event. If a minimum
of six months of service has been performed, and this agreement terminated prior to the restructuring event, a pro-rata amount of shares
shall be considered earned by the consultant. If either condition is not satisfied, then the stock-based rights shall be forfeited in
their entirety without consideration, and the Company shall have no obligation to issue any shares. Compensation expense for this contract
totaling $
| 14 |
AMERICAN FUSION, INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
Vesting on the other contingent contracts is contingent upon two vesting conditions as defined. The entirety of the stock-based rights shall vest when both a restructuring event has occurred and the consultant shall have remained continuously engaged under this agreement through the date on which the restructuring event condition is satisfied. If either condition is not satisfied, then the stock-based rights shall be forfeited in their entirety without consideration, and the Company shall have no obligation to issue any shares. The restructuring event is a substantive performance condition and until achievement is probable, no compensation expense is recorded for the award even when service is being provided. No compensation expense has been recorded as of September 30, 2026.
In the event the trading price of the Company’s common stock increases following the effective date, no reduction, clawback, or forfeiture shall apply. All shares issued pursuant to the agreements shall include piggyback registration rights in the Company’s next registration statement on Form S-1 or Form 1-A, subject to customary underwriter limitations, if any.
During the nine months ended September 30, 2026, the Company entered into an agreement with a third-party service provider which provides for a retainer of $100,000 to be issued in 1,250,000 shares of Company common stock at a price of $0.08 per share. Stock-based compensation expense has been included in selling, general and administrative expense on the accompanying statement of operations.
Series C Preferred Stock Modification
The Company accounts for equity-based and liability-based compensation arrangements under ASC 718, Compensation—Stock Compensation. As of September 30, 2026, the Company entered into agreements with certain consultants and directors to settle existing common stock-based compensation amounts earned and accrued totaling $986,958 for 98,696 shares of Series C Preferred Stock issuable. See “Stock Compensation Agreements,” above. See Note 12.
Thereafter, shares of Series C Preferred Stock will be issued automatically as future compensation is earned, in exchange for the surrender, cancellation, and release of each portion of the future compensation.
The Company concluded that the awards remain within the scope of ASC 718 because the awards were issued in exchange for services rendered or to be rendered to the Company and do not represent consideration transferred in a business combination under ASC 805. Certain recipients are nonemployee directors who are treated as employees for ASC 718 purposes.
Effective September 30, 2026, the Company modified certain outstanding compensation awards by replacing rights to receive common stock with rights to receive Series C Preferred Stock. The Company determined that September 30, 2026 represented the modification date because all material terms were approved and mutually understood by the parties on that date.
The Company evaluated the modification under ASC 718 and concluded that the exchange represented a modification because the form of the underlying instrument changed from common stock-based compensation rights to Series C Preferred Stock rights. The Company further concluded that:
| • | Vesting conditions remained unchanged. |
| • | The modified awards remained classified within stockholders’ equity. |
| • | The fair value of the modified awards was substantially equivalent to the fair value of the original awards immediately before modification. |
Accordingly, no significant incremental compensation cost was recognized as a result of the modification. Compensation cost continues to be recognized over the remaining requisite service period for unvested awards. Any compensation cost associated with service periods completed as of the modification date was recognized immediately.
| 15 |
AMERICAN FUSION, INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
The Company measured Series C Preferred Stock awards based on the fair value of the underlying equity instruments on the applicable grant or modification date. Management concluded that the economic rights associated with the Series C Preferred Stock were substantially similar to those associated with the Company's common stock, including participation in dividends and liquidation proceeds on an as-converted basis.
Based on the Company's historical compensation arrangements and contemporaneous pricing of common stock awards at $0.10 per common share, management estimated a fair value of $10.00 per share of Series C Preferred Stock. Management concluded that additional discounts for service conditions, conversion timing restrictions or ownership limitations were not appropriate because such restrictions do not constitute separate vesting conditions affecting fair value measurement.
Shares Issued in Reverse Recapitalization
In connection with the closing of the Kepler reverse recapitalization on February 27, 2026, the Company is obligated to issue additional common stock to Kepler’s former shareholders pursuant to the Share Exchange Agreement. These shares will represent approximately 89.7% of the post-merger outstanding common shares, subject to a restructuring event, and constitute the consideration deemed to have been transferred to the former owners of the legal acquirer (AMFN) under ASC 805-40. See Note 10 for additional information.
NOTE 5 – LITIGATION LIABILITY
On December 12, 2024, the Court of Alaska entered a judgment against
the Company. The total judgment recognized in the year ended December 31, 2024 was $
Interest expense totaled $
The Company is actively pursuing legal remedies to vacate the judgment on the grounds that the underlying asset purchase agreement was never consummated and no assets were delivered. The full amount of the judgment, together with accrued interest, has been recognized as a litigation payable in the accompanying consolidated balance sheet, as the obligation constitutes a determinable legal liability recorded in accordance with ASC 450.
NOTE 6 – CONVERTIBLE NOTES PAYABLE – RELATED PARTY
As of September 30, 2026, convertible notes payable – related party consisted of the following:
| Schedule of notes payable related parties | ||||
| September 30, 2026 | ||||
| Pinnacle Consulting Services – May 2023 Note | $ | |||
| Pinnacle Consulting Services – January 2024 Note | ||||
| Pinnacle Consulting Services – January 2025 Note | ||||
| CMB Communications – June 2023 Note | ||||
| CMB Communications – January 2025 Note | ||||
| Total | $ | |||
Upon the occurrence of an event of default, the
lenders shall have the option to convert all or any portion of the unpaid principal, accrued interest, and any other fees or charges into
shares of the Company’s common stock at a fixed price of $
During the nine months ended September 30, 2026,
Pinnacle Consulting Services, Inc. (“Pinnacle”) converted $
| 16 |
AMERICAN FUSION, INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
NOTE 7 – RELATED PARTY TRANSACTIONS
On March 1, 2026, the Company entered into a consulting agreement with
Brent Nelson, CEO of Kepler Fusion Technologies, Inc., a wholly owned subsidiary of the Company. On March 1, 2026, the Board of Directors
appointed Brent Nelson as Executive Chairman of the Board of Directors of the Company. The agreement includes monthly compensation of
$
In addition, Brent Nelson, through Earth Sciences Fund I LLC (an entity owned by him), holds the Control Share, which carries super-voting rights sufficient to control stockholder matters, as transferred on February 27, 2026. This share does not represent common stock ownership but provides majority voting power.
As part of the reverse recapitalization (Note
10), an entity controlled by Richard C. Hawkins, the Company’s then Chief Executive Officer, sold the one share of Series A Preferred
Stock (the “Control Share”) for $
In conjunction with the terms of the Master
Sales Agreement, the Company entered into a separate consulting agreement with RH2 Equity Partners, LP (“RH2”). RH2 is an
entity controlled by Richard C. Hawkins, the Company’s Chief Administrative Officer and former Chief Executive Officer, and Robert
Hymers, the principal of Pinnacle. The terms of the agreement provide (i) a one-time cash fee of twenty thousand dollars ($20,000) upon
execution, (ii) to allow CMB Communications, LLC (“CMB”) and Pinnacle to retain certain outstanding notes in the aggregate
principal amount of approximately $500,000 subject to the Settlement and Exchange Agreements being executed contemporaneously with the
Master Sales Agreement, and (iii) to issue to RH2 one million (
Under the Settlement and Exchange Agreements described above, the Company agreed to issue (i) 450,000 authorized, validly issued, fully paid and non-assessable shares of the Company’s common stock to CMB Communications LLC in exchange for the conversion of $4,500 of indebtedness at a fixed conversion price of $0.01 per share, and (ii) 550,000 authorized, validly issued, fully paid and non-assessable shares of the Company’s common stock to Pinnacle Consulting Services, Inc. in exchange for the conversion of $5,500 of indebtedness at a fixed conversion price of $0.01 per share. The aggregate issuance of 1,000,000 common shares (“Settlement Shares”) is fixed and shall not be adjusted, increased, or decreased as a result of any reverse stock split, recapitalization, or similar corporate action. Within five (5) business days following the effectiveness of a reverse stock split, each applicable holder is required to deliver to the Company’s transfer agent a completed notice of conversion irrevocably electing to convert the applicable indebtedness into shares of Company common stock. Failure to deliver timely such notice constitutes a breach of the applicable Settlement and Exchange Agreement. Upon issuance of the applicable Settlement Shares, only the portion of the indebtedness converted under the applicable agreement shall be deemed fully satisfied, extinguished, cancelled, released and discharged. All remaining conversion shares associated with the broader debt conversion transaction are issuable by the Company, at its direction, to Earth Sciences Fund I, LLC, CMB Communications LLC, Pinnacle Consulting Services, Inc., and/or such other persons or entities as the Company or Earth Sciences Fund I, LLC may designate in writing pursuant to the transaction.
| 17 |
AMERICAN FUSION, INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
During the nine months ended September 30, 2026,
the Company issued
During the nine months ended September 30, 2026,
Beginning in April 2026, the
Beginning in June 2026, the Company initiated monthly payments of $2,000 for each of its two independent directors.
Stock-based compensation expense under the agreements
with certain of the Company’s officers and independent directors totaled $
NOTE 8 – DERIVATIVE LIABILITIES
During the nine months ended September 30, 2026,
the Company entered into Securities Purchase Agreements with third-party investors for the sale of equity units (“Units”).
Each unit consists of one share of restricted common stock, $
The fair value of applicable derivative liabilities and the change in fair value of derivative liabilities are as follows for the nine months ended September 30, 2026:
| Schedule of change in fair value of derivative liabilities | ||||
| Fair value – December 31, 2025 | $ | — | ||
| Units sold under Securities Purchase Agreements | ||||
| Change in fair value of derivative liabilities | ||||
| Fair value – September 30, 2026 | $ | |||
The fair value of the derivative liabilities related to the Securities Purchase Agreements is estimated using a Monte Carlo pricing model with the following assumptions:
| Schedule of assumptions | ||||
| Market value of common stock | $ | |||
| Protected price | $ | |||
| Expected volatility | ||||
| Risk-free interest rate | ||||
| Expected term (in years) |
| 18 |
AMERICAN FUSION, INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
NOTE 9 – WARRANTS
During the nine months ended September 30, 2026, the Company entered
into Securities Purchase Agreements with third- party investors for the sale of equity units (“Units”). Each unit consists
of one share of restricted common stock, $
The warrants contain customary proportional anti-dilution adjustments for stock splits, stock dividends, combinations, and reorganizations, together with a 4.99% beneficial ownership blocker. See Note 4.
The warrants qualify for equity accounting as they do not fall within the scope of ASC Topic 480, Distinguishing Liabilities from Equity. Both the common stock and the warrant meet the requirements of freestanding equity instruments within the scope of ASC Topic 505, Equity. The warrants were measured at their relative fair value at the time of issuance and classified as equity.
The Company valued the warrants included in the Securities Purchase Agreements using the Black-Scholes valuation model with the following assumptions:
| Schedule of warrants assumptions | ||||
| Market value of common stock | $ | |||
| Exercise price | $ | |||
| Risk free rate | ||||
| Expected life (yrs.) | ||||
| Volatility | ||||
NOTE 10 – REVERSE RECAPITALIZATION
Overview of Transaction
On December 16, 2025, the Company entered into a Master Sales Agreement (the “MSA”) among Manufacturing 360, LLC (“Seller”), Earth Sciences Fund I LLC (“ESF” or “Buyer”), RH2 Equity Partners, LP ("Consultant"), and the Company, and a Share Exchange Agreement (the “SEA”) between the Company and Brent Nelson, the sole shareholder of Kepler Fusion Technologies Inc. (“Kepler”). The agreements contemplate a reverse-merger share exchange transaction under which RNWF acquired 100% of the issued and outstanding equity interests of Kepler in exchange for newly issued shares of RNWF common stock.
Closing of the Transaction
The transfer of the Control Share from Manufacturing 360, LLC to Earth Sciences Fund I LLC occurred on February 27, 2026, at which point all closing conditions under the MSA and SEA were satisfied. Accordingly, the acquisition date under ASC 805 is February 27, 2026.
Accounting Treatment — Reverse Recapitalization
The transaction has been accounted for as a reverse recapitalization in accordance with ASC 805-40. Although AMFN is the legal acquirer, Kepler has been identified as the accounting acquirer for financial reporting purposes. The following factors support this determination: (1) Kepler’s former shareholders shall hold approximately 89.7% of the common voting rights in the combined entity; (2) Kepler’s designees will control the board of directors; (3) Kepler’s management comprises the senior management team of the combined entity; and (4) AMFN was a non-operating public shell with minimal assets at the acquisition date. See Note 2.
Key Terms of Transaction
The MSA provides for: (a) the sale of one share of Series A Preferred Stock (the “Control Share”) from Manufacturing 360, LLC to ESF for $1,000, which carries 60% voting power; (b) the simultaneous share exchange with Kepler; and (c) a consulting engagement with RH2 Equity Partners, LP. The Share Exchange Agreement contemplated the issuance of 240,000,000 shares of RNWF common stock, which are reflected as common stock issuable as of December 31, 2025, as retroactively adjusted, and were issued in April 2026 (see Note 4), and the issuance of additional shares to Kepler’s former shareholders. RH2 Equity Partners, LP will receive 1,000,000 shares of post-reverse-split common stock vesting quarterly over 36 months for extended advisory services. See Note 7.
| 19 |
AMERICAN FUSION, INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
NOTE 11 – COMMITMENTS AND CONTINGENCIES
Legal Matters
In the normal course of business, the Company may be subject to various legal proceedings and claims. Other than the litigation payable described in Note 5, management is not aware of any pending or threatened litigation that would have a material adverse effect on the Company’s financial position or results of operations.
Lease Commitments
In June 2026, the Company entered into three operating leases for its
factory and office locations. The commencement of the leases was delayed until after September 30, 2026; accordingly, no right-of-use
assets or lease liabilities were recognized as of September 30, 2026.
Risks and Uncertainties
The Company’s operations are subject to significant risks and uncertainties, including financial, operational, regulatory, and technological risks. The Company is in an early stage of development with limited operating history and may require substantial additional capital to fund its operations and the commercialization of its fusion energy technology.
NOTE 12 – SUBSEQUENT EVENTS
The Company has evaluated events and transactions occurring subsequent to September 30, 2026 and through the date these consolidated financial statements were issued for potential recognition or disclosure in the financial statements. No material subsequent events have been identified that would require recognition or disclosure in the accompanying financial statements, other than as may be disclosed herein.
On October 1, 2026, Pinnacle Consulting Services,
Inc. converted $
Series C Convertible Preferred Stock
Effective October 2, 2026, the Company filed a
Certificate of Designation designating
Each share of Series C Preferred Stock is convertible at the holder’s option into one share of common stock, subject to adjustment, beginning in the first full calendar quarter after the later of full vesting under the underlying agreement and the earlier of (i) the 20th trading day after the common stock begins trading on a national securities exchange or (ii) nine months after the original issue date. Conversions are limited to 30% of a holder’s original entitlement per quarter for three quarters, with the balance convertible in the fourth quarter, and are subject to a 4.99% beneficial ownership limitation (adjustable up to 9.99%). Holders vote with common stockholders on an as-converted basis, subject to the 4.99% limitation, and participate in common stock dividends on an as-converted basis. Series C Preferred Stock ranks senior to common stock upon liquidation, with holders entitled to the amount they would receive on an as-converted basis. Prior to the earlier of a national exchange listing or nine months after the original issue date, the Company may repurchase all or any portion of the Series C Preferred Stock for cash at 125% of face value. Holders have no right to require redemption or cash settlement. Conversion shares carry piggyback registration rights.
Management evaluated the Series C Preferred Stock under ASC 480, Distinguishing Liabilities from Equity, and ASC 815, Derivatives and Hedging. The Company concluded that the Series C Preferred Stock is appropriately classified within permanent equity.
| 20 |
AMERICAN FUSION, INC. AND SUBSIDIARY NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) |
On
On October 28, 2026, the Company issued CFI Capital
LLC a $
On October 29, 2026, the Company issued a third-party
investor a $
On November 2, 2026, the Company issued
| 21 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included elsewhere in this Quarterly Report on Form 10-Q and with the audited financial statements and related notes included in our Registration Statement on Form 10 filed with the Securities and Exchange Commission on March 16, 2026.
Overview
We are a development-stage advanced energy company focused on the development and commercialization of the Texatron™, a compact pulsed toroidal fusion reactor designed to provide clean, scalable baseload electricity. We operate under a Power-as-a-Service business model, intending to own and operate Texatron™ units and sell electricity under long-term contracts.
The Company completed its reverse recapitalization with Kepler Fusion Technologies Inc. on February 27, 2026. As a result of the transaction, Kepler Fusion became our wholly owned subsidiary, and we have fully integrated its assets, technology, and operations. While the Company generated limited revenue during the nine months ended September 30, 2026, we remain in the early stages of commercialization. Our activities during the nine months ended September 30, 2026 continued to focus on research and development, prototype testing (including advancement of the Version 9 prototype in Midland, Texas), intellectual property expansion, and preparation for commercial deployment.
Going Concern
The Company’s consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As of September 30, 2026, the Company has an accumulated deficit of approximately $10.8 million and has incurred recurring losses from operations. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Management believes that the planned capital-raising activities will provide the resources necessary to fund ongoing operations; however, no assurance can be given that these plans will be successful.
Recent Developments
On July 17, 2026, the Company received Certificate of Registration No. R54726 from the Texas Department of State Health Services (“DSHS”), authorizing the Company to receive, possess, acquire, transfer and use registered industrial radiation machines for research and development activities at its authorized testing location in Lubbock, Texas, subject to the terms and conditions of the registration and applicable Texas radiation control regulations. The registration designates Dr. John E. Brandenburg as the Company’s Radiation Safety Officer, remains effective through February 28, 2034, and covers twelve registered Texatron™ Fusion Engine™ research model classes ranging from 500 kW through 1 GW.
The Company believes receipt of the registration represents a significant operational milestone supporting the continued engineering, prototype testing, technical validation and research activities associated with its Texatron™ Fusion Engine™ development program. The registration authorizes research and development activities only and does not constitute certification of the Company’s technology or commercial performance. Following receipt of the registration, the Company commenced preparations for research testing activities at its authorized testing location.
On August 10, 2026, the Company entered into a Consulting Services Agreement with JRMS Consulting LLC, a Texas limited liability company (“JRMS”), of which John Gerdin is the Manager and through whom JRMS provides services, pursuant to which JRMS will provide board governance, strategic advisory, corporate finance, business development and capital markets advisory services to the Company. JRMS is not entitled to any commission, success fee or other compensation based upon the amount or completion of any financing or securities transaction. As compensation, JRMS will receive a cash retainer of $2,000 per month for board service and related governance responsibilities, and a contingent right to purchase, at $0.001 per share, a number of shares of the Company’s common stock equal to $240,000 divided by the closing price on the first trading day following the date on which the right vests (the “Vesting Date”). The right vests only if the Company completes a reverse or forward stock split, recapitalization, reclassification, exchange of equity securities or other transaction that materially alters its outstanding capitalization or per-share trading price, and JRMS remains continuously engaged through the completion of such transaction; otherwise, the right is forfeited. If the lowest closing price during the ten trading days preceding the first anniversary of the Vesting Date is less than the initial valuation price, the Company will issue additional shares so that the aggregate value of all shares issued, measured at that lower price, equals $240,000, with no reduction if the trading price increases. As a result, the number of shares ultimately issuable is not currently determinable, and a decline in the trading price of the Company’s common stock would increase the number of shares issuable and the resulting dilution to existing stockholders.
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On August 11, 2026, the Board of Directors (the “Board”) appointed Mr. Gerdin as a member of the Board, effective as of that date.
On September 30, 2026, the Company entered into exchange agreements (each, an “Exchange Agreement”) with twelve of its officers, directors, consultants and advisors (each, a “Holder”), each of whom held a contractual right to $240,000 of stock-based compensation payable in shares of the Company’s common stock (the “Existing Compensation Right”). Under each Exchange Agreement, the Holder agreed to exchange its Existing Compensation Right for up to 24,000 shares of the Company’s newly designated Series C Convertible Preferred Stock, par value $0.001 per share (the “Series C Preferred Stock”), and the Company may issue up to 288,000 shares of Series C Preferred Stock in the aggregate. In connection with the Exchange Agreements, on October 2, 2026, the Company filed the Certificate of Designation of Series C Convertible Preferred Stock (the “Certificate of Designation”) with the Secretary of State of the State of Texas, designating 500,000 of the Company's 100,000,000 authorized shares of preferred stock, par value $0.001 per share, as Series C Preferred Stock. The Certificate of Designation became effective upon filing. Each share of Series C Preferred Stock is convertible at the holder’s option into one share of common stock, subject to customary adjustments, beginning in the first full calendar quarter after the later of (i) the date the holder’s underlying compensation fully vests and (ii) the earlier of the 20th trading day after the common stock begins trading on a national securities exchange and nine months after the original issue date. Thereafter, a holder may convert up to 30% of its original entitlement in each of the first three calendar quarters and the balance in the fourth quarter, and unused quarterly allowances do not carry forward. The Series C Preferred Stock votes with the common stock as a single class on an as-converted basis, subject to a 4.99% voting limitation, and ranks senior to the common stock with respect to dividends and liquidation, with holders entitled in a liquidation to the amount they would have received upon conversion. Until the earlier of the listing of the common stock on a national securities exchange and nine months after the original issue date, the Company may, at its option, repurchase all or any portion of the Series C Preferred Stock for cash at $12.50 per share (125% of face value). Holders have no right to require redemption, and the Series C Preferred Stock is not subject to mandatory redemption or cash settlement. The foregoing descriptions of the Exchange Agreements and the Certificate of Designation do not purport to be complete and are qualified in their entirety by reference to the form of Exchange Agreement and the Certificate of Designation, which are filed as Exhibits 10.1 and 3.1, respectively, to the Company’s Current Report on Form 8-K filed with the SEC on October 6, 2026, and incorporated herein by reference.
Results of Operations
Three Months Ended September 30, 2026
The following table sets forth the unaudited results of our operations for the three months ended September 30:
| 2026 | ||||
| Revenue | $ | — | ||
| Cost of revenue | — | |||
| Gross margin | — | |||
| Operating expenses | 1,399,778 | |||
| Loss from operations | (1,399,778 | ) | ||
| Other expense | (36,298 | ) | ||
| Net loss | $ | (1,436,076 | ) | |
We did not generate revenue during the three months ended September 30, 2026.
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The following table sets forth the operating expenses for the three months ended September 30:
| 2026 | ||||
| Consulting fees | $ | 783,692 | ||
| Professional fees | 195,326 | |||
| Corporate communications and marketing | 191,672 | |||
| Research and development | 112,195 | |||
| Director fees | 16,000 | |||
| Other operating expenses | 100,893 | |||
| $ | 1,399,778 | |||
The following table sets forth the stock-based compensation expense included in the above operating expenses for the three months ended September 30:
| 2026 | ||||
| Consulting fees | $ | 611,360 | ||
| Professional fees | 60,493 | |||
| Corporate communications and marketing | 32,406 | |||
| Research and development | 60,493 | |||
| $ | 764,752 | |||
Consulting fees totaling $783,692 consist of advisory services agreements entered into for key management positions, third-party advisors and directors and which are primarily stock compensation based. Professional fees totaling $195,326 are comprised primarily of legal and accounting fees reflecting costs associated with additional public company filings. Corporate communications and marketing costs reflect activity related to investor relations, product awareness and trade shows. Research and development costs totaling $112,195 relate to engineering efforts towards development of the Company’s prototypes. Included in other operating expenses totaling $100,893 are travel and entertainment expenses totaling $48,112, IT expenses totaling $22,514 and office and related costs totaling $15,653.
Nine Months Ended September 30, 2026
The following table sets forth the unaudited results of our operations for the nine months ended September 30:
| 2026 | ||||
| Revenue | $ | 58,000 | ||
| Cost of revenue | 50,000 | |||
| Gross margin | 8,000 | |||
| Operating expenses | 2,733,032 | |||
| Loss from operations | (2,725,032 | ) | ||
| Other expense | (75,046 | ) | ||
| Net loss | $ | (2,800,078 | ) | |
As a result of the reverse recapitalization, results of operations for the nine months ended September 30, 2026 include the results of Kepler for the full period and the results of AMFN from February 27, 2026.
Our sales totaled $58,000 for the nine months ended September 30, 2026, primarily related to a sale to a new customer. The cost related to this sale totaled $50,000, resulting in a gross margin of $8,000. Our cost of sales consists of the cost of materials and distribution expenses.
The following table sets forth the operating expenses for the nine months ended September 30:
| 2026 | ||||
| Consulting fees | $ | 1,379,925 | ||
| Professional fees | 438,908 | |||
| Corporate communications and marketing | 419,175 | |||
| Research and development | 243,538 | |||
| Director fees | 20,000 | |||
| Other operating expenses | 231,486 | |||
| $ | 2,733,032 | |||
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The following table sets forth the stock-based compensation expense included in the above operating expenses for the nine months ended September 30:
| 2026 | ||||
| Consulting fees | $ | 980,784 | ||
| Professional fees | 159,589 | |||
| Corporate communications and marketing | 111,206 | |||
| Research and development | 155,835 | |||
| $ | 1,407,414 | |||
Consulting fees totaling $1,379,925 consist of advisory services agreements entered into for key management positions, third-party advisors and directors and which are primarily stock compensation based. Professional fees totaling $438,908 are comprised primarily of legal and accounting fees reflecting costs associated with the reverse recapitalization and additional public company filings. Professional fees in the 2026 period include $159,589 related to stock-based compensation agreements with legal counsel. Corporate communications and marketing costs reflect increased activity related to investor relations, product awareness and trade shows. Corporate communications and marketing costs in the 2026 period include $111,206 related to stock-based compensation agreements with various third-party providers. Research and development costs totaling $243,538 relate to acceleration of engineering efforts towards development of the Company’s prototypes and include $155,835 related to a stock-based compensation agreement. Included in other operating expenses totaling $231,486 are travel and entertainment expenses totaling $102,820, public company expenses totaling $51,740, IT expenses totaling $42,035 and office and related costs totaling $15,852.
Liquidity and Capital Resources
During the nine months ended September 30, 2026, our cash and cash equivalents increased by $70,633 reflecting cash used in operating activities of $1,256,872 and cash used in investing activities of $223,495, offset by cash provided from financing activities of $1,551,000. At September 30, 2026, the Company had a working capital deficit of $1,325,931 and cash on hand of $70,633.
Operating Activities
Cash flows used in operating activities totaled $1,256,872 for the nine months ended September 30, 2026. Cash flows used in operating activities primarily reflect the net loss of $2,800,078 partially offset by stock-based compensation of $1,407,414 and an increase in accounts payable and accrued expenses of $136,265.
Investing Activities
Cash flows used in investing activities of $223,495 reflect capitalized property and equipment of $44,169 and costs of $181,992 associated with the filing of new patents and website development, partially offset by cash of $2,666 acquired in connection with the reverse recapitalization.
Financing Activities
Cash flows provided by financing activities resulted from prepaid warrant funding totaling $1,071,000 and the sale of equity units totaling $480,000. The Company entered into Securities Purchase Agreements with third-party investors for the sale of equity units (“Units”). Each unit consists of one share of restricted common stock, $0.001 par value, and one warrant to purchase one share of common stock at an exercise price of $0.50 per share.
Historically, we have funded our operations through equity issuances and related-party loans. We continue to incur significant losses and negative cash flows from operations. We expect to require substantial additional capital to fund our research and development activities, prototype testing, intellectual property filings, and preparation for commercial deployment. Management is actively pursuing financing opportunities, including the previously announced $50 million capital raise.
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Critical Accounting Policies and Estimates
There have been no material changes to our critical accounting policies and estimates from those disclosed in our Registration Statement on Form 10.
Forward-Looking Statements
The discussion in this Item 2 contains forward-looking statements. See “Cautionary Note Regarding Forward-Looking Statements” at the beginning of this Quarterly Report for important information regarding such statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
As a smaller reporting company, we are not required to provide the information required by this Item.
We do not currently have any material exposure to market risk, including interest rate risk, foreign currency exchange rate risk, commodity price risk, or equity price risk. As we advance our research and development activities and begin to generate revenue or hold financial instruments in the future, we may become subject to such risks.
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Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer (who serves as our principal executive officer and principal financial officer), evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of September 30, 2026. Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Management has concluded that our disclosure controls and procedures were not effective as of September 30, 2026 due to a material weakness in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. The material weakness relates to insufficient accounting personnel with appropriate knowledge of a one-time complex accounting transaction. Management has commenced a remediation plan designed to address the material weakness, including engaging additional accounting resources, enhancing review procedures, and utilizing third-party technical accounting consultants when necessary. While these remediation efforts are ongoing, the material weakness cannot be considered remediated until the controls have operated effectively for a sufficient period of time and management has concluded, through testing, that the controls are operating effectively. The material weakness contributed to the identification of errors in the Company's previously issued interim financial statements that were corrected during the current reporting period. Although management concluded that the errors were not qualitatively material to previously issued financial statements and revision was appropriate, the control deficiency giving rise to the errors constituted a material weakness because it created a reasonable possibility that a material misstatement may not be prevented or detected on a timely basis.
Management’s Report on Internal Control over Financial Reporting
This Quarterly Report on Form 10-Q does not include a report of management’s assessment of the effectiveness of our internal control over financial reporting or an attestation report of our registered public accounting firm due to a transition period established by rules of the Securities and Exchange Commission for newly public companies. As a non-accelerated filer and smaller reporting company, we are not currently required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended September 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
There have been no material changes to the legal proceedings previously disclosed in Item 3 of our Registration Statement on Form 10 filed with the Securities and Exchange Commission on March 16, 2026 except for that disclosed below.
In April, 2026, the Company obtained an amended default judgment in the Superior Court of Washington, King County, rescinding certain legacy asset purchase agreements and declaring void ab initio the prior issuance of an aggregate 1,683,000,000 shares of the Company’s common stock. Pursuant to the order, the Company’s transfer agent was authorized and directed to cancel such shares and correct the Company’s stock ledger accordingly.
Item 1A. Risk Factors
There have been no material changes to the risk factors previously disclosed in our Registration Statement on Form 10 filed with the Securities and Exchange Commission on March 16, 2026.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
During the three months ended September 30, 2026, the Company sold units, each consisting of one share of restricted common stock and one warrant to purchase one share of common stock at an exercise price of $0.50 per share, under securities purchase agreements dated July 21, 2026 (2,500,000 units for $125,000), July 23, 2026 (600,000 units for $30,000) and August 1, 2026 (1,428,571 units for $100,000). The securities were sold in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended.
Item 3. Defaults upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
During the Company’s third quarter, no
director or officer
Unregistered Sales of Equity Securities. See Part II, Item 2, “Unregistered Sales of Equity Securities and Use of Proceeds,” above.
On July 17, 2026, the Company received Certificate of Registration No. R54726 from the Texas Department of State Health Services authorizing the Company’s registered industrial radiation machines for research and development activities at its authorized testing location in Lubbock, Texas, subject to the terms and conditions of the registration and applicable Texas radiation control regulations. The registration covers twelve registered Texatron™ Fusion Engine™ research model classes, designates the Company’s Radiation Safety Officer, and remains effective through February 28, 2034.
Management believes receipt of the registration represents a significant operational milestone in the continued development and testing of the Company’s Texatron™ Fusion Engine™ platform. The registration authorizes research and development activities only and should not be interpreted as certification of the Company’s technology or commercial performance.
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Item 6. Exhibits
| Incorporated by Reference |
Filed or Furnished | |||||||||
| Exhibit No. | Exhibit Description | Form | Date Filed | Number | Herewith | |||||
| 3.1 | Certificate of Designation of Series C Convertible Preferred Stock | 8-K | 10/06/2026 | 3.1 | ||||||
| 10.1 | Consulting Services Agreement, dated August 11, 2026, between American Fusion, Inc. and JRMS Consulting LLC | 8-K | 8/13/2026 | 10.1 | ||||||
| 10.2 | Form of Exchange Agreement
|
8-K | 10/06/2026 | 10.1 | ||||||
| 31.1 | Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | Filed | ||||||||
| 31.2 | Certification of Chief Financial Officer Pursuant to Exchange Act Rules 13a-14 and 15d-14, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | Filed | ||||||||
| 32.1 | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | Furnished | ||||||||
| 32.2 | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | Furnished | ||||||||
| 101.INS | Inline XBRL Instance Document | Filed | ||||||||
| 101.SCH | Inline XBRL Instance Schema | Filed | ||||||||
| 101.CAL | Inline XBRL Instance Calculation Linkbase | Filed | ||||||||
| 101.DEF | Inline XBRL Instance Definition Linkbase | Filed | ||||||||
| 101.LAB | Inline XBRL Instance Label Linkbase | Filed | ||||||||
| 101.PRE | Inline XBRL Instance Presentation Linkbase | Filed | ||||||||
| 104 | The Cover Page Interactive Data File, formatted in Inline XBRL (included in Exhibit 101). | Filed | ||||||||
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SIGNATURES
Pursuant to the requirements of the Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| AMERICAN FUSION, INC. | ||
| Date: November 13, 2026 | By: | /s/ Brent Nelson |
| Brent Nelson | ||
| Chief Executive Officer | ||
| (Principal Executive Officer and Principal Financial Officer) | ||
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