First Quarter 2026 Financial Highlights
Selected financial information for the three months ended March 31, 2026, compared to the corresponding period in 2025 and balances at December 31, 2025 (audited), is summarized below. The following highlights are derived from, and should be read in conjunction with, the Company's unaudited (reviewed) consolidated financial statements and Management's Discussion and Analysis included in the Form 10-Q.
Cash and cash equivalents of $99,594 at March 31, 2026, compared to $2,525 at December 31, 2025.
Cash used in operating activities of $415,931 for the quarter, offset by $513,000 of cash provided by financing activities.
Prepaid warrant facility funding of $513,000 during Q1 2026 under the Company's Master Prepaid Common Stock Purchase Warrant Agreement, with approximately $793,000 funded to date under the facility and approximately $2,207,000 remaining available under the up-to-$3,000,000 commitment, subject to the applicable terms and conditions.
Total operating expenses of $632,583 for Q1 2026, compared to $100,000 for Q1 2025. The increase was driven principally by professional fees, advertising and marketing expenses, patent activity, and other costs associated with operating as a public reporting company.
Net loss of $669,750 for Q1 2026 compared to a net loss of $100,000 for Q1 2025.
Total assets of $99,594 and total current liabilities of $1,209,664 at March 31, 2026.
Accumulated deficit of approximately $9.6 million at March 31, 2026, compared to approximately $20.4 million at December 31, 2025. The reduction reflects the reverse-recapitalization accounting treatment associated with the Kepler transaction.
Understanding the Accounting Treatment of the Kepler Transaction
Following the closing of the Kepler transaction, the Company believes it is useful to provide shareholders with a plain-language explanation of the applicable accounting treatment reflected in the Form 10-Q.
Reverse Recapitalization, Not a Traditional Acquisition
Under U.S. generally accepted accounting principles ("GAAP"), the transaction was evaluated under ASC 805-40, Business Combinations, Reverse Acquisitions. Although American Fusion is the legal acquirer, Kepler was identified as the accounting acquirer for financial reporting purposes.
The Company further determined that the transaction is properly accounted for as a reverse recapitalization rather than as a business combination, principally because the individual who controlled Kepler immediately prior to closing continues to control the combined Company through ownership of the Special 2020 Series A Preferred Control Share and related equity interests. Because there was no accounting change in control of the operating business, acquisition accounting at fair value does not apply.
What This Means for the Balance Sheet
In a reverse recapitalization, the consolidated financial statements are presented as a continuation of the accounting acquirer's historical financial statements. The legal acquirer's identifiable assets and liabilities are added at historical carrying values as of closing.
Accordingly, no goodwill, no newly created intangible assets, and no fair-value step-up are recorded in connection with the transaction.
As a result, the Texatron™ ...
