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Subsequent Events | 6 Months Ended
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Jun. 30, 2025
Subsequent Events |
Subsequent Events | NOTE 19 — Subsequent Events On June 18, 2025, the Company entered into an amendment to the loan and security agreement with Maximcash, pursuant to which it agreed to issue 200,000 shares of common stock to MaximCash in exchange for Maximcash’s consent to enter into a transaction with 340 Broadway Holdings LLC. The shares issued under the agreement are to be registered on an amendment to the Company’s Registration Statement on Form S-1 (File No. 333-284806). On July 3, 2025 the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with 340 Broadway Holdings, LLC (the “Lender”). Pursuant to the terms of the Securities Purchase Agreement, the Company issued a senior secured promissory note (the “Note”) to the Lender with a total principal amount of up to $1,500,000 and 2,095,531 shares (the “Origination Shares”) of the Company’s common stock to the Lender. The Note bears interest at an annual rate of 15% and matures on July 3, 2026 (the “Maturity Date”). The Lender has the right, but not the obligation, to convert, at any time prior to the Maturity Date, all or any portion of the outstanding Principal Amount, accrued interest and fees due and payable thereon into shares (the “Conversion Shares”) of the Company’s common stock. The Lender is prohibited from converting an amount that would be convertible into that number of Conversion Shares which would exceed the difference between the number of shares of the Company’s common stock beneficially owned by the Lender and 4.99% of the outstanding shares of the Company’s common stock. The Lender may waive such 4.99% limitation upon, at the election of the Lender, not less than seven day’s prior notice to the Company. The Company is also obligated to register the Conversion Shares on a new registration statement within the later of (i) 30 calendar days following the issuance of the Note, or (ii) 7 calendar days following the date the SEC declares the Existing Registration Statement effective. On August 25, 2025, the Company received a notice on behalf of Maximcash Solutions LLC as lender under that certain Business Loan and Security Agreement and related documents (the “Maximcash Loan Documents”) entered into on or about May 14, 2025. The notice stated that pursuant to the Maximcash Loan Documents, the Company was required to deposit additional shares of its common stock as pledged collateral due to the fact that the then-current stock price fell below $1.00 per share and to maintain the fair market value of the pledge shares at 200% of the current loan repayment amount. Accordingly, on August 29, 2025, the Company issued and pledged an additional 1,518,521 shares to Maximcash Fund Partnership LLC. As of September 15, 2025, the total amount of pledged shares equals 2,518,521. In September 2025, the Company granted restricted stock units (“RSUs”) under its Equity Incentive Plan to certain employees as part of its ongoing equity compensation program. The RSU awards cover an aggregate of 2,965,961 shares of the Company’s common stock and were granted in accordance with the terms of the equity incentive plan approved by the Company’s Board of Directors and shareholders. The RSUs are subject to time-based vesting conditions, generally requiring continued service over a three-year period. Each RSU represents a contingent right to receive one share of the Company’s common stock upon vesting. As previously disclosed, the Company entered into a Securities Purchase Agreement with 340 Broadway Holdings, LLC (“340 Broadway”) effective as of July 3, 2025, pursuant to the terms of which the Company issued a senior secured promissory note (the “Note”) to 340 Broadway with a total principal amount of up to $1,500,000 which bears interest at an annual rate of 15% and matures on July 3, 2026. 340 Broadway subsequently assigned a portion of the Note to Southern Point Capital Corporation (“SPCC”). On September 11, 2025, the Company received written notice (the “Default Notice”) from SPCC that stated that the Company’s failure to timely file its Quarterly Report on Form 10-Q for the period ended June 30, 2025 constituted an “Event of Default” under the Note. The Default Notice further asserted that (i) as a consequence of the Event of Default, interest on the Note accrues at a rate of 18% per annum, effective as of the date of issuance of the Note, or July 3, 2025; (ii) SPCC elected to require the Default Payment equal to 115% of the outstanding principal amount of the Note, plus accrued (default-rate) interest and all other amounts due; and (iii) the conversion discount underlying the Note of 20% was to be increased to 40%. Based on a principal amount and accrued interest outstanding on the Note of $929,950 as of September 11, 2025, the Default Payment would be approximately $1,068,639. The Company is providing the disclosure in the paragraph above relating to the Default Notice to comply with the Company’s filing requirements with the U.S. Securities and Exchange Commission but does not by virtue hereof admit that the Company agrees with any assertion contained in the Default Notice. We are reviewing the Default Notice and reserve the right to dispute. If the Company is unable to resolve the alleged Event of Default and other assertions in the Default Notice, it could have a material adverse effect on the Company’s liquidity, financial condition, and results of operations. On September 29, 2025, the Company entered into an second amendment to the loan and security agreement with Maximcash, pursuant to which it agreed to issue 400,000 additional pledge shares of common stock to MaximCash in exchange for for the two (2) months that the company elects to pay just interest instead of interest and principal, to be registered in accordance with Section 12(i) of the Stock Pledge Agreement as “initial Pledge Shares” as used in that Section, and subject to the other terms applicable to Pledge Shares including in the Stock Pledge Agreement. The shares issued under the agreement are to be registered on an amendment to the Company’s Registration Statement on Form S-1 (File No. 333-284806). On October 8, 2025, ScanTech AI Systems Inc. (the “Company”) entered into a Purchase Agreement, dated as of October 8, 2025 (the “ELOC Purchase Agreement”), with ARC Group International Ltd. (the “Investor”), for an equity line of credit. Under the ELOC Purchase Agreement, the Company has the right, but not the obligation, to direct the Investor to purchase up to $50 million (the “Commitment Amount”) in shares of the Company’s common stock, par value $0.0001 per share, subject to the terms and conditions contained in the ELOC Purchase Agreement (such shares to be purchased, the “Purchase Shares”). In addition, pursuant to the ELOC Purchase Agreement, the Investor agreed to purchase 1,403,863 shares (the “Subscription Shares”) of the Company’s common stock from the Company for a purchase price equal to $500,000 in the aggregate at a purchase price per share of $0.35616 per share. In consideration for the Investor’s execution and delivery of the ELOC Purchase Agreement, the Company agreed to issue 3,869,969 shares of the Company’s common stock to the Investor (the “Commitment Fee Shares”), having an aggregate value of $1,750,000. The Commitment Fee Shares were deemed fully earned on the date of the ELOC Purchase Agreement. Pursuant to the terms of the ELOC Purchase Agreement, the Company agreed to issue to the Investor in satisfaction of its obligations for the Commitment Fee Shares and Subscription Shares, 3,365,934 shares of common stock and 1,907,898 pre-funded warrants to purchase shares of common stock (the “Pre-Funded Warrants”). Each Pre-Funded Warrant has a nominal exercise price of $0.0001 per share, was pre-funded at issuance, and is exercisable at any time after issuance subject to a 4.99%/9.99% beneficial ownership limitation. On October 10, 2025, the Company received written notice (the “SPCC Notice”) from SPCC that asserted that the terms of the Purchase Agreement entered into by the Company and ARC Group International Ltd. on October 8, 2025 (the “Purchase Agreement”) violated the covenants of the 340 Broadway/SPCC Note, constitute an “Event of Default” under the 340 Broadway/SPCC Note, and trigger mandatory repayment of the 340 Broadway/SPCC Note under Clause 2.12 of the 340 Broadway/SPCC Note. The SPCC Notice further asserted that (i) the 340 Broadway/SPCC Note accrued default interest at a rate of 18% per annum beginning on September 11, 2025 and the accrued interest since September 11, 2025 totals $15,283, resulting in a current balance as of September 10, 2025 of $1,083,922; (ii) the mandatory repayment amount equals $1,625,883 as of October 10, 2025, and will continue to accrue interest at the 18% default rate; and (iii) the conversion discount underlying the 340 Broadway/SPCC Note of 20% was to be increased to 45% for all future conversions. On October 10, 2025, the Company received correspondence (the “Polar Notice”) from Polar that asserted that, because certain shares of the Company’s common stock issued under the Polar Subscription and Settlement Agreement had not been registered with the SEC by August 1, 2025, (i) the settlement is void and the Polar Note matured as of August 1, 2025, and (ii) the Polar Note is now in default and has been collecting interest at 18% since August 1, 2025. As previously disclosed, on April 29, 2025, the Company, ScanTech Identification Beam Systems, LLC (“SIBS”), and Polar Multi-Strategy Master Fund (“Polar”) entered into a subscription and settlement agreement (the “Polar Subscription and Settlement Agreement”) related to a promissory note dated December 31, 2024 with a principal amount of $1,250,000 (the “Polar Note”). On October 23, 2025, the Company received written notice (the “Silverback Notice”) from Silverback that asserted that the Company failed to make a quarterly interest rate payment as of October 22, 2025 and failed to notify Silverback five business days in advance that the Company would not make the quarterly interest rate payment. Silverback asserts that such violation constitutes an “Event of Default” under the Note and requires that the quarterly interest rate payment be capitalized into the principal amount of the Note. Further, as previously disclosed, the Company entered into a Securities Purchase Agreement with 340 Broadway, effective as of July 3, 2025, pursuant to the terms of which the Company issued a senior secured promissory note (the “340 Broadway/SPCC Note”) to 340 Broadway with a total principal amount of up to $1,500,000. Subsequently, 340 Broadway assigned a portion of the 340 Broadway/SPCC Note to Southern Point Capital Corporation (“SPCC”). Under the 340 Broadway/SPCC Note, an “Event of Default” includes: “The occurrence of an Event of Default under and as defined herein or any event of default (or similar term) under any other agreement evidencing indebtedness of at least $100,000.” Consequently, the alleged Event of Default under the Note may also constitute an Event of Default under the 340 Broadway/SPCC Note. An Event of Default under the 340 Broadway/SPCC Note could result in additional default interest at a rate of 18% per annum and a greater conversion discount underlying the 340 Broadway/SPCC Note for all future conversions of principal or interest under the 340 Broadway/SPCC Note into common stock. On November 24, 2025 (the “Effective Date”), the Company entered into Agreement and Amendment No. 1 to the Supplemental Agreement (the “Steele Agreement”) by and between the Company, Karl Brenza (for limited purposes), ScanTech Identification Beam Systems LLC (“SIBS”), Steele Interest SIBS LLC (“Steele I”), Steele Interest SIBS II LLC (“Steele II”), Steele Interest SIBS III LLC (“Steele III”), Steele Interest SIBS IV LLC (“Steele IV” and together with Steele I, Steele II, and Steele III, referred to as the “Steele Lenders”), and Steele Interest LLC (“Steele Interests” and, collectively with the Steele Lenders, “Steele”). The Steele Agreement amends the Supplemental Agreement (the “Supplemental Agreement”) entered into with the same parties on January 31, 2025 which related to the Loan Exchange & Release Agreement entered into on September 25, 2025. Pursuant to the Steele Agreement, on the Satisfaction Date (as defined below), the mutual release and waiver provided for in accordance with the Supplemental Agreement shall no longer be subject to Section G of the Supplemental Agreement which shall be deleted in its entirety. Section G of the Supplemental Agreement had originally conditioned the mutual release and waiver provided for by the Supplemental Agreement on the condition that Taylor Freres Americas LLP, TFGS VII Gestion LLC, Zachary Taylor, and their affiliates (the “TF Parties”) extend the date by which the business combination agreement, entered into by the Company, SIBS, and Mars Acquisition Corp., must close by January 2, 2025 and that the TF Parties and the Company release all claims against each other. In addition, pursuant to the Steele Agreement, up and until the Satisfaction Date, the Steele Lenders agree not to object to any settlement agreement entered into by and between the Company and the TF Parties so long as the settlement agreement does not involve any compensation paid to the TF Parties other than in the form of common stock of the Company and the amendment to the Company’s Registration Statement on Form S-1 (SEC File No. 333-284806) (the “Resale Registration Statement”) has been filed with the Securities and Exchange Commission (the “SEC”) by January 30, 2026. The “Satisfaction Date” is defined as the date on which each of the following shall have occurred: (i) the First Additional Shares (as defined in the Supplemental Agreement), the Second Additional Shares (as defined in the Supplemental Agreement), the Steele Shares (as defined below) and the Legal and Expense Shares (as defined below) have all been included to be registered in the Resale Registration Statement; (ii) the Resale Registration Statement shall have been filed with the SEC prior to 5:00 p.m. (Eastern) on January 30, 2026; (ii) the Company has issued and delivered, or caused to be issued and delivered, the First Additional Shares, the Second Additional Shares, the Steele Shares, the Legal and Expense Shares and the Exchange Agreement Shares (as defined below) to an account for the benefit of Steele at Continental Stock Transfer & Trust Company (“Continental”); and (d) the Resale Registration Statement has been declared effective by the SEC. Pursuant to the Agreement, the Company is also obligated to issue 1,200,000 shares consisting of the First Tranche Shares The Company and SIBS each acknowledged and agreed that they, on a joint and several basis, are justly indebted to, and currently owe and shall pay, the Steele Lenders a total of $550,000 as reimbursement of legal fees paid and/or previously incurred by the Steele Lenders in connection with certain loans made by the Steele Lenders to SIBS and the Exchange Agreement (as defined in the Supplemental Agreement) (collectively, the “Steele Legal Fees”). No later than 5:00 p.m. (Eastern) on November 25, 2025, the Company agreed to issue and deliver to Steele, at Continental, 2,500,000 shares of the Company’s common stock (the “Legal and Expense Shares”), to cover in full the obligation of the Company and SIBS to pay to Steele for (or reimburse Steele for the payment of) the Steele Legal Fees. In certain circumstances, the Company may be obligated to issue additional shares of its common stock if the amendment to the Resale Registration Statement is not filed by certain dates. Notwithstanding anything to the contrary in the Steele Agreement or the Supplemental Agreement, in no event will the Company be required to (a) issue shares of the Company’s common stock or securities convertible into or exercisable for the Company’s common stock (including the First Additional Shares, the Second Additional Shares, the Steele Shares, the Legal and Expense Shares, and the Exchange Agreement Shares) exceeding 19.99% of the Company’s common stock or exceeding 19.99% of the voting power outstanding either as of the Effective Date or the date immediately preceding the Effective Date, as determined in accordance with the relevant stock exchange rules, or (b) otherwise issue shares of the Company’s common stock or other securities which issuance would violate any rule of the SEC or the relevant stock exchange or trading market on which the Company’s common stock is then listed or quoted. The foregoing description of the Steele Agreement does not purport to be complete and is qualified in its entirety by reference to the full text of the Steele Agreement, a copy of which will be filed in a future filing with the SEC.

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- Definition The entire disclosure for significant events or transactions that occurred after the balance sheet date through the date the financial statements were issued or the date the financial statements were available to be issued. Examples include: the sale of a capital stock issue, purchase of a business, settlement of litigation, catastrophic loss, significant foreign exchange rate changes, loans to insiders or affiliates, and transactions not in the ordinary course of business. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 855 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/855/tableOfContent Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Topic 855 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 2 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org/1943274/2147483399/855-10-50-2 + Details
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