Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended September 30, 2025, for CSLM Acquisition Corp. (the "Company"), a Cayman Islands exempted company and special purpose acquisition company (SPAC). The filing serves as the final report for CSLM prior to the consummation of its business combination with Fusemachines Inc. on October 22, 2025. Following the merger, the combined entity operates as Fusemachines Inc. (ticker: FUSE). The Company had not commenced commercial operations during the reporting period; all activities related to the pursuit of the business combination.
Key Financial Metrics
| Metric | Q3 2025 (Three Months) | YTD 2025 (Nine Months) | YTD 2024 (Nine Months) |
|---|---|---|---|
| Net Loss | $(19,839,905) | $(22,105,674) | $437,633 (Income) |
| Operating Expenses | $1,132,659 | $1,914,687 | $1,411,507 |
| Trust Account Balance | $12,289,337 | $12,289,337 | $16,053,202 (Dec 31, 2024) |
| Cash (Operating) | $9,284 | $9,284 | $83,227 (Dec 31, 2024) |
| Total Liabilities | $43,910,706 | $43,910,706 | $10,819,675 (Dec 31, 2024) |
| Working Capital Deficit | $(37,206,142) | $(37,206,142) | $(4,056,679) (Dec 31, 2024) |
Note: The significant increase in liabilities and net loss in 2025 is primarily driven by the recognition of a Forward Purchase Agreement (FPA) liability and financing expenses related to the merger.
Material Changes vs. Prior Period
- Net Loss vs. Net Income: The Company reported a net loss of $19.8 million for Q3 2025, compared to a net loss of $0.1 million in Q3 2024. For the nine months ended September 30, 2025, the net loss was $22.1 million, a reversal from the $0.4 million net income reported in the same period in 2024.
- Non-Operating Losses: The 2025 results include a $17.57 million financing expense and a $1.27 million loss on the change in fair value of the Forward Purchase Agreement liability. Additionally, a $1.82 million loss on extinguishment of debt was recognized in the first quarter of 2025 due to the amendment of the working capital promissory note.
- Share Redemptions: Significant redemptions occurred in 2025. In July 2025, 371,545 shares were redeemed for $4.5 million. In connection with the merger approval in July 2025, an additional 99,187 shares were redeemed for $1.2 million. As of September 30, 2025, 901,955 Class A shares remained subject to redemption.
- Liabilities: Total current liabilities increased from $10.8 million at year-end 2024 to $43.9 million at September 30, 2025. This increase is largely attributable to the new FPA liability ($18.8 million) and FPA prepayment payable ($11.0 million).
Outlook, Risks, and Unusual Items
- Business Combination Consummated: On October 22, 2025, the Company completed its merger with Fusemachines Inc. Fusemachines shareholders received $200 million in new common stock valued at $10.00 per share. The combined entity is now Fusemachines Inc.
- Forward Purchase Agreement (FPA): In July 2025, the Company entered into an OTC Equity Prepaid Forward Transaction with Meteora Capital Partners. This resulted in a significant non-cash liability ($18.8 million) and a corresponding receivable ($11.0 million) recorded on the balance sheet. The liability is subject to fair value remeasurement.
- Going Concern: As of September 30, 2025, the Company had a working capital deficit of $37.2 million and minimal operating cash ($9,284). Management raised substantial doubt about the Company's ability to continue as a going concern absent the completion of the business combination, which has now occurred.
- Debt Extinguishment: The amendment of the working capital promissory note in February 2025 was treated as a debt extinguishment, resulting in a $1.8 million loss and a substantial premium recorded in additional paid-in capital.
- Unrecognized Compensation: The Company has contingent stock-based compensation obligations totaling approximately $1.96 million (Broker-Dealer, Consultant, and Advisor fees) that will be recognized upon the consummation of the business combination.
Investor Verification Checklist
- Merger Closing Details: Verify the final share count and ownership structure of the new Fusemachines Inc. post-merger, including the conversion of public shares, rights, and warrants.
- Forward Purchase Agreement Terms: Review the specific terms of the Meteora Capital Partners FPA, including the "Shortfall Warrants" and the reset price mechanism, to understand potential future dilution.
- Debt Conversion: Confirm the treatment of the Sponsor's convertible promissory notes ($3.665 million principal) and whether they were converted to equity or repaid in cash at closing.
- Trust Account Disbursement: Verify the final amount released from the Trust Account to fund the merger and pay deferred underwriting fees (noting the waiver agreement with BTIG).
- Post-Merger Liquidity: Assess the combined entity's cash position immediately following the merger to ensure sufficient working capital for Fusemachines' operations.