10-K

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM

10-K

(Mark One)

☒	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2023

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File

No. 001-41219

CSLM ACQUISITION CORP.

(Exact name of registrant as specified in its charter)

(Previously Consilium Acquisition Corp I, Ltd)


Cayman Islands		98-1602789
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

2400 E. Commercial Boulevard, Suite 900 Ft. Lauderdale, Florida		33308
(Address of Principal Executive Offices)		(Zip Code)

(954)

315-9380

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Units, each consisting of one Class A ordinary share, one right and one-half of one redeemable warrant	CSLMU	The Nasdaq Stock Market LLC
Class A ordinary shares, par value $0.0001 per share	CSLM	The Nasdaq Stock Market LLC
Redeemable warrants, each whole warrant exercisable for one Class A ordinary share at an exercise price of $11.50	CSLMW	The Nasdaq Stock Market LLC
Rights to acquire one-tenth of one Class A ordinary share	CSLMR	The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act:

None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

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 ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 ☒ No ☐

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 the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule

12b-2

of the Exchange Act.

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 has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to

§240.10D-1(b). ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule

12b-2

of the Exchange Act): Yes ☒ No ☐

The aggregate market value of the Registrant’s shares of Class A common stock outstanding, other than shares held by persons who may be deemed affiliates of the Registrant, computed as of June 30, 2023 (the last business day of the Registrant’s most recently completed second fiscal quarter), was approximately $50,060,242

As of

April 1

2024, there

were 9,515,936 of the Registrant’s Class A ordinary shares and 1 of the Registrant’s Class B ordinary shares, par value $0.0001 per share, issued and outstanding.

CSLM ACQUISITION CORP.

FORM

10-K

FOR THE YEAR ENDED DECEMBER 31, 2023

TABLE OF CONTENTS


	Page
PART I		3
Item 1. Business		3
Item 1.A.Risk Factors		25
Item 1.B.Unresolved Staff Comments		45
Item 1C. Cybersecurity		45
Item 2. Properties		45
Item 3. Legal Proceedings		46
Item 4. Mine Safety Disclosures		46
PART II		46
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		46
Item 6. [Reserved]		48
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations		48
Item 7.A.Quantitative and Qualitative Disclosure About Market Risk		52
Item 8. Financial Statements and Supplementary Data		52
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure		52
Item 9.A.Controls and Procedures		52
Item 9.B.Other Information		53
Item 9.C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspection		53
PART III		54
Item 10. Directors, Executive Officers and Corporate Governance		54
Item 11. Executive Compensation		62
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		62
Item 13. Certain Relationships and Related Transactions, and Director Independence		63
Item 14. Principal Accounting Fees and Services		64
PART IV		66
Item 15. Exhibits, Financial Statements Schedules		66
Item 16. Form 10-K Summary		68

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS AND RISK FACTOR SUMMARY

This Annual Report on Form

10-K

contains statements that are forward-looking and as such are not historical facts. This includes, without limitation, statements under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding our financial position, business strategy and the plans and objectives of management for future operations. These statements constitute projections, forecasts and forward- looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “will,” “would” and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements contained in this Annual Report on Form

10-K

are based on our current expectations and beliefs concerning future developments and their potential effects on us. There can be no assurance that future developments affecting us will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, the following risks, uncertainties and other factors:

•

our being a company with no operating history and no operating revenues;

•

our ability to select an appropriate target business or businesses;

•

our ability to complete our initial business combination;

•

our expectations around the performance of a prospective target business or businesses;

•

our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;

•

our directors and officers allocating their time to other businesses and potentially having conflicts of interest with or otherwise conflicting contractual obligations in connection with our business or in approving or consummating our initial business combination;

•

our potential ability to obtain additional financing to complete our initial business combination;

•

our pool of prospective target businesses;

•

our ability to consummate an initial business combination due to the uncertainty resulting from the

COVID-19

pandemic and other events (such as terrorist attacks, global hostilities, natural disasters or a significant outbreak of other infectious diseases);

•

the ability of our directors and officers to generate a number of potential business combination opportunities;

•

our public securities’ potential liquidity and trading;

•

the lack of a market for our securities;

•

the use of proceeds not held in the trust account (as defined below) or available to us from interest income on the trust account balance;

•

the trust account being subject to claims of third parties;

•

our financial performance; and

•

the other risks and uncertainties discussed in “Item 1A. Risk Factors,” elsewhere in this Annual Report on Form

10-K

and in our other filings with the Securities and Exchange Commission (the “SEC”).

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Should one or more of these risks or uncertainties materialize, or should any of our assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking 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 under applicable securities laws.

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PART I.

References in this Annual Report on Form

10-K

(this “Annual Report”) to “we,” “us,” “our” or the “Company” are to CSLM Acquisition Corp. (previously Consilium Acquisition Corp I, Ltd.), a blank check company incorporated as a Cayman Islands exempted company. References to our “management” or our “management team” refer to our officers and directors, and references to the “sponsor” refer to Consilium Acquisition Sponsor I LLC, a Cayman Islands limited liability company. References to our “initial shareholders” refer to our sponsor and each of our independent directors.

Item 1.

Business.

Overview

We are a blank check company, incorporated as a Cayman Islands exempted company for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization or similar business combination with one or more businesses or entities, which we refer to as our initial business combination. Our efforts to identify a potential initial business combination target focuses on companies operating in the “new economy sectors”, which we broadly define as those in technology, financial services, or media and that are located in Frontier Growth Markets. While we may pursue an acquisition or a business combination target in any business, industry or geography, we are focusing our search on a target with business operations or prospective operations in the technology, digital media,

e-commerce,

financial technology, or digital services sectors, which we refer to as the “new economy sectors”, across Frontier Growth Markets, located in the following regions: the Middle East North Africa (“MENA”),

Sub-Saharan

Africa (“SSA”), South Asia (“SA”) and Southeast Asia (“SEA”).

Although we may pursue an initial business combination opportunity in any country or sector, we intend to capitalize on our management team’s and board’s decades of experience to identify, acquire and manage a business or businesses that we believe can benefit from their long-established relationships and expertise of having operated a successful investment management business in these regions. Our management team and board have extensive experience in identifying and executing investments at the global scale successfully across a number of sectors, and countries less followed by traditional investment managers. We believe our management team and directors’ experience and local contacts are differentiated and will enable us to successfully identify and execute an initial business combination.

Our management team has more than 85 years of combined experience investing in Frontier Growth Markets. At various times some members of our management team have lived and worked in certain markets we are targeting, which has enabled them to create professional and social networks. These relationships span the financial, corporate, legal, and political sectors. We believe their relationships and local knowledge will give our company credibility with businesses within Frontier Growth Markets and help aid in thorough company vetting and due diligence processes. Our sponsor is an affiliate of Consilium Investment Management LLC (“CIM”), an

SEC-registered

investment management firm headquartered in Fort Lauderdale, Florida. Given our affiliation with CIM, we intend to capitalize on its global platform and investment expertise which we believe, together with the extensive experience of our management team, well positions our company to be the partner of choice for quality Frontier Growth companies seeking public sponsorship.

The registration statement for our initial public offering was declared effective on January 12, 2022. On January 18, 2022 we consummated our initial public offering of 18,975,000 units, (the “units” and, with respect to the Class A ordinary shares included in the units sold, the “ordinary shares”), including 2,475,000 units issued pursuant to the exercise of the underwriters’ over-allotment option in full, generating gross proceeds of $189,750,000. Substantially concurrently with the closing of our initial public offering, we consummated a private placement of 7,942,500 warrants (each, a “private placement warrant” and collectively, the “private placement warrants”), at a price of $1.00 per private placement warrant to our sponsor, generating gross proceeds of $7,942,500.

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Upon the closing of our initial public offering and the sale of the private placement warrants, $191,647,500 ($10.10 per unit) of the net proceeds of our initial public offering and certain of the proceeds of the sale of private placement warrants were placed in a trust account (“trust account”) with Continental Stock Transfer & Trust Company acting as trustee and invested only in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act of 1940, as amended (the “Investment Company Act”), with a maturity of 185 days or less or in any open-ended investment company that holds itself out as a money market fund meeting certain conditions of Rule

2a-7

of the Investment Company Act, as determined by us, until the earlier of: (i) the completion of a business combination and (ii) the distribution of the funds held in the trust account, as described below. Our management team has broad discretion with respect to the specific application of the net proceeds of our initial public offering and the sale of the private placement warrants, although substantially all of the net proceeds are intended to be applied generally toward consummating a business combination. Although CSLM has signed a Merger Agreement with a target company, as described below, there is no assurance that the we will be able to complete a business combination successfully. We must complete a business combination with one or more operating businesses or assets that together have an aggregate fair market value equal to at least 80% of the net assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the income earned on the trust account) at the time of the agreement to enter into a business combination. We will only complete a business combination if the post-transaction company owns or acquires 50% or more of the outstanding voting securities of the target or otherwise acquires an interest in the target business or assets sufficient for it not to be required to register as an investment company under the Investment Company Act.

We intend to effectuate our initial business combination using cash from the proceeds of our initial public offering and the sale of the private placement warrants, our shares, debt or a combination of cash, shares and debt. We have not engaged in, and we will not engage in, any operations until we complete a business combination, and we have not generated any operating revenues to date. Our only activities since inception through December 31, 2023 have been organizational activities and those necessary to prepare for our initial offering. We will not generate any operating revenues until after completion of our initial business combination, at the earliest. We will generate

non-operating

income in the form of interest income from the proceeds derived from our initial public offering. There has been no significant change in our financial or trading position and no material adverse change has occurred since the date of our audited financial statements. We expect to incur increased expenses as a result of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.

On July 13, 2023 as approved by its shareholders at an extraordinary general meeting held on June 29, 2023 (the “

Special Meeting

”), CSLM and its trustee, Continental Stock Transfer & Trust Company amended (the “

Amendment

”) the Investment Management Trust Agreement, dated as of January 12, 2022 (the “

Trust Agreement

”), by and between the Company and Continental Stock Transfer & Trust Company (the “

Trustee

”) and the Company, in order to allow the Company to extend the time to complete a business combination by fifteen (15) additional one (1) month periods until, October 18, 2024 (the “

Termination Date

”) by depositing into the Trust Account $70,000 for each

one-month

extension (each an “

Extension

”).

At the Special Meeting, the shareholders of the Company approved a special resolution to the Articles of Association to extend the time to consummate a business combination until October 18, 2024 and the Amendment in accordance with the Company’s Amended and Restated Memorandum of Association and Articles of Association (the “

Articles of Association

”).

In connection with the shareholders’ vote at the Special Meeting, 14,202,813 Class A shares were tendered for redemption.

On July 13, 2023, as was approved by the shareholders at the Special Meeting, the Company submitted a certificate of incorporation of name change to the Cayman Islands Registry of Companies to change our name from “Consilium Acquisition Corp I, LTD.” to “CSLM Acquisition Corp.” The name change of the Company to CSLM Acquisition Corp. was effected on Nasdaq at the open of trading on July 18, 2023 and continued trading under the same ticker symbol “CSLM”.

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We will provide our holders of the outstanding public shares (the “

public shareholders

”) with the opportunity to redeem all or a portion of their ordinary shares upon the completion of a business combination for a pro rata portion of the amount then in the trust account, plus any pro rata interest earned on the funds held in the trust account and not previously released to us to pay our tax obligations (which interest shall be net of taxes payable), calculated as of two business days prior to the completion of the business combination. If we have not completed our initial business combination by October 18, 2024, with the monthly Extensions, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem the ordinary shares, at a

per-share

price, payable in cash, equal to the aggregate amount then on deposit in the trust account including interest earned on the funds held in the trust account and not previously released to us to pay our tax obligations (less up to $100,000 of interest to pay dissolution expenses, which interest shall be net of taxes payable), divided by the number of then outstanding ordinary shares, which redemption will completely extinguish public shareholders rights as shareholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining shareholders and board of directors, dissolve and liquidate, subject in each case to our obligations under Cayman Islands law to provide for claims of creditors and the requirements of other applicable law. There will be no redemption rights or liquidating distributions with respect to our warrants, which will expire worthless if we fail to complete a business combination within the combination period.

Merger Agreement

On January 22, 2024, CSLM Acquisition Corp. (“

CSLM

” or “

Parent

”), a Cayman Islands exempted company (which

shall de-register from

the Register of Companies in the Cayman Islands by way of continuation out of the Cayman Islands and into the State of Delaware so as to migrate to and domesticate as a Delaware corporation prior to the Closing Date (as defined below)), entered into a Merger Agreement, by and among CSLM, CSLM Merger Sub Inc., a Delaware corporation and a direct, wholly owned subsidiary of CSLM (“

Merger Sub

”), and Fusemachines Inc., a Delaware corporation (“

Fusemachines

” or the “

Company

”) (as it may be amended and/or restated from time to time, the “

Merger Agreement

”). Capitalized terms used in this Current Report on

Form 8-K but

not otherwise defined herein have the meanings given to them in the Merger Agreement.

Fusemachines is a global provider of enterprise Artificial Intelligence (“

”) products and solutions on a mission to democratize AI, by providing high quality AI education in underserved communities and helping organizations achieve their full potential with AI.

The board of directors of CSLM has unanimously approved and declared advisable the Merger Agreement and the Business Combination (as defined below) and resolved to recommend approval of the Merger Agreement and related matters by CSLM’s shareholders. The Merger is expected to be consummated after obtaining the required approval by the shareholders of CLSM and Fusemachines and the satisfaction of certain other customary closing conditions.

The following description of the Merger Agreement is qualified in its entirety by reference to the full text of the Merger Agreement, a copy of which is filed as Exhibit 2.1 to the Current Report on

Form 8-K

filed January 23, 2024, and incorporated herein by reference.

The Merger

The Merger Agreement provides that, among other things and upon the terms and subject to the conditions thereof, following the Domestication (as defined below) Merger Sub will merge with and into Fusemachines (the “

Merger

”), after which Fusemachines will be the surviving corporation (the “

Surviving Corporation

”) and a wholly-owned subsidiary of CSLM. The transactions contemplated by the Merger Agreement together with the other related agreements are referred to herein as the “

Business Combination

.” The time of the closing of the Business Combination is referred to herein as the “

Closing

.” The date of the Closing is referred to herein as the “

Closing Date

.” In connection with the Business Combination, CSLM will be renamed “Fusemachines, Inc.” (“

Pubco

”). The Merger will become effective upon the filing of the certificate of merger with the Secretary of State of the State of Delaware or at such later time as is agreed to by the parties to the Merger Agreement and specified in the articles of merger (the “

Effective Time

”).

The Domestication

At least one Business Day prior to the date of the Effective Time and on the terms and subject to the conditions of the Merger Agreement, CSLM

shall de-register from

the Register of Companies in the Cayman Islands by way of continuation out of the Cayman Islands and into the State of Delaware so as to migrate to and domesticate as a Delaware corporation in accordance with Parent’s organizational documents, Section 388 of the Delaware General Corporation Law, as amended, and Part XII of the Companies Act (Revised) of the Cayman Islands (the “

Domestication

”).

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In connection with the Domestication, (x) prior to the Domestication, Consilium Acquisition Sponsor I, LLC, a Cayman Islands limited liability company and the Sponsor of CSLM (“

Sponsor

”), will surrender to CSLM for no consideration the sole issued and outstanding Class B ordinary share of CSLM, par value $0.0001 per share, and (y) at the effective time of the Domestication, (i) each then issued and outstanding Class A ordinary share of CSLM, par value $0.0001 per share, after giving effect to redemptions occurring prior to the Domestication, will convert automatically, on

a one-for-one basis,

into one share of common stock, par value $0.0001 per share, of Parent (each a “

Parent Common Share

”), (ii) each then issued and outstanding Parent Class B Ordinary Share shall convert automatically into one Parent Common Share; (iii) each then issued and outstanding warrant of CSLM will become exercisable for one Parent Common Share (“

Domesticated Parent Warrant

”), pursuant to the Warrant Agreement, dated as of January 12, 2022, by and between CSLM and Continental Stock Transfer & Trust Company, as warrant agent, (iv) each then issued and outstanding Parent Right shall convert automatically into one right to

acquire one-tenth (1/10)

of one Parent Common Share upon the consummation of Parent’s initial business combination, pursuant to the terms of the Parent Rights Agreement (“

Domesticated Parent Right

”); and (v) each then issued and outstanding unit of CSLM shall separate and convert automatically into one Parent Common Share, one right to

acquire one-tenth of

a Parent Common Share,

and one-half of

one Domesticated Parent Warrant.

Consideration and Structure

Under the Merger Agreement, the Fusemachines equityholders that hold shares of Company Common Stock (as defined below), shares of Company Preferred Stock (as defined below), Company Options (as defined below), or Company Convertible Notes (as defined below) will receive an aggregate of the number of Parent Common Shares equal to the quotient obtained by dividing (a) $200,000,000, by (b) US$10.00 (the “

Aggregate Merger Consideration

”) in exchange for all of Fusemachines’s Aggregate Fully Diluted Company Common Stock, as defined below.

The Merger Agreement also provides, among other things, Parent, Sameer Maskey, the founder and Chief Executive Officer of the Company, and the Company are entering into and delivering a Founder Transaction Bonus Agreement, (the “

Founder Transaction Bonus Agreement

”), pursuant to which Mr. Maskey will be entitled to a transaction completion bonus upon the Closing upon the terms set forth in the Founder Transaction Bonus Agreement.

Sponsor Convertible Notes

Within five (5) Business Days following the execution of the Merger Agreement, and as a condition to Closing, an affiliate of Sponsor will provide to the Company loans in an aggregate amount of $6.5 million in the form of convertible promissory notes, of which $4.5 million shall be used by the Company for general corporate purposes, including debt repayment, and $2.0 million shall be used by the Company to repurchase certain Company shares from Mr. Maskey (collectively, the “

Sponsor Convertible Notes

”), and contemporaneously therewith, Mr. Maskey shall enter into a pledge agreement with the Sponsor and the Company (the “

Pledge Agreement

”), pursuant to which Mr. Maskey shall pledge certain shares of Company Common Stock held by him to secure the Company’s obligations under the Sponsor Convertible Notes. The Sponsor Convertible Notes (i) may convert into shares of Preferred Stock of the Company prior to the Closing of Merger at the option of the Sponsor in the event of a Qualified Financing, as defined in the Sponsor Convertible Notes, or (ii) automatically convert into shares of Common Stock of the Company prior to the Closing of the Merger, at the Conversion Price set forth and defined in the Sponsor Convertible Notes, upon receipt of five days’ notice the date of the Closing.

The PIPE Investment

In connection with the transactions contemplated by the Merger Agreement, Parent will enter into subscription agreements, in the form and substance as reasonably agreed upon by Parent and the Company (the “

Subscription Agreements

”), with certain investors providing for aggregate investments in Parent Common Shares in a private placement on or prior to the Closing of an amount as of immediately prior to the Effective Time, the sum of (i)

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$8,240,000, (ii) the outstanding balance under the Amended and Restated Promissory Note of up to $2 Million, dated as of January 18, 2024, issued by Parent in favor of Sponsor to fund Parent’s working capital requirements, as it may be from time to time amended or supplemented, and (iii) up to $3,000,000, subject to reduction up to zero as follows:

(a) a dollar-for-dollar reduction

for Parent Closing Excess Cash of up to $1,000,000, and (b) a 20% reduction for every dollar of Parent Closing Excess Cash in excess of $1,000,000 (the “

Contingent PIPE Investment Amount

”), if any (the “

PIPE Investment Amount

”) at $10.00 per Parent Common Share (the “

PIPE Investment

”). “

Parent Closing Excess Cash

” means (i) the amount of cash available in the Trust Account immediately prior to the Effective Time after deducting the amount required to satisfy the Parent Redemption Amount plus (ii) the proceeds of any equity investments (including any private investments in public equity) or debt financing facilities that are or will be actually received by Parent prior to or substantially concurrently with the Closing, but excluding the PIPE Investment Amount.

Treatment of Fusemachines Securities

Pursuant to the Merger Agreement, at the Effective Time, each option (whether vested or unvested) (each, a “

Company Option

”) to purchase shares of common stock of the Company

(“Company Common Stock

”) that is outstanding as of immediately prior to the Effective Time will be converted into an option to acquire, subject to substantially the same terms and conditions as were applicable under such Company Option (including expiration date, vesting conditions, and exercise provisions), the number of Parent Common Shares (rounded down to the nearest whole share), determined by multiplying the number of shares of Company Common Stock subject to such Company Option as of immediately prior to the Effective Time by the Conversion Ratio (as defined below), at an exercise price per Parent Common Share (rounded up to the nearest whole cent) equal to (A) the exercise price per share of Company Common Stock of such Company Option divided by (B) the Conversion Ratio (a “

Converted Stock Option

”). At the Effective Time, Parent will assume all obligations of the Company with respect to each Converted Stock Option.

Pursuant to the Merger Agreement, effective immediately prior to the Effective Time, each of the Company’s issued and outstanding convertible promissory notes (the “Company Convertible Notes”) shall be (i) treated in accordance with the terms of the relevant agreement governing such Company Convertible Notes, and (ii) converted into Company Preferred Stock or Company Common Stock, as applicable.

The “

Conversion Ratio

” is the quotient obtained by dividing (i) the number of Parent Common Shares constituting the Aggregate Merger Consideration, by (ii) the “Aggregate Fully Diluted Company Common Stock”, which means: the sum, without duplication, of (a) all shares of Company Common Stock that are issued and outstanding immediately prior to the Effective Time; plus (b) the aggregate number of shares of Company Common Stock issuable upon conversion of all shares of Company Preferred Stock that are issued and outstanding immediately prior to the Effective Time; plus (c) the aggregate number of shares of Company Common Stock issuable upon full exercise of all Company Options (whether vested or unvested); plus (d) the aggregate number of shares of Company Common Stock issuable upon full conversion of all Company Convertible Notes that are outstanding immediately prior to the Effective Time; plus (e) the aggregate number of shares of Company Common Stock issuable upon full conversion, exercise or exchange of any other securities of the Company outstanding immediately prior to the Effective Time directly or indirectly convertible into or exchangeable or exercisable for shares of Company Common Stock.

The Pubco Bylaws will provide that the Parent Common Shares issued as consideration pursuant to the Merger will be subject to

a lock-up for

a period of the shorter period of (i) one year after the Closing Date and (ii) subsequent to the Closing Date, (x) if the last reported sale price of Parent Common Shares equals or exceeds $12.00 per share (as adjusted for

share sub-divisions, share

dividends, rights issuances, reorganizations, recapitalizations and other similar transactions) for any 20 trading days within

any 30-trading day

period commencing at least 120 days after the Closing Date or (y) the date following the Closing Date on which the PubCo completes a liquidation, merger, share exchange, reorganization or other similar transaction that results in all of the PubCo’s shareholders having the right to exchange their Parent Common Shares for cash, securities or other property. The board of directors of the PubCo may, in its sole discretion, determine to waive, amend or repeal

such lock-up obligations,

whether in whole or in part.

The Sponsor Support Agreement provides that the Parent Common Shares owned by the Sponsor shall be subject to

a “lock-up” of

the same duration and terms as those set forth in the Pubco Bylaws with respect to Parent Common Shares issued as consideration in the Merger.

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Representations, Warranties and Covenants

The parties to the Merger Agreement have made customary representations, warranties and covenants in the Merger Agreement, including, among others, covenants with respect to the conduct of the Company and CSLM and their respective subsidiaries prior to the Closing, including the Company’s covenant to deliver to CSLM its audited financial statements for the twelve month periods ended December 31, 2023 and 2022 (the “

Financial Statements

”) for inclusion in the registration statement on

Form S-4 to

be filed by CSLM in connection with the Business Combination (the “

Registration Statement

”), and that such Financial Statements have been prepared in conformity with U.S. GAAP applied on a consistent basis and in accordance with the requirements of the Public Company Accounting Oversight Board for public companies. The Company has covenanted to provide the Financial Statements no later than February 29, 2024, or incur delay fees in the amount equal to $35,000 for the

first one-month delay

to March 31,

2024 (pro-rated for

a partial month), $50,000 for the

second one-month delay

to April 30, 2024 and thereafter $70,000 for each

subsequent one-month delay (pro-rated for

any partial month).

CSLM and the Company may also mutually agree that CSLM enter into and consummate subscription agreements with investors to purchase securities of CSLM in connection with the PIPE Investment on terms mutually agreeable to CSLM and the Company.

Conditions to Closing

The Closing is subject to certain customary conditions, including, among other things: (i) approval of the Business Combination and related agreements and transactions by the respective shareholders of CSLM and the Company; (ii) the effectiveness of the Registration Statement; (iii) the Parent Common Shares being conditionally approved for listing on the Nasdaq Stock Market (“

Nasdaq

”) or another national stock exchange; (iv) the Domestication shall have been consummated on the day that is at least one Business Day prior to the Closing Date (v) delivery of the respective certificates, authorizations and certificates of good standing from the Company, CSLM and Merger Sub; (vi) the Company shall have obtained each Company Consent; (vii) Company shall have delivered to Parent executed employment agreements with certain employees; (viii) the size and composition of the post-Closing Parent Board of Directors shall have been appointed; (ix) the PIPE Investment shall have been consummated as of immediately prior to the Closing with gross proceeds in an amount not less than the PIPE Investment Amount; and (x) there shall not have occurred an Event of Default under a Sponsor Convertible Note, as defined in the applicable Sponsor Convertible Note.

Termination without Default

The Merger Agreement may be terminated by CSLM and the Company under certain circumstances, including, among others, (i) by mutual written agreement of CSLM and the Company, (ii) by either CSLM or the Company if (1) the Closing has not occurred on or before the latest of (A) October 18, 2024, and (B) such date as approved in accordance with the Parent Articles to extend such date, the last date for Parent to consummate a Business Combination pursuant to such extensions (the “

Outside Date

”) and (2) the material breach or violation of any representation, warranty or covenant under the Merger Agreement by the party seeking to terminate the Merger Agreement is not the cause of, or has not resulted in, the failure of the Closing to occur by the Outside Date, (iii) in the event an Authority shall have issued an Order or enacted a Law (as such terms are defined in the Merger Agreement), having the effect of prohibiting the Merger or making the Merger illegal, which Order or Law is final

and non-appealable, CSLM

or the Company shall have the right, at its sole option, to terminate this Agreement without liability to the other party; provided, however, that the right to terminate the Merger Agreement pursuant to this Section shall not be available to the Company or CSLM if the failure by such party or its Affiliates to comply with any provision of the Merger Agreement has been a substantial cause of, or substantially resulted in, such action by such Authority, (iv)in the event that the Parent Shareholder Meeting has been held (including any adjournment thereof) and has concluded, and the holders of Parent Common Shares have duly voted, and the Parent Shareholder Approval was not obtained, CSLM or the Company shall have the right, at its sole option, to terminate the Merger Agreement within five (5) Business Days thereafter; and (v) in the event an Event of Default (as defined in the applicable Sponsor Convertible Note) has occurred under a Sponsor Convertible Note, then CSLM or the Company, as applicable, shall have the right, at its sole option, to terminate the Merger Agreement without liability to the other party at any time; provided, however, that such termination by the Company for an Event of Default pursuant to Section 3(g) of such Sponsor Convertible Note shall be deemed a Parent Termination for Cause. Such right to terminate the Merger Agreement may be exercised by CSLM or the Company, as the case may be, giving written notice to the other at any time prior to the Outside Date.

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Termination Upon Default

CSLM may terminate the Merger Agreement if (i) at any time prior to the Closing Date if (x) the Company shall have breached any representation, warranty, agreement or covenant contained herein to be performed on or prior to the Closing Date, which has rendered or would reasonably be expected to render the satisfaction of certain conditions impossible; (y) such breach cannot be cured or is not cured by the earlier of the Outside Date and thirty (30) days following receipt by the Company of a written notice from CSLM describing in reasonable detail the nature of such breach, provided, however, that CSLM is not then in material breach of any of its representations, warranties, covenants or agreements contained in the Merger Agreement; or (ii) at any time after the Company Shareholder Written Consent Deadline if the Company has not previously received the Company Shareholder Approval. For the avoidance of doubt, CSLM shall also have the right to terminate the Merger Agreement if (A) such conditions have been satisfied on or prior to the date of such termination (other than those conditions that, by their nature, cannot be satisfied until the Closing Date, but, which conditions would be satisfied if the Closing Date were the date of such termination), (B) CSLM and Merger Sub are willing, ready and able to effect the Closing, and (C) the Company fails to effect the Closing within two (2) Business Days following the written request of CSLM to proceed with the Closing.

The Company may terminate the Merger Agreement (i) at any time prior to the Closing Date if (x) CSLM shall have breached any of its covenants, agreements, representations, and warranties contained herein to be performed on or prior to the Closing Date, which has rendered or reasonably would render the satisfaction of certain conditions impossible; and (y) such breach cannot be cured or is not cured by the earlier of the Outside Date and thirty (30) days following receipt by CSLM of a written notice from the Company describing in reasonable detail the nature of such breach, provided, however, that the Company is not then in material breach of any of its representations, warranties, covenants or agreements contained in the Merger Agreement. For the avoidance of doubt, the Company shall also have the right to terminate if (A) such conditions have been satisfied on or prior to the date of such termination (other than those conditions that, by their nature, cannot be satisfied until the Closing Date, but, which conditions would be satisfied if the Closing Date were the date of such termination), (B) the Company is willing, ready and able to effect the Closing, and (C) CSLM and Merger Sub fail to effect the Closing within two (2) Business Days following the written request of the Company to proceed with the Closing.

In the event that the Merger Agreement is validly terminated by CSLM pursuant to Section 10.2(a) of the Merger Agreement, and at the time of any such termination, the Company is not permitted to terminate the Merger Agreement pursuant to Section 10.2(b) thereof, (such termination, a “

Parent Termination for Cause

”), then the Company shall pay to CSLM a termination fee in the amount equal to $1,000,000 (which fee shall be payable within two (2) Business Days after such termination).

In the event that the Merger Agreement is validly terminated by the Company pursuant to Section 10.2(b) of the Merger Agreement, and at the time of any such termination, Parent is not permitted to terminate the Merger Agreement pursuant to Section 10.2(a), then Sponsor and CSLM shall pay to (and Sponsor and CSLM shall be jointly and severally liable for) the Company a termination fee in the amount equal to $1,000,000 (which fee shall be payable within two (2) Business Days after such termination).

Governance

The executive management of the Company is expected to serve as the executive management of Pubco following the Closing. Pursuant to the Merger Agreement, Pubco’s board of directors will consist of five members, with the Sponsor having the right to designate one independent director and the remaining directors shall be designated by the Company. At least a majority of the board of directors shall qualify as independent directors under the Securities Act and Nasdaq or Alternate Exchange rules, as applicable. Pursuant to the Parent Certificate of Incorporation, the Parent’s Board of Directors will be a classified board with three classes of directors, with (I) one class of directors, the Class I Directors, initially serving until the first annual meeting of PubCo shareholders occurring after the Closing, such term effective from the Closing (but any subsequent Class I Directors serving a three (3) year term), (II) a second class of directors, the Class II Directors, initially serving until the second annual meeting of PubCo shareholders occurring after the Closing, such term effective from the Closing (but any subsequent Class II Directors serving a three (3) year term), and (III) a third class of directors, the Class III Directors, serving until the third annual meeting of PubCo shareholders occurring after the Closing, such term effective from the Closing (and with any subsequent Class III Directors serving a three (3) year term). The director designated by the Sponsor shall be a Class III Director.

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The foregoing description of the Merger Agreement and the Business Combination does not purport to be complete and is qualified in its entirety by the terms and conditions of the Merger Agreement, a copy of which is filed hereto as Exhibit 2.1 and is incorporated herein by reference. The Merger Agreement contains representations, warranties and covenants that the parties to the Merger Agreement made to each other as of the date of the Merger Agreement or other specific dates. The assertions embodied in those representations, warranties and covenants were made for purposes of the contract among the parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating the Merger Agreement. The Merger Agreement has been attached to provide investors with information regarding its terms and is not intended to provide any other factual information about CSLM, the Company or any other party to the Merger Agreement. In particular, the representations, warranties, covenants and agreements contained in the Merger Agreement, which were made only for purposes of the Merger Agreement and as of specific dates, were solely for the benefit of the parties to the Merger Agreement, may be subject to limitations agreed upon by the contracting parties (including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts) and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors and reports and documents filed with the SEC. Investors should not rely on the representations, warranties, covenants and agreements, or any descriptions thereof, as characterizations of the actual state of facts or condition of any party to the Merger Agreement. In addition, the representations, warranties, covenants and agreements and other terms of the Merger Agreement may be subject to subsequent waiver or modification. Moreover, information concerning the subject matter of the representations and warranties and other terms may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in CSLM’s public disclosures.

Timeframes for Filing and Closing

CSLM expects to file the Registration Statement as promptly as practicable after the date of the Merger Agreement. The Closing is expected to occur following the fulfillment or waiver of the closing conditions set forth in the Merger Agreement.

Certain Related Agreements

Sponsor Support Agreement

In connection with the execution of the Merger Agreement, CSLM entered into a support agreement (the “

Sponsor Support Agreement

”) with the Sponsor and the Company, pursuant to which the Sponsor agreed to, among other things, (i) vote all of its shares in favor of the various proposals related to the Business Combination and the Merger Agreement and any other matters necessary or reasonably requested by CSLM for consummation of the Business Combination, (ii) vote against any alternative proposal or alternative transaction or any proposal relating to an alternative proposal or alternative transaction, (iii) vote against any merger agreement or merger, consolidation, combination, sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding up of or by CSLM (other than the Merger Agreement and transactions relating to the Merger), (iv) vote against any change in the business, management or board of directors of CSLM (other than in connection with the Merger), (v) vote against any proposal that would impede the Merger or that would result in a breach with respect to any obligation or agreement of CSLM, Merger Sub or the Sponsor under the Merger Agreement or the Parent Support Agreement, and (vi) vote in favor of any proposal to extend the period of time CSLM is afforded under its organizational documents to consummate an initial business combination, in each case, subject to the terms and conditions of the Parent Support Agreement. The Sponsor agrees that, effective as of and conditioned upon the Closing, it shall irrevocably forfeit and surrender to Parent 3,971,250 Parent Private Warrants purchased in connection with the initial public offering.

In addition, the Sponsor agreed to be bound by exclusivity and publicity sections of the Merger Agreement.

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The foregoing description of the Parent Support Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Parent Support Agreement, a copy of which is filed as Exhibit 10.1 to the Current Report on Form

8-K

filed on January 23, 2024, and incorporated by reference herein.

Company Support Agreement

In connection with the execution of the Merger Agreement, CSLM entered into a support agreement (the “

Company Support Agreement

”) with the Company and certain shareholders of the Company (the “

Company Supporting Shareholders

”) pursuant to which the Company Supporting Shareholders agreed to, among other things, (i) vote to adopt and approve, or to execute a written consent with respect to the approval, within five Business Days following the date of the effectiveness of the Registration Statement, the Merger Agreement and all other documents and transactions contemplated thereby, (ii) vote against any alternative proposal or alternative transaction or any proposal relating to an alternative proposal or alternative transaction, (iii) vote against any merger agreement or merger, consolidation, or combination sale of substantial assets, reorganization, recapitalization, dissolution, liquidation or winding up of or by the Company (other than the Merger Agreement and the transactions relating to the Merger), (iv) vote against any change in the business (to the extent in violation of the Merger Agreement), management or board of directors of the Company (other than in connection with the Merger), and (v) vote against any proposal that would impede the Merger or that would result in a breach with respect to any obligation or agreement of the Company or the Company Supporting Shareholders under the Merger Agreement or the Company Support Agreement, in each case, subject to the terms and conditions of the Company Support Agreement.

In addition, the Company Supporting Shareholders agreed to be bound by exclusivity and publicity sections of the Merger Agreement.

The foregoing description of the Company Support Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Company Support Agreement, a copy of which is filed as Exhibit 10.2 to the Current Report on Form

8-K

filed on January 23, 2024, and incorporated by reference herein.

Registration Rights Agreement

The Merger Agreement contemplates that, at the Closing, Pubco, the Sponsor and certain former shareholders of the Company (collectively, the “

Holders

”) will enter into a registration rights agreement (the “

Registration Rights Agreement

”), pursuant to which Pubco will agree to register for resale, pursuant to Rule 415 under the Securities Act, certain Parent Common Shares and Domesticated Parent Warrants that are held by the Holders from time to time.

The Registration Rights Agreement amends and restates the registration rights agreement that was entered into by CSLM, the Sponsor and the other parties thereto in connection with CSLM’s initial public offering. The Registration Rights Agreement will terminate on the earlier of (a) the five year anniversary of the date of the Registration Rights Agreement or (b) with respect to any Holder, on the date that such Holder no longer holds any Registrable Securities (as defined therein).

The foregoing description of the form of Registration Rights Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the form of Registration Rights Agreement, a copy of which is filed as Exhibit 10.3 to the Current Report on Form

8-K

filed on January 23, 2024, and incorporated by reference herein.

Founder Transaction Bonus Agreement

Parent, Sameer Maskey, the founder and Chief Executive Officer of the Company, and the Company are entering into and delivering a Founder Transaction Bonus Agreement, (the “

Founder Transaction Bonus Agreement

”), pursuant to which Mr. Maskey will be entitled to a transaction completion bonus upon the Closing upon the terms set forth in the Founder Transaction Bonus Agreement.

The foregoing description of the Founder Transaction Bonus Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Founder Transaction Bonus Agreement, a copy of which is filed as Exhibit 10.4 to the Current Report on Form

8-K

filed on January 23, 2024, and incorporated by reference herein.

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Effecting a Business Combination

Our Business Strategy

We intend to effectuate our initial business combination using cash from the proceeds of the IPO and the private placement that closed contemporaneously with the IPO. As disclosed in our Current Report on Form

8-K

We believe our team’s strong network and differentiated expertise will help us execute on our business combination.

Fair Market Value of Target Business or Businesses

We believe that the target business for our business combination meets the Nasdaq requirement of having a collective fair market value equal to at least 80% of the value of the trust account (excluding any taxes payable) at the time of the agreement to enter into such initial business combination.

Lack of Business Diversification

For an indefinite period of time after consummation of our initial business combination, the prospects for our success may depend entirely on the future performance of a single business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business. By consummating our initial business combination with only a single entity, our lack of diversification may:

•

subject us to negative economic, competitive and regulatory developments, any or all of which may have a substantial adverse impact on the particular industry in which we operate after our initial business combination, and

•

cause us to depend on the marketing and sale of a single product or limited number of products or services.

Limited Ability to Evaluate the Target’s Management Team

Although we have met with and evaluated the target business’ management, the future role of members of our management team, if any, in the target business cannot presently be stated with any certainty. Further, it is also not certain whether one or more of our directors will remain associated in some capacity with us following our initial business combination. Moreover, members of our management team may not have significant experience or knowledge relating to the operations of the particular target business. Our key personnel may not remain in senior management or advisory positions with the combined company.

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Following our initial business combination, we may seek to recruit additional managers to supplement the incumbent management of the target business. We may not have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.

In the event that the business combination is not consummated, we will have to find another target business relying on the following strengths of our management team, including their

more than 85 years of combined experience investing in Frontier Growth Markets; their experience executing complex transactions and navigating complicated regulatory environments.

Business Combination Criteria

Consistent with our strategy, we have identified the following characteristics and guidelines that we believe are important in evaluating potential target businesses or entities. We have used these criteria and guidelines in assessing acquisition opportunities, including Fusemachines. In the event that the business combination with Fusemachines is not consummated, we will continue to use the following criteria as a guideline:

•

Operations in the new economy sectors across our target markets.

We believe that disruptive new economy companies benefit from highly favorable macroeconomic trends in our target markets. These trends are in their infancy, and we believe they have headroom for expansion and growth which makes investing in these sectors attractive.

•

Established business models.

Most of our target businesses will have models that we believe are well established in their home and core markets with relevant localization by market and established paths to profitable growth. In addition, we will seek a business that we believe has a sustainable competitive advantage as a result of differentiated

de-risked

business model, strong technology component, brand recognition and marketing capabilities or any other characteristics that are difficult to replicate.

•

Sector leading KPIs and unit economics.

We will seek to merge with a company with critical mass that enjoys sustainable unit economics in its sector. We believe that healthy growth must be supported by strong sector KPIs steering the company in the right direction to drive profitability and free cash flow generation.

•

Scalability.

We seek to invest in a business with a scalable platform and operations to take advantage of growth opportunities, including through geographical expansion and synergistic acquisitions. We intend to leverage our experience in scaling businesses in order to help accelerate growth.

•

Underpenetrated and growing total addressable market.

Based on our prior research and personal experience, we believe Frontier Growth Markets present a significant opportunity to invest in companies which serve an underpenetrated total addressable market. These countries hold significant potential due to their geographical size, favorable population trends and the emergence of a middle-class in certain countries.

•

Strong management team and culture.

We will look to partner with a passionate, experienced management team that is capable of scaling a business. We will also evaluate ways to support the team in its transition to becoming a U.S.-listed company and beyond.

•

Market leadership.

We will seek to combine with a company with a leading position in its geography, market share, volume, technology, product capabilities, or other attributes across an industry or segment, significant barriers to entry and a sustainable competitive advantage.

•

Attractive valuation.

We believe that valuations of some companies in Frontier Growth Markets are discounted relative to U.S. peers. We look to seek an acquisition of a company that has potential to grow valuation levels in line with its global peers.

•

Focus on ESG and social empowerment.

We will look for companies focused on making a positive impact across a variety of ESG themes within Frontier Growth Markets, as well as on a larger scale.

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Additional Disclosures

Our Acquisition Process

Our directors and officers presently have, and any of them in the future may have, additional, fiduciary or contractual obligations to other entities pursuant to which such officer or director is or will be required to present a business combination opportunity to such entity. Accordingly, if any of our directors or officers becomes aware of a business combination opportunity that is suitable for an entity to which he or she has then-current fiduciary or contractual obligations, he or she may need to honor these fiduciary or contractual obligations to present such business combination opportunity to such entity, or in the case of a

non-compete

restriction, may not present such opportunity to us at all, subject to his or her fiduciary duties under Cayman Islands law. Our directors and officers are also not required to commit any specified amount of time to our affairs, and, accordingly, will have conflicts of interest in allocating management time among various business activities, including identifying potential business combinations and monitoring the related due diligence. This may affect us if we do not consummate the business combination with Fusemachines.

Initial Business Combination

The Nasdaq listing rules require that our initial business combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the income earned on the trust account) at the time of the agreement to enter into our initial business combination. We refer to this as the 80% of fair market value test. If our board of directors is not able to independently determine the fair market value of the target business or businesses, we will obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions with respect to the satisfaction of such criteria. Unless we complete our initial business combination with an affiliated entity, we are not required to obtain an opinion that the price we are paying is fair to our company from a financial point of view. We do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination, although there is no assurance that will be the case.

Sourcing of Potential Business Combination Targets

If we are unable to complete the business combination with Fusemachines, we believe our team’s significant operating and transaction experience and relationships with companies will provide us with a substantial number of potential business combination targets. Over the course of their careers, the members of our team have developed a broad network of contacts and corporate relationships around the world.

We believe this network provides our team with a robust and consistent flow of acquisition opportunities which were proprietary or where a limited group of investors were invited to participate in the sale process. We believe that the network of contacts and relationships of our team will provide us with important sources of acquisition opportunities. In addition, we anticipate that target business candidates will be brought to our attention from various unaffiliated sources, including investment market participants, private equity funds and large business enterprises seeking to divest

non-core

assets or divisions.

We are not prohibited from pursuing an initial business combination with a company that is affiliated with our sponsor, directors or officers, or making the acquisition through a joint venture or other form of shared ownership with our sponsor, directors or officers. In the event we seek to complete an initial business combination with a target that is affiliated with our sponsor, directors or officers, we, or a committee of independent and disinterested directors, would obtain an opinion from an independent investment banking firm or another independent entity that commonly renders valuation opinions that such an initial business combination is fair to our company from a financial point of view. We are not required to obtain such an opinion in any other context.

If any of our directors or officers becomes aware of a business combination opportunity that falls within the line of business of any entity to which he or she has

pre-existing

fiduciary or contractual obligations, he or she may be required to present such business combination opportunity to such entity prior to presenting such business combination opportunity to us. Our directors and officers currently have fiduciary duties or contractual obligations that may take priority over their duties to us.

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Status as a Public Company

We are an “emerging growth company,” as defined in the JOBS Act. We will remain an emerging growth company until the earlier of (1) the last day of the fiscal year (a) following the fifth anniversary of the completion of our initial public offering, (b) in which we have total annual gross revenue of at least $1.235 billion, or (c) in which we are deemed to be a large accelerated filer, which means the market value of our ordinary shares that is held by

non-affiliates

equals or exceeds $700 million as of the end of that year’s second fiscal quarter, and (2) the date on which we have issued more than $1.00 billion in

non-convertible

debt securities during the prior three-year period. References herein to “emerging growth company” will have the meaning associated with it in the JOBS Act.

Additionally, we are a “smaller reporting company” as defined in Item 10(f)(1) of Regulation

S-K.

Smaller reporting companies may take advantage of certain reduced disclosure obligations, including, among other things, providing only two years of audited financial statements. We will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our ordinary shares held by

non-affiliates

equals or exceeds $250 million as of the end of that year’s second fiscal quarter, or (2) our annual revenues equaled or exceeded $100 million during such completed fiscal year and the market value of our ordinary shares held by

non-affiliates

equals or exceeds $700 million as of the end of that year’s second fiscal quarter.

Financial Position

With funds available for a business combination initially in the amount of $51,976,918 assuming no further redemptions, we offer a target business a variety of options such as creating a liquidity event for its owners, providing capital for the potential growth and expansion of its operations or strengthening its balance sheet by reducing its debt ratio. Because we are able to complete our initial business combination using our cash, debt or equity securities, or a combination of the foregoing, we have the flexibility to use the most efficient combination that will allow us to tailor the consideration to be paid to the target business to fit its needs and desires. We issued an interest-bearing promissory note to our Sponsor in the principal amount of $1,500,000 in February 2023. In January 2024, we amended the promissory note to increase the principal amount from $1,500,000 to $2,000,000. Proceeds from the promissory note will be applied towards monthly extension deposits and working capital needs.

Effecting Our Initial Business Combination

We intend to effectuate our initial business combination using cash from the proceeds of the IPO and the private placement of the private warrants, our shares, new debt, or a combination of these, as the consideration to be paid in our initial business combination.

As disclosed in our Current Report on Form

8-K

filed with the SEC on January 23, 2024, we signed a Merger Agreement with Fusemachines, as described more fully in this report. Although our management will assess the risks inherent with this business combination, this assessment may not result in our identifying all risks that this business combination may encounter. Furthermore, some of those risks may be outside of our control, meaning that we can do nothing to control or reduce the chances that those risks will adversely impact a target business. We may seek to raise additional funds through a private offering of debt or equity securities in connection with the completion of our initial business combination, and we may effectuate our initial business combination using the proceeds of such offering rather than using the amounts held in the trust account.

In the case of the initial business combination funded with assets other than the trust account assets, our tender offer documents or proxy materials disclosing the business combination would disclose the terms of the financing and, only if required by law or we decide to do so for business or other reasons, we would seek shareholder approval of such financing. There are no prohibitions on our ability to raise funds privately or through loans in connection with our initial business combination. At this time, we are not a party to any arrangement or understanding with any third party with respect to raising any additional funds through the sale of securities or otherwise.

Selection of a target business and structuring of our initial business combination

Nasdaq listing rules require that our initial business combination must be with one or more operating businesses or assets with a fair market value equal to at least 80% of the assets held in the trust account (excluding the deferred underwriting commissions and taxes payable on the income earned on the trust account) at the time of the agreement to enter into our initial business combination. We refer to this as the 80% of fair market value test.

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We believe that the target business for this business combination meets the Nasdaq requirement of having a collective fair market value equal to at least 80% of the value of the trust account (excluding any taxes payable) at the time of the agreement to enter into such initial business combination.

The fair market value of the target business or businesses or assets has been determined by our board of directors based upon standards generally accepted by the financial community, such as actual and potential gross margins, the values of comparable businesses, earnings and cash flow, book value, enterprise value and, where appropriate, upon the advice of appraisers or other professional consultants. Investors will be relying on the business judgment of our board of directors, which will have significant discretion in choosing the standard used to establish the fair market value of a particular target business. Since Fusemachines is not an affiliated entity, we are not required to obtain an opinion that the price we are paying is fair to our company from a financial point of view. However, we have engaged the services of Marshall Stevens, LLC to render a fairness opinion.

We do not currently intend to purchase multiple businesses in unrelated industries in conjunction with our initial business combination, although there is no assurance that will be the case. Subject to this requirement, our management will have virtually unrestricted flexibility in identifying and selecting one or more prospective target businesses, although we will not be permitted to effectuate our initial business combination solely with another blank check company or a similar company with nominal operations.

Although our management will endeavor to evaluate the risks inherent in Fusemachines’ business, we cannot assure you that we will properly ascertain or assess all significant risk factors.

Lack of business diversification

For an indefinite period of time after the completion of our initial business combination, the prospects for our success will depend entirely on the future performance of Fusemachines’ business. Unlike other entities that have the resources to complete business combinations with multiple entities in one or several industries, it is probable that we will not have the resources to diversify our operations and mitigate the risks of being in a single line of business. By completing our initial business combination with only a single entity, our lack of diversification may:

•

cause us to depend on the marketing and sale of a single product or limited number of products or services.

Limited ability to evaluate the target’s management team

Shareholders may not have the ability to approve our initial business combination

We may conduct redemptions without a shareholder vote pursuant to the tender offer rules of the SEC subject to the provisions of our amended and restated memorandum and articles of association. However, we will seek shareholder approval if it is required by applicable law or stock exchange listing requirement, or we may decide to seek shareholder approval for business or other reasons.

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Under Nasdaq listing rules, shareholder approval would be required for our initial business combination if, for example:

•

SEC Form 10-K filed by CSLM Acquisition Corp.