DEF 14A: CSLM Acquisition Corp. Seeks Shareholder Approval to Extend Business Combination Deadline Amid Nasdaq Delisting and AI Merger Pursuit

CSLM Acquisition Corp. is seeking shareholder approval to extend its business combination deadline to October 18, 2025, to complete its proposed merger with AI provider Fusemachines Inc., following its delisting from Nasdaq.

Summary

• CSLM Acquisition Corp. (CSLM) is holding an Extraordinary General Meeting on July 14, 2025, to vote on extending its business combination deadline.
• The company proposes to amend its charter and trust agreement to extend the period from July 18, 2025, to October 18, 2025, on a semi-monthly basis.
• The extension is necessary to complete a proposed business combination with Fusemachines Inc., a global provider of enterprise Artificial Intelligence (AI) products and solutions.
• Under the Merger Agreement, Fusemachines securityholders will receive CSLM Common Shares valued at $200,000,000, based on a US$10.00 per share exchange rate.
• If the extension is not approved, CSLM will cease operations and redeem 100% of its Public Shares at a per-share price equal to the aggregate amount in the Trust Account (less up to $100,000 for dissolution expenses), which was approximately $12.06 per Public Share as of June 20, 2025.
• The company's securities were suspended from trading on Nasdaq on January 22, 2025, due to non-compliance with the 36-month business combination deadline (January 12, 2025, after IPO effective date), and now trade on OTC Markets Group, Inc. Pink Open Market.
• The Sponsor (Consilium Acquisition Sponsor I, LLC) will contribute the lesser of $0.02 per non-redeemed share or $15,000 every two weeks as a loan to the Company for each semi-monthly extension period, starting July 18, 2025, if the Extension Proposal is approved. These loans are repayable upon business combination consummation and will be forgiven if the combination is not completed (except for funds held outside of the Trust Account).
• As of the Record Date (June 9, 2025), there were 6,116,436 Class A ordinary shares and one Class B Share issued and outstanding.
• The Trust Account balance was approximately $16,551,595.25 as of June 20, 2025.
• The closing price of CSLM's Public Shares on June 18, 2025, was $11.80.

Sentiment

Score: 3

Explanation: The document indicates significant operational challenges, including a Nasdaq delisting and repeated needs for extension, which typically signal distress for a SPAC. While a target has been identified (AI sector), the ongoing delays and prior high redemptions suggest a difficult path to closing and potential value erosion for remaining public shareholders. The risk of liquidation is explicitly stated if the extension is not approved.

Positives

• Identified a potential business combination target, Fusemachines Inc., which is described as a "compelling opportunity."
• Fusemachines Inc. is a global provider of enterprise Artificial Intelligence (AI) products and solutions, aligning with a high-growth industry.
• The Sponsor has committed to providing bi-weekly contributions (loans) to the Trust Account to facilitate the extension, demonstrating continued support.
• The board of directors unanimously recommends voting for the extension proposals, indicating internal alignment on the path forward.

Negatives

• Failed to consummate a business combination by the initial deadline, leading to delisting from Nasdaq.
• Securities were suspended from trading on Nasdaq on January 22, 2025, and now trade on the less liquid OTC Markets.
• Significant redemptions occurred in prior extension votes: 14,202,813 Public Shares on July 13, 2023, and 3,399,500 Class A Ordinary Shares on August 18, 2024.
• The current per-share redemption price of approximately $12.06 is higher than the closing price of Public Shares ($11.80 as of June 18, 2025), indicating a potential loss for shareholders who sell on the open market.
• If the extension is not approved, the company will liquidate, and Private Warrants held by the Sponsor and Initial Shareholders will become worthless.
• The Sponsor's loans for extensions will be forgiven if the business combination is not consummated, except for funds held outside of the Trust Account, potentially impacting the Sponsor's investment.

Risks

• **Liquidation Risk**: If the Extension Proposal and Trust Amendment Proposal are not approved, or if the business combination is not consummated by the extended date, the company will cease operations and liquidate, leading to the redemption of Public Shares and the worthlessness of Private Warrants.
• **Shareholder Liability for Creditor Claims**: In the event of liquidation, shareholders could potentially be liable for claims of creditors to the extent of distributions received if the company enters an insolvent liquidation, as creditors take priority.
• **Uncertainty of Creditor Waivers**: There is no guarantee that vendors, service providers, and prospective target businesses will execute agreements waiving rights to monies held in the Trust Account, or that such waivers would be legally enforceable.
• **CFIUS Review Risk**: The proposed business combination with a U.S. target company (Fusemachines Inc.) may be subject to review by the Committee on Foreign Investment in the United States (CFIUS), which could block or delay the transaction, or impose conditions, despite CSLM believing it should not be considered a foreign person.
• **Investment Company Act Risk**: There is uncertainty regarding the applicability of the Investment Company Act of 1940 to SPACs. If CSLM is deemed an unregistered investment company, it may be forced to abandon the business combination and liquidate, causing warrants to expire worthless. The longer funds are held in the trust account, the greater this risk.
• **Reduced Trust Account Balance**: If the Extension Proposal is approved, redemptions will reduce the amount remaining in the Trust Account, potentially leaving only a small fraction of the current balance for the business combination.
• **Lack of Liquidity**: The company cannot assure shareholders that they will be able to sell their Public Shares in the open market, even if the market price is higher than the redemption price, due to potential insufficient liquidity.

Future Outlook

CSLM intends to continue efforts to consummate the proposed business combination with Fusemachines Inc. until the extended date of October 18, 2025, if the Extension Proposal is approved. The board believes the extension is necessary as there is insufficient time to complete the combination and secure shareholder approval by the current deadline.

Management Comments

• "The Company believes the target business is a compelling opportunity for the Company's initial business combination and is currently in the process of completing an initial business combination."
• "Our board of directors currently believes that there will not be sufficient time before the Current Termination Date to complete the Proposed Business Combination and hold an extraordinary general meeting at which to conduct a vote for shareholder approval of the Proposed Business Combination."
• "Accordingly, our board of directors has determined it is in the best interests of the Company to extend the termination date from the Current Termination Date to the Extended Date."
• "The Board recommends that the Company's Shareholders vote FOR the Extension Proposal, FOR the Trust Amendment Proposal, and FOR the Adjournment Proposal."
• "The Board expresses no opinion as to whether you should redeem your Public Shares."

Industry Context

CSLM Acquisition Corp. is a Special Purpose Acquisition Company (SPAC) seeking to merge with Fusemachines Inc., a global provider of enterprise Artificial Intelligence (AI) products and solutions. This aligns with the broader industry trend of increasing investment and strategic focus on AI technologies across various sectors. The SPAC structure allows Fusemachines to potentially go public without a traditional IPO, a common trend in recent years, though the current market for SPACs has become more challenging.

Comparison to Industry Standards

• The document does not provide specific comparable companies, projects, or results to assess the proposed business combination against industry standards. It focuses solely on the procedural aspects of extending the SPAC's life and the general nature of the target company (AI products and solutions).

Corporate Governance

Related Party Transactions

• The Sponsor (Consilium Acquisition Sponsor I, LLC), which is controlled by Charles Cassel and Jonathan Binder (CEO and CFO), holds 4,593,750 Ordinary Shares and 7,942,500 Private Warrants. These will be worthless if a business combination is not completed.
• The Sponsor has agreed to waive its rights to liquidating distributions from the trust account in respect of any Sponsor Shares.
• The Sponsor will contribute bi-weekly loans to the Company for extensions, which are repayable upon business combination consummation and forgiven if not completed (except for funds held outside of the Trust Account).
• The Sponsor or an affiliate has issued working capital loans up to $4,000,000 to the Company.
• Company directors and officers are entitled to reimbursement of out-of-pocket expenses incurred in connection with business combination activities, but will not have claims against the Trust Account for reimbursement if a combination is not completed.

Stakeholder Impact

• **Shareholders (Public)**: Face a decision on whether to redeem shares now at a price higher than the current market price or hold for the potential business combination. Risk of liquidation if extensions are not approved. Potential for future gains if the Fusemachines merger is successful.
• **Shareholders (Initial/Sponsor)**: Their insider shares (acquired for $25,000, market value ~$55.9M) and private warrants (purchased for $7.9M, market value ~$0.55M) will become worthless if the business combination is not completed and the company liquidates. They have waived rights to liquidation distributions from the Trust Account.
• **Creditors**: Have priority over public shareholders in the event of liquidation. The company seeks waivers from vendors and service providers regarding claims on the Trust Account, but there's no guarantee of enforceability.
• **Fusemachines Inc.**: The proposed target company's merger is contingent on CSLM securing the extension, impacting its path to becoming a public entity.
• **Employees (CSLM)**: Implied impact on employment if the company liquidates.

Next Steps

• Hold an Extraordinary General Meeting on July 14, 2025, to vote on the Extension Proposal, Trust Amendment Proposal, and Adjournment Proposal.
• If approved, file the Extension Amendment to the Existing Charter with the Registrar of Companies of the Cayman Islands.
• Continue efforts to consummate the proposed business combination with Fusemachines Inc. until October 18, 2025 (the Extended Date).
• If the Extension Proposal is approved, the Sponsor will begin making bi-weekly contributions to the Trust Account starting July 18, 2025.
• If the Extension Proposal and Trust Amendment Proposal are not approved, the company will cease operations and liquidate, redeeming Public Shares.
• Shareholders who do not redeem now will retain the right to vote on the business combination when it is submitted and the right to redeem their shares upon consummation or by the extended date.

Key Dates

Recommendation

Keywords

SPAC, Special Purpose Acquisition Company, CSLM Acquisition Corp, Fusemachines Inc, Artificial Intelligence, AI, Business Combination, Merger, Extension, SEC Filing, DEF 14A, Proxy Statement, Trust Account, Redemption, Nasdaq Delisting, OTC Markets, Corporate Governance, Investment Company Act, CFIUS