Company: CSLMF
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076682
Chunk: 86

Company: CSLM ACQUISITION CORP.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 8
Chunk 86
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 observable such as quoted prices for similar instruments in active markets or quoted prices
for identical or similar instruments in markets that are not active; and

●Level 3, defined as unobservable inputs in which little or
no market data exists, therefore requiring an entity to develop its own assumptions, such as calculations derived from valuation techniques
in which one or more significant inputs or significant value drivers are observable.

In many cases, if a valuation technique used to measure fair value
includes inputs from multiple levels of the fair value hierarchy described above, the lowest level of significant input determines the
placement of the entire fair value measurement in the hierarchy.

The fair value of the Company’s assets and liabilities, which
qualify as financial instruments approximates the carrying amounts represented in the balance sheet, primarily due to its short-term
nature. 

Derivative Financial Instruments

The Company evaluates its financial instruments to determine if such
instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC Topic 815, Derivatives and
Hedging. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at
its fair value on the grant date and is then re-valued at each reporting date, with changes in the fair value reported in the statements
of operations. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as
equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current
based on whether or not net-cash settlement or conversion of the instrument could be required within 12 months of the balance sheet date.

Warrants and Rights

The Company accounts for the public and private warrants and rights
as either equity-classified or liability-classified instruments based on an assessment of the instruments’ specific terms and applicable
authoritative guidance in FASB ASC Topic 480, “Distinguishing Liabilities from Equity” (“ASC 480”) and FASB ASC
Topic 815, “Derivatives and Hedging” (“ASC 815”). Pursuant to the Company’s evaluation, the Company concluded
that the public and private warrants and rights do not meet the criteria to be accounted for as liability under ASC 480. The Company further
evaluated the public and private warrants and rights under “ASC 815-40, Derivatives and Hedging — Contracts in Entity’s
Own Equity” (“ASC 815-40”) and concluded that the public warrants,