Company: CSTAF
Filing Date: 2025-04-02
Form Type: 10-K
Source: 0001213900-25-027555
Chunk: 236

Company: Constellation Acquisition Corp I
Filing Date: 2025-04-02
Form: 10-K
Item: Item 1A
Chunk 236
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 In the SEC Staff Statement, the SEC Staff expressed its view
that certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities on the SPAC’s
balance sheet as opposed to equity. As a result of the SEC Staff Statement, we reevaluated the accounting treatment of our 31,000,000
public warrants and 5,466,667 private placement warrants, and determined to classify the warrants as derivative liabilities measured at
fair value, with changes in fair value each period reported in earnings.

As a result, included on our condensed balance sheets as of December
31, 2024 and 2023 contained elsewhere in this Annual Report are derivative liabilities related to embedded features contained within our
warrants. ASC 815, Derivatives and Hedging, provides for the remeasurement of the fair value of such derivatives at each balance sheet
date, with a resulting non-cash gain or loss related to the change in the fair value being recognized in earnings in the statement of
operations. As a result of the recurring fair value measurement, our financial statements and results of operations may fluctuate quarterly,
based on factors, which are outside of our control. Due to the recurring fair value measurement, we expect that we will recognize non-cash
gains or losses on our warrants each reporting period and that the amount of such gains or losses could be material. The impact of changes
in fair value on earnings may have an adverse effect on the market price of our securities.

Because each unit contains one-third of one warrant and
only a whole warrant may be exercised, the units may be worth less than units of other blank check companies.

Each unit contains one-third of one warrant. Pursuant to the warrant
agreement, no fractional warrants will be issued upon separation of the units, and only whole units will trade. If, upon exercise of the
warrants, a holder would be entitled to receive a fractional interest in a share, we will, upon exercise, round down to the nearest whole
number the number of Class A ordinary shares to be issued to the warrant holder. This is different from other offerings similar to ours
whose units include one ordinary share and one warrant to purchase one whole share. We have established the components of the units in
this way in order to reduce the dilutive effect of the warrants upon completion of a Business Combination since the warrants will be exercisable
in the aggregate for one-third of the number of shares compared to units that each contain a whole