Company: CSLMF
Filing Date: 2025-07-03
Form Type: DEFM14A
Source: 0001193125-25-155514
Chunk: 428

Company: CSLM ACQUISITION CORP.
Filing Date: 2025-07-03
Form: DEFM14A
Chunk 428
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 realized. A pattern of sustained profitability will generally be considered as sufficient positive evidence to reverse a valuation allowance. If the allowance is reversed
in a future period, the income tax provision will be correspondingly reduced. Accordingly, the increase and decrease of valuation allowances could have a significant negative or positive impact on future earnings.

The United States subjects corporations to taxes on Global Intangible Low-Taxed Income
(“GILTI”) earned by certain foreign subsidiaries. The Company elected to provide for the tax expense related to GILTI in the year the tax is incurred.

Stock-Based Compensation

Stock-based
compensation expense attributable to equity awards granted to employees and non-employees is measured at the grant date based on the fair value of the award. For employee awards, the expense is recognized on a
straight-line basis over the requisite service period for awards that actually vest, which is generally the period from the grant date to the end of the vesting period. For non-employee awards, the expense for
awards that actually vest is recognized based on when the goods or services are provided.

The Company records stock-based compensation in
accordance with ASC Topic 718, Compensation – Stock Compensation (“ASC 718”). This standard requires all equity-based payments to employees and non-employees, including grants of employee stock
options and restricted stock awards, to be recognized in the consolidated statements of operations and comprehensive loss based on the grant date fair value of the award. The stock-based compensation expense is recognized on a straight-line basis
over the requisite service period of the award, which is generally the period from the accounting grant date to the end of the vesting period. The Company elected to account for forfeitures of awards as they occur.

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Since the adoption of ASU 2018-07, Improvements to
Nonemployee Stock-Based Payment Accounting, the measurement date for non-employee awards is the date of grant, and stock-based compensation costs are recognized in the same period and in the same manner as if
the entity had paid cash for the goods or services. Stock-based compensation expense is classified as general & administrative, cost of services, selling & marketing and research & development expenses in the consolidated
statements of operations and comprehensive loss.

The Company estimates the fair value of stock option awards granted using the Black
Scholes Merton option pricing formula (the “Black-Scholes Model”). This model requires various significant judgmental assumptions in order to derive a final fair value determination for each type of award, including the expected term,