<SEC-DOCUMENT>0001493152-26-013668.txt : 20260330
<SEC-HEADER>0001493152-26-013668.hdr.sgml : 20260330
<ACCEPTANCE-DATETIME>20260330180131
ACCESSION NUMBER:		0001493152-26-013668
CONFORMED SUBMISSION TYPE:	424B3
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20260330
DATE AS OF CHANGE:		20260330

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			Fusemachines Inc.
		CENTRAL INDEX KEY:			0002033383
		STANDARD INDUSTRIAL CLASSIFICATION:	SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373]
		ORGANIZATION NAME:           	06 Technology
		EIN:				000000000
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		424B3
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-292318
		FILM NUMBER:		26814896

	BUSINESS ADDRESS:	
		STREET 1:		2400 EAST COMMERCIAL BOULEVARD
		STREET 2:		SUITE 900
		CITY:			FORT LAUDERDALE
		STATE:			FL
		ZIP:			33308
		BUSINESS PHONE:		954-315-9381

	MAIL ADDRESS:	
		STREET 1:		2400 EAST COMMERCIAL BOULEVARD
		STREET 2:		SUITE 900
		CITY:			FORT LAUDERDALE
		STATE:			FL
		ZIP:			33308

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	CSLM Holdings Inc.
		DATE OF NAME CHANGE:	20240809
</SEC-HEADER>
<DOCUMENT>
<TYPE>424B3
<SEQUENCE>1
<FILENAME>form424b3.htm
<DESCRIPTION>424B3
<TEXT>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Filed
Pursuant to Rule 424(b)(3)</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Registration
Statement No. 333-292318</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prospectus
Supplement No. 1</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(to
Prospectus dated February 9, 2026)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Primary
Offering of</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Up
to&nbsp;<FONT STYLE="background-color: white">9,487,500</FONT>&nbsp;Shares of Common Stock</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Secondary
Offering of</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Up
to 26,548,715 Shares of Common Stock</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><IMG SRC="form424b3_001.jpg" ALT=""></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
prospectus supplement is being filed to update and supplement the information contained in the prospectus dated February 9, 2026 (the
&ldquo;Prospectus&rdquo;), related to (i) the issuance by us of up to 9,487,500 shares of common stock, par value $0.0001 per share (&ldquo;Common
Stock&rdquo;) of Fusemachines Inc., a Delaware corporation (the &ldquo;Company&rdquo;, &ldquo;we&rdquo;, &ldquo;us&rdquo;, or &ldquo;Fusemachines&rdquo;),
to be issued upon the exercise of 9,487,500 public warrants, each of which entitle their holders to purchase shares of Common Stock at
an exercise price of $11.50 per share and (ii) the resale from time to time by the selling stockholders named in this prospectus or their
permitted transferees (the &ldquo;Selling Stockholders&rdquo;) of up to 26,548,715 shares of Common Stock, including 6,201,531 shares
of Common Stock issuable upon the exercise of private placement warrants.</FONT></P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
prospectus supplement updates and supplements the information in the Prospectus and is not complete without, and may not be delivered
or utilized except in combination with, the Prospectus, including any amendments or supplements thereto. This prospectus supplement should
be read in conjunction with the Prospectus and if there is any inconsistency between the information in the Prospectus and this prospectus
supplement, you should rely on the information in this prospectus supplement.</FONT></P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Common Stock and public warrants are listed on The Nasdaq Stock Market LLC (&ldquo;Nasdaq&rdquo;) under the symbols &ldquo;FUSE&rdquo;
and &ldquo;FUSEW&rdquo;, respectively. On March 26, 2026, the last reported sales price of Common Stock was $1.22 per share and the last
reported sales price of our Public Warrants was $0.075 per warrant.</FONT></P>

<P STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<!-- Field: Rule-Page --><DIV STYLE="margin: 0pt auto; width: 40%"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>We
are an &ldquo;emerging growth company&rdquo; under federal securities laws and are subject to reduced public company reporting requirements.
Investing in our Common Stock involves a high degree of risk. See the section entitled &ldquo;<I>Risk Factors</I>&rdquo; beginning on
page 8 of the Prospectus and in any applicable prospectus supplement to read about factors you should consider before buying our securities.</B></FONT></P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined
if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center; text-indent: 28.55pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center; text-indent: 28.55pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>The
date of this prospectus supplement is March 30, 2026</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-right: 0pt; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-right: 0pt; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 18pt"><B>UNITED
STATES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 18pt"><B>SECURITIES
AND EXCHANGE COMMISSION</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 12pt"><B>Washington,
D.C. 20549</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 18pt"><B>FORM
10-K</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(Mark
One)</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#9746;</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>ANNUAL
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 </B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>For
the fiscal year ended December 31, 2025</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>OR</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#9744;</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>TRANSITION
    REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO </B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Commission
File Number 001-42909</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 18pt"><B>FUSEMACHINES
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(Exact
name of Registrant as specified in its Charter)</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 49%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Delaware</B></FONT></TD>
    <TD STYLE="width: 2%">&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 49%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>98-1602789</B></FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(State
    or other jurisdiction of</B></FONT></P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>incorporation
    or organization)</B></FONT></P></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(I.R.S.
    Employer</B></FONT></P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Identification
    No.)</B></FONT></P></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>251
    West 30th Street, 5th Floor</B></FONT></P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>New
    York. New York </B></FONT></P></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>10001</B></FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(Address
    of principal executive offices)</B></FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(Zip
    Code)</B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Registrant&#8217;s
telephone number, including area code: (347) 212-5075</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Securities
registered pursuant to Section 12(b) of the Act:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; width: 38%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Title
    of each class</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 2%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
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    Symbol(s)</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 2%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Common
    stock, $0.0001 par value per share</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">FUSE</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    Nasdaq Stock Market LLC</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Warrants,
    each exercisable for one share of Common Stock</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">FUSEW</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    Nasdaq Stock Market LLC</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Securities
registered pursuant to Section 12(g) of the Act: <B>None</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Indicate
by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes &#9744; No &#9746;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Indicate
by check mark if the Registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes &#9744; No &#9746;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">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 &#9746; No &#9744;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">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 (&#167;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 &#9746; No &#9744;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company,
or an emerging growth company. See the definitions of &#8220;large accelerated filer,&#8221; &#8220;accelerated filer,&#8221; &#8220;smaller
reporting company,&#8221; and &#8220;emerging growth company&#8221; in Rule 12b-2 of the Exchange Act.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 35%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Large
    accelerated filer</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 20%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 35%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accelerated
    filer</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right; width: 10%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9744;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Non-accelerated
    filer</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9746;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Smaller
    reporting company</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9746;</FONT></TD></TR>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Emerging
    growth company</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9746;</FONT></TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">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. &#9744;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Indicate
by check mark whether the registrant has filed a report on and attestation to its management&#8217;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. &#9744;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">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. &#9744;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">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&#8217;s executive officers during the relevant recovery period pursuant to &#167;240.10D-1(b). &#9744;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes &#9744; No &#9746;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The registrant was not a public company as of June 30, 2025, the last business day of its most recently completed
second fiscal quarter, and therefore, cannot calculate the aggregate market value of its voting and non-voting common equity held by non-affiliates
as of such date. The registrant&#8217;s common stock began trading on the Nasdaq Global Market on October 23, 2025.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
number of shares of the registrant&#8217;s common stock outstanding as of March 26, 2026 was 28,938,266.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Auditor
    Firm Id:</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 10%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2983</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Auditor
    Name:</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">KNAV
    CPA LLP</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Auditor
    Location:</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 18%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Atlanta, Georgia</FONT></TD></TR>
  </TABLE>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Table
of Contents</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.75in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 0.5in; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Page</B></FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><A HREF="#a_001">PART I</A></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center">1</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Item
    1.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_002">Business</A></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center">1</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Item
    1A.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_003">Risk Factors</A></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center">3</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Item
    1B.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_004">Unresolved Staff Comments</A></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center">30</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Item
    1C.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_005">Cybersecurity</A></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center">30</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Item
    2.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_006">Properties</A></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center">31</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Item
    3.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_007">Legal Proceedings</A></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center">31</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Item
    4.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_008">Mine Safety Disclosures</A></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center">31</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><A HREF="#a_009">PART II</A></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center">32</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Item
    5.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_010">Market for Registrant&#8217;s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities</A></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center">32</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Item
    6.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#a_011">[Reserved]</A></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center">32</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Item
    7.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><A HREF="#Rma_001"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management&#8217;s Discussion and Analysis of Financial Condition and Results of Operations</FONT></A></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center">33</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Item
    7A.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><A HREF="#Rma_002"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Quantitative and Qualitative Disclosures about Market Risk</FONT></A></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center">58</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Item
    8.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><A HREF="#Rma_003"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial Statements and Supplementary Data</FONT></A></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center">58</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Item
    9.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><A HREF="#Rma_004"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Changes in and Disagreements with Accountants on Accounting and Financial Disclosure</FONT></A></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center">58</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Item
    9A.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><A HREF="#Rma_005"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Controls and Procedures</FONT></A></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center">59</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Item
    9B.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><A HREF="#Rma_006"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other Information</FONT></A></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center">60</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Item
    9C.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><A HREF="#Rma_007"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Disclosure Regarding Foreign Jurisdictions that Prevent Inspections</FONT></A></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center">60</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><A HREF="#Rma_008"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>PART III</B></FONT></A></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center">61</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Item
    10.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><A HREF="#Rma_009"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Directors, Executive Officers and Corporate Governance</FONT></A></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center">61</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Item
    11.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><A HREF="#Rma_010"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Executive Compensation</FONT></A></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center">61</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Item
    12.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><A HREF="#Rma_011"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters</FONT></A></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center">61</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Item
    13.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><A HREF="#Rma_012"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certain Relationships and Related Transactions, and Director Independence</FONT></A></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center">61</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Item
    14.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><A HREF="#Rma_013"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Principal Accounting Fees and Services</FONT></A></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center">61</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><A HREF="#Rma_014"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>PART IV</B></FONT></A></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center">61</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Item
    15.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><A HREF="#RMa_016"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Exhibits, Financial Statement Schedules</FONT></A></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center">61</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Item
    16.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; vertical-align: top"><A HREF="#Rma_015"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form 10-K Summary</FONT></A></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center">61</TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase"><B>Special
Note Regarding Forward-Looking Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
Annual Report on Form 10-K (&#8220;Annual Report&#8221;) contains forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended (the &#8220;Securities Act&#8221;), and Section 21E of the Securities Exchange Act of 1934, as amended
(the &#8220;Exchange Act&#8221;). These forward-looking statements are based on our management&#8217;s current beliefs and assumptions
and on information currently available to our management, and are contained principally in the sections entitled &#8220;Business,&#8221;
&#8220;Risk Factors,&#8221; and &#8220;Management&#8217;s Discussion and Analysis of Financial Condition and Results of Operations.&#8221;
Forward-looking statements include all statements that are not historical facts and can be identified by terms such as &#8220;anticipates,&#8221;
&#8220;believes,&#8221; &#8220;best in class,&#8221; &#8220;could,&#8221; &#8220;seeks,&#8221; &#8220;estimates,&#8221; &#8220;expects,&#8221;
&#8220;first-in-class,&#8221; &#8220;focused,&#8221; &#8220;goal,&#8221; &#8220;intends,&#8221; &#8220;may,&#8221; &#8220;objective,&#8221;
&#8220;opportunity,&#8221; &#8220;pipeline,&#8221; &#8220;plans,&#8221; &#8220;potential,&#8221; &#8220;predicts,&#8221; &#8220;projects,&#8221;
&#8220;pursuing,&#8221; &#8220;should,&#8221; &#8220;target,&#8221; &#8220;treatment option,&#8221; &#8220;will,&#8221; &#8220;would,&#8221;
&#8220;might,&#8221; &#8220;can,&#8221; &#8220;continue&#8221; or similar expressions and the negatives of those terms.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
forward-looking statements include, among other things, statements about:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
    ability to effectively operate our business segments;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
    ability to manage our research, development, expansion, growth and operating expenses;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
    ability to compete, directly and indirectly, and succeed in a highly competitive and evolving industry;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">our
    ability to protect our intellectual property and to develop, maintain and enhance a strong brand; and</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">other
    factors (including the risks contained in the section of this Annual Report on Form 10-K entitled &#8220;<I>Risk Factors</I>&#8221;)
    relating to our industry, our operations and results of operations.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Should
one or more of these risks or uncertainties materialize, or should the underlying assumptions prove incorrect, actual results may differ
significantly from those anticipated, believed, estimated, expected, intended or planned.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Factors
or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of
them. We cannot guarantee future results, levels of activity, performance or achievements. Except as required by applicable law, including
the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements
to actual results.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>References
to Fusemachines Inc.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
this Annual Report on Form 10-K, unless otherwise stated or the context otherwise indicates, references to the &#8220;Company,&#8221;
&#8220;FUSE,&#8221; &#8220;Fusemachines,&#8221; &#8220;we,&#8221; &#8220;our&#8221; and &#8220;us&#8221; mean Fusemachines Inc., a Delaware
corporation, and its consolidated subsidiaries.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Trademarks
and Tradenames</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Fusemachines logo and other trademarks of the Company appearing in this Annual Report on Form 10-K are the property of the Company. All
other trademarks, service marks and trade names in this Annual Report on Form 10-K are the property of their respective owners. Solely
for convenience, trademarks and trade names referred to in this report may appear without the &#174; or &#8482; symbols.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Market
Data, Forecasts, and Other Information</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Unless
otherwise indicated, information in this Annual Report on Form 10-K concerning economic conditions, our industry, and our markets, including
our general expectations and competitive position, market opportunity and market size, is based on a variety of sources, including information
from independent industry analysts and publications, as well as our own estimates and research. In addition, certain information included
references to third-party publications regarding our business, results of operations, products, and product candidates.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
estimates are derived from industry and general publications, studies and surveys conducted by third-parties, as well as data from our
own internal research. These publications, studies and surveys generally indicate that their information has been obtained from sources
believed to be reliable, although they do not guarantee the accuracy or completeness of such information, and we have not independently
verified industry data from such third-party sources. While we believe our internal research is reliable and that our internal estimates
are reasonable, such research has not been verified by any independent source and our internal estimates are based on our good faith
beliefs as of the respective dates of such estimates.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT ID="a_001"></FONT>PART
I</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT ID="a_002"></FONT>Item
1. Business.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fusemachines
is a leading provider of enterprise AI solutions, offering AI products including AI Studio, AI Engines, and AI Agents, along with supporting
services to organizations across a wide range of industries. With more than a decade of experience, we help enterprises integrate AI
into their operations to improve efficiency, reduce costs, and drive innovation. Our products and services are uniquely supported by
a global talent pool largely sourced from underserved communities, enabling us to deliver high quality AI solutions at scale while advancing
our mission of democratizing access to AI.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
diverse client base spans industries including consumer brands, healthcare, media, technology, government, and others. These clients
use our AI solutions to address critical business challenges such as improving sales forecasting accuracy, eliminating manual data entry
errors, automating recruitment processes, and detecting fraud in real time. Our focus on delivering measurable business outcomes has
enabled us to build long-term relationships with our clients and position Fusemachines as a partner in their AI driven transformation
efforts.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition to our enterprise AI solutions, we are committed to education and talent development. Our AI training programs, including our
AI Fellowship Program, are designed to upskill students and professionals by providing hands-on experience with real world AI applications.
To date, we have certified hundreds of AI Fellows across the United States, Nepal, and the Dominican Republic. These programs help expand
the global AI talent pool and address the growing shortage of skilled AI professionals.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>AI
Solutions</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">At
Fusemachines, we develop industry focused and problem specific AI solutions that combine software products with implementation services
to address complex business challenges. Our core platform, AI Studio, enables experimentation, model training, deployment, and lifecycle
management of AI systems. Built on top of AI Studio, AI Engines provide specialized AI capabilities for targeted use cases such as fraud
detection in food and beverage transactions or information extraction from loan documents. We also offer AI Agents that can assist with
or automate operational tasks such as interviewing candidates during the hiring process.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
services complement these products and include activities such as customizing and fine tuning models, integrating AI systems into existing
enterprise workflows, and developing bespoke solutions tailored to specific client needs. Clients can choose to engage with Fusemachines
through software, services, or a combination of both depending on their requirements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Products</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
product suite consists of our platform AI Studio, outcome-specific AI Engines, and advanced interactive AI Agents, designed to help organizations
build, deploy, and operationalize AI solutions at scale.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>AI
Studio</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">AI
Studio is the foundational platform that powers Fusemachines&#8217; AI solutions, enabling organizations to build, deploy, and manage
AI applications at scale. By providing a unified environment for data scientists, engineers, and business teams, AI Studio simplifies
the process of developing and operationalizing AI solutions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">AI
Studio is structured into four integrated layers that enable organizations to operationalize AI solutions efficiently. The Business Layer
sits at the top and contains the business applications, workflows, and AI-powered use cases that organizations deploy to support decision-making
and operations. Beneath it, the AI Hub provides the environment for developing, integrating, and managing AI models, engines, and agents
that power these applications. The Data Layer connects and organizes enterprise data from various sources, enabling AI systems to access
and process both structured and unstructured data. Supporting all layers is the Governance Layer, which ensures secure deployment, monitoring,
compliance, and lifecycle management of AI systems across the platform.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>AI
Engines</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">AI
Engines are specialized AI software solutions built on top of AI Studio that are designed to deliver industry- and pain point&#8211;specific
outcomes. Each engine focuses on solving targeted business challenges within particular domains by leveraging advanced AI technologies
such as large language models (LLMs), computer vision, machine learning, and deep learning. By addressing clearly defined operational
problems, AI Engines enable organizations to automate processes, improve efficiency, and generate actionable insights that directly support
business objectives. For example, AI Engines can be used to extract information from complex documents, generate accurate answers and
summaries from large datasets, or detect suspicious activities and patterns in financial transactions at retail outlets. By combining
technologies such as document understanding, Retrieval Augmented Generation (RAG), and predictive analytics, these engines enable organizations
to automate workflows, improve operational efficiency, and gain deeper insights from their data.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">AI
Engines are designed to be highly customizable and adaptable to the needs of different industries such as finance, legal, healthcare,
and enterprise operations. They can operate within a customer&#8217;s existing infrastructure while maintaining strong data security,
governance, and access control.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>AI
Agents</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">AI
Agents are intelligent systems built on top of AI Engines and AI Studio that automate complex workflows and interact with users or systems
to accomplish specific tasks. These agents combine capabilities such as reasoning, retrieval, API execution, data processing, and decision
support, enabling organizations to deploy AI systems that actively assist employees and customers in real-time operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
instance, an AI Agent designed for recruitment can act as an interview assistant, assisting recruiters by asking role-specific questions
and evaluating responses. The agent can analyze candidate answers, generate summaries of strengths and areas for improvement, and produce
standardized evaluation reports for hiring teams. By automating parts of the interview and evaluation process, such agents help organizations
streamline hiring workflows, improve consistency in candidate assessments, and reduce manual effort for recruiters and hiring managers.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Services</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
services are delivered by Forward Deployed Engineers (FDEs) who work closely with customer teams to design, implement, and operationalize
AI solutions built on top of AI Studio. These services provide hands-on support for organizations that require deeper technical collaboration
to successfully deploy AI within their environments. Leveraging the capabilities of AI Studio, our teams help customers customize and
deploy AI Engines, integrate AI into existing systems, and develop bespoke solutions that address complex challenges across AI, data,
and software systems.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&#160;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Customization,
Model Tuning, and Deployment:</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
assist clients in customizing our AI Engines or AI Agents to meet their specific needs. This includes fine-tuning models, configuring
workflows, and deploying solutions through AI Studio. Our teams also support the integration of these engines and agents into the client&#8217;s
existing business workflows, data pipelines, and enterprise systems to ensure seamless operation and alignment with business objectives.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Bespoke
AI Solutions:<BR>
<BR>
</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
organizations with specific requirements where existing AI Engines may not fully address their needs, we develop custom AI Engines and
AI Agents tailored to their specific business challenges. This may involve designing new models, building specialized AI capabilities,
and integrating them with enterprise data systems and workflows to deliver solutions that align closely with the client&#8217;s operational
requirements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
manage these engagements at scale, we developed Squadery, an internal platform that supports multiple teams within Fusemachines. Squadery
centralizes operational data from various sources including our CRM and HR systems to streamline project management, resource allocation,
and delivery coordination across service engagements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Intellectual
Property</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Intellectual
property (IP) is a critical asset for Fusemachines, and we take significant measures to protect our innovations. Our IP portfolio includes
patents, trademarks, copyrights, and trade secrets, all of which are designed to safeguard our technology and maintain our competitive
edge.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Patent
                                            Portfolio</I></B>: As of December 31, 2025, Fusemachines holds 8 patent applications. These
                                            patents cover a range of technologies that are central to our AI solutions, and we continue
                                            to pursue additional IP protection as we develop new products and solutions.</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>IP
                                            Strategy</I></B>: We rely on a combination of IP protection strategies, including license
                                            agreements, intellectual property assignment agreements, confidentiality agreements, and
                                            non-disclosure agreements. These measures help us secure our intellectual property rights
                                            and ensure that they are respected globally.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
more information, please see &#8220;Risk Factors &#8211; Risks Related to Business, Industry, and Operations&#8221;.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Competition
and Market Opportunity </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Competition
</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
AI and digital transformation landscape is highly competitive, with a wide range of players offering various solutions. Fusemachines
faces competition from several sources, including:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; width: 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Corporate
    IT organizations&#160;</B>that develop internal AI solutions.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Commercial
    enterprise and point solution software providers&#160;</B>that offer specialized AI tools.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Open-source
    software platforms&#160;</B>with data management, machine learning, and analytics capabilities.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Public
    cloud providers&#160;</B>offering discrete tools and microsolutions for AI and analytics.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>System
    integrators&#160;</B>that provide custom software solutions tailored to specific business needs.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; text-indent: 0.5in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Market
Opportunity</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
global AI market is set for substantial growth, with the global AI market itself is expected to reach nearly $1.4 trillion by 2029, and
the AI software segment is anticipated to generate around $791.5 billion in revenue by 2025. However, this expansion is challenged by
a global shortage of AI talent, with 63% of businesses citing AI and machine learning as their biggest skills gap.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; text-indent: 0.5in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe we are well-positioned to capitalize on this market opportunity. With over a decade of experience in developing AI solutions,
we have gained valuable insights into addressing customer challenges. Our solutions, including AI Studio and AI Engines, along with our
comprehensive AI services, allow us to provide highly specialized and problem-specific solutions that deliver substantial ROI. Moreover,
our AI talent development programs, such as the AI Fellowship program, support our ability to cultivate skilled talent as needed, fueling
our growth and helping us capture a significant share of the market in the years ahead.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Our
Corporate History</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
were originally organized as CSLM Acquisition Corp. (&#8220;CSLM&#8221;), a Cayman Islands exempted company. CSLM was formed as a special
purpose acquisition company for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization
or similar business combination with one or more businesses. CSLM closed its IPO (the &#8220;CSLM IPO&#8221;) in January 2022, generating
gross proceeds of $189,750,000.</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 22, 2024, CSLM, entered into a business combination agreement, as amended on August 27, 2024, by and among CSLM, CSLM Merger Sub, Inc., a Delaware
corporation and a direct, wholly-owned subsidiary of CSLM (&#8220;Merger Sub&#8221;), Fusemachines Inc., a Delaware company (&#8220;Legacy
Fusemachines&#8221;), and CSLM Holdings, Inc. (&#8220;CSLM Holdings&#8221;) (as amended, the &#8220;Business Combination Agreement&#8221;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
October 22, 2025, (a) CSLM merged with and into CSLM Holdings, at which time the separate existence of CSLM ceased and CSLM Holdings
became the surviving corporation (the &#8220;Company&#8221; or &#8220;Fusemachines&#8221;) (such transactions, the &#8220;Business
Combination&#8221;). In connection with the Business Combination, the Company was renamed &#8220;Fusemachines Inc.&#8221;
and Legacy Fusemachines was renamed &#8220;Fusemachines USA, Inc.&#8221;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Available
Information</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our principal offices are located at 251 West 30th Street, 5th Floor, New
York, New York 10001. We also maintain a website at www.fusemachines.com and https://ir.fusemachines.com/, where additional information
about our company and solutions can be found. Information contained on or that can be accessed through our website is neither a part of,
nor incorporated by reference into, this Annual Report on Form 10-K, and you should not consider information on our website to be part
of this Annual Report on Form 10-K.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Human
Capital</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">As of December 31, 2025, we had more
than 270 full-time employees. As of December 31, 2025, none of our employees were represented by
labor unions or covered by collective bargaining agreements. We consider our relationship with our employees to be good. We
emphasize several measures and objectives in managing our human capital assets, including, among others, (i) employee safety and
wellness, (ii) talent acquisition and retention, (iii) employee engagement, development, and training, (iv) diversity and inclusion
and (v) compensation. These targeted ideals may include annual bonuses, stock-based compensation awards, a 401(k) plan., healthcare,
and insurance benefits, health savings and flexible spending accounts, paid time off, family leave, family care resources, and/or
employee assistance programs. We also provide our employees with access to various innovative, flexible, and convenient health and
wellness programs. We designed these programs to support employees&#8217; physical and mental health by providing tools and
resources to improve or maintain their health status and encourage engagement in healthy behaviors.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT ID="a_003"></FONT>Item
1A. Risk Factors.</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Investing
in our securities involves a high degree of risk. Before you make a decision to buy our securities, in addition to the risks and uncertainties
discussed above under &#8220;Special Note Regarding Forward-Looking Statements,&#8221; you should carefully consider the risks and uncertainties
described below together with all of the other information contained in this Annual Report, including our financial statements and related
notes included at the end of this Annual Report and in the section titled &#8220;Management&#8217;s Discussion and Analysis of Financial
Condition and Results of Operations.&#8221; If any of the events or developments described below were to occur, our business, prospects,
operating results and financial condition could suffer materially, the trading price of our securities could decline, and you could lose
all or part of your investment. The risks and uncertainties described below are not the only ones we face. Additional risks and uncertainties
not presently known to us or that we currently believe to be immaterial may also adversely affect our business.</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&#160;</I></FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&#160;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Risk
Factors Summary</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Below
is a summary of material factors that make an investment in our securities speculative or risky. Importantly, this summary does not address
all of the risks and uncertainties that we face. You should carefully consider the full risk factor disclosure outlined in this Annual
Report, in addition to the other information herein, including the section of this report titled &#8220;Management&#8217;s Discussion
and Analysis of Financial Condition and Results of Operations&#8221; and our financial statements and related notes.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    market for our enterprise AI services and products is relatively new, and may decline or experience limited growth, and our business
    is dependent on our clients&#8217; continuing adoption and use of its services and products.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
    have experienced moderate growth in the past several years, and if we fail to effectively manage our growth, then our business, results
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
    sales efforts involve considerable time and expense and our sales cycle is often long and unpredictable. These fluctuations may negatively
    impact our results of operations and financial condition.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
    results of operations depend on sales to commercial enterprise organizations, which make product purchasing decisions based in part
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
    limited number of customers account for a substantial portion of our revenue. If existing customers do not make subsequent purchases
    from us or renew their contracts with us, or if our relationships with its largest customers are impaired or terminated, our revenue
    could decline, and its results of operations would be adversely impacted.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
    we do not successfully develop and deploy new technologies to address the needs of its customers, its business and results of operations
    could suffer.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
    ability to sell its products and satisfy its customers is dependent on the quality of our services, and our failure to offer high
    quality services could have a material adverse effect on its sales and results of operations.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
    we are not able to maintain and enhance its brand and reputation, our relationships with its customers, partners, and employees may
    be harmed, and its business and results of operations may be adversely affected.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
    the market for our platforms and services develops more slowly than we expect, our growth may slow or stall, and our business, financial
    condition, and results of operations could be harmed.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Issues
    raised by the use of AI (including machine learning) in our platforms may result in reputational harm or liability.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Real
    or perceived errors, failures, defects, or bugs in our products, or platforms could adversely affect our results of operations and
    growth prospects.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
    have not been profitable in the past and may not achieve or maintain profitability in the future.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
    require substantial additional funding, which may not be available to us on acceptable terms, or at all, and, if not so available,
    may require us to delay, limit, reduce or cease its operations.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
    independent registered public accounting firm&#8217;s report contains an explanatory paragraph that expresses substantial doubt about
    its ability to continue as a &#8220;going concern.&#8221;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
    indebtedness could adversely affect our business and growth prospects.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
    face intense competition within our industry and are subject to the effects of technological change.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
    proprietary products and services and service delivery may not operate properly, which could damage its reputation, give rise to
    claims against us, or divert application of its resources from other purposes, any of which could harm its business and operating
    results.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
    critical components used in our products become scarce or unavailable, we may incur delays in delivering our products and providing
    services, which could damage its business.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
    our security measures are breached or fail and unauthorized access is obtained to a customer&#8217;s data, our service may be perceived
    as insecure, the attractiveness of our services to current or potential customers may be reduced, and we may incur significant liabilities.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cyber-attacks
    and security vulnerabilities could lead to reduced revenue, increased costs, liability claims, or harm to our competitive position.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
    may not be able to adequately protect or enforce our intellectual property rights or prevent unauthorized parties from copying or
    reverse engineering our solutions.</FONT></TD></TR>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
    rely on unpatented proprietary information, trade secrets, processes and know-how, as well as open source software in certain instances.
    Our failure to protect our confidential information, trade secrets, processes and know-how, and our reliance on open source solutions,
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<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Algorithms
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
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  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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    material weakness or significant deficiency in its internal control over financial reporting, our ability to report our financial
    condition and results of operations in a timely and accurate manner could be adversely affected, investor confidence in our company
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    our periodic reports in the future could adversely affect our compliance with securities laws and exchange listing standards, impair
    our access to capital, increase regulatory scrutiny and litigation risk, and negatively impact our business and the market price
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Ongoing
    and escalating political volatility in Nepal may adversely affect our business, financial condition, and results of operations.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
    executive officers and directors exercise significant control over the company, which may limit your ability to influence corporate
    matters and could delay or prevent a change in corporate control.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    requirements of being a public company may strain the Company&#8217;s resources and distract management and we will incur substantial
    costs as a result of being a public company.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sales
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<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    do not intend to pay any cash dividends in the foreseeable future and, therefore, any return on your investment in the company&#8217;s
    capital stock must come from increases in the fair market value and trading price of the capital stock.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    Warrant holders will only be able to exercise their Public Warrants on a &#8220;cashless basis&#8221; under certain circumstances,
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    Warrant Agreement will designate the courts of the State of New York or the United States District Court for the Southern District
    of New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of the
    warrants, which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance
    with other public companies.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    after December 31, 2022.</FONT></TD></TR>
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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Delaware
    law and the Company&#8217;s Organizational Documents contain certain provisions, including anti-takeover provisions that limit the
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    provisions of the Certificate of Incorporation requiring exclusive forum in the Court of Chancery of the State of Delaware and the
    federal district courts of the United States for certain types of lawsuits may have the effect of discouraging lawsuits against our
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
    we fail to maintain an effective system of disclosure controls and internal control over financial reporting, our ability to produce
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
    business, financial condition, and results of operations may fluctuate on a quarterly and annual basis, which may result in a decline
    in our stock price if such fluctuations result in a failure to meet the expectations of securities analysts or investors.</FONT></TD></TR>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Changes
    in accounting principles may cause previously unanticipated fluctuations in our financial results, and the implementation of such
    changes may impact our ability to meet our financial reporting obligations.</FONT></TD></TR>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
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<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    investment unless you sell your common stock for a price greater than that which you paid for it.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sales
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Risks
Related to Business, Industry, and Operations</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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market for our enterprise AI services and products is relatively new, and may decline or experience limited growth, and our business
is dependent on our clients&#8217; continuing adoption and use of its services and products.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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use of enterprise AI is still relatively new, and customers may not recognize the need for or benefits of our services and products.
If customers do not recognize the need for and benefits of our services and products, then they may decide to adopt alternative services
to satisfy their business needs. In order to grow our business and extend our market position, Fusemachines intends to focus on educating
potential customers about the benefits of our services and products, expanding the range of our services and bringing new technologies
to market to increase market acceptance and use of our platform. Our ability to expand the market that our services and products address
depends upon a number of factors, including the cost, performance and perceived value associated with our services and products. The
market for our services and products could fail to grow significantly or there could be a reduction in demand for our services and/or
products as a result of a lack of acceptance, technological challenges, competing services, a decrease in spending by current and prospective
customers, weakening economic conditions and other causes. If the market for enterprise AI does not experience continued significant
growth, or demand for its services and/or products decreases, then our business, financial condition and results of operations could
be adversely affected.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
have experienced moderate growth in the past several years, and if we fail to effectively manage our growth, then our business, results
of operations and financial condition could be adversely affected.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have experienced moderate growth in our business since our founding in 2012. This growth has placed, and may continue to place, significant
demands on our corporate culture, operational infrastructure and management. Any failure to manage our anticipated growth and organizational
changes in a manner that preserves the key aspects of its culture and services could adversely affect our overall chance for future success,
including its ability to recruit and retain personnel, and effectively focus on and pursue its corporate objectives. This, in turn, could
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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addition, our ability to manage its operations and future growth will require us to continue to improve its operational, financial and
management controls, compliance programs with multiple and changing international laws and regulations and reporting systems. We may
not be able to implement improvements in an efficient or timely manner and may discover deficiencies in existing controls, programs,
systems and procedures, which could have an adverse effect on its business, reputation, results of operations and financial condition.</FONT></P>

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sales efforts involve considerable time and expense and our sales cycle is often long and unpredictable. These fluctuations may negatively
impact our results of operations and financial condition.</I></B></FONT></P>

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results of operations may fluctuate, in part, because of the intensive nature of our sales efforts and the length and unpredictability
of our sales cycle. The length of our sales cycle, from initial evaluation to payment often lasts six to eight months, but can extend
to a year or more for some customers. As part of our sales efforts, we invest considerable time and expense evaluating the specific organizational
needs of our potential customers and educating these potential customers about the technical capabilities and value of our products and
services.</FONT></P>

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sales strategy is comprised of two main constituents: our direct sales team and our channel partners. Our direct sales team is tasked
with both acquiring clients in established verticals and acquiring new channel partners in expansionary markets. We leverage our channel
partners to generate leads in new verticals and geographies which we then scale through our direct sales force. Our sales team is supported
by engineers with deep technical expertise and responsibility for pre-sales technical support, solutions for engineering for our customers
and technical training for our channel partners. We generate customer leads, accelerate sales opportunities and build brand awareness
through our marketing programs and through our channel partner relationships. Our marketing programs target business units within companies
rather than purchasing, human resources or administrative departments to drive sales by demonstrating the impact of our product capabilities
on results. Our principal marketing programs include webinars, roadshows, sponsored exhibitions and events, cooperative marketing efforts
with channel partners, and use of our website.</FONT></P>

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results of operations depend on sales to commercial enterprise organizations, which make product purchasing decisions based in part or
entirely on factors, or perceived factors, not directly related to the features of the platforms, including, among others, that customer&#8217;s
projections of business growth, uncertainty about macroeconomic conditions (including the occurrence of natural disasters, pandemics,
geopolitical tensions (particularly those relating to the People&#8217;s Republic of China), military conflicts rising inflation and
interest rates, or monetary policy changes), capital budgets, anticipated cost savings from the implementation of our platforms, potential
preference for such customer&#8217;s internally-developed software solutions, perceptions about our business and platforms, more favorable
terms offered by potential competitors, and previous technology investments. In addition, certain decision makers and other stakeholders
within our potential customers tend to have vested interests in the continued use of internally developed or existing software, which
may make it more difficult for us to sell our platforms and services. As a result of these and other factors, our sales efforts typically
require an extensive effort throughout a customer&#8217;s organization, a significant investment of human resources, expense and time,
including by our senior management, and there can be no assurances that we will be successful in making a sale to a potential customer.
If our sales efforts to a potential customer do not result in sufficient revenue to justify our investments, including in our growing
direct sales force, our business, financial condition, and results of operations could be adversely affected.</FONT></P>

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limited number of customers account for a substantial portion of our revenue. If existing customers do not make subsequent purchases
from us or renew their contracts with us, or if our relationships with its largest customers are impaired or terminated, our revenue
could decline, and its results of operations would be adversely impacted.</I></B></FONT></P>

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derive a significant portion of our revenue from existing customers that expand their relationships with us. Increasing the size and
number of the deployments of our existing customers is a major part of our growth strategy. We may not be effective in executing this
or any other aspect of our growth strategy.</FONT></P>

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the year ended December 31, 2025 and 2024, two customers represented approximately 30% and 23%, respectively, of our total revenue.
The loss of one or more significant customers or a reduction in the amount of revenue we derive from any such customer could significantly
and adversely affect our business, financial condition and results of operations. Our top customers by revenue have been long term customers.
From time to time, we may lose a major customer. It is not possible for us to predict the future level of demand from our larger customers
for our platforms and applications.</FONT></P>

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generally offer contract terms of up to one year in length, which may not provide for automatic renewal and may require the customer
to opt-in to extend the term. Our customers have no obligation to renew, upgrade, or expand their agreements with us after the terms
of their existing agreements have expired. In addition, many of our customer contracts permit the customer to terminate their contracts
with us with notice periods ranging from 60 to 90 days. If one or more of our customers terminate their contracts with us, whether for
convenience, for default in the event of a breach by us, or for other reasons specified in our contracts, as applicable; if our customers
elect not to renew their contracts with us; if our customers renew their contractual arrangements with us for shorter contract lengths
or for a reduced scope; or if our customers otherwise seek to renegotiate terms of their existing agreements on terms less favorable
to us, our business and results of operations could be adversely affected. This adverse impact would be even more pronounced for customers
that represent a material portion of our revenue or business operations.</FONT></P>

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ability to renew or expand our customer relationships may decrease or vary as a result of a number of factors, including our customers&#8217;
satisfaction or dissatisfaction with our platforms and services, the frequency and severity of software and implementation errors, our
platforms&#8217; reliability, our pricing, the effects of general economic conditions, competitive offerings or alternatives, or reductions
in our customers&#8217; spending levels. If our customers do not renew or expand their agreements with us or if they renew their contracts
for shorter lengths or on other terms less favorable to us, our revenue may grow more slowly than expected or decline, and our business
could suffer. Our business, financial condition, and results of operations would also be adversely affected if we face difficulty collecting
our accounts receivable from our customers.</FONT></P>

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renewal or expansion of deployments may require us to increasingly engage in sophisticated and costly sales efforts that may not result
in additional sales. In addition, our customers&#8217; decisions to expand the deployment of our platforms depends on a number of factors,
including general economic conditions, the functioning of our platforms, the ability of our forward-deployed engineers to assist our
customers in identifying new use cases, enabling the simplification and acceleration of rapidly building applications, and our customers&#8217;
satisfaction with our services. If our efforts to expand within our existing customer base are not successful, our business may suffer.</FONT></P>

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we do not successfully develop and deploy new technologies to address the needs of its customers, its business and results of operations
could suffer.</I></B></FONT></P>

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success has been based on our ability to design products that enables our customers to rapidly develop, deploy, and operate large-scale
enterprise AI applications. We spend substantial amounts of time and money researching and developing new technologies and enhanced versions
of existing features to meet our customers&#8217; and potential customers&#8217; rapidly evolving needs. There is no assurance that our
enhancements to our platforms or our new product features, capabilities, or offerings, will be compelling to our customers or gain market
acceptance. If our research and development investments do not accurately anticipate customer demand or if we fail to develop our platforms
in a manner that satisfies customer preferences in a timely and cost-effective manner, we may fail to retain our existing customers or
increase demand for our platforms.</FONT></P>

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introduction of new products and services by competitors or the development of entirely new technologies to replace existing offerings
could make our platforms obsolete or adversely affect our business, financial condition, and results of operations. We may experience
difficulties with software development, design, or marketing that delay or prevent our development, introduction, or implementation of
new platforms, features, or capabilities. We have in the past experienced delays in our internally planned release dates of new features
and capabilities, and there can be no assurance that new platforms, features, or capabilities will be released according to schedule.
Any delays could result in adverse publicity, loss of revenue or market acceptance, or claims by customers brought against us, any of
which could harm our business. Moreover, the design and development of new platforms or new features and capabilities to our existing
platforms may require substantial investment, and we have no assurance that such investments will be successful. If customers do not
widely adopt our new platforms, experiences, features, and capabilities, we may not be able to realize a return on our investment and
our business, financial condition, and results of operations may be adversely affected.</FONT></P>

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new and existing platforms and changes to our existing platforms could fail to attain sufficient market acceptance for many reasons,
including:</FONT></P>

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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">reluctance
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    of our customers to purchase products hosted by our vendors and/or service interruption from such providers; and</FONT></TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
we are not able to continue to identify challenges faced by our customers and develop, license, or acquire new features and capabilities
to our platforms in a timely and cost-effective manner, or if such enhancements do not achieve market acceptance, our business, financial
condition, results of operations, and prospects may suffer and our anticipated revenue growth may not be achieved. Because we derive,
and expect to continue to derive, substantially all of our revenue from customers purchasing our platforms and products, market acceptance
of these platforms and products, and any enhancements or changes thereto, is critical to our success.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Our
ability to sell its products and satisfy its customers is dependent on the quality of our services, and our failure to offer high quality
services could have a material adverse effect on its sales and results of operations.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Once
our platforms are deployed and integrated with our customers&#8217; existing information technology investments and data, our customers
will depend on our support and maintenance services to resolve any issues relating to our platforms. In the future, our platforms may
be deployed in large-scale, complex technology environments, and we believe our future success will depend on our ability to increase
sales of our platforms for use in such deployments. Further, our ability to provide effective ongoing services, or to provide such services
in a timely, efficient, or scalable manner, may depend in part on our customers&#8217; environments and their upgrading to the latest
versions of our platforms and participating in our centralized platform management and services.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, our ability to provide effective services is largely dependent on our ability to attract, train, and retain qualified personnel
with experience in supporting customers on platforms such as ours. We may be unable to respond quickly enough to accommodate short-term
increases in customer demand for our services. We also may be unable to modify the future scope and delivery of our services to compete
with changes in the services provided by our competitors. Increased customer demand for support, without corresponding revenue, could
increase costs and negatively affect our business and results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
customers may in the future need training in the proper use of and the variety of benefits that can be derived from our platforms to
maximize the potential of our platforms. If we do not effectively deploy, update, or upgrade our platforms, succeed in helping our customers
quickly resolve post-deployment issues, and provide effective ongoing services, our ability to sell additional products and services
to existing customers could be adversely affected, we may face negative publicity, and our reputation with potential customers could
be damaged. As a result, our failure to maintain high quality services may have a material adverse effect on our business, financial
condition, results of operations, and growth prospects.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>If
we are not able to maintain and enhance its brand and reputation, our relationships with our customers, partners, and employees may be
harmed, and its business and results of operations may be adversely affected.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe that maintaining and enhancing our brand identity and reputation is important to our relationships with, and to our ability to
attract and retain customers, partners, investors, and employees. The successful promotion of our brand depends upon our ability to continue
to offer high-quality software, maintain strong relationships with our customers, the community, and others, while successfully differentiating
our platforms from those of our competitors. Unfavorable media coverage may adversely affect our brand and reputation. We anticipate
that as our market becomes increasingly competitive, maintaining and enhancing our brand may become increasingly difficult and expensive.
If we do not successfully maintain and enhance our brand identity and reputation, we may fail to attract and retain employees, customers,
investors, or partners, grow our business, or sustain pricing power, all of which could adversely impact our business, financial condition,
results of operations, and growth prospects. Additionally, despite our internal safeguards and efforts to the contrary, we cannot guarantee
that our customers will not ultimately use our platforms for purposes inconsistent with our company values, and such uses may harm our
brand and reputation.</FONT></P>

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the market for our platforms and services develops more slowly than we expect, our growth may slow or stall, and our business, financial
condition, and results of operations could be harmed.</I></B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
market for our platforms is rapidly evolving. Our future success will depend in large part on the growth and expansion of this market,
which is difficult to predict and relies on a number of factors, including customer adoption, customer demand, changing customer needs,
the entry of competitive products, the success of existing competitive products, potential customers&#8217; willingness to adopt an alternative
approach to developing, deploying, and operating enterprise AI, and their willingness to invest in new software after significant prior
investments in legacy software. The estimates and assumptions that are used to calculate our market opportunity are subject to change
over time, and there is no guarantee that any particular number or percentage of the organizations covered by our market opportunity
estimates will pay for our platforms and services at all or generate any particular level of revenue for us. Even if the market in which
we compete meets the size estimates and growth forecasts, our business could fail to grow at the levels we expect or at all for a variety
of reasons outside our control, including competition in our industry. Further, if we or other enterprise AI companies experience security
breaches or incidents, loss, corruption, or unavailability of or unauthorized access to customer data, disruptions in delivery, or other
problems, this market as a whole, including our platforms, may be negatively affected. If software for the challenges that we address
does not achieve widespread adoption, or if there is a reduction in demand caused by a lack of customer acceptance, technological challenges,
weakening economic conditions (including the occurrence of natural disasters, pandemics, geopolitical tensions (particularly those relating
to the People&#8217;s Republic of China), military conflicts, rising inflation and interest rates, and monetary policy changes), security
or privacy concerns, competing technologies and products, decreases in corporate spending, or otherwise, or, alternatively, if the market
develops but we are unable to continue to penetrate it due to the cost, performance, and perceived value associated with our platforms,
or other factors, it could result in decreased revenue and our business, financial condition, and results of operations could be adversely
affected.</FONT></P>

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raised by the use of AI (including machine learning) in our platforms may result in reputational harm or liability.</I></B></FONT></P>

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is enabled by or integrated into our technology platforms and is a significant element of our business. As with many developing technologies,
AI presents risks and challenges that could affect its further development, adoption, and use, and therefore our business. AI algorithms
may be flawed. Datasets in AI training, development, or operations may be insufficient, of poor quality, or reflect unwanted forms of
bias. Inappropriate or controversial data practices by, or practices reflecting inherent biases of, data scientists, engineers, and end-users
of our systems could impair the acceptance of AI solutions. If the recommendations, forecasts, or analyses that AI applications assist
in producing are deficient or inaccurate, we could be subjected to competitive harm, potential legal liability, including under new proposed
legislation regulating AI in jurisdictions such as the United States and the European Union and brand or reputational harm. The European
Union has enacted the EU AI Act, which imposes significant compliance obligations on providers of AI systems, including requirements
for transparency, human oversight, and conformity assessments for high-risk AI applications. In the United States, various states have
enacted or proposed AI-specific legislation, and federal agencies are increasing their focus on AI governance. Compliance with these
evolving and potentially conflicting regulatory frameworks may require substantial investment in compliance infrastructure, modification
of our products and services, and could limit our ability to offer certain AI capabilities. Failure to comply with applicable AI regulations
could result in significant fines, restrictions on our business, reputational harm, and civil or criminal liability.</FONT></P>

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AI scenarios present ethical issues. Though our technologies and business practices are designed to mitigate many of these risks, if
we enable or offer AI solutions that are controversial or problematic because of their purported or real impact on human rights, privacy,
employment, or other social issues, we may experience brand or reputational harm, as well as regulatory or legal scrutiny.</FONT></P>

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or perceived errors, failures, defects, or bugs in our products, or platforms could adversely affect our results of operations and growth
prospects.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Because
we offer complex technology products, undetected errors, defects, failures, or bugs may in the future occur, especially when products
or capabilities are first introduced or when new versions or other product or infrastructure updates are released. Our platforms are
often installed and used in large-scale computing environments with different operating systems, software products and equipment, and
data source and network configurations, which may cause errors or failures in our platforms or may expose undetected errors, failures,
or bugs in our platforms. Despite testing by us, errors, failures, or bugs may not be found in new software or releases until after commencement
of platform implementation. Errors may affect the performance of our platforms and may also delay the development or release of new platforms
or capabilities or new versions of platforms, adversely affect our reputation and our customers&#8217; willingness to buy platforms from
us, and adversely affect market acceptance or perception of our platforms. Many of our customers use our platforms in applications that
are critical to their businesses or missions and may have a lower risk tolerance to defects in our platforms than to defects in other,
less critical, software products. Any errors or delays in releasing new software or new versions of platforms or allegations of unsatisfactory
performance, errors, defects, or failures in released software could cause us to lose revenue or market share, increase our service costs,
cause us to incur substantial costs in redesigning the software, cause us to lose significant customers, subject us to liability for
damages and divert our resources from other tasks, any one of which could materially and adversely affect our business, results of operations
and financial condition. In addition, our platforms could be perceived to be ineffective for a variety of reasons outside of our control.
Hackers or other malicious parties could circumvent our or our customers&#8217; security measures, and customers may misuse our platforms
resulting in a security breach or perceived product failure. Alleviating any of these problems could require additional significant expenditures
of our capital and other resources and could cause interruptions, delays, or cessation of our product licensing, which could cause us
to lose existing or potential customers and could adversely affect our business, financial condition, results of operations, and growth
prospects.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
have not been profitable in the past and may not achieve or maintain profitability in the future.</I></B></FONT></P>

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had a comprehensive loss of approximately $0.93 million and $15.3 million for the years ended December 31, 2025 and December 31, 2024,
respectively.</FONT></P>

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can be no assurance that Fusemachines will ever achieve the level of revenues needed to be profitable in the future and if profitability
is achieved, that it will be sustained. Our revenues have fluctuated and are likely to continue to fluctuate significantly from quarter
to quarter and from year to year. Fusemachines will need to obtain additional capital and increase sales to become profitable.</FONT></P>

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require substantial additional funding, which may not be available to us on acceptable terms, or at all, and, if not so available, may
require Fusemachines to delay, limit, reduce or cease its operations.</I></B></FONT></P>

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have limited financial resources. There can be no assurance that sufficient funding will be available to us to fund our operating expenses
and to further develop our business. Unless we achieve substantial profitability, we anticipate that we will likely need to raise additional
capital to fund our operations while we implement and execute our business plan. We currently do not have any contracts or commitments
for additional financing. In addition, any additional equity financing may involve substantial dilution to our existing shareholders.
There can be no assurance that such additional capital will be available on a timely basis or on terms that will be acceptable to us.
Failure to obtain such additional financing could result in delay or indefinite postponement of operations or the further development
of our business. If adequate funds are not available or are not available on acceptable terms, we may not be able to further fund our
business or the expansion thereof, take advantage of strategic acquisitions or investment opportunities or respond to competitive pressures.
Such inability to obtain additional financing when needed could have a material adverse effect on our business, results of operations,
cash flow, financial condition and prospects.</FONT></P>

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independent registered public accounting firm&#8217;s report for the year ended December 31, 2025 contains an explanatory paragraph that
expresses substantial doubt about our ability to continue as a &#8220;going concern.&#8221;</I></B></FONT></P>

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of December 31, 2025, we had cash of approximately $4,221 thousand. For the year ended December 31, 2025, we used approximately $5,529
thousand in cash for operating activities. Historically, we have incurred recurring net losses from operations and negative cash flows
from operating activities. As of December 31, 2025, we had an accumulated deficit of approximately $35,145 thousand. These factors raise
substantial doubt regarding our ability to continue as a going concern within one year of the date these consolidated financial statements
were issued.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Our
indebtedness could adversely affect our business and growth prospects.</I></B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have existing indebtedness, and we may be able to incur additional debt from time to time to finance working capital, capital expenditures,
investments or acquisitions, or for other purposes.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
face intense competition within our industry and are subject to the effects of technological change.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
industry in which we are engaged is subject to rapid and significant technological change. There can be no assurance that our systems
can be upgraded to meet future innovations in the industry or that new technologies will not emerge, or existing technologies will not
be improved, which would render our offerings obsolete or non-competitive. Many of the companies we compete with enjoy significant competitive
advantages over us, including greater name recognition; greater financial, technical and service resources; established networks; additional
product offerings; and greater resources for product development and sales and marketing. In addition, there can be no assurance that
other established technology companies, any of which would likely have greater resources than Fusemachines, will not enter the market.
There can be no assurance that Fusemachines will be able to compete successfully against any of its competitors.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Our
proprietary products and services and service delivery may not operate properly, which could damage its reputation, give rise to claims
against us, or divert application of its resources from other purposes, any of which could harm its business and operating results.</I></B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
may encounter supply chain, human, or technical obstacles that prevent our products and services from operating properly. If our offerings
do not function reliably or fail to achieve customer expectations in terms of performance, customers could assert liability claims against
us or cancel their contracts with us. This could damage our reputation and impair our ability to attract or maintain customers. We cannot
assure you that material performance problems or defects in our products will not arise in the future. Errors may result from receipt
and interpretation of customer data or from interface of our services. These defects and errors and any failure by us to identify and
address them could result in loss of revenue or market share, liability to customers or others, failure to achieve market acceptance
or expansion, diversion of development resources, injury to our reputation, and increased service and maintenance costs. The costs incurred
in correcting any defects or errors or in responding to resulting claims or liability may be substantial and could adversely affect our
operating results.</FONT></P>

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critical components used in our products become scarce or unavailable, we may incur delays in delivering our products and providing services,
which could damage its business. We rely on a sustainable supply chain. Any issues with this supply chain could adversely affect daily
business operations and profitability.</I></B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
depend on third party providers, suppliers and licensors to supply some of the hardware, software and support necessary to provide some
of our products and services. We obtain these materials from a limited number of vendors, some of which do not have a long operating
history, or which may not be able to continue to supply the equipment, supplies, and services we desire. If demand exceeds these vendors&#8217;
capacity or if these vendors experience operating or financial difficulties or are otherwise unable to provide the equipment or services
we need in a timely manner, at our specifications and at reasonable prices, our ability to provide some services might be materially
adversely affected, or the need to procure or develop alternative sources of the affected materials or services might delay our ability
to serve our customers. These events could materially and adversely affect our ability to retain and attract customers, and have a material
negative impact on our operations, business, financial results and financial condition.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>If
our security measures are breached or fail and unauthorized access is obtained to a customer&#8217;s data, our service may be perceived
as insecure, the attractiveness of our services to current or potential customers may be reduced, and we may incur significant liabilities.</I></B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
services involve the web-based and data storage and transmission of customers&#8217; information. We rely on proprietary and commercially
available systems, software, tools and monitoring, as well as other processes, to provide security for processing, transmission and storage
of such information. Because of the sensitivity of this information and due to requirements under applicable laws and regulations, the
effectiveness of our security efforts is very important. If our security measures are breached or fail as a result of third-party action,
acts of terror, social unrest, employee error, malfeasance or for any other reasons, someone may be able to obtain unauthorized access
to customer data. Improper activities by third-parties, advances in computer and software capabilities and encryption technology, new
tools and discoveries and other events or developments may facilitate or result in a compromise or breach of our security systems. Our
security measures may not be effective in preventing unauthorized access to the customer data stored on our servers. If a breach of our
security occurs, we could face damages for contract breach, penalties for violation of applicable laws or regulations, possible lawsuits
by individuals affected by the breach and significant remediation costs and efforts to prevent future occurrences. In addition, whether
there is an actual or a perceived breach of our security, the market perception of the effectiveness of our security measures could be
harmed and we could lose current or potential customers.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
depend on key information systems and third party service providers.</I></B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
depend on key information systems to transact our business accurately and efficiently. These systems and services are vulnerable to interruptions
or other failures resulting from, among other things, pandemics, epidemics, natural disasters, terrorist attacks, software or equipment
failures, processing errors, computer viruses, other security issues or supplier defaults. Security, backup and disaster recovery measures
may not be adequate or implemented properly to avoid such disruptions or failures. Any disruption or failure of these systems or services
could cause substantial errors, processing inefficiencies, security breaches, inability to use the systems or process transactions, loss
of customers or other business disruptions, all of which could negatively affect our business and financial performance.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
cybersecurity attacks continue to evolve and increase, our information systems could also be penetrated or compromised by internal and
external parties&#8217; intent on extracting confidential information, disrupting business processes or corrupting information. These
risks could arise from external parties or from acts or omissions of internal or service provider personnel. Such unauthorized access
could disrupt our business and could result in the loss of assets, litigation, remediation costs, damage to our reputation and failure
to retain or attract customers following such an event, which could adversely affect our business.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Cyber-attacks
and security vulnerabilities could lead to reduced revenue, increased costs, liability claims, or harm to our competitive position.</I></B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Increased
sophistication and activities of perpetrators of cyber-attacks have resulted in an increase in information security risks in recent years.
Hackers develop and deploy viruses, worms, and other malicious software programs that attack products and services and gain access to
networks and data centers. If we experience difficulties maintaining existing systems or implementing new systems, we could incur significant
losses due to disruptions in our operations. Additionally, these systems contain valuable proprietary and confidential information and
may contain personal data of our customers. A security breach could result in disruptions of our internal systems and business applications,
harm to our competitive position from the compromise of confidential business information, or subject us to liability under laws that
protect personal data. As cyber threats continue to evolve, we may be required to expend additional resources to continue to enhance
our information security measures and/or to investigate and remediate any information security vulnerabilities. Any of these consequences
would adversely affect our revenue and margins.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
may not be able to adequately protect or enforce our intellectual property rights or prevent unauthorized parties from copying or reverse
engineering our solutions. Our efforts to protect and enforce our intellectual property rights and prevent third parties from violating
its rights may be costly.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
success of our services and its business depends, in part, on our ability to obtain patents and other intellectual property rights and
maintain adequate legal protection for its products in the United States and other international jurisdictions. We cannot be certain
that the steps it has taken will prevent unauthorized use of its technology or the reverse engineering of its technology. Moreover, others
may independently develop technologies that are competitive to Fusemachines or infringe our intellectual property.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Protecting
against the unauthorized use of our intellectual property, products and other proprietary rights is expensive and can be difficult, particularly
with respect to international jurisdictions. Unauthorized parties may attempt to copy or reverse engineer our solutions or certain aspects
of our solutions that are considered proprietary. Litigation may be necessary in the future to enforce or defend our intellectual property
rights, to prevent unauthorized parties from copying or reverse engineering our solutions, to determine the validity and scope of the
proprietary rights of others or to block the importation of infringing products into the U.S. Any such litigation, regardless of merit,
could be costly, divert the attention of management and may not ultimately be resolved in our favor.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
patent, trademark, service mark, copyright and trade secret protection may not be available or applied for in every country in which
our products are available and competitors based in other countries may sell infringing products in one or more markets. An inability
to adequately protect and enforce our intellectual property and other proprietary rights or an inability to prevent authorized parties
from copying or reverse engineering its technology solutions or certain aspects of its solutions that we considers proprietary could
adversely affect its business, operating results, financial condition and prospects.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
rely on unpatented proprietary information, trade secrets, processes and know-how, as well as open source software in certain instances.
Our failure to protect our confidential information, trade secrets, processes and know-how, and our reliance on open source solutions,
could negatively impact our business and results of operations.</I></B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
rely on proprietary information (such as trade secrets, know-how and confidential information) to protect intellectual property that
may not be patentable or subject to copyright, trademark, trade dress or service mark protection.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
generally seek to protect this proprietary information by entering into confidentiality agreements, or consulting, services or employment
agreements that contain non-disclosure and non-use provisions with its employees, consultants, contractors and third parties. However,
we may fail to enter into the necessary agreements and, even if entered into, these agreements may be breached or may otherwise fail
to prevent disclosure, third-party infringement or misappropriation of its proprietary information, may be limited as to their term and
may not provide an adequate remedy in the event of unauthorized disclosure or use of proprietary information. Fusemachines has limited
control over the protection of trade secrets used by its current or future manufacturing partners and suppliers and could lose future
trade secret protection if any unauthorized disclosure of such information occurs. In addition, our proprietary information may otherwise
become known or be independently developed by its competitors or other third parties. To the extent that its employees, consultants,
contractors, advisors and other third parties use intellectual property owned by others in their work for us, disputes may arise as to
the rights in related or resulting know-how and inventions. Costly and time-consuming litigation could be necessary to enforce and determine
the scope of our proprietary rights, and failure to obtain or maintain protection for its proprietary information could adversely affect
its competitive business position. Furthermore, laws regarding trade secret rights in certain markets where we operate may afford limited
or no protection for its trade secrets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
also rely on physical and electronic security measures to protect its proprietary information, but it cannot provide assurance that these
security measures will not be breached or that these measures will provide adequate protection. There is a risk that third parties may
obtain and improperly utilize our proprietary information to its competitive disadvantage. We may not be able to detect or prevent the
unauthorized use of such information or take appropriate and timely steps to enforce our intellectual property rights.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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addition, while the majority of our algorithms utilized for its products are proprietary, including those most critical to the company&#8217;s
products, certain algorithms which form a part of these products are made available under &#8220;open source&#8221; licenses. We expect
to continue to incorporate open source software in the company&#8217;s solutions in the future. Open source software is typically freely
available, but is licensed under various requirements that bind the licensee. While the use of open source software may reduce development
costs and speed up the development process, it may also present certain risks, that may be greater than those associated with the use
of third-party commercial software, including but not limited to potential non-compliance with these licenses. Further, depending on
the manner in which such licenses were interpreted and applied to software code that combines proprietary and open source software and
source code, companies have in the past faced restrictions on their ability to commercialize certain of our products, and it is possible
that we could be subject to similar restrictions in the future.</FONT></P>

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embedded in AI solutions, and AI datasets, often suffer from lack of transparency, bias, and risks of inadvertent disclosure of information,
which could subject us to adverse consequences.</I></B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">AI
systems are created with a variety of tools including machine learning, natural language processing, computer vision, and neural networks.
AI systems are capable of behaving in ways that mimic human capabilities, and AI therefore refers to the ability of computers to emulate
human thought and perform tasks that are usually performed by humans; it refers to the technologies and algorithms that enable systems
to identify patterns, make decisions and could learn from data without being explicitly programmed. Challenges related to AI are numerous,
and include biases and lack of transparency embedded in AI solutions, and inadvertent disclosure of information.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Many
current AI models are closed, meaning it is unclear how they are trained, and even where open-source AI models are used, the risk of
bias and inadvertent disclosure of information can remain, depending on the humans developing the models and the way in which these models
are used. Use of closed AI models, where such a lack of transparency exists as to sources of data used to train or develop such technologies
or how inputs are converted to outputs, may make it difficult to fully validate the process and can raise issues with trust, accountability,
and ethics. Whether or not AI systems are closed, or open-source and available to review, the algorithms and models utilized in AI systems
may have limitations, including biases, vulnerabilities, errors, or inability to handle certain data types or scenarios. Any deficiencies
could, despite our efforts, undermine the decisions, predictions or analysis AI applications produce, or give rise to risks related to
harmful content, accuracy, bias, discrimination, toxicity, intellectual property infringement or misappropriation, defamation, data privacy,
and cybersecurity, among others. Any cybersecurity incidents related to our use of AI applications to analysis personal data could adversely
affect our reputation and results of operations.</FONT></P>

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AI solutions and models are part of a new and expanding industry, and our use and implementation of such models now and in the future,
could subject us to any of the foregoing, or additional risks, which could impact our business, results of operations, or result in brand
or reputational harm, competitive harm, or legal liability.</FONT></P>

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use of open source software, including algorithms, involves a number of risks, many of which cannot be eliminated and could negatively
affect our business. For example:</FONT></P>

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    of certain open source licenses, if we combine our proprietary software with open source software in a certain manner, we could be
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    if re-engineering could not be accomplished on a timely or cost-effective basis, require us to make the source code of our proprietary
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    devote additional research and development resources to re-engineer our platform. In addition to risks related to license requirements,
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by others that we infringe upon their intellectual property could force us to incur significant costs or revise the way we conduct our
business.</I></B></FONT></P>

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competitors protect their proprietary rights by means of patents, trade secrets, copyrights, trademarks and other intellectual property.
We have not conducted an independent review of patents and other intellectual property issued to third-parties (often referred to as
a freedom to operate search), who may have patents or patent applications relating to our proprietary technology. We may receive letters
from third parties alleging, or inquiring about, possible infringement, misappropriation or violation of their intellectual property
rights. Any party asserting that we infringe, misappropriate or violate proprietary rights may force us to defend ourselves, and potentially
our customers, against the alleged claim. These claims and any resulting lawsuit, if successful, could subject us to significant liability
for damages and/or invalidation of our proprietary rights or interruption or cessation of our operations. Any such claims or lawsuit
could:</FONT></P>

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during the course of litigation, confidential information may be disclosed in the form of documents or testimony in connection with discovery
requests, depositions or trial testimony. Disclosure of our confidential information and our involvement in intellectual property litigation
could materially adversely affect our business. Some of our competitors may be able to sustain the costs of intellectual property litigation
more effectively than we can because they have substantially greater resources. In addition, any litigation could significantly harm
our relationships with current and prospective customers. Any of the foregoing could disrupt our business and have a material adverse
effect on our business, operating results and financial condition.</FONT></P>

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depend on our management team and other key employees, and the loss of one or more of these employees or an inability to attract and
retain highly skilled employees could adversely affect its business.</I></B></FONT></P>

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future success depends, in part, on our ability to continue to attract and retain highly skilled personnel. The loss of the services
of any of our key personnel, the inability to attract or retain qualified personnel, or delays in hiring required personnel, particularly
in engineering and sales, may seriously and adversely affect our business, financial condition and results of operations. Although we
have entered into employment or consulting agreements with our personnel, their employment is generally for no specific duration.</FONT></P>

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future performance also depends on the continued services and continuing contributions of our senior management team, including Sameer
Maskey, our Chief Executive Officer, to execute on our business plan and to identify and pursue new opportunities and product innovations.
The loss of services of our senior management team, particularly our Chief Executive Officer, could significantly delay or prevent the
achievement of our development and strategic objectives, which could adversely affect our business, financial condition and results of
operations.</FONT></P>

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are subject to evolving laws and regulations that could impose substantial costs, legal prohibitions or unfavorable changes upon our
operations or products, and may be a party to material legal proceedings in the future.</I></B></FONT></P>

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are or will be subject to complex laws and regulations at numerous jurisdictional levels in the U.S., and other locations abroad. New,
or changes in such regulations or rules could also lead to increased costs of compliance, including remediations of any discovered issues
in our products, and changes to our operations, which may be significant, and any failures to comply could result in significant expenses,
delays or fines. In addition, we may become a party to material legal proceedings, or governmental investigations, in the future. If
we are unable to successfully defend ourselves in such proceedings or government investigations, it may harm our brand, ability to attract
and retain qualified employees, business and financial condition.</FONT></P>

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management team has limited experience managing a public company and regulatory compliance may divert their attention from the day-to-day
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management team has limited experience managing a publicly-traded company and limited experience complying with the increasingly complex
laws pertaining to public companies. These obligations typically require substantial attention from our senior management and could divert
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adverse developments in domestic and global economic conditions, or the occurrence of other world events, could materially adversely
affect our revenue and results of operations.</I></B></FONT></P>

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factors contribute to the uncertain economic environment, the occurrence of natural disasters, pandemics, geopolitical tensions (particularly
those relating to the People&#8217;s Republic of China), military conflicts, the increase in, and volatility of, interest rates, high
inflation, an actual recession or fears of a recession, trade policies and tariffs and geopolitical tensions. Our inability to offset
price inflation in our materials, components, shipping, or labor through increased prices to customers with long-term fixed contracts
and formula-based or long-term fixed price contracts with suppliers could adversely affect our business, financial condition and results
of operations. Global supply chain and labor market challenges could also negatively affect our performance as well as the performance
of our suppliers. Interest rate increases have also created financial market volatility and could further negatively impact financial
markets, lead to an economic downturn or recession or have an adverse effect on our operating results. In addition, geopolitical risks
could affect our customers&#8217; budgets and policies. These and other factors may adversely affect customer demand and ability to pay,
cause decrease in sales, and negatively impact the realizability of our accounts and notes receivable and contract assets.</FONT></P>

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business is heavily dependent upon our international operations, particularly in Nepal, and any disruption to those operations would
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business and future growth depend largely on continued demand for our services performed from Nepal. Various factors, such as changes
in the governments, could trigger significant changes in Nepal&#8217;s economic liberalization and deregulation policies and disrupt
business and economic conditions in Nepal generally and our business in particular. Our business and our international operations may
also be affected by actual or threatened trade war or tariffs or other trade controls. If we are unable to continue to leverage the skills
and experience of our international workforce, particularly in Nepal, we may be unable to provide our solutions at an attractive price
and our business could be materially and negatively impacted.</FONT></P>

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have made and continue to make significant contractual commitments related to our leased facilities. These expenses will have a significant
impact on our fixed costs, and if we are unable to grow our business and revenue proportionately, our operating results may be negatively
affected.</FONT></P>

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sites operate on leasehold property, and our inability to renew our leases on commercially acceptable terms or at all may adversely affect
our results of operations.</FONT></P>

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terms or at all, which may have an adverse impact on our operations. In addition, in the event of non-renewal of our leases, we may be
unable to locate suitable replacement properties for our sites or we may experience delays in relocation that could lead to a disruption
in our operations.</FONT></P>

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events, including those which impact third parties on which we materially rely, could materially adversely affect our business, results
of operations and/or financial condition.</I></B></FONT></P>

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disruption or failure of our systems or operations, or the systems or operations of a third party on which we materially rely, such as
in the event of a major earthquake, weather event, fire, explosion, failure to contain hazardous materials, industrial accident, utility
failure, cyber-attack, IT failure, terrorist attack, public health crisis, pandemic, or other catastrophic event could cause delays in
completing sales, providing services, or performing other mission-critical functions. A catastrophic event that results in the destruction
or disruption of any of our critical business or information technology systems could harm our ability to conduct normal business operations
and our operating results as well as expose us to claims, litigation and governmental investigations and fines.</FONT></P>

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our backup and mitigation plans are not sufficient to minimize business disruption, our financial results could be adversely affected.
We are continuously monitoring our operations and intend to take appropriate actions to mitigate the risks arising from catastrophic
events, but there can be no assurances that we will be successful in doing so.</FONT></P>

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have identified material weaknesses and significant deficiencies related in our internal control over financial reporting. If we fail
to remediate these material weaknesses, maintain effective internal control over financial reporting or identify additional material
weakness or significant deficiency in its internal control over financial reporting, our ability to report our financial condition and
results of operations in a timely and accurate manner could be adversely affected, investor confidence in our company could diminish,
and the value of our stock may decline.</I></B></FONT></P>

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our consolidated financial statements involves a number of complex manual and automated processes, which are dependent upon individual
data input or review and require significant management judgment. One or more of these processes may result in errors that may not be
detected and could result in a material misstatement or other errors of our consolidated financial statements. Such errors may be more
likely to occur when implementing new systems and processes, particularly when implementing evolving and complex accounting rules. The
Sarbanes-Oxley Act of 2002 (the &#8220;Sarbanes-Oxley Act&#8221;) requires, among other things, that as a publicly-traded company we
disclose whether our internal control over financial reporting and disclosure controls and procedures are effective. While we continually
undertake steps to improve our internal control over financial reporting as our business changes, we may not be successful in making
the improvements and changes necessary to be able to identify and remediate control deficiencies or material weaknesses on a timely basis.
If we are unable to successfully remediate any current or future material weaknesses in our internal control over financial reporting,
the accuracy and timing of our financial reporting may be adversely affected; our liquidity, access to capital markets and perceptions
of our creditworthiness may be adversely affected; we may be unable to maintain compliance with securities laws, stock exchange listing
requirements and debt instruments covenants regarding the timely filing of periodic reports; we may be subject to regulatory investigations
and penalties; investors may lose confidence in our financial reporting; we may suffer defaults under our debt instruments; and our stock
price may decline.</FONT></P>

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the standards of publicly traded companies required by Section 404(a) of the Sarbanes-Oxley Act.</FONT></P>

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connection with the preparation and audit of our consolidated financial statements as of and for the years ended December 31, 2025 and
2024, material weaknesses were identified in its internal control over financial reporting. A material weakness is a deficiency, or combination
of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement
of the financial statements will not be prevented or detected on a timely basis. The following material weaknesses were identified:</FONT></P>

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    systems that are relevant to the preparation of its consolidated financial statements. Specifically, Fusemachines currently relies
    on QuickBooks for its books and records as well as financial reporting needs. Because QuickBooks lacks robust financial reporting
    capabilities as well as certain controls, the close process was manually intensive. This process resulted in significant delays and
    errors in the preparation of its consolidated financial statements. In addition, Fusemachines did not design and maintain user access
    controls to ensure appropriate segregation of duties and restrict user access to its financial applications to appropriate company
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filed a Quarterly Report on Form 10-Q for the period ended September 30, 2025 later than required, and any failure to timely file our
periodic reports in the future could adversely affect our compliance with securities laws and exchange listing standards, impair our
access to capital, increase regulatory scrutiny and litigation risk, and negatively impact our business and the market price of our securities.</I></B></FONT></P>

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are required to file periodic reports with the SEC within prescribed deadlines. We did not file our most recent Quarterly Report on Form
10-Q, which included the financial information solely of CSLM, within the required timeframe. Although we ultimately filed the report,
our failure to file timely evidences vulnerabilities in our reporting processes and controls and may subject us to additional regulatory
and market risks. As a former special purpose acquisition company that recently completed a business combination, our financial reporting
environment is undergoing significant changes and integration, which increases the complexity of our reporting obligations and the risk
of future delays.</FONT></P>

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SEC filings can result in non-compliance with applicable stock exchange listing requirements, and our securities exchange may issue deficiency
notices or take other actions, including initiating delisting procedures, if we do not timely cure any reporting delinquency. A late
filing can also adversely affect our eligibility to use short-form registration statements on Form S-3, limit our status under shelf
registration rules, and restrict our ability to access the capital markets efficiently. In addition, late or incomplete filings can trigger
contractual penalties, liquidated damages, or other remedies under registration rights, financing agreements, and other commercial contracts
that require us to maintain effective registration statements or timely reports, which could increase our costs or limit our financing
flexibility. Delays in reporting may also elevate the risk of restatements, material weaknesses in internal control over financial reporting,
and increased audit fees and remediation expenses.</FONT></P>

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failure to timely file periodic reports may subject us to heightened SEC scrutiny and enforcement risk, harm investor and analyst confidence,
and increase the likelihood of stock price volatility, securities class actions, and derivative litigation. The reputational impact of
a late filing can be significant, particularly for companies that have recently merged with a SPAC, which commonly face greater market
and regulatory attention. If we experience additional delays in future filings, or if our remediation efforts are not effective, we could
face additional compliance challenges, suffer reduced liquidity and a higher cost of capital, and our business, financial condition,
results of operations, and the market price of our securities could be materially and adversely affected.</FONT></P>

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adversely affect our results of operations and growth prospects.</I></B></FONT></P>

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prepare our consolidated financial statements in accordance with GAAP. In particular, we make certain estimates and assumptions related
to the adoption and interpretation of these principles including the recognition of our revenue and the accounting for our provision
for income taxes. If these assumptions turn out to be incorrect, our financial results and position could materially differ from our
expectations and could be materially adversely affected. A change in any of these principles or guidance, or in their interpretations
or application to us, may have a significant effect on our reported results, as well as our processes and related controls, and may retroactively
affect previously reported results or our forecasts, which may negatively impact our financial statements.</FONT></P>

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our judgments or estimates relating to its critical accounting policies are based on assumptions that change or prove to be incorrect,
our results of operations could fall below expectations of securities analysts and investors, resulting in a decline in its stock price.</I></B></FONT></P>

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preparation of our financial statements in conformity with GAAP requires management to make judgments, estimates, and assumptions that
affect the amounts reported in the consolidated financial statements and accompanying notes. We base our estimates on historical experience
and on various other assumptions that we believe to be reasonable under the circumstances, as provided in the section titled <I>&#8220;Management&#8217;s
Discussion and Analysis of Financial Condition and Results of Operations&#8221;</I> the results of which form the basis for making judgments
about the carrying values of assets, liabilities, and equity, and the amount of revenue and expenses that are not readily apparent from
other sources. Our results of operations may be adversely affected if our assumptions change or if actual circumstances differ from those
in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts and investors,
resulting in a decline in the trading price of the combined company&#8217;s securities. Significant judgments, estimates, and assumptions
used in preparing our consolidated financial statements include, or may in the future include, those related to revenue recognition and
income taxes.</FONT></P>

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results of operations could be affected by currency fluctuations.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
global operations are conducted predominantly in U.S. dollars. While revenue is generated in U.S. dollars, Fusemachines incurs expenses
in other currencies, principally, Nepalese rupees and Canadian dollars. The Company&#8217;s international operations expose it to risk
of adverse fluctuations in foreign currency exchange rates through the remeasurement of foreign currency denominated assets and liabilities
(both third-party and intercompany) and translation of earnings and cash flows into U.S. dollars. Accordingly, the results of our operations
are subject to currency exchange risks. To date, we have not engaged in any formal hedging program to mitigate these risks. The fluctuations
in currency exchange rates may significantly impact our financial position and results of operations in the future.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Fusemachines
has limited insurance which may not cover claims by third parties against Fusemachines or its officers and directors.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have directors&#8217; and officers&#8217; liability insurance and commercial liability insurance policies. Claims, however, by third
parties against us may exceed policy amounts and we may not have amounts to cover these claims. Any significant claims would have a material
adverse effect on our business, financial condition and results of operations. In addition, our limited directors&#8217; and officers&#8217;
liability insurance may affect our ability to attract and retain directors and officers.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Fusemachines
could be subject to additional tax liabilities.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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are subject to federal, state, and local income taxes in the United States and foreign jurisdictions. Determining our provision for income
taxes requires significant management judgment, and the ultimate tax outcome may be uncertain. In addition, our provision for income
taxes is subject to volatility and could be adversely affected by many factors, including, among other things, changes to our operating
or holding structure, changes in the amounts of earnings in jurisdictions with differing statutory tax rates, changes in the valuation
of deferred tax assets and liabilities, and changes in U.S. and foreign tax laws. Moreover, we are subject to the examination of our
income tax returns by tax authorities in the United States and various foreign jurisdictions, which may disagree with our calculation
of research and development tax credits, cross-jurisdictional transfer pricing, or other matters and assess additional taxes, interest
or penalties. While we regularly assess the likely outcomes of these examinations to determine the adequacy of our provision for income
taxes and we believe that our financial statements reflect adequate reserves to cover any such contingencies, there can be no assurance
that the outcomes of such examinations will not have a material impact on our results of operations and cash flows. If U.S. or other
foreign tax authorities change applicable tax laws, our overall taxes could increase, and our financial condition or results of operations
may be adversely impacted.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Provisions
enacted by the 2017 Tax Cuts and Jobs Act related to the capitalization for tax purposes of research and experimental (&#8220;R&amp;E&#8221;)
expenditures became effective on January 1, 2022. Beginning January 1, 2022, all U.S. and non-U.S. based R&amp;E expenditures must be
capitalized and amortized over five years and 15 years, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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Company capitalizes certain costs related to internal use software acquired, modified, or developed related to the Company&#8217;s services.
These capitalized costs are primarily related to salaries and other personnel costs. Costs incurred in the preliminary stages of development
are expensed as incurred. Once the application development stage has been reached, internal and external costs, if direct and incremental,
are capitalized until the software is substantially complete and ready for its intended use. Capitalization ceases upon completion of
all substantial testing. Maintenance and training costs are expensed as incurred. Capitalized software is amortized on a straight-line
basis over its useful life.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Ongoing
and escalating political volatility in Nepal may adversely affect our business, financial condition, and results of operations.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Nepal
has experienced significant governmental turnover since the 2008 abolition of the country&#8217;s monarchy government. Beginning on September
8, 2025, thousands of demonstrators converged on central Kathmandu to protest alleged entrenched corruption, high unemployment, and perceived
democratic backsliding. Security forces responded violently. Parallel and subsequent protests, demonstrations, and work stoppages have
disrupted transportation and public services nationwide. Should similar or further unrest occur, we could face, among other things: restrictions
on the movement of personnel and goods; interruptions to supply chains; delays in permitting or licensing; selective enforcement or abrupt
changes in tax, labor, foreign-exchange, or investment regulations; increased security costs; and reputational damage. There can be no
assurance that Nepal&#8217;s government will stabilize, that further violent protests will not occur, or that new regulations or emergency
decrees will not materially impair our operations in the country. Any of the foregoing events, individually or in the aggregate, could
have a material adverse effect on our business, financial condition, and results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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Related to Ownership of Our Securities</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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price of our Common Stock may be volatile.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
market price of our Common Stock is likely to be highly volatile and could fluctuate widely in price in response to various factors,
many of which are beyond our control, including the following:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
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<TR STYLE="font: 10pt Times New Roman, Times, Serif">
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Many
of these factors are beyond our control and may decrease the market price of the Common Stock, regardless of our operating performance.
We cannot make any predictions or projections as to what the prevailing market price for the Common Stock will be at any time, including
as to whether the Common Stock will sustain current market prices, or as to what effect that the sale of shares or the availability of
the Common Stock for sale at any time will have on the prevailing market price.</FONT></P>

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addition, the securities markets have from time-to-time experienced significant price and volume fluctuations that are unrelated to the
operating performance of particular companies. These market fluctuations may also materially and adversely affect the market price of
the Common Stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Our
executive officers and directors exercise significant control over the company, which may limit your ability to influence corporate matters
and could delay or prevent a change in corporate control.</I></B></FONT></P>

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Maskey, our Chief Executive Officer, beneficially owns approximately 20.36% of the combined voting power for the election of directors
to the Company&#8217;s board of directors. As a result, this stockholder will be able to influence our management and affairs and control
the outcome of matters submitted to our stockholders for approval, including the election of directors and any sale, merger, consolidation,
or sale of all or substantially all of our assets.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
stockholder may have interests, with respect to his Common Stock, which are different from those of the public investors and the concentration
of voting power among this stockholder may have an adverse effect on the price of the Common Stock.</FONT></P>

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addition, this concentration of ownership might adversely affect the market price of the Common Stock by: (1) delaying, deferring or
preventing a change of control; (2) impeding a merger, consolidation, takeover or other business combination involving us; or (3) discouraging
a potential acquirer from making a tender offer or otherwise attempting to obtain control of us.</FONT></P>

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requirements of being a public company may strain the Company&#8217;s resources and distract management and we will incur substantial
costs as a result of being a public company.</I></B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act, and the Securities Act. These rules, regulations
and requirements are extensive. We will incur significant costs associated with our public company corporate governance and reporting
requirements. The Exchange Act requires, among other things, that we file annual, quarterly and current reports with respect to our business
and operating results. The Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures
and internal control over financial reporting. In order to maintain and, if required, improve our disclosure controls and procedures
and internal control over financial reporting to meet this standard, significant resources and management oversight may be required.
As a result, management&#8217;s attention may be diverted from other business concerns, which could adversely affect our business and
operating results. We may need to hire more corporate employees to comply with these requirements or engage outside consultants, which
would increase our costs and expenses. This may divert management&#8217;s attention from other business concerns, which could have a
material adverse effect on our business, financial condition and results of operations. These applicable rules and regulations may make
it more difficult and more expensive for us to obtain director and officer liability insurance and it may be required to accept reduced
policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. As a result, it may be more difficult
for us to attract and retain qualified individuals to serve on the Company&#8217;s board of directors or as executive officers.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for
public companies, increasing legal and financial compliance costs and making some activities more time-consuming. These laws, regulations
and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application
in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty
regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to
invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative
expenses and a diversion of management&#8217;s time and attention from revenue-generating activities to compliance activities. If our
efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due
to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our business
may be adversely affected.</FONT></P>

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a result of disclosure of information in this Annual Report on Form 10-K and in the filings that we are required to make as a public
company, our business, operating results and financial condition have become more visible, which may result in threatened or actual litigation,
including by competitors and other third parties. If any such claims are successful, our business, operating results and financial condition
could be adversely affected, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time
and resources necessary to resolve them, could divert the resources of our management and adversely affect our business, operating results
and financial condition.</FONT></P>

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stockholders, or the perception that these sales could occur, could cause the market price of the Common Stock to decline.</I></B></FONT></P>

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of a substantial number of shares of Common Stock in the public market, particularly sales by our executive officers, directors and principal
stockholders, or the perception that these sales might occur, could cause the market price of the Common Stock to decline. Holders of
a substantial number of shares of the Common Stock following the Business Combination are subject to lock-up provisions in our bylaws,
as amended and restated (the &#8220;Bylaws&#8221;) in that, for a period of at least one year from the date of closing of the Business
Combination, subject to certain exceptions, prohibit them from offering for sale, selling, contracting to sell, granting any option for
the sale of, transferring or otherwise disposing of any shares of the Common Stock and of any securities convertible into or exercisable
for the Common Stock, unless waived, amended, or repealed by the Company&#8217;s board of directors.</FONT></P>

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the applicable lock-up periods expire, our security holders subject to the lock-up provisions will be able to sell shares of Common Stock
in the public market. In addition, the Company&#8217;s board of directors may, in its discretion, permit our security holders to sell
shares prior to the expiration of the restrictive provisions contained in the Bylaws. Pursuant to Section 7.14(d) of the Bylaws, the
Company&#8217;s board of directors may also waive, amend or repeal the terms of the lock-up provision in the Bylaws for any reason, including
in order to meet or maintain the Nasdaq listing requirements, which would allow the holders of any securities held by the parties to
such lock-up agreements. to sell our shares without restriction, subject to applicable securities laws. Sales of a substantial number
of such shares upon expiration of the lock-up provisions, the perception that such sales may occur or early release of these provisions
could cause our market price to fall or make it more difficult for you to sell your common stock at a time and price that you deem appropriate.</FONT></P>

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addition, we may file a registration statement to register shares reserved for future issuance under our equity compensation plans. Subject
to the satisfaction of applicable vesting requirements and expiration of the lock-up provisions referred to above, the shares issued
upon exercise of outstanding stock options would be available for immediate resale in the open market.</FONT></P>

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decline in the price of the Common Stock could affect the company&#8217;s ability to raise working capital and adversely impact the company&#8217;s
ability to continue operations.</I></B></FONT></P>

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prolonged decline in the price of the Common Stock could result in a reduction in the liquidity of the common stock and a reduction in
our ability to raise capital. A decline in the price of the Common Stock could be especially detrimental to our liquidity, operations
and strategic plans. Such reductions may force us to reallocate funds from other planned uses and may have a significant negative effect
on our business plan and operations, including our ability to develop new products and services and continue current operations. If the
Common Stock&#8217;s price declines, we can offer no assurance that we will be able to raise additional capital or generate funds from
operations sufficient to meet our obligations. If we are unable to raise sufficient capital in the future, we may not be able to have
the resources to continue our normal operations.</FONT></P>

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does not intend to pay any cash dividends in the foreseeable future and, therefore, any return on your investment in the company&#8217;s
capital stock must come from increases in the fair market value and trading price of the capital stock.</I></B></FONT></P>

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have not paid any cash dividends on the Common Stock and do not intend to pay cash dividends on the Common Stock in the foreseeable future.
We intend to retain future earnings, if any, for reinvestment in the development and expansion of our business. Any credit agreements,
which we may enter into with institutional lenders, may restrict our ability to pay dividends. Whether we pay cash dividends in the future
will be at the discretion of the Company&#8217;s board of directors and will be dependent upon our financial condition, results of operations,
capital requirements and any other factors that the Company&#8217;s board of directors decides is relevant. Therefore, any return on
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the price of the Common Stock fluctuates, you could lose a significant part of your investment.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
market price of the Common Stock could be subject to wide fluctuations in response to, among other things, the risk factors described
herein, and other factors beyond our control, such as fluctuations in the valuation of companies perceived by investors to be comparable
to us. Furthermore, the stock markets have experienced price and volume fluctuations that have affected and continue to affect the market
prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance
of those companies. These broad market and industry fluctuations, as well as general economic, political, and market conditions, such
as the occurrence of natural disasters, pandemics, geopolitical tensions (particularly those relating to the People&#8217;s Republic
of China), military conflicts, recessions, inflation, interest rate changes or international currency fluctuations, may negatively affect
the market price of our common stock. In the past, many companies that have experienced volatility in the market price of their stock
have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation
against us could result in substantial costs and divert our management&#8217;s attention from other business concerns, which could seriously
harm our business.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>The
public stockholders will experience immediate dilution as a consequence of future issuances of Common Stock pursuant to the Fusemachines
Equity Incentive Plan.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&#160;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fusemachines
employees and consultants hold, and in the future may be granted, equity awards under equity incentive plans. You will experience additional
dilution when those equity awards and purchase rights become vested and settled or exercisable, as applicable, for shares of the Common
Stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>The
future exercise of registration rights may adversely affect the market price of the Common Stock.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the Amended and Registration Rights Agreement (as defined below), the Company has agreed to register for resale, pursuant to Rule
415 under the Securities Act, certain shares of Common Stock and other equity securities of the Company that are held by the Selling
Stockholders, from time to time.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
registration of these securities will permit the public resale of such securities, subject to any applicable contractual lock-up obligation.
The registration and availability of a significant number of securities for trading in the public market may have an adverse effect on
the market price of the Common Stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>The
Public Warrants may never be in the money, and they may expire worthless and the terms of the warrants may be amended in a manner adverse
to a holder if holders of at least 50% of the then outstanding Public Warrants approve of such amendment.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
exercise price for the outstanding Public Warrants is $11.50 per share. There can be no assurance that the Public Warrants will be in
the money  prior to their expiration and as such, the Public Warrants may expire worthless.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Public Warrants were issued in registered form under a Warrant Agreement between us and Continental Stock Transfer &amp; Trust
Company, as warrant agent, originally executed January 12, 2022 between the warrant agent and CSLM Acquisition, Corp.
(CSLM&#160;&#160;) (&#8220;now known as Fusemachines Inc.&#8221;) and amended at Closing (the &#8220;Warrant Agreement&#8221;). The
Warrant Agreement provides that the terms of the warrants may be amended without the consent of any holder to cure any ambiguity or
correct any defective provision, but requires the approval by the holders of at least 50% of the then outstanding Public Warrants to
make any change that increases the exercise price or shortens the exercise period of the Public Warrants.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accordingly,
we may amend the terms of the Public Warrants in a manner adverse to a holder if holders of at least 50% of the then outstanding Public
Warrants approve of such amendment. Although our ability to amend the terms of the Public Warrants with the consent of at least 50% of
the then outstanding Public Warrants is unlimited, examples of such amendments could be amendments to, among other things, increase the
exercise price of the warrants, shorten the exercise period or decrease the number of shares of Common Stock purchasable upon exercise
of a warrant.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>The
Company may redeem your unexpired Public Warrants prior to their exercise at a time that is disadvantageous to you, thereby making your
Public Warrants worthless.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have the ability to redeem outstanding Public Warrants at any time  and prior to their expiration, at a
price of $0.01 per warrant, provided that the closing price of the Common Stock equals or exceeds $18.00 per share (as adjusted for share
sub-divisions, share capitalizations, reorganizations, recapitalizations and the like) for any twenty (20) trading days within a thirty
(30) trading-day period ending on the third trading day prior to the date on which we give proper notice of such redemption to the warrants
holders and provided certain other conditions are met. We will not redeem the Public Warrants unless an effective registration statement
under the Securities Act covering the shares issuable upon exercise of the warrants is effective and a current prospectus relating to
those shares is available throughout the thirty (30)-day redemption period, except if we elect to require the warrants to be exercised
on a cashless basis and such cashless exercise is exempt from registration under the Securities Act. If and when the Public Warrants
become redeemable by us, we may exercise our redemption right even if we are unable to register or qualify the underlying securities
for sale under all applicable state securities laws. Redemption of the outstanding warrants could force you to accept the nominal redemption
price which, at the time the outstanding warrants are called for redemption, is likely to be substantially less than the market value
of your warrants, if you do not otherwise exercise you warrants, as permitted under the Warrant Agreement, before the redemption date.
None of the Private Placement Warrants will be redeemable by us so long as they are held by the Sponsor or any of its permitted transferees.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, we have the ability to redeem the outstanding Public Warrants at any time  prior to their
expiration, at a price of $0.01 per warrant upon a minimum of 30 days&#8217; prior written notice of redemption if the closing price
of the Common Stock equals or exceeds $18.00 per share (as adjusted for share sub-divisions, share capitalizations, reorganizations,
recapitalizations and the like) for any twenty (20) trading days within a thirty (30) day trading-day period ending on the third day
prior to proper notice of such redemption and provided that certain other conditions are met, including that holders will be able to
exercise their warrants on a cashless basis prior to redemption for a number of shares of Common Stock determined based on the redemption
date and fair market value of the Common Stock. The value received upon exercise of the warrants (1) may be less than the value the holders
would have received if they had been able to exercise their warrants at a later time at which the underlying share price is higher and
(2) may not compensate the holders for the value of the warrants. In addition, such redemptions may occur at a time when the Public Warrants
are &#8220;out-of-the-money,&#8221; in which case holders thereof would lose any potential embedded value from a subsequent increase
in the value of the Common Stock had such Public Warrants remained outstanding. If the price of the Common Stock is less than $18.00
and we seek redemption of the Public Warrants, we must call the Private Placement Warrants for redemption on the same terms.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the event that the Company determines to redeem the Public Warrants when the closing price of the shares of Common Stock equals or exceeds
$18.00 per share, pursuant to Section 6.2 of the Warrant Agreement, respectively, the Company will fix a date for the redemption. Notice
of redemption will be mailed by first class mail, postage prepaid, by the Company not less than thirty (30) days prior to the redemption
date to the registered holders of the Public Warrants to be redeemed at their last addresses as they appear on the registration books.
Any notice mailed in the manner herein provided will be conclusively presumed to have been duly given whether or not the registered holder
received such notice.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Public
Warrant holders will only be able to exercise their Public Warrants on a &#8220;cashless basis&#8221; under certain circumstances, and
if they do so, they will receive fewer shares of Common Stock from such exercise than if such warrants were exercised for cash.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Public Warrants generally may not be exercised on a &#8220;cashless basis&#8221;, except as described below. In contrast, the Private
Placement Warrants, for so long as they are held by the Sponsor and certain permitted transferees, may be exercised on a &#8220;cashless
basis&#8221;.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Warrant Agreement provides that in the following circumstances holders of Public Warrants who seek to exercise their Public Warrants
will not be permitted to do for cash and will, instead, be required to do so on a cashless basis in accordance with Section 3(a)(9) of
the Securities Act: (i) if the Common Stock issuable upon exercise of the warrants are not registered under the Securities Act in accordance
with the terms of the Warrant Agreement; (ii) if we have so elected and the Common Stock are at the time of any exercise of a warrant
not listed on a national securities exchange such that they satisfy the definition of &#8220;covered securities&#8221; under Section
18(b)(1) of the Securities Act; and (iii) if we have so elected and we call the Public Warrants for redemption. If you exercise your
Public Warrants on a cashless basis, you would pay the warrant exercise price by surrendering the warrants for that number of shares
of Common Stock equal to the quotient obtained by dividing (x) the product of the number of shares of Common Stock underlying the Public
Warrants, multiplied by the excess of the &#8220;fair market value&#8221; of the shares of Common Stock (as defined in the next sentence)
over the exercise price of the warrants by (y) the fair market value. The &#8220;fair market value&#8221; is the average reported closing
price of the shares of Common Stock for the ten (10) trading days ending on the third trading day prior to the date on which the notice
of exercise is received by the warrant agent or on which the notice of redemption is sent to the holders of warrants, as applicable.
As a result, a holder of Public Warrants would receive fewer shares of Common Stock from such exercise than if such warrants were exercised
for cash.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>The
Warrant Agreement will designate the courts of the State of New York or the United States District Court for the Southern District of
New York as the sole and exclusive forum for certain types of actions and proceedings that may be initiated by holders of the warrants,
which could limit the ability of warrant holders to obtain a favorable judicial forum for disputes.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Warrant Agreement provides that, subject to applicable law, (i) any action, proceeding or claim against us arising out of or relating
in any way to the Warrant Agreement, including under the Securities Act, will be brought and enforced in the courts of the State of New
York or the United States District Court for the Southern District of New York, and (ii) that we irrevocably submit to such jurisdiction,
which jurisdiction shall be the exclusive forum for any such action, proceeding or claim. We will waive any objection to such exclusive
jurisdiction and that such courts represent an inconvenient forum.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notwithstanding
the foregoing, these provisions of the Warrant Agreement will not apply to suits brought to enforce any liability or duty created by
the Exchange Act or any other claim for which the federal district courts of the United States of America are the sole and exclusive
forum. Any person or entity purchasing or otherwise acquiring any interest in any of our warrants shall be deemed to have notice of and
to have consented to the forum provisions in our warrant agreement. If any action, the subject matter of which is within the scope the
forum provisions of the Warrant Agreement, is filed in a court other than a court of the State of New York or the United States District
Court for the Southern District of New York (a &#8220;foreign action&#8221;) in the name of any holder of our warrants, such holder shall
be deemed to have consented to: (x) the personal jurisdiction of the state and federal courts located in the State of New York in connection
with any action brought in any such court to enforce the forum provisions (an &#8220;enforcement action&#8221;), and (y) having service
of process made upon such warrant holder in any such enforcement action by service upon such warrant holder&#8217;s counsel in the foreign
action as agent for such warrant holder.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
choice-of-forum provision may limit a warrant holder&#8217;s ability to bring a claim in a judicial forum that it finds favorable for
disputes, which may discourage such lawsuits and result in increased costs to warrant holders to bring a lawsuit. Alternatively, if a
court were to find this provision of our Warrant Agreement inapplicable or unenforceable with respect to one or more of the specified
types of actions or proceedings, we may incur additional costs associated with resolving such matters in other jurisdictions, which could
materially and adversely affect our business, financial condition and results of operations and result in a diversion of the time and
resources of our management and board.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>The
historical financial results of Legacy Fusemachines may not be indicative of what the Company&#8217;s actual financial position or results
of operations would have been.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
historical financial results of Legacy Fusemachines included in this Annual Report on Form 10-K do not reflect the financial condition,
results of operations or cash flows they would have achieved as a standalone public company during the periods presented or those the
Company will achieve in the future. This is primarily the result of the following factors: (i) the Company will incur additional ongoing
costs, including costs related to public company reporting, investor relations and compliance with the Sarbanes-Oxley Act; and (ii) the
Company&#8217;s capital structure is different from that reflected in Legacy Fusemachines&#8217; historical financial statements. The Company&#8217;s
financial condition and future results of operations could be materially different from amounts reflected in its historical financial
statements included elsewhere in this Annual Report on Form 10-K, so it may be difficult for investors to compare the Company&#8217;s
future results to historical results or to evaluate its relative performance or trends in its business.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>We
are currently an emerging growth company and a smaller reporting company within the meaning of the Securities Act, and to the extent
we have taken advantage of certain exemptions from disclosure requirements available to emerging growth companies or smaller reporting
companies, this could make our securities less attractive to investors and may make it more difficult to compare our performance with
other public companies.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are currently an &#8220;emerging growth company&#8221; within the meaning of the Securities Act, as modified by the JOBS Act, and we
may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not
emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section
404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements,
and exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any
golden parachute payments not previously approved. Additionally, we are a &#8220;smaller reporting company&#8221; 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. As a result, our shareholders may not have access to certain
information they may deem important. We cannot predict whether investors will find our securities less attractive because we will rely
on these exemptions. If some investors find our securities less attractive as a result of our reliance on these exemptions, the trading
prices of our securities may be lower than they otherwise would be, there may be a less active trading market for our securities and
the trading prices of our securities may be more volatile.</FONT></P>

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Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting
standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do
not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements
that apply to non-emerging growth companies but any such election to opt out is irrevocable. We have elected not to opt out of such extended
transition period, which means that when a standard is issued or revised and it has different application dates for public or private
companies, we, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised
standard. This may make comparison of our financial statements with another public company, which is neither an emerging growth company
nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential
differences in accountant standards used. Once we lose our &#8220;emerging growth company&#8221; and &#8220;smaller reporting company&#8221;
status, we will no longer be able to take advantage of certain exemptions from reporting, and we will also be required to comply with
the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act. We will incur additional expenses in connection with such
compliance and our management will need to devote additional time and effort to implement and comply with such requirements.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
will remain a smaller reporting company until the last day of the fiscal year in which (1) the market value of our common stock held
by non-affiliates exceeds $250 million as of the prior June 30, or (2) our annual revenues exceeded $100 million during such completed
fiscal year and the market value of our common stock held by non-affiliates exceeds $700 million as of the prior June 30.</FONT></P>

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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 closing of CSLM&#8217;s IPO, (b) in which we have total annual gross revenue of at least $1.23 billion, or (c) in which we are
deemed to be a large accelerated filer, which means the market value of our common equity that is held by non-affiliates exceeds $700
million as of the end of the prior fiscal year&#8217;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.</FONT></P>

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may be subject to the Excise Tax included in the Inflation Reduction Act of 2022 in connection with redemptions of shares of public common
stock.</I></B></FONT></P>

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Inflation Reduction Act of 2022 imposes a 1% U.S. federal excise tax on certain repurchases (including redemptions) of stock by publicly
traded U.S. corporations beginning January 1, 2023. Because we are a Delaware corporation and our common stock is publicly traded, we
are a &#8220;covered corporation&#8221; for purposes of the excise tax.</FONT></P>

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redemptions of our common stock that occurred in connection with the business combination closed in October 2025 may be netted
against equity issuances occurring during the same taxable year, we could nevertheless incur excise tax liability for the 2025 taxable
year. In addition, any future repurchases or redemptions of our common stock, whether conducted through open-market repurchases, tender
offers, redemptions, net settlements of equity awards, or other transactions, may also be subject to the excise tax, unless an exemption
applies.</FONT></P>

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U.S. Department of the Treasury has finalized certain procedural regulations but the substantive rules governing the computation of the
tax remain in proposed form and are subject to change. As a result, the application of the excise tax is uncertain and could materially
increase the cost of future share repurchases or other capital-allocation strategies.</FONT></P>

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law and the Company&#8217;s Organizational Documents contain certain provisions, including anti-takeover provisions that limit the ability
of stockholders to take certain actions and could delay or discourage takeover attempts that stockholders may consider favorable.</I></B></FONT></P>

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Company&#8217;s amended and restated certificate of incorporation, as amended and restated (the &#8220;Certificate of Incorporation&#8221;)
and Bylaws (together, the &#8220;Organizational Documents&#8221;), and the DGCL, contain provisions that could have the effect of rendering
more difficult, delaying, or preventing an acquisition that stockholders may consider favorable, including transactions in which stockholders
might otherwise receive a premium for their shares. These provisions could also limit the price that investors might be willing to pay
in the future for shares of our common stock, and therefore depress the trading price of the Common Stock. These provisions could also
make it difficult for stockholders to take certain actions, including electing directors who are not nominated by the current members
of the Company&#8217;s board of directors or taking other corporate actions, including effecting changes in our management. Among other
things, the Organizational Documents include provisions regarding:</FONT></P>

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    ability of the Company&#8217;s board of directors to issue shares of preferred stock, including &#8220;blank check&#8221; preferred
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    notice procedures with which stockholders must comply to nominate candidates to the Company&#8217;s board of directors or to propose
    matters to be acted upon at a stockholders&#8217; meeting, which could preclude stockholders from bringing matters before annual
    or special meetings of stockholders and delay changes in the Company&#8217;s board of directors and also may discourage or deter
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provisions, alone or together, could delay or prevent hostile takeovers and changes in control or changes in the Company&#8217;s board
of directors or management.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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provisions of the Certificate of Incorporation requiring exclusive forum in the Court of Chancery of the State of Delaware and the federal
district courts of the United States for certain types of lawsuits may have the effect of discouraging lawsuits against our directors
and officers.</I></B></FONT></P>

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Company&#8217;s Certificate of Incorporation provides that, to the fullest extent permitted by law, and unless the Company consents in
writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (or, in the event that the Chancery
Court does not have jurisdiction, the federal district court for the District of Delaware or other state courts of the State of Delaware)
will be the sole and exclusive forum for (i) any derivative action, suit or proceeding brought on the Company&#8217;s behalf, (ii) any
action, suit or proceeding asserting a claim of breach of a fiduciary duty owed by any director, officer or stockholder of the Company
to the Company or the Company&#8217;s stockholders, (iii) any action, suit or proceeding arising pursuant to any provision of the DGCL
or the Organizational Documents (as each may be amended from time to time), (iv) any action, suit or proceeding as to which the DGCL
confers jurisdiction on the Court of Chancery of the State of Delaware, or (v) any action, suit or proceeding asserting a claim against
the Company or any current or former director, officer or stockholder governed by the internal affairs doctrine.</FONT></P>

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22 of the Securities Act creates concurrent jurisdiction for federal and state courts over all suits brought to enforce any duty or liability
created by the Securities Act or the rules and regulations thereunder. Accordingly, both state and federal courts have jurisdiction to
entertain such Securities Act claims. To prevent having to litigate claims in multiple jurisdictions and the threat of inconsistent or
contrary rulings by different courts, among other considerations, the Certificate of Incorporation provides that, unless the Company
consents in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of
the United States of America will be the exclusive forum for the resolution of any complaint asserting a cause of action arising under
the Securities Act; however, there is uncertainty as to whether a court would enforce such provision, and investors cannot waive compliance
with federal securities laws and the rules and regulations thereunder. Notwithstanding the foregoing, the Certificate of Incorporation
provides that the exclusive forum provision will not apply to suits brought to enforce any cause of action arising under the Securities
Act, any duty or liability created by the Exchange Act or any other claim for which the federal courts have exclusive jurisdiction. Section
27 of the Exchange Act creates exclusive federal jurisdiction over all suits brought to enforce any duty or liability created by the
Exchange Act or the rules and regulations thereunder.</FONT></P>

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provisions may have the effect of discouraging lawsuits against the Company&#8217;s directors and officers. The enforceability of similar
choice of forum provisions in other companies&#8217; certificates of incorporation has been challenged in legal proceedings, and it is
possible that, in connection with any applicable action brought against the Company, a court could find the choice of forum provisions
contained in the Certificate of Incorporation to be inapplicable or unenforceable in such action.</FONT></P>

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will incur increased costs and demands upon management as a result of complying with the laws and regulations affecting public companies</I>,
<I>which could adversely affect our business</I>, <I>financial condition</I>, <I>and results of operations</I>.</B></FONT></P>

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a public company, we are and will continue to be subject to the reporting requirements of the Exchange Act, the listing standards of
Nasdaq and other applicable securities rules and regulations. We expect that the requirements of these rules and regulations will continue
to increase our legal, accounting, and financial compliance costs, make some activities more difficult, time-consuming and costly, and
place significant strain on our personnel, systems, and resources. For example, the Exchange Act requires, among other things, that we
file annual, quarterly, and current reports with respect to our business and results of operations. As a result of the complexity involved
in complying with the rules and regulations applicable to public companies, our management&#8217;s attention may be diverted from other
business concerns, which could harm our business, financial condition, and results of operations, although we have already hired additional
employees to assist us in complying with these requirements, we may need to hire more employees in the future or engage outside consultants,
which will increase our operating expenses.</FONT></P>

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addition, changing laws, regulations, and standards relating to corporate governance and public disclosure are creating uncertainty for
public companies, increasing legal and financial compliance costs, and making some activities more time-consuming. These laws, regulations
and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application
in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty
regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to
invest substantial resources to comply with evolving laws, regulations, and standards, and this investment may result in increased general
and administrative expenses and a diversion of management&#8217;s time and attention from business operations to compliance activities.
If our efforts to comply with new laws, regulations, and standards differ from the activities intended by regulatory or governing bodies
due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and our
business may be harmed.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
factors could also make it more difficult for us to attract and retain qualified members of our board of directors, particularly to serve
on our audit committee and compensation committee, and qualified executive officers.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a result of disclosure of information in filings required of a public company, our business and financial condition will become more
visible, which may result in an increased risk of threatened or actual litigation, including by competitors and other third parties.
If such claims are successful, our business, financial condition, and results of operations could be harmed, and even if the claims do
not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert
the resources of our management and harm our business, financial condition, and results of operations.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>If
we fail to maintain an effective system of disclosure controls and internal control over financial reporting</I>, <I>our ability to produce
timely and accurate financial statements or comply with applicable regulations could be impaired</I>.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a public company, we are subject to the reporting requirements of the Exchange Act, the Sarbanes-Oxley Act and the rules and regulations
of the applicable listing standards of Nasdaq. We expect that the requirements of these rules and regulations will continue to increase
our legal, accounting and financial compliance costs, make some activities more difficult, time-consuming and costly and place significant
strain on our personnel, systems and resources.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Sarbanes-Oxley Act requires, among other things, that we maintain effective disclosure controls and procedures and internal control over
financial reporting. We are continuing to develop and refine our disclosure controls and other procedures that are designed to ensure
that information required to be disclosed by us in the reports that we will file with the SEC is recorded, processed, summarized and
reported within the time periods specified in SEC rules and forms and that information required to be disclosed in reports under the
Exchange Act is accumulated and communicated to our principal executive and financial officers. We are also continuing to improve our
internal control over financial reporting, which includes hiring additional accounting and financial personnel to implement such processes
and controls. In order to maintain and improve the effectiveness of our disclosure controls and procedures and internal control over
financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related
costs and significant management oversight. If any of these new or improved controls and systems do not perform as expected, we may experience
material weaknesses in our controls.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
current controls and any new controls that we develop may become inadequate because of changes in conditions in our business. Further,
weaknesses in our disclosure controls and internal control over financial reporting may be discovered in the future. Any failure to develop
or maintain effective controls or any difficulties encountered in their implementation or improvement could harm our results of operations
or cause us to fail to meet our reporting obligations and may result in a restatement of our financial statements for prior periods.
Any failure to implement and maintain effective internal control over financial reporting also could adversely affect the results of
periodic management evaluations and annual independent registered public accounting firm attestation reports regarding the effectiveness
of our internal control over financial reporting that we will eventually be required to include in our periodic reports that will be
filed with the SEC. Ineffective disclosure controls and procedures and internal control over financial reporting could also cause investors
to lose confidence in our reported financial and other information, which would likely have a negative effect on the trading price of
our common stock. In addition, if we are unable to continue to meet these requirements, we may not be able to remain listed on Nasdaq.
We are not currently required to comply with the SEC rules that implement Section 404 of the Sarbanes-Oxley Act and are therefore not
required to make a formal assessment of the effectiveness of our internal control over financial reporting for that purpose. As a public
company, we will be required to provide an annual management report on the effectiveness of our internal control over financial reporting
commencing with our second annual report on Form 10-K.</FONT></P>

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independent registered public accounting firm is not required to formally attest to the effectiveness of our internal control over financial
reporting until after we are no longer an &#8220;emerging growth company&#8221; as defined in the JOBS Act. At such time, our independent
registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our internal
control over financial reporting is documented, designed or operating. Any failure to maintain effective disclosure controls and internal
control over financial reporting could have an adverse effect on our business and results of operations and could cause a decline in
the price of our common stock.</FONT></P>

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business</I>, <I>financial condition</I>, <I>and results of operations may fluctuate on a quarterly and annual basis</I>, <I>which may
result in a decline in our stock price if such fluctuations result in a failure to meet the expectations of securities analysts or investors</I>.</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
operating results have in the past and could in the future vary significantly from quarter-to-quarter and year-to-year and may fail to
match our past performance, our projections or the expectations of securities analysts because of a variety of factors, many of which
are outside of our control and, as a result, should not be relied upon as an indicator of future performance. As a result, we may not
be able to accurately forecast our operating results and growth rate. Any of these events could cause the market price of our common
stock to fluctuate. Factors that may contribute to the variability of our operating results include, but are not limited to: our ability
to attract new clients and partners, retain existing clients and partners and maximize engagement and enrollment with existing and future
clients; changes in our sales and implementation cycles, especially in the case of our large clients; new solution introductions and
expansions, or challenges with such introductions; changes in our pricing or fee policies or those of our competitors; the timing and
success of new solution introductions by us or our competitors or announcements by competitors or other third parties of significant
new products or acquisitions or entrance into certain markets; any other change in the competitive landscape of our industry, including
consolidation among our competitors; increases in operating expenses that we may incur to grow and expand our operations and to remain
competitive; our ability to successfully expand our business, whether domestically or internationally; breaches of security or privacy;
changes in stock-based compensation expenses; the amount and timing of operating costs and capital expenditures related to the expansion
of our business; adverse litigation judgments, settlements, or other litigation-related costs; changes in the legislative or regulatory
environment, including with respect to privacy or data protection, or enforcement by government regulators, including fines, orders,
or consent decrees; the cost and potential outcomes of ongoing or future regulatory investigations or examinations, or of future litigation;
changes in our effective tax rate; our ability to make accurate accounting estimates and appropriately recognize revenue for our solutions
for which there are no relevant comparable products; changes in accounting standards, policies, guidance, interpretations, or principles;
instability in the financial markets; general economic conditions, both domestic and international; volatility in the global financial
markets; political, economic, and social instability, including terrorist activities and health epidemics (including the outbreak of
COVID-19), and any disruption these events may cause to the global economy; and changes in business or macroeconomic conditions. The
impact of one or more of the foregoing or other factors may cause our operating results to vary significantly.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Changes
in accounting principles may cause previously unanticipated fluctuations in our financial results</I>, <I>and the implementation of such
changes may impact our ability to meet our financial reporting obligations</I>.</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
prepare our financial statements in accordance with GAAP, which are subject to interpretation or changes by the FASB, the SEC, and other
various bodies formed to promulgate and interpret appropriate accounting principles. New accounting pronouncements and changes in accounting
principles have occurred in the past and are expected to occur in the future which may have a significant effect on our financial results.
Furthermore, any difficulties in implementation of changes in accounting principles, including the ability to modify our accounting systems,
could cause us to fail to meet our financial reporting obligations, which could result in regulatory discipline and harm investors&#8217;
confidence in us.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>If
our estimates or judgments relating to our critical accounting policies prove to be incorrect</I>, <I>our business</I>, <I>financial
condition</I>, <I>and results of operations could be adversely affected</I>.</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
preparation of financial statements in conformity with GAAP and our key metrics require management to make estimates and assumptions
that affect the amounts reported in the consolidated financial statements and accompanying notes and amounts reported in our key metrics.
We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances,
as provided in the sections titled &#8220;<I>Management&#8217;s Discussion and Analysis of Financial Condition and Results of Operations</I>&#8221;
The results of these estimates form the basis for making judgments about the carrying values of assets, liabilities, and equity and the
amount of revenue and expenses that are not readily apparent from other sources. Significant assumptions and estimates used in preparing
our consolidated financial statements include those related to allowance for doubtful accounts, assessment of the useful life and recoverability
of long-lived assets, fair value of guarantees included in revenue arrangements and fair values of stock-based awards, warrants, contingent
consideration, and income taxes. Our results of operations may be adversely affected if our assumptions change or if actual circumstances
differ from those in our assumptions, which could cause our results of operations to fall below the expectations of securities analysts
and investors, resulting in a decline in the trading price of our common stock.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Risks
Related to an Investment in Our Securities</B></FONT></P>

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may not be an active trading market for our securities, which may make it difficult to sell shares of our common stock or warrants.</I></B></FONT></P>

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is possible that an active trading market for our securities will not develop or, if developed, that any market will not be sustained.
This would make it difficult for you to sell our securities at an attractive price or at all.</FONT></P>

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market price of our securities may be volatile, which could cause the value of your investment to decline.</I></B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
price of our securities may fluctuate significantly due general market and economic conditions. An active trading market for our securities
may not develop or, if developed, it may not be sustained. In addition, fluctuations in the price of our securities could contribute
to the loss of all or part of your investment. Even if an active market for our securities develops and continues, the trading price
of our securities could be volatile and subject to wide fluctuations in response to various factors, some of which are beyond our control.
Any of the factors listed below could have a material adverse effect on your investment in our securities and our securities may trade
at prices significantly below the price you paid for them. In such circumstances, the trading price of our securities may not recover
and may experience a further decline. Factors affecting the trading price of our securities may include, but are not solely limited to,
the risk factors identified herein.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, the stock market in general, and Nasdaq and technology and growth companies in particular, have experienced extreme price and
volume fluctuations that have often been unrelated or disproportionate to the operating performance of these companies. Broad market
and industry factors may negatively affect the market price of our common stock, regardless of its actual operating performance. In the
past, securities class action litigation has often been instituted against companies following periods of volatility in the market price
of a company&#8217;s securities. This type of litigation, if instituted, could result in substantial costs and a diversion of management&#8217;s
attention and resources, which would harm our business, operating results or financial condition.</FONT></P>

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stockholders could face significant negative consequences including:</FONT></P>

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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Nasdaq
may delist our securities from trading on its exchange, which could limit investors&#8217; ability to make transactions in its securities
and subject us to additional trading restrictions.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&#160;</I></B></FONT></P>

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our common stock and public warrants are listed on the Nasdaq Global Market under the symbols &#8220;FUSE&#8221; and &#8220;FUSEW.&#8221;
In order to continue the list of these securities on the Nasdaq Global Market, we are required to maintain certain financial, distribution
and stock price levels. On January 15, 2026, we received a notification letter from the Listing Qualifications Department of The Nasdaq
Stock Market indicating that we are not in compliance with the continued listing requirement to maintain a minimum Market Value of Publicly
Held Shares of $15,000,000 for the Nasdaq Global Market, as set forth in Nasdaq Listing Rule 5450(b)(2)(C). In accordance with Nasdaq
Listing Rule 5810(c)(3)(D), we have 180 calendar days, or until July 14, 2026, to regain compliance with the MVPHS requirement. If at
any time before July 14, 2026, our MVPHS closes at or above $15,000,000 for a minimum of 10 consecutive business days, Nasdaq will provide
written confirmation that we have regained compliance. If Nasdaq delists our securities from trading on its exchange and we are not able
to list its securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market.
If this were to occur, we could face significant material adverse consequences, including:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 20pt; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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                                            determination that our common stock is a &#8220;penny stock&#8221; which will require brokers
                                            trading in our common stock to adhere to more stringent rules and possibly result in a reduced
                                            level of trading activity in the secondary trading market for our securities;</FONT></TD></TR>
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<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&#9679;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
                                            decreased ability to issue additional securities or obtain additional financing in the future.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify; text-indent: -0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the
sale of certain securities, which are referred to as &#8220;covered securities.&#8221; Since our common stock and public warrants are
listed on the Nasdaq Global Market, they are covered securities. However, if our securities were no longer listed on the Nasdaq Global
Market, they would not be covered securities and we would be subject to regulation in each state in which we offer our securities.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Because
we have no current plans to pay cash dividends on our common stock for the foreseeable future, you may not receive any return on investment
unless you sell your common stock for a price greater than that which you paid for it.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
may retain future earnings, if any, for future operations, expansion and debt repayment and have no current plans to pay any cash dividends
for the foreseeable future. Any decision to declare and pay dividends as a public company in the future will be made at the discretion
of our board of directors and will depend on, among other things, our results of operations, financial condition, cash requirements,
contractual restrictions and other factors that our board of directors may deem relevant. As a result, you may not receive any return
on an investment in our Common Stock unless you sell the Common Stock for a price greater than that which you paid for it.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Sales
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sales
of a substantial number of shares of our Common Stock in the public market or the perception that these sales might occur, could depress
the market price of our Common Stock and could impair our ability to raise capital through the sale of additional equity securities.
We are unable to predict the effect that sales may have on the prevailing market price of our Common Stock. Sales of significant number
of shares of our Common Stock may make it more difficult for us to sell equity or equity-related securities in the future at a time and
price that it deems reasonable or appropriate, and make it more difficult for you to sell shares of our common stock. Certain holders
of our securities are entitled to rights with respect to the registration of the shares of our Common Stock under the Securities Act.
Any sales of securities by these stockholders could have a material adverse effect on the trading price of our Common Stock.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Future
sales and issuances of our Common Stock or rights to purchase Common Stock, including pursuant to our equity plans, could result in additional
dilution of the percentage ownership of our stockholders and could cause our stock price to fall.</I></B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
expect that significant additional capital may be needed in the future to continue our planned operations, commercialization efforts,
expanded research and development activities and costs associated with operating as a public company. To raise capital, we may sell Common
Stock, convertible securities or other equity securities in one or more transactions at prices and in a manner it determines from time
to time. We may also sell our Common Stock as part of entering into strategic alliances, creating joint ventures or collaborations or
entering into additional licensing arrangements with third parties that we believe will complement or augment its development and commercialization
efforts. If we sell Common Stock, convertible securities or other equity securities, investors may be materially diluted by subsequent
sales. Such sales may also result in material dilution to existing stockholders, and new investors could gain rights, preferences and
privileges senior to the holders of our Common Stock.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Our
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
executive officers have limited experience in the management of a publicly traded company subject to significant regulatory oversight
and reporting obligations under federal securities laws. Our management team may not successfully or effectively manage our transition
to a public company. Their limited experience in dealing with the increasingly complex laws pertaining to public companies could be a
significant disadvantage in that it is likely that an increasing amount of their time may be devoted to these activities which will result
in less time being devoted to our management and growth. We may not have adequate personnel with the appropriate level of knowledge,
experience and training in the accounting policies, practices or internal controls over financial reporting required of public companies
in the United States. It is possible that will be required to expand its employee base and hire additional employees to support our operations
as a public company, which will increase its operating costs in future periods.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT ID="a_004"></FONT>Item
1B. Unresolved Staff Comments.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">None.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT ID="a_005"></FONT>Item
1C. Cybersecurity.</B> </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Risk
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&#160;</I></B></FONT></P>

<DIV><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
recognize the critical importance of developing, implementing, and maintaining cybersecurity measures to safeguard our information systems
and protect the confidentiality, integrity, and availability of our data.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Managing
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&#160;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have implemented tools, processes, and strategies to promote a company-wide culture of cybersecurity risk management. This ensures that
cybersecurity considerations are integrated into our decision-making processes to monitor and manage risk. Our IT Department works closely
with our leadership and key operating personnel to evaluate and address cybersecurity risks in alignment with our business objectives
and operational needs.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Engage
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Due
to the complexity and evolving nature of cybersecurity threats, we engaged with a cybersecurity assessment firm as an external expert,
to evaluate and test our risk management systems. This partnership enables us to leverage specialized knowledge and insights, of dedicated
cybersecurity firms. Our collaborations with this third-party include regular system audits, threat assessments, 24-hour monitoring,
and consultation on security enhancements.</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Oversee
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&#160;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Because
we are aware of the risks associated with third-party service providers, we conduct security assessments of all third-party providers
before engagement to ensure compliance with industry cybersecurity standards and frameworks. This includes assessments performed by our
Head of Technology, who oversees the Company&#8217;s cybersecurity function.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<DIV><DIV><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Risks
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&#160;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company does not believe that it has experienced any cybersecurity threats or incidents that have materially affected or are reasonably
likely to materially affect the Company and its business strategy, results of operations and/or financial condition. These types of events,
which could lead to business disruptions, unplanned downtimes or outages, particularly in critical systems or services, may impact our
ability to operate efficiently, affecting business continuity.</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

</DIV></DIV><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Governance</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&#160;</I></B></FONT></P>

<DIV><DIV><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have implemented standard operating procedures to define the channels by which cybersecurity threats are communicated to the Board. This
ensures that Board has oversight and effective governance in managing risks associated with cybersecurity threats.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Board
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Audit Committee is central to the Board&#8217;s oversight of cybersecurity risks and bears the primary responsibility for this domain.
The Audit Committee is composed of board members with diverse expertise including, risk management, and finance, which we believe equips
them to oversee cybersecurity and other risks effectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Management&#8217;s
Role Managing Risk</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&#160;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Head of Technology plays a pivotal role in informing the Audit Committee on cybersecurity risks. This role provides briefings to the
Audit Committee on a regular basis, with a minimum frequency of once per year. These briefings encompass a broad range of topics, including:</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24.45pt"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">current
                                            cybersecurity landscape and emerging threats;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 48.95pt; text-align: justify; text-indent: -24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24.45pt"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">status
                                            of ongoing cybersecurity initiatives and strategies;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 48.95pt; text-align: justify; text-indent: -24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24.45pt"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">incident
                                            reports and learnings from any cybersecurity events; and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 48.95pt; text-align: justify; text-indent: -24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24.45pt"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">compliance
                                            with regulatory requirements and industry standards.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 48.95pt; text-align: justify; text-indent: -24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Risk
Management Personnel</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&#160;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Primary
responsibility for assessing, monitoring and managing our cybersecurity risks rests with the Head of Technology and department staff.
Our IT team oversees our governance programs, tests our compliance with standards, remediates known risks, stays informed of significant
developments in the cybersecurity domain, and leads our employee training program.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Monitor
Cybersecurity Incidents</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&#160;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Head of Technology is continually informed about the latest developments in cybersecurity, including potential threats and innovative
risk management techniques. This ongoing knowledge acquisition is crucial for the effective prevention, detection, mitigation, and remediation
of cybersecurity incidents. Under his direction, the IT department implements and oversees processes for the regular monitoring of our
information systems. This includes the deployment of advanced security measures and regular system audits to identify potential vulnerabilities.
In the event of a cybersecurity incident, the IT department is equipped with a well-defined written procedure. This plan includes immediate
actions to mitigate the impact and long-term strategies for remediation and prevention of future incidents.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Reporting
to Board of Directors</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&#160;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Head of Technology consistently communicates with the Audit Committee regarding critical cybersecurity risks and incidents, ensuring
that the organization&#8217;s highest governance bodies remain well-informed about our cybersecurity status and potential vulnerabilities.
Moreover, matters of significant cybersecurity importance, along with strategic risk management decisions, are promptly escalated to
the Board of Directors. This process ensures that the Board maintains thorough oversight and is equipped to offer informed guidance on
critical cybersecurity issues.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

</DIV></DIV><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT ID="a_006"></FONT>Item
2. Properties.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Corporate
Headquarters</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company leases its corporate headquarters located at 251 West 30th Street, 5th Floor, New York, New York 10001. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company also leases approximately 11,000 square feet of office space in Nepal.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company believes
that its existing facilities and other available properties will be sufficient for its needs for the foreseeable future.</FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT ID="a_007"></FONT>Item
3. Legal Proceedings.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are not currently a party to any material litigation, nor are we aware of any pending or threatened litigation against us that we believe
would materially affect our business, operating results, financial condition, or cash flows. Participants in our industry face frequent
claims and litigation, including securities litigation, claims regarding patent and other intellectual property rights, and other liability
claims. As a result, we may be involved in various legal proceedings from time to time in the future.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT ID="a_008"></FONT>Item
4. Mine Safety Disclosures.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
Applicable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT ID="a_009"></FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>PART
II</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT ID="a_010"></FONT>Item
5. Market for Registrant&#8217;s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Market
Information</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white">Our
common stock and public warrants are lis</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ted on
Nasdaq under the symbols &#8220;FUSE&#8221; and &#8220;FUSEW&#8221;, respectively. On March 25, 2026, the closing price of our
common stock was $1.26 per share and the closing price of our
public warrants was $0.09 per warrant.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"><B>Holders
of Our Common Stock</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of March 26, 2026, we had 173 holders of
record of our common stock. Certain shares are held in &#8220;street&#8221; name and accordingly, the number of beneficial owners of
such shares is not known or included in the foregoing number. This number of holders of record also does not include stockholders
whose shares may be held in trust by other entities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Dividend
Policy</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
currently intend to retain all available funds and any future earnings to fund the growth and development of our business. We have never
declared or paid any cash dividends on our capital stock. We do not intend to pay cash dividends to our stockholders in the foreseeable
future. Investors should not purchase our common stock with the expectation of receiving cash dividends.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
future determination to declare dividends will be made at the discretion of our board of directors and will depend on our financial condition,
operating results, capital requirements, general business conditions, and other factors that our board of directors may deem relevant.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Securities
Authorized for Issuance Under Equity Compensation Plans</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
information required by Item 5 of Form 10-K regarding equity compensation plans is incorporated herein by reference to Item 12 of Part
III of this Annual Report.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Recent
Sales of Unregistered Securities</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
sales of unregistered securities by us during the year ended December 31, 2025 have been included previously in a Quarterly Report on
Form 10-Q or in a Current Report on Form 8-K.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Purchases
of Equity Securities by the Issuer and Affiliated Purchasers</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">None.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT ID="a_011"></FONT>Item
6. [Reserved].</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT ID="Rma_001"></FONT>Item
7. Management&#8217;s Discussion and Analysis of Financial Condition and Results of Operations.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>The
following discussion and analysis provides information that Fusemachines Inc.</I> (&#8220;Pubco&#8221; or &#8220;Fusemachines&#8221;)
<I>management believes is relevant to an assessment and understanding of Fusemachines consolidated results of operations and financial
condition as of December 31, 2025, and for the fiscal year ended December 31, 2025. The discussion should be read together with Fusemachines
consolidated financial statements and related notes that are included elsewhere in this annual report on Form 10-K (this &#8220;Annual
report&#8221;) as of and for the year ended December 31, 2025, and December 31, 2024. Capitalized and defined terms used in this section
shall have the meanings ascribed to them herein. Capitalized terms not defined in this section shall have the meanings ascribed to them
elsewhere in this annual report.</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>This
discussion may contain forward-looking statements based upon current expectations that involve risks and uncertainties. Fusemachines
actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including
those set forth under &#8220;Risk Factors&#8221; or in other parts of this annual report.</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&#160;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Company
Overview</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are a leading provider of agentic AI solutions, offering innovative AI products and services to businesses. With over a decade of experience,
we help enterprises seamlessly integrate AI into their operations, enhancing efficiency, reducing costs, and driving innovation. Our
products and services are uniquely supported by a global talent pool, primarily sourced from underserved communities, allowing us to
deliver high- quality AI solutions at scale while fulfilling our mission of democratizing AI.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56.7pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
clients have successfully utilized our AI solutions to solve critical business challenges such as improving sales forecasting accuracy,
eliminating manual data entry errors. Our commitment to delivering measurable business value has enabled us to build enduring partnerships
with these organizations, positioning Fusemachines as a trusted partner in their AI-driven transformation journeys.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56.7pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition to our agentic AI solutions, we are deeply invested in education and talent development. Our AI training programs, particularly
our flagship AI Fellowship Program, are designed to upskill students and professionals, providing them with hands-on experience in real-world
AI applications. To date, we have certified hundreds of AI Fellows across the United States, Nepal, and the Dominican Republic. These
programs not only empower individuals but also contribute to the global AI talent pool, which is critical given the current shortage
of AI professionals.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
were originally incorporated under the name CSLM Acquisition Corp.(&#8220;CSLM&#8221;<B>)</B>, as a Cayman Islands exempted Company,
as a special purpose acquisition company (&#8220;SPAC&#8221;) formed 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.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
January 2024, the Company entered into an Agreement and Plan of Merger (as amended in August 2024 and February 2025, the &#8220;Business
Combination Agreement&#8221;) with CSLM Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of CSLM (&#8220;Merger Sub&#8221;),
and Fusemachines USA, Inc. (formerly Fusemachines Inc.) (&#8220;Legacy Fusemachines&#8221;). On October 22, 2025, the Company consummated
the business combination whereby (a) CSLM merged with and into CSLM Holdings, Inc., a Delaware corporation and wholly owned subsidiary
of CSLM at which time the separate existence of CSLM ceased and CSLM Holdings became the surviving corporation (&#8220;Pubco&#8221;)
in accordance with the Delaware General Corporation Law (&#8220;DGCL&#8221;), the Cayman Islands Companies Act (As Revised) (the &#8220;Companies
Act&#8221;), the Certificate of Merger, (the &#8220;Certificate of Merger&#8221;), and the amended and restated memorandum and articles
of association of CSLM (the &#8220;Domestication&#8221;); (b) the merger (the &#8220;Merger&#8221;) of Merger Sub with and into Legacy
Fusemachines, pursuant to which, at the closing of the transactions contemplated by the Business Combination Agreement (the &#8220;Closing&#8221;),
the separate corporate existence of Merger Sub ceased and Legacy Fusemachines became the surviving corporation and a wholly-owned subsidiary
of Pubco, pursuant to the terms of the Business Combination Agreement and in accordance with the laws of the State of Delaware, as more
fully described elsewhere in the Proxy Statement/Prospectus; and (c) the other transactions contemplated by the Business Combination
Agreement and documents related thereto (such transactions, together with the Domestication and the Merger, the &#8220;Business Combination&#8221;).
In connection with the Business Combination, Pubco was renamed &#8220;Fusemachines Inc.&#8221; (the &#8220;Company&#8221;) and Fusemachines
Inc. was renamed &#8220;Fusemachines USA, Inc.&#8221; (&#8220;Legacy Fusemachines&#8221;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
common stock of the Company began trading on The Nasdaq Stock Market (Nasdaq Global Market) under the symbol &#8220;FUSE&#8221;, and
the warrants trade under the symbol &#8220;FUSEW&#8221;, beginning on October 23, 2025.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Throughout
the notes to the consolidated financial statements, unless otherwise noted or the context otherwise requires, the term &#8220;Company&#8221;
refers to Legacy Fusemachines and its subsidiaries prior to the consummation of the Business Combination, and to Fusemachines Inc. (the
publicly traded parent company) and its subsidiaries after the consummation of the Business Combination.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Recent
Developments</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&#160;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Business
Combination</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
consummation of the transaction on October 22, 2025, Legacy Fusemachines (the &#8220;Company&#8221;) was determined to be the
accounting acquirer, and the transaction was accounted for as a reverse recapitalization in accordance with U.S. GAAP. Accordingly, the historical financial
statements of Legacy Fusemachines became the historical financial statements of the registrant.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56.7pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accordingly,
the following disclosure on &#8220;Reverse Recapitalization&#8221; is presented to summarize the common stock issued at Closing, the
application of the exchange ratio, and the resulting additional paid-in-capital recognized in connection with the recapitalization.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
overall voting interest on closing date is summarized below:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 90%; margin-right: auto">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: justify">Particulars</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Shares</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&#160;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">%Ownership</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 64%; text-align: justify; padding-bottom: 1pt">Shares held by Fusemachines Inc. Stockholders</TD><TD STYLE="width: 2%; padding-bottom: 1pt">&#160;</TD>
    <TD STYLE="padding-bottom: 1pt; width: 1%; text-align: left">&#160;</TD><TD STYLE="padding-bottom: 1pt; width: 14%; text-align: right">14,864,110</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">&#160;</TD><TD STYLE="width: 2%; padding-bottom: 1pt">&#160;</TD>
    <TD STYLE="padding-bottom: 1pt; width: 1%; text-align: left">&#160;</TD><TD STYLE="padding-bottom: 1pt; width: 14%; text-align: right">52</TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="padding-bottom: 1pt; text-align: left">&#160;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">12,654,921</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&#160;</TD><TD STYLE="padding-bottom: 1pt">&#160;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&#160;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">45</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify; padding-bottom: 1pt">Shares held by unrelated third parties</TD><TD STYLE="padding-bottom: 1pt">&#160;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&#160;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">831,000</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&#160;</TD><TD STYLE="padding-bottom: 1pt">&#160;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&#160;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">3</TD><TD STYLE="padding-bottom: 1pt; text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: justify; padding-bottom: 1pt">Total</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&#160;</TD>
    <TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&#160;</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: right">28,350,031</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&#160;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&#160;</TD>
    <TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&#160;</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: right">100</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">%</TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
October 22, 2025, all holders of 29,199,809 issued and outstanding Legacy Fusemachines common stock received shares of Fusemachines Inc
common stock at a par value $0.0001 per share after giving effect to the exchange ratio of 0.6580 (the &#8220;Conversion Ratio&#8221;)
resulting in 19,214,201 shares of Fusemachines Inc common stock issued and outstanding as of the Closing. The issuance reflects the following
events contemplated by the Business Combination Agreement:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a) 9,043,234 shares of Legacy Fusemachines convertible preferred stock were converted into shares of Legacy Fusemachines common stock in
accordance with the applicable conversion terms. Subsequently, in connection with the Business Combination, all such shares of Legacy
Fusemachines common stock were exchanged for shares of common stock of Fusemachines Inc. (the &#8220;Company&#8221; or &#8220;PubCo&#8221;)
based on the exchange ratio specified in the Business Combination Agreement. After giving effect to the exchange ratio, an aggregate of
5,950,673 shares of the Company&#8217;s common stock were issued.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b) The
surrender and exchange of all 29,199,809 issued and outstanding shares of Legacy Fusemachines common stock (including shares issued upon
conversion of preferred stock) into 19,214,201 shares of Fusemachines Inc. common stock as adjusted by the Exchange Ratio&#894;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c) The
other related events that occurred in connection with the Closing are summarized below:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; Upon the closing date, there is settlement of sponsor convertible note amounting to $ 3,978 thousand which was
effected through a combination of $2,343 thousand in cash and balance through issuance of 408,639 common stock of Fusemachines Inc.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; Public
shareholders of CSLM received an aggregate of 901,955 shares of Fusemachines Inc. common stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; All
public rights were converted into 1,897,486 shares of Fusemachines Inc. common stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; 1,184,000
shares of Fusemachines Inc. common stock issued in connection with the PIPE Financing</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; Issuance
of 4,743,750 shares of Fusemachines Inc common stock upon conversion of non-redeemable CSLM Class A &amp; Class B Ordinary Shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; Fusemachines
Inc. received funds from a convertible note with an affiliate of the Sponsor in the principal amount of $2,193 thousand. On the Closing
Date, the note was converted into a share of Fusemachines Inc. common stock pursuant to the conversion terms of the convertible note
agreement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; Approximately
$11,005 thousand prepayment made by CSLM to the Meteora Parties pursuant to the Forward Purchase Agreement funded from the Trust Account.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; Repayment
of approximately $745 thousand (principal and accrued interest) on promissory notes issued to the Chief Executive Officer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;
Each Convertible note of Legacy Fusemachines (including both related party and other convertible notes) outstanding immediately
prior to the Closing was converted into shares of Legacy Fusemachines common stock of 8,048,770 shares in accordance with the
applicable convertible note agreement and immediately thereafter exchanged into 5,296,271 shares of Fusemachines Inc. common stock
in accordance with the Conversion Ratio specified in the Business Combination Agreement, accordingly as a result of the conversions
and exchanges, no convertible notes or related-party notes payable remained outstanding as of December 31, 2025, other than related
party note payable related to Dolma Impact Fund I (&#8220;Dolma&#8221;) amounting $300 thousand.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;
Upon the closing of the business combination, the Company settled its obligation under the Second Agreement through the issuance of
29,610 shares of Fusemachines, Inc. common stock, reflecting the application of the 0.6580 conversion ratio to the 45,000 shares of
the Company&#8217;s common stock, and a partial cash payment of approximately $110 thousand. The remaining $98 thousand obligation
is still outstanding and is reflected in accounts payable as of December 31, 2025.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;
Upon the conversion of the April 2024, June 2024 and September 2024 Convertible Note to common stock, the Company shall issue the holder
a warrant to purchase 7,500 shares of common stock of CSLM with a per share exercise price of $11.50. The warrants issuable upon conversion
of the April 2024, June 2024 and September 2024 Convertible Notes are classified as equity instruments</FONT>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#9679; The assumption of the public and private
warrants, as described in Note 24 Public and private warrants of Consolidated Financial Statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#9679; The Company&#8217;s amended and restated
certificate of incorporation and amended and restated bylaws were adopted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</P>

<P STYLE="margin: 0pt 0">&#9679; The Company adopted the 2025 equity incentive plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 99.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(d)
The reverse recapitalization accounting treatment was primarily determined based on the fact that the stockholders of Legacy
Fusemachines held a relative majority of the voting power of Fusemachines Inc. and had the ability to nominate a majority of the
members of the Board of Directors. In addition, the senior management of Legacy Fusemachines becomes the senior management of
Fusemachines Inc., and the strategy and operations of Legacy Fusemachines prior to the merger represent the ongoing operations of
the combined Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 63.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accordingly,
for accounting purposes, the financial statements of Fusemachines Inc. represent a continuation of the financial statements of Legacy
Fusemachines, with the Merger being treated as the equivalent of Legacy Fusemachines issuing shares for the net assets of CSLM, accompanied
by a recapitalization. The net assets of CSLM were recognized at their historical carrying amounts as of the Closing date, and no goodwill
or other intangible assets were recorded. Operations prior to the Merger are presented as those of Legacy Fusemachines Inc. and the accumulated
deficit of Legacy Fusemachines has been carried forward after Closing.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">(e) Fusemachines Inc. incurred transaction cost of $1,873 thousands,
consisting of deferred transaction cost, banking fees, legal fees, and other professional fees, which has been recorded as a reduction
to additional paid-in capital as a direct and incremental cost of the reverse recapitalization.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(f) All
periods presented prior to the Merger have been retrospectively adjusted to reflect the Exchange Ratio for the equivalent number of shares
of Fusemachines Inc. common stock outstanding immediately after the Closing in order to effect the reverse recapitalization.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&#160;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Covenant
Fees</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&#160;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the Business Combination Agreement, the Company was covenanted to deliver to CSLM its audited financial statements for the year ended
December 31, 2023 and 2022 for inclusion in the registration statement on Form S-4 to be filed by CSLM in connection with the Merger,
and that such audited financial statements had been prepared in conformity with GAAP applied on a consistent basis and in accordance
with the requirements of the Public Company Accounting Oversight Board for public companies. The Company had covenanted to provide the
audited financial statements no later than February 29, 2024, or incur delay fees in the amount equal to $35.0 thousand for the first
one-month delay to March 31, 2024 (pro-rated for a partial month), $50.0 thousand for the second one-month delay to April 30, 2024, and
thereafter $70.0 thousand for each subsequent one-month delay (pro-rated for any partial month). The Company provided the audited financial
statements to CSLM in September 2024. As such, the Company has recorded $505 thousand of deferred transaction costs on the audited consolidated
balance sheets as of December 31, 2024. On February 4, 2025, the company entered into a second amendment of the original agreement wherein
the above-mentioned delay fee provision is deleted and provides the Company with relief from future penalties related to the delivery
of the 2023 financial statements. Accordingly, the company recorded waiver in the year ended December 31, 2025 which have no impact in
the consolidated Statements of Operations and Comprehensive Loss as the amount of provision was eliminated from the deferred transaction
cost and from the Accounts Payable, Accrued expense and other current liabilities in the consolidated balance sheets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I><FONT STYLE="text-decoration: underline">Amendment
of the maturity date and conversion option</FONT></I></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Related
party convertible notes payable at fair value</I></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 31, 2025, the Company entered into an amendment agreement of the convertible note payable to Dolma. Pursuant to the amendment
agreement, the maturity date was revised to February 28, 2026. Further, it was agreed that if the Company enters into a SPAC Business
Combination Agreement at any time while the Notes are outstanding, any portion of the Aggregate Notes Amount that is not redeemed or
repaid in connection or prior to the closing of the SPAC Transaction will convert, without any required action by the Holder, into shares
of Common Stock immediately prior to the consummation of the SPAC Transaction contemplated by the SPAC Business Combination Agreement
at a conversion rate that is derived from a Company valuation of $85,000 thousand, on a fully-diluted basis (provided that the Notes will
be deemed have converted simultaneously with all other convertible notes being converted in connection the SPAC Transaction)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company evaluated the above amendment agreement entered on January 31, 2025, under the guidance in ASC 470-50 Debt - Modifications and
Extinguishments, and it was determined terms of the amendment were not substantially different than the terms of the convertible notes
prior to the Amendment. Accordingly, the aforesaid amendment was accounted for as a debt modification.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>2024
Convertible Notes at fair value</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56.7pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 4, 2025, the maturity date of January 2024 convertible note was extended to July 12, 2025 pursuant to the second amendment.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56.7pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company evaluated the above amendment agreement entered on February 4, 2025, under the guidance in ASC 470-50 Debt - Modifications and
Extinguishments, and it was determined terms of the amendment were not substantially different than the terms of the convertible notes
prior to the Amendment. Accordingly, the aforesaid amendment was accounted for as a debt modification.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56.7pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
July 12, 2025, the maturity date of 2024 Convertible Notes were extended from July 12, 2025 to October 18, 2025, pursuant to the third
amendment. The Company applied the 10% cash flow test pursuant to ASC 470 to calculate the difference between the present value of the
amended note&#8217;s cash flows and the present value of the original remaining cash flow and concluded that the results didn&#8217;t
exceed the 10% factor, the debt modification is not considered substantially different and therefore did not apply extinguishment accounting,
rather it accounted for the modification on a prospective basis pursuant to ASC 470.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&#160;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>April
2024 Convertible Note</I></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 5, 2025, the conversion price of the April 2024 Convertible Promissory Notes with principal amount of $125,000 was
amended to $3.15 from the original conversion price of $4.94.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company evaluated the conversion feature of April 2024 Convertible Note offering for embedded derivatives in accordance with ASC 815,
Derivatives and Hedging, and the substantial premium model in accordance with ASC 470, Debt. Based on our assessment, separate accounting
for the conversion feature of this note offering is not required and will be accounted for under the substantial premium model. Under
the substantial premium model, the excess above the fair value amounting to $113.0 thousand this note will be recorded as loss on extinguishment
of debt in additional paid-in-capital with a corresponding debit in the consolidated statement of profit and loss for the year ended
December 31, 2025.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
April 2024 Convertible Notes were once again amended in April 2025 and basis the amendment the maturity date was revised from April 5,
2025, to April 5, 2026, pursuant to the second amendment. The Company applied the 10% cash flow test pursuant to ASC 470 to calculate
the difference between the present value of the amended note&#8217;s cash flows and the present value of the original remaining cash
flow and concluded that the results didn&#8217;t exceed the 10% factor, the debt modification is not considered substantially different
and therefore did not apply extinguishment accounting, rather it accounted for the modification on a prospective basis pursuant to ASC
470.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>June
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
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amended to $3.15 from the original conversion price of $4.94.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company evaluated the conversion feature of June 2024 Convertible Note offering for embedded derivatives in accordance with ASC 815,
Derivatives and Hedging, and the substantial premium model in accordance with ASC 470, Debt. Based on our assessment, separate accounting
for the conversion feature of this note offering is not required and will be accounted for under the substantial premium model. Under
the substantial premium model, the excess above the fair value amounting to $114.0 thousand this note was recorded as loss on extinguishment
of debt in additional paid-in-capital with a corresponding debit in the consolidated statement of profit and loss for the year ended
December 31, 2025.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>September
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 5, 2025, the conversion price of the two September 2024 Convertible Promissory Notes with principal amount of $100,000 each
was amended to $3.15 from the original conversion price of $4.94.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company evaluated the conversion feature of September 2024 Convertible Notes offering for embedded derivatives in accordance with ASC
815, Derivatives and Hedging, and the substantial premium model in accordance with ASC 470, Debt. Based on our assessment, separate accounting
for the conversion feature of these notes offering is not required and will be accounted for under the substantial premium model. Under
the substantial premium model, the excess above the fair value amounting to $164.0 thousand these notes was recorded as loss on extinguishment
of debt in additional paid-in-capital with a corresponding debit in the consolidated statement of profit and loss for the year ended
December 31, 2025.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>February
2025 Convertible Note</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 24, 2025, the company entered into a convertible promissory note amounting to $180,000 with an interest rate of 4.71% and maturity
date of February 19, 2028. Upon closing of the merger, the Note shall automatically convert into the number of shares of Common Stock
equal to the then outstanding Obligations under the note divided by the applicable Conversion Price i.e., $3.15.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
February 2025 Convertible Note has customary events of default, are fully secured by the assets of the Company and because the conversion
feature does not meet the definition of a derivative are being accounted for at amortized cost. The proceeds of the February 2025 Convertible
Note will be used for working capital purposes.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Related
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 12, 2025, an amendment to the seven promissory notes was entered into between the company and the CEO, Mr. Sameer Maskey. As
per the original agreement, the maturity date was earlier of (1) the occurrence of an Event of Default and (2) December 31, 2024. Pursuant
to the amendment agreement, the maturity date was extended to earlier of (1) the occurrence of an Event of Default and (2) December 31,
2025</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company evaluated the amendment in maturity date under the guidance in ASC 470-50 Debt - Modifications and Extinguishments, and it was
determined that there was no gain/loss to be recorded in the consolidated statements of operations and comprehensive loss, for the year
ended December 31, 2025.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56.7pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company incurred interest expense on promissory notes held at amortized cost and subsequently the promissory notes principal and accrued
and unpaid interest were repaid in cash upon the Closing of merger.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56.7pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Others-
February 2025 Convertible Notes</I></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the second amendment to the Business Combination Agreement, an entity provided financing to Fusemachines in the amount
of $2,160,000, in exchange for a convertible note which note shall convert into shares of common stock of Fusemachines at a price of
$0.44 per share (a) automatically at the time of the Business Combination, or (b) on July 12, 2025 at the option of the holder, if not,
then payable in cash.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the terms of the Note and related Escrow Agreement, the proceeds are required to be deposited into an escrow account and will be released
to the Company only upon the consummation of the Business Combination.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Further,
per Section 4.2 of the Escrow Agreement &#8220;Upon the Closing, the Company, Investor and Fusemachines shall jointly deliver a Joint
Release Notice to the Escrow Agent directing the Escrow Agent to disburse all Funds held in the Escrow Account to the Fusemachines Inc.&#8221;
Accordingly, the escrowed funds are not freely available to the Company prior to joint instruction by the Investor, Fusemachines and
the Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56.7pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May 22, 2025, the proceeds from Consilium Frontier Equity Fund, LP have been received into an escrow account. Upon closing of the merger, these funds were subsequently released and received in the bank account of Fusemachines Inc.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT STYLE="text-decoration: underline">Impact
of reverse capitalization on convertible note </FONT></B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the consummation of the Business Combination on October 22, 2025, each Legacy Fusemachines convertible note, including
both related-party and non-related-party convertible notes, that was issued and outstanding immediately prior to the Closing was converted
into an aggregate of 8,048,770 shares of Legacy Fusemachines common stock in accordance with the convertible note agreements.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Convertible
notes that are exchanged for equity pursuant to their original contractual terms are accounted for in accordance with ASC 470-20, Debt
with Conversion and Other Options. Upon conversion, the carrying amount of the convertible debt is reclassified to equity, and no gain
or loss is recognized in earnings, as the conversion is executed in accordance with the original terms of the instruments</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56.7pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Immediately
following such conversions, all shares of Legacy Fusemachines common stock issued upon conversion were exchanged for shares of Fusemachines
Inc. common stock based on the exchange ratio specified in the Business Combination Agreement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56.7pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a result of the conversions and exchanges, no convertible notes or related-party notes payable remained outstanding as of December 31,
2025, other than related party note payable related to Dolma amounting $300 thousand.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Litigation</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fusemachines
Inc. received a legal notice dated March 27, 2025&#160;&#160; requiring payment of $76.3 thousand to KCSA Strategic Communications under
a Work Labor &amp; Services agreement due to non-fulfillment of payment obligations. Although there can be no assurance of the outcome
of such legal actions, in the opinion of management, the Company does not have a potential liability related to any current legal proceeding
or claim that would individually or in aggregate materially affect its results of operations, financial condition or cash flows. The
company has already recognized $41.3 thousand liability in its consolidated balance sheet as of December 31, 2025.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&#160;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Forward
purchase agreement</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
July 31, 2025, CSLM and Legacy Fusemachines (CSLM prior to the Merger and the Company after the Merger, (the &#8220;Counterparty&#8221;),
entered into an over-the-counter (OTC) equity prepaid forward confirmation (the &#8220;Forward Purchase Agreement&#8221; or &#8220;FPA&#8221;)
with Meteora Capital Partners, LP, Meteora Select Trading Opportunities Master, LP and Meteora Strategic Capital, LLC (collectively,
the &#8220;Sellers&#8221;)</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
the consummation of the Merger on October 22, 2025, the Sellers (Meteora) delivered a Pricing Date Notice (as defined in the Forward
Purchase Agreement). Based on this notice, the applicable Prepayment Amount (as defined in the Forward Purchase Agreement) became determinable
and was subsequently funded by the Counterparty from the Trust Account (as defined in the Forward Purchase Agreement) in accordance with
the Forward Purchase Agreement.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Under
the material terms of the FPA:</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
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    the Counterparty&#8217;s organizational documents). The Prepayment Amount is payable from the Counterparty&#8217;s Trust Account
    and subject to receipt of a Pricing Date Notice, will be wired no later than the earlier of (a) one Local Business Day after the
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    stock equal to the difference between the Maximum Number of Shares (as defined in the Forward Purchase Agreement) and the number
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Payment
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Forward Purchase Agreement includes escrow arrangements pursuant to which the Prepayment Amount funded from the CSLM trust account is
held in escrow for the benefit of the Meteora Parties until settlement or release in accordance with the terms of the Forward Purchase
Agreement. The Company does not have unconditional access to the funds held in escrow, and such funds are not available to satisfy the
claims of the Company&#8217;s creditors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accordingly,
the Company recorded the prepayment amount $11,005 thousand as a contra-equity share subscription receivable, presented as a reduction
of stockholders&#8217; equity (APIC), as the escrowed funds represent conditional consideration receivable from shareholders that is
subject to future settlement under the Forward Purchase Agreement. The Prepayment Amount was determined based on 891,930 shares of common
stock at a per share price equal to the SPAC per-share redemption price (the &#8220;Initial Price&#8221;), as defined in the Forward
Purchase Agreement</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&#160;</I></FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Forward Purchase Agreement contains features that meet the definition of a derivative under ASC 815, including an underlying based on
the Company&#8217;s Class A common stock, a notional amount, payment provisions, and provisions that require or permit net cash settlement.
Accordingly, at the Closing, the Company recognized a derivative liability measured at fair value, representing the portion of the escrowed
Prepayment Amount that may be payable to the Forward Counterparty based on conditions existing as of the Closing Date.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
share subscription receivable and the derivative liability, when considered together, represent management&#8217;s estimate of the portion
of the escrowed funds that the Company expects to ultimately retain. Subsequent changes in the fair value of the derivative liability
associated with the Forward Purchase Agreement are recognized in earnings at each reporting date.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Upon receipt of consideration related to the sale
of any shares sold by Meteora, the Company will record the receipt of funds as an increase to cash and a decrease to the share subscription
receivable previously recorded as contra-equity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</P>

<P STYLE="margin: 0pt 0; text-align: justify">The Company incurred no transaction costs that were directly related to issuance of the Forward Purchase Agreement.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Further
subsequent to year ended December 31, 2025, the Company entered into an amendment on February 3, 2026 to the Prepaid Forward Purchase
Agreement (the &#8220;Amendment&#8221;) originally entered into on July 31, 2025 with Meteora Capital Partners and affiliates, for detail
refer to Note 25 - Subsequent events.</FONT></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2025, the value of the Forward purchase derivative liability is $9,692 thousand disclosed as Current Liability in the
Consolidated Balance Sheets. Further the derivative liability is measured at fair value on a recurring basis using Level 3 inputs, refer
to Note 3 &#8211; Fair Value Measurements for further information on the valuation techniques and significant unobservable inputs used
in determining the fair value of this instrument.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Further,
the derivative liability has been classified as current as the Company does not have an unconditional right to defer settlement beyond
twelve months. The Forward Purchase Agreement includes provisions for early termination upon sale of shares by the Sellers, which can
result in cash settlement within the next twelve months, as well as periodic settlement features, thereby requiring current classification</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subsequently
to year ended December 31, 2025, the Company entered into an amendment on February 3, 2026 to the Prepaid Forward Purchase Agreement
(the &#8220;Amendment&#8221;) originally entered into on July 31, 2025 with Meteora Capital Partners and affiliates. The Amendment replaces
the agreement&#8217;s previously fixed Termination Price of $12.00 per share with a weekly-reset Termination Price equal to the lower
of (a) $12.00 and (b) the volume-weighted average price (VWAP) of the Shares for the immediately preceding week (as reported by Bloomberg
L.P.), subject to Reset Price Floors applied on a tranche basis (50% of the Shares: $2.50 floor; 50% of the Shares: $5.00 floor). The
Company is currently evaluating the accounting and financial reporting implications of this Amendment, including its impact, if any,
on the valuation of the related derivative instrument.</FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Private
Investment in Public Equity (&#8220;PIPE&#8221;) Financing</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 63.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&#160;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 23, 2025, Fusemachines Inc. (the &#8220;Company&#8221;) entered into and consummated a Securities Purchase Agreement with an
accredited investor pursuant to which the Company issued and sold shares of its common stock, par value $0.0001 per share, in a private
placement transaction (the &#8220;PIPE Financing&#8221;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 63.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In connection with the PIPE Financing, the Company
issued 588,235 shares of its common stock at a purchase price of $1.70 per share, resulting in aggregate gross proceeds of $1,000 thousand.
The shares were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended,
and/or Regulation D promulgated thereunder.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 63.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The proceeds from the PIPE Financing were received
in cash at closing. For accounting purposes, the issuance of common stock was recorded within stockholders&#8217; equity as permanent
equity.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 63.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Public
and private warrants</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 63.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&#160;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2025, there were 3,971,250 Private Warrants and 9,487,500 Public Warrants outstanding. There are no warrants exercised as at December 31, 2025.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 63.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Public
warrants</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 63.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
Public Warrant entitles the holder to purchase one whole share of the Company&#8217;s common stock. Public Warrants are exercisable only
for whole warrants; no fractional warrants will be issued upon separation of the units, and only whole warrants will trade. The Public
Warrants became exercisable  30 days after the completion
of the Business Combination.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company will not be obligated to deliver Class A common shares upon exercise of a Public Warrant (and will have no obligation to settle
a Public Warrant exercise) unless a registration statement under the Securities Act, covering the shares issuable upon exercise, is then
effective and a prospectus relating thereto is current, or a valid exemption from registration is available. If the conditions for registered
issuance are not satisfied, holders will not be able to exercise those Public Warrants for registered shares until such time as an effective
registration statement is available; in such circumstances the Company may permit (or require, as described below) cashless exercise
pursuant to Section 3(a)(9) or other available exemption.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
whole Public Warrant is exercisable for one share of the Company&#8217;s Class A common stock at an exercise price of $11.50 per share,
subject to the customary anti-dilution and other adjustment provisions set forth in the warrant agreement. The Public Warrants became
exercisable  30 days after the completion of an initial Business Combination and  expire five years after the completion of an initial Business Combination or earlier
upon redemption or liquidation, in each case in accordance with the warrant agreement.&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Public Warrants contain customary terms and features for contracts in the Company&#8217;s own equity, including (i) anti-dilution adjustments
to the exercise price and the number of shares issuable upon exercise for share capitalizations, sub-divisions, combinations, reclassifications,
certain rights offerings and Extraordinary Dividends, as described in Section 4 of the warrant agreement; (ii) the Alternative Issuance
provisions in Section 4.5 of the warrant agreement, pursuant to which, upon specified reclassifications, reorganizations, mergers, consolidations,
tender offers or similar change-of-control transactions, each Public Warrant becomes exercisable for the same form and amount of cash,
securities or other property that a holder would receive as a common shareholder on an as-if-exercised basis immediately prior to the
transaction; and (iii) an optional beneficial ownership limitation in Section 3.3.5 of the warrant agreement that permits a holder, at
its election, to limit the number of Class A common shares issuable upon exercise of its warrants such that, immediately after giving
effect to such exercise, the holder&#8217;s beneficial ownership of the Company&#8217;s outstanding Class A common shares does not exceed
a specified &#8220;Maximum Percentage&#8221; (initially 9.8% or such other percentage specified by the holder). Public Warrants are issued
in registered form, may be held in book-entry form through The Depository Trust Company and are transferable in accordance with the procedures
set forth in Section 5 of the warrant agreement, subject to applicable securities law restrictions. The warrant agreement also provides
that the Company is not required to net cash settle the Public Warrants and that, other than the fixed cash redemption price described
above, settlement of the Public Warrants occurs through the issuance of equity or the delivery of the Alternative Issuance consideration
specified in the contract.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company may call the Public Warrants for redemption</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 78pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; in
whole and not in part&#894;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; at
a price of $0.01 per warrant&#894;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; upon
not less than 30 days&#8217; prior written notice of redemption to each warrant holder&#894; and</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; if,
and only if, the closing price of the Class A ordinary shares equals or exceeds $18.00 per share for any 20 trading days within a 30-trading
day period ending three trading days before the Company sends the notice of redemption to the warrant holders</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 106.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
and when the Public Warrants become redeemable by the Company, it may exercise its redemption right even if the Company is unable to
register or qualify the underlying securities for sale under all applicable state securities laws.&#160;</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, if (x) the Company issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection
with the closing of a Business Combination at an issue price or effective issue price of less than $9.20 per share of Class A ordinary
shares (with such issue price or effective issue price to be determined in good faith by the Company&#8217;s board of directors and,
in the case of any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor
or such affiliates, as applicable, prior to such issuance) (the &#8220;Newly Issued Price&#8221;), (y) the aggregate gross proceeds from
such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business Combination
on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average trading price of
the Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates
a Business Combination (such price, the &#8220;Market Value&#8221;) is below $9.20 per share, then the exercise price of the warrants
will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the Newly Issued Price and the $18.00
per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market Value and the
Newly Issued Price.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2025, if holders elect to exercise Public Warrants for cash, the Company would deliver one Class A common share for each
Public Warrant exercised and would receive cash equal to the fixed exercise price per share. The aggregate fair value of the shares issued
upon such cash exercise would vary directly with the then-current market price of the Company&#8217;s Class A common stock, whereas the
per-warrant exercise price and resulting cash proceeds to the Company remain fixed in accordance with the warrant agreement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">When
Public Warrants are exercised on a cashless basis in accordance with the warrant agreement, each warrant is settled through the issuance
of a reduced number of Class A common shares determined by reference to the then-current &#8220;Fair Market Value&#8221; of the Class
A common stock and the fixed exercise price. As the market price of the Company&#8217;s Class A common stock increases above the exercise
price, the number of shares issued per Public Warrant and the aggregate fair value of the shares delivered on cashless exercise increase;
conversely, as the market price approaches or falls below the exercise price, the number of shares issued per Public Warrant and the
aggregate fair value of the shares delivered decrease, and no shares would be delivered if the Public Warrants are out-of-the-money.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
and when the Public Warrants become redeemable and the Company elects to redeem them for cash in accordance with the warrant agreement,
the Company would be obligated to pay the fixed contractual redemption price per Public Warrant and the Public Warrants would be cancelled
without the issuance of any Class A common shares. Although the fixed redemption price per warrant does not change with the market price
of the Company&#8217;s Class A common stock, the Company may only exercise this redemption alternative if the Reference Value of the
Class A common stock equals or exceeds the specified redemption trigger, which is based on the trading price of the Company&#8217;s shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the event of certain reclassifications, reorganizations, mergers, consolidations, tender offers or similar transactions that result in
a change of control, the Public Warrants provide for an &#8220;Alternative Issuance&#8221; under which each Public Warrant becomes exercisable
for the cash, securities or other property that the holder would have been entitled to receive if the holder had exercised the Public
Warrant and participated in the transaction as a common shareholder immediately prior to its consummation, as described in the warrant
agreement. Accordingly, the amount and form of consideration delivered upon settlement under this alternative will generally change in
direct proportion to the per-share consideration (whether in cash, stock or other property) payable to the Company&#8217;s common shareholders
in the underlying transaction, which reflects the then-current fair value of the Company&#8217;s equity shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Private
warrants</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 78pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Private Placement Warrants are substantially identical to the Public Warrants, except that (i) the Private Placement Warrants may
be exercised for cash or on a cashless basis, at the holder&#8217;s option; (ii) the Private Placement Warrants and the Class A common
shares issuable upon their exercise are subject to certain transfer restrictions pursuant to the letter agreement between the Company,
the Sponsor and other parties thereto, as amended from time to time, including that any permitted transferee must agree to be bound by
such transfer restrictions; (iii) the Private Placement Warrants are not redeemable by the Company; and (iv) the holders of the Private
Placement Warrants (including the Class A common shares issuable upon exercise thereof) may be entitled to certain registration rights.
The Private Placement Warrants will not become Public Warrants upon any transfer and shall remain non-redeemable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 63.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As of December 31, 2025, if holders elect to exercise the Private Placement Warrants for cash, the Company would deliver one Class A common
share for each Private Placement Warrant exercised and would receive cash equal to the fixed exercise price per share. Consistent with
the Public Warrants, the aggregate fair value of the shares issued upon such cash exercise of the Private Placement Warrants would vary
directly with the then-current market price of the Company&#8217;s Class A common stock, while the per-warrant exercise price and resulting
cash proceeds to the Company remain fixed in accordance with the warrant agreement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">When
Private Placement Warrants are exercised on a cashless basis in accordance with the warrant agreement, each warrant is settled through
the issuance of a reduced number of Class A common shares determined by reference to the &#8220;Sponsor Exercise Fair Market Value&#8221;
of the Class A common stock and the fixed exercise price. As the market price of the Company&#8217;s Class A common stock increases above
the exercise price, the number of shares issued per Private Placement Warrant and the aggregate fair value of the shares delivered on
cashless exercise increase; conversely, as the market price approaches or falls below the exercise price, the number of shares issued
per Private Placement Warrant and the aggregate fair value of the shares delivered decrease, and no shares would be delivered if the
Private Placement Warrants are out-of-the-money.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Alternative Issuance provisions described above for the Public Warrants also apply to the Private Placement Warrants such that, upon
the specified reclassification, reorganization, merger, consolidation, tender offer or similar change-of-control transactions, each Private
Placement Warrant becomes exercisable for the same form and amount of cash, securities or other property that would be received by a
common shareholder on an as-if-exercised basis immediately prior to the transaction, and the settlement amount therefore varies directly
with the per-share consideration payable to the Company&#8217;s common shareholders.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Classification
and accounting: </I>The Company evaluated the terms of the Public and Private Warrants under the relevant U.S. GAAP guidance for freestanding
financial instruments and derivative accounting and concluded that both the Public Warrants and the Private Warrants meet the criteria
for <B>equity classification</B>. In connection with the reverse recapitalization transaction, the Public Warrants and Private Warrants
that were outstanding immediately prior to the transaction were initially recorded through the reverse recapitalization and are presented
within stockholders&#8217; equity on the consolidated balance sheet as part of additional paid-in capital (rather than as a separate
warrant liability line item). Because the Public Warrants and Private Warrants are classified in equity, there is no subsequent remeasurement
required after initial recognition and changes in the fair value of the Company&#8217;s common stock do not give rise to gains or losses
in the statement of operations related to these warrants.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Cashless
Exercise of Stock Options</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
August 2025, certain Fusemachines employees exercised an aggregate of 745,896 options to purchase shares of Fusemachines common stock
on a cashless basis via net share settlement resulting in the net share issuance of 666,662 shares of Fusemachines common stock. The
transaction has been accounted under the guidance of ASC 718 - Stock Compensation. The cashless exercise mechanism does not change the
substantive terms or fair-value-based measure of the awards and therefore does not constitute a modification under ASC 718.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&#160;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I></I></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&#160;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>2025
Omnibus Equity Incentive Plan (the &#8220;Plan&#8221;)</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&#160;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
July 28, 2025, the Board of Directors and shareholders of the Company approved the Fusemachines Inc. 2025 Omnibus Equity Incentive Plan
(the &#8220;Plan&#8221;). The Plan authorizes the Company to issue up to 1,500,000 shares of the Company&#8217;s common stock, par value
$0.0001 per share, to eligible employees, directors, and consultants in the form of stock options, restricted stock, restricted stock
units, or other equity-based awards. Subsequent to December 31, 2025, the Company is in the process of granting awards under the Plan
to certain employees. As the awards were not granted and no shares were issued under the Plan as of December 31, 2025, no amounts have
been recognized in the accompanying consolidated financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&#160;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Shortfall
Warrant</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&#160;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the execution of the Forward Purchase Agreement the Company agreed to issue &#8220;Shortfall Warrants&#8221; to the Sellers
(Meteora) for shares not elected under the Forward Purchase Agreement, representing the difference between the maximum number of shares
subject to the FPA and the number of shares ultimately elected by the Forward Counterparty.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Seller
in its sole discretion may request (in one or more requests) warrants of the Counterparty exercisable for Shares in an amount equal to
(i) the Maximum Number of Shares less (ii) the Number of Shares specified in the Pricing Date Notice (the &#8220;Shortfall Warrants,&#8221;
and the Shares underlying the Shortfall Warrants, the &#8220;Shortfall Warrant Shares&#8221;). The Shortfall Warrants shall have an exercise
price equal to the termination price which is defined $12 in the forward purchase agreement and is subject to reset in accordance with
the pricing provisions of that agreement, and this termination price has subsequently been amended; for further details, refer to Note
25 &#8211; Subsequent Events.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
warrants grant the holders the right to purchase a fixed number of shares (2,108,070) at a fixed exercise price/termination price. The
Shortfall Warrants are exercisable for shares of common stock and were issued concurrently with the consummation of the Business Combination
on October 22, 2025 (the &#8220;Initial Exercise Date&#8221;) and are exercisable at any time from the Initial Exercise Date until 5:00
p.m. (New York City time) on October 22, 2028 (the &#8220;Termination Date&#8221;). No shortfall warrants have been exercised as at
December 31, 2025.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Shortfall Warrants contain a beneficial ownership limitation that, subject to certain limited exceptions, restricts a holder from exercising
the Shortfall Warrants to the extent that, following such exercise, the holder, together with its affiliates and certain related parties,
would beneficially own more than 9.9% of the Company&#8217;s outstanding common stock. A holder may increase or decrease this beneficial
ownership limitation upon notice to the Company, provided that any increase will not be effective until the 61st day after such notice
and in no event may the beneficial ownership limitation exceed 9.9%.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
exercise price and the number of Shortfall Warrant Shares are subject to customary anti-dilution adjustments for stock dividends and
other distributions on the Company&#8217;s common stock, stock splits, reverse stock splits, reclassifications and certain rights offerings.
In addition, subject to any required shareholder approvals and applicable stock exchange rules, the Company may, in its discretion, reduce
the exercise price of the Shortfall Warrants for any period of time.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Shortfall Warrants and the rights thereunder are transferable, in whole or in part, with the prior written consent of the Company and
subject to compliance with applicable securities laws and payment of any applicable transfer taxes. The warrants may be divided or combined
into new warrants, and, if properly assigned, may be exercised by a permitted transferee without the issuance of a new warrant certificate.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company evaluated the Shortfall Warrants in accordance with ASC 480, Distinguishing Liabilities from Equity, and ASC 815, Derivatives
and Hedging, including the guidance in ASC 815-40 related to contracts indexed to, and potentially settled in, an entity&#8217;s own
equity.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
making this assessment, the Company considered, among other factors:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 92pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; whether
the Shortfall Warrants are freestanding financial instruments,</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; whether
the warrants are indexed to the Company&#8217;s own stock,</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; whether
settlement is required to be in shares rather than cash, and</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;
whether any provisions could require net cash settlement under circumstances outside the Company&#8217;s control&#160;</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accordingly,
in connection with the reverse recapitalization, the Company recognized the Shortfall Warrants at their initial fair value of $1,009
thousands, which is included within additional paid-in capital in the stockholders&#8217; equity section of the consolidated balance
sheet.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Based
on this assessment, the Company concluded that the Shortfall Warrants meet all of the criteria for equity classification under ASC 815-40.
Accordingly, the Shortfall Warrants are classified as equity and are not subject to subsequent remeasurement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subsequent
to year ended December 31, 2025, the Company entered into an amendment on February 3, 2026, to the Common Stock Purchase Warrant (the
&#8220;Warrant Amendment&#8221;) originally issued on October 22, 2025 in connection with the Business Combination with Meteora Capital
Partners, LP, Meteora Select Trading Opportunities Master, LP and Meteora Strategic Capital, LLC (collectively, the &#8220;Holder&#8221;).
Pursuant to the Warrant Amendment, the exercise price of the warrant was amended such that the exercise price per share of the Company&#8217;s
common stock is $10.00, subject to customary adjustments as set forth in the warrant agreement. All other terms and conditions of the
warrant remain unchanged and continue in full force and effect. The Company is currently evaluating the accounting and financial reporting
implications of the Warrant Amendment, including its impact, if any, on the classification and valuation of the warrant.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Financial
Performance</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year ended December 31, 2025, and December 31, 2024, we generated revenues of $7.71 million and $8.81 million and reported a net
loss of $0.93 million and $15.38 million, respectively. Net cash used in operating activities was $5.53 million for the year ended December
31, 2025, and $2.20 million for the year ended December 31, 2024. As noted in our consolidated financial statements, we had an accumulated
deficit of $35.15 million as of December 31, 2025, and $34.21 million as of December 2024</FONT>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Key
Factors and Trends Affecting Results of Operations</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
believe the following factors and trends may cause previously reported financial information not to be necessarily indicative of future
operating results or future financial conditions:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; <B>Market
Competition</B>: The AI industry is highly competitive and is changing rapidly with numerous players vying for market share. We attempt
to mitigate this risk by continuously innovating and differentiating our offerings, as we have been delivering AI solutions for well
over a decade and have deep institutional capabilities to stand apart in terms of our ability to provide value to our customers and scale.
Nevertheless, increasing competition could result in loss of business or pressure on margins for Fusemachines.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; <B>Technological
Changes</B>: Rapid technological advancements in AI can impact our offering, dilute our value proposition and require us to pivot in
different directions. However, given our broad spectrum of AI solutions, coupled with our ability to produce AI talent, our deep investment
in research and development, and a culture of continuous learning, we have been able to navigate these changes effectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; <B>Adequate
Capital Raise</B>: As of December 31, 2025, we have limited financial resources as our existing cash and cash equivalents provide limited
operating runway relative to our current cost structure and planned growth initiatives. Although we raised capital in connection with
the consummation of the Business Combination and related PIPE financing during 2025, we expect that additional capital will be required
to fund operations, support product development, expand sales and marketing activities, and meet our working capital requirements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 96pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
may seek to raise additional funds through equity offerings, debt financings, strategic investments, or other capital sources. However,
there can be no assurance that sufficient funding will be available to us to fund our operating expenses and to further develop our business.
Unless we achieve substantial profitability, we anticipate that we will likely need to raise additional capital to fund our operations
while we implement and execute our business plan.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 96pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; <B>Ability
to manage costs and expenses while achieving revenue growth</B>: Our results of operations may fluctuate, in part, because of the intensive
nature of our sales efforts and the length and unpredictability of our sales cycle. As part of our sales efforts, we invest considerable
time and expense evaluating the specific organizational needs of our potential customers and educating these potential customers about
the technical capabilities and value of our platforms and services. As part of our sales efforts, we also provide our platforms to potential
customers at no or low cost initially to them for evaluation purposes through short-term pilot deployments of our platforms, and there
is no guarantee that we will be able to convert customers from these short-term pilot deployments to full revenue generating contracts.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679; <B>Finance
costs</B>: Historically, the Company issued certain convertible promissory notes to finance its operations, as further described in
Note 10 &#8211; Long-Term Debt to the consolidated financial statements. These instruments bore interest and were subject to
automatic conversion. In connection with the consummation of the Business Combination during 2025, the outstanding principal and
accrued interest under these convertible notes were converted into equity securities in accordance with their contractual terms. As
a result, no convertible promissory notes remained outstanding as of December 31, 2025 other than related party note payable related
to Dolma Impact Fund I (&#8220;Dolma&#8221;) amounting $300 thousand. Accordingly, finance costs for the year ended December 31,
2025 primarily reflect interest expense incurred prior to the conversion date. Following the conversion, the Company no longer
incurs interest expense related to these instruments, which has reduced ongoing finance costs compared to prior periods.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 96pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Emerging
Growth Company and Smaller Reporting Company Status</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Section
102(b)(1) of the Jumpstart Our Business Startups Act (&#8220;JOBS Act&#8221;) exempts emerging growth companies from being required to
comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act
registration statement declared effective or do not have a class of securities registered under the Securities Exchange Act of 1934,
as amended) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a Company can elect
to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such
election to opt out is irrevocable. Until the Company is considered to be an emerging growth company, the Company has elected not to
opt out of such extended transition period which means that when an accounting standard is issued or revised and it has different application
dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time
private companies adopt the new or revised standard.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are also a &#8220;smaller reporting company&#8221; as defined in the Securities Exchange Act of 1934. We may continue to be a smaller
reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures
available to smaller reporting companies until the fiscal year following the determination that our voting and non-voting common stock
held by non-affiliates is $250 million or more measured on the last business day of our second fiscal quarter, or our annual revenues
are less than $100 million during the most recently completed fiscal year and our voting and non-voting common stock held by non-affiliates
is $700 million or more measured on the last business day of our second fiscal quarter.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Segment
Reporting</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
operate as one operating segment with a focus on data engineering, artificial intelligence consulting, and technical services. Our Chief
Executive Officer (&#8220;CEO&#8221;), as our chief operating decision maker, manages and allocates resources to the operations of the
Company on a consolidated basis. This enables our CEO to assess the overall level of available resources and determine how best to deploy
these resources across service lines in line with our long-term company-wide strategic goals.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Results
of Operations</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
period-to-period comparisons of results of operations have been prepared using the historical periods included in our consolidated financial
statements. The following discussion should be read in conjunction with the consolidated financial statements and related notes included
elsewhere in this annual report. We have derived this data from our annual consolidated financial statements included elsewhere in this
annual report.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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ended December <I>31, 2025, Compared To Year Ended December 31, 2024</I></B></FONT></P>

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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD></TR>
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1) Includes
stock-based compensation expense as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 80%; margin-right: auto">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&#160;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1pt">&#160;</TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1pt solid; text-align: center; font-weight: bold">Year ended December 31,</TD><TD STYLE="text-align: center; padding-bottom: 1pt; font-weight: bold">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&#160;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1pt">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2025</TD><TD STYLE="text-align: center; padding-bottom: 1pt; font-weight: bold">&#160;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1pt">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2024</TD><TD STYLE="text-align: center; padding-bottom: 1pt; font-weight: bold">&#160;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1pt">&#160;</TD>
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; width: 46%; text-align: left">General and administrative</TD><TD STYLE="width: 2%">&#160;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 14%; text-align: right">154</TD><TD STYLE="width: 1%; text-align: left">&#160;</TD><TD STYLE="width: 2%">&#160;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 14%; text-align: right">723</TD><TD STYLE="width: 1%; text-align: left">&#160;</TD><TD STYLE="width: 2%">&#160;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 14%; text-align: right">(569</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-left: 10pt">Cost of revenue</TD><TD>&#160;</TD>
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    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">44</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(23</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-left: 10pt; text-align: left">Selling and marketing</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">38</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">170</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(132</TD><TD STYLE="text-align: left">)</TD></TR>
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    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">18</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&#160;</TD><TD STYLE="padding-bottom: 1pt">&#160;</TD>
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    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(112</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Total stock-based compensation expense</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&#160;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right">231</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&#160;</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&#160;</TD>
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  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">For Revenue recognition policy refer note details
under &#8220;Critical accounting policies and estimates&#8221; section</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
provide services to customers worldwide, with the majority of revenues being derived from contracts with customers located within the
United States. The table below presents the breakdown of our revenues, based on the customer&#8217;s location (in thousands).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-left: 0.75in; border-collapse: collapse; width: 80%">
  <TR STYLE="vertical-align: bottom">
    <TD>&#160;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&#160;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Year Ended December 31,</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD>&#160;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&#160;</TD>
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    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2024</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
table below presents the breakdown of our revenues, based on the type of services (in thousands).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt">*AI Solutions (Products and
Services) includes both software product revenues and related services. Product revenue represents an insignificant portion of total revenue
for the periods presented and, accordingly, has not been separately disclosed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenue
for the year ended December 31, 2025, reduced to $7.71 million as compared to $8.81&#160;&#160; million for the year ended December 31,
2024, due to AI Solutions (Products and Services). Overall revenue decreased by $1.10 million mainly due to termination of 12 customers
and reduction in contract size of 16 customers which resulted in loss of revenue by $2.99 million. This decrease was partially offset
by 11 new customer contracts and increase in contract size of 9 customers adding $1.91 million of revenue.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&#160;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Cost
of revenue</I> &#8211; Cost of revenue primarily consists of consulting and payroll expenses that are assigned to building AI solutions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Cost
of revenue decreased by $0.57 million to $3.40 million for the year ended December 31, 2025, compared to $3.97 million for the year ended
December 31, 2024. The decrease was primarily driven by lower consultancy expenses of $0.22 million and a reduction in payroll expenses
of $0.37 million. The decline in consultancy costs was mainly attributable to a decrease in the average cost per consultant which is
$50K in year 2024 and $48K in year 2025, in the United States (US) entity, while the average headcount of billable consultants also
decreases from 39 in year 2024 to 35 in year 2025. In the Nepal entity, the decrease was due to the offboarding of two consultants who
were engaged in client projects during 2024 but not in 2025. The reduction in payroll expenses was driven by a combination of factors.
In the US entity, the average cost per employee decreased slightly from $139k in year 2024 to $130k in year 2025, with the average headcount
remaining constant at 8. In contrast, in the Nepal entity, the decrease was mainly due to a decline in average headcount from 327 in
2024 to 270 in 2025 as there was reduction in billable resource and employee resignation, even though the average cost per consultant
increased in 2025. Additionally, there was a $0.02 million decrease in cost of revenue related to stock-based compensation, primarily
due to the completion of vesting for previously granted awards.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Gross
profit</I> &#8211; Gross profit is calculated as revenue less total cost of revenue. Our gross profit in future periods will depend on
a variety of factors, including market conditions that may impact our pricing, sales mix changes among our service agreements, and product
mix changes between established services and new services.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Gross
profit decreased by $0.53 million to $4.31 million for the year ended December 31, 2025, compared to $4.84 million for the year ended
December 31, 2024, as a result of lower sales.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Selling
and marketing expenses</I> &#8211; Selling and marketing expenses represent spending associated with promoting and selling of our services.
These expenses comprise of personnel costs, travel and accommodation expenses, as well as advertising and consulting costs related to
such activities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Selling
and marketing expenses decreased by $0.59 million, from $1.96 million for the year ended December 31, 2024, to $1.37 million for the
year ended December 31, 2025. The decrease was primarily attributable to lower commission expenses, consulting fees, payroll costs, and
stock-based compensation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Commission
expenses decreased by $0.06 million, as only few business deal brought on by sales team in current year 2025, unlike in the prior year.
Consulting fees for the selling and marketing team decreased by $0.06 million, mainly because consultants worked fewer hours in 2025
compared to 2024, and one consultant was transitioned to payroll.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Payroll
expenses decreased by $0.11 million, primarily due to a reduction in headcount as three employees resigned and one shifted to consultant
in, in the United States (US) entity, additionally the average costs has slightly decreased $142 thousand in year 2024 to $131 thousand
in year 2025.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>General
and administrative expenses</I> &#8211; General and administrative expenses consist of expenses associated with general and administrative
functions of the business such as the costs of salaries, IT infrastructure, bad debt, travel, legal and accounting services, insurance,
rent, software and tools, meals, other professional services activities, and certain non-income taxes.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">General
and administrative expenses decreased by $2.15 million, from $10.33 million for the year ended December 31, 2024, to $8.18 million for
the year ended December 31, 2025. The decrease was primarily driven by lower professional charges, stock-based compensation, and bad
debt expenses, partially offset by higher payroll and consultancy expenses.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Professional charges decreased by approximately $2.5 million compared to the prior year, primarily driven by management&#8217;s
conscious efforts to optimize and reduce operational costs, resulting in lower professional expenses during the period. Further Stock-based compensation expense declined by $0.57 million,
primarily due to the completion of vesting for previously granted awards. Additionally, bad debt expense has been decreased by $0.48
million during the period as allowances were provided for the long outstanding Accounts receivables in previous year. Further, there
has been decrease in consultancy expense for approximately $0.30 million as in US entity there has been decrease in headcount from 16
in year 2024 to 10 in year 2025 and there has also been decrease in IT infrastructure expense due to significant decrease of utilization
for Amazon Web, Google Suite and termination of Meta Workspace.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
reductions were partially offset by an increase in payroll expenses of $0.49 million and payout of incentive linked to business
combination amounting to $1.0 million. The payroll expense has been increasing as in US entity the average head count has increased
from 9 in year 2024 to 11 in year 2025 and there is an increment of insurance cost due to increase in premium amount of Director
and officer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Research
and development expenses </I>&#8211; Research and development expenses include costs associated with software product development, testing,
quality assurance, documentation, enhancements and upgrades for existing customers under maintenance.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Research
and development expenses for the year ended December 31, 2025, decreased by $0.01 million to $0.72 million as compared to $0.73 million
for the year ended December 31, 2024. The decrease was primarily due to stock-based compensation of $0.11 million due to the completion
of vesting for previously granted awards. This was partially offset by increases in payroll expenses of $0.08 million as the headcount
increased from 36 in year 2024 to 44 in year 2025.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Interest
expense</I> &#8211; Interest expense represents interest payable on our borrowings including the debt discount that is being amortized,
as well as debt financing and equity issuance costs that are amortized to interest expense.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Interest
expense increased by $0.03 million to $0.27 million for the year ended December 31, 2025, from $0.23 million for the year ended December
31, 2024. The increase was primarily due to a higher outstanding balance of promissory notes reflecting the issuance of a new promissory
notes between the periods. Further Pursuant consummation of the Business Combination on October 22, 2025, substantially all Fusemachines
convertible notes that were issued and outstanding immediately prior to the Closing were converted into  shares of Legacy Fusemachines
common stock in accordance with the respective convertible note agreements. As a result of the conversions and exchanges, no convertible
notes or related-party notes payable remained outstanding as of December 31, 2025 other than related party note payable related
to Dolma amounting $300 thousand.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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on extinguishment of debt</I> &#8211; Loss on extinguishment of debt for the year ended December 31, 2025 represents $0.1 million
related to April 2024 Convertible Note, $0.1 million related to June 2024 Convertible Note and $0.2 million related to September
2024 Convertible Notes. Loss on extinguishment of debt are related to modification of the aforementioned loans on account of change
in conversion price from $4.94 to $3.15 was accounted for under the substantial premium model in accordance with ASC 470, Debt where
the excess above the fair value of these notes was recorded as loss on extinguishment of debt.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Loss
on extinguishment of debt for year ended December 31, 2024 represents the repayment of the 2023 Notes Agreement. In August 2023, we entered
into a loan and security agreement with a lender (the &#8220;2023 Notes Agreement&#8221;) that will make available to us the loans in
an aggregate principal amount of up to $4.0 million in three separate tranches. In January 2024, we repaid the entire aggregate outstanding
principal on the 2023 Notes Payable along with an additional payment for interest, prepayment fees, and lender fees. These payments resulted
in a loss, recorded in loss on extinguishment of debt.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Loss
on extinguishment of debt for the year ended December 31, 2025, was $0.39 million as compared to $0.60 million for the year ended December
31, 2024.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Loss
on change in fair value</I> &#8211; Loss on change in value represents the changes in fair value related to our convertible notes, warrant
liability and forward purchase derivative liability.&#160;&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Gain/(Loss)
on change in fair value for the year ended December 31, 2025 was a gain of $5.47 million as compared to ($6.10 million) for the year
ended December 31, 2024. We qualified for and elected to account for the convertible notes under the fair value option and, in doing
so, bypassed the analysis of potential embedded derivative features. As a result, the convertible notes were recorded at fair value
upon issuance and recorded as gain and loss on change in fair value in the consolidated statements of operations and comprehensive
loss, for the year ended December 31, 2025 and December 31, 2024, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the consummation of the Business Combination on October 22, 2025, substantially all outstanding convertible notes were
either converted into equity or repaid, and therefore fair value changes were recognized only up to the closing date of the Business
Combination. During this period, the Company recorded a net increase of approximately $5.72 million in gains related to changes in the
fair value of the convertible notes. The increase in fair value promissory note was primarily driven by a decline in the estimated
market price of the Company&#8217;s underlying equity, which decreased from approximately $7.48 per share as of December 31, 2024 to
approximately $3.40 per share immediately prior to the Business Combination, resulting in a corresponding reduction in the fair value
of the convertible instruments.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, the Company recorded an increase of approximately $1.08 million in the fair value of forward purchase derivative
liability. This increase was primarily driven by changes in key valuation inputs, including the Company&#8217;s relatively low share
price of $1.65, elevated equity volatility of 65.0%, and the remaining contractual term of approximately 2.81 years. These factors
increased the probability-weighted value of the potential share settlement under the arrangement. Further, the fair value was
further impacted by adjustments for counterparty credit risk of 6.3%. The remaining changes in fair value during the period
primarily relate to the re-measurement of the warrant liability.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
conversion, the carrying amount of the convertible debt is reclassified to equity, and no gain or loss is recognized in earnings, as
the conversion is executed in accordance with the original terms of the instruments The Company&#8217;s management performed a quantitative
assessment of Gain/(Loss) on change in fair value for prior period, and in doing so, considered an independent fair valuation report
obtained by management.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Other
(expense) income</I> &#8211; Other (expense) income consists of our proportional share of earnings and losses related to our equity method
investment as well as impairment loss, penalties and settlements, and other miscellaneous expenses.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other
income for the year ended December 31, 2025, was $0.22 million, compared to other expenses of $(0.15) million for the year ended December
31, 2024, representing an improvement of $0.37 million. The improvement was primarily attributable one time impairment loss booked last
year amounting $0.12 million and balance pertains to forex exchange gain and other income as compared to last year</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56.7pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Provision
for income tax </I>&#8211; Provision for income tax is accounted for using the asset and liability method, which requires the recognition
of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in our consolidated
financial statements or tax returns. In addition, deferred tax assets are recorded for all future benefits including, but not limited
to, net operating losses, research and development credit carryforwards, and basis differences with certain assets and liabilities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&#160;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Provision
for income tax is $0.003 million for the for the year ended December 31, 2025 and $0.03 million&#160; for year ended December 31,2024.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Net
loss</I> &#8211; Net loss for the year ended December 31, 2025, was $0.93 million, compared to a net loss of $15.38 million for
December 31, 2024. The change was the result of increase in profit on change in fair value of convertible notes, warrant
liability and forward purchase derivative liability, decrease in General and administrative and Selling and Marketing expense
and due to decrease in stock-based compensation due to the completion of vesting for previously granted awards, payroll expenses and
decrease in Loss on extinguishment of debt.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Non-GAAP
Financial Measures</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States (&#8220;GAAP&#8221;).
We report certain key financial measures that are not required by, or presented in accordance with GAAP, and these non-GAAP financial
measures should not be considered as an alternative to the information prepared in accordance with GAAP. In addition, the Company&#8217;s
management reviews performance by focusing on several key performance indicators not prepared in conformity with GAAP. We believe these
non-GAAP financial measures provide a useful measure of our operating results, a meaningful comparison with historical results and with
the results of other companies, and insight into our ongoing operating performance. Further, we utilize these measures, in addition to
GAAP measures, when evaluating and comparing our operating performance against internal financial forecasts and budgets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">However,
there are several limitations related to the use of non-GAAP financial measures because it excludes significant expenses or credits that
are required by GAAP to be included in our financial statements. In addition, other companies may calculate non-GAAP measures differently
or may use other measures to calculate their financial performance. Therefore, non-GAAP measures may not be directly comparable to similarly
titled measures of other companies.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company defines adjusted earnings before interest, tax, depreciation and amortization (&#8220;EBITDA&#8221;) as net loss before interest
expense, income tax expense (benefit), depreciation and amortization, as adjusted to exclude stock-based compensation, fair value changes,
loss on extinguishment of debt and payable, and aborted IPO costs that consisted of direct and incremental costs, such as accounting,
consulting, and legal fees, incurred in connection with the aborted IPO.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Non-GAAP
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
use the non-GAAP measures EBITDA and adjusted EBITDA to help us evaluate our business, identify trends affecting our business, formulate
business plans and financial projections, and make strategic decisions. Also, we exclude depreciation and amortization, stock-based compensation
and fair value changes, which are non-cash expenses, from these non-GAAP financial measures because we believe that excluding these items
provides meaningful supplemental information regarding operational performance and provides useful information to investors and others
in understanding and evaluating our operating results in the same manner as our management team.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
definitions may differ from the definitions used by other companies and therefore comparability may be limited. In addition, other companies
may not publish these or similar metrics. Further, these metrics have certain limitations, as they do not include the impact of certain
expenses that are reflected in our consolidated statements of operations and comprehensive loss. Thus, our non-GAAP EBITDA and adjusted
EBITDA should be considered in addition to, not as a substitute for, or in isolation from, measures prepared in accordance with GAAP.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
compensate for these limitations by providing reconciliations of these non-GAAP measures to the most comparable GAAP measures. We encourage
investors and others to review our business, results of operations, and financial information in its entirety, not to rely on any single
financial measure, and to view these non-GAAP measures in conjunction with the most directly comparable GAAP financial measures.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 80%; margin-right: auto">
  <TR STYLE="vertical-align: bottom">
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  <TR STYLE="vertical-align: bottom">
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    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2025</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&#160;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2024</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&#160;</TD></TR>
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    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 16%; text-align: right">(15,383</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">234</TD><TD STYLE="text-align: left">&#160;</TD></TR>
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">31</TD><TD STYLE="text-align: left">&#160;</TD></TR>
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    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&#160;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">179</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&#160;</TD></TR>
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    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(468</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&#160;</TD>
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">70</TD><TD STYLE="text-align: left">&#160;</TD></TR>
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    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&#160;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">601</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt">Adjusted EBITDA</TD><TD STYLE="padding-bottom: 2.5pt">&#160;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(5,314</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&#160;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(7,097</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)
Represents change in fair value of convertible notes, warrant liability and forward purchase derivative liability.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Liquidity
and Capital Resources as of December 31, 2025</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Liquidity
is the ability of a company to generate funds to support its current and future operations, satisfy its obligations, and otherwise operate
on an ongoing basis. Significant factors in the management of liquidity are funds generated by operations, levels of accounts receivable
and accounts payable and capital expenditure.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
formally evaluated our liquidity and cash position most recently in 2025 when preparing our 2025 consolidated financial statements. As
of December 31, 2025, we had cash of approximately $4.22 million and a net working capital deficit of approximately $13.30 million. As
of that date, we also had an accumulated deficit of approximately $35.15 million and a net loss of $0.93 million for the year then ended.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56.7pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2024, we had cash of approximately $0.50 million and a net working capital deficit of approximately $16.18 million. As
of December 31, 2024, we had an accumulated deficit of $34.22 million and a net loss of $15.38 million for the year ended December 31,
2024.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56.7pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56.7pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
factors raise substantial doubt regarding the Company&#8217;s ability to continue as a going concern within one year of the date these
consolidated financial statements were issued. The continuation of the Company as a going concern is dependent upon the continued financial
support from its stockholders and debt holders. Specifically, the Company&#8217;s ability to continue operations depends on obtaining
additional equity or debt financing and, ultimately, on generating profits from operations and achieving positive operating cash flows
&#8212; neither of which is assured.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56.7pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
October 22, 2025, Merger Sub merged with and into Legacy Fusemachines with Legacy Fusemachines continuing as the surviving company and
becoming a wholly owned subsidiary of Fusemachines Inc. In connection with the closing, approximately $14.0 million in cash was received
for the issuance of shares of Fusemachines Inc. common stock. Substantially all convertible notes were settled through the issuance of
Fusemachines Inc. Common Stock, other than related party note payable related to Dolma Impact Fund I (&#8220;Dolma&#8221;) amounting $300 thousand, and certain
promissory notes were repaid in cash upon closing. Following the business combination, the net balance of cash and cash equivalents was
approximately $9.4 million. The Company&#8217;s trade payables, accrued expenses, and other current liabilities exceed the net cash and
cash equivalents balance. Management is evaluating initiatives to streamline operations through reductions in headcount and consultant
costs, and continued negotiations with vendors to achieve more favorable terms. In addition, the Company&#8217;s business plan anticipates
a measured growth trajectory supported by new client acquisitions and expansion of existing customer relationships. While these actions
are expected to enhance the Company&#8217;s financial position and extend its operational runway once implemented, they remain in the
planning and negotiation stages.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56.7pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date on which these consolidated financial statements were available to be issued, we believe that the cash on hand, and additional
investments available through issuance of new Common Stock, will be inadequate to satisfy the Company&#8217;s working capital and capital
expenditure requirements for at least the next twelve months. The ability of the Company to continue as a going concern is dependent
upon management&#8217;s plan to raise additional capital from issuance of equity or receive additional borrowings to fund the Company&#8217;s
operating and investing activities over the next year. These consolidated financial statements do not include any adjustments to the
recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company
be unable to continue as a going concern.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Cash
flows</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Year
End Cash Flows</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table summarizes our cash flows for the periods presented</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(165</TD><TD STYLE="text-align: left">)</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(176</TD><TD STYLE="text-align: left">)</TD><TD>&#160;</TD>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Operating
Activities</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify">Net cash used in operating activities for the year ended December 31, 2025 increased by $3.32 million to $5.53
million, compared to $2.2 million in the same period in 2024. This increase was primarily driven by a reduction in non-cash gains, as
net loss decreased to $0.93 million for the year ended December 31, 2025 from $(15.38) million in 2024, largely due to changes in the
fair value of convertible notes, warrant liability and forward purchase derivative liabilities. Additionally, selling and marketing expenses
decreased due to lower stock-based compensation following the completion of vesting for previously granted awards. Further, changes in
working capital decreased to $0.21 million from $4.39 million in the prior year. The $5.53 million net cash used in operating activities
in 2025 was primarily related to (i) a net loss of $(0.93) million, offset by; (ii) depreciation and amortization of $0.19 million; (iii)
provision for credit losses of $0.06 million; (iv) stock-based compensation of $0.23 million; (v) amortization of right-of-use assets
of $0.09 million; (vi) Loss on extinguishment of debt of $0.39 million; (vii) Changes in fair value of Convertible Notes at Fair Value
and Forward Purchase derivative liability of $ (6.54) million; (viii) Change in fair value of common stock warrant liability of $1.08
million (ix) Accretion of cumulative mandatorily redeemable common and preferred stock liability of $0.10 million; (x) Working capital
changes of $(0.21) million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash used in operating activities during the year ended December 31, 2024 was $2.2 million. The $2.2 million net cash used in operating
activities in 2024 was primarily related to (i) a net loss of $15.4 million, offset by&#894; (ii) depreciation and amortization of $0.18
million&#894; (iii) provision for credit losses of $0.5 million&#894; (iv) stock-based compensation of $1.1 million&#894; (v) amortization
of right-of-use assets of $0.1 million&#894; (vi) changes in fair value of convertible notes and common stock warrant liability totalling
$6.1 million ($5.6 million and $0.5 million, respectively)&#894; (vii) Accretion of cumulative mandatorily redeemable common and preferred
stock liability of $0.1 million&#894; (viii) Loss on extinguishment of debt and payable of $0.7 million ($0.6 million and $0.1 million,
respectively) and (ix) Working capital changes of $4.4 million.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Investing
Activities</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash used in investing activities during the year ended December 31, 2025, was $0.17 million compared to $0.18 million during the year
ended December 31, 2024. The $0.17 million net cash used in investing activities in 2025 consisted of $0.11 million in costs capitalized
for internally developed software and $0.05 million in purchases of property and equipment.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash used in investing activities for the year ended December 31, 2024 was $0.18 million and consisted of purchases of property and equipment
of $0.02 million, costs capitalized for internally developed software of $0.14 million.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Financing
Activities</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash provided by financing activities was $9.42 million in the year ended December 31, 2025, compared to $2.61 million in December 2024,
representing an increase of $6.81 million over the respective periods. The increase in cash flow from financing activities was primarily
due to i) proceeds from reverse capitalization of $9.43 million; (ii) proceeds from Issuance of issuance of shares pursuant to PIPE transaction
of $1.00 million; (iii) proceeds from convertible notes payable of $0.18 million (iv) payments of related party notes payable of $(0.70)
million. Balance $0.84 million pertains to payment of deferred transaction cost and $0.34 million relates to proceeds received and payments made in connection with directors&#8217; and officers&#8217; insurance during
the current period.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
cash provided by financing activities was $2.6 million in the year ended December 31, 2024<FONT STYLE="text-decoration: line-through">. </FONT>The $2.6 million net cash
provided by financing activities in 2024 consisted of (i) proceeds from convertible notes at fair value of $6.5 million&#894; (ii) proceeds
from convertible notes payable of $0.5 million&#894; (iii) proceeds from related party loan payable of $0.7 million, offset by (iv) payments
on notes payable of $3.0 million&#894; (v) common stock repurchase of $2.0 million&#894; and partially offset by (vi) exercise of stock
options and payment of deferred transaction costs</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 56pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Contractual
Obligations and Commitments</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
contractual cash obligations as of December 31, 2025, are summarized in the table below:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-left: auto; border-collapse: collapse; width: 85%; margin-right: auto">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
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  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="font-weight: bold; text-align: left">&#160;</TD><TD STYLE="font-weight: bold; text-align: right">185</TD><TD STYLE="font-weight: bold; text-align: left">&#160;</TD><TD STYLE="font-weight: bold">&#160;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&#160;</TD><TD STYLE="font-weight: bold; text-align: right">193</TD><TD STYLE="font-weight: bold; text-align: left">&#160;</TD><TD STYLE="font-weight: bold">&#160;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&#160;</TD><TD STYLE="font-weight: bold; text-align: right">452</TD><TD STYLE="font-weight: bold; text-align: left">&#160;</TD><TD STYLE="font-weight: bold">&#160;</TD>
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  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)
As discussed in Note 10, Long-Term Debt, pursuant to business combination substantially all convertible debt and related party debt has
been settled either in cash or equity as per the terms of respective debt agreements. Accordingly, no convertible notes or related-party
notes payable remained outstanding as of December 31, 2025, other than related party note payable related to Dolma amounting $300 thousand.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)
</FONT>Upon the closing of the business combination, the Company settled its obligation under the Second Agreement through the issuance
of 29,610 shares of Fusemachines, Inc. common stock, reflecting the application of the 0.6580 conversion ratio to the 45,000 shares of
the Company&#8217;s common stock, and a partial cash payment of approximately $110 thousand. The remaining $98 thousand obligation is
still outstanding and is reflected in accounts payable as of December 31, 2025.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Debt
Financing Arrangements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
October 15, 2019, we entered into a convertible promissory note agreement with a lender and issued a convertible promissory note for
a principal amount of $2.0 million (the &#8220;2019 Convertible Note Agreement&#8221;). On September 7, 2021 a second convertible promissory
note was issued to the same lender for a principal amount of $0.5 million (the &#8220;2021 Convertible Note Agreement&#8221;), collectively
with the 2019 Convertible Note Agreement referred to as the &#8220;Convertible Notes Agreements&#8221;. On December 22, 2022, the Convertible
Notes Agreements were amended (the &#8220;2022 Amended Convertible Notes Agreements&#8221;) to extend the maturity date to December 23,
2023, increase the interest rate to 15% for the period from December 22, 2022, to December 22, 2023, adding a prepayment option, amending
one of the conversion scenarios, and amending the definition of a next equity financing to require a sale of equity securities to result
in gross proceeds of $7.5 million (the &#8220;Next Equity Financing&#8221;). The 2022 Amended Convertible Notes Agreements also added
a partial payment of the interest accrued and outstanding on the note of $0.4 million due no later than March 22, 2023. Failure to pay
by the payment deadline obligated the Company to pay interest at a rate of twenty percent (20%) per annum, compounded quarterly, on the
outstanding $0.4 million. On December 20, 2023, the 2022 Amended Convertible Notes Agreements were amended again (the &#8220;2023 Amended
Convertible Notes Agreements&#8221;), extending the maturity date of both notes to January 22, 2024. In January 2024, these convertible
notes were amended again (the &#8220;2024 Amended Convertible Notes Agreements&#8221;), extending the maturity date to January 2025.
The amendment also added a provision surrounding conversion in the case we complete the business combination mentioned above. On January
31, 2025, the company entered into an amendment agreement of the convertible note payable pursuant to which the maturity date was revised
to February 28, 2026. The 2021, 2022, 2023 and 2025 amendments were accounted for as debt modifications, prospectively, with any change
in fair value from the new terms incorporated into future valuations. The 2024 amendment is accounted for as an extinguishment of debt.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
August 24, 2023, we entered into a loan and security agreement with a lender (the &#8220;2023 Notes Agreement&#8221;) that will make
available to us loans in an aggregate principal amount of up to $4.0 million in three separate tranches. On that day, we withdrew $3.0
million (the &#8220;First Tranche&#8221;). We additionally had the opportunity to request, subject to the terms of the 2023 Notes Agreement,
an additional tranche of $0.5 million on or before March 31, 2024 (the &#8220;Second Tranche&#8221;) and a third tranche of $0.5 million
on or before September 30, 2024 (the &#8220;Third Tranche&#8221;) (the First Tranche, Second Tranche and Third Tranche are collectively
referred to as the &#8220;2023 Notes&#8221;). The 2023 Notes bear interest at a rate of 13.25% per annum, compounded annually, payable
at maturity. The 2023 Notes are secured by substantially all of our assets. The 2023 notes mature on August 24, 2027. In January 2024,
we repaid the entire aggregate outstanding principal on the 2023 Notes Payable in the amount of $3.0 million along with an additional
payment of $0.1 million for interest, prepayment fees, and lender fees. These payments resulted in a 0.6 million loss, recorded in loss
on extinguishment of debt, in the consolidated statements of operations and comprehensive loss.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the 2023 Notes Agreement, we issued to the lender common stock warrants (the &#8220;Common Stock Warrants&#8221;) to
purchase up to 92,211 shares of the Company&#8217;s common stock, exercisable immediately, with an exercise price of $0.46 per share
with a contractual term of 10 years. As of December 31, 2025, the fair value and carrying amount of the Common Stock Warrant Liability
was $0.02 million.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
January 2024, we entered into two convertible promissory note agreements (the &#8220;January 2024 Convertible Notes Agreements&#8221;)
with a lender for the principal amounts of $2.0 million (&#8220;January 2024 Convertible Note A&#8221;) and $4.5 million (&#8220;January
2024 Convertible Note B&#8221;), respectively, payable at maturity (the &#8220;January 2024 Convertible Notes&#8221;). The January 2024
Convertible Notes mature in January 2025.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 4, 2025, the maturity date of January 2024 convertible note was extended to July 12, 2025 pursuant to the second amendment.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
April 2024, we entered into a convertible note agreement (the &#8220;April 2024 Convertible Note Agreement&#8221;) with a lender for
the aggregate principal amount of $0.1 million and is convertible to common stock (the &#8220;April 2024 Convertible Note&#8221;). The
April 2024 Convertible Promissory Note matures in April 2025.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
the conversion of the April 2024 Convertible Note to common stock, we shall issue the holder a warrant to purchase 7,500 shares of common
stock of CSLM with a per share exercise price of $11.50.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 5, 2025, the conversion price of the April 2024 Convertible Promissory Notes with principal amount of $125,000 was amended to
$3.15 from the original conversion price of $4.94. Further these were once again amended in April 2025 and basis the amendment the maturity
date was revised from April 5, 2025 to April 5, 2026 pursuant to the second amendment.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
June 2024, we entered into a convertible note agreement (the &#8220;June 2024 Convertible Note Agreement&#8221;) with a lender for the
principal amount of $0.1 million and is convertible to common stock (the &#8220;June 2024 Convertible Note&#8221;). The June 2024 Convertible
Promissory Note matures in June 2025. Upon the conversion of June 2024 Convertible Note to common stock of CSLM, we shall issue the holder
a warrant to purchase 7,500 shares of common stock with a per share exercise price of $11.50.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 5, 2025, the conversion price of the June 2024 Convertible Promissory Note with principal amount of $130,000 was amended to
$3.15 from the original conversion price of $4.94. Further, these were once again amended in July 2025 and basis the amendment, the maturity
date was revised from June 17, 2025, to June 17, 2026, pursuant to the amendment.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
September 2024, we entered into two convertible note agreements (the &#8220;September 2024 Convertible Notes Agreements&#8221;) with
two lenders, each for the principal amount of $0.1 thousand (the &#8220;September 2024 Convertible Notes&#8221;). The 2024 September
Convertible Notes mature in September 2026. Upon the conversion of the September 2024 Convertible Notes to common stock, we shall issue
the holders each a warrant to purchase 7,500 shares of common stock with a per share exercise price of $11.50.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 5, 2025, the conversion price of the two September 2024 Convertible Promissory Notes with principal amount of $100,000 each
was amended to $3.15 from the original conversion price of $4.94.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
2024, we have entered into seven separate promissory notes with the Sameer Maskey, the Company CEO for aggregate principal amount of
$0.7 million. On February 12, 2025, an amendment to the seven promissory notes was entered into between the company and the
CEO, Mr. Sameer Maskey. As per the original agreement, the maturity date was earlier of (1) the occurrence of an Event of Default and
(2) December 31, 2024. Pursuant to the amendment agreement, the maturity date was extended to earlier of (1) the occurrence of an Event
of Default and (2) December 31, 2025.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 24, 2025, the Company entered into a convertible promissory note (&#8220;February 2025 Convertible Notes) amounting to $180,000
with an interest rate of 4.71% and maturity date of February 19, 2028. Upon closing of the merger, the Note shall automatically convert
into the number of shares of common stock equal to the then outstanding Obligations under the note divided by the applicable Conversion
Price i.e., $3.15.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the consummation of the Business Combination on October 22, 2025, each Legacy Fusemachines convertible note, including
both related-party and non-related-party convertible notes, that was issued and outstanding immediately prior to the Closing was converted
into an aggregate of 8,048,770 shares of Legacy Fusemachines common stock in accordance with the respective convertible note agreements.
Immediately following such conversions, all shares of Legacy Fusemachines common stock issued upon conversion were exchanged for shares
of Fusemachines common stock based on the exchange ratio specified in the Business Combination Agreement, As a result of the conversions
and exchanges, no convertible notes or related-party notes payable remained outstanding as of December 31, 2025, other than related party
note payable related to Dolma amounting $300 thousand. Refer to the section entitled &#8216;Recent Developments&#8217; for details.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Equity
financing, if obtained, could result in dilution to our then-existing stockholders and/or require such stockholders to waive certain
rights and preferences. If such financing is not available on satisfactory terms, or is not available at all, we may be required to delay,
scale back, or eliminate the development of business opportunities and our operations and financial condition may be materially adversely
affected.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Off-Balance
Sheet Arrangements</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
do not have any off-balance sheet arrangements (as that term is defined in Item 303 of Regulation S-K) that are reasonably likely to
have a current or future material effect on our financial condition, revenue or expenses, results of operations, liquidity, capital expenditures
or capital resources.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Related
Party Transactions</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Refer
to Note 18, &#8220;Related Parties&#8221; of the consolidated financial statements contained elsewhere in this annual report, for disclosure
of our related party transactions.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Critical
Accounting Policies and Estimates</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
consolidated financial statements have been prepared in accordance with U.S. GAAP. The preparation of these consolidated financial statements
requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, expenses, and related
disclosures. We base our estimates on historical experience and on various other assumptions that we believe are reasonable under the
circumstances. We evaluate our estimates and assumptions on an ongoing basis. Actual results could differ materially from those estimates
due to risks and uncertainties, including uncertainty in the current economic environment. To the extent that there are material differences
between these estimates and our actual results, our future consolidated financial statements will be affected.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
critical accounting estimates, assumptions, and judgments that have the most significant impact on our consolidated financial statements
are described below. For further information on significant accounting policies, see &#8220;Note 2, Summary of Significant Accounting
Policies&#8221; of our audited consolidated financial statements included herein.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Revenue
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (&#8220;ASC 606&#8221;). Under ASC
606, the Company recognizes revenue when (or as) customers obtain control of promised goods or services, in an amount that reflects the
consideration which is expected to be received in exchange for those goods or services. The Company recognizes revenue following the
five-step model prescribed under ASC 606: (i) identify contract(s) with a customer; (ii) identify the performance obligation(s) in the
contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract;
and (v) recognize revenues when (or as) the Company satisfies a performance obligation. The Company applies the provisions of ASC 606
to an arrangement when a substantive contract exists and collectability is probable.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company derives the majority of its revenue from AI Solutions (Products and Services) that largely represents the professional services
Fusemachines provides to its customers to help them achieve any AI-related goals within their organization. Standard contractual arrangements
are governed by Master Services Agreements (&#8220;MSAs&#8221;), which set out general terms including payment, termination rights, and
intellectual property ownership. Detailed scope, pricing, and performance obligations are defined in Statements of Work (&#8220;SOWs&#8221;),
which are executed for each engagement or project phase. The Company&#8217;s contracts for AI Services have different terms based on
the scope and complexity of engagements; pricing for the majority of contracts are invoiced monthly on a time-and-materials basis. The
Company notes that its contracts meet the requirements for over-time revenue recognition, as the customer is simultaneously receiving
the benefits and able to consume the benefits of the services being provided. For professional services that are distinct and billed
on a time-and-materials basis, revenue is generally recognized as the services are provided, which is reflective of the transfer of the
services to the customer. The Company elected the &#8220;right to invoice&#8221; practical expedient based on the Company&#8217;s right
to invoice a customer at an amount that approximates the value to the customer and the performance completed to date.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company also provides AI Education Services which represents a customized curriculum of educational services provided to train the customer&#8217;s
C-suite on AI for Business. The Company provides AI Education Services over time as the course proceeds and the students retain knowledge
over time. Thus, the customer receives and consumes benefits as the Company performs the AI Education Services, and revenue is recognized
over time.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Company&#8217;s
AI Solutions includes product revenues primarily comprising software license fees from sales of term-based license contracts, under which
we grant customers the license right to use the software for a specified period (i.e. when the customer can access, use, and benefit
from the software license). Term software licenses are satisfied at a point in time and associated revenue is recognized upon the later
of 1) delivery of the software, or 2) the beginning of the period in which the customer has received the license right to use the software.
For customer contracts that include software license fees, implementation and/or other consulting services, the portion of the transaction
price allocated to software licenses is generally recognized when delivered. Implementation, customization, or model tuning services
if applicable, when included, are evaluated as separate performance obligations when they are distinct from the software and not highly
interdependent. These services are generally satisfied over time as the work progresses. During the year ended December 31, 2025, and
December 31, 2024, the product revenues were insignificant.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
most contracts, the Company uses a Master Services Agreements (&#8220;MSA&#8221;) to govern the overall relevant terms and conditions
of the business agreement, and a Statement of Work (&#8220;SOW&#8221;) to specify the services delivered and the associated prices. Performance
obligations specific to each individual contract are defined within the terms of each SOW. Each performance obligation is identified
based on the services that will be transferred to our customer that are both capable of being distinct and are distinct within the context
of the contract. The transaction price is determined based on the consideration to which the Company will be entitled and expect to receive
in exchange for transferring services to the customer.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consideration
for some contracts may include variable consideration including volume discounts and rebates. If the consideration promised includes
a variable amount, the Company only includes estimated amounts of consideration in the transaction price to the extent it is probable
that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration
is resolved. These estimates require management judgments and estimates. The determination of whether to constrain consideration in the
transaction is based on historical, current, and forecasted information that is reasonably available to the Company, taking into consideration
the type of customer, the transaction, and specific facts and circumstances of each arrangement. The Company uses judgement to determine
if collectability of consideration is uncertain, and accordingly, revenue recognition is deferred until the uncertainty is resolved and
cash is collected.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Payment
terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days of the invoice
date. In certain arrangements, the Company will receive payment from a customer either before or after the performance obligation to
which the invoice relates has been satisfied. As a practical expedient, the Company does not account for significant financing components
if the period between when it transfers the promised good or service to the customer and when the customer pays for the product or service
will be one year or less.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
contracts with multiple performance obligations, the Company allocates the contract&#8217;s transaction price to each performance obligation
based on its relative standalone selling price. The stand-alone selling prices are determined based on the prices at which the Company
separately sells these products. For items that are not sold separately, the Company estimates the stand-alone selling prices using other
observable inputs. As Fusemachines Inc. is the sole reportable segment, all revenues are attributed to the sole segment.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Income
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
provision for income taxes includes federal, state, local and foreign taxes. Deferred tax assets and liabilities are recognized for the
estimated future tax consequences of temporary differences between the consolidated financial statements carrying amounts and their respective
tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in
which the temporary differences are expected to be reversed. Changes to enacted tax rates would result in either increases or decreases
in the provision for income taxes in the period of changes.</FONT></P>

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realizability of deferred tax assets is primarily dependent on future earnings. The Company evaluates the realizability of deferred tax
assets and recognizes a valuation allowance when it is more likely than not that all, or a portion of, deferred tax assets will not be
realized. A reduction in estimated forecasted results may require that we record valuation allowances against deferred tax assets. Once
a valuation allowance has been established, it will be maintained until there is sufficient positive evidence to conclude that it is
more likely than not that the deferred tax assets will be 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.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
United States subjects corporations to taxes on Global Intangible Low-Taxed Income (&#8220;GILTI&#8221;) earned by certain foreign subsidiaries.
The Company elected to provide for the tax expense related to GILTI in the year the tax is incurred.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</FONT></P>

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Company records stock-based compensation in accordance with ASC Topic 718, Compensation &#8211; Stock Compensation (&#8220;ASC 718&#8221;).
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.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">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 and administrative, cost of revenue, selling
and marketing and research and development expenses in the consolidated statements of operations and comprehensive loss.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company estimates the fair value of stock option awards granted using the Black Scholes Merton option pricing formula (the &#8220;Black-Scholes
Model&#8221;). 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, expected volatility, expected dividend yield, risk-free interest rate and fair value
of the Company&#8217;s stock on the date of grant. The expected option term for options granted is calculated using the &#8220;simplified
method&#8221;. This election was made based on the lack of sufficient historical exercise data to provide a reasonable basis upon which
to estimate the expected term. The simplified method defines the expected term as the average of the contractual term and the vesting
period. Estimated volatility is based on similar entities whose stock prices are publicly traded. The Company uses the historical volatilities
of similar entities due to the lack of sufficient historical data for the Company&#8217;s common stock price. The Company estimates volatility
based upon the observed historical volatilities of comparable companies over a lookback period commensurate with the estimated holding
period, adjusted for relative leverage using the Black-Scholes-Merton formula. Dividend yields are based on the Company&#8217;s history
and expected future actions. The Company has not declared or paid dividends to date and does not anticipate declaring dividends. As such,
the dividend yield has been estimated to be zero. The risk-free interest rate is based on the yield curve of a zero-coupon U.S. Treasury
bond on the date the stock option award was granted with a maturity equal to the expected term of the stock option award. All grants
of stock options generally have an exercise price equal to or greater than the fair market value of the Company&#8217;s common stock
on the date of grant.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
fair value of the shares of common stock underlying the stock options has historically been determined by the Company&#8217;s Board of
directors as there was no public market for the underlying common stock prior to October 22, 2025. In estimating the fair value of its
stock, the Company uses a third-party valuation specialist and considers factors it believes are material to the valuation process, including
but not limited to, the price at which recent equity was issued by the Company to independent third parties or transacted between third
parties, any indications of value from offers to acquire the Company, actual and projected financial results, risks, prospects, economic
and market conditions, and estimates of weighted average cost of capital. The Company believes the combination of these factors provides
an appropriate estimate of the expected fair value of the Company and reflects the best estimate of the fair value of the Company&#8217;s
common stock at each grant date.</FONT></P>

<P STYLE="margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Recent
Accounting Pronouncements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
further information on recent accounting pronouncements, see &#8220;Note 2, Summary of Significant Accounting Policies&#8221; of our
audited consolidated financial statements included herein</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Quantitative
and Qualitative Disclosures About Market Risk</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise
required under this item.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I></I></FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><FONT ID="Rma_002"></FONT><B>Item
7A. Quantitative and Qualitative Disclosures about Market Risk.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
Applicable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT ID="Rma_003"></FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Item
8. Financial Statements and Supplementary Data.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
consolidated financial statements required pursuant to this item are included in Part IV, Item 15 of this Annual Report, and are presented
beginning on page F-1.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT ID="Rma_004"></FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Item
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">None.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT ID="Rma_005"></FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Item
9A. Controls and Procedures.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Evaluation
of Disclosure Controls and Procedures</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&#160;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
management, with the participation of our Chief Executive Officer and Chief Financial Officer has evaluated the effectiveness of our
disclosure controls and procedures. The term &#8220;disclosure controls and procedures,&#8221; as defined in Rules 13a-15(e) and 15d-15(e)
under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be
disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported,
within the time periods specified in the SEC&#8217;s rules and forms. Disclosure controls and procedures include, without limitation,
controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits
under the Exchange Act is accumulated and communicated to the Company&#8217;s management, including its principal executive and principal
financial officers, as appropriate to allow timely decisions regarding required disclosure.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management
recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving
their objectives and management necessarily applies its judgment in evaluating the cost benefit relationship of possible controls and
procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that the Company&#8217;s
disclosure controls and procedures were not effective as of the end of the fiscal year covered by this Annual Report as a result of the material
weaknesses in Internal Control over Financial Reporting described below.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Management&#8217;s
Report on Internal Control over Financial Reporting</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&#160;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Management,
including our Chief Executive Officer and Chief Financial Officer, is responsible for establishing and maintaining adequate internal
control over financial reporting as defined in Rules 13a- 15(f) and 15d-15(f) under the Exchange Act and based upon the criteria established
in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (the &#8220;COSO
framework&#8221;). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the
reliability of our financial reporting and the preparation of our financial statements for external purposes in accordance with U.S.
GAAP.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">An
effective internal control system, no matter how well designed, has inherent limitations, including the possibility of human error or
overriding of controls, and therefore can provide only reasonable assurance with respect to reliable financial reporting. Because of
its inherent limitations, our internal control over financial reporting may not prevent or detect all misstatements, including the possibility
of human error, the circumvention or overriding of controls, or fraud. Effective internal controls can provide only reasonable assurance
with respect to the preparation and fair presentation of financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we
have conducted an evaluation of the effectiveness of our internal control over financial reporting based on the COSO framework.
Based on evaluation under these criteria, management determined that our internal controls over financial reporting were not
effective as of December 31, 2025.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Remediation
of Material Weakness in Internal Controls</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&#160;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the preparation and audit of our consolidated financial statements as of and for the years ended December 31, 2025 and
2024, material weaknesses were identified in its internal control over financial reporting. A material weakness is a deficiency, or combination
of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement
of the financial statements will not be prevented or detected on a timely basis. The following material weaknesses were identified:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white">&#160;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt; background-color: white"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify">Incomplete implementation of internal
                                            control framework (e.g., COSO 13) to establish an effective control environment, risk assessment,
                                            control activities, communication, and monitoring processes.</TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify">Lack of formal process for Board review or approval of significant CEO-initiated transactions.</TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify">Lack of formal process for independent review of significant accounting estimates by qualified personnel
at each reporting date.</TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify">Lack of sufficient trained accounting staff with US GAAP expertise.</TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify">Inadequate segregation of duties and lack of review of accounting entries.</TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify">Absence of a robust monthly and annual close process.</TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify">Lack of centralized contract repository or checklist for key contract terms and accounting implications.</TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify">Lack of adequate IT controls.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">Management expects to
address these deficiencies by implementing remediation measures, including those that have already been taken to date, which include the
following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; background-color: white">&#160;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font-size: 10pt">
  <TR>
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    <TD STYLE="vertical-align: top; width: 24px"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify; vertical-align: top"><FONT STYLE="font-size: 10pt">the Company&#8217;s hiring of the current CFO and additional consulting resources with extensive technical accounting and internal control advisory background;</FONT></TD></TR>
  <TR>
    <TD>&#160;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify; vertical-align: top"><FONT STYLE="font-size: 10pt">the already introduced reconciliation processes including balance sheet account reconciliations, and a review of chart of accounts and mapping of expense accounts as of December 31, 2023;</FONT></TD></TR>
  <TR>
    <TD>&#160;</TD>
    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify; vertical-align: top"><FONT STYLE="font-size: 10pt">establishing a central repository of signed contracts with periodic management review for completeness and assessment of accounting implications; and</FONT></TD></TR>
  <TR>
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    <TD STYLE="vertical-align: top"><FONT STYLE="font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="text-align: justify; vertical-align: top"><FONT STYLE="font-size: 10pt">establishing a quarterly management oversight and review mechanism for identifying significant unusual/non-recurring transactions, critical accounting and complex financial instruments and evaluating related accounting implications.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Management expects to take the following additional remedial measures
to address the internal control deficiencies:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&#160;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify">Strengthen its monthly payroll reconciliation process to ensure accuracy with the general ledger and trial balance, especially for
North American entities.</TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify">Maintaining a vendor master list and strengthening documentation, with proper segregation by vendor type to ensure accurate classification
of expenses (Cost of Services, G&amp;A, R&amp;D, Sales &amp; Marketing) including software, hardware, and IT consultants.</TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify">Strengthen the monthly accrual process for services received by maintaining a schedule of accrued expenses to ensure proper expense
cut-off and accurate financial statement presentation.</TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify">Perform monthly reconciliations and adjustments for loan balances, fixed assets, accounts payable, and related party transactions
to ensure accurate financial statements for management decisions, tax planning, and statutory compliance.</TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify">Strengthen fixed asset tagging and serial numbering to maintain an accurate fixed asset schedule and enable timely reconciliation
with the trial balance.</TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify">Strengthen documentation of inter-company transactions and perform transfer pricing studies for Nepal and Canadian subsidiaries.</TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify">Adopt and implement the COSO 13 Framework (or equivalent) to establish an effective control environment, perform risk assessments,
implement controls, and monitor internal control over financial reporting.</TD></TR></TABLE>

<P STYLE="margin-top: 0; margin-bottom: 0">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&#160;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Changes
in Internal Control Over Financial Reporting</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&#160;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Other
than the changes associated with the material weaknesses and remediation actions noted above, there have been no changes to our internal
control over financial reporting that occurred during the year ended December 31, 2025.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Inherent
Limitations on Effectiveness of Disclosure Controls and Procedures, and Internal Controls Over Financial Reporting</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&#160;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and
procedures or our internal control over financial reporting will prevent all errors and all fraud. A control system, no matter how well
designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further,
the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered
relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance
that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments
in decision-making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented
by the individual acts of some persons, by collusion of two or more people or by management override of the controls. The design of any
system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance
that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate
because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Due to inherent limitations
in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT ID="Rma_006"></FONT>Item
9B. Other Information.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Rule
10b5-1 Trading Plans</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&#160;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the year and quarter ended December 31, 2025, none of our directors or officers adopted, modified, or terminated a &#8220;Rule 10b5-1
trading arrangement&#8221; (as defined in Item 408 of Regulation S-K of the Exchange Act) intended to satisfy the affirmative defense
conditions of Rule 10b5-1(c) under the Exchange Act.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT ID="Rma_007"></FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Item
9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
applicable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT ID="Rma_008"></FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>PART
III</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT ID="Rma_009"></FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Item
10. Directors, Executive Officers and Corporate Governance.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Information
required by this item will be contained in our Definitive Proxy Statement for our 2026 Annual Meeting of Stockholders, to be filed pursuant
to Regulation 14A with the Securities and Exchange Commission within 120 days of December 31, 2025. Such information is incorporated
herein by reference.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
board of directors has adopted a Code of Business Conduct applicable to all officers, directors, and employees, which is available on
our website (ir.fusemachines.com) under &#8220;Governance Documents.&#8221; We intend to satisfy the disclosure requirement under Item
5.05 of Form 8-K regarding amendment to, or waiver from, a provision of our Code of Business Conduct by posting such information on the
website address and location specified above.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have adopted an insider trading policy applicable to our directors, officers, employees, and other covered persons, and have implemented
processes for the company, that we believe are reasonably designed to promote compliance with insider trading laws, rules and regulations,
and the Nasdaq Stock Market LLC listing standards. Our insider trading policy is filed as Exhibit 19.1 to this Annual Report on Form
10-K.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT ID="Rma_010"></FONT>Item
11. Executive Compensation.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Information
required by this item will be contained in our Definitive Proxy Statement for our 2026 Annual Meeting of Stockholders, to be filed pursuant
to Regulation 14A with the Securities and Exchange Commission within 120 days of December 31, 2025. Such information is incorporated
herein by reference.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT ID="Rma_011"></FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Item
12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Information
required by this item will be contained in our Definitive Proxy Statement for our 2026 Annual Meeting of Stockholders, to be filed pursuant
to Regulation 14A with the Securities and Exchange Commission within 120 days of December 31, 2025. Such information is incorporated
herein by reference.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT ID="Rma_012"></FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Item
13. Certain Relationships and Related Transactions, and Director Independence.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Information
required by this item will be contained in our Definitive Proxy Statement for our 2026 Annual Meeting of Stockholders, to be filed pursuant
to Regulation 14A with the Securities and Exchange Commission within 120 days of December 31, 2025. Such information is incorporated
herein by reference.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT ID="Rma_013"></FONT>Item
14. Principal Accounting Fees and Services.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Information
required by this item will be contained in our Definitive Proxy Statement for our 2026 Annual Meeting of Stockholders, to be filed pursuant
to Regulation 14A with the Securities and Exchange Commission within 120 days of December 31, 2025. Such information is incorporated
herein by reference.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT ID="Rma_014"></FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>PART
IV</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT ID="RMa_016"></FONT>Item
15. Exhibits, Financial Statement Schedules.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
                                            a list of the financial statements included herein, see Index to the Consolidated Financial
                                            Statements on page F-1 of this Annual Report, incorporated into this Item by reference.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial
                                            statement schedules have been omitted because they are either not required or not applicable
                                            or the information is included in the consolidated financial statements or the notes thereto.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT ID="Rma_015"></FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Item
16. Form 10-K Summary</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">None.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Exhibit
Index</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center; width: 0.75in; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Exhibit
Number</B></FONT></TD>
    <TD STYLE="text-align: center; width: 0.1in; vertical-align: bottom">&#160;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Description</B></FONT></TD>
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    <TD>&#160;</TD>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">001-42909</FONT></TD>
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    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8-K</FONT></TD>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">001-42909</FONT></TD>
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    <TD>&#160;</TD>
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    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">001-42909</FONT></TD>
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#gv_001">Amended and Restated Certificate of Incorporation (as amended and restated)</A></FONT></TD>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center">&#160;</TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">&#160;</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="https://www.sec.gov/Archives/edgar/data/2033383/000149315225019927/ex3-2.htm" STYLE="-sec-extract: exhibit"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Amended and Restated Bylaws.</FONT></A></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8-K</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">001-42909</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.2</FONT></TD>
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.1*</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#gv_002">Description of Registrant&#8217;s Securities</A></FONT></TD>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.2</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="https://www.sec.gov/Archives/edgar/data/1875493/000121390022002455/ea154082ex4-1_consilium1.htm" STYLE="-sec-extract: exhibit"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Warrant Agreement, dated January 12, 2022, by and between the Registrant and Continental Stock Transfer &amp; Trust Company, as warrant agent</FONT></A></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">S-4</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">333-283520</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.2</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">June
    24, 2025</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.3</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="https://www.sec.gov/Archives/edgar/data/1875493/000121390022002455/ea154082ex4-1_consilium1.htm" STYLE="-sec-extract: exhibit">Form of Warrant Certificate (included as Exhibit A-1 to the Warrant Agreement dated January 12, 2022, by and between the Registrant and Continental Stock Transfer &amp; Trust Company, as warrant agent</A></FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">S-4</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">333-283520</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.2</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">June
    24, 2025</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.4</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="https://www.sec.gov/Archives/edgar/data/2033383/000149315226004538/ex4-3.htm" STYLE="-sec-extract: exhibit">Form of Private Placement Warrant</A></FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">S-1</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">333-292318</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.3</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">January 30, 2026</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">4.5</TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="https://www.sec.gov/Archives/edgar/data/2033383/000149315226005019/ex4-1.htm" STYLE="-sec-extract: exhibit">Amendment No. 1 to Warrant</A></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center">8-K</TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center">001-42909</TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center">4.1</TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">February 4, 2026</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.1</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="https://www.sec.gov/Archives/edgar/data/2033383/000149315225019927/ex10-1.htm" STYLE="-sec-extract: exhibit"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Amended and Restated Registration Rights Agreement</FONT></A></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8-K</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">001-42909</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.1</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">October
    29, 2025</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.2&#165;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="https://www.sec.gov/Archives/edgar/data/2033383/000149315225019927/ex10-2.htm" STYLE="-sec-extract: exhibit"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2025 Omnibus Equity Incentive Plan</FONT></A></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8-K</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">001-42909</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.2</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">October
    29, 2025</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.3&#165;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="https://www.sec.gov/Archives/edgar/data/2033383/000149315225019927/ex10-3.htm" STYLE="-sec-extract: exhibit"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Employment Agreement between Fusemachines, Inc. and Sameer Maskey, dated October 22, 2025</FONT></A></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8-K</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">001-42909</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.3</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">October
    29, 2025</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.4&#165;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="https://www.sec.gov/Archives/edgar/data/2033383/000149315225019927/ex10-4.htm" STYLE="-sec-extract: exhibit"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Offer Letter between Fusemachines, Inc. and Christine Chambers, dated July 21, 2025</FONT></A></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8-K</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">001-42909</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.4</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">October
    29, 2025</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.5&#165;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="https://www.sec.gov/Archives/edgar/data/2033383/000149315225019927/ex10-5.htm" STYLE="-sec-extract: exhibit"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form of Indemnity Agreement</FONT></A></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8-K</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">001-42909</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.5</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">October
    29, 2025</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.6</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="https://www.sec.gov/Archives/edgar/data/2033383/000149315226000186/ex10-1.htm" STYLE="-sec-extract: exhibit">Securities Purchase Agreement by and between Fusemachines Inc. and Consilium Frontier Equity Fund LP, dated December 23, 2025.</A></FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8-K</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">001-42909</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.1</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">January 2, 2026</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">10.7</TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="https://www.sec.gov/Archives/edgar/data/2033383/000149315226005019/ex10-1.htm" STYLE="-sec-extract: exhibit">Forward Purchase Agreement dated July 31, 2025 between CSLM Acquisition Corp., CSLM Holdings, Inc., and Fusemachines Inc., with Meteora Capital Partners, LP, Meteora Select Trading Opportunities Master, LP, and Meteora Strategic Capital, LLC.</A></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center">8-K</TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center">001-42909</TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center">10.1</TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">February 4, 2026</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">10.8</TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="https://www.sec.gov/Archives/edgar/data/2033383/000149315226005019/ex10-2.htm" STYLE="-sec-extract: exhibit">Amendment No. 1 to Forward Purchase Agreement dated February 3, 2026 between Fusemachines Inc. and Meteora Capital Partners, LP, Meteora Select Trading Opportunities Master, LP, and Meteora Strategic Capital, LLC.</A></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center">8-K</TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center">001-42909</TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center">10.2</TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right">February 4, 2026</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">19.1*</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#gv_003">Insider Trading Policy</A></FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">21.1*</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#gv_004">List of Subsidiaries</A></FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">23.1*</FONT></TD>
    <TD>&#160;</TD>
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    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD>&#160;</TD>
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    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#gv_007">Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</A></FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#gv_008">Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.</A></FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#gv_010">Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.</A></FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
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    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Inline
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    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD>&#160;</TD>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">* Filed herewith</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">**
The certifications attached as Exhibits 32.1 and 32.2 that accompany this Annual Report are not deemed filed with the SEC and are not
to be incorporated by reference into any filing of Fusemachines Inc. under the Securities Act of 1933 or the Securities Exchange Act
of 1934, whether made before or after the date of this Annual Report, irrespective of any general incorporation language contained in
such filing.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">+
Schedules and exhibits have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The Company agrees to furnish supplementally a
copy of any omitted schedule or exhibit to the SEC upon request.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#165;
Denotes management contract or any compensatory plan, contract or arrangement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>SIGNATURES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report
to be signed on its behalf by the undersigned, thereunto duly authorized<B>.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: white">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">FUSEMACHINES
    INC.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: white">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 50%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 3%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 47%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: white">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Date:
    March 27, 2026</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">By:</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>/s/
    Sameer Maskey</I></FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: white">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Sameer
    Maskey</B></FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: white">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Chief
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  </TABLE>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><FONT ID="poa_001"></FONT>The
undersigned officers and directors of Fusemachines Inc., hereby severally constitute and appoint Sameer Maskey and Christine Chambers,
and each of them individually, with full power of substitution and resubstitution, as their true and lawful attorneys and agents, to
do any and all acts and things in their name and behalf in their capacities as directors and officers and to execute any and all instruments
for them and in their names in the capacities indicated below, which said attorneys and agents, may deem necessary or advisable to enable
said corporation to comply with the Securities Exchange Act of 1934, as amended, and any rules, regulations and requirements of the Securities
and Exchange Commission, in connection with this Annual Report, including specifically but without limitation, power and authority to
sign for them or any of them in their names in the capacities indicated below, any and all amendments hereto, and they do hereby ratify
and confirm all that said attorneys and agents, or either of them, may lawfully do or cause to be done by virtue hereof.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on
behalf of the Registrant in the capacities and on the dates indicated.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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    <TD STYLE="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>/s/
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    <TD STYLE="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>/s/
    Christine Chambers </I></FONT></TD>
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: white">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Christine
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    <TD STYLE="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>/s/
    Bharat Krish </I></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director</FONT></TD>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">March
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Bharat
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    <TD STYLE="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>/s/
    Tim Gocher</I></FONT></TD>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">March
    27, 2026</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: white">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Tim
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    <TD STYLE="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>/s/
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director</FONT></TD>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">March
    27, 2026</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: white">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Sanjay
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></TD>
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    <TD STYLE="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>/s/
    Salman Alam</I></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director</FONT></TD>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">March
    27, 2026</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; background-color: white">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Salman
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>INDEX
TO CONSOLIDATED FINANCIAL STATEMENTS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-indent: 24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 95%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#fn_001">Report of Independent Registered Public Accounting Firm</A> (PCAOB ID 2983)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 5%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-2</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#fn_002">Consolidated Balance Sheets as of December 31, 2025 and 2024</A></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-3</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#fn_003">Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2025 and 2024</A></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-4</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#fn_004">Consolidated Statements of Changes in Stockholders&#8217; Equity for the years ended December 31, 2025 and 2024</A></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-5</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: rgb(204,238,255)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#fn_005">Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024</A></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-7</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><A HREF="#fn_006">Notes to Consolidated Financial Statements</A></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F-8</FONT></TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><FONT ID="fn_001"></FONT><B>REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
the Board of Directors and Stockholders of</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fusemachines
Inc. and its subsidiaries</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Opinion
on the consolidated financial statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have audited the accompanying consolidated balance sheets of Fusemachines Inc. and its subsidiaries (the Company) as of December 31,
2025 and December 31, 2024 and the related consolidated statements of operations and comprehensive loss, stockholders&#8217; deficit
and cash flows for each of the years in the two-year period ended December 31, 2025 and the related notes (collectively referred to as
the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects,
the financial position of the Company as of December 31, 2025 and December 31, 2024, and the results of its operations and its cash flows
for each of the years in the two-year period ended December 31, 2025, in conformity with accounting principles generally accepted in
the United States of America.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Substantial
doubt about the Company&#8217;s ability to continue as a going concern</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As
discussed in Note 2 to the consolidated financial statements, the Company has suffered recurring losses, has an accumulated deficit
and stockholders&#8217; deficit. The continuation of the Company as a going concern is dependent upon the continued financial
support from its stockholders and debt holders including management&#8217;s plan to raise additional capital from issuance of equity
or receive additional borrowings to fund the Company&#8217;s operating and investing activities over the next year. These conditions raise substantial doubt about the
Company&#8217;s ability to continue as a going concern. These consolidated financial statements do not include any adjustments to
the recoverability and classification of recorded asset amounts and classification &#160;&#160;of liabilities that might be
necessary should the Company be unable to continue as a going concern.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Basis
for opinion</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">These
consolidated financial statements are the responsibility of the Company&#8217;s management. Our responsibility is to express an opinion
on the Company&#8217;s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public
Company Accounting Oversight Board (United States) (&#8220;PCAOB&#8221;) and are required to be independent with respect to the Company
in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission
and the PCAOB.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.
The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part
of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing
an opinion on the effectiveness of the Company&#8217;s internal control over financial reporting. Accordingly, we express no such opinion.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether
due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence
regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.
We believe that our audit provides a reasonable basis for our opinion.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
KNAV CPA LLP</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">KNAV
CPA LLP</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
have served as the Company&#8217;s auditor since 2023.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Atlanta,
Georgia</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">March
27, 2026</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">PCAOB
ID &#8211; 2983</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

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    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT ID="fn_002"></FONT>Fusemachines
Inc. and Subsidiaries</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Consolidated
Balance Sheets</B></FONT></P>

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amounts in USD, in thousands, except number of shares and per share data)</I></B></FONT></P>

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    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
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    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 16%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">500</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
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    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">219</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">348</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">187</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Accounts receivable, net</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Deferred tax asset</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">11</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">10</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Operating lease right-of-use assets</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">744</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">870</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Other assets</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">16</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total assets</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,548</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Liabilities and stockholders&#8217;
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Current liabilities:</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Accounts payable</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,012</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">6,537</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Accrued expenses and other current liabilities</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,618</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,700</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Deferred revenue</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">54</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Convertible notes payable, at fair value, current</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8,986</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Convertible notes payable, current</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">255</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Related party loan payable, current</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">300</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">700</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Operating lease liability, current</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">85</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">74</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Forward purchase derivative liability</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9,692</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; text-align: left">Short term debt</TD><TD STYLE="padding-bottom: 1pt">&#160;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&#160;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">342</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&#160;</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&#160;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">&#160;</TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">&#160;</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total current liabilities</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">20,049</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">20,306</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Accounts payable non-current</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">143</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Related party convertible notes payable, at
    fair value</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">6,524</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Convertible notes payable</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">200</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Warrant liability</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right">121</TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">945</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Cumulative mandatorily redeemable common and
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,048</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,000</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Operating lease liability</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">751</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">878</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">22,112</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="display: none; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Convertible preferred stock ($0.0001 par
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    as of December 31, 2025 and December 31, 2024, respectively; Nil and 5,950,673 shares outstanding as of December 31, 2025 and December
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">7,865</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Common stock ($0.0001 par value, 500,000,000
    shares and 15,924,202 shares authorized as of December 31,2025 and December 31, 2024; 29,377,169 and 7,709,867 shares issued as of
    December 31,2025 and December 31,2024 respectively; 28,938,266 shares and 7,264,192 shares outstanding as of December 31,2025 and
    December 31, 2024, respectively)</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Additional paid in capital</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4,699</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Treasury stock, at cost (Nil and 438,903 as
    of December 31,2025 and December 31, 2024, respectively)</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(2,903</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">Share subscription receivable</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(11,005</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Accumulated deficit</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(35,145</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(34,217</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Accumulated other comprehensive income</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">260</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">250</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total stockholders&#8217;
    deficit</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(24,305</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total liabilities and stockholders&#8217;
    deficit</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">7,536</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,548</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&#160;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>The
accompanying notes are an integral part of these consolidated financial statements.</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><FONT ID="fn_003"></FONT><B>Fusemachines
Inc. and Subsidiaries</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Consolidated
Statements of Operations and Comprehensive Loss</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(all
amounts in USD, in thousands, except number of shares and per share data)</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Year
    ended<BR>
 December 31, 2025</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Year
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                                            31, 2024</B></FONT></P></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 60%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Revenue</FONT></TD><TD STYLE="width: 2%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 16%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8,811</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Gross Profit</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Operating expenses:</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">10,333</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Research and development</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">720</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">732</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total operating expenses</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">13,029</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Loss from operations</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(5,954</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(8,194</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Other (expense) income:</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Interest expense</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(268</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(234</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Loss on extinguishment of convertible  notes payable</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(391</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Loss on extinguishment of notes payable</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(601</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Loss on extinguishment of payable</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(70</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Gain/(Loss) on change in fair value of convertible
    notes and warranty liability </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right">6,544</TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(6,104</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><P STYLE="margin: 0">Gain/(Loss) on change in fair value of forward purchase derivative liability</P></TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">(1,076</TD><TD STYLE="text-align: left">)</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Other (expense) income</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">220</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(148</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total other expense/(income),
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    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(7,157</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Loss before income taxes
    and equity in earnings of investee</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(925</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(15,351</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Provision for income tax</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(3</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(31</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Equity in earnings of investee,
    net of income tax provision of $0 and $0, respectively</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(1</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Net loss</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(928</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(15,383</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Other comprehensive income
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Change in foreign currency translation adjustment</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">57</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total comprehensive loss</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(15,326</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">(0.08</TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(2.21</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Weighted-average common
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    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">6,958,570</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&#160;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>The
accompanying notes are an integral part of these consolidated financial statements.</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: center"><FONT ID="fn_004"></FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Consolidated
Statements of Stockholders Deficit</B></FONT></P>

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amounts in USD, in thousands, except number of shares and per share data)</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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                                                                               <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt"><B>Preferred </B></FONT><B>Stock*</B></P></TD><TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
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                                                                  <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">paid-in</FONT></P>
                                                                  <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">capital</FONT></P></TD><TD STYLE="text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt"><B>Treasury
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                                               <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt"><B>Subscription</B></FONT></P>
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                                                                  <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt"></FONT>deficit</P></TD><TD STYLE="text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
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                                                                  <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">other</FONT></P>
                                                                  <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">comprehensive</FONT></P>
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                                                                  <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">Total</FONT></P>
                                                                  <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt"></FONT>stockholders&#8217;</P>
                                                                  <P STYLE="margin-top: 0; margin-bottom: 0">deficit</P></TD><TD STYLE="text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD></TR>
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    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
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    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
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    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
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  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"></P>

<!-- Field: Page; Sequence: 72; Value: 1 -->
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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Consolidated
Statements of Stockholders Deficit</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>(all
amounts in USD, in thousands, except number of shares and per share data)</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1pt solid; text-align: center"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt"><B>Convertible</B></FONT></P>
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    <TD COLSPAN="6" STYLE="border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt"><B>Common
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                                                                  <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt"></FONT>paid-in</P>
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                                               <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt"><B>Subscription</B></FONT></P>
                                               <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt"><B>Receivable</B></FONT></P></TD><TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center; font-weight: bold"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">Accumulated</FONT></P>
                                                                  <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt"></FONT>deficit</P></TD><TD STYLE="text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
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                                                                  <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">other</FONT></P>
                                                                  <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">comprehensive</FONT></P>
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                                                                  <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt"></FONT>stockholders&#8217;</P>
                                                                  <P STYLE="margin-top: 0; margin-bottom: 0">deficit</P></TD><TD STYLE="text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD></TR>
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    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">Shares</FONT></TD><TD STYLE="text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
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    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">Shares</FONT></TD><TD STYLE="text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">Amount</FONT></TD><TD STYLE="text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">Amount</FONT></TD><TD STYLE="text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
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    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">Amount</FONT></TD><TD STYLE="text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
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    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">Amount</FONT></TD><TD STYLE="text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">Amount</FONT></TD><TD STYLE="text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD></TR>
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    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD></TR>
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    <TD STYLE="width: 23%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">Balance at
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    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">$</FONT></TD><TD STYLE="width: 4%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">2,307</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="width: 4%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">$</FONT></TD><TD STYLE="width: 4%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="width: 4%; text-align: right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">$</FONT></TD><TD STYLE="width: 4%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">(18,834</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">)</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
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    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">$</FONT></TD><TD STYLE="width: 4%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;(8,467</FONT></TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">(1</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">)&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD></TR>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 9pt">&#160;</FONT></TD>
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<TR STYLE="vertical-align: bottom; background-color: White">
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
number of shares of convertible preferred stock and common stock issued and outstanding prior to the Merger have been retroactively adjusted
by the Exchange Ratio to give effect to the reverse recapitalization treatment of the Merger. </FONT></TD>
</TR>
<TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="text-align: center">&#160;</TD><TD STYLE="text-align: justify">&#160;</TD></TR>
<TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
                                                                                                                                                              connection with the consummation of the business combination, the Company adopted a new capital structure and amended the par value
                                                                                                                                                              of its common stock from $0.00001
                                                                                                                                                              per share to $0.0001
                                                                                                                                                              per share. Accordingly, the historical equity presentation has been adjusted to reflect the revised par value of the Company&#8217;s
                                                                                                                                                              common stock. The change resulted in a reclassification of amounts within stockholders&#8217; equity from additional paid-in capital
                                                                                                                                                              to common stock to reflect the increased par value per share. This reclassification had no impact on total stockholders&#8217;
                                                                                                                                                              equity.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>The
accompanying notes are an integral part of these consolidated financial statements.</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&#160;</I></FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: center"><FONT ID="fn_005"></FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Consolidated
Statements of Cash Flows</B></FONT></P>

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amounts in USD, in thousands)</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    <TD>&#160;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&#160;</TD>
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    <TD>&#160;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&#160;</TD>
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    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2025</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&#160;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&#160;</TD>
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    <TD STYLE="font-weight: bold; text-align: left">&#160;</TD><TD>&#160;</TD>
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: White">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: White">
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  <TR STYLE="vertical-align: bottom; background-color: White">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">22</TD><TD STYLE="text-align: left"></TD><TD>&#160;</TD>
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">(73</TD><TD STYLE="text-align: left">)</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">(87</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">(54</TD><TD STYLE="text-align: left">)</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">33</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">(112</TD><TD STYLE="text-align: left">)</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">(144</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">(53</TD><TD STYLE="text-align: left">)</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">(15</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">(20</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Disposal of property and equipment</TD><TD STYLE="padding-bottom: 1pt">&#160;</TD>
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">&#160;</TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">(165</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">)</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&#160;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">&#160;</TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">(176</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">Cash flows from financing activities</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">180</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">455</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">(700</TD><TD STYLE="text-align: left">)</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">700</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">6,500</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">(3,000</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Payment of deferred transaction costs</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">(836</TD><TD STYLE="text-align: left">)</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">(2</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Common stock repurchase</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">(2,000</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">9,432</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">(53</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Exercise of stock options</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">12</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD>&#160;</TD>
    <TD>&#160;</TD>
    <TD STYLE="text-align: right"><FONT STYLE="font-size: 10pt">382</FONT></TD>
    <TD>&#160;</TD>
    <TD>&#160;</TD>
    <TD>&#160;</TD>
    <TD STYLE="text-align: right">&#160;</TD>
    <TD>&#160;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
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    <TD>&#160;</TD>
    <TD>&#160;</TD>
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    <TD>&#160;</TD>
    <TD>&#160;</TD>
    <TD STYLE="text-align: right">&#160;</TD>
    <TD>&#160;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">(1</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">Net change in cash and cash equivalents</TD><TD>&#160;</TD>
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  <TR STYLE="vertical-align: bottom; background-color: White">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: White">
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>The
accompanying notes are an integral part of these consolidated financial statements.</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT ID="fn_006"></FONT>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Note
1. Organization</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fusemachines
Inc. (&#8220;Company&#8221; or &#8220;Pubco&#8221;) provide enterprise artificial intelligence solutions and services across North America,
Latin America and Asia. The Company was originally incorporated on April 13, 2021 under the name CSLM Acquisition, Corp. (&#8220;CSLM&#8221;<B>)</B>,
as a Cayman Islands exempted Company, a special purpose acquisition company (&#8220;SPAC&#8221;) formed 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. Upon consummation of the Business Combination, Fusemachines USA, Inc. (&#8220;Legacy Fusemachines&#8221;) became the surviving
corporation and a wholly-owned subsidiary of the Company. The Company operated through the following legal entities and branch:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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    Inc. Dominican Republic (Wholly Owned Branch)</FONT></TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Business
Oxygen Private Limited (&#8220;BO2&#8221;), a company domiciled in Nepal, holds certain redeemable common and preferred stock of Fusemachines
Nepal Private Ltd. (see Note 8 &#8212; Cumulative Mandatorily Redeemable Financial Instruments).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Merger
Agreement and Business Combination</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 2024, the Company entered into an Agreement and Plan of Merger (as amended in August 2024 and February 2025, the
&#8220;Business Combination Agreement&#8221;) with CSLM Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of CSLM
(&#8220;Merger Sub&#8221;), and Fusemachines USA, Inc. (formerly Fusemachines Inc.) (&#8220;Legacy Fusemachines&#8221;). On October 22, 2025, the Company consummated the business combination whereby
(a) CSLM merged with and into CSLM Holdings, Inc., a Delaware corporation and wholly owned subsidiary of CSLM at which time the separate
existence of CSLM ceased and CSLM Holdings became the surviving corporation (&#8220;Pubco&#8221;) in accordance with the Delaware
General Corporation Law (&#8220;DGCL&#8221;), the Cayman Islands Companies Act (As Revised) (the &#8220;Companies Act&#8221;), the
Certificate of Merger, (the &#8220;Certificate of Merger&#8221;), and the amended and restated memorandum and articles of
association of CSLM (the &#8220;Domestication&#8221;); (b) the merger (the &#8220;Merger&#8221;) of Merger Sub with and into Legacy
Fusemachines, pursuant to which, at the closing of the transactions contemplated by the Business Combination Agreement (the
&#8220;Closing&#8221;), the separate corporate existence of Merger Sub ceased and Legacy Fusemachines became the surviving
corporation and a wholly-owned subsidiary of Pubco, pursuant to the terms of the Business Combination Agreement and in accordance
with the laws of the State of Delaware, as more fully described elsewhere in the Proxy Statement/Prospectus; and (c) the other
transactions contemplated by the Business Combination Agreement and documents related thereto (such transactions, together with the
Domestication and the Merger, the &#8220;Business Combination&#8221;). In connection with the Business Combination, Pubco was
renamed &#8220;Fusemachines Inc.&#8221; (the &#8220;Company&#8221;) and Fusemachines Inc. was renamed &#8220;Fusemachines USA,
Inc.&#8221; (&#8220;Legacy Fusemachines&#8221;).</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
common stock of the Company began trading on The Nasdaq Stock Market (Nasdaq Global Market) under the symbol &#8220;FUSE&#8221;, and
the warrants trade under the symbol &#8220;FUSEW&#8221;, beginning on October 23, 2025. The Merger between CSLM and Legacy Fusemachines
was accounted for as a reverse recapitalization. See Note 20 - Reverse Recapitalization for more information.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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the notes to the consolidated financial statements, unless otherwise noted or the context otherwise requires, the term &#8220;Company&#8221;
refers to Legacy Fusemachines and its subsidiaries prior to the consummation of the Business Combination, and to Fusemachines Inc. (the
publicly traded parent company) and its subsidiaries after the consummation of the Business Combination.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Covenant
Fees</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the Business Combination Agreement, the Company was covenanted to deliver to CSLM its audited financial statements for the year ended December 31,
2023 and 2022 for inclusion in the registration statement on Form S-4 to be filed by CSLM in connection with the Merger, and that such
audited financial statements had been prepared in conformity with GAAP applied on a consistent basis and in accordance with the requirements
of the Public Company Accounting Oversight Board for public companies. The Company had covenanted to provide the audited financial statements
no later than February 29, 2024, or incur delay fees in the amount equal to $35.0 thousand for the first one-month delay to March 31,
2024 (pro-rated for a partial month), $50.0 thousand for the second one-month delay to April 30, 2024, and thereafter $70.0 thousand
for each subsequent one-month delay (pro-rated for any partial month). The Company provided the audited financial statements to CSLM
in September 2024. As such, the Company has recorded $505 thousand of deferred transaction costs on the audited consolidated balance
sheets as of December 31, 2024. On February 4, 2025, the company entered into a second amendment of the original agreement wherein the
above-mentioned delay fee provision is deleted and provides the Company with relief from future penalties related to the delivery of
the 2023 financial statements. Accordingly, the company recorded waiver in the year ended December 31, 2025 which have no impact in the
consolidated Statements of Operations and Comprehensive Loss as the amount of provision was eliminated from the deferred transaction
cost and from the Accounts Payable, Accrued expense and other current liabilities in the consolidated balance sheets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Note
2. Summary of Significant Accounting Policies</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Basis
of Presentation and Principles of Consolidation</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company prepares its consolidated financial statements in accordance with U.S. Generally Accepted Accounting Principles (&#8220;U.S.
GAAP&#8221; or &#8220;GAAP&#8221;) and pursuant to the rules and regulations of the Securities and Exchange Commission (the
&#8220;SEC&#8221;) regarding financial reporting. The consolidated financial statements include the financial statements of
Fusemachines Inc. and its subsidiaries. Investments in entities where we hold at least a 20% ownership interest and have the ability
to exercise significant influence, but not control, over the investee are accounted for using the equity method of accounting. All
intercompany balances and transactions have been eliminated. These consolidated financial statements are presented in United States
Dollars (&#8220;USD&#8221; or $), which is the functional currency of the Parent Company. The consolidated financial statements as
of and for the year ended December 31, 2024, included herein was derived from the audited consolidated financial statements of
Legacy Fusemachines (now known as Fusemachines USA, Inc.).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Prior
Period Reclassifications</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Certain
amounts in prior periods have been reclassified to conform with current period presentation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Use
of Estimates</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions. These
estimates and assumptions affect reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at
the date of the consolidated financial statements, as well as revenues and expenses during the reporting period. On an ongoing basis,
the Company evaluates its estimates and assumptions, including those related to the valuation of operating lease right-of-use assets,
convertible notes, cumulative mandatorily redeemable common and preferred stock liability, common stock warrants, common and convertible
preferred stock, current expected credit losses (&#8220;CECL&#8221;), stock-based compensation, useful lives of property and equipment
and intangible assets, impairment of long-lived assets, capitalization of software development costs, forward purchase derivative liability,
equity method investments and income taxes.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company bases its estimates and judgments on historical experience, knowledge of current conditions and its beliefs of what could occur
in the future, given available information. Actual results could differ from those estimates, and such differences may be material to
the consolidated financial statements. Changes in facts and circumstances may cause the Company to revise its estimates.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Cash
&amp; cash equivalents</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company considers all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. These
investments are carried at cost, which approximates fair value.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Accounts
Receivable and Related Allowance for Expected Credit Losses</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company classifies its right to consideration in exchange for deliverables as an accounts receivable. A receivable is a right to consideration
that is unconditional (i.e., only the passage of time is required before payment is due) regardless of whether the amounts have been
billed. Accounts receivable represents amounts due from the Company&#8217;s customers for AI solutions (products and services). The Company
receives payments from customers based upon agreed-upon contractual terms. The timing of revenue recognition may differ from the timing
of invoicing to customers.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Account
receivables are stated net of allowance for expected credit losses. Outstanding receivables are reviewed periodically, and allowances
are provided for the estimated amount of receivables that may not be collected. The allowance for expected credit loss is based on the
probability of future collection determined by applying a loss-rate method using the Company&#8217;s historical loss experience. The
Company also considers reasonable and supportable current and future conditions in determining its estimated loss rates, such as external
forecasts, macroeconomic trends or other factors including customer specific credit risk characteristics. The adequacy of the allowance
is evaluated on a regular basis. Account balances are written off after all means of collection are exhausted and the balance is deemed
uncollectible, which occurs when balances reach 365 days past due. Subsequent recoveries are credited to the allowance. Changes in the
allowance are recorded as adjustments to bad debt expense in the period incurred.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Bad
debt expense is included in general and administrative expenses in the consolidated statements of operations and comprehensive loss.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Property
and Equipment, net</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Property
and equipment acquired in the ordinary course of the Company&#8217;s operations are stated at cost, net of accumulated depreciation.
Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets. Leasehold improvements are amortized
on a straight-line basis over the shorter of the term of the lease or the estimated useful life of the improvement. Maintenance and repairs
are expensed as incurred</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Depreciation
expense is included in general and administrative expenses in the consolidated statements of operations and comprehensive loss.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Depreciable
lives by major classification generally are as follows:</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Intangible
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Intangible
assets consists of internally developed capitalized software, which will help in the management of the AI solutions business and will
be sold on a license basis.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Internal
use software</I></FONT></P>

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Company capitalizes certain costs related to internal use software acquired, modified, or developed related to the Company&#8217;s services
in accordance with ASC 350, Internal use software. These capitalized costs are primarily related to salaries and other personnel costs.
Costs incurred in the preliminary stages of development and the post implementation phase are expensed as incurred. The company adopts
agile method of software development which is generally characterized as an iterative and more dynamic process where the planning, design
and coding are less distinct and performed in short sprints. The Company analyses the nature of the development and implementation activities
- i.e. whether Subtopic 350-40 characterizes them as capitalizable application development stage activities - when deciding whether the
costs of those activities should be capitalized or expensed as incurred. Maintenance and training costs are expensed as incurred. The
amortization expense is recorded in &#8220;General and administration&#8221; on the consolidated statements of operations and comprehensive
loss.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Software
costs that are expensed are recorded in &#8220;Research and Development&#8221; on the consolidated statements of operations and comprehensive
loss.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Software
developed for sale</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
costs incurred for the development of computer software to be sold, leased or otherwise marketed are capitalized in accordance with ASC
985, Costs of Software to be sold, leased or marketed, when technological feasibility has been established. Technological feasibility
generally occurs when all planning, designing, coding and testing activities are completed that are necessary to establish that the product
can be produced to meet its design specifications, including functions, features, and technical performance requirements. These capitalized
costs are primarily related to salaries and other personnel costs.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT><FONT STYLE="display: none">Schedule
of Intangible Assets, Net Useful Lives</FONT></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Segment
reporting</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
Topic 280, an operating segment is defined as a component of a public entity that engages in business activities from which it may recognize
revenues and incur expenses, has operating results that are regularly reviewed by the CODM to make decisions about resources to be allocated
to the segment and assess its performance, and has discrete financial information available.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company operates as one operating segment with a focus on data engineering, AI consulting, and technical services. The Company&#8217;s
Chief Executive Officer (&#8220;CEO&#8221;), as the Company&#8217;s chief operating decision maker, manages and allocates resources to
the operations of the Company on a consolidated basis. This enables the Company&#8217;s CEO to assess the overall level of available
resources and determine how best to deploy these resources across service lines in line with the Company&#8217;s long-term company-wide
strategic goals.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
CODM considers the Company&#8217;s net income/(loss), expenses and the components of total assets to assess the segment&#8217;s performance
and make resource allocation decisions for the Company&#8217;s single segment which is consistent with that presented within these financial
statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
the Company&#8217;s operations are comprised of a single reporting segment, the Company&#8217;s segment assets are reflected on the accompanying
consolidated balance sheet as &#8220;total assets&#8221; and its significant segment expenses and net loss are listed on the accompanying
Consolidated Statements of Operations and Comprehensive loss.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Impairment
of Long-Lived Assets</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Long-lived
assets, such as property and equipment and finite-lived intangible assets, are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be recoverable. The Company uses the straight-line method of depreciation
and amortization. When the carrying value of an asset is more than the sum of the undiscounted expected future cash flows, an impairment
is recognized. An impairment loss is measured as the excess of the asset&#8217;s carrying amount over its fair value. Intangible assets
that have finite useful lives are amortized over their estimated useful lives on a straight-line basis. Factors that would necessitate
an impairment assessment include a significant adverse change in the extent or manner in which an asset is used, a significant adverse
change in legal factors or the business climate that could affect the value of the asset, or a significant decline in the observable
market value of an asset, among others.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company holds long-lived assets in two countries worldwide. The table below presents the breakdown of the Company&#8217;s long-lived
assets, based on geographic region (in thousands).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><FONT STYLE="display: none; font-family: Times New Roman, Times, Serif; font-size: 10pt">Schedule of Long-lived Assets, Based on Geographic Region</FONT></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 70%">
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    <TD STYLE="padding-bottom: 1pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="padding-bottom: 1pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: center; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fair
Value Option (&#8220;FVO&#8221;) Election</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company entered into related party convertible notes payable, at fair value in October 2019, September 2021, and Convertible Notes
payable at fair value in January 2024, (the &#8220;Convertible Notes at Fair Value&#8221;). (Refer to &#8220;Note 10 &#8211;
Long-Term Debt&#8221;). As permitted under ASC 825, Financial Instruments (&#8220;ASC 825&#8221;), the Company elected the FVO to
account for the Convertible Notes at Fair Value and Related Party Convertible notes at Fair Value. In accordance with ASC 825, the
Company recorded them at fair value. The FVO may be applied instrument by instrument, but it is irrevocable. Subsequent changes in
fair value would be recorded as a separate line in the consolidated statements of operations and comprehensive loss. As a result of
applying the FVO, direct costs and fees related to the Convertible Notes at Fair Value and Related Party Convertible notes at Fair
Value were expensed as incurred. The Company concluded it was appropriate to apply the FVO to Convertible Notes at Fair Value and
Related Party Convertible notes at Fair Value because they are liabilities that are not, in whole or in part, classified as a
component of stockholders&#8217; equity. In addition, the Convertible Notes at Fair Value and Related Party Convertible notes at
Fair Value met other applicable criteria for electing the FVO under ASC 825.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Accumulated
Other Comprehensive Income</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accumulated
other comprehensive income consists of changes in the cumulative foreign currency translation adjustments.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Revenue
Recognition</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (&#8220;ASC 606&#8221;). Under ASC
606, the Company recognizes revenue when (or as) customers obtain control of promised goods or services, in an amount that reflects the
consideration which is expected to be received in exchange for those goods or services. The Company recognizes revenue following the
five-step model prescribed under ASC 606: (i) identify contract(s) with a customer; (ii) identify the performance obligation(s) in the
contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligation(s) in the contract;
and (v) recognize revenues when (or as) the Company satisfies a performance obligation. The Company applies the provisions of ASC 606
to an arrangement when a substantive contract exists and collectability is probable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company derives the majority of its revenue from AI Solutions (Products and Services) that largely represents professional services the
Company provides to its customers to help them achieve any AI-related goals within their organization. Standard contractual arrangements
are governed by Master Services Agreements (&#8220;MSAs&#8221;), which set out general terms including payment, termination rights, and
intellectual property ownership. Detailed scope, pricing, and performance obligations are defined in Statements of Work (&#8220;SOWs&#8221;),
which are executed for each engagement or project phase. The Company&#8217;s contracts for AI Services have different terms based on
the scope and complexity of engagements; pricing for the majority of contracts are invoiced monthly on a time-and-materials basis. The
Company notes that its contracts meet the requirements for over-time revenue recognition, as the customer is simultaneously receiving
the benefits and able to consume the benefits of the services being provided. For professional services that are distinct and billed
on a time-and-materials basis, revenue is generally recognized as the services are provided, which is reflective of the transfer of the
services to the customer. The Company elected the &#8220;right to invoice&#8221; practical expedient based on the Company&#8217;s right
to invoice a customer at an amount that approximates the value to the customer and the performance completed to date.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company also provides AI Education Services which represents a customized curriculum of educational services provided to train the customer&#8217;s
C-suite on AI for Business. The Company provides AI Education Services over time as the course proceeds and the students retain knowledge
over time. Thus, the customer receives and consumes benefits as the Company performs the AI Education Services, and revenue is recognized
overtime.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Company&#8217;s
AI Solutions includes product revenues primarily comprising of software license fees from sales of term-based license contracts, under
which we grant customers the license right to use the software for a specified period (i.e. when the customer can access, use, and benefit
from the software license). Term software licenses are satisfied at a point in time and associated revenue is recognized upon the later
of 1) delivery of the software, or 2) the beginning of the period in which the customer has received the license right to use the software.
For customer contracts that include software license fees, implementation and/or other consulting services, the portion of the transaction
price allocated to software licenses is generally recognized when delivered. Implementation, customization, or model tuning services
if applicable, when included, are evaluated as separate performance obligations when they are distinct from the software and not highly
interdependent. These services are generally satisfied over time as the work progresses. During the year ended December 31, 2025 and
December 31, 2024, the product revenues were insignificant.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
most contracts, the Company uses a Master Service Agreements (&#8220;MSA&#8221;) to govern the overall relevant terms and conditions
of the business agreement, and a Statement of Work (&#8220;SOW&#8221;) to specify the services delivered and the associated prices. Performance
obligations specific to each individual contract are defined within the terms of each SOW. Each performance obligation is identified
based on the services that will be transferred to our customer that are both capable of being distinct and are distinct within the context
of the contract. The transaction price is determined based on the consideration to which the Company will be entitled and expect to receive
in exchange for transferring services to the customer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consideration
for some contracts may include variable consideration including volume discounts and rebates. If the consideration promised includes
a variable amount, the Company only includes estimated amounts of consideration in the transaction price to the extent it is probable
that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration
is resolved. These estimates require management judgments and estimates. The determination of whether to constrain consideration in the
transaction is based on historical, current, and forecasted information that is reasonably available to the Company, taking into consideration
the type of customer, the transaction, and specific facts and circumstances of each arrangement. The Company uses judgement to determine
if collectability of consideration is uncertain, and accordingly, revenue recognition is deferred until the uncertainty is resolved and
cash is collected.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Payment
terms and conditions vary by contract type, although terms generally include a requirement of payment within 30 to 60 days of the invoice
date. In certain arrangements, the Company will receive payment from a customer either before or after the performance obligation to
which the invoice relates has been satisfied. As a practical expedient, the Company does not account for significant financing components
if the period between when it transfers the promised good or service to the customer and when the customer pays for the product or service
will be one year or less.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
contracts with multiple performance obligations, the Company allocates the contract&#8217;s transaction price to each performance obligation
based on its relative standalone selling price. The stand-alone selling prices are determined based on the prices at which the Company
separately sells these products. For items that are not sold separately, the Company estimates the stand-alone selling prices using other
observable inputs. As Fusemachines Inc. is the sole reportable segment, all revenues are attributed to the sole segment.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Contract
Balances</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Differences
in timing between revenue recognition and cash collection result in contract assets and contract liabilities. The Company classifies
these assets as unbilled revenue; the liabilities are classified as deferred revenue.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Deferred
revenue represents the amounts billed or cash payments received in advance of revenue recognition at the end of the reporting period.
These amounts are recorded in deferred revenue until revenue is recognized through delivery of service or upon meeting the performance
obligation. The Company&#8217;s deferred revenue represents contract liabilities. Generally, when billing occurs subsequent to revenue
recognition, the Company reports unbilled revenue on the consolidated balance sheets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Cost
of Revenue</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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principally of consulting and payroll expenses as well as stock-based compensation expense that are assigned to customer projects.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Selling
and Marketing Expenses</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Selling
and marketing expenses represent costs incurred to promote the Company&#8217;s services offered, including salaries, benefits and related
costs of our sales and marketing personnel, and represent costs of advertising and other selling and marketing expenses. All sales and
marketing costs are expensed as incurred.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>General
and Administrative Expenses</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consists
of expenses associated with general and administrative functions of the business such as the costs of salaries, stock-based compensation
expense, Information Technology (&#8220;IT&#8221;) infrastructure, allowance for expected credit losses, travel, legal and accounting
services, insurance, rent, software and tools, meals, other professional services activities, and certain non-income taxes.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Defined
Contribution Plan</B></FONT></P>

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to defined contribution plans are expensed in the period in which services are rendered by the covered employees. The Company recognizes
its liabilities for compensated absences dependent on whether the obligation is attributable to employee services already rendered, relates
to rights that vest or accumulate and payment is probable and estimable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Stock-Based
Compensation</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">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.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company records stock-based compensation in accordance with ASC Topic 718, Compensation &#8211; Stock Compensation (&#8220;ASC 718&#8221;).
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.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">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 and administrative, cost of revenue, selling
and marketing and research and development expenses in the consolidated statements of operations and comprehensive loss.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company estimates the fair value of stock option awards granted using the Black Scholes Merton option pricing formula (the &#8220;Black-Scholes
Model&#8221;). 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, expected volatility, expected dividend yield, risk-free interest rate and fair value
of the Company&#8217;s stock on the date of grant. The expected option term for options granted is calculated using the &#8220;simplified
method&#8221;. This election was made based on the lack of sufficient historical exercise data to provide a reasonable basis upon which
to estimate the expected term. The simplified method defines the expected term as the average of the contractual term and the vesting
period. Estimated volatility is based on similar entities whose stock prices are publicly traded. The Company uses the historical volatilities
of similar entities due to the lack of sufficient historical data for the Company&#8217;s common stock price. The Company estimates volatility
based upon the observed historical volatilities of comparable companies over a lookback period commensurate with the estimated holding
period, adjusted for relative leverage using the Black-Scholes-Merton formula. Dividend yields are based on the Company&#8217;s history
and expected future actions. The Company has not declared or paid dividends to date and does not anticipate declaring dividends. As such,
the dividend yield has been estimated to be zero. The risk-free interest rate is based on the yield curve of a zero-coupon U.S. Treasury
bond on the date the stock option award was granted with a maturity equal to the expected term of the stock option award. All grants
of stock options generally have an exercise price equal to or greater than the fair market value of the Company&#8217;s common stock
on the date of grant.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
fair value of the shares of common stock underlying the stock options has historically been determined by the Company&#8217;s Board of
directors as there was no public market for the underlying common stock prior to October 22, 2025. In estimating the fair value of its
stock, the Company uses a third-party valuation specialist and considers factors it believes are material to the valuation process, including
but not limited to, the price at which recent equity was issued by the Company to independent third parties or transacted between third
parties, any indications of value from offers to acquire the Company, actual and projected financial results, risks, prospects, economic
and market conditions, and estimates of weighted average cost of capital. The Company believes the combination of these factors provides
an appropriate estimate of the expected fair value of the Company and reflects the best estimate of the fair value of the Company&#8217;s
common stock at each grant date.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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time to time the Company has entered into promissory note agreements with certain employees for the purpose of financing the early exercise
of the Company&#8217;s stock options. Although the shares of common stock purchased by the employees in exchange for the promissory notes
are considered legally issued, the Company does not consider them outstanding for accounting purposes. Instead, the Company treats them
as restricted until the options are fully vested and the outstanding principal and accrued interest on the notes are repaid in full.
Unvested shares for which the promissory notes are fully satisfied are recorded as a share repurchase liability and as shares vest are
recognized to additional paid-in capital in the Consolidated Balance Sheets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Advertising
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Advertising
costs are expensed as incurred. Advertising costs were $61.8
thousand and $126.2
thousand for the years ended December 31, 2025, and 2024, respectively, which are included in selling and marketing costs on the
consolidated statements of operations and comprehensive loss.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Income
Taxes</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
provision for income taxes includes federal, state, local and foreign taxes. Deferred tax assets and liabilities are recognized for the
estimated future tax consequences of temporary differences between the consolidated financial statements carrying amounts and their respective
tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the year in
which the temporary differences are expected to be reversed. Changes to enacted tax rates would result in either increases or decreases
in the provision for income taxes in the period of changes</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
realizability of deferred tax assets is primarily dependent on future earnings. The Company evaluates the realizability of deferred tax
assets and recognizes a valuation allowance when it is more likely than not that all, or a portion of, deferred tax assets will not be
realized. A reduction in estimated forecasted results may require that we record valuation allowances against deferred tax assets. Once
a valuation allowance has been established, it will be maintained until there is sufficient positive evidence to conclude that it is
more likely than not that the deferred tax assets will be 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.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accordingly,
the increase and decrease of valuation allowances could have a significant negative or positive impact on future earnings</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
United States subjects corporations to taxes on Global Intangible Low-Taxed Income (&#8220;GILTI&#8221;) earned by certain foreign subsidiaries.
The Company elected to provide for the tax expense related to GILTI in the year the tax is incurred.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Deferred
Transaction Costs</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company records deferred transaction costs, which consist of legal, accounting, and other fees related to the preparation of the Merger.
(Refer to &#8220;Note 1 &#8211; Organization&#8221;). The deferred transaction costs will be offset against proceeds from the transaction
upon the effectiveness of the Business Combination. Fusemachines Inc. incurred transaction cost of $1,873</FONT>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">thousands, consisting of deferred transaction cost, banking
fees, legal fees, and other professional fees as at October 22, 2025, which has been recorded as a reduction to Additional paid-in capital
as a direct and incremental cost of the reverse recapitalization. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><B>&#160;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Convertible Preferred Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company applies the guidance
enumerated in ASC Subtopic 480-10,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>

<P STYLE="margin: 0; text-align: justify"><I>Distinguishing Liabilities from Equity-Overall</I> <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(</FONT><FONT STYLE="font-family: Yu Mincho,serif; font-size: 10pt">&#8220;</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ASC
480-10</FONT><FONT STYLE="font-family: Yu Mincho,serif; font-size: 10pt">&#8221;</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">),
when determining the classification and measurement of convertible preferred stock. Convertible preferred stock subject to mandatory
redemption are classified as liability instruments and are initially measured at fair value in accordance with ASC 480-10 and accreted
to their redemption value under the effective interest method. All other issuances of convertible preferred stock are subject to the
classification and measurement principles of ASC 480-10. Accordingly, the Company classifies conditionally redeemable preferred stock
(if any), which includes preferred stock that feature redemption rights that are either within the control of the holder or subject to
redemption upon the occurrence of uncertain events not solely within the Company</FONT><FONT STYLE="font-family: Yu Mincho,serif; font-size: 10pt">&#8217;</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">s
control, as temporary equity. At all other times, the Company classifies its convertible preferred stock in stockholder&#8217;s deficit.</FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Research
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company accounts for research and development costs in accordance with the ASC 730, Research and Development. Under ASC 730, all research
and development costs are expensed as incurred, with the exception of certain software development costs discussed above. Our research
and development costs consist primarily of payroll costs associated with software product development, testing, quality assurance, documentation,
enhancements and upgrades for existing customers under maintenance.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify">

<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Research and Development costs were $720
thousand and $732
thousand for the years ended December 31, 2025 and 2024 respectively, which are included in the consolidated statements of
operations and comprehensive loss.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Net
Loss per Share</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company applies the two-class method to compute basic and diluted net loss per share attributable to common shareholders, when shares
meet the definition of participating securities. The two-class method determines net loss per share for each class of common and participating
securities according to dividends declared or accumulated and participation rights in undistributed earnings. The two-class method requires
income (loss) available to common shareholders for the period to be allocated between common and participating securities based upon
their respective rights to share in the earnings as if all income (loss) for the period had been distributed. The Company reported a
net loss attributable to common shareholders for the year ended December 31, 2025 and 2024.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Basic
net loss per share is computed by dividing the net loss attributable to common shareholders by the weighted-average number of shares
of common stock outstanding during the year. Diluted net loss per share is computed by dividing the net loss attributable to common shareholders
by the weighted average number of shares outstanding, plus the impact of potential common shares, if dilutive, resulting from the potential
exercise of warrants or options, and the potential conversion of preferred stock or convertible notes, into common stock, under the if-converted
method. Due to the net losses for the year ended December 31, 2025 and 2024, basic and dilutive net loss per share were the same, as
the effect of potentially dilutive securities would have been anti-dilutive</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Warrants</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company accounts for warrants as either equity-classified
or liability-classified instruments based on an assessment of the specific terms of the instruments in accordance with FASB ASC Topic
480, <I>Distinguishing Liabilities from Equity</I> (&#8220;ASC 480&#8221;) and FASB ASC Topic 815, <I>Derivatives and Hedging</I> (&#8220;ASC
815&#8221;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Shortfall warrants, public and private warrants, and
warrants issued in connection with convertible notes were evaluated under ASC 480 and ASC 815-40 and determined not to meet the criteria
for liability classification. These warrants are indexed to the Company&#8217;s own stock and meet the requirements for equity classification.
Accordingly, such warrants are recorded within stockholders&#8217; equity and are not subsequently remeasured.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">All other warrants that do not meet the criteria for
equity classification are accounted for as liabilities and measured at fair value, with changes in fair value recognized in the consolidated statement of operations and comprehensive loss in each reporting period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Commitments
and Contingencies</B><BR>
<BR></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company may at times be involved in litigation in the ordinary course of business. The Company will, from time to time, when
appropriate in management&#8217;s estimation, record adequate reserves in the Company&#8217;s consolidated financial statements for
pending litigation. Currently there are no <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; color: #231F20">material
pending or threatened litigation matters that management believes require accrual or disclosure in addition to those presented in
the Note on Litigation</FONT> (refer Note 17 &#8211; Commitments and Contingencies).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Foreign
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Assets
and liabilities of consolidated foreign subsidiaries whose functional currency is not the U.S. dollar are translated into U.S. dollars
at period-end exchange rates and revenues and expenses are translated into U.S. dollars using average exchange rates during the year.
Equity transactions are translated using historical exchange rates. The adjustment resulting from translating the consolidated financial
statements of such foreign subsidiaries into U.S. dollars is reflected as a cumulative translation adjustment and reported as a component
of Accumulated other comprehensive loss.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Risks
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Concentration
of Credit</B> - Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash
and cash equivalents, and accounts receivable. The Company maintains cash and cash equivalents with financial institutions. The Company
believes its credit policies reflect normal industry terms and business risk and there is no expectation of non-performance by the counterparties.
Accounts receivables are generally dispersed across many customers operating in different industries&#894; therefore, concentration of
credit risk is limited. If any of the Company&#8217;s customers enter bankruptcy protection or otherwise take steps to alleviate their
financial distress, the Company&#8217;s credit losses and write-offs of receivables could increase, which would negatively impact its
results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Significant
Customers and Suppliers &#8212; The concentration of credit risk with respect to accounts receivable is primarily limited to certain
customers to which the Company makes substantial sales. To minimize credit risk related to accounts receivable, the Company maintains
allowances for potential credit losses based on historical loss patterns as well as future expectations. As of December 31, 2025 and
December 31, 2024, the Company had three and four customers whose accounts receivable balance accounted for at least 10% of the Company&#8217;s
consolidated accounts receivables, respectively. These customers accounted for approximately 47.64% and 61.6% of the Company&#8217;s
receivables at the end of the respective periods. For the year ended December 31, 2025 and 2024, the Company had three and two customers
whose revenue accounted for at least 10% of the Company&#8217;s consolidated revenue, respectively. These customers accounted for approximately
42.2 % and 23.9 % of the Company&#8217;s total revenue at the end of the respective periods.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company pays its suppliers on normal commercial terms and does not believe that there is any significant supply risk from its suppliers.
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10% of the Company&#8217;s consolidated account payables, respectively. These suppliers accounted for approximately 57.0% and 61.4% of
the Company&#8217;s total payables at the end of the respective periods.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Foreign
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U.S. dollars, the Company incurs expenses in other currencies, principally, Nepalese rupees and Canadian dollars. The Company&#8217;s
international operations expose it to risk of adverse fluctuations in foreign currency exchange rates through the remeasurement of foreign
currency denominated assets and liabilities (both third-party and intercompany) and translation of earnings and cash flows into U.S.
dollars.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Interest
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from variable rates related to cash, short-term investments, and the Company&#8217;s borrowings. The Company does not believe it is exposed
to material direct risks associated with changes in interest rates related to these deposits, investments and borrowings.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Geopolitical risks -
</B>As a result of its global operations, the Company is exposed to geopolitical risks, including ongoing and potential wars, terrorism,
sanctions and trade disputes. These developments may disrupt supply chains and data flows, restrict access to critical technology and
infrastructure (including AI-enabling hardware and cloud services), and increase cybersecurity and compliance risks. As a result of its
global operations, the Company may be subject to certain inherent risks.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Leases</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s lease portfolio includes one real estate leases under operating lease agreements. At the inception of a contract, the
Company assesses whether the contract is, or contains, a lease. The Company&#8217;s assessment is based on whether: (i) the contract
involves the use of a distinct identified asset, (ii) the Company obtains the right to substantially all the economic benefit from the
use of the asset throughout the term of the contract, and (iii) the Company has the right to direct the use of the asset.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
the adoption of ASC 842, the Company elected the package of practical expedients to not (i) reassess whether any expired or existing
contracts are or contain a lease, (ii) reassess historical lease classifications for existing leases, and (iii) reassess initial direct
costs for existing leases. The Company also elected the practical expedient to account for lease and non-lease components as a single
lease component. Accordingly, the Company shall include non-lease components with lease payments for the purpose of calculating lease
assets and liabilities to the extent that they are fixed. Non-lease components that are not fixed are expensed as incurred as variable
lease payments</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company exempts leases with an initial term of 12 months or less from balance sheet recognition and, for all classes of assets, combines
non-lease components with lease components. Lease assets are tested for impairment in the same manner as long-lived assets used in operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company evaluates the classification of its leases as either finance leases or operating leases. A lease is classified as a finance lease
if any one of the following criteria are met: (i) the lease transfers ownership of the asset by the end of the lease term, (ii) the lease
contains an option to purchase the asset that is reasonably certain to be exercised, (iii) the lease term is for a major part of the
remaining useful life of the asset, (iv) the present value of the lease payments equals or exceeds substantially all of the fair value
of the asset, or (v) the leased asset is of such a specialized nature that it is expected to have no alternative use to the lessor at
the end of the lease term. A lease is classified as an operating lease if it does not meet any of these criteria.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company recognizes right-of-use assets and lease liabilities based on the present value of lease payments over the lease term at the
commencement date of the lease (or January 1, 2022, for existing leases upon the adoption of Topic 842). The discount rate implicit within
the Company&#8217;s leases is generally not determinable&#894; therefore, the Company determines the discount rate using its incremental
borrowing rate based on the information available at the commencement date in determining the present value of lease payments.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company records rent expense for short-term leases and operating leases, some of which have escalating rent payments, on a straight-line
basis over the lease term</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
additional information regarding the Company&#8217;s lease arrangements, refer to &#8220;Note 18 - Leases&#8221;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Related
Parties</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Parties
are considered to be related to the Company if the parties, directly or indirectly, through one or more intermediaries, control, are
controlled by, or are under common control with the Company. Related party also include principal owners of the Company, its management,
members of the immediate families of principal owners of the Company and its management and other parties with which the Company may
deal with if one party control or can significantly influence the management or operating policies of the other to an extent that one
of the transacting parties might be prevented from fully pursuing its own separate interests. The Company discloses all significant related
party transactions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Going
Concern</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s consolidated financial statements have been presented on the basis that it is a going concern, which contemplates the
realization of assets and the satisfaction of liabilities in the normal course of business.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2025, the Company had cash of approximately $4,221 thousand. For the years ended December 31, 2025, the Company used
approximately $5,529<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT> thousand in cash for operating activities. Historically, the Company has incurred recurring net losses from operations
and negative cash flows from operating activities. As of December 31, 2025, the Company had an accumulated deficit of approximately $35,145
thousand. These factors raise substantial doubt regarding the Company&#8217;s ability to continue as a going concern within one year
of the date these consolidated financial statements were issued.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
continuation of the Company as a going concern is dependent upon the continued financial support from its stockholders and debt holders.
Specifically, continuation is contingent on the Company&#8217;s ability to obtain necessary equity to continue
operations, and ultimately the Company&#8217;s ability to generate profit from sales and positive operating cash flows, which is not
assured.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
October 22, 2025, Merger Sub merged with and into Legacy Fusemachines, with Legacy Fusemachines continuing as the surviving company and
becoming a wholly owned subsidiary of Fusemachines Inc. In connection with the closing, approximately $14.0 million in cash was received
for the issuance of shares of Fusemachines Inc. common stock. All convertible notes were settled through the issuance of Fusemachines
Inc. common stock, and certain promissory notes were repaid in cash upon closing. Following the business combination, the net balance
of cash and cash equivalents was approximately $9.4 million. The Company&#8217;s trade payables, accrued expenses, and other current
liabilities exceed the net cash and cash equivalents balance. Management is evaluating initiatives to streamline operations through reductions
in headcount and consultant costs, and continued negotiations with vendors to achieve more favorable terms. In addition, the Company&#8217;s
business plan anticipates a measured growth trajectory supported by new client acquisitions and expansion of existing customer relationships.
While these actions are expected to enhance the Company&#8217;s financial position and extend its operational runway once implemented,
they remain in the planning and negotiation stages.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of the date on which these consolidated financial statements were available to be issued, we believe that the cash on hand, and additional
investments available through issuance of new common stock, will be inadequate to satisfy the Company&#8217;s working capital and capital
expenditure requirements for at least the next twelve months. The ability of the Company to continue as a going concern is dependent
upon management&#8217;s plan to raise additional capital from issuance of equity or receive additional borrowings to fund the Company&#8217;s
operating and investing activities over the next year. These consolidated financial statements do not include any adjustments to the
recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company
be unable to continue as a going concern.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Investment
in Equity Securities</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s equity investment comprises of investments in equity securities of private Companies. These equity investments are accounted
for under the equity method, and initially recorded at estimated fair value, less any impairment. The Company&#8217;s share of gains
and losses if any from these equity method investments are included in the consolidated statements of operations and comprehensive loss,
net of income tax provision. Equity investments are reviewed regularly to determine whether there is a decline in estimated fair value
below the carrying amount. If there is a decline that is other-than-temporary, the investment is written down to estimated fair value.
When evaluating the equity investment for impairment, the Company performs a qualitative and quantitative assessment to evaluate whether
a decline in estimated fair value below the carrying amount is other-than- temporary. The qualitative assessment includes a review of
macroeconomic conditions, industry and market considerations, the investee&#8217;s recent operating results and trends, recent acquisitions
and sales of the investee securities, and other publicly available data, among other factors. If the Company determines that the decline
is other-than-temporary, the Company records an impairment loss to write the equity investment to the estimated fair value.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Treasury
Stock</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company records treasury stock activities under the cost method whereby the cost of the acquired stock is recorded as treasury stock.
The Company&#8217;s accounting policy upon the formal retirement of treasury stock is to deduct the par value from the Company&#8217;s
common stock and to reflect any excess cost over par value as a reduction to additional paid-in capital (to the extent created by previous
issuances of the shares) and then retained earnings.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the consummation of the Business Combination on October 22, 2025, treasury shares previously held by the Company totaling
438,903 shares, with an aggregate carrying value of approximately $2.9 million, were excluded from the share exchange and did not participate
in the reverse recapitalization. As treasury shares are not considered outstanding, these shares were effectively retired in connection
with the transaction and accordingly are not reflected as outstanding shares of common stock following the closing of the Business Combination.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Emerging
Growth Company (EGC)</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is an &#8220;emerging growth company,&#8221; as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart our
Business Startups Act of 2012, (the &#8220;<B>JOBS Act</B>&#8221;), and it may take advantage of certain exemptions from various reporting
requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not
being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations
regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding
advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Further,
Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting
standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do
not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting
standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements
that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of
such extended transition period which means that when a standard is issued or revised and it has different application dates for public
or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies
adopt the new or revised standard. This may make comparison of the Company&#8217;s consolidated financial statements with another public
company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition
period difficult or impossible because of the potential differences in accounting standards used.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify">&#160;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font: normal 10pt Times New Roman, Times, Serif">ASC
815&#160;requires companies to bifurcate certain features from their host instruments and account for them as free-standing derivative
financial instruments should certain criteria be met. We evaluate our financial instruments to determine whether such instruments are
derivatives or contain features that qualify as embedded derivatives. Embedded derivatives must be separately measured from the host
contract if all the requirements for bifurcation are met. The assessment of the conditions surrounding the bifurcation of embedded derivatives
depends on the nature of the host contract and the features of the derivatives. Bifurcated embedded derivatives are recognized at fair
value, with changes in fair value recognized in the consolidated statements of operations each period. Bifurcated embedded derivatives
are classified with the related host contract in our consolidated balance sheets. The classification of derivative instruments, including
whether such instruments should be recorded as liabilities or as equity is re-assessed at the end of each reporting period.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Recent
Accounting Pronouncements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT>New
Accounting Pronouncements Not Yet Adopted</FONT></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company considers the applicability and impact of all Accounting Standards Updates (&#8220;ASUs&#8221;) issued by the Financial Accounting
Standards Board. Management periodically reviews newly issued accounting standards to determine their potential impact on the Company&#8217;s
consolidated financial statements and related disclosures.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>ASU
2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures</I>- In December 2023, the FASB issued this ASU to update income
tax disclosure requirements, primarily related to the income tax rate reconciliation and income taxes paid information. This update is
effective on a prospective basis for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently
evaluating the impact that the adoption of this standard will have on its consolidated financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
March 2024, the SEC issued its final climate disclosure rules (Rule 1), which require the disclosure of climate-related information in
annual reports and registration statements, beginning with annual reports for the year ending December 31, 2025. The rules require disclosure
in the audited financial statements of certain effects of severe weather events and other natural conditions above certain financial
thresholds, as well as amounts related to carbon offsets and renewable energy credits or certificates, if material. We are currently
evaluating the impact of the new rules and continue to monitor the status of the related legal challenges.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>ASU
2024-03, Income Statement - Reporting Comprehensive Income </I>- Expense Disaggregation Disclosures. In November 2024, the FASB issued
this ASU that requires more detailed disclosure about certain costs and expenses presented in the income statement, including inventory
purchases, employee compensation, selling expense and depreciation expense. The new guidance is effective for annual reporting periods
beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The
guidance does not affect recognition or measurement in our consolidated financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>ASU
2024-04 Debt - Debt with Conversion and Other Options</I> - Induced Conversions of Convertible Debt Instruments. In November 2024, the
FASB issued this ASU which clarifies the requirements for determining whether certain settlements of convertible debt instruments should
be accounted for as induced conversions or extinguishments. The amendments in this update are effective for all entities for annual reporting
periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted
for all entities that have adopted the amendments in Update 2020-06. We are currently evaluating the impact this guidance will have on
our consolidated financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
May 2025, the FASB issued <I>Accounting Standards Update No. 2025-04, Compensation &#8211; Stock Compensation (Topic 718) and Revenue
from Contracts With Customers (Topic 606)</I>: Clarifications to Share-Based Consideration Payable to a Customer (&#8220;ASU 2025-04&#8221;).
ASU 2025-04 revises the definition of a performance condition, eliminates the forfeiture policy election for service conditions, and
clarifies that the variable consideration constraint in Topic 606 does not apply to share-based consideration payable to customers. The
new guidance requires entities to consistently account for share-based awards granted to customers by clarifying the treatment of vesting
conditions and ensuring alignment with Topic 606 and Topic 718. ASU 2025-04 is effective for fiscal years beginning after December 15,
2026, including interim periods within those fiscal years. Early adoption is permitted. The Company is currently evaluating the impact
of adopting this new accounting guidance on its financial statements and related disclosures.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
September 2025, the FASB issued <I>ASU 2025-06- Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40)</I>: Targeted
Improvements to the Accounting for Internal-Use Software (ASU 2025-06), which is intended to simplify the capitalization guidance for
internal-use software by removing references to project stages and clarifying when the capitalizing of eligible costs is required. ASU
2025-06 is effective for annual periods beginning after December 15, 2027, and interim periods within those fiscal years. Early adoption
is permitted. The Company is in the process of evaluating the impact of this new guidance on its disclosures.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
December 2025, the FASB issued ASU 2025-11, <I>Interim Reporting (Topic 270): Narrow-Scope Improvements</I>, which clarifies the guidance
in Topic 270 to improve the consistency of interim financial reporting. The ASU provides a comprehensive list of required interim disclosures
and introduces a disclosure principle requiring entities to disclose events since the end of the last annual reporting period that have
had a material impact on the entity. ASU 2025-11 is effective for fiscal years beginning after December 15, 2027, including interim periods
within those fiscal years, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-11.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company does not believe any other new accounting pronouncements issued by the FASB that have not become effective will have a material
impact on its consolidated financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>New Accounting Pronouncements Adopted</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</P>

<P STYLE="margin: 0pt 0; text-align: justify">In May 2025, the FASB issued Accounting Standards Update No. 2025-03, Business Combinations (Topic 805) and Consolidation
(Topic 810): Determining the Accounting Acquirer in the Acquisition of a Variable Interest Entity (&#8220;ASU 2025-03&#8221;). ASU 2025-03
changes how companies determine the accounting acquirer in certain business combinations involving variable interest entities. The new
guidance requires considering the factors used for other acquisition transactions to assess which party is the accounting acquirer. ASU
2025-03 is effective for the Company&#8217;s annual reporting periods beginning on January 1, 2027. The Company has early adopted ASU
2025-03. Accordingly, even if the acquired entity meets the definition of a VIE under ASC 810, the determination of the accounting acquirer
is based on an evaluation in accordance with ASC 805-10 and ASC 805-50. The adoption of this guidance did not have a material impact on
the Company&#8217;s financial statements. Further, the adoption did not change the Company&#8217;s overall accounting conclusions with
respect to the identification of the accounting acquirer.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Note
3. Fair Value Measurements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
authoritative guidance on fair value measurements establishes a three-tier fair value hierarchy for disclosure of fair value measurements
as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level
1 - Quoted prices for identical assets or liabilities in active markets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level
2 - Inputs other than quoted prices within Level 1 that are observable either directly or indirectly, including quoted prices in markets
that are not active, quoted prices in active markets for similar assets or liabilities, and observable inputs other than quoted prices
such as interest rates or yield curves.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Level
3 - Unobservable inputs reflecting management&#8217;s view about the assumptions that market participants would use in pricing the asset
or liability.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Assets
and liabilities measured at fair value are classified in their entirety based on the lowest level of input that is significant to the
fair value measurement. The Company&#8217;s assessment of the significance of a particular input to the fair value measurement in its
entirety requires management to make judgments and consider factors specific to the asset or liability.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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carrying values of the Company&#8217;s accounts receivable, unbilled revenue, prepaid expenses and other current assets, other assets,
accounts payable, transaction costs, accrued expenses and other current liabilities and cumulative mandatorily redeemable common and
preferred stock liability approximate their fair values based on the instrument&#8217;s relative short-term nature.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify">As of
December 31, 2025, the Company does not have any outstanding convertible notes payable or related party loan payable, as these
instruments were either converted or settled during the year other than related party note payable related to Dolma Impact Fund
I (&#8220;Dolma&#8221;) amounting $300 thousand, which were reclassified from a convertible note to a related party note payable on demand. Accordingly, no fair value estimation is required for such
instruments as of the reporting date. As of December 31, 2024, the estimated fair values of these instruments approximated their
carrying values due to their relatively short maturities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Financial
Instruments Recorded at Fair Value</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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following tables present the Company&#8217;s fair value hierarchy for its financial liabilities that are measured at fair value on a
recurring basis and indicate the level within the fair value hierarchy of the valuation techniques the Company utilized to determine
such fair value (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT><FONT STYLE="display: none">Schedule of Financial Instruments Recorded at Fair Value on a Recurring Basis</FONT></FONT></P>

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    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Level
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    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="text-align: left; width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right; width: 12%"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left; width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 2%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <TR STYLE="display: none; vertical-align: bottom">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Level
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    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Level
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<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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  <TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Level
    1</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Level
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    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Level
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 36%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Related Party
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    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 2%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 2%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">6,524</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Convertible Notes at Fair
    Value <I>(Refer Note 10. Long-Term Debt)</I></FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Warrant
    liability <I></I></FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">945</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Warrant
Liabilities</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table shows the change in the fair value of the warrant liability (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT><FONT STYLE="display: none">Schedule of Change in Fair Value of Warrant Liability</FONT></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Amount</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 80%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">Balance as of December 31, 2023</FONT></TD><TD STYLE="width: 2%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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  <TR STYLE="vertical-align: bottom; background-color: White">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Balance as of December
    31, 2024</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">945</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
</TABLE>

<P STYLE="margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Amount</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 80%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">Balance as of December 31, 2024</FONT></TD><TD STYLE="width: 2%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 16%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">945</FONT></TD><TD STYLE="width: 1%; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="display: none; vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold">Warrant liability, beginning balance</TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">945</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Change in fair value of warrant liabilities</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(824</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Balance as of December
    31, 2025</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">121</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="display: none; vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; padding-bottom: 1pt">Warrant liability, ending Balance</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">121</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Forward
Purchase Derivative Liability</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
forward purchase derivative liability was recognized at Closing on October 22, 2025. The fair value as of December 31, 2025, was $9,692
thousand. The following table presents a reconciliation of the Forward Purchase Derivative Liability (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><FONT STYLE="display: none">Schedule
of Reconciliation of the Forward Purchase Derivative Liability</FONT></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Amount</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">Balance as of December 31, 2024</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Nil</B></FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 80%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Forward purchase derivative recognized
    in connection with the merger on October 22, 2025</FONT></TD><TD STYLE="width: 2%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 16%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8,616</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Change in fair value of
    forward purchase derivative liabilities</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,076</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Balance as of December
    31, 2025</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9,692</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
fair value of the forward purchase derivative liability was estimated using a Monte Carlo simulation approach. The key assumptions used
in valuation as of December 31, 2025: a risk-free rate of 3.53</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">%,
a valuation term of 2.81</FONT>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">years, and annualized volatility of 65.0</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">%.
The Company&#8217;s common share price was simulated with daily time steps for a range of various possible scenarios. The breadth of
all possible scenarios was captured in an estimate of volatility, based on comparable companies&#8217; historical equity volatilities,
considering differences in their capital structure. The simulated prices were compared against the settlement adjustment features of
the Forward Purchase Agreements. Under each simulated scenario of future stock price, the Company calculated the value of the forward
purchase derivative liability arrangement. The average value across this range of possible scenarios, discounted to present using the
risk-free rate, was used as the fair value of the forward purchase derivative liability.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following unobservable assumptions were used in determining the fair value of the forward purchase derivative liability at Closing</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><FONT STYLE="display: none">Schedule
of Unobservable Assumptions Were Used in Determining the Fair Value of the Forward Purchase Derivative Liability</FONT></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%">
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 80%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Equity volatility</FONT></TD><TD STYLE="width: 2%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 16%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">65</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">%</FONT></TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Convertible
notes payable and forward purchase derivative liability</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table shows the change in the fair value of the Convertible Notes measured at Fair Value and forward purchase derivative
liability (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT><FONT STYLE="display: none">Schedule of Change in Fair Value of the Convertible Notes at Fair Value</FONT></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: center; padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Related
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    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>January
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    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Forward
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    </TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 49%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">Balance as of December 31, 2023</FONT></TD><TD STYLE="width: 2%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 13%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,764</FONT></TD><TD STYLE="width: 1%; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 2%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 13%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="width: 1%; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 2%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 13%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="width: 1%; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    </TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Issuance of convertible notes at fair value</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: White">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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<TR STYLE="vertical-align: bottom; background-color: White">
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    </TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    </TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    </TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt; text-align: justify"><P STYLE="margin: 0">Reclassification from convertible note payable*</P></TD><TD STYLE="padding-bottom: 1pt">&#160;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&#160;</TD><TD STYLE="padding-bottom: 1pt; text-align: right"><P STYLE="margin: 0">(300</P></TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&#160;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&#160;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&#160;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&#160;</TD><TD STYLE="padding-bottom: 1pt">&#160;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&#160;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&#160;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    </TR>
  <TR STYLE="display: none; vertical-align: bottom; background-color: rgb(204,238,255)">
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    </TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right">*</TD><TD STYLE="text-align: justify">In connection with the Business Combination on October 22, 2025, all outstanding convertible notes,
                                                 including both related party and third-party balances, were converted into equity in accordance with their respective terms.
                                                 Accordingly, no convertible notes remained outstanding as of December 31, 2025, except for the note related to Dolma Impact Fund I
                                                 (&#8220;Dolma&#8221;) amounting to $300 thousand, which was reclassified from a convertible note to a related party note payable on
                                                 demand.</TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Common
Stock Warrant Liability</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company estimates the fair value of the common stock warrant liability (refer to &#8220;Note 10 &#8211; Long-term Debt&#8221;) using an
option pricing model and assumptions that are based on the individual characteristics of the warrants on the valuation date, as well
as assumptions for fair value of the underlying common stock expected volatility, expected life, dividends, and risk-free interest rate.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
warrant liability is classified as Level 3 as there were no quotable prices for identical assets or quoted prices for similar. The warrant
liabilities are measured using a Black-Scholes Model. The fair value of the warrant liability as of December 31, 2025 was determined
using the following assumptions: a dividend yield of 0.0%, a risk-free rate of 3.99%, a stock price of $1.65, a term of 7.65 years, and
annualized volatility of 62.0%. The fair value of the warrant liability as of December 31, 2024 was determined using the following assumptions:
a dividend yield of 0.0%, a risk-free rate of 4.5%, a stock price of $7.48, a term of 8.65 years, and annualized volatility of 65.0%.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Related
Party Note payable at Fair Value and Convertible Notes at Fair Value</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company accounts for certain long-term debt (also refer to &#8220;Note 10 - Long-term Debt&#8221;) under the fair value option. At the
issuance date of the Convertible Notes at Fair Value, the Company determined that the fair value approximated the principal amount.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
measurement of fair value of the Convertible Notes at Fair Value as of December 31,2024 was estimated based on significant inputs not
observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The Company used a scenario-based analysis
to incorporate estimates and assumptions concerning the Company&#8217;s prospects and market indications into a model to estimate the
value of the Convertible Notes at Fair Value. The most significant estimates and assumptions used as inputs are those concerning timing,
probability of possible scenarios for conversion or settlement of the Convertible Notes at Fair Value. The Convertible Notes at Fair
Value are classified as Level 3 as there were no quotable prices for identical assets or quoted prices for similar</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the consummation of the business combination on October 22, 2025, which was accounted for as a reverse
recapitalization, each convertible note of Legacy Fusemachines, including both related party and other convertible notes, that was
issued and outstanding immediately prior to the closing was converted into an aggregate of 8,048,770
shares of Legacy Fusemachines common stock in accordance with the respective convertible note agreements. Immediately following such
conversion, all such shares of Legacy Fusemachines common stock were exchanged for shares of Fusemachines Inc. common stock based on
the Exchange Ratio specified in the Merger Agreement. As a result of the foregoing, no convertible notes or related party notes
payable remained outstanding as of December 31, 2025 other than related party note payable related to Dolma Impact Fund I
(&#8220;Dolma&#8221;) amounting $300
thousand.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has certain non-financial assets that are measured at fair value on a non-recurring basis when there is an indicator of impairment,
and they are recorded at fair value only when an impairment is recognized. These assets include property and equipment and amortizable
intangible assets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth the significant inputs to the probability-weighted valuation model used to value the Convertible Notes at
Fair Value as of December 31, 2024:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT><FONT STYLE="display: none">Schedule of Probability-Weighted Valuation Model Used to Value the Convertible Notes at Fair Value</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>2019
and 2021 Convertible Notes</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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<P STYLE="margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></P>

<P STYLE="margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>January 2024 Convertible Notes</B></FONT></P>

<P STYLE="margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Note
4 Accounts receivable, net</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accounts
receivable, net consisted of the following (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT><FONT STYLE="display: none">Schedule of Accounts Receivable, Net</FONT></FONT></P>

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    <TD STYLE="width: 60%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Accounts receivable, current</FONT></TD><TD STYLE="width: 2%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 16%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,015</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Accounts receivable</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total accounts receivable</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,386</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,019</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Less: Allowance for credit
    losses</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(122</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(588</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total
    accounts receivable, net</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,264</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,431</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
some contracts with customers, the Company agreed to instalment payments exceeding 12 months. The present value of these contracts is
recorded as a receivable as the revenue is recognized in accordance with GAAP, and profit is recognized to the extent the present value
is in excess of cost. The present value of long-term receivables is Nil, and the face value is Nil as of December 31, 2025. The present
value of long-term receivables is $4 thousand, and the face value is $5.0 thousand as of December 31, 2024.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table sets forth the activity in the Company&#8217;s allowance for credit losses (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT><FONT STYLE="display: none">Schedule of Allowance for Credit Losses</FONT></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">December 31,</FONT></P>
                                                                                <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">2025</FONT></P></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">December 31,</FONT></P>
                                                                                <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">2024</FONT></P></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 60%; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Beginning balance</FONT></TD><TD STYLE="width: 2%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 16%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">588</FONT></TD><TD STYLE="width: 1%; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 2%; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 16%; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">368</FONT></TD><TD STYLE="width: 1%; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Provision for credit losses</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">55</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">540</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Write-offs</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(521</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(320</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ending balance</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">122</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">588</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Unbilled
revenue for the year ended December 31, 2025 was $15.0 thousand and $113.0 thousand for the year ended December 31, 2024.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: right; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Note
5 Prepaid Expenses and Other Current Assets</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prepaid
expenses and other current assets consisted of the following (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><FONT STYLE="display: none">Schedule of Prepaid Expenses and Other Current Assets</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">December 31,</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">December 31,</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">2025</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">2024</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 60%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Value added tax receivable</FONT></TD><TD STYLE="width: 2%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 16%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">98</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 2%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 16%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">96</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Prepaid expenses</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">571</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">88</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;Advance to vendors</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">13</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;Contract asset, current</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">19</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">22</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Other current
    assets</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">62</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total prepaid expenses and
    other current assets</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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  </TABLE>


<P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Note
6(A). Property and Equipment, net</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Property
and equipment, net consisted of the following (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT><FONT STYLE="display: none">Schedule
of Property and Equipment</FONT></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">94</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
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    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">35</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
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    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">834</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">800</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
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    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(452</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
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    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">348</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company recognized depreciation expense related to property and equipment in the consolidated statements of operations and comprehensive
loss of $96.8 thousand and $108.6 thousand during the year ended December 31, 2025 and 2024 respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Note
6(B). Intangible Assets, net</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Intangible
assets subject to amortization consisted of the following (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT><FONT STYLE="display: none">Schedule
of Intangible Assets Subject to Amortization</FONT></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">December 31,</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">December 31,</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">2025</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">2024</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 60%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Internally developed capitalized
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    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 16%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">274</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(180</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(87</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total
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    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">206</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company recognized amortization expense related to capitalized software in the consolidated statements of operations and comprehensive
loss of $93.4 thousand and $70.0 thousand during the year ended December 31, 2025 and December 31, 2024, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Note 7. Investment in Equity Securities</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In January 2024, the Company reached an agreement
with one of its customers, Campaign Brain, Inc. (&#8220;Campaign Brain&#8221;), to provide AI Solutions. The total amount owed to the
Company is to be satisfied through the issuance of 1,000,000 shares of Campaign Brain&#8217;s restricted stock to the Company with a determinable
estimated fair value of $0.122 per share as of the issuance date. Of the 1,000,000 shares issuable, 450,000 shares of Campaign Brain&#8217;s
restricted stock were vested on January 17, 2024, and 50,000 shares of Campaign Brain&#8217;s restricted stock are to be vested each month
from February 15,2024 to December 15, 2024. The Company had approximately 10% and 20% ownership in Campaign Brain, respectively, on January
17, 2024 and December 31, 2024. The Company recognized revenue when Campaign Brain obtained control of promised services over the service
period. At the time of the issuance, the estimated fair value of the shares was determined to be representative of the standalone selling
price of the services rendered in exchange for the non-cash consideration in the form of restricted stock of Campaign Brain, or $122.0
thousand. The acquisition of Campaign Brain&#8217;s restricted stock did not have a major impact on the Company&#8217;s operations as
the asset test, investment test and income test under the significance tests of the Securities Exchange Commission Regulation S-X Rule
1-02 (w) does not exceed 20%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The transaction represents an equity investment in
a private company for which the Company has the ability to exercise significant influence. Since the equity investment is accounted for
under the equity method and does not qualify for the net asset value practical expedient, the Company measured the estimated fair value
of the equity instrument received at contract inception, minus impairment, if any, with equity method investment gains and losses included
in other (expense) income, net on the consolidated statements of operations and comprehensive loss. For the year ended December 31, 2024,
the financial figures related to Campaign Brain including revenue, operating expenses and income tax provision were insignificant. The
Company&#8217;s equity method investment losses derived from the vested portion of the investment were $1.9 thousand, recorded in equity
in earnings of investee, net of income tax provision in the consolidated statement of comprehensive loss during the year ended December
31, 2024. As the equity investment is subject to vesting criteria, the Company records the vested portion of the investment at the estimated
fair value received at contract inception on each reporting date</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In the previous year ended December 31, 2024, the
Company recognized an impairment loss of $120.13 thousand on its investment in Campaign Brain Inc., which is an equity security classified
under &#8220;Investments in Equity Securities.&#8221; The impairment was triggered due to the inability of Campaign Brain Inc. to generate
earnings with expected future losses and deteriorating financial performance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of December 31, 2024, the fair value of the
investment in Campaign Brain Inc. has been assessed to be nil.
This assessment is based on the deteriorating financial performance of the entity, including minimal revenue during the year,
negative net worth, low bank balance as of December 31, 2024, negative cashflows and lack of future projections. Additionally, the
entity has no current or foreseeable plans to generate future revenue, which further supports the conclusion that the fair value is
nil. Consequently, no value has been assigned to this investment in the financial statements. Since the investment had already been
fully written down to nil
as of December 31, 2024, there was no financial impact recognized in the consolidated financial statements for the year ended
December 31, 2025 related to this investment.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Note
8. Cumulative Mandatorily Redeemable Financial Instruments</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
July 2021, Fusemachines Nepal Private Ltd entered into a Share Purchase Agreement between Fusemachines Nepal Inc., and BO2 (the &#8220;BO2
Purchase Agreement&#8221;) in which BO2 agreed to invest $964.2 thousand in Fusemachines Nepal Private Ltd. Fusemachines Nepal Private
Ltd issued 39,750 Ordinary Shares with a par value of 100 Nepalese rupees and also issued 1,110,250 cumulative and compulsory redeemable
Preference Shares with a par value of 100 Nepalese rupees. The Preference Shares contain an annual coupon rate of 10% with the option
to convert the Preference Shares into Ordinary Shares. The Preference Shares and Ordinary Shares are mandatorily redeemable five years
from the date of issuance at a redemption price equal to 200% of the purchase price. Any dividends paid on these shares will reduce the
ultimate redemption price. Management determined that these shares represent mandatorily redeemable financial instruments under ASC 480
and thus are liability-classified. These liabilities are recorded in cumulative mandatorily redeemable common and preferred stock liability
within the consolidated balance sheets, and accretions to the redemption value are recorded within interest expense in the consolidated
statements of operations and comprehensive loss. The effective interest rate is 13.7%, the accrued interest was $304.4 thousand and $238.3
thousand at December 31, 2025 and December 31, 2024 respectively, and is recorded in accrued expenses and other current liabilities in
the consolidated balance sheets, and the issuance cost incurred was $13.7 thousand.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
outstanding balance of the Cumulative Mandatorily Redeemable Financial instruments were $1,048 thousand and $1,000 thousand for the year
ended December 31, 2025 and December 31, 2024 respectively</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following summarizes the key terms and provisions of the Preference Shares and Ordinary Shares:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Preference
Shares</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Rights
and privileges</I></B> - Preference Shares will be paid dividends before the Ordinary Shares. Preference shareholders will receive a
10% percent annual dividend on Preference Shares. Apart from this, Preference Shares will not receive any kind of dividend or profit.
If the Company fails to make a profit in any year or if the Company decides not to distribute dividends, then the dividends to be received
by the Preference Shares will be cumulated and those amounts must be returned to the preference shareholders in a lump sum in the year
when the dividends are distributed or when the Company withdraws the Preference Shares. Preference Shares will be given priority when
the amount of shares is returned in case of liquidation of the Company. Preference Shares will not have voting rights in the general
meeting of the Company. The preference share amount is redeemable after a certain period.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Redemption</I></B>
- In terms of return, no Preference Share can be redeemed until the price of the issued Preference Share is fully paid. The amount of
Preference Shares cannot be returned from any amount other than the amount of profit that can be distributed as dividends or the amount
received from the new shares issued by the Company for the purpose of returning the shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
rate per share for redeeming Preference Shares shall be as per share purchase and sale agreement or shareholder agreement and shall be
redeemed at the same rate. In case any Preference Shares issued for return are to be returned along with the premium, a separate fund
of appropriate amount shall be arranged from the Company&#8217;s profit or the Company&#8217;s share premium account for that purpose.
In this way, except in the case where the amount of the Preference Shares is returned from the amount received by issuing new shares,
in accordance with the law, when the amount of the Preference Shares is returned, an amount equal to the face value of the returned shares
from the amount that can be received to distribute dividends from the Company&#8217;s profits shall be deposited in a separate account.
Any preference share returned in accordance with this regulation shall be deemed to have been automatically forfeited after the completion
of the return process. If the Company redeems or proposes to redeem any Preference Shares, it may issue new shares equal to the face
value of the shares so redeemed or to be redeemed.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Ordinary
Shares</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Rights
and privileges</I></B> - The shareholders of this category will have voting rights and other rights according to the prevailing law.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Redemption</I></B>
- The Ordinary Shares will be redeemed if the Company fails to withdraw the Preference Shares issued by the Company to be redeemed. If
the Preference Shares have to be converted into ordinary shares, it shall be done according to the decision of the general meeting of
the Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Additional
provisions related to Preference Shares shall be in accordance with the shareholders&#8217; agreement between them.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Note
9. Accrued Expenses and Other Current Liabilities</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accrued
expenses and other current liabilities consisted of the following (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT><FONT STYLE="display: none">Schedule of Accrued Expenses and Other Current Liabilities</FONT></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
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    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,700</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Note
10. Long-Term Debt</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Long-term
debt consists of the following (in thousands):</FONT>&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><FONT STYLE="display: none; font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;Schedule
of Long-Term Debt</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%">
  <TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">December
    31, 2025</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="10" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">December
    31, 2024</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Current</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 22%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">2024 Convertible Notes</FONT></TD><TD STYLE="width: 2%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 2%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 2%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">255</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 2%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">200</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="width: 2%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">455</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">2024 Convertible Notes at fair value</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8,986</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8,986</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Related party convertible notes payable at
    fair value</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">6,524</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">6,524</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Related party loan payable</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">300</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">300</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">700</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">700</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">300</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">300</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9,941</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">6,724</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">16,665</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT STYLE="text-decoration: underline">Convertible
Notes at Fair Value</FONT></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Related
party convertible notes payable at fair value</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
October 2019, the Company entered into a convertible promissory note agreement (the &#8220;2019 Convertible Note Agreement&#8221;) with
a lender and issued a convertible promissory note for the principal amount of $2,000.0 thousand (the &#8220;2019 Convertible Note&#8221;).
The 2019 Convertible Note bears interest at a rate of 10% per annum, compounded quarterly. The 2019 Convertible Note matured in September
2022</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
September 2021, the Company entered into a second convertible promissory note agreement (the &#8220;2021 Convertible Note Agreement&#8221;)
(the 2019 Convertible Note Agreement and the 2021 Convertible Note Agreement collectively referred to as the &#8220;2019 and 2021 Convertible
Notes Agreements&#8221;) with the same lender and issued a convertible promissory note for the principal amount of $450.0 thousand (the
&#8220;2021 Convertible Note&#8221;) (the 2019 Convertible Note and the 2021 Convertible Note collectively, the &#8220;2019 and 2021
Convertible Notes&#8221;). The 2021 Convertible Note was issued with the same terms as the 2019 Convertible Note, except with a maturity
date of October 2022.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
December 2022, the 2019 and 2021 Convertible Notes Agreements were amended (the &#8220;2022 Amended Convertible Notes Agreements&#8221;)
to extend the maturity date for the 2019 and 2021 Convertible Notes to December 2023, increase the interest rate to 15% for the period
from December 2022 through December 2023, adding a prepayment option, amending one of the conversion scenarios, and amending the definition
of a next equity financing to require a sale of equity securities to result in gross proceeds of $7,500.0 thousand (the &#8220;Next Equity
Financing&#8221;). The 2022 Amended Convertible Notes Agreements also added a partial payment of the interest accrued and outstanding
on the note of $386.4 thousand due no later than March 2023. Failure to pay by the payment deadline obligated the Company to pay interest
at a rate of twenty percent (20%) per annum, compounded quarterly, on the outstanding $386.4 thousand.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
December 2023, the 2022 Amended Convertible Notes Agreements were amended again (the &#8220;2023 Amended Convertible Notes Agreements&#8221;),
extending the maturity date of the 2019 and 2021 Convertible Notes to January 2024.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
January 2024, the 2023 Amended Convertible Notes Agreements were amended again (the &#8220;2024 Amended Convertible Notes Agreements&#8221;),
extending the maturity date to January 2025. The amendment also added a provision surrounding conversion in the case the Company completes
the merger (see &#8220;SPAC PIPE financing&#8221; below) (also see &#8220;Note 1 &#8211;Organization&#8221;), an additional table depicting
principal and interest on the 2019 and 2021 Convertible Notes to be redeemed in connection with the merger, and additional definitions
related to the merger</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
2021, 2022 and 2023 amendments were accounted for as debt modifications, prospectively, with any change in fair value from the new terms
incorporated into future valuations. The 2024 amendment was deemed as capital transaction as per ASC 470-50-40-2 and is accounted for
as an extinguishment of debt, with a gain on extinguishment of debt of $343.0 thousand recorded in additional paid in capital in the
consolidated balance sheet for the year ended December 31, 2024, with any change in subsequent fair value incorporated into future valuations
and any amendment fees or third-party costs to be expensed at the time of the amendment, and the amended terms to be incorporated into
the valuations at each subsequent balance sheet date.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
January 31, 2025, the Company entered into an amendment agreement of the convertible note payable to Dolma. Pursuant to the amendment
agreement, the maturity date was revised to February 28, 2026. Further, it was agreed that if the Company enters into a SPAC Business
Combination Agreement at any time while the Notes are outstanding, any portion of the Aggregate Notes Amount that is not redeemed or
repaid in connection or prior to the closing of the SPAC Transaction will convert, without any required action by the Holder, into shares
of Common Stock immediately prior to the consummation of the SPAC Transaction contemplated by the SPAC Business Combination Agreement
at a conversion rate that is derived from a Company valuation of $85,000.0 thousands on a fully-diluted basis (provided that the Notes will
be deemed have converted simultaneously with all other convertible notes being converted in connection the SPAC Transaction).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company evaluated the above amendment agreement entered on January 31, 2025, under the guidance in ASC 470-50 Debt - Modifications and
Extinguishments, and it was determined terms of the amendment were not substantially different than the terms of the convertible notes
prior to the Amendment. Accordingly, the aforesaid amendment was accounted for as a debt modification.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
2019 and 2021 Convertible Notes, contain the following conversion features:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Conversion
upon next equity financing</B> &#8211; The conversion balance will be automatically converted into shares of the Company&#8217;s Convertible
Preferred Stock upon the closing of the Next Equity Financing. The number of Convertible Preferred Stock to be issued upon the conversion
will be equal to the quotient of the outstanding principal and, if so elected by the Company, any accrued and unpaid interest on the
date of the conversion, divided by the conversion price calculated as the product of (a) 100% minus the discount rate, times (b) the
price paid per share for equity securities by the investor in the Next Equity Financing. The aggregate liquidation preference of the
Convertible Preferred Stock issued upon conversion shall be equal to the aggregate conversion balance</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Maturity
</B>&#8211; If the Next Equity Financing or a corporate transaction (as defined below) has not occurred on or before the Maturity Date,
and if the outstanding balance is not repaid by the Company in full on the Maturity Date, then the conversion balance shall automatically
be converted into (i) the conversion balance on the Maturity Date, divided by (ii) $2.235 price per share.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Corporate
transaction</B> &#8211; In the event of a (i) closing of the sale, transfer or other disposition of all or substantially all of the Company&#8217;s
assets, (ii) the consummation of the merger or consolidation of the Company with or into another entity, (iii) the closing of the transfer
(whether by merger, consolidation or otherwise), in one transaction or a series of related transactions, to a person or group of affiliated
persons (other than an underwriter of the Company&#8217;s securities), of the Company&#8217;s securities if, after such closing, such
person or group of affiliated persons would hold at least a majority of the outstanding voting stock of the Company (or the surviving
or acquiring entity) (the &#8220;Corporate Transaction&#8221;), or (iv) a liquidation, dissolution or winding up of the Company prior
to full payment of either of the Convertible Notes or prior to the time when either of the Convertible Notes are converted as provided
in a Next Equity Financing or a Maturity Conversion, then the conversion balance shall automatically be converted into that number of
conversion shares immediately prior to the closing of such Corporate Transaction obtained by dividing the conversion balance by 75% of
the price per share of the corporate transaction.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>SPAC
PIPE Financing</B> &#8211; Aggregate redemption amount of the 2019 and 2021 Convertible Notes will be redeemed in connection with the
consummation of a SPAC transaction to be issued by the SPAC (a &#8220;SPAC PIPE Financing&#8221;). The aggregate redemption amount ranges
from $300.0 thousand to $4,000.0 thousand and the corresponding SPAC PIPE Financing amount ranges from $15,000.0 thousand to $40,000.0
thousand.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
the Company enters into a SPAC business combination agreement at any time while the 2019 and 2021 Convertible Notes are outstanding,
then any portion of the aggregate outstanding amounts that are not redeemed or repaid in connection with the closing of a SPAC
transaction will convert into shares of the Company&#8217;s common stock at a conversion valuation of $115,000.0
thousand, on a fully-diluted basis. Further as per the amendment dated January 31, 2025, the Company valuation to be used for calculating the conversion
rate, which shall be changed from $115,000.0 thousand to $85,000.0 thousand,</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company qualified for and elected to account for the 2019 and 2021 Convertible Notes under the fair value option and, in doing so, bypassed
the analysis of potential embedded derivative features. The Company believes that the fair value option better reflects the underlying
economics of the 2019 and 2021 Convertible Notes. As a result, the 2019 and 2021 Convertible Notes were recorded at fair value upon issuance</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company recorded a gain/charge of $4,468.0 thousand $3,103.3 thousand related to changes in fair value for both the 2019 Convertible
Note and 2021 Convertible Note, which is recorded as Gain/(loss) on change in fair value in the consolidated statements of operations
and comprehensive loss, for the year ended December 31, 2025 and 2024, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2024, the lender of the 2019 and 2021 Convertible Notes was considered a principal owner of the Company, because it held
greater than 10% of voting common stock of the Company (also see &#8220;Note 19 - Related Parties).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>2024
Convertible Notes at fair value</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
January 2024, the Company entered into two convertible promissory note agreements (the &#8220;January 2024 Convertible Notes Agreements&#8221;)
with a lender for the principal amounts of $2,000.0 thousand (&#8220;January 2024 Convertible Note A&#8221;) and $4,500.0 thousand (&#8220;January
2024 Convertible Note B&#8221;), respectively, that each bear interest at a rate of 4.863% per annum, payable at maturity (the &#8220;January
2024 Convertible Notes&#8221;). The January 2024 Convertible Notes mature in January 2025.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 4, 2025, the maturity date of January 2024 convertible note was extended to July 12, 2025 pursuant to the second amendment</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
January 2024 Convertible Notes contain the following conversion features:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Optional
conversion upon a qualifying financing</B> &#8211; Before the maturity date in January 2025, if the company plans to go through a significant
funding round of the issuance of preferred stock resulting in gross proceeds of at least $5,000.0 thousand (the &#8220;January 2024 Notes
Qualifying Financing&#8221;), it will let the holder know at least 10 days before this funding round is set to happen. The holder then
has the option to turn any outstanding obligations from the January 2024 Convertible Notes into shares of preferred stock when the funding
round closes, based on all of the outstanding obligations under the January 2024 Convertible Notes (the &#8220;Conversion Amount&#8221;),
divided by a specific price calculated as the lower of two figures: (i) either the maximum share price (the share price cap as discussed
below) or (ii) 80% of the price at which other investors are buying the preferred stock in the funding round (the &#8220;Conversion Price&#8221;).
However, if this funding round also counts as a company sell-off or shutdown the holder can choose the optional conversion upon a liquidation
event (as described in the &#8220;optional conversion upon a liquidation event&#8221; section below).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Automatic
conversion into common stock</B> - If the company completes the plan of merger as per the Merger Agreement (as defined in &#8220;Note
1 - Organization) before the January 2024 Convertible Notes maturity date in January 2025, the Company must notify the lender at least
5 days before the merger is finalized. Immediately preceding the merger, any outstanding amounts the Company owes under the January 2024
Convertible Notes will automatically turn into shares of the Company&#8217;s common stock. The number of shares converted is based on
the Conversion Amount, divided by the Conversion Price, which will be capped at a maximum value (the share price cap as discussed below).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Optional
conversion into preferred stock or common stock</B> &#8211; After the maturity date of this note in January 2025, the holder can choose
to turn the Conversion Amount into shares. There are two scenarios: (i) if converted in conjunction with the January 2024 Convertible
Notes Qualifying Financing after the maturity date of January 2025, the conversion will be to preferred stock. The number of shares will
be the Conversion Amount divided by the Conversion Price, or (ii) if converted at any other time that is not tied to a Qualifying Financing
after the maturity date of January 2025, the conversion will be to common stock. The number of shares will be based on the Conversion
Amount, divided by the maximum share price (the share price cap as discussed below).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Optional
conversion upon a liquidation event</B> &#8211; Before the maturity date in January 2025, or before the January 2024 Convertible Notes
convert into shares according to the optional conversion upon a qualifying financing, automatic conversion into common stock, or optional
conversion into preferred or common stock as discussed above, if the Company plans to sell off its assets or dissolve (when not part
of a merger, a &#8220;Liquidation Event&#8221;), the holder can: (i) choose to convert any Conversion Amount into common stock immediately
prior to the Liquidation Event. The number of shares to be calculated as the Conversion Amount, divided by a set price per share (the
share price cap as discussed below), or (ii) alternatively, choose to be paid in cash, which would be the Conversion Amount, payable
prior to the Liquidation Event. The Company must notify the holder at least 10 days before the Liquidation Event is expected to occur.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Liquidation
Preference Upon Conversion</B> &#8211; If the January 2024 Convertible Notes convert in the January 2024 Notes Qualifying Financing,
they will be converted into preferred stock such that the liquidation preference shall equal the Conversion Price.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>January
2024 Convertible Note A specific terms</B> &#8211; Upon the occurrence of a default (as defined in the January 2024 Notes Agreement and
discussed below), the holder can declare all amounts due and outstanding to be paid immediately. The proceeds received under the January
2024 Convertible Note A are to be used to repurchase 667,000 shares of common stock held by Sameer Maskey, CEO of the Company. The share
price cap is $3.00 per share.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>January
2024 Convertible Note B specific terms</B> &#8211; Upon the occurrence of a default (as defined in the January 2024 Notes Agreement and
discussed below), the holder can declare all amounts due and outstanding be paid immediately, including a termination fee of $1,000.0
thousand as defined in the January 2024 Notes Agreement). The proceeds received under the January 2024 Convertible Note B are to be used
to repay third-party debt of the Company and for working capital purposes. The share price cap is $5.798.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
January 2024 Convertible Notes will default if the Merger Agreement (as defined in &#8220;Note 1 &#8211; Organization&#8221;) is terminated
and also has other customary events of default. The January 2024 Convertible Notes are fully secured by 3,600,000 shares of common stock
held by Sameer Maskey, the CEO of the Company (refer to &#8220;Note 19 &#8211; Related Parties&#8221;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company qualified for and elected to account for the January 2024 Convertible Notes under the fair value option and, in doing so, bypassed
the analysis of potential embedded derivative features. The Company believes that the fair value option better reflects the underlying
economics of the January 2024 Convertible Notes. As a result, the January 2024 Convertible Notes were recorded at fair value upon issuance</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company evaluated the amendment agreement entered on February 4, 2025, under the guidance in ASC 470-50 Debt - Modifications and Extinguishments,
and it was determined terms of the amendment were not substantially different than the terms of the convertible notes prior to the Amendment.
Accordingly, the aforesaid amendment was accounted for as a debt modification.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company recorded a gain and charge of $3,664.0 thousand and $2,486 related to changes in fair value for the January 2024 Convertible
Notes, which is recorded as Gain/(loss) on change in fair value in the consolidated statements of operations and comprehensive loss,
for the year ended December 31, 2025, and December 31, 2024 respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
January 2024 Convertible Notes were once again amended in July 2025 and basis the amendment the maturity date was revised from July 12,
2025, to October 18, 2025, pursuant to the third amendment. The Company applied the 10% cash flow test pursuant to ASC 470 to calculate
the difference between the present value of the amended note&#8217;s cash flows and the present value of the original remaining cash
flow and concluded that the results didn&#8217;t exceed the 10% factor, the debt modification is not considered substantially different
and therefore did not apply extinguishment accounting, rather it accounted for the modification on a prospective basis pursuant to ASC
470.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT STYLE="text-decoration: underline">2023
Notes Payable</FONT></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
August 2023, the Company entered into a loan and security agreement with a lender (the &#8220;2023 Notes Agreement&#8221;) that will
make available to the Company loans in an aggregate principal amount of up to $4,000.0 thousand in three separate tranches. In that month,
the Company withdrew $3,000.0 thousand (the &#8220;First Tranche&#8221;). The Company additionally had the opportunity to request, subject
to the terms of the 2023 Notes Agreement, an additional tranche of $500.0 thousand in or before March 2024 (the &#8220;Second Tranche&#8221;)
and a third tranche of $500.0 thousand in or before June 2024 (the &#8220;Third Tranche&#8221;) (the First Tranche, Second Tranche and
Third Tranche are collectively referred to as the &#8220;2023 Notes&#8221;). The 2023 Notes bear interest at a rate of 13.25% per annum,
compounded annually, payable at maturity. The effective interest rate was 23%. The 2023 Notes were secured by substantially all of the
Company&#8217;s assets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
January 2024, the Company repaid the entire aggregate outstanding principal on the 2023 Notes Payable in the amount of $3,000.0 thousand
along with an additional payment of $78.5 thousand for interest, prepayment fees, and lender fees. The Company recorded a loss of $601.1
thousand on extinguishment of debt, in the consolidated statements of operations and comprehensive loss for the year ended December 31,
2024</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT STYLE="text-decoration: underline">Common
Stock warrant</FONT></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the 2023 Notes Agreement, the Company issued to the lender common stock warrants (the &#8220;Common Stock Warrants&#8221;)
to purchase up to 92,211 shares of the Company&#8217;s common stock, exercisable immediately, with an exercise price of $0.70  per share
with a contractual term of 10 years. The Company determined that the Common Stock Warrants are freestanding financial instruments and
were determined to be within the scope of ASC 480-10, and accordingly, are liability classified. As of December 31, 2025 and December
31, 2024, the fair value and carrying amount of the Common Stock Warrant Liability was $121.0 thousand and $945.0 thousand, respectively
(refer to &#8220;Note 3 - Fair Value Measurements&#8221;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company recorded a gain of $824.0 thousand and a charge of $515.0 thousand related to changes in fair value, which is recorded as loss
on change in fair value in the consolidated statements of operations and comprehensive loss, for the year ended December 31, 2025 and
2024, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT STYLE="text-decoration: underline">April
2024 Convertible Note</FONT></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
April 2024, the Company entered into a convertible note agreement (the &#8220;April 2024 Convertible Note Agreement&#8221;) with a lender
for the aggregate principal amount of $125.0 thousand, that bears interest at a rate of 4.71% per annum and is convertible to common
stock (the &#8220;April 2024 Convertible Note&#8221;). The April 2024 Convertible Promissory Note matures in April 2025.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Automatic
conversion into common stock</B> &#8211; If on or before the maturity date in April 2025, the Company closes the plan of merger as described
in the Merger Agreement (as defined in &#8220;Note 1 &#8211; Organization&#8221;), the Company will notify the holder of the April 2024
Convertible Note five days prior to the merger. Immediately prior to the closing of the merger, all of the then outstanding obligations
of the April 2024 Convertible Note will automatically convert into the number of common shares equal to the outstanding amount divided
by $4.94.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Warrant
issuance</B> &#8211; Upon the conversion of the April 2024 Convertible Note to common stock, the Company shall issue the holder a warrant
to purchase 7,500 shares of common stock of CSLM with a per share exercise price of $11.50. With respect to classification and initial
recognition of warrants as of the date of closing of the merger, refer note on accounting of warrants issuance pursuant to conversion
of convertible note.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Subordination
</B>&#8211; Upon the occurrence of any event of default (as described in the April 2024 Convertible Note Agreement and discussed below),
the April 2024 Convertible Note shall become junior and subordinate to the January 2024 Convertible Notes.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
April 2024 Convertible Note has customary events of default, are fully secured by the assets of the Company and because the conversion
feature does not meet the definition of a derivative are being accounted for at amortized cost. The proceeds of the April 2024 Convertible
Note will be used for working capital purposes.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 5, 2025, the conversion price of the April 2024 Convertible Promissory Notes with principal amount of $125  thousand was amended to
$3.15 from the original conversion price of $4.94.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company evaluated the conversion feature of April 2024 Convertible Note offering for embedded derivatives in accordance with ASC
815, Derivatives and Hedging, and the substantial premium model in accordance with ASC 470, Debt. Based on this assessment, separate
accounting for the conversion feature was not required and the instrument was accounted for under the substantial
premium model. Accordingly, the excess of the consideration over the fair value amounting to $113.0
thousand was recorded as loss on extinguishment of debt, with a corresponding adjustment <FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">recorded
</FONT> in additional paid-in-capital debit, in
the consolidated statement of profit and loss for the year ended December 31, 2025.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
April 2024 Convertible Notes were once again amended in April 2025 and basis the amendment the maturity date was revised from April 5,
2025 to April 5, 2026 pursuant to the second amendment. The Company applied the 10% cash flow test pursuant to ASC 470 to calculate the
difference between the present value of the amended note&#8217;s cash flows and the present value of the original remaining cash flow
and concluded that the results didn&#8217;t exceed the 10% factor, the debt modification is not considered substantially different and
therefore did not apply extinguishment accounting, rather it accounted for the modification on a prospective basis pursuant to ASC 470.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT STYLE="text-decoration: underline">June
2024 Convertible Note</FONT></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
June 2024, the Company entered into a convertible note agreement (the &#8220;June 2024 Convertible Note Agreement&#8221;) with a lender
for the principal amount of $130.0 thousand, that bears interest at a rate of 4.71% per annum and is convertible to common stock (the
&#8220;June 2024 Convertible Note&#8221;). The June 2024 Convertible Promissory Note matures in June 2025.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Automatic
conversion into common stock</B> &#8211; If on or before the maturity date in June 2025, the Company closes the plan of merger as described
in the Merger Agreement (as defined in &#8220;Note 1 &#8211; Organization&#8221;), the Company will notify the holder of the June 2024
Convertible Note five days prior to the merger. Immediately prior to the closing of the merger, all of the then outstanding obligations
of the June 2024 Convertible Note will automatically convert into the number of common shares equal to the outstanding amount divided
by $4.94.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Warrant
issuance</B> &#8211; Upon the conversion of the June 2024 Convertible Note to common stock, the Company shall issue the holder a warrant
to purchase 7,500 shares of common stock of CSLM with a per share exercise price of $11.50. With respect to classification and initial
recognition of warrants as of the date of closing of the merger, refer note on accounting of warrants issuance pursuant to conversion
of convertible note.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Subordination</B>
&#8211; Upon the occurrence of any event of default (as described in the June 2024 Convertible Note Agreement and discussed below), the
June 2024 Convertible Note shall become junior and subordinate to the January 2024 Convertible Notes.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
June 2024 Convertible Note has customary events of default, are fully secured by the assets of the Company and because the conversion
feature does not meet the definition of a derivative are being accounted for at amortized cost. The proceeds of the June 2024 Convertible
Note will be used for working capital purposes.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 5, 2025, the conversion price of the June 2024 Convertible Promissory Note with principal amount of $130  thousand was amended to
$3.15 from the original conversion price of $4.94.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company evaluated the conversion feature of June 2024 Convertible Note offering for embedded derivatives in accordance with ASC 815,
Derivatives and Hedging, and the substantial premium model in accordance with ASC 470, Debt. Based on the  assessment, separate accounting
for the conversion feature was  not required, and  the instrument was  accounted for under
the substantial premium model. Accordingly, the excess  of the consideration  over  the fair value amounting to $114.0 thousand was  recorded as loss on extinguishment
of debt, with a corresponding adjustment in additional paid-in-capital,   in the consolidated statement of profit and loss for the year ended
December 31, 2025.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
June 2024 Convertible Note were once again amended in July 2025 and basis the amendment, the maturity date was revised from June 17, 2025,
to June 17, 2026, pursuant to the amendment. The Company applied the 10% cash flow test pursuant to ASC 470 to calculate the difference
between the present value of the amended note&#8217;s cash flows and the present value of the original remaining cash flow and concluded
that the results didn&#8217;t exceed the 10% factor, the debt modification is not considered substantially different and therefore did
not apply extinguishment accounting, rather it accounted for the modification on a prospective basis pursuant to ASC 470.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT STYLE="text-decoration: underline">September
2024 Convertible Notes</FONT></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
September 2024, the Company entered into two convertible note agreements (the &#8220;September 2024 Convertible Notes Agreements&#8221;)
with two lenders, each for the principal amount of $100.0 thousand (the &#8220;September 2024 Convertible Notes&#8221;). The September
2024 Convertible Notes bear interest at a rate of 4.71% per annum. The 2024 September Convertible Notes mature in September 2026.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Automatic
conversion into common stock</B> &#8211; If on or before the maturity date in September 2026, the Company closes the plan of merger as
described in the Business Combination Agreement (as defined in &#8220;Note 1 &#8211; Organization&#8221;), the Company will notify the holders of the
September 2024 Convertible Notes five days prior to the merger. Immediately prior to the closing of the merger, all of the then outstanding
obligations of the September 2024 Convertible Notes will automatically convert into the number of common shares equal to the outstanding
amount divided by $4.94.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Warrant
issuance</B> &#8211; Upon the conversion of the September 2024 Convertible Note to common stock, the Company shall issue the holder a
warrant to purchase 7,500 shares of common stock of CSLM with a per share exercise price of $11.50. With respect to classification and
initial recognition of warrants as of the date of closing of the merger, refer note on accounting of warrants issuance pursuant to conversion
of convertible note.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Subordination</B>
&#8211; Upon the occurrence of any event of default (as described in the September 2024 Convertible Notes Agreements and discussed below),
the September 2024 Convertible Notes shall become junior and subordinate to the January 2024 Convertible Notes.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
September 2024 Convertible Notes have customary events of default, are fully secured by the assets of the Company and because the conversion
feature does not meet the definition of a derivative are being accounted for at amortized cost. The proceeds of the September 2024 Convertible
Notes will be used for working capital purposes.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 5, 2025, the conversion price of the two September 2024 Convertible Promissory Notes with principal amount of $100   thousand each
was amended to $3.15 from the original conversion price of $4.94.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company evaluated the conversion feature of September 2024 Convertible Notes offering for embedded derivatives in accordance with
ASC 815, Derivatives and Hedging, and the substantial premium model in accordance with ASC 470, Debt. Based on the assessment,
separate accounting for the conversion feature was not required, and the instrument was accounted for under the substantial premium
model. Accordingly, the excess of the consideration over fair value amounting to $164.0
thousand was recorded as loss on extinguishment of debt, with a corresponding adjustment in additional paid-in-capital in
the consolidated statement of Operations and Comprehensive Loss for the year ended December 31, 2025.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT STYLE="text-decoration: underline">February
2025 Convertible Notes</FONT></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 24, 2025, the Company entered into a convertible promissory note amounting to $180,000 with an interest rate of 4.71% and maturity
date of February 19, 2028. Upon closing of the Merger, the Note shall automatically convert into the number of shares of Common
Stock equal to the then outstanding Obligations under the note divided by the applicable Conversion Price i.e., $3.15.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Automatic
conversion into common stock</B> &#8211; If on or before the maturity date in February 2028, the Company closes the plan of merger as
described in the Business Combination Agreement (as defined in &#8220;Note 1 &#8211; Organization&#8221;), the Company will notify the holders of the
February 2025 Convertible Notes five days prior to the merger. Immediately prior to the closing of the merger, all of the then outstanding
obligations of the September 2024 Convertible Notes will automatically convert into the number of common shares equal to the outstanding
amount divided by $3.15.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Subordination</B>
&#8211; Upon the occurrence of any event of default (as described in the February 2025 Convertible Notes Agreements and discussed below),
the February 2025 Convertible Notes shall become junior and subordinate to the January 2024 Convertible Notes.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
February 2025 Convertible Note has customary events of default, are fully secured by the assets of the Company and because the conversion
feature does not meet the definition of a derivative are being accounted for at amortized cost. The proceeds of the February 2025 Convertible
Note will be used for working capital purposes.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT STYLE="text-decoration: underline">Related
Party loan payable</FONT></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the previous year ended December 31, 2024, the Company entered into seven separate promissory notes with Mr. Maskey for an aggregate
principal amount of $700.0 thousand (the &#8220;2024 Related Party Promissory Notes&#8221;). The 2024 Related Party Promissory Notes
bear interest at a rate of 4.71% per annum and mature in December 2025. Upon an event of default, the 2024 Related Party Promissory Notes
shall become junior and subordinate to the January 2024 Convertible Notes (also see &#8220;Note 19 - Related Parties&#8221;), and any
amounts owed will bear interest at 10% per annum until the obligations are satisfied in full. The 2024 Related Party Promissory Notes
have customary events of default. As of December 31, 2025, no balance is outstanding of the 2024 Related Party Promissory notes, as in
connection with the consummation of the Business Combination on October 22, 2025, the Company settled the outstanding principal and accrued
interest under the 2024 Related Party Promissory Notes in cash.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
February 12, 2025, an amendment to the seven promissory notes was entered into between the company and the CEO, Mr. Sameer Maskey. As
per the original agreement, the maturity date was earlier of (1) the occurrence of an Event of Default and (2) December 31, 2024. Pursuant
to the amendment agreement, the maturity date was extended to earlier of (1) the occurrence of an Event of Default and (2) December 31,
2025.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company evaluated the amendment in maturity date under the guidance in ASC 470-50 Debt - Modifications and Extinguishments, and it was
determined that there was no gain/loss to be recorded in the consolidated statements of operations and comprehensive loss, for the year
ended December 31, 2025.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company incurred interest expense on promissory notes held at amortized cost and subsequently the promissory notes principal and accrued
and unpaid interest were repaid in cash upon the Closing of merger.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT STYLE="text-decoration: underline">Others-
February 2025 Convertible Notes</FONT></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the second amendment to the Business Combination Agreement, Consilium Frontier Equity Fund, LP provided financing to Fusemachines Inc.
in the amount of $2,160,000, in exchange for a convertible note which note shall convert into shares of Fusemachines Inc. common stock
of at a price of $0.44 per share (a) automatically at the time of the Business Combination, or (b) on July 12, 2025 at the option of
the holder, if not, then payable in cash.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the terms of the Note and related Escrow Agreement, the proceeds are required to be deposited into an escrow account and will be released
to the Company only upon the consummation of the Business Combination.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Further,
per Section 4.2 of the Escrow Agreement &#8220;Upon the Closing, the Company, Investor and Fusemachines shall jointly deliver a Joint
Release Notice to the Escrow Agent directing the Escrow Agent to disburse all Funds held in the Escrow Account to the Fusemachines Inc.&#8221;
Accordingly, the escrowed funds are not freely available to the Company prior to joint instruction by the Investor, Fusemachines and
the Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
May 22, 2025, the proceeds from Consilium Frontier Equity Fund, LP have been received into an escrow account. </FONT>Upon closing of
the merger, these funds were subsequently released and received in the bank account of Fusemachines Inc.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT STYLE="text-decoration: underline">Impact
of reverse capitalization on convertible note </FONT></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the consummation of the Business Combination on October 22, 2025, each Legacy Fusemachines convertible note, including
both related-party and non-related-party convertible notes, that was issued and outstanding immediately prior to the Closing was converted
into an aggregate of 8,048,770 shares of Legacy Fusemachines common stock in accordance with the respective convertible note agreements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Convertible
notes that are exchanged for equity pursuant to their original contractual terms are accounted for in accordance with ASC 470-20, Debt
with Conversion and Other Options. Upon conversion, the carrying amount of the convertible debt is reclassified to equity, and no gain
or loss is recognized in earnings, as the conversion is executed in accordance with the original terms of the instruments.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Immediately
following such conversions, all shares of Legacy Fusemachines common stock issued upon conversion were exchanged for shares of Fusemachines
Inc. common stock based on the exchange ratio specified in the Business Combination Agreement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
a result of the conversions and exchanges, no convertible notes or related-party notes payable remained outstanding as of December 31,
2025, other than related party note payable related to Dolma amounting $300 thousand.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><FONT STYLE="text-decoration: underline">Accounting
of warrants issuance pursuant to conversion of convertible note.</FONT></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&#160;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
warrants issuable upon conversion of the April 2024, June 2024, September 2024 Convertible Note are classified as equity warrants,
based on an assessment of the instruments&#8217; specific terms and applicable authoritative guidance in FASB ASC Topic 480, &#8220;Distinguishing
Liabilities from Equity&#8221; (&#8220;ASC 480&#8221;) and FASB ASC Topic 815, &#8220;Derivatives and Hedging&#8221; (&#8220;ASC 815&#8221;).
These warrants are measured at fair value on the issuance date (Day 1), which is the merger closing date of October 22, 2025, and
should not be subsequently remeasured, with no recurring fair value adjustments recognized in earnings. The Company recorded a loss of
$4.2 thousand due to initial recognition of warrants, which is recorded as Other (expense) income in the consolidated statements of operations and
comprehensive loss, for the year ended December 31, 2025. These warrants have same terms and provisions as public warrant. Refer note
24-&#8216;Public and private warrants&#8217; for details with respect to terms of public warrants.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify; text-indent: -1.45pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Note
11. Convertible Preferred Stock</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify; text-indent: -1.45pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
February 2023, the Company amended the Third Amended and Restated Certificate of Incorporation of Fusemachines Inc. (the &#8220;Restated
Certificate&#8221;) to increase the number of shares of series seed preferred stock (&#8220;Convertible Preferred Stock&#8221;) that
the Company is authorized to issue from 5,947,706 to 5,972,716 (including 3,580 authorized shares of preferred stock not assigned to
a particular series) and increase the authorized shares of series seed-2 preferred stock (&#8220;Series Seed-2 Convertible Preferred
Stock&#8221;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
October 22, 2025, upon the consummation of the business combination, which was accounted for as a reverse recapitalization,
9,043,234 shares of Legacy Fusemachines convertible preferred stock were converted into Legacy Fusemachines common stock in
accordance with the applicable conversion terms</FONT>. Subsequently, in connection with the Business Combination, all such Legacy
Fusemachines common shares were exchanged for shares of common stock of Fusemachines Inc. (the &#8220;Company&#8221; or
&#8220;PubCo&#8221;) based on the exchange ratio specified in the Business Combination Agreement. After giving effect to the
exchange ratio, an aggregate of 5,950,673 shares of the Company&#8217;s common stock were issued.</P>

<P STYLE="margin: 0">&#160;</P>

<P STYLE="margin: 0">As a result of these transactions, no shares of Convertible Preferred Stock remained outstanding as of December 31,
2025.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
authorized, issued and outstanding shares of Convertible Preferred Stock, along with the related liquidation preferences and carrying
values, after giving effect to the conversion ratio applied in connection with the merger (reverse capitalization), as of December 31,
2024, were as follows (in thousands, except share numbers)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><FONT STYLE="display: none; font-family: Times New Roman, Times, Serif; font-size: 10pt">Schedule
of Convertible Preferred Stock&#160;</FONT></FONT></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="14" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">As
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  <TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">Series</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Authorized
    Shares</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Issued
    and Outstanding Shares</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Liquidation
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    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Carrying
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 19%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Seed-1</FONT></TD><TD STYLE="width: 2%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">Seed-2</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">922,925</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">922,950</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">940</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">940</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">Seed-3</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,764,724</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,515</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,515</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">Seed-4</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,937,918</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,100</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,087</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,969,136</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,950,673</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">$</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">7,865</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Rights,
preferences and privileges of the Convertible Preferred Stock (Historical)</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following summarizes the rights, preferences, and privileges of the Convertible Preferred Stock prior to its conversion at Closing</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Dividends</I>.
The Company may not pay dividends on other classes or series of stock (excluding dividends in common stock) before unless the holders
of the Company&#8217;s Convertible Preferred Stock receive, at the same time or before, a dividend on each of their shares. Upon the
declaration of a dividend for another class or series of stock (excluding common stock), the holders of the Convertible Preferred Stock
are entitled to receive dividends based on the equivalent amount if the other stocks were converted into common stock, times the number
of common stock shares that each Convertible Preferred Stock share could be converted into (as adjusted for stock splits, combinations
and reorganizations). No dividends have been declared to date.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Conversion</I>.
The series seed preferred stock is convertible, at the option of the holder, at any time and from time to time, into such number of fully
paid and nonassessable shares of common stock as is determined by dividing the series seed original issue price by the series seed conversion
price in effect at the time of conversion.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Voting
rights.</I> The holders of Convertible Preferred Stock are entitled to that number of votes on all matters presented to stockholders
equal to the number of shares of common stock then issuable upon conversion of such preferred stock. The holders of Convertible Preferred
Stock are entitled to elect one director of the Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Liquidation</I>.
In the event of any sale of substantially all of the assets, a merger, or liquidation, dissolution or winding up of the Company, the
holders of series seed-4 Convertible Preferred Stock then outstanding will be entitled to receive, in preference to the holders of all
other series of Convertible Preferred Stock and common stock, an amount equal to or greater than (a) $1.0553 per share (as adjusted for
stock splits, combinations, and reorganizations) plus declared and unpaid dividends, if any, or (b) such amount per share as would have
been payable had all shares of series seed-4 Convertible Preferred Stock had been converted to common stock immediately prior to such
liquidation, dissolution or winding up or deemed liquidation event. Given that deemed liquidation event is within the control of the
common stockholders, the Convertible Preferred Stock is recognized as permanent equity within the consolidated statements of stockholders&#8217;
deficit.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">After
the payment of all preferential amounts required to the paid to the holders of shares of series seed-4 Convertible Preferred Stock, the
holders of series seed 3, 2, and 1 Convertible Preferred Stock will be entitled to receive, on a pari passu basis and in preference to
the holders of common stock, $0.9379, $0.6704, and $0.6704, respectively, per share plus declared and unpaid dividends, if any. After
the payment of all preferential amounts required to be paid to the holders of series seed-4 Convertible Preferred Stock, then the holders
of series seed 3, 2 and 1 Convertible Preferred Stock, shall be entitled to be paid out of the assets of the Company. After distributing
to all preferred stockholders, the remaining assets of the Company will be distributed ratably to the holders of the common stock on
a pro rata basis.</FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Note
12. Stockholder&#8217;s Deficit</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Common
Stock</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the Restated Certificate, the number of shares of Fusemachine Inc. common stock that the Company is authorized to issue
is 500,000,000 shares and 15,924,202 shares as of December 31, 2025 and December 31, 2024 respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s reserved shares of common stock for future issuance related to potential conversion of the Convertible Preferred Stock,
exercise of Common Stock Warrants and exercise of stock options are as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT><FONT STYLE="display: none">Schedule of Reserved Shares of Common Stock for Future Issuance</FONT></FONT></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%">
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    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    of December 31, 2025</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    (refer note 24)</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">13,458,750</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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    stock for future issuance</FONT></FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&#160;</FONT></TD>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 6pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</FONT></TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Includes 6,772
stock options as of December 31, 2024 that were legally exercised prior to meeting the service base vesting requirements in exchange
for nonrecourse promissory notes (Refer to &#8220;The Promissory Notes Transactions&#8221; in &#8220;Note 14 - Stock-based Compensation
&#8220;).</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Convertible
Preferred Stock</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the Restated Certificate, the number of shares of Convertible Preferred Stock that the Company is authorized to issue
is 5,000,000 as at December 31, 2025  (Refer to &#8220;Note 11 - Convertible Preferred Stock &#8220;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Warrants</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2025 and December 31, 2024 the Company had Common Stock Warrants outstanding to purchase up to 92,211</FONT>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">shares of the Company&#8217;s common stock at an exercise price
of $0.46</FONT>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">per share and have a contractual term of 10</FONT>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">years. The Common Stock Warrants were issued in August 2023.
(Refer to &#8220;Note 3 - Fair Value Measurements&#8221;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Common
Stock Contingent Obligation</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2025, the Company had a Nil contingent obligation upon closing of the Merger Shares issued to Legacy Fusemachines vendor
for settlement of outstanding vendor invoices.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Note  13.
Revenue</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
ASC 606, revenue is recognized throughout the life of the executed agreement. The Company measures revenue based on consideration specified
in a contract with a customer. Furthermore, the majority of the Company&#8217;s revenues are recognized over time as services are performed.
The Company recognizes revenue when a performance obligation is satisfied by transferring control of the product or service to the customer</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company provides services to customers worldwide, with the majority of revenues being derived from contracts with customers located within
the United States. The table below presents the breakdown of the Company&#8217;s revenues, based on the customer&#8217;s location (in
thousands).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<FONT STYLE="display: none">Schedule
of Revenues, Based on the Customer&#8217;s Location</FONT></FONT></P>

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                                                                             Product revenue represents an insignificant portion of total revenue for the periods presented and, accordingly, has not been
                                                                             separately disclosed.</TD>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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the year ended December 31, 2025 and 2024, the Company had one significant service type, AI Solutions (products and services). For the
year ended December 31, 2025 and 2024, there were $7,581 thousand and $8,811 thousand of AI Solutions (products and services) revenue.
The company had insignificant revenue from AI Solutions &#8211; Products for the year ended December 31, 2025, and 2024, respectively.
The revenue recognized for AI education services were $133 thousand and Nil during the year ended December 31, 2025, and 2024.</FONT></P>

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2024. During the year ended December 31, 2024, the Company recognized revenue of $20.6 thousand from the deferred revenue balance as
of December 31, 2023.</FONT></P>

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as a result of obtaining service contracts and contract renewals, are recoverable and therefore the Company&#8217;s consolidated balance
sheets included capitalized balances in the amount of $18.9 thousand and $21.9 thousand as of December 31, 2025 and December 31, 2024
which represents the current portion and is included within prepaid expenses and other current assets, respectively and $3.2 thousand
and $5 thousand, as of December 31, 2025 and December 31, 2024, respectively, which are included within other assets. Capitalized commission
fees are amortized on a straight-line basis over the average period of service contracts of approximately two years and are included
in selling and marketing in the accompanying consolidated statements of operations and comprehensive loss. Amortization recognized during
the year ended December 31, 2025 and 2024 was $31.1 thousand and $36.2 thousand, respectively.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Note
14. Stock-based Compensation</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 1.45pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Effective
June 2014, the Company adopted an equity-based compensation plan, the 2014 Equity Incentive Plan (the &#8220;2014 Plan&#8221;), which
allows for the grant of stock options, stock issuances and other equity interests in the Company to the Company&#8217;s officers, directors,
employees and consultants. The 2014 Plan is administrated by the Company&#8217;s Board of Directors, or a committee appointed by the
Board. In February 2023, the Company&#8217;s board of directors and stockholders adopted the 2023 Equity Incentive Plan (the &#8220;2023
Plan&#8221;), which provides for the grant of incentive stock options, restricted stock awards and restricted stock units (&#8220;RSUs&#8221;)
to eligible employees, directors and consultants of the Company. With the introduction of the 2023 Plan, shares are no longer available
for future grants under the 2014 Plan. Awards outstanding under the 2014 Plan will be governed by the 2023 Plan.3,258,230 shares of Common
Stock were authorized for issuance under the 2023 Plan to officers, directors, employees and consultants of the Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
2023 Plan was amended and approved by the stockholders of the Company in December 2023 to increase the number of shares of the Company&#8217;s
Common Stock reserved for issuance under the Fusemachines Inc. 2023 Amended and Restated Equity Plan (the &#8220;2023 Equity Incentive
Plan&#8221;) by 391,525 to 3,649,755 shares of common stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the Business Combination, which was accounted for as a reverse recapitalization, the number of shares under the 2023
Equity Incentive Plan was adjusted to reflect the exchange ratio established in the business combination agreement. Accordingly, all
share and per share amounts under the plan have been retrospectively adjusted to reflect the conversion of Legacy Fusemachines equity
into the Company&#8217;s common stock</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify">As
of December 31, 2025, no
shares of Common Stock were available for future grant under the 2023 Plan, as the 2023 Plan was replaced in its entirety by the 2025 Plan which was adopted in connection with the Business
Combination. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
stock-based compensation expense during the year ended December 31, 2025, and 2024 are reported in the following consolidated financial
statement line items (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<FONT STYLE="display: none">Schedule
of Stock-based Compensation Expense</FONT></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%">
  <TR STYLE="display: none; vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt; text-align: center">&#160;</TD><TD STYLE="padding-bottom: 1pt; text-align: center; font-weight: bold">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2025</TD><TD STYLE="padding-bottom: 1pt; text-align: center; font-weight: bold">&#160;</TD><TD STYLE="padding-bottom: 1pt; text-align: center; font-weight: bold">&#160;</TD>
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  <TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt; text-align: center">&#160;</TD><TD STYLE="padding-bottom: 1pt; text-align: center; font-weight: bold">&#160;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Year ended December 31,</TD><TD STYLE="padding-bottom: 1pt; text-align: center; font-weight: bold">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 60%; text-align: left">General and administrative</TD><TD STYLE="width: 2%">&#160;</TD>
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    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 16%; text-align: right">723</TD><TD STYLE="width: 1%; text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">38</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">170</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">Total stock-based compensation expense</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&#160;</TD>
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    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">1,067</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&#160;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Stock
Options</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&#8217;s stock options outstanding consist primarily of time-based options to purchase common stock, the majority of which
vest over a <FONT STYLE="display: none">2</FONT>
two-to-four- year <FONT STYLE="display: none">4</FONT>
period and have a <FONT STYLE="display: none">10</FONT> ten-year contractual term. These awards are subject to the risk of forfeiture until vested by virtue of
continued employment or service to the Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following table summarizes the stock option activity for options with service-based vesting conditions during the year ended December
31, 2025:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<FONT STYLE="display: none">Schedule
of Stock Option Activity for Options with Service-based Vesting</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center">&#160;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1pt">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><P STYLE="margin-top: 0; margin-bottom: 0">Number of</P>
                                                                                <P STYLE="margin-top: 0; margin-bottom: 0">Options</P></TD><TD STYLE="text-align: center; padding-bottom: 1pt; font-weight: bold">&#160;</TD><TD STYLE="text-align: center; padding-bottom: 1pt">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Weighted Average</B></FONT></P>
                                                                               <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Exercise
                                                                               Price</B></FONT></P></TD><TD STYLE="text-align: center; padding-bottom: 1pt">&#160;</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1pt">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><P STYLE="margin-top: 0; margin-bottom: 0">Weighted Average Remaining</P>
                                                                                <P STYLE="margin-top: 0; margin-bottom: 0">Contractual</P>
                                                                                <P STYLE="margin-top: 0; margin-bottom: 0">Term (Years)</P></TD><TD STYLE="text-align: center; padding-bottom: 1pt; font-weight: bold">&#160;</TD><TD STYLE="text-align: center; padding-bottom: 1pt">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Aggregate<BR>
Intrinsic Value <BR>(In thousands)</B></FONT></P></TD><TD STYLE="text-align: center; padding-bottom: 1pt">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 44%; font-weight: bold">Outstanding balance as of December 31, 2024</TD><TD STYLE="width: 2%; font-weight: bold">&#160;</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left">&#160;</TD><TD STYLE="width: 10%; font-weight: bold; text-align: right">1,700,058</TD><TD STYLE="width: 1%; font-weight: bold; text-align: left">&#160;</TD><TD STYLE="width: 2%; font-weight: bold">&#160;</TD>
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  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Granted</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right"><FONT STYLE="display: none; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</FONT></TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right"><FONT STYLE="display: none; font-family: Times New Roman, Times, Serif; font-size: 10pt">-</FONT></TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Exercised</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">(6,772</TD><TD STYLE="text-align: left">)</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">0.70</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD>Forfeited</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">(14,892</TD><TD STYLE="text-align: left">)</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">5.34</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD>Cashless exercise (1)</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">(745,896</TD><TD STYLE="text-align: left">)</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">0.95</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="padding-bottom: 1pt">Expired</TD><TD STYLE="padding-bottom: 1pt">&#160;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&#160;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(245,618</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&#160;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&#160;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">0.72</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&#160;</TD><TD STYLE="padding-bottom: 1pt">&#160;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&#160;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&#160;</TD><TD STYLE="padding-bottom: 1pt">&#160;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&#160;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; padding-bottom: 1pt">Outstanding balance as of December 31, 2025</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&#160;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">&#160;</TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">686,880</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&#160;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&#160;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">&#160;</TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">3.25</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&#160;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&#160;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">&#160;</TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">6.88</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&#160;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&#160;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">234</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold">Options vested and exercisable as of December 31, 2025</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">523,632</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">2.93</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">6.52</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">230</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>(1)</I></FONT></TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>During the year
ended 31st December 2025, employees have performed cashless exercise of 745,896 options</I></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
the year ended December 31, 2025 and 2024, the Company recorded stock-based compensation expense of $231 thousand and $1,067 thousand,
respectively. As of December 31, 2025, total stock-based compensation expense not yet recognized related to unvested stock options was
$438.1 thousand, which is expected to be recognized over a weighted-average period of 1.91 years.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
total intrinsic value of options exercised was $6,036.4 thousand and $10,647.5 thousand during the year ended December 31, 2025 and year
ended December 31, 2024, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
weighted average grant-date fair value per share of stock options granted during the year ended December 31, 2025 and year ended December
31, 2024 was Nil and $4.26, respectively The Company estimated the fair value of stock options using the Black-Scholes Model on the date
of grant. The assumptions used in the Black-Scholes Model were as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<FONT STYLE="display: none">Schedule
of Assumptions Used in the Black-Scholes Model</FONT></FONT></P>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Cashless
Exercise of Stock Options</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: left">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
August 2025, certain Fusemachines employees exercised 745,896 options to purchase Fusemachines Inc. Common Stock. The exercise prices
for the 745,896 options were paid on a cashless basis via net share settlement resulting in the net share issuance of 666,662 shares
of Fusemachines Inc. Common Stock. The transaction has been accounted under the guidance of ASC 718 - Stock Compensation. The cashless
exercise mechanism does not change the substantive terms or fair-value-based measure of the awards and therefore does not constitute
a modification under ASC 718.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>The
Promissory Notes Transaction</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Early
Exercise of Stock Options</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&#160;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company permits certain employees and directors to exercise stock options granted under the 2023 Plan prior to vesting. In February 2023,
the Company&#8217;s Chief Executive Officer, Mr. Maskey and other three executives early exercised a total of 1,625,321 stock options
prior to vesting (The February Options Awards)&#894; however, in lieu of the cash consideration required to exercise the stock options,
these individuals each provided a 3.82% interest bearing non-recourse note (the &#8220;2023 Promissory Notes&#8221;), for an aggregate
principle of $1,136.2 thousand. The notes are scheduled to mature in February 2030.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
nonrecourse nature of the loan secured by the shares pledged as collateral essentially provides the employee with rights like that of
an option and thus no receivable for amounts due under the 2023 Promissory Notes was recorded on the Company consolidated balance sheets.
While the shares of common stock purchased by the employees in exchange for the 2023 Promissory Notes are considered legally issued,
the shares are not deemed, for accounting purposes, outstanding and are considered restricted until all of the options are fully vested
and the outstanding principal and accrued interest due on the note is repaid in full.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
issuance of the 2023 Promissory Notes resulted in an additional stock-based compensation expense of Nil and $11.7 thousand for the year
ended December 31, 2025 and 2024, respectively, based on the grant-date fair value of the Promissory Notes, which was determined using
the Black-Scholes Model.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
assumptions used in deriving the grant-date fair value of the 2023 Promissory Notes via the Black-Scholes Model were as follows: (i)
a stock price of $0.88 per share, (ii) an exercise price of $0.70 per share, (iii) an estimated risk-free interest rate of 4.02%, (iv)
an expected term of 3.50 years, (v) volatility of 75%, and (vi) a dividend yield of 0%. These assumptions resulted in a grant-date fair
value of approximately $0.53 per option.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company continues to recognize expenses for the original option award of 1,625,321 shares granted in February 2023 (the &#8220;February
Option Awards&#8221;), which were early exercised in exchange for Promissory Notes. The early exercise is not considered substantive
for accounting purposes until the vesting requirements are met through continued employment and service to the Company. As of December
31, 2025 and 2024, the Company recognized Nil and $41.4 thousand, respectively, in stock-based compensation expense related to the February
Option Awards. The unrecognized stock-based compensation expense related to the February Option Awards was Nil. The weighted-average
grant-date fair value per share of the February Option Awards was $0.50.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Repayment
of the Promissory Notes</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
January 2024, the Company repurchased 438,903 shares of common stock from Sameer Maskey, the CEO, at a price of $6.61 per share, totalling
$2,902.7 thousand (the &#8220;Repurchase Consideration&#8221;). Mr. Maskey applied $902.7 thousand of the Repurchase Consideration toward
repayment of his 2023 Promissory Note to the Company. Upon repayment, the 2023 Promissory Note, along with any accrued interest, was
settled, and the vested shares pledged under the 2023 Promissory Notes are now considered exercised. As of the December 31, 2025, there
were no shares which were subject to vesting.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Forgiveness
of Promissory Notes</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
August 2024, the Company&#8217;s board of directors approved the forgiveness of the 2023 Promissory Notes totaling $262.2 thousand (excluding
interest) for three of its executives. The forgiveness of these 2023 Promissory Notes effectively modified the strike price to zero,
allowing the executives to retain shares at no cost.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
accordance with ASC 718, the incremental value of the modification was calculated as the difference between the fair value of the modified
award and the fair value of the original award immediately before the modification. As of December 31, 2024, the Company recognized $227.2
thousand in stock based compensation expense related to this modification.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Adoption
of 2025 Omnibus Equity Incentive Plan</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
October 22, 2025, the Board of Directors of the Company approved the 2025 Omnibus Equity Incentive Plan (the &#8220;2025 Plan&#8221;).
The 2025 Plan provides for the grant of equity-based awards to employees, directors, officers, and other eligible service providers of
the Company and its subsidiaries.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the adoption of the 2025 Plan, an aggregate of 1,500,000 shares of the Company&#8217;s Common Stock were reserved for
issuance pursuant to awards granted under the 2025 Plan. The types of awards that may be granted under the 2025 Plan include, but are
not limited to, stock options, restricted stock, restricted stock units, stock appreciation rights, performance-based awards, and other
stock-based awards, as determined by the Board of Directors or a designated committee thereof.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">No
awards had been granted under the 2025 Plan as of period ended December 31, 2025. Accordingly, the adoption of the 2025 Plan did not
have any impact on the Company&#8217;s consolidated financial statements as of that date.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Note
15. Net loss per share</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Basic
and diluted net loss per share attributable to common stockholders was calculated as follows (in thousands except for share and per share
amounts-</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<FONT STYLE="display: none">Schedule
of Basic and Diluted Net Loss Per Share</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <TR STYLE="display: none; vertical-align: bottom">
    <TD>&#160;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2025</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&#160;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2024</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&#160;</TD></TR>
<TR STYLE="vertical-align: bottom">
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  <TR STYLE="vertical-align: bottom">
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  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 16%; text-align: right">(15,383</TD><TD STYLE="width: 1%; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="font-weight: bold; text-align: left">Net loss per share attributable to Fusemachines Inc. common stockholders - basic and diluted</TD><TD STYLE="font-weight: bold">&#160;</TD>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following outstanding shares of potentially dilutive securities were excluded from the computation of diluted net loss per share for
the periods presented because including them would have been antidilutive:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<FONT STYLE="display: none">Schedule
of Outstanding Shares of Potentially Dilutive Securities</FONT></FONT></P>

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  <TR STYLE="vertical-align: bottom">
    <TD>&#160;</TD><TD STYLE="font-weight: bold">&#160;</TD>
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    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">December 31,</TD><TD STYLE="font-weight: bold">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD>&#160;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2025</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&#160;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2024</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">92,211</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">92,211</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Stock options (1)</TD><TD>&#160;</TD>
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">1,700,058</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">&#160;SPAC public and private placement warrants (2) (refer note
    24)</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">13,458,750</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Equity Share warrant (refer note 22)</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">2,108,070</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Issuance of warrants pursuant to conversion of convertible note (refer note 10)</TD><TD>&#160;</TD>
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD><FONT STYLE="display: none; font-family: Times New Roman, Times, Serif; font-size: 10pt">Antidilutive securities
    excluded from computation of earnings per share, amount</FONT></TD><TD STYLE="font-weight: bold">&#160;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&#160;</TD><TD STYLE="font-weight: bold; text-align: right">16,375,911</TD><TD STYLE="font-weight: bold; text-align: left">&#160;</TD><TD STYLE="font-weight: bold">&#160;</TD>
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  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 15pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</FONT></TD><TD STYLE="width: 5pt"></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Includes 6,772
stock options as of December 31, 2024, that were early exercised in exchange for non-recourse promissory notes. (Refer to &#8220;Note
14 - Stock-based Compensation &#8220;).</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
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and private placement warrants were outstanding at CSLM Acquisition Corp. prior to the business combination and were classified as equity
and included in APIC in CSLM&#8217;s historical financial statements. The warrants became exercisable for shares of Fusemachines, Inc.
common stock 30 days after the consummation of the business combination and were excluded from diluted net loss per share as their inclusion
would have been antidilutive</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Convertible Notes were also outstanding as of December 31, 2024, which could obligate the Company to issue preferred shares upon the
occurrence of various future events at prices and in amounts that are not determinable until the occurrence of those future events. Because
the necessary conditions for the conversion of the Convertible Notes have not been satisfied as of December 31, 2024, the Company has
excluded the Convertible Notes from the table above and the calculation of diluted net loss per share. (Refer to &#8220;Note 10 - Long-Term
Debt &#8220;)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has also entered into a contingent obligation to issue 45,000</FONT>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">shares of its common stock to a certain vendor in connection
with an outstanding accounts payable balance as part of a settlement agreement (refer to &#8220;Note 17 - Commitment and Contingencies&#8221;).
The issuance of common stock is contingent upon the completion the Merger (refer to &#8220;Note 1 - Organization&#8221;). As the Merger
had not taken place as of December 31, 2024, the conditions for the issuance of common stock have not been satisfied. Accordingly, the
Company has excluded the common stock shares arising from this contingent obligation from the table above and the calculation of diluted
net loss per share. Upon the closing of the business combination, the Company settled its obligation under the Second Agreement through
the issuance of 29,610 shares of Fusemachines, Inc. common stock, reflecting the application of the 0.6580 conversion ratio to the 45,000
shares of the Company&#8217;s common stock, and a partial cash payment of approximately $110 thousand. The remaining $98 thousand obligation
is still outstanding and is reflected in accounts payable as of December 31, 2025. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Note
16. Income Taxes</B></FONT></P>

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provision for income taxes consists of the following (in thousand):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<FONT STYLE="display: none">Schedule
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    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">December 31,</TD><TD STYLE="font-weight: bold">&#160;</TD></TR>
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD></TR>
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&#160;</TD></TR>
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right"><P STYLE="margin: 0">16</P></TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&#160;</TD></TR>
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    <TD STYLE="font-weight: bold">Deferred:</TD><TD>&#160;</TD>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Deferred
income taxes are provided for the temporary differences between the financial reporting basis and the tax basis of the Company&#8217;s
assets and liabilities. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and
liabilities are presented below (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><FONT STYLE="display: none">Schedule
of Deferred Income Taxes&#160;</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%; margin-left: 0.75in">
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">(60</TD><TD STYLE="text-align: left">)</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">(54</TD><TD STYLE="text-align: left">)</TD></TR>
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">(14</TD><TD STYLE="text-align: left">)</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">(13</TD><TD STYLE="text-align: left">)</TD></TR>
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right"></TD><TD STYLE="text-align: left"></TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD></TR>
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">(93</TD><TD STYLE="text-align: left">)</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">(109</TD><TD STYLE="text-align: left">)</TD></TR>
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    <TD STYLE="font-weight: bold; text-align: left">&#160;</TD><TD STYLE="font-weight: bold; text-align: right">(176</TD><TD STYLE="font-weight: bold; text-align: left">)</TD></TR>
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  <TR STYLE="vertical-align: bottom; background-color: White">
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.6pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.6pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
adoption of ASU 2023-09, Improvements to Income Tax Disclosures the reconciliation of taxes at the federal statutory rate to our provision
for (benefit from) income taxes for the year ended December 31, 2025 was as follows (in thousands, except for percentages):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 0 1.6pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 1.6pt; display: none; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Schedule
of Income Tax Rate Reconciliation</FONT></P><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
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  <TR STYLE="vertical-align: bottom">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 1.6pt; text-align: justify; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 1.6pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">
The reconciliation of taxes at the federal statutory rate to the provision for (benefit from) income taxes for the year ended December 31, 2024 in accordance with the guidance prior to the adoption of ASU 2023-09 was as follows (in thousands):
</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 1.6pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><FONT STYLE="display: none"></FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 1.6pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-left: 0.75in; border-collapse: collapse; width: 89%">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: White">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">Provision for Income Tax</TD><TD>&#160;</TD>
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    <TD STYLE="font-weight: bold; text-align: left">&#160;</TD><TD STYLE="font-weight: bold; text-align: right">(0.20</TD><TD STYLE="font-weight: bold; text-align: left">)</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify">The utilization of the Company&#8217;s net operating loss carryforwards and research tax credit carryovers could
be subject to annual limitations under Section 382 and 383 of the Internal Revenue Code of 1986, as amended (the &#8220;Code&#8221;),
due to ownership change limitations that may have occurred previously or that could occur in the future. These ownership changes limit
the amount of net operating loss carryforwards and other deferred tax assets that can be utilized to offset future taxable income and
tax, respectively. In general, an ownership change, as defined by Section 382 and 383 of the Code, results from transactions increasing
ownership of certain stockholders or public groups in the stock of the corporation by more than 50 percent points over a three-year period.
The Company has not completed an analysis of an ownership change under Section 382 of the Code. To the extent that a study is completed
and an ownership change is deemed to occur, the Company&#8217;s net operating losses and tax credits could be limited.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
ultimate realization of deferred tax assets is dependent upon the generation of sufficient future taxable income during the periods in
which those temporary differences become deductible. Management has considered all positive and negative evidence in connection with
the realization of the deferred tax assets based on projected future taxable income and tax planning strategies. Based upon the level
of projections for future taxable income over the periods in which the deferred tax assets are deductible, management believes it is
more likely than not the Company will not realize the benefits of these deductible differences. Therefore, the Company continues to record
a 100% valuation allowance against all deferred tax assets as of December 31, 2025 and 2024.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
valuation allowance for the year ending December 31, 2025 increased by $1,000.0 thousand.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2025, the Company had federal net operating loss carryforward of approximately $15,680 thousand of which approximately
$1,163 thousand will begin to expire in 2037 for federal tax purposes, and approximately $14,517  thousand in federal net operating loss
carryforward can be carried forward indefinitely. While these federal NOLs do not expire, the Tax Cuts &amp; Jobs Act of 2017 limits
the amount of federal net operating loss utilized each year after December 31, 2017 to 80% of taxable income. As at December 31, 2025,
the Company has state net operating loss carryforward of approximately $24,630 thousand that start expiring in 2026. In addition, the
Company has foreign net operating loss carryforward of $2,104  thousand that start expiring in 2042.</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">ASC 740-10 prescribes a comprehensive model for the
recognition, measurement, presentation and disclosure in financial statements of any uncertain tax positions that have been taken or expected
to be taken on a tax return. As of December 31, 2025 and 2024, the Company had unrecognized tax benefits (&#8220;UTBs&#8221;) of approximately
$21 thousand and $22 thousand, respectively. The amount of unrecognized tax benefits is not expected to significantly change over the
next twelve months. No amounts, outside of valuation allowance, would impact the effective tax rate on the continuing operations. The
beginning and ending unrecognized tax benefits amounts is as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><FONT STYLE="display: none">Schedule
of Unrecognized Tax Benefits</FONT></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 85%">
  <TR STYLE="vertical-align: bottom">
    <TD>&#160;</TD><TD STYLE="font-weight: bold">&#160;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">December 31,</TD><TD STYLE="font-weight: bold">&#160;</TD><TD STYLE="font-weight: bold">&#160;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">December 31,</TD><TD STYLE="font-weight: bold">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD>&#160;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2025</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&#160;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2024</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 60%; font-weight: bold; text-align: justify; text-indent: 0pt; padding-left: 0pt">Beginning Balance</TD><TD STYLE="width: 2%">&#160;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 16%; text-align: right">&#160;&#160;&#160;&#160;&#160;&#160;&#160;22</TD><TD STYLE="width: 1%; text-align: left">&#160;</TD><TD STYLE="width: 2%">&#160;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 16%; text-align: right">&#160;&#160;&#160;&#160;&#160;&#160;22</TD><TD STYLE="width: 1%; text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: 0pt; padding-left: 0pt">Change related to prior year provisions</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">(6</TD><TD STYLE="text-align: left">)</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left; text-indent: 0pt; padding-left: 0pt">Change related to current year provisions</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">5</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-indent: 0pt; padding-left: 0pt">Ending balance</TD><TD STYLE="font-weight: bold">&#160;</TD>
    <TD STYLE="font-weight: bold; text-align: left">$</TD><TD STYLE="font-weight: bold; text-align: right">21</TD><TD STYLE="font-weight: bold; text-align: left">&#160;</TD><TD STYLE="font-weight: bold">&#160;</TD>
    <TD STYLE="font-weight: bold; text-align: left">$</TD><TD STYLE="font-weight: bold; text-align: right">22</TD><TD STYLE="font-weight: bold; text-align: left">&#160;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>Fusemachines Inc. and Subsidiaries
Notes to the Consolidated Financial Statements</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Income tax returns are filed in the United States
and various state jurisdictions. The Company is not currently under examination by income tax authorities in US federal or state jurisdictions.
Fusemachines Nepal Private Limited is currently under examination by local Nepal tax authorities for FY 2023-24.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify">Due to
net operating loss carryforward, the Company&#8217;s returns remain open for all prior years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Note
17. Commitment and Contingencies</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Consulting
Agreement</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
December 2020, the Company entered into a consulting agreement with a certain vendor, whereby they agreed to help develop and implement
sales strategies for the Company for $10.0 thousand per month as well as a commission fee as defined in the agreement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
August 2024, the Company entered into a second agreement (the &#8220;Second Agreement&#8221;) with the same vendor mentioned above whereby
the Company and vendor acknowledged an outstanding accounts payable balance of $408.9 thousand owed to the vendor for services provided.
The Second Agreement stipulates that in full and final satisfaction of this balance, the Company will: (i) issue 45,000 shares of its
common stock to the vendor immediately prior to and contingent upon the consummation of the Merger (see &#8220;Note 1 &#8211; Organization&#8221;), and (ii) pay $208.9 thousand in cash to the vendor within ten days after the closing of the Merger. If the Merger does not
close the $408.9 thousand will be payable to the vendor in cash.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company evaluated the feature in the Second Agreement whereby the closing of the Merger triggers the obligation to issue 45,000 shares
of the Company&#8217;s common stock (the &#8220;Conversion Feature&#8221;) to determine whether the feature should be considered a freestanding
financial instrument (as defined in ASC 480-10-20) or whether it should be considered embedded. The Company determined that the Conversion
Feature should be considered embedded because it did not meet the definition of a freestanding financial instrument because it was neither
i) entered into separately and apart from any of the entity&#8217;s other financial instruments, nor was it ii) separately exercisable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">After
determining that the Conversion Feature should be considered embedded, the Company determined that it did not require bifurcation as
an embedded derivative under ASC 815-15 because it did not meet the net settlement criterion to be considered a derivative.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subsequent
to determining that derivative bifurcation for the Conversion Feature was not required, the Company evaluated its obligations to the
vendor under the Second Agreement to determine whether the Second Agreement should be accounted for as an extinguishment (in accordance
with ASC 470-50) of the Company&#8217;s initial obligations (those obligations prior to the Second Agreement under the initial consulting
agreement) and an immediate recognition of the new obligations specified in the Second Agreement. The Company determined that the Second
Agreement should be accounted for as an extinguishment because the Conversion Feature represented the addition of a substantive conversion
option, as that term is used in ASC 470-50-50-10 (and as it is defined in ASC 470-20-40-7). As the Company determined that the Second
Agreement should be accounted for as an extinguishment, it calculated a loss on extinguishment (in accordance with ASC 470-50-40-4) equal
to the reacquisition price of the new obligations under the Second Agreement less the net carrying amount of the initial obligation under
the initial consulting agreement. The reacquisition price was equal to the fair value of the new obligations on the effective date of
the Second Agreement, which was determined to be $478.6</FONT>
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<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">thousand, which resulted in a loss on extinguishment of $69.7</FONT>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">thousand, which is recorded in loss on extinguishment of payable
in the consolidated statement of operations and comprehensive loss for the year ended December 31, 2024. In accordance with ASC 470-20-25-13,
the offset to the loss on extinguishment of $69.7</FONT>
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capital as the premium associated with the new obligations issued under the Second Agreement was determined to be substantial. The $408.9 thousand obligation incurred under the initial consulting agreement, which is described in the Second
Agreement, is recorded in accounts payable in the consolidated balance sheet as of December 31, 2024.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
fair value of the new obligations used to determine the loss on extinguishment was determined using a probability-weighted expected return
method/scenario-based method. The significant inputs to the valuation method were an estimate of the probability of the Merger closing,
an estimate of the date the Merger will close, an estimate of the fair value of the Fusemachines shares (estimate based on an income
approach and market approach in accordance with Internal Revenue Service Ruling 59-60 for compliance with Internal Revenue Code Section
409A) to be issued upon the closing of the Merger, and an estimated discount rate. As the method for estimating the fair value of the
new obligations used significant unobservable inputs, it was determined to represent a Level 3 fair value measurement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
the closing of the business combination, the Company settled its obligation under the Second Agreement through the issuance of 29,610
shares of Fusemachines, Inc. common stock, reflecting the application of the 0.6580 conversion ratio to the 45,000 shares of the Company&#8217;s
common stock, and a partial cash payment of approximately $110 thousand. The remaining $98 thousand obligation is still outstanding and
is reflected in accounts payable as of December 31, 2025.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B>Legal counsel fee arrangement</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In connection with the Business Combination, the Company
incurred legal fees payable to its external legal counsel, totaling $1,307,653. Pursuant to an agreement
entered into in December 2025, Counsel agreed to reduce the outstanding deal-related fees to $600,000, which was fully paid in October
2025. Under the same agreement, the Company committed to pay for ongoing legal services, including ordinary course SEC filings,
an S-1 registration statement, review of non-disclosure agreements and letters of intent, and attendance at board and committee meetings,
covering the period from November 1, 2025 through December 31, 2026, in monthly instalments of $25,000 from January through May 2026 and
$75,000 from June through December 2026, totaling $700,000. The Company&#8217;s remaining obligation under this arrangement as of December
31, 2025 is $650,000. The Company is also obligated to reimburse such counsel for all out-of-pocket expenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>&#160;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>Consulting arrangements</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-style: normal; font-weight: normal">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-style: normal; font-weight: normal">In
December 2025, the Company entered into a Payment Plan Agreement with a service provider to settle outstanding
obligations of $1,032 thousand related to services rendered in connection with the Company&#8217;s S-4 registration statements. Under
the agreement, the service provider agreed to discount the past-due balance by $555 thousand, resulting in a negotiated settlement amount of $476 thousand.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company made an initial payment of $125 thousand
in December 2025, which included $45 thousand relating to a one-year subscription for Active disclosure, a software service. The remaining balance is payable in equal monthly installments of $26 thousand, commencing in April 2026 through June 2027.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of December 31, 2025, the current portion of the
settlement obligation (amounts due within twelve months) is classified within accounts payable under current liabilities, with the remaining
balance classified as non-current within accounts payable in the balance sheet</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>&#160;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Guarantees
and Indemnifications</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the normal course of business, the Company enters into agreements that contain a variety of representations and provide for general indemnification.
The Company&#8217;s exposure under these agreements is unknown because it involves claims that may be made against the Company in the
future. To date, the Company has not paid any claims or has been required to defend any action related to its indemnification obligations.
As of December 31, 2025 and December 31, 2024, the Company does not have any material indemnification claims that were probable or reasonably
possible and consequently has not recorded related liabilities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Litigation</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Legacy
Fusemachines received a legal notice dated March 27, 2025, requiring payment of $76.3 thousand to a vendor under a Work Labor &amp; Services
agreement due to alleged non-fulfilment of payment obligations. Based on its assessment of the services received and contractual terms,
management believes that the amount payable is $41.3 thousand, which has been recognized in its consolidated balance sheet as of December
31, 2025, and intends to contest the remaining portion of the claim. Although there can be no assurance of the outcome of such legal
actions, in the opinion of management, the Company does not have a potential liability related to any current legal proceeding or claim
that would individually or in the aggregate materially affect its results of operations, financial condition, or cash flows.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Lease
obligations</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Refer
to &#8220;Note 18 &#8211; Leases&#8221; for a description of the Company&#8217;s lease obligations as of December 31, 2025 and December
31, 2024.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Note
18. Leases</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has operating leases for office space. These leases have expected remaining lease terms ranging from less than one year to 7
years. The Company currently has two leases with an initial term of 12 months or less that are accounted for as short-term leases. The
Company does not separate lease and fixed non-lease components of lease contracts. The Company&#8217;s lease terms may include options
to extend or terminate the lease. These options are included in the lease term only when it is reasonably certain that the Company will
elect the option.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
are no material residual guarantees associated with any of the Company&#8217;s leases, and there are no significant restrictions or covenants
included in the Company&#8217;s lease agreements. Certain leases include variable payments related to common area maintenance and property
taxes, which are billed by the landlord, as is customary with these types of charges for office space.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
table below presents certain information related to the Company&#8217;s lease costs for the period ended (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

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of Lease Costs</FONT></FONT></P>

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    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2025</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&#160;</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&#160;</TD>
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<P STYLE="margin: 0">&#160;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">Lease Position</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Operating
lease right-of-use assets and operating lease liabilities were recorded in the consolidated balance sheets as follows (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<FONT STYLE="display: none">Schedule
of Operating Lease Right-of-Use Assets and Liabilities</FONT></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
    <TD>&#160;</TD><TD STYLE="font-weight: bold">&#160;</TD>
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    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center">December 31,</TD><TD STYLE="font-weight: bold">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom">
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    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2025</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&#160;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&#160;</TD>
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold">Assets</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
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  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">85</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
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  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">&#160;</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">751</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">878</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="font-weight: bold; text-align: left">$</TD><TD STYLE="font-weight: bold; text-align: right">836</TD><TD STYLE="font-weight: bold; text-align: left">&#160;</TD><TD STYLE="font-weight: bold">&#160;</TD>
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  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
table below presents certain information related to the weighted-average remaining lease term and the weighted-average discount rate
for the Company&#8217;s operating leases:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="margin: 0"><FONT STYLE="display: none">Schedule of Operating Leases Weighted Average Remaining Lease Term and Discount Rate</FONT>&#160;</P>

<P STYLE="margin: 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt; text-align: center">&#160;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center; font-weight: bold">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">December 31,</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center; font-weight: bold">&#160;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center; font-weight: bold">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">December 31,</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center; font-weight: bold">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt; text-align: center">&#160;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center; font-weight: bold">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2025</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center; font-weight: bold">&#160;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center; font-weight: bold">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2024</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: center; font-weight: bold">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="width: 2%">&#160;</TD>
    <TD STYLE="width: 1%; text-align: left">&#160;</TD>
    <TD STYLE="width: 16%; text-align: right">6.17</TD>
    <TD STYLE="width: 1%; text-align: left">&#160;</TD>
    <TD STYLE="width: 2%">&#160;</TD>
    <TD STYLE="width: 1%; text-align: left">&#160;</TD>
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  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD>
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    <TD STYLE="text-align: left">%</TD>
    <TD>&#160;</TD>
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    <TD STYLE="text-align: right">9.25</TD>
    <TD STYLE="text-align: left">%</TD></TR>
  </TABLE>

<P STYLE="margin: 0">&#160;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">Cash Flows</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
table below presents certain information related to the cash flows for the Company&#8217;s operating leases for the period ended (in
thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<FONT STYLE="display: none">Schedule
of Cash flows for the Operating Leases</FONT></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 100%">
  <TR STYLE="display: none; vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt; text-align: center">&#160;</TD><TD STYLE="padding-bottom: 1pt; text-align: center; font-weight: bold">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2025</TD><TD STYLE="padding-bottom: 1pt; text-align: center; font-weight: bold">&#160;</TD><TD STYLE="padding-bottom: 1pt; text-align: center; font-weight: bold">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2024</TD><TD STYLE="padding-bottom: 1pt; text-align: center; font-weight: bold">&#160;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt; text-align: center">&#160;</TD><TD STYLE="padding-bottom: 1pt; text-align: center">&#160;</TD>
    <TD COLSPAN="6" STYLE="border-bottom: Black 1pt solid; text-align: center"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>For the Year Ended</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>December 31,</B></FONT></P></TD><TD STYLE="padding-bottom: 1pt; text-align: center">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-bottom: 1pt; text-align: center">&#160;</TD><TD STYLE="padding-bottom: 1pt; text-align: center; font-weight: bold">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2025</TD><TD STYLE="padding-bottom: 1pt; text-align: center; font-weight: bold">&#160;</TD><TD STYLE="padding-bottom: 1pt; text-align: center; font-weight: bold">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">2024</TD><TD STYLE="padding-bottom: 1pt; text-align: center; font-weight: bold">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 60%; text-align: left">Amortization of right-of-use assets</TD><TD STYLE="width: 2%">&#160;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 16%; text-align: right">88</TD><TD STYLE="width: 1%; text-align: left">&#160;</TD><TD STYLE="width: 2%">&#160;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 16%; text-align: right">111</TD><TD STYLE="width: 1%; text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Change in operating lease liability</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(73</TD><TD STYLE="text-align: left">)</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">(87</TD><TD STYLE="text-align: left">)</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Future
minimum lease payments required under operating leases are as follows (in thousands):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<FONT STYLE="display: none">Schedule
of Future Minimum Lease Payments</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; font-weight: bold">Period Ended December 31,</TD><TD STYLE="text-align: center; font-weight: bold; padding-bottom: 1pt">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; text-align: center; font-weight: bold">Future Minimum Rents</TD><TD STYLE="text-align: center; padding-bottom: 1pt; font-weight: bold">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 80%; text-align: left">2026</TD><TD STYLE="width: 2%">&#160;</TD>
    <TD STYLE="width: 1%; text-align: left">$</TD><TD STYLE="width: 16%; text-align: right">159</TD><TD STYLE="width: 1%; text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">2027</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">167</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">2028</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">175</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">2029</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">185</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&#160;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">430</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt">Total minimum lease payments</TD><TD STYLE="padding-bottom: 1pt">&#160;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&#160;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,116</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&#160;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(280</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt">Present value of future minimum lease payments</TD><TD STYLE="padding-bottom: 1pt">&#160;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">836</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&#160;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Note
19. Related Parties</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Related
Party Convertible Notes</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In October 2019 and September 2021, the Company entered
into two convertible promissory note agreements with a lender (the &#8220;Convertible Notes Payable&#8221;). As of December 31, 2024,
the lender was considered a principal owner of the Company because it held greater than 10% of the voting common stock. The convertible
notes payable, recorded in &#8220;Convertible Notes Payable, at Fair Value&#8221; in the consolidated balance sheet, amounted to $6,524.0
thousand as of December 31, 2024.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of December 31, 2025, the obligation under these
notes was classified as a related party payable, with a balance of $300 thousands, and is recorded in &#8220;Related Party Payable&#8221;
in the consolidated balance sheet. Refer to &#8220;Note 10 &#8211; Long-Term Debt,&#8221; &#8220;Convertible Notes at Fair Value&#8221;
section for further details.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>BO2
Purchase Agreement</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
July 2021, Fusemachines Nepal Private Limited entered into the BO2 Purchase Agreement with a related party, BO2, and Mr. Maskey. According
to the terms of the BO2 Purchase Agreement, BO2 agreed to invest up to $964.2</FONT>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">thousand in Fusemachines Nepal Private Limited to support the
development and growth of the business. (Refer to &#8220;Note 8 &#8211; Cumulative Mandatorily Redeemable Financial Instruments&#8221;).
In addition, the BO2 Purchase Agreement also included terms and conditions of regulating the management and operation of Fusemachines
Nepal Private Limited, their relationship with each other, certain aspects of the business and affairs of, and their dealings with, Fusemachines
Nepal Private Limited and BO2&#8217;s exit from Fusemachines Nepal Private Limited. The BO2 Agreement required Fusemachines Nepal Private
Limited to pay BO2 a one-time arrangement fee of 1.5</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">%
exclusive of value added tax (&#8220;VAT&#8221;) of the BO2&#8217;s total investment, and an annual monitoring fee. Fusemachines Nepal
Private Limited incurred an initial arrangement fee of $13.7</FONT>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">thousand which was recorded as a reduction to cumulative mandatorily
redeemable common and preferred stock liability in the consolidated balance sheet for the periods ended December 31, 2025, and December
31, 2024. Additionally, Fusemachines Nepal Private Limited incurred $5.0</FONT>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">thousand as</FONT> an annual monitoring fee for the year ended
December 31, 2025 and 2024.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Repurchase
and Repayment of 2023 Promissory Notes</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
January 2024, the Company repurchased 667,000 shares of its common stock from Mr. Maskey, at a price of $4.352 per share for a total
of $2,902.7 thousand. Out of this amount, $902.7 thousand was applied towards repayment of Mr. Maskey&#8217;s 2023 Promissory Note including
accrued interest and balance of the Repurchase Consideration amounting to $2,000.0 thousand that was paid in cash to Mr. Maskey (see
&#8220;Note 14 &#8211; Stock-based Compensation &#8220;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>January
2024 Related Party Pledge Agreement</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
January 2024, Mr. Maskey entered into a pledge agreement (the &#8220;January 2024 Related Party Pledge Agreement&#8221;) with Consilium
Extended Opportunities Fund, LP (&#8220;Consilium&#8221;). As per the terms of the January 2024 Related Party Pledge Agreement, Mr. Maskey
agreed to assign a security interest to Consilium of 3,600,000 shares of common stock held by Mr. Maskey to fully secure the Company&#8217;s
obligations under the January 2024 Convertible Notes (also see &#8220;Note 10 &#8211; Long-Term Debt &#8220;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>2024
Related Party Promissory Notes</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">During
2024, the Company entered into seven separate promissory notes with Sameer Maskey, the CEO of the Company for aggregate principal amount
of $700.0 thousand (refer to &#8220;Note 10 &#8211; Long-Term Debt &#8220;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>Dolma Impact Fund&#160;I</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">In January 2025, the Company amended the convertible
note payable to Dolma Impact Fund I (&#8220;Dolma&#8221;). Pursuant to the amended terms, the maturity date was extended to February 28,
2026. As of December 31, 2025, the related party note payable to Dolma remained outstanding in the amount of $300 thousand and is presented
in &#8220;Related party notes payable, at fair value, current&#8221; in the consolidated balance sheets.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><B><I>Private Investment in Public Equity (&#8220;PIPE&#8221;)
Financing</I></B>&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">On December 23, 2025, Fusemachines Inc. (the &#8220;Company&#8221;)
entered into a Securities Purchase Agreement with Consilium Frontier Equity Fund LP, a related party, pursuant to which the Company issued
and sold 588,235 shares of its common stock, par value $0.0001 per share, at a purchase price of $1.70 per share in a private placement
transaction (the &#8220;PIPE Financing&#8221;), resulting in aggregate gross proceeds of $1,000 thousand.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-style: normal; font-weight: normal">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-style: normal; font-weight: normal">The
proceeds were received in cash at closing and the issuance was recorded within stockholders&#8217; equity as permanent equity (refer
Note 23 Private Investment in Public Equity (&#8220;PIPE&#8221;) Financing).</FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font: normal 10pt Times New Roman, Times, Serif">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Note
20. Reverse Recapitalization</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
consummation of the transaction on October 22, 2025, Fusemachines Inc. (the &#8220;Company&#8221;) was determined to be the
accounting acquirer, and the transaction was accounted for as a reverse recapitalization in accordance with U.S. GAAP. Accordingly, the historical financial
statements of Legacy Fusemachines became the historical financial statements of the registrant.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accordingly,
the following disclosure on &#8220;Reverse Recapitalization&#8221; is presented to summarize the common stock issued at Closing, the
application of the exchange ratio, and the resulting additional paid-in-capital recognized in connection with the recapitalization.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
overall voting interest on closing date is summarized below:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<FONT STYLE="display: none">Schedule
of Overall Voting Interest on Closing Date</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: justify">Particulars</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">Shares</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&#160;</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center">%Ownership</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 60%; text-align: justify">Shares held by Fusemachines Inc. Stockholders</TD><TD STYLE="width: 2%">&#160;</TD>
    <TD STYLE="width: 1%; text-align: left">&#160;</TD><TD STYLE="width: 16%; text-align: right">14,864,110</TD><TD STYLE="width: 1%; text-align: left">&#160;</TD><TD STYLE="width: 2%">&#160;</TD>
    <TD STYLE="width: 1%; text-align: left">&#160;</TD><TD STYLE="width: 16%; text-align: right">52</TD><TD STYLE="width: 1%; text-align: left">%</TD></TR>
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">12,654,921</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">45</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">831,000</TD><TD STYLE="text-align: left">&#160;</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">3</TD><TD STYLE="text-align: left">%</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: justify">Total</TD><TD STYLE="font-weight: bold">&#160;</TD>
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    <TD STYLE="font-weight: bold; text-align: left">&#160;</TD><TD STYLE="font-weight: bold; text-align: right">100</TD><TD STYLE="font-weight: bold; text-align: left">%</TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
October 22, 2025, all holders of 29,199,809 issued and outstanding Legacy Fusemachines common stock received shares of Fusemachines Inc
common stock at a par value $0.0001 per share after giving effect to the exchange ratio of 0.6580 (the &#8220;Conversion Ratio&#8221;)
resulting in 19,214,201 shares of Fusemachines Inc. common stock issued and outstanding as of the Closing. The issuance reflects the
following events contemplated by the Business Combination Agreement:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a) </FONT>9,043,234
shares of Legacy Fusemachines convertible preferred stock were converted into shares of Legacy Fusemachines common stock in
accordance with the applicable conversion terms. Subsequently, in connection with the Business Combination, all such shares of
Legacy Fusemachines common stock were exchanged for shares of common stock of Fusemachines Inc. (the &#8220;Company&#8221; or
&#8220;PubCo&#8221;) based on the exchange ratio specified in the Business Combination Agreement. After giving effect to the
exchange ratio, an aggregate of 5,950,673 shares of the Company&#8217;s common stock were issued.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)
The surrender and exchange of all 29,199,809 issued and outstanding shares of Legacy Fusemachines common stock (including shares issued
upon conversion of preferred stock) into 19,214,201 shares of Fusemachines Inc. common stock as adjusted by the Exchange Ratio&#894;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)
The other related events that occurred in connection with the Closing are summarized below:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

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effected through a combination of $2,343 thousand in cash and balance through issuance  of 408,639 common stock of Fusemachines Inc.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
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    Date, the note was converted into a share of Fusemachines Inc. common stock pursuant to the conversion terms of the convertible note
    agreement. </FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
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    $11,005 thousand prepayment made by CSLM to the Meteora Parties pursuant to the Forward Purchase Agreement funded from the Trust
    Account. </FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
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    of approximately $745 thousand (principal and accrued interest) on promissory notes issued to the Chief Executive Officer.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
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    the Closing was converted into shares of Legacy Fusemachines common stock of 8,048,770
    shares in accordance with the applicable convertible note agreement and immediately thereafter exchanged into 5,296,271 shares of
    Fusemachines Inc. common stock in accordance with the Conversion Ratio specified in the Business Combination Agreement accordingly
    as a result of the conversions and exchanges, no convertible notes or related-party notes payable remained outstanding as of
    December 31, 2025, other than related party note payable related to Dolma amounting $300
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Upon the closing of the business combination, the
Company settled its obligation under the Second Agreement through the issuance of 29,610 shares of Fusemachines, Inc. common stock, reflecting
the application of the 0.6580 conversion ratio to the 45,000 shares of the Company&#8217;s common stock, and a partial cash payment of
approximately $110 thousand. The remaining $98 thousand obligation is still outstanding and is reflected in accounts payable as of December
31, 2025. (refer Note 17 - Commitments and Contingencies).</P>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
    the conversion of the April 2024, June 2024 and September 2024 Convertible Note to common stock, the Company shall issue the holder
    a warrant to purchase 7,500 shares of common stock of CSLM with a per share exercise price of $11.50. The warrants issuable upon
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  </TABLE>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify">The assumption of the public and private warrants, as described in Note 24<I>&#160;&#8220;</I>Public and
private warrants&#8221;.</TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify">The Company&#8217;s amended and restated certificate of incorporation and amended and restated bylaws
were adopted.</TD></TR>
<TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">&#9679;</TD><TD STYLE="text-align: justify">The Company adopted the 2025 equity incentive plan.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 42.55pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<FONT STYLE="display: none">Schedule
of Reverse Recapitalization</FONT></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%; margin-left: 0.5in">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold">Particulars</TD><TD STYLE="padding-bottom: 1pt">&#160;</TD>
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 80%; text-align: justify">Partial conversion of the 3rd Amended and Restated Promissory Note into Fusemachines Inc. common stock on the Closing Date</TD><TD STYLE="width: 2%">&#160;</TD>
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  <TR STYLE="vertical-align: bottom; background-color: White">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Automatic exercise of the rights related to 18,975,000 units issued in CSLM&#8217;s Initial Public Offering</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">1,897,486</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
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  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Conversion of non-redeemable CSLM Class A &amp; Class B Ordinary Shares into Fusemachines Inc. common stock</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">4,743,749</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Share issued to Consilium Frontier Equity Fund in connection with conversion of convertible note on
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    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">3,320,241</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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    <TD STYLE="font-weight: bold; text-align: left">&#160;</TD><TD STYLE="font-weight: bold; text-align: right">12,456,071</TD><TD STYLE="font-weight: bold; text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Conversion of Legacy Fusemachines convertible notes (as adjusted by the Exchange Ratio)</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">1,976,050</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: justify">Conversion of Legacy Fusemachines convertible preferred stock into common stock in connection with the reverse Recapitalization (as adjusted by the Exchange Ratio)</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">5,950,673</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify">Shares issued to Legacy Fusemachines stockholders (as adjusted by the Exchange Ratio)</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">7,967,237</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: justify">Total shares of Fusemachines Inc. common stock outstanding immediately after the Merger</TD><TD STYLE="font-weight: bold">&#160;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&#160;</TD><TD STYLE="font-weight: bold; text-align: right">28,350,031</TD><TD STYLE="font-weight: bold; text-align: left">&#160;</TD></TR>
  </TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Below
table presents the Fund flow reconciliation (in thousands):</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 14.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;<FONT STYLE="display: none">Schedule
of Fund Flow Reconciliation</FONT></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 80%">
  <TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1pt solid; text-align: justify"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Particulars</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P></TD><TD STYLE="padding-bottom: 1pt">&#160;</TD>
    <TD COLSPAN="2" STYLE="border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(Amount In Thousands)</B></FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: right"></P></TD><TD STYLE="padding-bottom: 1pt">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="width: 80%; text-align: left">Trust balance as of Closing date</TD><TD STYLE="width: 2%">&#160;</TD>
    <TD STYLE="width: 1%; text-align: left">&#160;</TD><TD STYLE="width: 16%; text-align: right">11,118</TD><TD STYLE="width: 1%; text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Proceeds from CSLM loan</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">2,193</TD><TD STYLE="text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
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  <TR STYLE="vertical-align: bottom; background-color: White">
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    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&#160;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">9</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">Total Available Cash (A)</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&#160;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">&#160;</TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">25,160</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&#160;</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">CSLM transaction costs</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">(2,249</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="text-align: left">Payment of Director &amp; Officer insurance premium</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">(131</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left">Prepayment under Forward Purchase Agreement</TD><TD>&#160;</TD>
    <TD STYLE="text-align: left">&#160;</TD><TD STYLE="text-align: right">(11,005</TD><TD STYLE="text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="padding-bottom: 1pt; text-align: left">Settlement of sponsor convertible note of CSLM</TD><TD STYLE="padding-bottom: 1pt">&#160;</TD>
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    <TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">Total Payments as of the closing date (B)</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold">&#160;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: left">&#160;</TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: right">(15,728</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">)</TD></TR>
  <TR STYLE="vertical-align: bottom; background-color: rgb(204,238,255)">
    <TD STYLE="font-weight: bold; text-align: left">Funds going to Fusemachines Inc. (classified under financing activities under Consolidated Statements of Cash Flows) (A+B)</TD><TD STYLE="font-weight: bold">&#160;</TD>
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  <TR STYLE="font-style: normal; vertical-align: bottom; background-color: rgb(204,238,255); font-weight: normal">
    <TD STYLE="font-style: normal; font-weight: normal; text-align: left"><FONT STYLE="font-style: normal; font-weight: normal">Operating
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    <TD STYLE="font-style: normal; font-weight: normal; text-align: left"><FONT STYLE="font-style: normal; font-weight: normal">&#160;</FONT></TD><TD STYLE="font-style: normal; font-weight: normal; text-align: right"><FONT STYLE="font-style: normal; font-weight: normal">(1,100</FONT></TD><TD STYLE="font-style: normal; font-weight: normal; text-align: left">)<FONT STYLE="font-style: normal; font-weight: normal"></FONT></TD></TR>
  <TR STYLE="font-style: normal; vertical-align: bottom; background-color: White; font-weight: normal">
    <TD STYLE="font-style: normal; font-weight: normal; text-align: left">Initial fair value of forward purchase derivative liability</TD><TD STYLE="font-style: normal; font-weight: normal">&#160;</TD>
    <TD STYLE="font-style: normal; font-weight: normal; text-align: left">&#160;</TD><TD STYLE="font-style: normal; font-weight: normal; text-align: right">(8,616</TD><TD STYLE="font-style: normal; font-weight: normal; text-align: left">)</TD></TR>
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    <TD STYLE="font-style: normal; font-weight: normal; text-align: left"><FONT STYLE="font-style: normal; font-weight: normal">Issuance
of share subscription receivable</FONT></TD><TD STYLE="font-style: normal; font-weight: normal"><FONT STYLE="font-style: normal; font-weight: normal">&#160;</FONT></TD>
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    <TD STYLE="font-style: normal; font-weight: normal; text-align: left"><FONT STYLE="font-style: normal; font-weight: normal">Legacy
Fusemachines transaction cost</FONT></TD><TD STYLE="font-style: normal; font-weight: normal"><FONT STYLE="font-style: normal; font-weight: normal">&#160;</FONT></TD>
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    <TD STYLE="padding-bottom: 1pt; font-style: normal; font-weight: normal; text-align: left"><B>Net equity impact of reverse recapitalization</B></TD><TD STYLE="padding-bottom: 1pt; font-style: normal; font-weight: normal"><B>&#160;</B></TD>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
reverse recapitalization accounting treatment was primarily determined based on the fact that the stockholders of Legacy Fusemachines
held a relative majority of the voting power of Fusemachines and had the ability to nominate a majority of the members of the Board of
Directors. In addition, the senior management of Legacy Fusemachines becomes the senior management of Fusemachines, and the strategy
and operations of Legacy Fusemachines prior to the merger represent the ongoing operations of the combined Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Accordingly,
for accounting purposes, the financial statements of Fusemachines represent a continuation of the financial statements of Legacy Fusemachines,
with the Merger being treated as the equivalent of Legacy Fusemachines issuing shares for the net assets of CSLM, accompanied by a recapitalization.
The net assets of CSLM were recognized at their historical carrying amounts as of the Closing date, and no goodwill or other intangible
assets were recorded. Operations prior to the Merger are presented as those of Legacy Fusemachines and the accumulated deficit of Legacy
Fusemachines has been carried forward after Closing.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify">Fusemachines Inc. incurred transaction costs of $1,873 thousands, consisting of deferred transaction cost, banking fees, legal fees, and other professional fees, which has been
recorded as a reduction to additional paid-in capital as a direct and incremental cost of the reverse recapitalization.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
periods presented prior to the Merger have been retrospectively adjusted to reflect the Exchange Ratio for the equivalent number of shares
of Fusemachines Inc. common stock outstanding immediately after the Closing in order to effect the reverse recapitalization.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Note
21. Forward Purchase agreement</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
July 31, 2025, CSLM and Legacy Fusemachines (CSLM prior to the Merger and the Company after the Merger, (the
&#8220;Counterparty&#8221;), entered into an over-the-counter
(OTC) equity prepaid forward confirmation (the &#8220;Forward Purchase Agreement&#8221; or &#8220;FPA&#8221;) with Meteora Capital
Partners, LP, Meteora Select Trading Opportunities Master, LP and Meteora Strategic Capital, LLC (collectively, the
&#8220;Sellers&#8221;)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Upon
the consummation of the Merger on October 22, 2025, the Sellers (Meteora) delivered a Pricing Date Notice (as defined in the Forward
Purchase Agreement). Based on this notice, the applicable Prepayment Amount (as defined in the Forward Purchase Agreement) became
determinable and was subsequently funded by the Counterparty from the Trust Account (as defined in the Forward Purchase Agreement)
in accordance with the Forward Purchase Agreement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Under
the material terms of the FPA:</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
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    Agreement) specified in each Pricing Date Notice multiplied by the per-share redemption price (the &#8220;Initial Price&#8221; as
    defined in the Counterparty&#8217;s organizational documents). The Prepayment Amount is payable from the Counterparty&#8217;s Trust
    Account and subject to receipt of a Pricing Date Notice, will be wired no later than the earlier of (a) one Local Business Day after
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  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</TD>
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    is by cash settlement at the end of the agreement: on the Valuation Date (generally three years after the Closing Date unless
    earlier determined under specified events as set forth in the SPA) the Seller will pay the Counterparty a cash amount equal to the
    Number of Shares as of the Valuation Date multiplied by the VWAP over the Valuation Period; the cash settlement payment date is the tenth local business day following the end of the Valuation Period.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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    FPA includes an early termination mechanism: where Sellers sell (terminate) specified shares after closing, Sellers must pay an
    Early Termination Obligation (as defined in the Forward Purchase Agreement) to Counterparty equal to the number of Terminated Shares
    (as defined in the Forward Purchase Agreement) multiplied by the Termination Price of $12.00
    per share (payable on the first local business day following settlement of the sale).</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</TD>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
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    common stock equal to the difference between the Maximum Number of Shares (as defined in the Forward Purchase Agreement) and the
    number of shares of common stock specified in a Pricing Date Notice; such warrants have exercise terms and an exercise price as set
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</TD></TR>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
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    and compliance with tender-offer and SEC rules.</FONT></TD></TR>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 22.7pt; text-align: justify; text-indent: -14.15pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Forward Purchase Agreement includes escrow arrangements pursuant to which the Prepayment Amount funded from the CSLM trust account is
held in escrow for the benefit of the Meteora Parties until settlement or release in accordance with the terms of the Forward Purchase
Agreement. The Company does not have unconditional access to the funds held in escrow, and such funds are not available to satisfy the
claims of the Company&#8217;s creditors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font: normal 10pt Times New Roman, Times, Serif">Accordingly,
the Company recorded the prepayment amount $11,005</FONT>
<FONT STYLE="font: normal 10pt Times New Roman, Times, Serif">thousand as a contra-equity
share subscription receivable, presented as a reduction of stockholders&#8217; equity (APIC), as the escrowed funds represent conditional
consideration receivable from shareholders that is subject to future settlement under the Forward Purchase Agreement. The Prepayment
Amount was determined based on 891,930 shares of common stock at a per share price equal to the SPAC per-share redemption price (the
&#8220;Initial Price&#8221;), as defined in the Forward Purchase Agreement</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Forward Purchase Agreement contains features that meet the definition of a derivative under ASC 815, including an underlying based on
the Company&#8217;s Class A common stock, a notional amount, payment provisions, and provisions that require or permit net cash settlement.
Accordingly, at the Closing, the Company recognized a derivative liability measured at fair value, representing the portion of the escrowed
Prepayment Amount that may be payable to the Forward Counterparty based on conditions existing as of the Closing Date.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
share subscription receivable and the derivative liability, when considered together, represent management&#8217;s estimate of the portion
of the escrowed funds that the Company expects to ultimately retain. Subsequent changes in the fair value of the derivative liability
associated with the Forward Purchase Agreement are recognized in earnings at each reporting date.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Upon receipt of consideration related to the sale
of any shares sold by Meteora, the Company will record the receipt of funds as an increase to cash and a decrease to the share subscription
receivable previously recorded as contra-equity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#160;</P>

<P STYLE="margin: 0pt 0; text-align: justify">The Company incurred no transaction costs that were directly related to issuance of the Forward Purchase Agreement.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Further
subsequent to year ended December 31, 2025, the Company entered into an amendment on February 3, 2026 to the Prepaid Forward
Purchase Agreement (the &#8220;Amendment&#8221;) originally entered into on July 31, 2025 with Meteora Capital Partners and
affiliates, for detail refer to Note 25 - Subsequent events.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2025, the value of the Forward purchase derivative liability is $9,692</FONT>
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">thousand disclosed as Current Liability in the Consolidated
Balance Sheets. </FONT>Further the derivative liability is measured at fair value on a recurring basis using Level 3 inputs, refer to
<B STYLE="font-style: normal; font-weight: normal">Note 3 &#8211; Fair Value Measurements</B> for further information on the valuation techniques and significant unobservable inputs
used in determining the fair value of this instrument.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>

<P STYLE="margin: 0">Further, the derivative liability has been classified as current as the Company does not have an unconditional right
to defer settlement beyond twelve months. The Forward Purchase Agreement includes provisions for early termination upon sale of shares
by the Sellers, which can result in cash settlement within the next twelve months, as well as periodic settlement features, thereby requiring
current classification</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Note
22. Shortfall warrants</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the execution of the Forward Purchase Agreement the Company agreed to issue &#8220;Shortfall Warrants&#8221;
to the Sellers (Meteora) for shares not elected under the Forward Purchase Agreement, representing the difference between the
maximum number of shares subject to the FPA and the number of shares ultimately elected by the Forward Counterparty.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify">
<FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Seller
in its sole discretion may request (in one or more requests) warrants of the Counterparty exercisable for Shares in an amount equal to
(i) the Maximum Number of Shares less (ii) the Number of Shares specified in the Pricing Date Notice (the &#8220;Shortfall Warrants,&#8221;
and the Shares underlying the Shortfall Warrants, the &#8220;Shortfall Warrant Shares&#8221;). The Shortfall Warrants shall have an exercise
price equal to the termination price which is defined $12 in the forward purchase agreement and is subject to reset in accordance
with the pricing provisions of that agreement, and this termination
price has subsequently been amended; for further details, refer to Note 25 &#8211; Subsequent Events.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
warrants grant the holders the right to purchase a fixed number of shares (2,108,070</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">)
at a fixed exercise price/termination price. </FONT>The Shortfall Warrants are exercisable for shares of common stock and were issued
concurrently with the consummation of the Business Combination on October 22, 2025 (the &#8220;Initial Exercise Date&#8221;) and are
exercisable at any time from the Initial Exercise Date until 5:00 p.m. (New York City time) on October 22, 2028 (the &#8220;Termination
Date&#8221;). No shortfall warrants have been exercised as at December 31, 2025.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Shortfall Warrants contain a beneficial ownership
limitation that, subject to certain limited exceptions, restricts a holder from exercising the Shortfall Warrants to the extent that,
following such exercise, the holder, together with its affiliates and certain related parties, would beneficially own more than 9.9% of
the Company&#8217;s outstanding common stock. A holder may increase or decrease this beneficial ownership limitation upon notice to the
Company, provided that any increase will not be effective until the 61st day after such notice and in no event may the beneficial ownership
limitation exceed 9.9%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The exercise price and the number of Shortfall Warrant
Shares are subject to customary anti-dilution adjustments for stock dividends and other distributions on the Company&#8217;s common stock,
stock splits, reverse stock splits, reclassifications and certain rights offerings. In addition, subject to any required shareholder approvals
and applicable stock exchange rules, the Company may, in its discretion, reduce the exercise price of the Shortfall Warrants for any period
of time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Shortfall Warrants and the rights thereunder are
transferable, in whole or in part, with the prior written consent of the Company and subject to compliance with applicable securities
laws and payment of any applicable transfer taxes. The warrants may be divided or combined into new warrants, and, if properly assigned,
may be exercised by a permitted transferee without the issuance of a new warrant certificate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company evaluated the Shortfall Warrants in accordance with ASC 480, Distinguishing Liabilities from Equity, and ASC 815, Derivatives
and Hedging, including the guidance in ASC 815-40 related to contracts indexed to, and potentially settled in, an entity&#8217;s own
equity.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
making this assessment, the Company considered, among other factors:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 30.35pt; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">whether
    the Shortfall Warrants are freestanding financial instruments,</FONT></TD></TR>
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    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">whether
    the warrants are indexed to the Company&#8217;s own stock,</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">whether
    settlement is required to be in shares rather than cash, and</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">whether
    any provisions could require net cash settlement under circumstances outside the Company&#8217;s control.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 30.35pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Accordingly, in connection with the reverse recapitalization,
the Company recognized the Shortfall Warrants at their initial fair value of $1,009 thousands, which is included within additional paid-in
capital in the stockholders&#8217; equity section of the consolidated balance sheet.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Based
on this assessment, the Company concluded that the Shortfall Warrants meet all of the criteria for equity classification under ASC 815-40.
Accordingly, the Shortfall Warrants are classified as equity and are not subject to subsequent remeasurement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Note
23. Private Investment in Public Equity (&#8220;PIPE&#8221;) Financing</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">On
December 23, 2025, Fusemachines Inc. (the &#8220;Company&#8221;) entered into and consummated a Securities Purchase Agreement with an
accredited investor pursuant to which the Company issued and sold shares of its common stock, par value $0.0001 per share, in a private
placement transaction (the &#8220;PIPE Financing&#8221;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font: normal 10pt Times New Roman, Times, Serif">In
connection with the PIPE Financing, the Company issued 588,235</FONT>
<FONT STYLE="font: normal 10pt Times New Roman, Times, Serif">shares of its common
stock at a purchase price of $1.70</FONT>
<FONT STYLE="font: normal 10pt Times New Roman, Times, Serif">per share, resulting
in aggregate gross proceeds of $1,000</FONT>
<FONT STYLE="font: normal 10pt Times New Roman, Times, Serif">thousand. The shares
were issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended, and/or
Regulation D promulgated thereunder.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
proceeds from the PIPE Financing were received in cash at closing. For accounting purposes, the issuance of common stock was recorded
within stockholders&#8217; equity as permanent equity.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Note
24. Public and private  warrants </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
of December 31, 2025, there were 3,971,250
Private Warrants and 9,487,500
Public Warrants outstanding. </FONT>There are no warrants exercised as at December 31, 2025.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Public
warrants</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>&#160;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
Public Warrant entitles the holder to purchase one whole share of the Company&#8217;s common stock. Public Warrants are exercisable only
for whole warrants; no fractional warrants will be issued upon separation of the units, and only whole warrants will trade. The Public
Warrants became  30 days after the completion
of the Business Combination.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company will not be obligated to deliver Class A common shares upon exercise of a Public Warrant (and will have no obligation to settle
a Public Warrant exercise) unless a registration statement under the Securities Act, covering the shares issuable upon exercise, is then
effective and a prospectus relating thereto is current, or a valid exemption from registration is available. If the conditions for registered
issuance are not satisfied, holders will not be able to exercise those Public Warrants for registered shares until such time as an effective
registration statement is available; in such circumstances the Company may permit (or require, as described below) cashless exercise
pursuant to Section 3(a)(9) or other available exemption</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">Each whole Public Warrant is
exercisable for one share of the Company&#8217;s Class A common stock at an exercise price of $11.50 per share, subject to the customary
anti-dilution and other adjustment provisions set forth in the warrant agreement. The Public Warrants became exercisable 30 days after the completion of the initial Business Combination  and expire five years after the completion of an initial Business Combination or earlier upon redemption or liquidation,
in each case in accordance with the warrant agreement.</P>

<P STYLE="margin: 0pt; text-align: justify">&#160;</P>

<P STYLE="margin: 0pt; text-align: justify">The Public Warrants contain customary terms and features for contracts in the Company&#8217;s own equity, including
(i) anti-dilution adjustments to the exercise price and the number of shares issuable upon exercise for share capitalizations, sub-divisions,
combinations, reclassifications, certain rights offerings and Extraordinary Dividends, as described in Section 4 of the warrant agreement;
(ii) the Alternative Issuance provisions in Section 4.5 of the warrant agreement, pursuant to which, upon specified reclassifications,
reorganizations, mergers, consolidations, tender offers or similar change-of-control transactions, each Public Warrant becomes exercisable
for the same form and amount of cash, securities or other property that a holder would receive as a common shareholder on an as-if-exercised
basis immediately prior to the transaction; and (iii) an optional beneficial ownership limitation in Section 3.3.5 of the warrant agreement
that permits a holder, at its election, to limit the number of Class A common shares issuable upon exercise of its warrants such that,
immediately after giving effect to such exercise, the holder&#8217;s beneficial ownership of the Company&#8217;s outstanding Class A common
shares does not exceed a specified &#8220;Maximum Percentage&#8221; (initially 9.8% or such other percentage specified by the holder).
Public Warrants are issued in registered form, may be held in book-entry form through The Depository Trust Company and are transferable
in accordance with the procedures set forth in Section 5 of the warrant agreement, subject to applicable securities law restrictions.
The warrant agreement also provides that the Company is not required to net cash settle the Public Warrants and that, other than the fixed
cash redemption price described above, settlement of the Public Warrants occurs through the issuance of equity or the delivery of the
Alternative Issuance consideration specified in the contract.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The Company may call the Public Warrants for redemption</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">in
    whole and not in part&#894;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">at
    a price of $0.01 per warrant&#894;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">upon
    not less than 30 days&#8217; prior written notice of redemption to each warrant holder&#894; and</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">if,
    and only if, the closing price of the Class A ordinary shares equals or exceeds $18.00 per share for any 20 trading days within a
    30-trading day period ending three trading days before the Company sends the notice of redemption to the warrant holders</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
and when the Public Warrants become redeemable by the Company, it may exercise its redemption right even if the Company is unable to
register or qualify the underlying securities for sale under all applicable state securities laws.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In addition, if (x) the Company
issues additional Class A ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of
a Business Combination at an issue price or effective issue price of less than $9.20 per share of Class A ordinary shares (with such
issue price or effective issue price to be determined in good faith by the Company&#8217;s board of directors and, in the case of
any such issuance to the Sponsor or its affiliates, without taking into account any Founder Shares held by the Sponsor or such
affiliates, as applicable, prior to such issuance) (the &#8220;Newly Issued Price&#8221;), (y) the aggregate gross proceeds from
such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding of a Business
Combination on the date of the consummation of a Business Combination (net of redemptions), and (z) the volume weighted average
trading price of the Class A ordinary shares during the 20 trading day period starting on the trading day prior to the day on which
the Company consummates a Business Combination (such price, the &#8220;Market Value&#8221;) is below $9.20 per share, then the
exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market Value and the
Newly Issued Price and the $18.00 per share redemption trigger price will be adjusted (to the nearest cent) to be equal to 180% of
the higher of the Market Value and the Newly Issued Price.</FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">As of December 31, 2025, if
holders elect to exercise Public Warrants for cash, the Company would deliver one Class A common share for each Public Warrant exercised
and would receive cash equal to the fixed exercise price per share. The aggregate fair value of the shares issued upon such cash exercise
would vary directly with the then-current market price of the Company&#8217;s Class A common stock, whereas the per-warrant exercise price
and resulting cash proceeds to the Company remain fixed in accordance with the warrant agreement. &#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">When Public Warrants are exercised
on a cashless basis in accordance with the warrant agreement, each warrant is settled through the issuance of a reduced number of Class
A common shares determined by reference to the then-current &#8220;Fair Market Value&#8221; of the Class A common stock and the fixed
exercise price. As the market price of the Company&#8217;s Class A common stock increases above the exercise price, the number of shares
issued per Public Warrant and the aggregate fair value of the shares delivered on cashless exercise increase; conversely, as the market
price approaches or falls below the exercise price, the number of shares issued per Public Warrant and the aggregate fair value of the
shares delivered decrease, and no shares would be delivered if the Public Warrants are out-of-the-money.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">&#160;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify">If and when the Public Warrants
become redeemable and the Company elects to redeem them for cash in accordance with the warrant agreement, the Company would be obligated
to pay the fixed contractual redemption price per Public Warrant and the Public Warrants would be cancelled without the issuance of any
Class A common shares. Although the fixed redemption price per warrant does not change with the market price of the Company&#8217;s Class
A common stock, the Company may only exercise this redemption alternative if the Reference Value of the Class A common stock equals or
exceeds the specified redemption trigger, which is based on the trading price of the Company&#8217;s shares.</P>

<P STYLE="margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Fusemachines
Inc. and Subsidiaries Notes to the Consolidated Financial Statements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: center">&#160;</P>



<P STYLE="margin: 0pt; text-align: justify">In the event of certain reclassifications, reorganizations, mergers, consolidations, tender offers or similar transactions
that result in a change of control, the Public Warrants provide for an &#8220;Alternative Issuance&#8221; under which each Public Warrant
becomes exercisable for the cash, securities or other property that the holder would have been entitled to receive if the holder had exercised
the Public Warrant and participated in the transaction as a common shareholder immediately prior to its consummation, as described in
the warrant agreement. Accordingly, the amount and form of consideration delivered upon settlement under this alternative will generally
change in direct proportion to the per-share consideration (whether in cash, stock or other property) payable to the Company&#8217;s common
shareholders in the underlying transaction, which reflects the then-current fair value of the Company&#8217;s equity shares.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Private
warrants</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Private Placement Warrants are substantially identical to the Public Warrants, except that (i) the Private Placement Warrants may be
exercised for cash or on a cashless basis, at the holder&#8217;s option; (ii) the Private Placement Warrants and the Class A common shares
issuable upon their exercise are subject to certain transfer restrictions pursuant to the letter agreement between the Company, the Sponsor
and other parties thereto, as amended from time to time, including that any permitted transferee must agree to be bound by such transfer
restrictions; (iii) the Private Placement Warrants are not redeemable by the Company; and (iv) the holders of the Private Placement Warrants
(including the Class A common shares issuable upon exercise thereof) may be entitled to certain registration rights. The Private Placement
Warrants will not become Public Warrants upon any transfer and shall remain non-redeemable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of December 31, 2025, if holders elect to exercise
the Private Placement Warrants for cash, the Company would deliver one Class A common share for each Private Placement Warrant exercised
and would receive cash equal to the fixed exercise price per share. Consistent with the Public Warrants, the aggregate fair value of the
shares issued upon such cash exercise of the Private Placement Warrants would vary directly with the then-current market price of the
Company&#8217;s Class A common stock, while the per-warrant exercise price and resulting cash proceeds to the Company remain fixed in
accordance with the warrant agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">When Private Placement Warrants are exercised on a
cashless basis in accordance with the warrant agreement, each warrant is settled through the issuance of a reduced number of Class A common
shares determined by reference to the &#8220;Sponsor Exercise Fair Market Value&#8221; of the Class A common stock and the fixed exercise
price. As the market price of the Company&#8217;s Class A common stock increases above the exercise price, the number of shares issued
per Private Placement Warrant and the aggregate fair value of the shares delivered on cashless exercise increase; conversely, as the market
price approaches or falls below the exercise price, the number of shares issued per Private Placement Warrant and the aggregate fair value
of the shares delivered decrease, and no shares would be delivered if the Private Placement Warrants are out-of-the-money.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&#160;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Alternative Issuance provisions described above for the Public Warrants
also apply to the Private Placement Warrants such that, upon the specified reclassification, reorganization, merger, consolidation, tender
offer or similar change-of-control transactions, each Private Placement Warrant becomes exercisable for the same form and amount of cash,
securities or other property that would be received by a common shareholder on an as-if-exercised basis immediately prior to the transaction,
and the settlement amount therefore varies directly with the per-share consideration payable to the Company&#8217;s common shareholders.</P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Classification
and accounting: </I>The Company evaluated the terms of the Public and Private Warrants under the relevant U.S. GAAP guidance for freestanding
financial instruments and derivative accounting and concluded that both the Public Warrants and the Private Warrants meet the criteria
for <B>equity classification</B>. In connection with the reverse recapitalization transaction, the Public Warrants and Private Warrants that were outstanding
immediately prior to the transaction were initially recorded through the reverse recapitalization and are presented within stockholders&#8217;
equity on the consolidated balance sheet as part of additional paid-in capital (rather than as a separate warrant liability line item).
Because the Public Warrants and Private Warrants are classified in equity, there is no subsequent remeasurement required after initial
recognition and changes in the fair value of the Company&#8217;s common stock do not give rise to gains or losses in the statement of
operations related to these warrants.</FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Note
25. Subsequent Events</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
  <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
  <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subsequently
  to year ended December 31, 2025, the Company entered into an amendment on February 3, 2026 to the Prepaid Forward Purchase Agreement
  (the &#8220;Amendment&#8221;) originally entered into on July 31, 2025 with Meteora Capital Partners and affiliates. The Amendment
  replaces the agreement&#8217;s previously fixed Termination Price of $12.00 per share with a weekly-reset Termination Price equal to
  the lower of (a) $12.00 and (b) the volume-weighted average price (VWAP) of the Shares for the immediately preceding week (as reported
  by Bloomberg L.P.), subject to Reset Price Floors applied on a tranche basis (50% of the Shares: $2.50 floor; 50% of the Shares: $5.00
  floor). The Company is currently evaluating the accounting and financial reporting implications of this Amendment, including
its impact, if any, on the valuation of the related derivative instrument.</FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 30.35pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
  <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
  <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subsequent
  to year ended December 31, 2025, the Company entered into an amendment on February 3, 2026, to the Common Stock Purchase Warrant
  (the &#8220;Warrant Amendment&#8221;) originally issued on October 22, 2025 in connection with the Business Combination with Meteora
  Capital Partners, LP, Meteora Select Trading Opportunities Master, LP and Meteora Strategic Capital, LLC (collectively, the
  &#8220;Holder&#8221;). Pursuant to the Warrant Amendment, the exercise price of the warrant was amended such that the exercise price
  per share of the Company&#8217;s common stock is $10.00,
  subject to customary adjustments as set forth in the warrant agreement. All other terms and conditions of the warrant remain
  unchanged and continue in full force and effect. The Company is currently evaluating the accounting and financial reporting
  implications of the Warrant Amendment, including its impact, if any, on the classification and valuation of the warrant. </FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&#160;</TD>
  <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</TD>
  <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#160;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&#160;</TD>
  <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&#9679;</TD>
  <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">On July 28, 2025, the Board of Directors and shareholders of the Company approved the Fusemachines Inc. 2025 Omnibus
Equity Incentive Plan (the &#8220;Plan&#8221;). The Plan authorizes the Company to issue up to 1,500,000 shares of the Company&#8217;s
common stock, par value $0.0001 per share, to eligible employees, directors, and consultants in the form of stock options, restricted
stock, restricted stock units, or other equity-based awards. Subsequent to December 31, 2025, the Company is in the process of granting awards under
the Plan to certain employees. As the awards were not granted and no shares were issued under the Plan as of December 31, 2025, no amounts
have been recognized in the accompanying consolidated financial statements.</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 30.35pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" BORDER="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; margin-top: 0pt; margin-bottom: 0pt">
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></TD>
  <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD>
  <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Further
  the Company has evaluated any other subsequent events through the date of issuance of these consolidated financial statements and determined
  that there have been no events that have occurred that would require adjustments to disclosures in the consolidated financial statements.</FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 30.35pt; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#160;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: right; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><A NAME="gv_001"></A>Exhibit
3.1</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>AMENDED
&amp; RESTATED</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>CERTIFICATE
OF INCORPORATION</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>OF</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>FUSEMACHINES
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>ARTICLE
I</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
name of the corporation is Fusemachines Inc. (the &ldquo;<U>Corporation</U>&rdquo;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>ARTICLE
II</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
address of the Corporation&rsquo;s registered office in the State of Delaware is 1209 Orange Street, City of Wilmington, County of New
Castle County, Delaware 19801. The name of its registered agent at such address is the Corporation Trust Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>ARTICLE
III</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation
Law of the State of Delaware (the &ldquo;<U>DGCL</U>&rdquo;) as it now exists or may hereafter be amended and supplemented.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>ARTICLE
IV</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Corporation is authorized to issue two classes of stock to be designated, respectively, &ldquo;<U>Common Stock</U>&rdquo; and &ldquo;<U>Preferred
Stock</U>.&rdquo; The total number of shares of capital stock that the Corporation shall have authority to issue is 505,000,000. The
total number of shares of Common Stock that the Corporation is authorized to issue is 500,000,000 having a par value of $0.0001 per share,
and the total number of shares of Preferred Stock that the Corporation is authorized to issue is 5,000,000, having a par value of $0.0001
per share.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>ARTICLE
V</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
powers, designations, preferences and relative, participating, optional and other rights, and the qualifications, limitations or restrictions
thereof in respect of each class of capital stock of the Corporation are as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A.
<U>COMMON STOCK</U>.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.
<U>General</U>. The voting, dividend, liquidation and other rights and powers of the Common Stock are subject to and qualified by the
rights, powers and preferences of any series of Preferred Stock as may be designated by the Board of Directors of the Corporation (the
&ldquo;<U>Board of Directors</U>&rdquo;) and outstanding from time to time.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.
<U>Voting</U>.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 1in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 1in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a.
Except as otherwise provided herein or expressly required by law, each holder of Common Stock, as such, shall be entitled to vote on
each matter properly submitted to a vote of stockholders of the Corporation and shall be entitled to one vote for each share of Common
Stock held of record by such holder as of the record date for determining stockholders entitled to vote on such matter. Except as otherwise
required by law, holders of Common Stock, as such, shall not be entitled to vote on any amendment to this Amended and Restated Certificate
of Incorporation (including any Certificate of Designation (as defined below)) that relates solely to the rights, powers, preferences
(or the qualifications, limitations or restrictions thereof) or other terms of any outstanding series of Preferred Stock if the holders
of such affected series are entitled, either separately or together with the holders of one or more other such series, to vote thereon
pursuant to this Amended and Restated Certificate of Incorporation (including any Certificate of Designation) or pursuant to the DGCL.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 1in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 1in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">b.
Subject to the rights of any holders of any outstanding series of Preferred Stock, the number of authorized shares of Common Stock may
be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority
of the voting power of all of the then outstanding shares of stock of the Corporation entitled to vote, irrespective of the provisions
of Section 242(b)(2) of the DGCL.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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    <DIV STYLE="break-before: page; margin-top: 6pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.
<U>Dividends</U>. Subject to applicable law and the rights and preferences of any holders of any outstanding series of Preferred Stock,
the holders of Common Stock, as such, shall be entitled to the payment of dividends and other distributions on the Common Stock when,
as and if declared by the Board of Directors from time to time out of assets or funds of the Corporation legally available therefor,
in accordance with applicable law.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.
<U>Liquidation</U>. Subject to the rights and preferences of any holders of any shares of any outstanding series of Preferred Stock,
in the event of any liquidation, dissolution or winding up of the Corporation, whether voluntary or involuntary, the funds and assets
of the Corporation that may be legally distributed to the Corporation&rsquo;s stockholders shall be distributed among the holders of
the then outstanding Common Stock on an equal priority, <U>pro rata</U> in accordance with the number of shares of Common Stock held
by each such holder.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.
<U>PREFERRED STOCK</U>.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.
Shares of Preferred Stock may be issued from time to time in one or more series, each of such series to have such terms as stated or
expressed herein and in the resolution or resolutions providing for the creation and issuance of such series adopted by the Board of
Directors as hereinafter provided.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.
Authority is hereby expressly granted to the Board of Directors from time to time to issue any or all of the unissued and undesignated
shares of the Preferred Stock in one or more series, and in connection with the creation of any such series, by adopting a resolution
or resolutions providing for the issuance of the shares thereof and by filing a certificate of designation relating thereto in accordance
with the DGCL (a &ldquo;<U>Certificate of Designation</U>&rdquo;), to determine and fix the number of shares of such series and such
voting powers, full or limited, or no voting powers, and such designations, preferences and relative participating, optional or other
special rights, and qualifications, limitations or restrictions thereof, including without limitation thereof, dividend rights, conversion
rights, redemption privileges and liquidation preferences, and to increase or decrease (but not below the number of shares of such series
then outstanding) the number of shares of any series as shall be stated and expressed in such resolutions, all to the fullest extent
now or hereafter permitted by the DGCL. Without limiting the generality of the foregoing, the resolution or resolutions providing for
the creation and issuance of any series of Preferred Stock may provide that such series shall be superior or rank equally or be junior
to any other series of Preferred Stock to the extent permitted by law and this Amended and Restated Certificate of Incorporation (including
any Certificate of Designation). Except as otherwise required by law, holders of any series of Preferred Stock shall be entitled only
to such voting rights, if any, as shall expressly be granted thereto by this Amended and Restated Certificate of Incorporation (including
any Certificate of Designation).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.
The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding)
by the affirmative vote of the holders of a majority of the voting power of all of the then outstanding shares of stock of the Corporation
entitled to vote thereon, without a separate vote of the holders of the Preferred Stock, or of any series thereof, or Common Stock, irrespective
of the provisions of Section 242(b)(2) of the DGCL, unless a vote of any such holders is required pursuant to the terms of any Certificate
of Designation filed with respect to any series of Preferred Stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>ARTICLE
VI</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the management of the business and for the conduct of the affairs of the Corporation it is further provided that:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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    <DIV STYLE="break-before: page; margin-top: 6pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A.
The number of directors of the Corporation, other than those who may be elected by the holders of one or more series of the Preferred
Stock voting separately by class or series, shall be fixed from time to time exclusively by the Board pursuant to a resolution adopted
by a majority of the Board of Directors. At the effective time of this Amended and Restated Certificate of Incorporation, the Board of
Directors shall consist of five (5) directors. The Board of Directors shall be divided into three classes, as nearly equal in number
as possible and designated Class I, Class II and Class III. The Board of Directors is authorized to assign members of the Board of Directors
already in office to Class I, Class II or Class III. The term of the initial Class I Directors shall expire at the first annual meeting
of the stockholders of the Corporation following the effectiveness of this Amended and Restated Certificate of Incorporation, the term
of the initial Class II Directors shall expire at the second annual meeting of the stockholders of the Corporation following the effectiveness
of this Amended and Restated Certificate of Incorporation and the term of the initial Class III Directors shall expire at the third annual
meeting of the stockholders of the Corporation following the effectiveness of this Amended and Restated Certificate of Incorporation.
At each succeeding annual meeting of the stockholders of the Corporation, beginning with the first annual meeting of the stockholders
of the Corporation following the effectiveness of this Amended and Restated Certificate of Incorporation, each of the successors elected
to replace the class of directors whose term expires at that annual meeting shall be elected for a three-year term or until the election
and qualification of their respective successors in office, subject to their earlier death, resignation or removal. If the number of
directors that constitutes the Board of Directors is changed, any increase or decrease shall be apportioned by the Board of Directors
among the classes so as to maintain the number of directors in each class as nearly equal as possible, but in no case shall a decrease
in the number of directors constituting the Board of Directors shorten the term of any incumbent director. Subject to the rights of the
holders of one or more series of Preferred Stock, voting separately by class or series, to elect directors pursuant to the terms of one
or more series of Preferred Stock, the election of directors shall be determined by a plurality of the votes cast by the stockholders
present in person or represented by proxy at the meeting and entitled to vote thereon. The Board of Directors is hereby expressly authorized,
by resolution or resolutions thereof, to assign members of the Board of Directors already in office to the aforesaid classes at the time
this Amended and Restated Certificate of Incorporation (and therefore such classification) becomes effective in accordance with the DGCL.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.
Each director shall hold office until the annual meeting for the year in which his or her term expires and until his or her successor
has been elected and qualified, subject, however, to such director&rsquo;s earlier death, resignation, retirement, disqualification or
removal.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">C.
Except as otherwise expressly provided by the DGCL or this Amended and Restated Certificate of Incorporation, the business and affairs
of the Corporation shall be managed by or under the direction of the Board of Directors. The number of directors that shall constitute
the whole Board of Directors shall be fixed exclusively by one or more resolutions adopted from time to time by the Board of Directors
in accordance with the bylaws of the Corporation (as such bylaws may be amended from time to time, the &ldquo;<U>Bylaws</U>&rdquo;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">D.
Subject to the special rights of the holders of any outstanding series of Preferred Stock to elect directors, the Board of Directors
or any individual director may be removed from office at any time, solely with cause by the affirmative vote of the holders of at least
sixty-six and two-thirds percent (66 2/3%) of the voting power of all of the then outstanding shares of stock of the Corporation entitled
to vote generally in the election of directors, voting together as a single class.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">E.
Subject to the special rights of the holders of any outstanding series of Preferred Stock to elect directors, except as otherwise provided
by law, any vacancies on the Board of Directors resulting from death resignation, retirement, disqualification, removal or other causes
and any newly created directorships resulting from any increase in the number of directors, shall, unless the Board of Directors determines
by resolution that any such vacancies or newly created directorships shall be filled by the stockholders and except as otherwise provided
by applicable law, be filled exclusively by the affirmative vote of a majority of the directors then in office, even though less than
a quorum, or by a sole remaining director (other than any directors elected by a separate vote of any outstanding series of Preferred
Stock), and shall not be filled by the stockholders. Any director appointed in accordance with the preceding sentence shall hold office
for the remainder of the full term of the class of directors to which the new directorship was added or in which the vacancy occurred
and until such director&rsquo;s successor has been elected and qualified, subject, however, to such director&rsquo;s earlier death, resignation,
retirement, disqualification or removal.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F.
Whenever the holders of any series of Preferred Stock issued by the Corporation shall have the right, voting separately as a series or
separately as a class with one or more such other series, to elect directors at an annual or special meeting of stockholders, the election,
term of office, removal and other features of such directorships shall be governed by the terms of this Amended and Restated Certificate
of Incorporation (including any Certificate of Designation). Notwithstanding anything to the contrary in this Article VI, the number
of directors that may be elected by the holders of any such series of Preferred Stock shall be in addition to the number fixed pursuant
to paragraph A of this Article VI, the total number of directors constituting the whole Board of Directors shall be automatically adjusted
accordingly, and such additional directors shall not be included in any of the classes created pursuant to this Article VI unless expressly
provided by such terms. Except as otherwise provided in the Certificate of Designation(s) in respect of any series of Preferred Stock,
whenever the holders of any series of Preferred Stock having such right to elect additional directors are divested of such right pursuant
to the provisions of such Certificate of Designation(s), the terms of office of all such additional directors elected by the holders
of such series of Preferred Stock, or elected to fill any vacancies resulting from the death, resignation, retirement, disqualification
or removal of such additional directors, shall forthwith terminate (in which case each such director thereupon shall cease to be qualified
as, and shall cease to be, a director) and the total authorized number of directors of the Corporation shall automatically be reduced
accordingly.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">G.
In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to adopt, amend
or repeal the Bylaws, subject to the power of the stockholders of the Corporation entitled to vote with respect thereto to adopt, amend
or repeal the Bylaws. The stockholders of the Corporation shall also have the power to adopt, amend or repeal the Bylaws; provided, that
in addition to any vote of the holders of any class or series of stock of the Corporation required by applicable law or by this Amended
and Restated Certificate of Incorporation (including any Certificate of Designation in respect of any series of Preferred Stock) or the
Bylaws, the adoption, amendment or repeal of the Bylaws by the stockholders of the Corporation shall require the affirmative vote of
the holders of at least a majority of the voting power of all of the then outstanding shares of stock of the Corporation entitled to
vote generally in an election of directors, voting together as a single class.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">H.
The directors of the Corporation need not be elected by written ballot unless the Bylaws so provide.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>ARTICLE
VII</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A.
For so long as the Corporation qualifies as a Controlled Company (as defined in Section 5615(c)(1) of the Nasdaq Stock Market LLC Rules
or Section 303A.00 of the New York Stock Exchange Listed Company Manual, as applicable), any action required or permitted to be taken
by the stockholders of the Corporation may be effected at an annual or special meeting of the stockholders of the Corporation, or may,
except as otherwise required by applicable law or this Amended and Restated Certificate of Incorporation, be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth the action so taken, shall be signed by the holders of
outstanding shares of stock having not less than the minimum number of votes that would be necessary to authorize or take such action
at a meeting at which all the shares entitled to vote thereon were present and voted and shall be delivered to the Corporation in accordance
with the applicable provisions of the DGCL. From and after the date the Corporation ceases to qualify as a Controlled Company, any action
required or permitted to be taken by the stockholders of the Corporation must be effected at a duly called annual or special meeting
of the stockholders of the Corporation (and may not be taken by consent of the stockholders in lieu of a meeting). Notwithstanding the
foregoing, any action required or permitted to be taken by the holders of any series of Preferred Stock, voting separately as a series
or separately as a class with one or more other such series, may be taken without a meeting, without prior notice and without a vote,
to the extent expressly so provided by the applicable Certificate of Designation relating to such series of Preferred Stock, if a consent
or consents in writing, setting forth the action so taken, shall be signed by the holders of outstanding shares of the relevant series
of Preferred Stock having not less than the minimum number of votes that would be necessary to authorize or take such action at a meeting
at which all shares entitled to vote thereon were present and voted and shall be delivered to the Corporation in accordance with the
applicable provisions of the DGCL.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.
Subject to the special rights of the holders of any series of Preferred Stock, and to the requirements of applicable law, special meetings
of the stockholders of the Corporation may be called for any purpose or purposes, at any time only by or at the direction of the Board
of Directors, the Chairperson of the Board of Directors, the Chief Executive Officer or President, in each case, in accordance with the
Bylaws, and shall not be called by any other person or persons. Any such special meeting so called may be postponed, rescheduled or cancelled
by the Board of Directors or other person calling the meeting.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">C.
Advance notice of stockholder nominations for the election of directors and of other business proposed to be brought by stockholders
before any meeting of the stockholders of the Corporation shall be given in the manner provided in the Bylaws. Any business transacted
at any special meeting of stockholders shall be limited to matters relating to the purpose or purposes identified in the notice of meeting.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>ARTICLE
VIII</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
the fullest extent permitted by the DGCL, as the same exists or as may hereafter be amended, no director or officer of the Corporation
shall have any personal liability to the Corporation or its stockholders for monetary damages for any breach of fiduciary duty as a director
or officer, except to the extent such exemption from liability or limitation thereof is not permitted under the DGCL as the same exists
or hereafter may be amended. Any amendment, repeal or modification of this Article VIII, or the adoption of any provision of this Amended
and Restated Certificate of Incorporation inconsistent with this Article VIII, shall not adversely affect any right or protection or
increase the liability of any director or officer of the Corporation with respect to any act or omission occurring prior to such amendment,
repeal, modification or adoption. If the DGCL is amended after approval by the stockholders of this Article VIII to authorize corporate
action further eliminating or limiting the personal liability of directors or officers, then the liability of a director or officer of
the Corporation shall be eliminated or limited to the fullest extent permitted by the DGCL as so amended.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>ARTICLE
IX</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A.
The Corporation hereby expressly elects not to be governed by Section 203 of the DGCL, and instead the provisions of Article IX(B)-(D)
below shall apply, for so long as the Corporation&rsquo;s Common Stock is registered under Section 12(b) or 12(g) of the Exchange Act
of 1934, as amended (the &ldquo;<U>Exchange Act</U>&rdquo;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.
The Corporation shall not engage in any business combination (as defined below) with any interested stockholder (as defined below) for
a period of three years following the time that such stockholder became an interested stockholder, unless:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)
prior to such time, the Board approved either the business combination or the transaction that resulted in the stockholder becoming an
interested stockholder;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)
upon consummation of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder
owned at least 85% of the voting stock (as defined below) of the Corporation outstanding at the time the transaction commenced, excluding
for purposes of determining the voting stock outstanding (but not the outstanding voting stock owned by the interested stockholder) those
shares owned by (i) persons who are directors and also officers and (ii) employee stock plans in which employee participants do not have
the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3)
at or subsequent to such time, the business combination is approved by the Board and authorized at an annual or special meeting of stockholders,
and not by written consent, by the affirmative vote of sixty-six and two thirds percent (66 2/3%) of all of the then outstanding shares
of stock of the Corporation which is not owned by the interested stockholder.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">C.
The restrictions contained in the foregoing Article IX(B) shall not apply if:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)
a stockholder becomes an interested stockholder inadvertently and (i) as soon as practicable divests itself of ownership of sufficient
shares so that the stockholder ceases to be an interested stockholder and (ii) would not, at any time, within the three-year period immediately
prior to the business combination between the Corporation and such stockholder, have been an interested stockholder but for the inadvertent
acquisition of ownership; or</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)
the business combination is proposed prior to the consummation or abandonment of and subsequent to the earlier of the public announcement
or the notice required hereunder of a proposed transaction which (i) constitutes one of the transactions described in the second sentence
of this Article IX(C)(2), (ii) is with or by a person who either was not an interested stockholder during the previous three years or
who became an interested stockholder with the approval of the Board and (iii) is approved or not opposed by a majority of the directors
then in office (but not less than one) who were directors prior to any person becoming an interested stockholder during the previous
three years or were recommended for election or elected to succeed such directors by a majority of such directors. The proposed transactions
referred to in the preceding sentence are limited to (x) a merger or consolidation of the Corporation (except for a merger in respect
of which, pursuant to Section 251(f) of the DGCL, no vote of the stockholders of the Corporation is required), (y) a sale, lease, exchange,
mortgage, whether as part of a dissolution or otherwise, of assets of the Corporation or of any direct or indirect majority-owned subsidiary
of the Corporation (other than to any direct or indirect wholly owned subsidiary or to the Corporation) having an aggregate market value
equal to fifty percent or more of either that aggregate market value of all the assets of the Corporation determined on a consolidated
basis or the aggregate market value of all the outstanding stock of the Corporation or (z) a proposed tender or exchange offer for 50%
or more of the outstanding voting stock of the Corporation. The Corporation shall give not less than 20 days&rsquo; notice to all interested
stockholders prior to the consummation of any of the transactions described in clause (x) or (y) of the second sentence of this Article
IX(C)(2).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">D.
For purposes of this Article IX, references to:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)
&ldquo;affiliate&rdquo; means a person that directly, or indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, another person.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)
&ldquo;associate,&rdquo; when used to indicate a relationship with any person, means: (i) any corporation, partnership, unincorporated
association or other entity of which such person is a director, officer or partner or is, directly or indirectly, the owner of 20% or
more of the voting power thereof; (ii) any trust or other estate in which such person has at least a 20% beneficial interest or as to
which such person serves as trustee or in a similar fiduciary capacity; and (iii) any relative or spouse of such person, or any relative
of such spouse, who has the same residence as such person.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(3)
&ldquo;business combination,&rdquo; when used in reference to the Corporation and any interested stockholder of the Corporation, means:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 1.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 1.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a.
any merger or consolidation of the Corporation or any direct or indirect majority-owned subsidiary of the Corporation (i) with the interested
stockholder, or (ii) with any other corporation, partnership, unincorporated association or other entity if the merger or consolidation
is caused by the interested stockholder and as a result of such merger or consolidation subsection (B) of this Article IX is not applicable
to the surviving entity;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 1.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 1.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">b.
any sale, lease, exchange, mortgage, pledge, transfer or other disposition (in one transaction or a series of transactions), except proportionately
as a stockholder of the Corporation, to or with the interested stockholder, whether as part of a dissolution or otherwise, of assets
of the Corporation or of any direct or indirect majority-owned subsidiary of the Corporation which assets have an aggregate market value
equal to 25% or more of either the aggregate market value of all the assets of the Corporation determined on a consolidated basis or
the aggregate market value of all the outstanding stock of the Corporation;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 1.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 1.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">c.
any transaction which results in the issuance or transfer by the Corporation or by any direct or indirect majority-owned subsidiary of
the Corporation of any stock of the Corporation or of such subsidiary to the interested stockholder, except: (i) pursuant to the exercise,
exchange or conversion of securities exercisable for, exchangeable for or convertible into stock of the Corporation or any such subsidiary
which securities were outstanding prior to the time that the interested stockholder became such; (ii) pursuant to a merger under Section
251(g) of the DGCL; (iii) pursuant to a dividend or distribution paid or made, or the exercise, exchange or conversion of securities
exercisable for, exchangeable for or convertible into stock of the Corporation or any such subsidiary which security is distributed,
pro rata to all holders of a class or series of stock of the Corporation subsequent to the time the interested stockholder became such;
(iv) pursuant to an exchange offer by the Corporation to purchase stock made on the same terms to all holders of said stock; or (v) any
issuance or transfer of stock by the Corporation; <U>provided</U>, <U>however</U>, that in no case under items (iii) through (v) of this
subsection shall there be an increase in the interested stockholder&rsquo;s proportionate share of the stock of any class or series of
the Corporation or of the voting stock of the Corporation (except as a result of immaterial changes due to fractional share adjustments);</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 1.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 1.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">d.
any transaction involving the Corporation or any direct or indirect majority-owned subsidiary of the Corporation which has the effect,
directly or indirectly, of increasing the proportionate share of the stock of any class or series, or securities convertible into the
stock of any class or series, of the Corporation or of any such subsidiary which is owned by the interested stockholder, except as a
result of immaterial changes due to fractional share adjustments or as a result of any purchase or redemption of any shares of stock
not caused, directly or indirectly, by the interested stockholder; or</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 1.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 1.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">e.
any receipt by the interested stockholder of the benefit, directly or indirectly (except proportionately as a stockholder of the Corporation),
of any loans, advances, guarantees, pledges, or other financial benefits (other than those expressly permitted in subsections (a) through
(d) above) provided by or through the Corporation or any direct or indirect majority-owned subsidiary.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(4)
&ldquo;control,&rdquo; including the terms &ldquo;controlling,&rdquo; &ldquo;controlled by&rdquo; and &ldquo;under common control with,&rdquo;
means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person,
whether through the ownership of voting stock, by contract, or otherwise. A person who is the owner of 20% or more of the outstanding
voting stock of a corporation, partnership, unincorporated association or other entity shall be presumed to have control of such entity,
in the absence of proof by a preponderance of the evidence to the contrary. Notwithstanding the foregoing, a presumption of control shall
not apply where such person holds voting stock, in good faith and not for the purpose of circumventing this subsection (D) of Article
IX, as an agent, bank, broker, nominee, custodian or trustee for one or more owners who do not individually or as a group have control
of such entity.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(5)
&ldquo;interested stockholder&rdquo; means any person (other than the Corporation or any direct or indirect majority-owned subsidiary
of the Corporation) that (i) is the owner of 15% or more of the outstanding voting stock of the Corporation, or (ii) is an affiliate
or associate of the Corporation and was the owner of 15% or more of the outstanding voting stock of the Corporation at any time within
the three year period immediately prior to the date on which it is sought to be determined whether such person is an interested stockholder;
and the affiliates and associates of such person; <U>provided</U>, <U>however</U>, that the term &ldquo;interested stockholder&rdquo;
shall not include (a) any Principal Stockholder or any of its affiliates or successors or any &ldquo;group,&rdquo; or any member of any
such group, to which such persons are a party under Rule 13d-5 of the Exchange Act, or (b) any person whose ownership of shares in excess
of the 15% limitation set forth herein is the result of any action taken solely by the Corporation; <U>provided</U>, <U>further</U>,
that in the case of clause (b) such person shall be an interested stockholder if thereafter such person acquires additional shares of
voting stock of the Corporation, except as a result of further corporate action not caused, directly or indirectly, by such person. For
the purpose of determining whether a person is an interested stockholder, the voting stock of the Corporation deemed to be outstanding
shall include stock deemed to be owned by the person through application of the definition of &ldquo;owner&rdquo; below but shall not
include any other unissued stock of the Corporation which may be issuable pursuant to any agreement, arrangement or understanding, or
upon exercise of conversion rights, warrants or options, or otherwise.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(6)
&ldquo;owner,&rdquo; including the terms &ldquo;own&rdquo; and &ldquo;owned,&rdquo; when used with respect to any stock, means a person
that individually or with or through any of its affiliates or associates:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 1.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 1.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a.
beneficially owns such stock, directly or indirectly;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 1.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 1.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">b.
has (i) the right to acquire such stock (whether such right is exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding, or upon the exercise of conversion rights, exchange rights, warrants or options, or otherwise;
<U>provided</U>, <U>however</U>, that a person shall not be deemed the owner of stock tendered pursuant to a tender or exchange offer
made by such person or any of such person&rsquo;s affiliates or associates until such tendered stock is accepted for purchase or exchange;
or (ii) the right to vote such stock pursuant to any agreement, arrangement or understanding; <U>provided</U>, <U>however</U>, that a
person shall not be deemed the owner of any stock because of such person&rsquo;s right to vote such stock if the agreement, arrangement
or understanding to vote such stock arises solely from a revocable proxy or consent given in response to a proxy or consent solicitation
made to 10 or more persons; or</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 1.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 1.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">c.
has any agreement, arrangement or understanding for the purpose of acquiring, holding, voting (except voting pursuant to a revocable
proxy or consent as described in item (ii) of subsection (b) above), or disposing of such stock with any other person that beneficially
owns, or whose affiliates or associates beneficially own, directly or indirectly, such stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(7)
&ldquo;person&rdquo; means any individual, corporation, partnership, unincorporated association or other entity.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(8)
&ldquo;Principal Stockholder&rdquo; means Consilium Acquisition Sponsor I, LLC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(9)
&ldquo;stock&rdquo; means, with respect to any corporation, capital stock and, with respect to any other entity, any equity interest.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.75in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(10)
&ldquo;voting stock&rdquo; means stock of any class or series entitled to vote generally in the election of directors and, with respect
to any entity that is not a corporation, any equity interest entitled to vote generally in the election of the governing body of such
entity. Every reference to a percentage of voting stock shall be calculated on the basis of the aggregate number of votes applicable
to all shares of such voting stock, and by allocating to each share of voting stock, that number of votes to which such share is entitled.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>ARTICLE
X</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A.
The Corporation shall indemnify its directors and officers to the fullest extent authorized or permitted by applicable law, as now or
hereafter in effect, and such right to indemnification shall continue as to a person who has ceased to be a director or officer of the
Corporation and shall inure to the benefit of his or her heirs, executors and personal and legal representatives; <U>provided</U>, <U>however</U>,
that, except for proceedings to enforce rights to indemnification, the Corporation shall not be obligated to indemnify any director or
officer (or his or her heirs, executors or personal or legal representatives) in connection with a proceeding (or part thereof) initiated
by such person unless such proceeding (or part thereof) was authorized or consented to by the Board. The right to indemnification conferred
by this Article X shall include the right to be paid by the Corporation the expenses incurred in defending or otherwise participating
in any proceeding in advance of its final disposition upon receipt by the Corporation of an undertaking by or on behalf of the director
or officer receiving advancement to repay the amount advanced if it shall ultimately be determined that such person is not entitled to
be indemnified by the Corporation under this Article X. The Corporation may, to the extent authorized from time to time by the Board,
provide rights to indemnification and to the advancement of expenses to employees and agents of the Corporation similar to those conferred
in this Article X to directors and officers of the Corporation. The rights to indemnification and to the advancement of expenses conferred
in this Article X shall not be exclusive of any other right which any person may have or hereafter acquire under this Amended and Restated
Certificate of Incorporation, the Bylaws, any statute, agreement, vote of stockholders or disinterested directors or otherwise. Any repeal
or modification of this Article X shall only be prospective and shall not adversely affect any rights to indemnification and to the advancement
of expenses of a director, officer, employee or agent of the Corporation (collectively, the &ldquo;<U>Covered Persons</U>&rdquo;) existing
at the time of such repeal or modification with respect to any acts or omissions occurring prior to such repeal or modification.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.
The Corporation hereby acknowledges that certain Covered Persons may have rights to indemnification and advancement of expenses (directly
or through insurance obtained by any such entity) provided by one or more third parties (collectively, the &ldquo;<U>Other Indemnitors</U>&rdquo;),
and which may include third parties for whom such Covered Person serves as a manager, member, officer, employee or agent. The Corporation
hereby agrees and acknowledges that notwithstanding any such rights that a Covered Person may have with respect to any Other Indemnitor(s),
(i) the Corporation is the indemnitor of first resort with respect to all Covered Persons and all obligations to indemnify and provide
advancement of expenses to Covered Persons, (ii) the Corporation shall be required to indemnify and advance the full amount of expenses
incurred by the Covered Persons, to the fullest extent required by law, the terms of this Amended and Restated Certificate of Incorporation,
the Bylaws, any agreement to which the Corporation is a party, any vote of the stockholders or the Board, or otherwise, without regard
to any rights the Covered Persons may have against the Other Indemnitors and (iii) to the fullest extent permitted by law, the Corporation
irrevocably waives, relinquishes and releases the Other Indemnitors from any and all claims for contribution, subrogation or any other
recovery of any kind in respect thereof. The Corporation further agrees that no advancement or payment by the Other Indemnitors with
respect to any claim for which the Covered Persons have sought indemnification from the Corporation shall affect the foregoing and the
Other Indemnitors shall have a right of contribution and/or be subrogated to the extent of any such advancement or payment to all of
the rights of recovery of the Covered Persons against the Corporation. These rights shall be a contract right, and the Other Indemnitors
are express third party beneficiaries of the terms of this paragraph. Notwithstanding anything to the contrary herein, the obligations
of the Corporation under this paragraph shall only apply to Covered Persons in their capacity as Covered Persons.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>ARTICLE
XI</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A.
Unless the Corporation consents in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware (the
&ldquo;<U>Chancery Court</U>&rdquo;) (or, if and only if the Chancery Court lacks subject matter jurisdiction, any state court located
within the State of Delaware or, if and only if all such state courts lack subject matter jurisdiction, the federal district court for
the District of Delaware) and any appellate court thereof shall, to the fullest extent permitted by law, be the sole and exclusive forum
for the following claims or causes of action under the Delaware statutory or common law: (i) any derivative action, suit or proceeding
brought on behalf of the Corporation, (ii) any action, suit or proceeding asserting a claim of breach of a fiduciary duty owed by any
current or former director, officer or other employee of the Corporation to the Corporation or the Corporation&rsquo;s stockholders,
(iii) any action, suit or proceeding against the Corporation or any current or former director, officer or other employee of the Corporation
arising pursuant to any provision of the DGCL or this Amended and Restated Certificate of Incorporation or the Bylaws (as each may be
amended from time to time), (iv) any claim or cause of action seeking to interpret, apply, enforce or determine the validity of this
Amended and Restated Certificate of Incorporation or the Bylaws (as each may be amended from time to time, including any right, obligation,
or remedy thereunder), (v) any action, suit or proceeding as to which the DGCL confers jurisdiction on the Chancery Court, or (vi) any
action, suit or proceeding asserting a claim against the Corporation or any current or former director, officer or other employee of
the Corporation governed by the internal affairs doctrine or otherwise related to the Corporation&rsquo;s internal affairs, in all cases
to the fullest extent permitted by law and subject to the court having personal jurisdiction over the indispensable parties named as
defendants. If any action the subject matter of which is within the scope of the immediately preceding sentence is filed in a court other
than the courts in the State of Delaware (a &ldquo;<U>Foreign Action</U>&rdquo;) in the name of any stockholder, such stockholder shall
be deemed to have consented to (a) the personal jurisdiction of the state and federal courts in the State of Delaware in connection with
any action brought in any such court to enforce the provisions of the immediately preceding sentence and (b) having service of process
made upon such stockholder in any such action by service upon such stockholder&rsquo;s counsel in the Foreign Action as agent for such
stockholder.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.
Unless the Corporation consents in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal
district courts of the United States of America shall be the exclusive forum for the resolution of any complaint asserting a cause of
action arising under the Securities Act of 1933, as amended.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">C.
Notwithstanding the foregoing, the provisions of this Article XI shall not apply to any claim or action arising under the Exchange Act
or any other claim for which the federal courts of the United States have exclusive jurisdiction.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">D.
Any person or entity holding, owning, purchasing or otherwise acquiring any interest in any security of the Corporation shall be deemed
to have notice of and consented to this Article XI.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase"><B>Article
XII</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A.
In recognition and anticipation that (i) certain directors, managers, principals, officers, employees and/or other representatives of
the Principal Stockholders and their Affiliates (as defined below) may serve as directors, officers or agents of the Corporation, (ii)
the Principal Stockholders and their Affiliates may now engage and may continue to engage in the same or similar activities or related
lines of business as those in which the Corporation, directly or indirectly, may engage and/or other business activities that overlap
with or compete with those in which the Corporation, directly or indirectly, may engage, and (iii) members of the Board who are not employees
of the Corporation or a majority owned subsidiary thereof (&ldquo;<U>Non-Employee Directors</U>&rdquo;) and their respective Affiliates
may now engage and may continue to engage in the same or similar activities or related lines of business as those in which the Corporation,
directly or indirectly, may engage and/or other business activities that overlap with or compete with those in which the Corporation,
directly or indirectly, may engage, the provisions of this Article XII are set forth to regulate and define the conduct of certain affairs
of the Corporation with respect to certain classes or categories of business opportunities as they may involve any of the Principal Stockholders,
the Non-Employee Directors or their respective Affiliates and the powers, rights, duties and liabilities of the Corporation and its directors,
officers and stockholders in connection therewith.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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    <DIV STYLE="break-before: page; margin-top: 6pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.
None of (i) the Principal Stockholders or any of their Affiliates or (ii) any Non-Employee Director (including any Non-Employee Director
who serves as an officer of the Corporation in both his or her director and officer capacities) or his or her Affiliates (the Persons
(as defined below) identified in (i) and (ii) above being referred to, collectively, as &ldquo;<U>Identified Persons</U>&rdquo; and,
individually, as an &ldquo;<U>Identified Person</U>&rdquo;) shall, to the fullest extent permitted by law, have any duty to refrain from
directly or indirectly (1) engaging in the same or similar business activities or lines of business in which the Corporation or any of
its Affiliates now engages or proposes to engage or (2) otherwise competing with the Corporation or any of its Affiliates, and, to the
fullest extent permitted by law, no Identified Person shall be liable to the Corporation or its stockholders or to any Affiliate of the
Corporation for breach of any fiduciary duty solely by reason of the fact that such Identified Person engages in any such activities.
To the fullest extent permitted by law, the Corporation hereby renounces any interest or expectancy in, or right to be offered an opportunity
to participate in, any business opportunity which may be a corporate opportunity for an Identified Person and the Corporation or any
of its Affiliates, except as provided in Section C of this Article XII. Subject to Section C of this Article XII, in the event that any
Identified Person acquires knowledge of a potential transaction or other business opportunity which may be a corporate opportunity for
itself, herself or himself and the Corporation or any of its Affiliates, such Identified Person shall, to the fullest extent permitted
by law, have no duty to communicate or offer such transaction or other business opportunity to the Corporation or any of its Affiliates
and, to the fullest extent permitted by law, shall not be liable to the Corporation or its stockholders or to any Affiliate of the Corporation
for breach of any fiduciary duty as a stockholder, director or officer of the Corporation solely by reason of the fact that such Identified
Person pursues or acquires such corporate opportunity for itself, herself or himself, offers or directs such corporate opportunity to
another Person, or does not communicate information regarding such corporate opportunity to the Corporation or any Affiliate of the Corporation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">C.
The Corporation does not renounce its interest in any corporate opportunity offered to any Non-Employee Director (including any Non-Employee
Director who serves as an officer of the Corporation in both his or her director and officer capacities) if such opportunity is expressly
offered to such Person solely in his or her capacity as a director or officer of the Corporation, and the provisions of Section B of
this Article XII shall not apply to any such corporate opportunity.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">D.
In addition to and notwithstanding the foregoing provisions of this Article XII, a corporate opportunity shall not be deemed to be a
potential corporate opportunity for the Corporation if it is a business opportunity that (i) the Corporation is neither financially or
legally able, nor contractually permitted, to undertake, (ii) from its nature, is not in the line of the Corporation&rsquo;s business
or is of no practical advantage to the Corporation or (iii) is one in which the Corporation has no interest or reasonable expectancy.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">E.
Solely for purposes of this Article XII, &ldquo;Affiliate&rdquo; shall mean (a) in respect of any Principal Stockholder, any Person that,
directly or indirectly, is controlled by such Principal Stockholder, controls such Principal Stockholder or is under common control with
such Principal Stockholder and shall include (i) any principal, member, director, manager, partner, stockholder, officer, employee or
other representative of any of the foregoing (other than the Corporation and any entity that is controlled by the Corporation) and (ii)
any funds or vehicles advised by Affiliates of such Principal Stockholder, (b) in respect of a Non-Employee Director, any Person that,
directly or indirectly, is controlled by such Non-Employee Director (other than the Corporation and any entity that is controlled by
the Corporation) and (c) in respect of the Corporation, any Person that, directly or indirectly, is controlled by the Corporation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">F.
To the fullest extent permitted by law, any Person purchasing or otherwise acquiring or holding any interest in any shares of capital
stock of the Corporation shall be deemed to have notice of and to have consented to the provisions of this Article XII.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>ARTICLE
XIII</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A.
Notwithstanding anything contained in this Amended and Restated Certificate of Incorporation to the contrary or any provision of law
which might otherwise permit a lesser vote or no vote, in addition to any vote required by applicable law or by this Amended and Restated
Certificate of Incorporation, the following provisions in this Amended and Restated Certificate of Incorporation may be amended, altered,
repealed or rescinded, in whole or in part, or any provision inconsistent therewith or herewith may be adopted, only by the affirmative
vote of the holders of sixty-six and two thirds percent (66 2/3%) of the voting power of all the then outstanding shares of stock of
the Corporation entitled to vote thereon, voting together as a single class: Article V(B), Article VI, Article VII, Article VIII, Article
IX, Article X, Article XI, Article XII and this Article XIII.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">B.
If any provision or provisions of this Amended and Restated Certificate of Incorporation shall be held to be invalid, illegal or unenforceable
as applied to any circumstance for any reason whatsoever, then, to the fullest extent permitted by law: (i) the validity, legality and
enforceability of such provisions in any other circumstance and of the remaining provisions of this Amended and Restated Certificate
of Incorporation (including, without limitation, each portion of any paragraph of this Amended and Restated Certificate of Incorporation
containing any such provision held to be invalid, illegal or unenforceable that is not itself held to be invalid, illegal or unenforceable)
and the application of such provision to other circumstances shall not, to the fullest extent permitted by law, in any way be affected
or impaired thereby and (ii) to the fullest extent permitted by applicable law, the provisions of this Amended and Restated Certificate
of Incorporation (including, without limitation, each such portion of any paragraph of this Amended and Restated Certificate of Incorporation
containing any such provision held to be invalid, illegal or unenforceable) shall be construed so as to permit the Corporation to protect
its directors, officers, employees and agents from personal liability in respect of their good faith service to or for the benefit of
the Corporation to the fullest extent permitted by law.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">[<I>Remainder
of page intentionally left blank.</I>]</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0.25in; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">IN
WITNESS WHEREOF, this Amended and Restated Certificate of Incorporation of Fusemachines Inc. has been executed by a duly authorized officer
of the Corporation on this 22nd day of October, 2025.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; background-color: white"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>FUSEMACHINES
    INC.</B></FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 50%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 5%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 45%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">By:</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; border-bottom: black 1pt solid; padding-bottom: 1.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>/s/
    Sameer Maskey</I></FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Name:</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Sameer
    Maskey</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Title:</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Chief
    Executive Officer</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>
<P STYLE="text-align: center; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><A NAME="gv_002"></A>Exhibit
4.1</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>DESCRIPTION
OF THE REGISTRANT&rsquo;S SECURITIES REGISTERED PURSUANT TO SECTION 12 OF THE</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>SECURITIES
EXCHANGE ACT OF 1934, AS AMENDED</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fusemachines
Inc. (&ldquo;we,&rdquo; &ldquo;our,&rdquo; &ldquo;us&rdquo; or the &ldquo;Company&rdquo;) has the following two classes of securities
registered under Section 12 of the Securities Exchange Act of 1934, as amended (the &ldquo;Exchange Act&rdquo;): (i) its common stock,
$0.0001 par value per share (&ldquo;common stock&rdquo;), and (ii) its warrants, with each whole warrant exercisable for one share of
common stock for $11.50 per share (the &ldquo;warrants&rdquo;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following summary of the material terms of our securities is not intended to be a complete summary of the rights and preferences of such
securities. The descriptions below are qualified by reference to the actual text of our amended and restated certificate of incorporation
(the &ldquo;Certificate of Incorporation&rdquo;) and amended and restated bylaws (the &ldquo;Bylaws&rdquo;). We urge you to read our
Certificate of Incorporation in its entirety for a complete description of the rights and preferences of our securities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
authorized capital stock consists of 500,000,000 shares of common stock $0.0001 par value per share, and 5,000,000 shares of preferred
stock, $0.0001 par value per share.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Common
Stock</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Voting
Power</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Except
as otherwise required by law or as otherwise provided in any certificate of designation for any series of preferred stock, the holders
of common stock possess all voting power for the election of our directors and all other matters requiring stockholder action. Holders
of common stock are entitled to one vote per share on matters to be voted on by stockholders.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Dividends</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Holders
of common stock will be entitled to receive such dividends, if any, as may be declared from time to time by our board of directors in
its discretion out of funds legally available therefor. In no event will any stock dividends or stock splits or combinations of stock
be declared or made on common stock unless the shares of common stock at the time outstanding are treated equally and identically.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Liquidation,
Dissolution and Winding Up</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the event of our voluntary or involuntary liquidation, dissolution, distribution of assets or winding-up, the holders of the common stock
will be entitled to receive an equal amount per share of all of our assets of whatever kind available for distribution to stockholders,
after the rights of the holders of the preferred stock have been satisfied.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Preemptive
or Other Rights</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
stockholders have no preemptive or other subscription rights and there are no sinking fund or redemption provisions applicable to common
stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Election
of Directors</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
board of directors is divided into three classes, Class I, Class II and Class III, with only one class of directors being elected in
each year and each class serving a three-year term, except with respect to the election of directors at the special meeting held in connection
with the Merger. Class I directors are elected to an initial one-year term (and three-year terms subsequently), the Class II directors
are elected to an initial two-year term (and three-year terms subsequently) and the Class III directors are elected to an initial three-year
term (and three-year terms subsequently).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">There
is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted
for the election of directors can elect all of the directors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Warrants</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Public
Stockholders&rsquo; Warrants</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Pursuant
to the warrant agreement, each whole warrant entitles the registered holder to purchase one share of common stock at a price of $11.50
per share, subject to adjustment as discussed below. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only
for a whole number of shares of common stock. This means only a whole warrant may be exercised at a given time by a warrant holder. The
warrants will expire five years after the completion of our initial business combination (the &ldquo;Merger&rdquo;) at 5:00 p.m., New
York City time, or earlier upon redemption or liquidation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company is not obligated to deliver any shares of common stock pursuant to the exercise of a warrant and will have no obligation to settle
such warrant exercise unless a registration statement under the Securities Act covering the issuance of the shares of common stock issuable
upon exercise of the warrants is then effective and a current prospectus relating to those shares of common stock is available, subject
to the Company satisfying its obligations described below with respect to registration. No warrant will be exercisable for cash or on
a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the
issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of the exercising holder,
or an exemption from registration is available. In the event that the conditions in the two immediately preceding sentences are not satisfied
with respect to a warrant, the holder of such warrant will not be entitled to exercise such warrant and such warrant may have no value
and expire worthless. The Company has agreed that as soon as practicable, but in no event later than 15 business days after the closing
of the Merger, it will use its reasonable best efforts to file with the SEC, and within 60 business days following the merger to have
declared effective, a registration statement covering the issuance of the shares of common stock issuable upon exercise of the warrants
and to maintain a current prospectus relating to those shares of common stock until the warrants expire or are redeemed. Notwithstanding
the above, if the common stock is at the time of any exercise of a warrant not listed on a national securities exchange such that it
satisfies the definition of a &ldquo;covered security&rdquo; under Section 18(b)(1) of the Securities Act, the Company may, at its option,
require holders of public warrants who exercise their warrants to do so on a &ldquo;cashless basis&rdquo; in accordance with Section
3(a)(9) of the Securities Act and, in the event we so elect, we will not be required to file or maintain in effect a registration statement,
but will use our reasonable best efforts to qualify the shares under applicable blue sky laws to the extent an exemption is not available.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Redemption
of Warrants.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Redemption
of warrants when the price per share of our common stock equals or exceeds $180.00.</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We may call the warrants for redemption.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Warrants
are not be exercisable for cash unless we have an effective and current registration statement covering the shares of common stock issuable
upon exercise of the warrants and a current prospectus relating to such shares of common stock. Notwithstanding the foregoing, if a registration
statement covering the shares of common stock issuable upon exercise of the public warrants is not effective within 60 business days
following the Merger, holders of public warrants may, until such time as there is an effective registration statement and during any
period when the Company has failed to maintain an effective registration statement, exercise Public warrants on a cashless basis pursuant
to the exemption provided by Section 3(a)(9) of the Securities Act, provided that such exemption is available. If that exemption, or
another exemption, is not available, holders will not be able to exercise their public warrants on a cashless basis. In the event of
such a cashless exercise, each holder would pay the exercise price by surrendering the public warrants for that number of shares of common
stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the public warrants,
multiplied by the difference between the exercise price of the public warrants and the &ldquo;fair market value&rdquo; (as defined below)
by (y) the fair market value. The &ldquo;fair market value&rdquo; for this purpose means the average reported last sale price of the
shares of our common stock for the ten trading days ending on the trading day prior to the date of exercise. A registration statement covering the shares underlying the warrants was declared effective by the Securities
and Exchange Commission on February 9, 2026.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company may call the warrants for redemption (excluding the private warrants), in whole and not in part, at a price of $0.01 per warrant,
(i) at any time after the warrants become exercisable, (ii) upon not less than 30 days&rsquo; prior written notice of redemption to each
holder of warrants after the warrants become exercisable, and (iii) if, and only if, the reported last sale price of the shares of common
stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for
any 20 trading days within a 30 trading day period commencing after the warrants become exercisable and ending on the third trading day
prior to the notice of redemption to holders of warrants.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
right to exercise will be forfeited unless the warrants are exercised prior to the date specified in the notice of redemption. On and
after the redemption date, a record holder of a warrant will have no further rights except to receive the redemption price for such holder&rsquo;s
warrant upon surrender of such warrant.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
the Company calls the warrants for redemption as described above, the Company&rsquo;s management will have the option to require all
holders that wish to exercise warrants to do so on a &ldquo;cashless basis.&rdquo; In such event, each holder would pay the exercise
price by surrendering the warrants for that number of shares of common stock equal to the quotient obtained by dividing (x) the product
of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants
and the &ldquo;fair market value&rdquo; (as defined below) by (y) the fair market value. The &ldquo;fair market value&rdquo; for this
purpose means the average reported last sale price of the shares of common stock for the ten trading days ending on the third trading
day prior to the date on which the notice of redemption is sent to the holders of warrants.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
exercise price and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances including
in the event of a stock dividend, extraordinary dividend or our recapitalization, reorganization, merger or consolidation. However, except
as described below, the warrants will not be adjusted for issuances of shares of common stock at a price below their respective exercise
prices.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">No
fractional shares will be issued upon exercise of the warrants. If, upon exercise of the warrants, a holder would be entitled to receive
a fractional interest in a share, the Company will, upon exercise, round up to the nearest whole number the number of shares of common
stock to be issued to the warrant holder.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Certain
Anti-Takeover Provisions of Delaware Law</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Special
Meetings of Stockholders</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
Bylaws provide that special meetings of our stockholders may be called only by a majority vote of the board of directors, by the Chairperson
of the board of directors, or by the chief executive officer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Advance
Notice Requirements for Stockholder Proposals and Director Nominations</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
Bylaws provide that stockholders seeking to bring business before our annual meeting of stockholders, or to nominate candidates for election
as directors at our annual meeting of stockholders, must provide timely notice of their intent in writing. To be timely under our current
bylaws and the Bylaws, a stockholder&rsquo;s notice will need to be received by the company secretary at our principal executive offices
not later than the close of business on the 90<SUP>th</SUP> day nor earlier than the open of business on the 120<SUP>th</SUP> day prior
to the first anniversary of the preceding year&rsquo;s annual meeting. Pursuant to Rule 14a-8 of the Exchange Act, proposals seeking
inclusion in our annual proxy statement must comply with the notice periods contained therein. Our Bylaws also specify certain requirements
as to the form and content of a stockholders&rsquo; meeting. These provisions may preclude our stockholders from bringing matters before
our annual meeting of stockholders or from making nominations for directors at our annual meeting of stockholders.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Authorized
but Unissued Shares</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Our
authorized but unissued common stock and preferred stock are available for future issuances without stockholder approval and could be
utilized for a variety of corporate purposes, including future offerings to raise additional capital, acquisitions and employee benefit
plans. The existence of authorized but unissued and unreserved common stock and preferred stock could render more difficult or discourage
an attempt to obtain control of us by means of a proxy contest, tender offer, merger or otherwise.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>Anti-Takeover
Provisions</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
are subject to provisions of Section 203 of the DGCL regulating corporate takeovers under our Certificate of Incorporation. This statute
prevents certain Delaware corporations, under certain circumstances, from engaging in a &ldquo;business combination&rdquo; with:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify; text-indent: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;
a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an &ldquo;interested stockholder&rdquo;);</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;
an affiliate of an interested stockholder; or</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;
an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
&ldquo;business combination&rdquo; includes a merger or sale of more than 10% of our assets. However, the above provisions of Section
203 do not apply if:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify; text-indent: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;
our board of directors approves the transaction that made the stockholder an &ldquo;interested stockholder,&rdquo; prior to the date
of the transaction;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify; text-indent: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;
after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at
least 85% of our voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of common stock;
or</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify; text-indent: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;
on or subsequent to the date of the transaction, our initial business combination is approved by our board of directors and authorized
at a meeting of our stockholders, and not by written consent, by an affirmative vote of at least two-thirds of the outstanding voting
stock not owned by the interested stockholder.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: right"><B><A NAME="gv_003"></A>Exhibit 19.1</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>FUSEMACHINES
INC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>INSIDER
TRADING POLICY</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>and
Guidelines with Respect to Certain Company Information </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>and
Certain Transactions in Company Securities</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Purpose</U></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-decoration: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
Insider Trading Policy (this &ldquo;<B>Policy</B>&rdquo;) provides guidelines with respect to transactions in the securities of Fusemachines
Inc., a Delaware corporation (including subsidiaries where applicable, the &ldquo;<B>Company</B>&rdquo;) and the handling of material
confidential information about the Company and the companies with which the Company engages in transactions or does business. The Company&rsquo;s
Board of Directors (the &ldquo;<B>Board</B>&rdquo;, and each member of the Board, a &ldquo;<B>director</B>&rdquo;) has adopted this Policy
to promote compliance with U.S. federal, state and foreign securities laws that prohibit certain persons who are aware of material nonpublic
information about a company from: (i) trading in securities of that company; or (ii) providing material nonpublic information to other
persons who may trade based on that information.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Persons
Subject to the Policy</U></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-decoration: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
Policy applies to (each of the following, a &ldquo;<B>Covered Person</B>&rdquo;):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">officers
                                            of the Company;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                            Board;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">employees
                                            of the Company;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">consultants
                                            of the Company who receive or have access to material nonpublic information;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">independent
                                            contractors of the Company who receive or have access to material nonpublic information;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Family
                                            Members and Controlled Entities, each as defined below; and</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">any
                                            other persons who receive or have access to material nonpublic information that the Company
                                            designates as subject to this Policy.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 38.65pt; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Transactions
Subject to the Policy</U></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-decoration: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
Policy applies to transactions in the Company&rsquo;s securities (collectively referred to in this Policy as &ldquo;<B>Company Securities</B>&rdquo;),
including but not limited to, the Company&rsquo;s common stock, par value $0.0001 per share (&ldquo;<B>common stock</B>&rdquo;), options
to purchase common stock, or any other type of securities that the Company may issue, including (but not limited to) preferred stock,
convertible debentures and warrants, as well as derivative securities that are not issued by the Company, such as exchange-traded put
or call options or swaps relating to the Company&rsquo;s Securities. Transactions subject to this Policy include purchases, sales and
<I>bona fide</I> gifts of Company Securities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Individual
Responsibility</U></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-decoration: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Persons
subject to this Policy have ethical and legal obligations to maintain the confidentiality of information about the Company and to not
engage in transactions in Company Securities while in possession of material nonpublic information. Persons subject to this policy must
not engage in illegal trading and must avoid the appearance of improper trading.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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    <DIV STYLE="break-before: page; margin-top: 6pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Each
individual is responsible for making sure that he, she or they complies with this Policy, and that any Family Member or Controlled Entity
whose transactions are subject to this Policy, also comply with this Policy.</B> In all cases, the responsibility for determining whether
an individual is in possession of material nonpublic information rests with that individual, and any action on the part of the Company,
the Compliance Officer (as defined below) or any other employee or director pursuant to this Policy (or otherwise) does not in any way
constitute legal advice or insulate an individual from liability under applicable securities laws. You could be subject to severe legal
penalties and disciplinary action by the Company for any conduct prohibited by this Policy or applicable securities laws, as described
below in more detail under the heading &ldquo;Consequences of Violations.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Administration
of the Policy</U></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-decoration: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Compliance Officer shall be responsible for administration of this Policy. For the purposes of this Policy, the Chief Financial Officer
of the Company shall serve as the &ldquo;<B>Compliance Officer</B>.&rdquo; In the absence of the Chief Financial Officer of the Company,
the Chief Compliance Officer of the Company (or such other officer of the Company that has been designated by the Chief Financial Officer
of the Company in advance of such absence) shall serve as the &ldquo;Compliance Officer&rdquo; for purposes of this Policy during such
absence. All determinations and interpretations by the Compliance Officer shall be final and not subject to further review.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Statement
of Policy</U></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-decoration: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Company
Securities</U>. No director, officer, employee, consultant, or independent contractor of the Company (or any other person designated
by this Policy or by the Compliance Officer as subject to this Policy) who is aware of material nonpublic information relating to the
Company may, directly, or indirectly through family members or other persons or entities:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Engage
                                            in transactions in Company Securities, except as otherwise specified in this Policy under
                                            the headings &ldquo;Transactions Under Company Plans&rdquo; and &ldquo;Rule 10b5-1 Plans;&rdquo;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Recommend
                                            that others engage in transactions in any Company Securities;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Disclose
                                            material nonpublic information to persons within the Company whose jobs do not require them
                                            to have that information, or outside of the Company to other persons, including, but not
                                            limited to, family, friends, business associates, investors and expert consulting firms,
                                            unless any such disclosure is made in accordance with the Company&rsquo;s policies regarding
                                            the protection or authorized external disclosure of information regarding the Company; or</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Assist
                                            anyone engaged in the above activities.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 1in; text-align: justify; text-indent: -0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Securities
of Third Parties</U>. In addition, it is the policy of the Company that no director, officer, employee, consultant, or independent contractor
of the Company (or any other person designated as subject to this Policy) who, in the course of working for or with the Company, learns
of material nonpublic information about another company (1) with which the Company does business, such as the Company&rsquo;s distributors,
vendors, customers and suppliers, or (2) that is involved in a potential transaction or business relationship with Company, may engage
in transactions in that other company&rsquo;s securities until the information becomes public or is no longer material.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Confidentiality
Obligation</U>. Each person associated with the Company has a duty to protect the confidential information, including material nonpublic
information, of the Company. Nonpublic information relating to the Company is the property of the Company and the unauthorized disclosure
of such information is forbidden. Accordingly, such information must be strictly safeguarded and not shared with unauthorized third parties
including family members, household members and controlled entities, as described below. In the event any officer, director or employee
of the Company receives any inquiry from outside the Company, such as a stock analyst, for information (particularly financial results
and/or projections) that may be material nonpublic information, the inquiry should be referred to the Chief Executive Officer or Chief
Financial Officer and to the other appropriate Company officers, as provided for in the Investor Relations Policy of the Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Limited
Exceptions</U>. There are no exceptions to this Policy, except as specifically noted herein. Transactions that may be necessary or justifiable
for independent reasons (such as the need to raise money for an emergency expenditure), or small transactions, are not excepted from
this Policy. The securities laws do not recognize any mitigating circumstances, and, in any event, even the appearance of an improper
transaction must be avoided to preserve the Company&rsquo;s reputation for adhering to the highest standards of conduct.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Definition
of Material Nonpublic Information</U></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-decoration: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>Material
Information</U></B>. Information is considered &ldquo;material&rdquo; if a reasonable investor would consider that information important
in making a decision to buy, hold or sell securities. Any information that could be expected to affect a company&rsquo;s stock price,
whether it is positive or negative, should be considered material. There is no bright-line standard for assessing materiality; rather,
materiality is based on an assessment of all of the facts and circumstances, and is often evaluated by enforcement authorities with the
benefit of hindsight. While it is not possible to define all categories of material information, some examples of information that ordinarily
would be regarded as material are:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
                                            proposed acquisition of a significant business;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
                                            significant expansion or cutback of operations;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">internal
                                            financial information that departs from what the market would expect;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
                                            default or anticipated default under debt instruments or important contracts;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
                                            proposal for a merger or the purchase of substantial assets;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
                                            tender offer for Company Securities;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">an
                                            earnings estimate or revision of a previously released earnings estimate;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">major
                                            litigation or the threat of major litigation;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">significant
                                            management developments such as resignations or new appointments;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">a
                                            significant increase or decrease in sales or earnings;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                            receipt of FDA or other regulatory approvals; and</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                            discovery of a new product or the issuance of an important patent.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
foregoing list is illustrative only and is not intended to provide a comprehensive list of all circumstances that could give rise to
material information.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>When
Information is Considered Public</U></B>. Information that has not been disclosed to the public is generally considered to be nonpublic
information. In order to establish that the information has been disclosed to the public, it may be necessary to demonstrate that the
information has been widely disseminated. Information generally would be considered widely disseminated if it has been disclosed through
the newswire services, a broadcast on widely-available news programs, publication in a widely-available news source, or public disclosure
documents filed with the Securities and Exchange Commission (the &ldquo;<B>SEC</B>&rdquo;) that are available on the SEC&rsquo;s website.
By contrast, information would likely not be considered widely disseminated if it is available only to the Company&rsquo;s employees,
or if it is only available to a select group of analysts, brokers and institutional investors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Once
information is widely disseminated, it is still necessary to provide the investing public with sufficient time to absorb the information.
As a general rule, information should not be considered fully absorbed by the market until after the second Trading Day after the day
on which the information is publicly released. As used herein, the term &ldquo;<B>Trading Day</B>&rdquo; shall mean any day on which
the Nasdaq Stock Market LLC ( the &ldquo;<B>Nasdaq</B>&rdquo;) or, if the Company&rsquo;s common stock is not then traded on the Nasdaq,
the principal national securities exchange, automated quotation system or other trading market where the Company&rsquo;s common stock
is then listed, quoted or traded, is open for trading. Nasdaq or such other principal national securities exchange, automated quotation
system or other trading market where the Company&rsquo;s common stock is then listed, quoted or traded is herein referred to as the &ldquo;<B>Principal
Market</B>&rdquo;. If, for example, the Company were to make a public announcement of previously material nonpublic information on a
Monday that is a Trading Day (at any time after market open), the information would not be considered fully absorbed by the market until
the close of the second daily trading session on the Principal Market following such public announcement, i.e., the close of trading
on Wednesday (assuming Tuesday and Wednesday are Trading Days). However, if, for example, the Company were to make an announcement pre-market
on a Monday that is a Trading Day, the information would not be considered fully absorbed by the market until the close of the second
daily trading session on the Principal Market following such public announcement, i.e., the close of trading on Tuesday (assuming Tuesday
is also a Trading Day). Although such circumstances are likely to be rare, depending on the particular circumstances, the Compliance
Officer may determine that a longer or shorter absorption period should apply following public release of specific material nonpublic
information. For the avoidance of doubt, the persons designated by the Compliance Officer as being subject to pre-clearance procedures
(as described under the heading &ldquo;Additional Procedures&rdquo;) may not engage, or allow their Family Members or Controlled Entities
to engage, in any transaction in Company Securities without first obtaining pre-clearance of the transaction from the Compliance Officer
in accordance with the terms of this Policy, even after information is considered to be fully absorbed by the market, as set forth above.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Transactions
by Family Members and Others</U></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-decoration: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition to all directors, officers, employees, consultants, and independent contractors of the Company (or any other person designated
as subject to this Policy) (&ldquo;<B>you</B>&rdquo;), this Policy applies to all family members who reside with you (including a spouse,
a child, a child away at college, stepchildren, grandchildren, parents, stepparents, grandparents, siblings and in-laws), anyone else
who lives in your household, and any family members who do not live in your household but whose transactions in Company Securities are
directed by you or are subject to your influence or control, such as parents or children who consult with you before they trade in Company
Securities (collectively referred to as &ldquo;<B>Family Members</B>&rdquo;). You are responsible for the transactions of these other
persons and therefore should make them aware of the need to confer with you before they trade in Company Securities, and you should treat
all such transactions for the purposes of this Policy and applicable securities laws as if the transactions were for your own account.
This Policy does not, however, apply to personal securities transactions of Family Members where the purchase or sale decision is made
by a third party not controlled by, influenced by or related to you or your Family Members.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Transactions
by Entities that You Influence or Control</U></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-decoration: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>This
Policy applies to any entities that you influence or control</B>, including any corporations, companies, partnerships or trusts (collectively
referred to as &ldquo;<B>Controlled Entities</B>&rdquo;), and transactions by these Controlled Entities should be treated for the purposes
of this Policy and applicable securities laws as if they were for your own account.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Transactions
Under Company Plans</U></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-decoration: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
Policy does not apply in the case of the following transactions, except as specifically noted:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Stock
Option Exercises</U>. This Policy does not apply to the <B><I>exercise</I></B> of an employee stock option acquired pursuant to the Company&rsquo;s
plans, or to the exercise of a tax withholding right pursuant to which a person has elected to have the Company withhold shares subject
to an option to satisfy tax withholding requirements. This Policy does apply, however, to any sale of stock as part of a broker-assisted
cashless exercise of an option, or any other market sale for the purpose of generating the cash needed to pay the exercise price of an
option.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Restricted
Stock Awards</U>. This Policy does not apply to the vesting of restricted stock, or the exercise of a tax withholding right pursuant
to which you elect to have the Company withhold shares of stock to satisfy tax withholding requirements upon the vesting of any restricted
stock. The Policy does apply, however, to any market sale of restricted stock.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>401(k)
Plan</U>. This Policy does not apply to purchases of Company Securities in the Company&rsquo;s 401(k) plan, if any, resulting from your
periodic contribution of money to the plan pursuant to your payroll deduction election. This Policy does apply, however, to certain elections
you may make under the 401(k) plan, if any, including: (a) an election to increase or decrease the percentage of your periodic contributions
that will be allocated to the Company Securities fund; (b) an election to make an intra-plan transfer of an existing account balance
into or out of the Company Securities fund; (c) an election to borrow money against your 401(k) plan account if the loan will result
in a liquidation of some or all of your Company Securities fund balance; and (d) an election to pre-pay a plan loan if the pre-payment
will result in allocation of loan proceeds to the Company stock fund. It should be noted that sales of Company Securities from a 401(k)
account are also subject to Rule 144, and therefore affiliates should ensure that a Form 144 is filed when required.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Employee
Stock Purchase Plan</U>. This Policy does not apply to purchases of Company Securities in the Company&rsquo;s employee stock purchase
plan, if any, resulting from your periodic contribution of money to the plan pursuant to the election you made at the time of your enrollment
in the plan, if any. This Policy also does not apply to purchases of Company Securities resulting from lump sum contributions to the
plan, if any, provided that you elected to participate by lump sum payment during the applicable enrollment period. This Policy does
apply, however, to your sales of Company Securities purchased pursuant to the plan, if any.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Other
Similar Transactions</U>. Any other purchase of Company Securities from the Company or sales of Company Securities to the Company are
not subject to this Policy.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Special
and Prohibited Transactions</U></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-decoration: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has determined that there is a heightened legal risk and/or the appearance of improper conduct if the persons subject to this
Policy engage in certain types of transactions. It therefore is the Company&rsquo;s policy that any Covered Person may not engage in
any of the following transactions:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Short-Term
Trading</U>. Short-term trading of Company Securities may be distracting to the person and may unduly focus the person on the Company&rsquo;s
short-term stock market performance instead of the Company&rsquo;s long-term business objectives. For these reasons, any Covered Person
who purchases Company Securities in the open market may not sell any Company Securities of the same class during the six months following
the purchase (or vice versa), except where the matching purchase or sale within six months is exempt from liability under Section 16(b)
of the Securities Exchange Act of 1934, as amended (the &ldquo;Exchange Act&rdquo;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Short
Sales</U>. Short sales of Company Securities (<I>i.e.</I>, the sale of a security that the seller does not own) may evidence an expectation
on the part of the seller that the securities will decline in value, and therefore have the potential to signal to the market that the
seller lacks confidence in the Company&rsquo;s prospects. Furthermore, short sales may reduce a seller&rsquo;s incentive to seek to improve
the Company&rsquo;s performance. In addition, Section 16(c) of the Exchange Act prohibits Section 16 insiders from engaging in transactions
that would render them net short. For these reasons, short sales of Company Securities by Covered Persons are prohibited.(Short sales
arising from certain types of hedging transactions are governed by the paragraph below captioned &ldquo;Hedging Transactions.&rdquo;)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Publicly-Traded
Options</U>. Given the relatively short term of publicly-traded options, transactions in options may create the appearance that a Covered
Person is trading based on material nonpublic information and that the attention of persons associated with the Company is on short-term
performance at the expense of the Company&rsquo;s long-term objectives. Accordingly, transactions in put options, call options or other
derivative securities, on an exchange or in any other organized market, by Covered Persons are prohibited by this Policy. (Option positions
arising from certain types of hedging transactions are governed by the next paragraph below.)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Hedging
Transactions</U>. Hedging or monetization transactions can be accomplished through a number of possible mechanisms, including through
the use of financial instruments such as prepaid variable forwards, equity swaps, collars and exchange funds. Such transactions may permit
a director, officer, employee, consultant, or independent contractor, to continue to own Company Securities obtained through employee
benefit plans or otherwise, but without the full risks and rewards of ownership. When that occurs, Covered Persons may no longer have
the same objectives as the Company&rsquo;s other shareholders. Therefore, Covered Persons are prohibited from engaging in any such transactions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Margin
Accounts and Pledged Securities</U>. Securities held in a margin account as collateral for a margin loan may be sold by the broker without
the customer&rsquo;s consent if the customer fails to meet a margin call. Similarly, securities pledged (or hypothecated) as collateral
for a loan may be sold in foreclosure if the borrower defaults on the loan. Because a margin sale or foreclosure sale may occur at a
time when the pledgor is aware of material nonpublic information or otherwise is not permitted to trade in Company Securities, Covered
Persons are prohibited from holding Company Securities in a margin account or otherwise pledging Company Securities as collateral for
a loan. (Pledges of Company Securities arising from certain types of hedging transactions are governed by the paragraph above captioned
&ldquo;Hedging Transactions&rdquo;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Additional
Procedures</U></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-decoration: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company has established additional procedures in order to assist the Company in the administration of this Policy, to facilitate compliance
with laws prohibiting insider trading while in possession of material nonpublic information, and to avoid the appearance of any impropriety.
These additional procedures are applicable only to those individuals described below.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Pre-Clearance
Procedures for Deemed Insiders</U>. Officers and directors, and employees of the Company, as well as the Family Members and Controlled
Entities of such persons, and any other person that the Compliance Officer designates (collectively, &ldquo;<B>Deemed Insiders</B>&rdquo;),
may not engage in any transaction in Company Securities without first obtaining pre-clearance of the transaction from the Compliance
Officer. Any Deemed Insider seeking to request pre-clearance can obtain the Company&rsquo;s pre-clearance form upon request from the
Compliance Officer. A request for pre-clearance should be submitted to the Compliance Officer at least two Trading Days in advance of
the proposed transaction. The Compliance Officer is under no obligation to approve a transaction submitted for pre-clearance based on
insider trading concerns, and may determine not to permit the transaction. If a person seeks pre-clearance and permission to engage in
the transaction and such pre-clearance is not received, then he or she should refrain from initiating any transaction in Company Securities,
and should not inform any other person of the restriction.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">When
a request for pre-clearance is made, the requestor should carefully consider whether he or she may be aware of any material nonpublic
information about the Company. The requestor should also indicate whether he or she has effected any non-exempt &ldquo;opposite-way&rdquo;
transactions within the past six months, and should be prepared to report the proposed transaction on an appropriate Form 4 or Form 5.
The requestor should also be prepared to comply with SEC Rule 144 and file a Form 144, if necessary, at the time of any sale, unless
the broker has undertaken to make that filing.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
pre-cleared transaction must be effected within the period of time indicated on the pre-clearance form as approved by the Compliance
Officer (typically not to exceed 10 Trading Days), unless a different period of time is specified by the Compliance Officer. Transactions
not effected within such specified period shall be subject to pre-clearance again before a trade can be effected.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Quarterly
Trading Restrictions</U>. No Covered Person may conduct any transactions involving the Company&rsquo;s Securities (other than as specified
by this Policy), during a &ldquo;<B>Quarterly Restricted Period</B>&rdquo; beginning 14 calendar days prior to the end of each fiscal
quarter and ending at the close of the second daily trading session on the Principal Market following the public release of the Company&rsquo;s
earnings results for that quarter. In other words, Covered Persons may only conduct transactions in Company Securities during the &ldquo;<B>Window
Period</B>&rdquo; beginning after the close of the second daily trading session on the Principal Market following the public release
of the Company&rsquo;s earnings results for that quarter and ending 14 calendar days prior to the close of the next fiscal quarter. It
should be noted that preliminary guidance with respect to the quarterly results generally will not suffice to end the Quarterly Restricted
Period.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
illustrate the commencement of a Quarterly Restricted Period, if the Company&rsquo;s fourth fiscal quarter ends immediately following
11:59 p.m., Eastern time, on December 31st, the corresponding Quarterly Restricted Period would begin immediately following 11:59 p.m.,
Eastern time, on December 17th.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
illustrate the commencement of the Window Period, if the Company publicly announces its earnings results intra-day or post-market, for
example, on March 8th (a Monday), then the Window Period shall begin after the close of the daily trading session on the Principal Market
on March 10th (a Wednesday). However, if the Company publicly announces its earnings results pre-market, for example, on March 8th (a
Monday), then the Window Period shall begin after the close of the daily trading session on the Principal Market on March 9th (a Tuesday).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
foregoing calculation of the two-daily trading session period required prior to commencement of a Window Period assumes all relevant
days are Trading Days and is made using the same method of calculating the two-daily trading session period as set forth under the heading
&ldquo;When Information is Considered Public&rdquo;.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
the avoidance of doubt, all persons designated by the Compliance Officer as being subject to pre-clearance procedures, as well as the
Family Members and Controlled Entities of such persons, may not engage in any transaction in Company Securities without first obtaining
pre-clearance of the transaction from the Compliance Officer in accordance with the terms of this Policy, even during a Window Period.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
certain very limited circumstances, a person subject to a Quarterly Restricted Period may be permitted to trade during such Quarterly
Restricted Period, but only if the Compliance Officer concludes that such person is not aware of material nonpublic information. Persons
wishing to trade during a Quarterly Restricted Period must contact the Compliance Officer for approval at least two Trading Days in advance
of any proposed transaction involving Company Securities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Event-Specific
Restricted Periods</U>. From time to time, an event may occur that is material to the Company and is known by only a few directors, officers,
employees, consultants, and independent contractors. So long as the event remains material and nonpublic (the &ldquo;<B>Event-Specific
Restricted Period</B>&rdquo;), the persons designated by the Compliance Officer may not engage in transactions in Company Securities.
In addition, the Company&rsquo;s financial results may be sufficiently material in a particular fiscal quarter that, in the judgment
of the Compliance Officer, designated persons should refrain from engaging in transactions in Company Securities even sooner than the
Quarterly Restricted Period described above. In that situation, the Compliance Officer may notify these persons that they should not
trade in the Company&rsquo;s Securities, without disclosing the reason for the restriction. The existence of an Event-Specific Restricted
Period or the extension of a Quarterly Restricted Period will not be announced to the Company as a whole, and should not be communicated
to any other person. Even if the Compliance Officer has not designated you as a person who should not engage in transactions in Company
Securities due to an Event-Specific Restricted Period, you should not trade while aware of material nonpublic information. Exceptions
will not be granted during an Event-Specific Restricted Period.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Exceptions</U>.
The quarterly trading restrictions and event-specific trading restrictions do not apply to those transactions to which this Policy does
not apply, as described above under the heading &ldquo;Transactions Under Company Plans.&rdquo; Further, the requirement for pre-clearance,
the quarterly trading restrictions and event-specific trading restrictions do not apply to transactions conducted pursuant to approved
Rule 10b5-1 plans, described under the heading &ldquo;Rule 10b5-1 Plans.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Rule
10b5-1 Plans</U></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-decoration: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Rule
10b5-1 under the Exchange Act provides a defense from insider trading liability under Rule 10b-5. In order to be eligible to rely on
this defense, a person subject to this Policy must enter into a Rule 10b5-1 plan for transactions in Company Securities that meets certain
conditions specified in the Rule (a &ldquo;<B>Rule 10b5-1 Plan</B>&rdquo;) and must be in accordance with the Company&rsquo;s &ldquo;Guidelines
for Rule 10b5-1 Plans.&rdquo; If the plan meets the requirements of Rule 10b5-1, transactions in Company Securities may occur even when
the person who has entered into the plan is aware of material nonpublic information.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
comply with the Policy, a Rule 10b5-1 Plan must be approved by the Compliance Officer and meet the requirements of Rule 10b5-1 and the
Company&rsquo;s &ldquo;Guidelines for Rule 10b5-1 Plans,&rdquo; which may be obtained from the Compliance Officer. In general, a Rule
10b5-1 Plan must be entered into during a Window Period when the person entering into the plan is not aware of material nonpublic information.
Once the plan is adopted, the person must not exercise any influence over the amount of securities to be traded, the price at which they
are to be traded or the date of the trade. The plan must either specify the amount, pricing and timing of transactions in advance or
delegate discretion on these matters to an independent third party. The plan must include a cooling-off period before trading can commence
that, for directors or officers, ends on the later of 90 days after the adoption of the Rule 10b5-1 Plan or two Trading Days following
the disclosure of the Company&rsquo;s financial results in an SEC periodic report for the fiscal quarter in which the plan was adopted
(but in any event, the required cooling-off period is subject to a maximum of 120 days after adoption of the plan), and for persons other
than directors or officers, 30 days following the adoption or modification of a Rule 10b5-1 Plan. A person may not enter into overlapping
Rule 10b5-1 plans (subject to certain exceptions) and may only enter into one single-trade Rule 10b5-1 Plan during any 12-month period.
Directors and officers must include a representation in their Rule 10b5-1 Plan certifying that: (i) they are not aware of any material
nonpublic information; and (ii) they are adopting the plan in good faith and not as part of a plan or scheme to evade the prohibitions
in Rule 10b-5. All persons entering into a Rule 10b5-1 Plan must act in good faith with respect to that plan.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
Rule 10b5-1 Plan must be submitted for approval at least five days prior to the entry into the Rule 10b5-1 Plan. No further pre-approval
of transactions conducted pursuant to the Rule 10b5-1 Plan will be required.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Notwithstanding
anything contained herein to the contrary, it is the Company&rsquo;s policy that no officer or director, or Family Members or Controlled
Entities of any such person, may enter into any transaction in Company Securities while such person has a Rule 10b5-1 Plan that is in
effect; provided, however, that the foregoing shall only apply to a Rule 10b5-1 Plan adopted by such person on or after October 22, 2025.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Post-Termination
Transactions</U></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-decoration: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
Policy continues to apply to transactions in Company Securities even after termination of service by a person to the Company. If an individual
is in possession of material nonpublic information when his, her, or their service terminates, that individual may not engage in transactions
in Company Securities until such information has been publicly announced or is no longer material. The pre-clearance procedures specified
under the heading &ldquo;Additional Procedures&rdquo; above, however, will cease to apply to transactions in Company Securities upon
the expiration of any Quarterly Restricted Period, Event-Specific Restricted Period, or other Company-imposed trading restrictions applicable
at the time of the termination of service.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Consequences
of Violations</U></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-decoration: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
purchase or sale of securities while aware of material nonpublic information, or the disclosure of material nonpublic information to
others who then engage in transactions in the Company&rsquo;s Securities, is prohibited by the federal and state laws. Insider trading
violations are pursued vigorously by the SEC, U.S. Attorneys and state enforcement authorities, as well as enforcement authorities in
foreign jurisdictions. Punishment for insider trading violations is severe, and could include significant fines and imprisonment. While
the regulatory authorities concentrate their efforts on the individuals who trade, or who tip inside information to others who trade,
the federal securities laws also impose potential liability on companies and other &ldquo;controlling persons&rdquo; if they fail to
take reasonable steps to prevent insider trading by company personnel.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, an individual&rsquo;s failure to comply with this Policy may subject the individual to Company-imposed sanctions, including
dismissal for cause, whether or not the employee&rsquo;s failure to comply results in a violation of law. Needless to say, a violation
of law, or even an SEC investigation that does not result in prosecution, can tarnish a person&rsquo;s reputation and irreparably damage
a career.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Persons
located or engaged in dealings outside the United States should be aware that laws regarding insider trading and similar offenses differ
from country to country. Employees must abide by the laws in the country where they are located. However, all persons subject to this
Policy are required to comply with this Policy even if applicable local law is less restrictive. If a local law conflicts with this Policy,
consult the Compliance Officer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>Reporting
</U></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consistent
with the Company&rsquo;s Code of Conduct, it is the responsibility of all directors, officers and employees of the Company to report
any violation of this Policy to the Compliance Officer. This reporting duty should be broadly construed to include any inappropriate
conduct by their Family Members and Controlled Entities in respect of trading in the securities of the Company, as well as the sharing
or misuse of the confidential information of the Company and any material nonpublic information.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Company
Assistance</U></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-decoration: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
person who has a question about this Policy or its application to any proposed transaction may obtain additional guidance from the Compliance
Officer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Prior
to disclosure to any third party, any officer, director or employee of the Company who is aware of any material nonpublic information
concerning the Company that has not been disclosed to the public should report the intention to disclose such information promptly to
the Compliance Officer and obtain approval to do so, or otherwise act in accordance with the Company&rsquo;s Investor Relations Policy.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Certification</U></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-decoration: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
Covered Persons must certify their understanding of, and intent to comply with, this Policy.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-transform: uppercase; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CERTIFICATION</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-transform: uppercase; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-decoration: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">I
certify that:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">I
                                            have read and understand the Policy. I understand that the Compliance Officer is available
                                            to answer any questions I have regarding the Policy.</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Since
                                            the date that the Policy became effective, or such shorter period of time that I have been
                                            an employee of the Company, I have complied with the Policy.</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">I
                                            will continue to comply with the Policy for as long as I am subject to the Policy.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 1in; text-indent: -0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; width: 10%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Print
    name:</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; width: 40%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; width: 50%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Signature:</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Date:</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>Memorandum
to Directors and Executive Officers</U></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>(and
Employees, Consultants, and Independent Contractors)</U></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>October
22, 2025</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>TO:
Directors, Executive Officers, Employees, Consultants, and Independent Contractors</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>FROM:
The Management of Fusemachines Inc. </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>RE:
Transactions Involving Company Securities&mdash;Our Pre-Clearance Procedures, Trading Restrictions and Broker Interface
Procedures</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
you know, the Company&rsquo;s board of directors recently adopted the Company&rsquo;s updated insider trading policy. The policy will
go into effect on October 22, 2025. The policy is described in this memorandum to all employees, consultants, independent contractors,
officers and directors dated October 22, 2025. The insider trading policy includes procedures governing transactions in Company Securities
by directors, executive officers, employees, consultants, and independent contractors including procedures to address the two-day Form
4 filing requirement applicable to all directors and executive officers subject to Section 16. Certain of the procedures apply also to
non-executive employees, consultants, and independent contractors who regularly become aware of earnings information or other material
nonpublic information about the Company. This memorandum describes these procedures. Capitalized terms in this memorandum are defined
in the Insider Trading Policy.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Pre-Clearance
Procedures</U></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-decoration: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Officers
and directors, and certain employees of the Company, as well as the Family Members and Controlled Entities of such persons, and any other
person that the Compliance Officer designates, may not engage in any transaction in Company Securities without first obtaining pre-clearance
of the transaction from the Compliance Officer. Any person seeking to request pre-clearance can obtain the Company&rsquo;s pre-clearance
form upon request from the Compliance Officer. A request for pre-clearance should be submitted to the Compliance Officer at least two
Trading Days in advance of the proposed transaction. The Compliance Officer is under no obligation to approve a transaction submitted
for pre-clearance, and may determine not to permit the transaction. If a person seeks pre-clearance and permission to engage in the transaction
and such pre-clearance is not received, then he or she should refrain from initiating any transaction in Company Securities, and should
not inform any other person of the restriction.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">When
a request for pre-clearance is made, the requestor should carefully consider whether he or she may be aware of any material nonpublic
information about the Company, and should describe fully those circumstances to the Compliance Officer. The requestor should also indicate
whether he or she has effected any non-exempt &ldquo;opposite-way&rdquo; transactions within the past six months, and should be prepared
to report the proposed transaction on an appropriate Form 4 or Form 5. The requestor should also be prepared to comply with SEC Rule
144 and file a Form 144, if necessary, at the time of any sale.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
pre-cleared transaction must be effected within the period of time indicated on the pre-clearance form as approved by the Compliance
Officer (typically not to exceed 10 Trading Days), unless a different period of time is specified by the Compliance Officer. Transactions
not effected within such specified period shall be subject to pre-clearance again before a trade can be effected.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Quarterly
Trading Restrictions</U></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-decoration: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-weight: normal; text-decoration: none">No
Covered Person may conduct any transactions involving the Company&rsquo;s Securities (other than as specified by this Policy), during
a &ldquo;Quarterly Restricted Period&rdquo; beginning 14 calendar days prior to the end of each fiscal quarter and ending at the close
of the second daily trading session on the Principal Market following the public release of the Company&rsquo;s earnings results for
that quarter. In other words, Covered Persons may only conduct transactions in Company Securities during the &ldquo;Window Period&rdquo;
beginning after the close of the second daily trading session on the Principal Market following the public release of the Company&rsquo;s
earnings results for that quarter and ending 14 calendar days prior to the close of the next fiscal quarter. It should be noted that
preliminary guidance with respect to the quarterly results generally will not suffice to end the Quarterly Restricted Period. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-weight: normal; text-decoration: none">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-weight: normal; text-decoration: none">To
illustrate the commencement of a Quarterly Restricted Period, if the Company&rsquo;s fourth fiscal quarter ends immediately following
11:59 p.m., Eastern time, on December 31st, the corresponding Quarterly Restricted Period would begin immediately following 11:59 p.m.,
Eastern time, on December 17th. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-weight: normal; text-decoration: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-weight: normal; text-decoration: none">To
illustrate the commencement of the Window Period, if the Company publicly announces its earnings results intra-day or post-market, for
example, on March 8<SUP>th</SUP> (Monday), then the Window Period shall begin after the close of the daily trading session on the Principal
Market on March 10<SUP>th</SUP> (Wednesday). However, if the Company publicly announces its earnings results pre-market, for example,
on March 8<SUP>th</SUP> (Monday), then the Window Period shall begin after the close of the daily trading session on the Principal Market
on March 9<SUP>th</SUP> (Tuesday). </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-weight: normal; text-decoration: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
foregoing calculation of the two-daily trading session period required prior to commencement of a Window Period assumes all relevant
days are Trading Days and is made using the same method of calculating the two-daily trading session period as set forth under the heading
&ldquo;When Information is Considered Public&rdquo;.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-weight: normal; text-decoration: none">For
the avoidance of doubt, the persons designated by the Compliance Officer as being subject to pre-clearance procedures, as well as the
Family Members and Controlled Entities of such persons, may not engage in any transaction in Company Securities without first obtaining
pre-clearance of the transaction from the Compliance Officer in accordance with the terms of this Policy, even during a Window Period.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-weight: normal; text-decoration: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
certain very limited circumstances, a person subject to a Quarterly Restricted Period may be permitted to trade during such Quarterly
Restricted Period, but only if the Compliance Officer concludes that the person is not aware of material nonpublic information. Persons
wishing to trade during a Quarterly Restricted Period must contact the Compliance Officer for approval at least two Trading Days in advance
of any proposed transaction involving Company Securities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Event-Specific
Restricted Periods</U></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-decoration: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">From
time to time, an event may occur that is material to the Company and is known by only a few directors, officers, employees, consultants,
and independent contractors. So long as the event remains material and nonpublic (the &ldquo;<B><I>Event-Specific Restricted Period</I></B>&rdquo;),
the persons designated by the Compliance Officer may not engage in transactions in Company Securities. In addition, the Company&rsquo;s
financial results may be sufficiently material in a particular fiscal quarter that, in the judgment of the Compliance Officer, designated
persons should refrain from engaging in transactions in Company Securities even sooner than the Quarterly Restricted Period described
above. In that situation, the Compliance Officer may notify these persons that they should not trade in the Company&rsquo;s Securities,
without disclosing the reason for the restriction. The existence of an Event-Specific Restricted Period or the extension of a Quarterly
Restricted Period will not be announced to the Company as a whole, and should not be communicated to any other person. Even if the Compliance
Officer has not designated you as a person who should not engage in transactions in Company Securities due to an Event-Specific Restricted
Period, you should not trade while aware of material nonpublic information. Exceptions will not be granted during an Event-Specific Restricted
Period.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Exceptions</U></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-decoration: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
quarterly trading restrictions and event-specific trading restrictions do not apply to those transactions to which the Policy does not
apply, as described in the Policy under the headings &ldquo;Transactions Under Company Plans.&rdquo; Further, the requirement for pre-clearance,
the quarterly trading restrictions and event-specific trading restrictions do not apply to transactions conducted pursuant to approved
Rule 10b5-1 plans, described in the Policy under the heading &ldquo;Rule 10b5-1 Plans.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Post-Termination
Transactions</U></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-decoration: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Policy continues to apply to transactions in Company Securities even after termination of service to the Company. If an individual is
in possession of material nonpublic information when his or her service terminates, that individual may not engage in transactions in
Company Securities until that information has become public or is no longer material. The pre-clearance procedures specified under the
heading &ldquo;Additional Procedures&rdquo; in the Policy, however, will cease to apply to transactions in Company Securities upon the
expiration of any Restricted Period or other Company-imposed trading restrictions applicable at the time of the termination of service.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Company
Assistance</U></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-decoration: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
person who has a question about this memorandum or the Policy, or their application to any proposed transaction may obtain additional
guidance from the Compliance Officer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Power
of Attorney</U></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-decoration: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; font-weight: normal; text-decoration: none">In
order to enable the Company to prepare and file the Forms 4 on a timely basis, it is imperative that you sign and return immediately
the enclosed power of attorney.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font: normal 10pt Times New Roman, Times, Serif; text-decoration: none">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U>Memorandum
to Department Heads Regarding Certifications</U></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; text-decoration: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>October
22, 2025</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>TO:
Department Heads, Directors and Officers</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>FROM:
Management of Fusemachines Inc. </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>RE:
Certification of Compliance</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
the insider trading laws, not only may companies have potential liability for failing to implement policies and procedures to prevent
employees from engaging in insider trading, but other &ldquo;controlling persons&rdquo; may also have exposure.</FONT></P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">It
is therefore imperative that we all ensure that the employees we supervise have read, signed and returned the enclosed certification
of compliance with the Company&rsquo;s Insider Trading Policy.</FONT></P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
that connection, please see that the signed certifications of all employees, consultants, and independent contractors in your department
are returned to the office of the Compliance Officer.</FONT></P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, the Human Resources Department should furnish the Insider Trading Policy to, and obtain signed certifications from, all new
employees.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>Guidelines
for Rule 10b5-1 Plans</U></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Rule
10b5-1 under the Exchange Act provides a defense from insider trading liability under Rule 10b-5. In order to be eligible to rely on
this defense, a person subject to this Policy must enter into a Rule 10b5-1 plan for transactions in Company Securities (as defined in
the Insider Trading Policy) that meets certain conditions specified in the Rule (a &ldquo;Rule 10b5-1 Plan&rdquo;). If the plan meets
the requirements of Rule 10b5-1, transactions in Company Securities may occur without regard to certain insider trading restrictions.
In general, a Rule 10b5-1 Plan must be entered into at a time when the person entering into the plan is not aware of material nonpublic
information. Once the plan is adopted, the person must not exercise any influence over the amount of securities to be traded, the price
at which they are to be traded or the date of the trade. The plan must either specify the amount, pricing and timing of transactions
in advance or delegate discretion on these matters to an independent third party.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">A
Rule 10b5-1 plan must include a cooling-off period before trading can commence that, for directors or officers, ends on the later of
90 days after the adoption of the Rule 10b5-1 plan or two Trading Days following the disclosure of the Company&rsquo;s financial results
in an SEC periodic report for the fiscal quarter in which the plan was adopted (but in any event, the required cooling-off period is
subject to a maximum of 120 days after adoption of the plan), and for persons other than directors or officers, 30 days following the
adoption or modification of a Rule 10b5-1 plan. A person may not enter into overlapping Rule 10b5-1 plans (subject to certain exceptions)
and may only enter into one single-trade Rule 10b5-1 plans during any 12-month period (subject to certain exceptions). Directors and
officers must include a representation in their Rule 10b5-1 plan certifying that: (i) they are not aware of any material nonpublic information;
and (ii) they are adopting the plan in good faith and not as part of a plan or scheme to evade the prohibitions in Rule 10b-5. All persons
entering into a Rule 10b5-1 plan must act in good faith with respect to that plan.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">As
specified in the Company&rsquo;s Insider Trading Policy, a Rule 10b5-1 Plan must be approved by the Compliance Officer and meet the requirements
of Rule 10b5-1 and these guidelines. Any Rule 10b5-1 Plan must be submitted for approval five days prior to the entry into the Rule 10b5-1
Plan. No further pre-approval of transactions conducted pursuant to the Rule 10b5-1 Plan will be required.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
following guidelines apply to all Rule 10b5-1 Plans:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">You
                                            may not enter into, modify or terminate a trading program during a Restricted Period, or
                                            Event-Specific Restricted Period or otherwise while you are aware of material nonpublic information.</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
                                            Rule 10b5-1 Plans must have a duration of at least six (6) months and no more than two (2)
                                            years.</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
                                            officers and directors, no transaction may take place under a Rule 10b5-1 Plan until the
                                            later of (a) 90 days after adoption or modification of the Rule 10b5-1 Plan or (b) two Trading
                                            Days following the disclosure of the Company&rsquo;s financial results in a Form 10-Q or
                                            Form 10-K for the fiscal quarter (the Company&rsquo;s fourth fiscal quarter in the case of
                                            a Form 10-K) in which the Rule 10b5-1 Plan was adopted or modified (but in any event, the
                                            cooling-off period is subject to a maximum of 120 days after adoption of the plan).</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
                                            persons other than officers and directors, no transaction may take place under a Rule 10b5-1
                                            Plan until 30 days following the adoption or modification of a Rule 10b5-1 plan.</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
                                            to certain limited exceptions specified in Rule 10b5-1, you may not enter into more than
                                            one Rule 10b5-1 Plan at the same time;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Subject
                                            to certain limited exceptions specified in Rule 10b5-1, you are limited to only one Rule
                                            10b5-1 designed to effect an open market purchase or sale of the total amount of securities
                                            subject to the Rule 10b-1 Plan as a single transaction in any 12-month period;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">You
                                            must act in good faith with respect to a Rule 10b5-1 Plan. A Rule 10b5-1 Plan cannot be entered
                                            into as part of a plan or scheme to evade the prohibition of Rule 10b&not;5. Therefore, although
                                            modifications to an existing Rule 10b5-1 Plan are not prohibited, a Rule 10b5-1 Plan should
                                            be adopted with the intention that it will not be amended or terminated prior to its expiration.</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&#9679;</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Officer
                                            and directors must include a representation to the Company at the time of adoption or modification
                                            of a Rule 10b5-1 Plan that (i) the person is not aware of material nonpublic information
                                            about the Company or Company Securities and (ii) the person is adopting the plan in good
                                            faith and not as part of plan or scheme to evade the prohibitions of Rule 10b-5.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 1in; text-align: justify; text-indent: -0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company and the Company&rsquo;s officers and directors must make certain disclosures in SEC filings concerning Rule 10b5-1 Plans. Officers
and directors of the Company must undertake to provide any information requested by the Company regarding Rule 10b5-1 Plans for the purpose
of providing the required disclosures or any other disclosures that the Company deems to be appropriate under the circumstances.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Each
director, officer and other Section 16 insider understands that the approval or adoption of a pre-planned selling program in no way reduces
or eliminates such person&rsquo;s obligations under Section 16 of the Exchange Act, including such person&rsquo;s disclosure and short-swing
trading liabilities thereunder. If any questions arise, such person should consult with their own counsel in implementing a Rule 10b5-1
Plan.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>PRE-CLEARANCE
OF TRANSACTIONS IN<BR>
FUSEMACHINES INC. COMMON STOCK</U></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 20%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>NAME</U>:</B></FONT></TD><TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; width: 40%"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; width: 40%"></TD>
</TR></TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 20%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Check
    if applicable:</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; width: 15%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; width: 15%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Officer</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; width: 15%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; width: 15%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Director</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; width: 20%">&nbsp;</TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>DESCRIBE
TRANSACTION</U>:</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<!-- Field: Rule-Page --><DIV STYLE="margin-left: auto; margin-right: auto; width: 100%"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; width: 30%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(#
    of shares and type of trans-</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 70%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>action
    (i.e., sale, purchase, gift,</B></FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>pledge
    or other disposition)</B></FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 30%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>EXPECTED
    DATE OF TRANSACTION</U>:</B></FONT></TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; width: 20%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 48%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Date
    of Last Sale of Fusemachines Inc. stock in the last six months (including sale for payment of taxes):</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Date
    of Last Purchase of Fusemachines Inc. stock in the last six months:</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>MATERIAL,
NON-PUBLIC<BR>
INFORMATION</U>:</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 48%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Are
    you in possession of any material, non-public Information about Fusemachines Inc. or any of its Subsidiaries?</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 2%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; width: 12%"></TD>
    <TD STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; width: 12%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">YES</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 2%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; width: 12%"></TD>
    <TD STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; width: 12%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">NO</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 16%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>SIGNATURE</U></B>:</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; width: 30%"></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 15%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; width: 15%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Date</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; width: 15%"></TD>
    <TD STYLE="width: 9%">&nbsp;</TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">*****************************************************************************************</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>BOTTOM PORTION TO BE FILLED OUT BY THE <FONT STYLE="text-transform: uppercase">Chief Financial Officer</FONT> OR DESIGNEE</U>:</B></FONT> </P>



<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 35%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>NAME
    OF OFFICER OR DESIGNEE</U>:</B></FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; width: 30%"></TD>
    <TD STYLE="width: 35%">&nbsp;</TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 10%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Date:</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; width: 15%"></TD>
    <TD STYLE="width: 75%">&nbsp;</TD>
    </TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; width: 10%">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 15%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approved</FONT></TD>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 15%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Approval
Expires:</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif; width: 15%">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 10%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 30%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(<U>If
    you do not complete</U></B></FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>this
    transaction prior to</U></B></FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Not
    Approved</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>the
    expiration date, you </U></B></FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>must
    resubmit this form</U></B></FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>for
    approval</U>)</B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Approval
is subject to the terms and conditions of the Company&rsquo;s Insider Trading Policy (the &ldquo;Policy&rdquo;), which provides that
the Compliance Officer (as defined in the Policy) is under no obligation to approve a transaction submitted for pre-clearance, and may
determine not to permit the transaction. If a person seeks pre-clearance and permission to engage in the transaction and such pre-clearance
is not received, then he or she should refrain from initiating any transaction in Company Securities, and should not inform any other
person of the restriction.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>Forms
required to be filed with the SEC</U>: </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 10%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form
    4:</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top; width: 10%; text-align: left"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; width: 78%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Form
    must be filed with the SEC by 10:00 p.m. (Eastern Time) on the second business day following the transaction. To be timely filed,
    sufficient lead time is necessary for counsel to prepare the Form. Counsel needs all transaction and brokerage details as soon as
    possible after execution.</B></FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Form
    144:</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><U></U></FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Form
    must be filed on or before you effectuate the transaction.</B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><I>Please
contact the Chief Financial Officer or Dentons for assistance in filing the appropriate SEC forms.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>
<P STYLE="text-align: center; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><A NAME="gv_004"></A>Exhibit
21.1</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>LIST
OF SUBSIDIARIES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Set
forth below is a list of subsidiaries of Fusemachines Inc. (the &ldquo;Registrant&rdquo;) Other than as set forth below, all of the subsidiaries
listed below are wholly-owned subsidiaries of the Registrant and are owned directly by the Registrant.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; width: 23%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Subsidiary</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 2%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; width: 23%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Jurisdiction
    of Formation</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 2%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; width: 50%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Percentage
    of Ownership</B></FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fusemachines
    USA Inc.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Delaware</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">100%</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fusemachines
    Nepal, Inc.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Delaware</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">100%</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fusemachines
    Nepal Private Ltd.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Nepal</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fusemachines
    Nepal, Inc., the Registrant&rsquo;s wholly-owned subsidiary, owns 158,965 Ordinary Shares. Business Oxygen Private Limited, a third
    party, owns 39,750 Ordinary Shares and 1,110,250 Preference Shares.</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fusemachines
    Canada, Inc.</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Ontario,
    Canada</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">100%</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>


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<P STYLE="margin: 0"></P>

<P STYLE="margin: 0"></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><A NAME="gv_005"></A>Exhibit
23.1</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="margin-right: 0pt; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>CONSENT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">We
hereby consent to the incorporation by reference in Registration Statement on Form S-8 (File No. 333-292702), of our report
dated March 27, 2026, (which includes an explanatory paragraph relating to Fusemachines Inc. and its subsidiaries ability to continue
as a going concern), relating to the consolidated financial statements and schedules of Fusemachines Inc. and its subsidiaries (the &ldquo;Company&rdquo;)
appearing in this Annual Report on Form 10-K for the year ended December 31, 2025.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">/s/
KNAV CPA LLP</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">KNAV
CPA LLP</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Atlanta,
Georgia<BR>
March 27, 2026</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"></P>

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    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 0pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>
<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 3in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>
<P STYLE="text-align: center; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><A NAME="gv_007"></A>Exhibit
31.1</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"><B>CERTIFICATION
PURSUANT TO</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"><B>RULES
13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"><B>AS
ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">I,
Sameer Maskey, certify that:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">I
    have reviewed this Annual Report on Form 10-K of Fusemachines Inc.;</FONT></TD></TR>

<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Based
    on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
    to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
    the period covered by this report;</FONT></TD></TR>

<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Based
    on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
    respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented
    in this report;</FONT></TD></TR>

<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    registrant&rsquo;s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures
    (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
    Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Designed
    such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
    to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known
    to us by others within those entities, particularly during the period in which this report is being prepared;</FONT></TD></TR>

<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Designed
    such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
    supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
    for external purposes in accordance with generally accepted accounting principles;</FONT></TD></TR>

<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Evaluated
    the effectiveness of the registrant&rsquo;s disclosure controls and procedures and presented in this report our conclusions about
    the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
    and</FONT></TD></TR>

<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(d)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Disclosed
    in this report any change in the registrant&rsquo;s internal control over financial reporting that occurred during the registrant&rsquo;s
    most recent fiscal quarter (the registrant&rsquo;s fourth fiscal quarter in the case of an annual report) that has materially affected,
    or is reasonably likely to materially affect, the small business issuer&rsquo;s internal control over financial reporting; and</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    registrant&rsquo;s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
    financial reporting, to the registrant&rsquo;s auditors and the audit committee of the registrant&rsquo;s board of directors (or
    persons performing the equivalent functions):</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
    significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
    reasonably likely to adversely affect the registrant&rsquo;s ability to record, process, summarize and report financial information;
    and</FONT></TD></TR>

<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
    fraud, whether or not material, that involves management or other employees who have a significant role in the registrant&rsquo;s
    internal control over financial reporting.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="border-bottom: white 1pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 50%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Date:
    March 27, 2026</FONT></TD>
    <TD STYLE="border-bottom: white 1pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: top; width: 4%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">By:</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 46%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>/s/
    Sameer Maskey</I></FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Sameer
    Maskey</B></FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Chief
    Executive Officer</B></FONT></P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"></P></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(Principal
    Executive Officer)</B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="margin: 0"></P>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; margin-left: 0; text-align: justify"></P>
<P STYLE="text-align: center; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"><B><A NAME="gv_008"></A>Exhibit
31.2</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"><B>CERTIFICATION
PURSUANT TO</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"><B>RULES
13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"><B>AS
ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">I,
Christine Chambers, certify that:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">I
    have reviewed this Annual Report on Form 10-K of Fusemachines Inc.;</FONT></TD></TR>

<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Based
    on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary
    to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to
    the period covered by this report;</FONT></TD></TR>

<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><P STYLE="text-align: justify; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;</FONT></P>
                                                         <P STYLE="text-align: justify; margin-top: 0; margin-bottom: 0">&nbsp;</P></TD></TR>

<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    registrant&rsquo;s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures
    (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange
    Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Designed
    such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision,
    to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known
    to us by others within those entities, particularly during the period in which this report is being prepared;</FONT></TD></TR>

<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Designed
    such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our
    supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements
    for external purposes in accordance with generally accepted accounting principles;</FONT></TD></TR>

<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Evaluated
    the effectiveness of the registrant&rsquo;s disclosure controls and procedures and presented in this report our conclusions about
    the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation;
    and</FONT></TD></TR>

<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(d)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Disclosed
    in this report any change in the registrant&rsquo;s internal control over financial reporting that occurred during the registrant&rsquo;s
    most recent fiscal quarter (the registrant&rsquo;s fourth fiscal quarter in the case of an annual report) that has materially affected,
    or is reasonably likely to materially affect, the small business issuer&rsquo;s internal control over financial reporting; and</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5.</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    registrant&rsquo;s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over
    financial reporting, to the registrant&rsquo;s auditors and the audit committee of the registrant&rsquo;s board of directors (or
    persons performing the equivalent functions):</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
    significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
    reasonably likely to adversely affect the registrant&rsquo;s ability to record, process, summarize and report financial information;
    and</FONT></TD></TR>

<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
    fraud, whether or not material, that involves management or other employees who have a significant role in the registrant&rsquo;s
    internal control over financial reporting.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="border-bottom: white 1pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 50%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Date:
    March 27, 2026</FONT></TD>
    <TD STYLE="border-bottom: white 1pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: top; width: 4%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">By:</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 46%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>/s/
    Christine Chambers</I></FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"></P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"></P></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Christine
    Chambers</B></FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Chief
    Financial Officer</B></FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(Principal
    Financial and Accounting Officer)</B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>
<P STYLE="text-align: center; margin-top: 0; margin-bottom: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><A NAME="gv_009"></A>Exhibit
32.1</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"><B>CERTIFICATION
PURSUANT TO</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"><B>18
U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"><B>SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the Annual Report of Fusemachines Inc. (the &ldquo;Company&rdquo;) on Form 10-K for the period ending December 31, 2025
as filed with the Securities and Exchange Commission on the date hereof (the &ldquo;Report&rdquo;), I certify, pursuant to 18 U.S.C.
&sect; 1350, as adopted pursuant to &sect; 906 of the Sarbanes-Oxley Act of 2002, that:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and</FONT></TD></TR>

<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
    of the Company.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="border-bottom: white 1pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 50%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Date:
    March 27, 2026</FONT></TD>
    <TD STYLE="border-bottom: white 1pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: top; width: 4%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">By:</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 46%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>/s/
    Sameer Maskey</I></FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Sameer
    Maskey</B></FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Chief
    Executive Officer</B></FONT></P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"></P></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(Principal
    Executive Officer)</B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<!-- Field: Page; Sequence: 155 -->
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    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 0pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>



<P STYLE="margin: 0"></P>

<P STYLE="text-align: center; margin-top: 0; margin-bottom: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><A NAME="gv_010"></A>Exhibit
32.2</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"><B>CERTIFICATION
PURSUANT TO</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"><B>18
U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt; background-color: white"><B>SECTION
906 OF THE SARBANES-OXLEY ACT OF 2002</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
connection with the Annual Report of Fusemachines Inc. (the &ldquo;Company&rdquo;) on Form 10-K for the period ending December 31, 2025
as filed with the Securities and Exchange Commission on the date hereof (the &ldquo;Report&rdquo;), I certify, pursuant to 18 U.S.C.
&sect; 1350, as adopted pursuant to &sect; 906 of the Sarbanes-Oxley Act of 2002, that:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(1)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and</FONT></TD></TR>

<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(2)</FONT></TD>
    <TD STYLE="text-align: justify; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
    information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
    of the Company.</FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="border-bottom: white 1pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 50%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Date:
    March 27, 2026</FONT></TD>
    <TD STYLE="border-bottom: white 1pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: top; width: 4%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">By:</FONT></TD>
    <TD STYLE="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; width: 46%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>/s/
    Christine Chambers</I></FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Christine
    Chambers</B></FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>Chief
    Financial Officer</B></FONT></P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B></B></FONT></P>
    <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: center"></P></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: bottom">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD>
    <TD STYLE="text-align: center; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>(Principal
    Financial and Accounting Officer)</B></FONT></TD></TR>
  </TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></P>

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    <DIV STYLE="break-before: page; margin-top: 6pt; margin-bottom: 0pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt; text-align: justify"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: right"><A NAME="gv_011"></A>Exhibit 97.1</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">FUSEMACHINES
INC.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CLAWBACK
POLICY</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">1.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>Introduction</U></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-indent: -0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Fusemachines
Inc. (the &ldquo;<B>Company</B>&rdquo;) believes that it is in the best interests of the Company and its stockholders to create and foster
a culture of business ethics, integrity and accountability, and that, among other purposes, reinforces the Company&rsquo;s incentive
compensation philosophy.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Board of Directors (the &ldquo;<B>Board</B>&rdquo;) therefore adopts this policy to provide for the Company&rsquo;s recovery of certain
compensation in the event of an accounting restatement of the Company&rsquo;s financial statements resulting from material noncompliance
with applicable financial reporting requirements under the federal securities laws (this &ldquo;<B>Policy</B>&rdquo;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
Policy is designed to comply with Section 10D of the Securities Exchange Act of 1934, as amended (the &ldquo;<B>Exchange Act</B>&rdquo;),
and the rules and regulations promulgated thereunder, and Nasdaq Listing Rule 5608, &ldquo;Recovery of Erroneously Awarded Compensation.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">2.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>General
                                            Administration</U></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-indent: -0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
Policy shall be administered by the Board or, if so designated by the Board, the Compensation Committee of the Board, in which case references
herein to the Board shall be deemed to be references to the Compensation Committee of the Board. Any determinations made by the Board
in respect of this Policy, or to matters as to this Policy&rsquo;s amendment, enforcement, or otherwise, shall be final and binding on
all individuals governed under this Policy as well as any related actions or procedures carried out by the Company&rsquo;s Executive
Officers (as defined herein) that are deemed necessary, appropriate, or advisable to effectuate the purposes of this Policy.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">3.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>Applicability</U></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-indent: -0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
Policy applies to the Company&rsquo;s current and former Executive Officers, as determined by the Board in accordance with Section 10D
of the Exchange Act and the listing standards of the national securities exchange on which the Company&rsquo;s securities are listed
(such as Section 303A.14 of the New York Stock Exchange&rsquo;s listing standards or Rule 5608 of Nasdaq&rsquo;s Listing Rules, which
are each approved by the U.S. Securities and Exchange Commission (the &ldquo;<B>SEC</B>&rdquo;) to implement Rule 10D-1 promulgated under
the Exchange Act).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
purposes of this Policy, &ldquo;<B>Executive Officer</B>&rdquo; means the Company&rsquo;s president, principal financial officer, principal
accounting officer (or, if there is no such accounting officer, the controller); any vice president of the Company in charge of a principal
business unit, division, or function (such as sales, administration, or finance); any other officer who performs a policy-making function;
and any other person who performs a function similar to a policy-making function on behalf of the Company. Executive officers of the
Company&rsquo;s parent(s) or subsidiaries are deemed Executive Officers of the Company if they perform such policy-making or similar
functions for or on behalf of the Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
Policy also applies to other senior executives, employees, or classes of employees of the Company as may be determined by the Board in
its sole discretion from time to time (together with Executive Officers, &ldquo;<B>Covered Persons</B>&rdquo;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">4.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>Recoupment</U></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-indent: -0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
the Company is required to prepare an accounting restatement of its financial statements due to the Company&rsquo;s material noncompliance
with financial reporting requirements under the applicable federal securities laws (including any required accounting restatement to
correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would
result in a material misstatement if the error were corrected in the current period or left uncorrected in the current period) (an &ldquo;<B>Accounting
Restatement</B>&rdquo;), without regard to any fault or misconduct of a Covered Person, then, the Board shall mandate the Company&rsquo;s
recovery, in the form of reimbursement, or forfeiture, as applicable (&ldquo;<B>Recoupment</B>&rdquo;), of any Excess Incentive Compensation
(as defined herein) received by a Covered Person, <I>provided that</I>:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                            receipt of any such Excess Incentive Compensation by a Covered Person occurred after the
                                            Covered Person became a Covered Person;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                            Covered Person served as a Covered Person at any time during the performance period applicable
                                            to the Covered Person&rsquo;s Incentive Compensation (as defined herein);</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                            Company had a class of securities listed on a national securities exchange or a national
                                            securities association during the Covered Person&rsquo;s service as a Covered Person and
                                            during the performance period applicable to the Covered Person&rsquo;s Incentive Compensation;
                                            and</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(d)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">the
                                            receipt of the Excess Incentive Compensation by the Covered Person occurred during the three
                                            completed fiscal years immediately preceding the date that the Company is required to prepare
                                            an Accounting Restatement, or during any transition period (that results from a change in
                                            the Company&rsquo;s fiscal year) within or immediately following such three completed fiscal
                                            years.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 1in; text-align: justify; text-indent: -0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
purposes of this Policy, a transition period between the last day of the Company&rsquo;s previous fiscal year end and the first day of
its new fiscal year that comprises a period of nine to 12 months is a completed fiscal year.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
purposes of this Policy, any Incentive Compensation is deemed to be &ldquo;<U>received</U>&rdquo; by a Covered Person <I>at the point
in time when a Financial Reporting Measure</I> (as defined herein), as specified in a Covered Person&rsquo;s incentive compensation agreement
(or other equity or incentive compensation plan of the Company) providing for a Covered Person&rsquo;s compensation that is contingent
upon or tied to the attainment of a Financial Reporting Measure, <I>is attained during the relevant fiscal period of the Company</I>.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Therefore,
under this Policy, a Covered Person is deemed to receive Incentive Compensation even if, for instance, the payment or grant of Incentive
Compensation occurs after the end of the relevant fiscal period of the Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
purposes of this Policy, the date on which the Company is required to prepare an Accounting Restatement is deemed to have occurred on
the earlier of (i) the date the Board concludes, or reasonably should have concluded, that the Company&rsquo;s previously issued financial
statements contain a material error and (ii) the date a court, regulator, or other legally authorized body directs the Company to restate
its previously issued financial statements to correct a material error.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company&rsquo;s obligation to seek Recoupment of a Covered Person&rsquo;s Excess Incentive Compensation is <I>not</I> dependent on whether
or when the restated financial statements are filed with the SEC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">5.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>Incentive
                                            Compensation; Financial Reporting Measures</U></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-indent: -0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
purposes of this Policy, &ldquo;<U>Incentive Compensation</U>&rdquo; means any compensation that is granted, earned, or vested based
wholly or in part upon the attainment of a Financial Reporting Measure.<SUP>1</SUP></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Incentive
Compensation includes (but is not limited to):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in">&#9679;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Annual
                                            bonuses and other short- and long-term cash incentives;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in">&#9679;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Stock
                                            options;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in">&#9679;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Stock
                                            appreciation rights;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in">&#9679;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Restricted
                                            stock;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in">&#9679;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Restricted
                                            stock units;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in">&#9679;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Performance
                                            shares; and</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in">&#9679;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Performance
                                            units.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">For
purposes of this Policy, &ldquo;<U>Financial Reporting Measure</U>&rdquo; means a measure that is determined and presented in accordance
with the generally accepted accounting principles used in preparing the Company&rsquo;s financial statements, or any measure that is
derived wholly or in part therefrom. For avoidance of doubt, a Financial Reporting Measure need not be presented within the Company&rsquo;s
financial statements or included in a filing with the SEC.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Financial
Reporting Measures include (but are not limited to):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in">&#9679;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Company
                                            stock price;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in">&#9679;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Total
                                            shareholder return;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in">&#9679;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Revenues;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in">&#9679;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Net
                                            income;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in">&#9679;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Earnings
                                            before interest, taxes, depreciation and amortization, EBITDA, or adjusted EBITDA;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in">&#9679;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Funds
                                            from operations;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in">&#9679;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Liquidity
                                            measures, such as working capital or operating cash flow;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in">&#9679;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Return
                                            measures, such as return on invested capital or return on assets; and</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.25in">&#9679;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Earnings
                                            measures, such as earnings per share.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><SUP>1</SUP>
Equity awards that vest exclusively upon completion of a specified employment period, without any performance condition, and bonus awards
that are discretionary or exclusively based on subjective goals or goals unrelated to Financial Reporting Measures do <I>not</I> constitute
Incentive Compensation under this Policy.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; margin-top: 0pt; margin-right: 0pt; margin-bottom: 0pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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    <DIV STYLE="break-before: page; margin-top: 6pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">6.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>Excess
                                            Incentive Compensation</U></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-indent: -0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><I>The
amount subject to Recoupment</I> is any Incentive Compensation received by a Covered Person that is determined by the Board, in good
faith and upon the exercise of due care, to have been based on erroneous information that caused the Company&rsquo;s material noncompliance
with financial reporting requirements under the federal securities laws (without regard to any fault or misconduct of a Covered Person),
which would not have been received by a Covered Person had the Incentive Compensation of a Covered Person been based on the restated
financial statements&rsquo; results (&ldquo;<B>Excess Incentive Compensation</B>&rdquo;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
the Board cannot calculate Excess Incentive Compensation received by a Covered Person from the information in an Accounting Restatement
(i.e., the amount of Excess Incentive Compensation is not subject to mathematical recalculation directly from the information in an Accounting
Restatement), then, the Board shall determine such Excess Incentive Compensation based on a reasonable estimate of the effect of such
Accounting Restatement on the applicable Financial Reporting Measures upon which the Excess Incentive Compensation was received and in
consideration of all facts relevant to the Company&rsquo;s Recoupment of Excess Incentive Compensation received by a Covered Person in
the circumstances.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Company shall maintain documentation of any such reasonable estimates and provide such documentation, when and if reasonably requested,
to the applicable national securities exchange on which the Company&rsquo;s securities are listed in accordance with the applicable standards
or rules of the national securities exchange.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">With
respect to Incentive Compensation based in part or whole on stock price or measures of shareholder return, the Board shall calculate
Excess Incentive Compensation relating thereto in such manner as the Board deems appropriate or reasonable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
no event shall the Company be required to award a Covered Person additional Incentive Compensation if the restated financial statements&rsquo;
results would have resulted in the provision of Incentive Compensation that is higher in monetary value relative to the monetary value
received by a Covered Person prior to the Accounting Restatement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">7.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>Recoupment
                                            Method</U></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-indent: -0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Board shall determine in its sole discretion, to be exercised in good faith, and not inconsistent with applicable law, the method for
Recoupment of a Covered Person&rsquo;s Excess Incentive Compensation, which may include, without limitation, one or more of the following
acts:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">mandating
                                            reimbursement of cash-based Incentive Compensation previously paid to a Covered Person;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">seeking
                                            recovery of any gain realized on the vesting, exercise, settlement, sale, transfer, or other
                                            disposition of any equity-based Incentive Compensation of a Covered Person;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">offsetting
                                            the recouped amount from any compensation otherwise owed by the Company to a Covered Person;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(d)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">cancelling
                                            outstanding vested or unvested equity-based Incentive Compensation of a Covered Person; and</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(e)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">taking
                                            any other remedial and recovery action not disallowed by applicable law, as determined by
                                            the Board, consistent with Sections 4, 6, 10, and 13 under this Policy.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 1in; text-align: justify; text-indent: -0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Board shall, in the exercise of its fiduciary duty to safeguard the assets of the Company (including the time value of any potentially
recoverable Incentive Compensation), and, in the light of the particular facts and circumstances of a Covered Person who is determined
by the Board to owe Excess Incentive Compensation to the Company, pursue the most appropriate balance of cost and speed in determining
the means to seek Recoupment of a Covered Person&rsquo;s Excess Incentive Compensation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consistent
with this Section 7 and Rule 10D-1 of the Exchange Act, regardless of the means of Recoupment used, the Board intends that Recoupment
of a Covered Person&rsquo;s Excess Incentive Compensation shall be effected by the Company reasonably promptly. The Board further intends
that the administration of this Policy shall abide by the Company&rsquo;s recognition that what is reasonable may depend on the additional
cost incident to Recoupment.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">8.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>No
                                            Indemnification</U></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-indent: -0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
no event shall the Company indemnify any Covered Persons against the loss of any incorrectly awarded Incentive Compensation pursuant
to Rule 10D-1 of the Exchange Act and applicable stock exchange listing rules.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">9.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>Cooperation</U></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-indent: -0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Covered
Persons shall facilitate the Company&rsquo;s compliance with its disclosure obligations relating to this Policy in accordance with the
requirements of the federal securities laws and applicable stock exchange listing rules.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">10.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>Interpretation</U></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-indent: -0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consistent
with Section 2 of this Policy, the Board shall be authorized to construe and interpret this Policy and to make all determinations necessary,
appropriate, or advisable for the administration of this Policy in accordance with the Company&rsquo;s constitutional documents.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
Policy memorializes the Board&rsquo;s intention that this Policy be interpreted in a manner that is consistent with Section 10D of the
Exchange Act and any applicable rules, regulations, or standards adopted by the SEC (such as Rule 10D-1) and those adopted by the national
securities exchange on which the Company&rsquo;s securities are listed as well as any other relevant law, in each case as in effect from
time to time (the &ldquo;<B>Applicable Rules</B>&rdquo;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">To
the extent the Applicable Rules require recovery of Incentive Compensation in additional circumstances beyond those specified above,
nothing in this Policy shall be deemed to limit or restrict the right or obligation of the Company to recover Incentive Compensation
to the fullest extent required by the Applicable Rules.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">11.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>Effective
                                            Date</U></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-indent: -0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
Policy is effective as of October 22, 2025 (the &ldquo;<B>Effective Date</B>&rdquo;) and shall be duly adopted by the Board in accordance
with the Company&rsquo;s constitutional documents. This Policy shall apply to all Incentive Compensation that is received by Covered
Persons on or after the Effective Date.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">12.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>Amendment;
                                            Termination</U></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-indent: -0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Consistent
with Section 2 of this Policy, the Board may amend this Policy from time to time in its sole discretion and shall amend this Policy as
the Board deems necessary or proper to (i) reflect any modification to the rules and regulations adopted by the SEC interpreting Section
954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 and the rules and regulations adopted by the SEC under Section
10D of the Exchange Act and to (ii) comply with any rules or standards adopted by a national securities exchange on which the Company&rsquo;s
securities are listed.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Board may, but is not required to, reassess the contents of this Policy on a yearly basis as part of the Company&rsquo;s analysis of
material risks.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Board may terminate this Policy at any time, subject to compliance with any applicable rules or standards of a national securities exchange
on which the Company&rsquo;s securities are then listed.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">13.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>Other
                                            Recoupment Rights</U></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-indent: -0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Board intends that this Policy shall be applied to the fullest extent of the law.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
the Board&rsquo;s good-faith determination, the Board may require that any employment agreement, equity award agreement, or similar enforceable
agreement by and between the Company and a Covered Person entered into on or after the Effective Date shall, as a condition to the grant
of any benefit thereunder, be amended and restated, or otherwise validly modified or supplemented, under the governing law of any such
agreement, to require a Covered Person to agree to abide by the terms of this Policy.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">All
of the Company&rsquo;s actions or powers associated with Recoupment contemplated by this Policy are in addition to, and not in lieu of,
any contract or other rights of a compensation-recovery nature that may be available to the Company (including, without limitation, any
right of repayment, forfeiture, or right of offset against any employees that is required pursuant to any statutory repayment requirement
(regardless of whether implemented at any time prior to or following the adoption or amendment of this Policy), including Section 304
of the Sarbanes-Oxley Act of 2002 (&ldquo;<B>SOX</B>&rdquo;)).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Any
amounts paid to the Company in accordance with Section 304 of SOX shall be considered by the Company in determining any amounts recovered
under this Policy.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
application and enforcement of this Policy does not preclude the Company from taking any other action to enforce a Covered Person&rsquo;s
obligations to the Company, including termination of employment or institution of legal proceedings. Nothing in this Policy restricts
the Company from seeking Recoupment under any other compensation recoupment-based policy or any applicable provisions in plans, agreements,
awards, or other arrangements that contemplate the recovery of compensation from a Covered Person.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
a Covered Person fails to repay Excess Incentive Compensation that is owed to the Company under this Policy, then, the Company shall
take all appropriate action to recover such Excess Incentive Compensation from the Covered Person, and the Covered Person shall be required
to reimburse the Company for all expenses (including legal expenses) incurred by the Company in recovering such Excess Incentive Compensation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">14.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>Impracticability</U></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-indent: -0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
Board shall mandate Recoupment of any Excess Incentive Compensation of a Covered Person in accordance with this Policy <I>unless</I>
effecting Recoupment would be impracticable, as the Compensation Committee of the Board may so determine (i) in consistence with its
fiduciary duties owed to the Company&rsquo;s shareholders and (ii) in accordance with Rule 10D-1 of the Exchange Act and the applicable
listing standards of the national securities exchange on which the Company&rsquo;s securities are traded.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Under
Rule 10D-1 of the Exchange Act, a company&rsquo;s obligation to recover any erroneously awarded compensation is subject only to the following
limited instances in which recovery would be considered impracticable:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(a)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">The
                                            direct expense paid to a third party to assist in enforcing the policy would exceed the amount
                                            to be recovered after a company has made and documented a reasonable attempt to recover;</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(b)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Recovery
                                            would violate home country law where that law was adopted prior to November 28, 2022, and
                                            the issuer provides an opinion of home country counsel to the securities exchange on which
                                            the Company&rsquo;s securities are traded; or</FONT></TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif">&nbsp;</TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">(c)</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Recovery
                                            would likely cause an otherwise tax-qualified retirement plan to fail to meet the requirements
                                            of the Internal Revenue Code of 1986, as amended.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 1in; text-align: justify; text-indent: -0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Therefore,
the Board intends that this Policy shall be implemented in a manner that follows the aforementioned exceptions (as applicable to the
Company), and that Recoupment of any Excess Incentive Compensation of a Covered Person under this Policy shall be mandatory unless one
of the exceptions under Rule 10D-1 of the Exchange Act apply.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">15.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>Severability</U></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-indent: -0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">If
any provision of this Policy or the application of such provision to any Covered Person shall be adjudicated to be invalid, illegal,
or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provisions of this Policy,
and the invalid, illegal, or unenforceable provisions shall be deemed amended to the minimum extent necessary to render any such provision
(or the application of such provision) valid, legal or enforceable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
<TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">16.</FONT></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B><U>Successors</U></B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0.5in; text-indent: -0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">This
Policy shall be binding and enforceable against all Covered Persons and their beneficiaries, heirs, executors, administrators, or other
legal representatives.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>


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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">FUSEMACHINES
INC.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">CLAWBACK
POLICY</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">ACKNOWLEDGEMENT
AND AGREEMENT FORM</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">By
signing below, the undersigned acknowledges and confirms that the undersigned has received and reviewed a copy of the Fusemachines Inc.
(the &ldquo;<B>Company</B>&rdquo;) Clawback Policy (the &ldquo;<B>Policy</B>&rdquo;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">By
signing this Acknowledgement and Agreement Form, the undersigned acknowledges and agrees that the undersigned is and will continue to
be subject to the Policy, and that the Policy will apply both during and after the undersigned&rsquo;s employment with the Company. Further,
by signing below, the undersigned agrees to abide by the terms of the Policy, including, without limitation, by returning any Excess
Incentive Compensation (as defined in the Policy) reasonably promptly to the Company to the extent required by, and in a manner consistent
with, the Policy.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">In
addition, by signing below, the undersigned acknowledges that the Policy applies to all Incentive Compensation (as defined in the Policy);
agrees to waive any legal right that might conflict or otherwise interfere with the Company&rsquo;s Recoupment (as defined in the Policy)
of any Excess Incentive Compensation in consistence with the terms of the Policy; and acknowledges that the Company may seek Recoupment
of any Excess Incentive Compensation through any method of recovery it deems appropriate or necessary under the circumstances (which
may include offsetting against any compensation payable to the undersigned, among other methods of recovery), as contemplated by Sections
7 and 13 under the Policy.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 50%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; width: 50%"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">COVERED
    PERSON</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">Signature</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif; font-size: 10pt">&nbsp;</FONT></TD></TR>
  <TR STYLE="font: 10pt Times New Roman, Times, Serif; vertical-align: top">
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