Fair Value Measurements (Tables)
|
12 Months Ended |
Dec. 31, 2025 |
|---|
| Fair Value Disclosures [Abstract] |
|
| Schedule of Financial Instruments Recorded at Fair Value on a Recurring Basis |
The
following tables present the Company’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):
Schedule of Financial Instruments Recorded at Fair Value on a Recurring Basis
| | |
Level
1 | | |
Level
2 | | |
Level
3 | | |
Total | |
| | |
Fair
Value Measurements at December 31, 2025 | |
| | |
Level
1 | | |
Level
2 | | |
Level
3 | | |
Total | |
| Liabilities: | |
| | |
| | |
| | |
| |
| Warrant liability | |
| - | | |
| - | | |
$ | 121 | | |
$ | 121 | |
| Forward
Purchase derivative liability (Refer Note 21. Forward Purchase agreement) | |
| - | | |
| - | | |
$ | 9,692 | | |
$ | 9,692 | |
| Liabilities | |
$ | - | | |
$ | - | | |
$ | 9,813 | | |
$ | 9,813 | |
| | |
Level
1 | | |
Level
2 | | |
Level
3 | | |
Total | |
| | |
Fair Value
Measurements at December 31, 2024 | |
| | |
Level
1 | | |
Level
2 | | |
Level
3 | | |
Total | |
| Liabilities: | |
| | | |
| | | |
| | | |
| | |
| Related Party
convertible Notes Payable, at fair value (Refer Note 10. Long-Term Debt) | |
$ | - | | |
$ | - | | |
$ | 6,524 | | |
$ | 6,524 | |
| Convertible Notes at Fair
Value (Refer Note 10. Long-Term Debt) | |
| - | | |
| - | | |
$ | 8,986 | | |
$ | 8,986 | |
| Warrant
liability | |
| - | | |
| - | | |
$ | 945 | | |
$ | 945 | |
| Liabilities | |
$ | - | | |
$ | - | | |
$ | 16,455 | | |
$ | 16,455 | |
|
| Schedule of Change in Fair Value of Warrant Liability |
The
following table shows the change in the fair value of the warrant liability (in thousands):
Schedule of Change in Fair Value of Warrant Liability
| | |
Amount | |
| Balance as of December 31, 2023 | |
$ | 430 | |
| Change in fair value of warrant liabilities | |
| 515 | |
| Balance as of December
31, 2024 | |
$ | 945 | |
| | |
Amount | |
| Balance as of December 31, 2024 | |
$ | 945 | |
| Warrant liability, beginning balance | |
$ | 945 | |
| Change in fair value of warrant liabilities | |
$ | (824 | ) |
| Balance as of December
31, 2025 | |
$ | 121 | |
| Warrant liability, ending Balance | |
$ | 121 | |
|
| Schedule of Reconciliation of the Forward Purchase Derivative Liability |
Schedule
of Reconciliation of the Forward Purchase Derivative Liability
| | |
Amount | |
| Balance as of December 31, 2024 | |
| Nil | |
| Forward purchase derivative recognized
in connection with the merger on October 22, 2025 | |
| 8,616 | |
| Change in fair value of
forward purchase derivative liabilities | |
| 1,076 | |
| Balance as of December
31, 2025 | |
| 9,692 | |
|
| Schedule of Unobservable Assumptions Were Used in Determining the Fair Value of the Forward Purchase Derivative Liability |
The
following unobservable assumptions were used in determining the fair value of the forward purchase derivative liability at Closing
Schedule
of Unobservable Assumptions Were Used in Determining the Fair Value of the Forward Purchase Derivative Liability
|
| Schedule of Change in Fair Value of the Convertible Notes at Fair Value |
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):
Schedule of Change in Fair Value of the Convertible Notes at Fair Value
| | |
Related
party Convertible Note payable at fair value | | |
January
2024 Convertible
Notes | | |
Forward
Purchase Derivative Liability | |
| Balance as of December 31, 2023 | |
$ | 3,764 | | |
$ | - | | |
| - | |
| Issuance of convertible notes at fair value | |
| - | | |
$ | 6,500 | | |
| - | |
| Gain on extinguishment of debt recorded
as a capital transaction | |
| (343 | ) | |
| - | | |
| - | |
| Change in fair value of related party note and convertible notes at fair value | |
| 3,103 | | |
| 2,486 | | |
| - | |
| Balance as of December
31, 2024 | |
$ | 6,524 | | |
$ | 8,986 | | |
| - | |
| | |
| | | |
| | | |
| | |
| Balance as of December
31, 2024 | |
$ | 6,524 | | |
$ | 8,986 | | |
| | |
| Convertible notes at fair value, beginning balance | |
$ | 6,524 | | |
$ | 8,986 | | |
| | |
| Forward purchase derivative recognized in
connection with the merger on October 22, 2025 | |
| | | |
| | | |
| 8,616 | |
| Change in fair value of Related Party
Convertible note, Convertible Notes at Fair Value and Forward Purchase derivative liability | |
| (2,056 | ) | |
| (3,664 | ) | |
| 1,076 | |
| Conversion into Fusemachines Inc. common
stock to give effect of reverse capitalization of the merger (Refer Note 20) | |
| (4,168 | ) | |
| (5,322 | ) | |
| - | |
Reclassification from convertible note payable* | |
| (300 | ) | |
| | | |
| | |
| Balance as of December
31, 2025 | |
$ | - | | |
$ | - | | |
$ | 9,692 | |
| Convertible notes at fair value, ending balance | |
$ | - | | |
$ | - | | |
$ | 9,692 | |
| * | 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
(“Dolma”) amounting to $300 thousand, which was reclassified from a convertible note to a related party note payable on
demand. |
|
| Schedule of Probability-Weighted Valuation Model Used to Value the Convertible Notes at Fair Value |
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:
Schedule of Probability-Weighted Valuation Model Used to Value the Convertible Notes at Fair Value
2019
and 2021 Convertible Notes
| Type
of Events | |
Expected
Date | |
Probability
of Event | | |
Discount
rate | |
| SPAC
transaction | |
4/3/2025 | |
| 75 | % | |
| 54 | % |
| Maturity | |
2/28/2026 | |
| 10 | % | |
| 54 | % |
| Default
feature | |
NA | |
| 15 | % | |
| 54 | % |
January 2024 Convertible Notes
| Type of Events | |
Expected
Date | |
Probability
of Event | | |
Discount
rate | |
| SPAC
transaction | |
4/3/2025 | |
| 75 | % | |
| 45 | % |
| Maturity | |
7/12/2025 | |
| 10 | % | |
| 45 | % |
| Default
feature | |
7/12/2025 | |
| 15 | % | |
| 45 | % |
|