Important Investor Update: Fusemachines Inc. Faces Nasdaq Listing Challenge

This update provides a clear, straightforward overview of a significant development for Fusemachines Inc., helping investors understand the situation.

---

1. What happened? (The Event)

Nasdaq, the stock exchange where Fusemachines Inc. shares trade, notified the company that it no longer meets a key listing requirement for the Nasdaq Global Market.

Specifically, the company's Market Value of Publicly Held Shares (MVPHS) falls below the required threshold. Nasdaq mandates a minimum MVPHS of $15 million. Fusemachines' MVPHS has remained below this level for an extended period.

2. When did it happen?

Fusemachines received this official notification on January 15, 2026. Nasdaq issued the notice because the company's MVPHS remained below the $15 million requirement for 30 consecutive business days, from November 6, 2025, through January 14, 2026.

3. Why did it happen? (Underlying Factors)

A declining MVPHS usually signals a sustained drop in a company's stock price. This can also happen if insiders hold a large portion of shares, leaving fewer shares for public trading. For Fusemachines, this situation points to a lack of sustained investor confidence, likely due to concerns about its financial performance, operational execution, or future growth prospects.

While the 8-K filing does not detail the specific causes for Fusemachines' stock decline, investors should consider these factors:

• Recent Financial Performance: Have recent quarterly (10-Q) or annual (10-K) filings shown sustained losses, declining revenue growth, or significant cash burn?
• Market Conditions: Is the broader market or AI/tech sector experiencing a downturn that disproportionately affects Fusemachines?
• Strategic Execution: Are there perceived challenges in the company's ability to execute its business strategy, secure new contracts, or achieve profitability?
• Competitive Landscape: Is Fusemachines facing increased competition or a shift in market demand that impacts its business model?

Understanding these underlying reasons is crucial for assessing the company's long-term viability.

4. Why does this matter? (Significance and Risks)

This notice represents a serious development with several implications:

• Risk of Delisting: The most significant risk is that Nasdaq could eventually remove (delist) Fusemachines' stock from the Global Market if the company fails to regain compliance. Delisting can severely impact a stock's liquidity, making it harder for investors to buy and sell shares, and often causes a further decline in stock price.
• Reputation and Credibility: Non-compliance can damage the company's reputation, signaling instability or operational challenges to potential investors, partners, and customers.
• Access to Capital: Companies listed on major exchanges generally find it easier and less expensive to raise capital. Delisting could make future fundraising efforts more difficult and costly for Fusemachines.

It's important to note that the stock will not be immediately delisted and will continue to trade under its current symbol, "FUSE," during the compliance period.

5. Who is affected? (Stakeholder Impact)

This situation affects various stakeholders:

• Investors: Shareholders face increased uncertainty and potential volatility. Their investment value could be impacted, and liquidity may decrease if the company does not regain compliance.
• Fusemachines Management and Board: They face significant pressure to develop and execute a credible plan to restore the company's market value and regain compliance.
• Employees: While not immediately affected, prolonged stock price weakness and potential delisting can sometimes lead to broader company challenges, impacting employee morale and retention.
• Business Partners and Customers: May view this as a sign of financial instability, potentially affecting business relationships.

6. Financial Impact

Receiving this Nasdaq notification has no immediate effect on the listing of the Company's common stock on the Nasdaq Global Market. It also does not immediately impact the Company's business operations or its reporting requirements with the Securities and Exchange Commission.

However, as discussed in "Significance and Risks," failure to regain compliance within the prescribed period could lead to the delisting of the Company's common stock. This would likely have adverse financial consequences, including reduced liquidity for shareholders, potential difficulty in raising capital, and a negative impact on the Company's market valuation and access to capital markets.

7. What happens next? (Path Forward and Deadlines)

Fusemachines faces a clear timeline and specific requirements to regain compliance:

• Compliance Period: The company has 180 calendar days, until July 14, 2026, to resolve the issue. During this period, the stock will continue to trade on the Nasdaq Global Market.
• Compliance Requirement: To regain good standing, Fusemachines' MVPHS must close at or above $15 million for a minimum of 10 consecutive business days before the July 14th deadline.
• Company's Stated Intentions: Fusemachines states it "intends to actively evaluate and monitor its MVPHS and evaluate available options to regain compliance."
• Potential Strategies: To address the MVPHS deficiency, the company might pursue several strategies:
  • Improving Business Performance: This could involve implementing cost-cutting measures, accelerating revenue growth through new product launches or strategic partnerships, or demonstrating a clear path to profitability.
  • Strategic Announcements: Positive news regarding significant contracts, technological advancements, or financial milestones could boost investor confidence.
  • Reverse Stock Split: This is a common, though often temporary, measure where the company reduces the number of outstanding shares to increase the per-share price, thereby raising the total MVPHS. Investors should know that a reverse split does not inherently improve the company's underlying business fundamentals.
• Alternative Listing: If Fusemachines cannot meet the Nasdaq Global Market requirements, it may transfer its listing to the Nasdaq Capital Market, which has less stringent listing criteria. However, if the company cannot achieve compliance there either, delisting from Nasdaq entirely becomes a strong possibility.

8. What should investors know? (Key Takeaways)

For investors considering Fusemachines stock, here are critical points to remember:

• Increased Volatility: Expect potential price swings as the market reacts to compliance developments.
• Serious Warning Sign: This is not a minor administrative issue but a formal warning about the company's ability to maintain its listing on a major exchange.
• Focus on Fundamentals: While a reverse stock split might temporarily fix the MVPHS, investors should prioritize understanding the company's underlying business health. Look for concrete plans to improve financial performance, achieve profitability, and generate sustainable growth.
• Monitor Progress: Closely track whether the company's stock price recovers sufficiently to meet the MVPHS requirement for 10 consecutive business days before the July 14, 2026, deadline.
• Due Diligence: Review Fusemachines' latest financial reports (10-K, 10-Q) and any subsequent press releases or 8-K filings for details on its strategy to regain compliance and address the root causes of the stock decline.
• Risk-Reward Assessment: Weigh the significant risk of potential delisting against any perceived upside if the company successfully regains compliance and improves its business trajectory.