Company: KOYNU
Filing Date: 2025-08-12
Form Type: S-1/A
Source: 0001829126-25-006117
Chunk: 364

Company: CSLM Digital Asset Acquisition Corp III, Ltd
Filing Date: 2025-08-12
Form: S-1/A
Chunk 364
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 to the exercise price for the total number of public warrants deemed exercised. Subject to the PFIC rules discussed below, the U.S. Holder would recognize capital gain or loss in an amount equal to the difference between the fair market value of the public warrants deemed surrendered and the U.S. Holder’s tax basis in such public warrants. In this case, a U.S. Holder’s tax basis in the public shares received would equal the sum of the U.S. Holder’s initial investment in the public warrants deemed exercised (i.e., the portion of the U.S. Holder’s purchase price for the units that is allocated to such public warrants, as described above under “— Allocation of Purchase Price and Characterization of a Unit”) and the exercise price of such public warrants. It is unclear whether a U.S. Holder’s holding period for the public shares would commence on the date of exercise of the public warrant or the day following the date of exercise of the public warrant.

Due to the absence of authority on the United States federal income tax treatment of a cashless exercise, there can be no assurance which, if any, of the alternative tax consequences and holding periods described above would be adopted by the IRS or a court of law. Accordingly, U.S. Holders should consult their tax advisors regarding the tax consequences of a cashless exercise.

Subject to the PFIC rules described below, if we redeem public warrants for cash pursuant to the redemption provisions described in the section of this prospectus entitled “Description of Securities — Warrants” or if we purchase public warrants in an open market transaction, such redemption or purchase generally will be treated as a taxable disposition to the U.S. Holder, taxed as described above under “— Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Public Shares and Public Warrants.” In the case of a cashless exercise, the exercise may be treated either as if we redeemed such public warrant for public shares or as an exercise of the public warrant. If the cashless exercise of a public warrant for public shares is treated as a redemption, then such redemption generally should be treated as a tax-deferred recapitalization for U.S. federal income tax purposes, in which case a U.S. Holder should not recognize any gain or loss on the deemed redemption and accordingly a U.S. Holder’s aggregate tax basis in the public shares received in the redemption should equal the U.S. Holder’s aggregate tax basis in the public warrants so redeemed and the holding period for the public shares should include the U.S