Company: SCAG
Filing Date: 2025-01-06
Form Type: 424B3
Source: 0001213900-25-001215
Chunk: 39

Company: Scage Future
Filing Date: 2025-01-06
Form: 424B3
Chunk 39
---
 Warrants exchanged therefor) and (ii) the fair market value of the Assumed Warrants received by such holder in such exchange. If the Business Combination qualifies as an exchange governed only by section 351 of the Code (and not by section 368 of the Code), a U.S. holder that holds only Finnovate Warrants that automatically convert into Assumed Warrants should recognize gain or loss upon such exchange equal to the difference between the fair market value of the Assumed Warrants received and such U.S. holder’s adjusted basis in its Finnovate Warrants. A U.S. holder’s basis in its Assumed Warrants received in the Business Combination should equal the fair market value of the Assumed Warrants. A U.S. holder’s holding period in its Assumed Warrants should begin on the day after the Business Combination. If the Business Combination qualifies as a “reorganization” as well as a section 351 exchange, a U.S. holder that receives PubCo ADSs in exchange for Finnovate Ordinary Shares and whose Finnovate Warrants automatically convert into Assumed Warrants should not recognize any gain or loss upon the exchange. In such case, a U.S. holder’s tax basis in the PubCo ADSs and the Assumed Warrants received should be equal to the U.S. holder’s basis in the Finnovate Ordinary Shares and Finnovate Warrants exchanged therefor, and the holding period of the PubCo ADSs and Assumed Warrants should include the holding period during which the Finnovate Ordinary Shares and Finnovate Warrants exchanged therefor were held by such U.S. holder. However, it is unclear whether the requirements of Section 368 of the Code can be satisfied. There are many requirements that must be satisfied in order for the Business Combination to qualify as a “reorganization” under Section 368 of the Code, some of which are based upon factual determinations and others are fundamental to corporate reorganizations. For example, it is unclear as a matter of law whether an entity that may not have a historic business, such as Finnovate, can satisfy the “continuity of business enterprise” requirement under Section 368 of the Code. In addition, reorganization treatment could be adversely affected by events or actions that occur prior to or at the time of the Business Combination, some of which are outside the control of Finnovate. For example, the requirements for reorganization treatment could be affected by the magnitude of Finnovate Ordinary Share redem