Company: SMNR
Filing Date: 2025-04-21
Form Type: S-4/A
Source: 0001193125-25-087342
Chunk: 427

Company: Semnur Pharmaceuticals, Inc.
Filing Date: 2025-04-21
Form: S-4/A
Chunk 427
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 the application of the PFIC rules to such securities under such holder’s particular circumstances.

U.S. Federal Income Tax Consequences of Ownership and Disposition of New Semnur Common Stock

The following discussion is a summary of certain material U.S. federal income tax consequences of the ownership and disposition of New Semnur Common Stock to U.S. Holders who receive such New Semnur Common Stock pursuant to the Domestication.

Distributions on New Semnur Common Stock

The gross amount of any distribution on New Semnur Common Stock that is made out of New Semnur’s current or accumulated earnings and profits (as determined for U.S. federal income tax purposes) will generally be taxable to a U.S. Holder as ordinary dividend income on the date such distribution is actually or constructively received by such U.S. Holder. Any such dividends paid to corporate U.S. Holders generally will qualify for the dividends received deduction if the requisite holding period is satisfied. Subject to applicable requirements and limitations, dividends paid to a non–corporate U.S. Holder generally will constitute “qualified dividends” that will be subject to tax at the preferential tax rate accorded to long–term capital gains.

Non–corporate U.S. Holders that do not meet a minimum holding period requirement or that elect to treat the dividend income as “investment income” pursuant to Section 163(d)(4) of the Code (dealing with the deduction for investment interest expense) will not be eligible for the reduced rates of taxation applicable to qualified dividends. In addition, the rate reduction will not apply to dividends if the recipient of a dividend is obligated to make related payments with respect to positions in substantially similar or related property. This disallowance applies even if the minimum holding period has been met.

To the extent that the amount of any distribution made by New Semnur on the New Semnur Common Stock exceeds New Semnur’s current and accumulated earnings and profits for a taxable year (as determined under U.S. federal income tax principles), the distribution will first be treated as a tax–free return of capital, causing a reduction (but not below zero) in the adjusted basis of the U.S. Holder’s New Semnur Common Stock, and to the extent the amount of the distribution exceeds the U.S. Holder’s tax basis, the excess will be taxed as capital gain recognized on a sale or exchange as described below under “– Sale, Exchange, or Other Taxable Disposition of New Semnur Common Stock.”