Company: CSLMF
Filing Date: 2025-07-03
Form Type: DEFM14A
Source: 0001193125-25-155514
Chunk: 307

Company: CSLM ACQUISITION CORP.
Filing Date: 2025-07-03
Form: DEFM14A
Chunk 307
---
 the exercise of a Pubco Warrant.

Exercise, Lapse or Redemption of Pubco Warrants

A U.S. Holder generally will not recognize taxable gain or loss on the acquisition of Pubco Common Stock upon exercise of Pubco Warrants
for cash. The U.S. Holder’s tax basis in the Pubco Common Stock received upon exercise of the Pubco Warrants generally will be an amount equal to the sum of the U.S. Holder’s tax basis in the Pubco Warrants and the exercise
price. It is unclear whether the U.S. Holder’s holding period for the Pubco Common Stock received upon exercise of the Pubco Warrants will begin on the date following the date of exercise or on the date of exercise of the Pubco Warrants;
in either case, the holding period will not include the period during which the U.S. Holder held the Pubco Warrants. If any Pubco Warrants are allowed to lapse unexercised, a U.S. Holder generally will recognize a capital loss equal to
such holder’s tax basis in the lapsed Pubco Warrants.

The tax consequences of a cashless exercise of Pubco Warrants are not clear
under current tax law. A cashless exercise may not be taxable, either because the exercise is not a realization event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. In either situation, a
U.S. Holder’s basis in the Pubco Common Stock received would equal the U.S. Holder’s basis in the Pubco Warrants exercised therefor. If the cashless exercise were treated as not being a realization event, it is unclear whether a
U.S. Holder’s holding period in the Pubco Common Stock would be treated as commencing on the date following the date of exercise or on the date of exercise of the Pubco Warrants; in either case, the holding period would not include the
period during which the U.S. Holder held the Pubco Warrants. If the cashless exercise were treated as a recapitalization, the holding period of the Pubco Common Stock would include the holding period of the Pubco Warrants exercised therefor.

179

It is also possible that a cashless exercise could be treated in part as a taxable exchange
in which gain or loss would be recognized. In such event, a U.S. Holder could be deemed to have surrendered a number of Pubco Warrants equal to the number of shares of Pubco Common Stock having a