Company: SCLXW
Filing Date: 2025-05-14
Form Type: 424B3
Source: 0001193125-25-119846
Chunk: 424

Company: Scilex Holding Co
Filing Date: 2025-05-14
Form: 424B3
Chunk 424
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 federal income tax purposes. In either situation, a U.S. Holder’s initial tax basis in the Common Stock received
generally should equal the holder’s adjusted tax basis in the SPAC Warrant. If the cashless exercise were treated as not being a realization event, it is unclear whether a U.S. Holder’s holding period for the Common Stock would
commence on the date of exercise of the SPAC Warrant or the day following the date of exercise of the SPAC Warrant; in either case, the holding period would not include the period during which the U.S. Holder held the SPAC Warrant. If, instead,
the cashless exercise were treated as a recapitalization, the holding period of the Common Stock generally would include the holding period of the SPAC Warrant.

It is also possible that a cashless exercise of a SPAC Warrant could be treated in part as a taxable exchange in which gain or loss is
recognized. In such event, a U.S. Holder could be deemed to have surrendered a portion of the SPAC Warrants being exercised having a value equal to the exercise price of such SPAC Warrants in satisfaction of such exercise price. Although not
free from doubt, such U.S. Holder generally should recognize capital gain or loss in an amount equal to the difference between the fair market value of the SPAC Warrants deemed surrendered to satisfy the exercise price and the
U.S. Holder’s adjusted tax basis in such surrendered SPAC Warrants. In this case, a U.S. Holder’s initial tax basis in the Common Stock received would equal the sum of the exercise price and the U.S. holder’s adjusted
tax basis in the SPAC Warrants exercised. It is unclear whether a U.S. Holder’s holding period for the Common Stock would commence on the date of exercise of the SPAC Warrant or the day following the date of exercise of the SPAC Warrant;
in either case, the holding period would not include the period during which the U.S. Holder held the SPAC Warrant. Due to the uncertainty and absence of authority on the U.S. federal income tax treatment of a cashless exercise, including
when a U.S. Holder’s holding period would commence with respect to the Common Stock received, U.S. Holders are urged to consult their tax advisors regarding the tax consequences of a cashless exercise.

Sale, Exchange, Redemption or Expiration of a SPAC Warrant

Upon a sale, exchange (other than by exercise),