Company: SMNR
Filing Date: 2025-06-11
Form Type: S-4/A
Source: 0001193125-25-139124
Chunk: 432

Company: Semnur Pharmaceuticals, Inc.
Filing Date: 2025-06-11
Form: S-4/A
Chunk 432
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 otherwise recognize if the U.S. Holder sold its Denali Ordinary Shares for their fair market value on the “qualification date.” The qualification date is the first day of Denali’s tax year in which Denali qualifies as a QEF with respect to such U.S. Holder. The purging election can only be made if such U.S. Holder held Denali Ordinary Shares on the qualification date. The gain recognized by the purging election will be subject to the special tax and interest charge rules treating the gain as an excess distribution, as described above. As a result of the purging election, the U.S. Holder will increase the adjusted tax basis in its Denali Ordinary Shares by the amount of the gain recognized and will also have a new holding period in the Denali Ordinary Shares for purposes of the PFIC rules.

A U.S. Holder may not make a QEF election with respect to its Warrants. As a result, if a U.S. Holder of Warrants sells or otherwise disposes of such warrants, any gain recognized generally will be subject to the special tax and interest charge rules treating the gain as an excess distribution, as described above, if Denali were a PFIC at any time during the period the U.S. Holder held the Warrants.

U.S. Holders that hold (or are deemed to hold) stock of a foreign corporation that qualifies as a PFIC may instead elect to annually mark such stock to its market value if such stock is regularly traded on a national securities exchange that is registered with the SEC or certain foreign exchanges or markets of which the IRS has approved (a “mark–to–market election”). Nasdaq currently is considered to be an exchange that would allow a U.S. Holder to make a mark–to–market election. U.S. Holders are urged to consult their own tax advisors regarding the availability and tax consequences of a mark–to–market election with respect to their Denali Ordinary Shares under their particular circumstances.

Effect of PFIC Rules on the Domestication

Even if the Domestication qualifies as a reorganization, Section 1291(f) of the Code requires that, to the extent provided in regulations, a U.S. person that disposes of stock of a PFIC (including warrants and rights to acquire stock of a PFIC) must recognize gain notwithstanding any other provision of the Code. No final Treasury Regulations are in effect under Section 1291(f). Proposed Treasury Regulations under Section 1291(f) (the “Proposed Regulations”) were promulg