Company: XOMAP
Filing Date: 2025-10-03
Form Type: 424B5
Source: 0001193125-25-230393
Chunk: 42

Company: XOMA Royalty Corp
Filing Date: 2025-10-03
Form: 424B5
Chunk 42
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 offering. This
discussion is for informational purposes only and is not tax advice. Each person considering purchasing our depositary shares pursuant to this offering is urged to consult its tax advisor concerning the U.S. federal income, estate, and other tax
considerations of owning and disposing of our depositary shares in light of its particular situation as well as any considerations arising under the laws of any other taxing jurisdiction, including any state, local, or
non-U.S. tax considerations.

U.S. Holders

Distributions.

Distributions with respect to the Series B
Preferred Stock will generally constitute dividends to the extent paid out of our current or accumulated earnings and profits, as determined under U.S. federal income tax principles. To the extent that the amount of a distribution with respect to
the Series B Preferred Stock exceeds our current and accumulated earnings and profits, such distribution will generally constitute a non-taxable return of capital and will first be applied against and reduce,
but not below zero, a U.S. Holder’s adjusted tax basis in such Series B Preferred Stock, and thereafter as capital gain.

Distributions with respect
to the Series B Preferred Stock taxable as dividends for U.S. federal income tax purposes paid to a corporate U.S. Holder will generally qualify for a dividends received deduction, subject to limitations. Distributions with respect to the Series B
Preferred Stock taxable as dividends for U.S. federal income tax purposes paid to a non-corporate U.S. Holder will generally constitute “qualified dividend income.” Qualified dividend income is
taxable at preferential rates applicable to long-term capital gains, provided that certain holding period requirements are met and certain other conditions are satisfied. U.S. Holders are urged to consult their own tax advisors regarding the
availability of the reduced tax rate applicable to qualified dividend income and the dividends received deduction.

Extraordinary Dividends

Dividends that exceed certain thresholds in relation to a U.S. Holder’s tax basis in our Series B Preferred Stock could be characterized as
“extraordinary dividends” under the Code. A corporate U.S. Holder that has held our Series B Preferred Stock for two years or less before the dividend announcement date and that receives an extraordinary dividend will generally be
required to reduce its tax basis in the stock (but not below zero) with respect to which such dividend was made by the “nontaxed portion” of such dividend, which equals (i) the amount of such dividend over (ii) the portion of
such dividend includible in gross income, reduced by any