Company: LIMN
Filing Date: 2025-08-13
Form Type: 424B3
Source: 0001410578-25-001746
Chunk: 302

Company: Liminatus Pharma, Inc.
Filing Date: 2025-08-13
Form: 424B3
Chunk 302
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 into by the Sponsor in connection with the IPO.

Upon the closing of the Business Combination, the holders of the Company’s Class A common stock received 7,014,633 shares of the combined company’s common stock.

Note 9. Income Taxes

The Company’s effective tax rate for the three months ended March 31, 2025 and 2024 was (0.2)% and (0.7)%, respectively. The Company’s effective tax rate differs from the statutory income tax rate of 21% primarily due to the business combination costs, changes in the fair value of warrant liabilities and change in the valuation allowance. The Company has used a discrete effective tax rate method to calculate taxes for the three months ended March 31, 2025. The Company believes that the use of the discrete method is more appropriate than the estimated effective tax rate method as the estimated annual effective tax rate method is not reliable due to a high degree of uncertainty in estimating annual pretax earnings.

Note 10. Recurring Fair Value Measurements

As of March 31, 2025 and December 31, 2024, the Company’s warrant liabilities were valued at $379,315 and $357,400, respectively. Under the guidance in ASC 815-40, the warrants do not meet the criteria for equity treatment. As such, the warrants must be recorded on the unaudited condensed balance sheets at fair value. This valuation is subject to re-measurement at each balance sheet date. With each re-measurement, the warrant valuation will be adjusted to fair value, with the change in fair value recognized in the Company’s unaudited condensed statements of operations.

All of the Company’s permitted investments are held in the form of cash in the Company’s Trust Account and are classified within Level 1 of the fair value hierarchy. Fair values of these investments are determined by Level 1 inputs utilizing quoted prices (unadjusted) in active markets for identical assets. The Company’s warrant liability for the Private Placement Warrants is based on a valuation model utilizing management judgment and pricing inputs from observable and unobservable markets with less volume and transaction frequency than active markets. Significant deviations from these estimates and inputs could result in a material change in fair value. The fair value of the Private Placement Warrant liability is classified within Level 3 of the fair value hierarchy. The Company’s warrant liability for the Public Warrants is based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. The fair value of