Company: KOYNU
Filing Date: 2025-08-12
Form Type: S-1/A
Source: 0001829126-25-006117
Chunk: 365

Company: CSLM Digital Asset Acquisition Corp III, Ltd
Filing Date: 2025-08-12
Form: S-1/A
Chunk 365
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. Holder’s holding period for the redeemed public warrants. However, if there is some uncertainty regarding this tax treatment and it is possible such a redemption could be treated as a taxable exchange in which gain or loss would be recognized. If the cashless exercise of the public warrant is treated as such, then the tax treatment would instead be treated as described above in the second and third paragraphs under “—U.S. Holders — Exercise, Lapse or Redemption of a Warrant.” In the case of an exercise of a public warrant for cash, the tax treatment generally should be as described above in the first paragraph under “—U.S. Holders — Exercise, Lapse or Redemption of a Warrant.”

Due to the lack of clarity under current law regarding the treatment of an exercise of a public warrant after our giving notice of an intention to redeem the public warrant, there can be no assurance as to which, if any, of the alternative tax consequences described above would be adopted by the IRS or a court of law. Accordingly, U.S. Holders should consult their tax advisors regarding the tax consequences of the exercise of a public warrant occurring after our giving notice of an intention to redeem the public warrant as described above.

Possible Constructive Distributions

The terms of each public warrant provide for an adjustment to the number of public shares for which the public warrant may be exercised or to the exercise price of the public warrant in certain events, as discussed in the section of this prospectus captioned “ Description of Securities — Warrants.” An adjustment which has the effect of preventing dilution generally is not taxable. The U.S. Holders of the public warrants would, however, be treated as receiving a constructive distribution from us if, for example, the adjustment increases such U.S. Holders’ proportionate interest in our assets or earnings and profits (e.g., through an increase in the number of public shares that would be obtained upon exercise or through a decrease in the exercise price of the public warrant) as a result of a distribution of cash or other property such as other securities to the holders of our public shares which is taxable to the U.S. Holders of such public shares as described under “— Taxation of Distributions” above. Such constructive distribution would be subject to tax as described under that section in the same manner as if the U.S. Holders of the public warrants received a cash distribution from us equal to the fair market value of the increase in the interest. For certain information reporting purposes, we are required to determine the date