Company: MDCXW
Filing Date: 2025-04-04
Form Type: POS AM
Source: 0001062993-25-007073
Chunk: 178

Company: Medicus Pharma Ltd.
Filing Date: 2025-04-04
Form: POS AM
Chunk 178
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 Section 7874 of the Code. As such, we will generally be subject to U.S. federal income tax as if we were organized under the laws of the United States or a state thereof. The remaining discussion contained in this "U.S. Federal Income Tax Considerations" assumes that we will be treated as a domestic corporation for all U.S. federal income tax purposes.

Tax Considerations Applicable to U.S. Holders

Exercise of a Warrant

Except as discussed below with respect to the cashless exercise of a Warrant, a U.S. Holder generally will not recognize taxable gain or loss upon exercise of a Warrant for cash. The U.S. Holder's initial tax basis in our common shares received upon the exercise of the Warrant will generally be an amount equal to the sum of the U.S. Holder's adjusted tax basis in the Warrant and the exercise price of such Warrant. A U.S. Holder's adjusted tax basis in a Warrant would generally equal the U.S. Holder's acquisition cost of the Warrant, increased by the amount of any constructive dividends included in income by such U.S. Holder during its holding period of such Warrant. It is unclear whether a U.S. Holder's holding period for the common shares received upon exercise of the Warrant would commence on the date of exercise of the Warrant or the day following the date of exercise of the Warrant; however, in either case the holding period will not include the period during which the U.S. Holder held the Warrants.

The tax consequences of a cashless exercise of a Warrant are not clear under current tax law. A cashless exercise may be nontaxable, either because the exercise is not a realization event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. In either situation, a U.S. Holder's initial tax basis in the common shares received would generally equal the holder's adjusted tax basis in the Warrant exchanged therefor. 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 shares would commence on the date of exercise of the Warrant or the day following the date of exercise of the Warrant. If, however, the cashless exercise were treated as a recapitalization, the holding period of the common shares would include the holding period of the Warrant. Although we expect a U.S. Holder's cashless exercise of our Warrants (including