Company: SCAG
Filing Date: 2025-01-06
Form Type: 424B3
Source: 0001213900-25-001215
Chunk: 487

Company: Scage Future
Filing Date: 2025-01-06
Form: 424B3
Chunk 487
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 is likely to be a PFIC for its current taxable year. 248 Section 1291(f) of the Code requires that, to the extent provided in Treasury Regulations, a U.S. person who disposes of stock of a PFIC (including for this purpose exchanging Finnovate Warrants for newly issued Assumed Warrants) recognizes gain notwithstanding any other provision of the Code. No final Treasury Regulations are currently in effect under Section 1291(f) of the Code. However, proposed Treasury Regulations under Section 1291(f) of the Code have been promulgated with a retroactive effective date. If finalized in their current form, those proposed Treasury Regulations may require gain recognition to U.S. holders of Finnovate Ordinary Shares or Company Ordinary Shares in connection with the Business Combination if: (1)Finnovate or Scage International, as the case may be, were classified as a PFIC at any time during such U.S. holder’s holding period for such Finnovate Ordinary Shares or Company Ordinary Shares; and (2)the U.S. holder had not timely made, effective from the first taxable year of its holding period of Finnovate Ordinary Shares or Company Ordinary Shares during which Finnovate or Scage International, as the case may be, qualified as a PFIC: (a) a valid election to treat Finnovate or Scage International, as the case may be, as a “qualified electing fund” under Section 1295 of the Code (a “QEF election”), or (b) a valid “mark -to -marketelection” under Section 1296 of the Code, with respect to such Finnovate Ordinary Shares or Company or Ordinary Shares. The application of the PFIC rules to Finnovate Warrants is unclear. A proposed Treasury Regulation issued under the PFIC rules generally treats an “option” (which would include a Finnovate Warrant) to acquire stock of a PFIC as stock of the PFIC, while a final Treasury Regulation issued under the PFIC rules provides that a QEF Election does not apply to options and no mark -to -marketelection (as described above) is currently available with respect to options. Therefore, if finalized in their current form, these proposed Treasury Regulations may require gain recognition on the exchange of Finnovate Warrants for Assumed Warrants pursuant to the Business Combination Agreement. The tax on any such recognized gain would be imposed based on the “excess distribution” rules, discussed below under