Company: KOYNU
Filing Date: 2025-07-08
Form Type: S-1/A
Source: 0001829126-25-004923
Chunk: 361

Company: CSLM Digital Asset Acquisition Corp III, Ltd
Filing Date: 2025-07-08
Form: S-1/A
Chunk 361
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 described above under “— Allocation of Purchase Price and Characterization of a Unit”) and the exercise price. It is unclear whether a U.S. Holder’s holding period for the public share will commence on the date of exercise of the public warrant or the day following the date of exercise of the public warrant; in either case, the holding period will not include the period during which the U.S. Holder held the public warrant. If a public warrant is allowed to lapse unexercised, a U.S. Holder generally will recognize a capital loss equal to such holder’s tax basis in the public warrant.

The tax consequences of a cashless exercise of a public warrant are not clear under current law. Subject to the PFIC rules discussed below, cashless exercise may not be taxable, either because the exercise is not a realization event or because the exercise is treated as a recapitalization for United States federal income tax purposes. In either situation, a U.S. Holder’s tax basis in the public shares received generally would equal the U.S. Holder’s tax basis in the public warrants. If the cashless exercise was not a realization event, it is unclear whether a U.S. Holder’s holding period for the public share will commence on the date of exercise of the public warrant or the day following the date of exercise of the public warrant. If the cashless exercise were treated as a recapitalization, the holding period of the public shares would include the holding period of the public warrants.

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It is also possible that a cashless exercise may be treated as a taxable exchange in which gain or loss would be recognized. In such event, a U.S. Holder may be deemed to have surrendered public warrants with an aggregate value equal to the exercise price for the total number of public warrants deemed exercised. Subject to the PFIC rules discussed below, the U.S. Holder would recognize capital gain or loss in an amount equal to the difference between the fair market value of the public warrants deemed surrendered and the U.S. Holder’s tax basis in such public warrants. In this case, a U.S. Holder’s tax basis in the public shares received would equal the sum of the U.S. Holder’s initial investment in the public warrants deemed exercised (i.e., the portion of the U.S. Holder’s purchase price for the units that is allocated to such public warrants, as described above under “— Allocation of Purchase Price and Characterization of a Unit”) and the exercise price of such public warrants. It is unclear