Company: SCAG
Filing Date: 2025-01-06
Form Type: 424B3
Source: 0001213900-25-001215
Chunk: 494

Company: Scage Future
Filing Date: 2025-01-06
Form: 424B3
Chunk 494
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 the total number of warrants to be exercised. Subject to the discussion below under “—Passive Foreign Investment Company Rules”, the U.S. holder would recognize capital gain or loss with respect to the Assumed Warrants deemed surrendered in an amount generally equal to the difference between (i) the fair market value of the PubCo ADSs that would have been received in a regular exercise of the Assumed Warrants deemed surrendered, net of the aggregate exercise price of such Assumed Warrants and (ii) the U.S. holder’s tax basis in such Assumed Warrants. In this case, a U.S. holder’s aggregate tax basis in the PubCo ADSs received would equal the sum of (i) such U.S. holder’s tax basis in the Assumed Warrants deemed exercised and (ii) the aggregate exercise price of such Assumed Warrants. A U.S. holder’s holding period for the PubCo ADSs received in such case generally would commence on the date following the date of exercise (or possibly the date of exercise) of the Assumed Warrants and will not include the period during which the U.S. holder held the Assumed Warrants. Due to the absence of authority on the U.S. federal income tax treatment of a cashless exercise of warrants, including when a U.S. holder’s holding period would commence with respect to the PubCo Ordinary Share received, there can be no assurance regarding which, if any, of the alternative tax consequences and holding periods 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 a cashless exercise of Assumed Warrants. Possible Effect of the Change in the Assumed Warrant Conversion Ratio In some circumstances, the conversion ratio of the Assumed Warrants is subject to adjustment. For U.S. federal income tax purposes, U.S. holders of the Assumed Warrants will be treated as having received a constructive distribution, resulting in ordinary income to the extent of the increase of the U.S. holder’s proportionate interest in the PubCo’s current or accumulated earnings and profits if certain adjustments in the conversion ratio occur (particularly an adjustment to reflect a taxable dividend to holders of the PubCo ADSs) to increase the proportionate interest of the U.S. holder of an Assumed Warrant in the fully diluted PubCo ADSs, whether or not the U.S. holder ever exercises the Assumed Warrant. Generally, a U.S. holder’s tax basis