Company: INTS
Filing Date: 2025-03-28
Form Type: DRS
Source: 0001628279-25-000170
Chunk: 46

Company: INTENSITY THERAPEUTICS, INC.
Filing Date: 2025-03-28
Form: DRS
Chunk 46
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 may be exercised on a cashless basis. The U.S. federal income tax treatment of an exercise of a Common Warrants on a cashless basis is not clear under current law, and could differ from the consequences described above. It is possible that a cashless exercise is a non-taxable transaction, either because the exercise is not treated as a realization event or because the exercise is treated as a tax-free recapitalization for U.S. federal income tax purposes. Under either characterization, a U.S. holder’s tax basis in the Common Stock received generally would equal the U.S. holder’s tax basis in the Common Warrant. If the cashless exercise was not a realization event, it is unclear whether a U.S. holder’s holding period for the shares of Common Stock acquired pursuant to the cashless exercise will commence on the date of exercise of the Common Warrant or the day following the date of exercise of the Common Warrant. If the cashless exercise were treated as a recapitalization, the holding period of the shares of Common Stock acquired pursuant to it would include the holding period of the Common Warrant.

It is also possible that a cashless exercise is 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 Common Warrant with an aggregate fair market value equal to the exercise price for the total number of Common Warrant to be exercised. The U.S. holder would recognize capital gain or loss in an amount equal to the difference between the fair market value of the Common Warrants deemed surrendered and the U.S. holder’s tax basis in such Common Warrants (such gain or loss would be long-term or short-term, depending on the U.S. holder’s holding period in the Common Warrants deemed surrendered). In this case, a U.S. holder’s tax basis in the shares of Common Stock received pursuant to the cashless exercise would equal the sum of the U.S. holder’s tax basis in the Common Warrants exercised and the exercise price of such Common Warrants. It is unclear whether a U.S. holder’s holding period for the Common Stock would commence on the date of exercise of the Common Warrant or the day following the date of exercise of the Common Warrant.

Due to the absence of authority on the U.S. federal income tax treatment of a cashless exercise, there can be no assurance which, if any, of the alternative tax consequences and holding periods described above would be adopted by the IRS or a