Company: VMCWF
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001827
Chunk: 106

Company: Valuence Merger Corp. I
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1
Chunk 106
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 the future.

On
August 16, 2022, President Biden signed into law the Inflation Reduction Act of 2022 (the “IR Act”), which, among other things,
generally imposes a 1% U.S. federal excise tax (the “Excise Tax”) on certain repurchases of stock by “covered corporations”
(which include publicly traded domestic (i.e., U.S.) corporations and certain domestic subsidiaries of publicly traded foreign (i.e.,
non-U.S.) corporations) occurring on or after January 1, 2023. The Excise Tax is imposed on the repurchasing corporation itself, not
its stockholders from which the stock is repurchased. The amount of the Excise Tax is generally 1% of the fair market value of the shares
repurchased at the time of the repurchase. However, for purposes of calculating the Excise Tax, repurchasing corporations are permitted
to net the fair market value of certain new stock issuances against the fair market value of stock repurchases during the same taxable
year. In addition, certain exceptions apply to the Excise Tax. The U.S. Department of the Treasury (the “Treasury”) has authority
to provide regulations and other guidance to carry out, and prevent the abuse or avoidance of the Excise Tax. On December 27, 2022, the
Treasury issued a notice that provides interim operating rules for the Excise Tax, including rules governing the calculation and reporting
of the Excise Tax, on which taxpayers may rely until the forthcoming proposed Treasury regulations addressing the Excise Tax are published.
Although such notice clarifies certain aspects of the Excise Tax, the interpretation and operation of other aspects of the Excise Tax
remain unclear, and such interim operating rules are subject to change.

55

We
are currently not a covered corporation for purposes of the Excise Tax. If we were to become a covered corporation in the future, whether
in connection with the consummation of our Business Combination with a U.S. company (including if we were to redomicile as a U.S. corporation
in connection therewith) or otherwise, whether and to what extent we would be subject to the Excise Tax on a redemption of our stock
would depend on a number of factors, including (i) whether the redemption is treated as a repurchase of stock for purposes of the Excise
Tax, (ii) the fair market value of the redemption treated as a repurchase of stock,