Company: CGCT
Filing Date: 2025-01-29
Form Type: S-1
Source: 0001104659-25-006780
Chunk: 316

Company: Cartesian Growth Corp III
Filing Date: 2025-01-29
Form: S-1
Chunk 316
---
 — Public Warrants” or if we purchase warrants in an open market transaction,
such redemption or purchase generally will be treated as a taxable disposition to the U.S. Holder, taxed as described above under
“— Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of Class A Ordinary Shares and Warrants.”

Possible Constructive Distributions

The terms of each warrant provide for an adjustment
to the number of Class A ordinary shares for which the warrant may be exercised or to the exercise price of the warrant in certain
events, as discussed in the section of this prospectus entitled “Description of Securities — Warrants — Public Warrants.” An adjustment which has the effect of preventing dilution generally is not taxable. The U.S. Holders of the
warrants would, however, be treated as receiving a constructive distribution from us if, for example, the adjustment increases such U.S. Holders’
proportionate interest in our assets or earnings and profits (e.g., through an increase in the number of Class A ordinary shares
that would be obtained upon exercise or through a decrease in the exercise price of the warrants), which adjustment may be made as a
result of a distribution of cash or other property to the holders of our Class A ordinary shares. Such constructive distribution
to a U.S. Holder of warrants would be treated as if such U.S. Holder had received a cash distribution from us generally equal
to the fair market value of such increased interest (taxed as described above under “— Taxation of Distributions”)
and generally would increase the U.S. Holder’s adjusted tax basis in its warrants to the extent that such distribution is
treated as a dividend.

Passive Foreign Investment Company Rules

A foreign (i.e., non-U.S.) corporation will be
classified as a PFIC for United States federal income tax purposes if either (i) at least 75% of its gross income in a taxable
year, including its pro rata share of the gross income of any corporation in which it is considered to own at least 25% of the shares
by value, is passive income or (ii) at least 50% of its assets in a taxable year (ordinarily determined based on fair market value
and averaged quarterly over the year), including its pro rata share of the assets of any corporation in which it is considered to own
at least 25% of the shares by value, are held for the production of, or produce, passive income.