Company: FGMCU
Filing Date: 2025-01-21
Form Type: S-1/A
Source: 0001104659-25-004764
Chunk: 279

Company: FG Merger II Corp.
Filing Date: 2025-01-21
Form: S-1/A
Chunk 279
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as any stock the U.S. holder has a right to acquire by exercise of an option, which would generally include common stock which could
be acquired pursuant to the exercise of the rights. In order to meet the substantially disproportionate test, the percentage of our outstanding
voting stock actually and constructively owned by the U.S. holder immediately following the redemption or purchase by us of common stock
must, among other requirements, be less than 80% of the percentage of our outstanding voting stock actually and constructively owned
by the U.S. holder immediately before the redemption or purchase by us. There will be a complete termination of a U.S. holder’s
interest if either (i) all of the shares of our stock actually and constructively owned by the U.S. holder are redeemed or (ii) all
of the shares of our stock actually owned by the U.S. holder are redeemed and the U.S. holder is eligible to waive, and effectively waives
in accordance with specific rules, the attribution of stock owned by certain family members and the U.S. holder does not constructively
own any other shares of our stock (including any stock constructively owned by the U.S. holder as a result of owning rights). The redemption
or purchase by us of the common stock will not be essentially equivalent to a dividend if the redemption or purchase by us results in
a “meaningful reduction” of the U.S. holder’s proportionate interest in us. Whether the redemption or purchase by us
will result in a meaningful reduction in a U.S. holder’s proportionate interest in us will depend on the particular facts and circumstances.
However, the IRS has indicated in a published ruling that even a small reduction in the proportionate interest of a small minority stockholder
in a publicly held corporation who exercises no control over corporate affairs may constitute such a “meaningful reduction.”
A U.S. holder should consult with its own tax advisors as to the tax consequences of a redemption or purchase by us.

If none of the foregoing tests is satisfied, then
the redemption or purchase by us will be treated as a corporate distribution and the tax effects will be as described under “U.S.
Holders — Taxation of Distributions,” above. After the application of those rules, any remaining tax basis of the U.S. holder
in the redeemed common stock will be added to the U.S. holder’s adjusted tax basis in its remaining stock, or, if it has none,
to the U.S. holder’s adjusted tax