Company: TGE
Filing Date: 2025-11-21
Form Type: POS AM
Source: 0001213900-25-113604
Chunk: 189

Company: Generation Essentials Group
Filing Date: 2025-11-21
Form: POS AM
Chunk 189
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IC rules
discussed below and except as discussed below regarding a cashless exercise, a U.S. Holder will generally not recognize gain or
loss upon the exercise of a Warrant. A Class A Ordinary Share acquired pursuant to the exercise of n Warrant for cash will generally
have a tax basis equal to the U.S. Holder’s tax basis in the Warrant, increased by the amount paid to exercise the Warrant.
It is unclear whether a U.S. Holder’s holding period for the Class A Ordinary Share will commence on the date of exercise
of the Warrant or the day following the date of exercise of the Warrant; in either case, the holding period will not include the
period during which the U.S. Holder held the Warrant. If a Warrant is allowed to lapse unexercised, a U.S. Holder will generally
recognize a capital loss equal to such holder’s tax basis in the Warrant. Such loss will be long-term capital loss if, at the time
of the expiration, the holding period in the Warrants is more than one year. The deductibility of capital losses is subject to limitations.

Because of the absence of
authority specifically addressing the treatment of a cashless exercise of warrants under current U.S. federal income tax law, the
treatment of such a cashless exercise is unclear. A cashless exercise may be tax-free, either because the exercise is not a realization
event or because the exercise is treated as a recapitalization for U.S. federal income tax purposes. Alternatively, a cashless exercise
could be treated as a taxable exchange in which gain or loss would be recognized.

In either tax-free situation,
a U.S. Holder’s tax basis in the Class A Ordinary Shares received would generally equal the U.S. Holder’s
tax basis in the Warrants. If a cashless exercise is not treated as a realization event, it is unclear whether a U.S. Holder’s
holding period for the Class A Ordinary Shares received on exercise would be treated as commencing on the date of exercise of the
Warrants or the following day. If a cashless exercise is treated as a recapitalization, the holding period of the Class A Ordinary
Share received will include the holding period of the Warrant.

If a cashless exercise is
treated as a taxable exchange, a U.S. Holder could be deemed to have surrendered a portion of the Warrants to be exercised with
an aggregate fair market value equal to the exercise price