Company: ATMCW
Filing Date: 2025-11-17
Form Type: DEFM14A
Source: 0001493152-25-023842
Chunk: 206

Company: ALPHATIME ACQUISITION CORP
Filing Date: 2025-11-17
Form: DEFM14A
Chunk 206
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 their tax advisors regarding the tax consequences of a cashless exercise.

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Possible Constructive Distributions

The terms of the PubCo Warrants provide for an adjustment to the number of PubCo Ordinary Shares for which the warrant may be exercised or to the exercise price of the warrant in certain events. An adjustment which has the effect of preventing dilution generally is not taxable. U.S. Holders of PubCo Warrants would, however, be treated as receiving a constructive distribution from PubCo if, for example, the adjustment increases the warrantholders’ proportionate interest in PubCo’s assets or earnings and profits (e.g., through an increase in the number of PubCo Ordinary Shares that would be obtained upon exercise) as a result of a distribution of cash to the holders of PubCo Ordinary Shares which is taxable to the U.S. Holders of such PubCo Ordinary Shares as described under “ - Taxation of Distributions.” Such constructive distribution would be subject to tax as described under that section in the same manner as if the U.S. Holders of the PubCo Warrants received a cash distribution from PubCo equal to the fair market value of the increase in the interest. U.S. Holders should consult their tax advisors regarding the tax consequences in their particular circumstances, including the possibility of any constructive distributions.

Consequences of a Redemption of ATMC Ordinary Shares

The following discussion is subject to the discussion below under “ - Passive Foreign Investment Company Rules.”

In the event that a U.S. Holder’s ATMC Ordinary Shares are redeemed pursuant to the redemption provisions described in this proxy statement/prospectus under “ Extraordinary General Meeting of AlphaTime Shareholders - Redemption Rights,” the treatment of the redemption for U.S. federal income tax purposes will generally depend on whether the redemption qualifies as a sale of the ATMC Ordinary Shares under Section 302 of the Code (in which case such redemption would be treated as described above under the heading “ - Gain or Loss on Sale, Taxable Exchange or Other Taxable Disposition of PubCo Ordinary Shares and PubCo Warrants”) or rather as a distribution, in which case such redemption would be treated as described in “ - Taxation of Distributions” (except that the preferential rate for qualified dividend income will not apply).

Generally, whether a redemption qualifies for sale treatment will depend largely on the total number of ATMC Ordinary Shares treated as held by the U.S. Holder (including any shares constructively owned by the U.S. Holder described in the following paragraph)