Company: QSEA
Filing Date: 2025-02-24
Form Type: S-1
Source: 0001829126-25-001168
Chunk: 227

Company: Quartzsea Acquisition Corp
Filing Date: 2025-02-24
Form: S-1
Chunk 227
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 or are deemed to own (pursuant to certain constructive ownership rules) more than 50% of the stock of the corporation by
value and (ii) at least 60% of the corporation’s adjusted ordinary gross income, as determined for U.S. federal income tax purposes,
for such taxable year consists of PHC income (which includes, among other things, dividends, interest, certain royalties, annuities and,
under certain circumstances, rents).

Depending on the date and size of our initial business
combination, it is possible that at least 60% of our adjusted ordinary gross income may consist of PHC income as discussed above. In
addition, depending on the concentration of our stock in the hands of individuals, including the members of our Sponsor and certain tax-exempt
organizations, pension funds and charitable trusts, it is possible that more than 50% of our stock may be owned or deemed owned (pursuant
to the constructive ownership rules) by such persons during the last half of a taxable year. Thus, no assurance can be given that we
will not be a PHC following this offering or in the future. If we are or were to become a PHC in a given taxable year, we would be subject
to an additional PHC tax, currently 20%, on our undistributed PHC income, which generally includes our taxable income, subject to certain
adjustments.

Allocation of Purchase Price and Characterization of a Unit

No statutory, administrative or judicial authority
directly addresses the treatment of a unit or instruments similar to a unit for U.S. federal income tax purposes, and therefore, that
treatment is not entirely clear. The acquisition of a unit should be treated for U.S. federal income tax purposes as the acquisition
of our ordinary shares and rights, with each whole right exchangeable to acquire our ordinary share, and we intend to treat the acquisition
of a unit in this manner. For U.S. federal income tax purposes, each holder of a unit must allocate the purchase price paid by such holder
for such unit among the ordinary shares and rights based on the relative fair market value of each at the time of issuance. Under U.S.
federal income tax law, each investor must make its own determination of such value based on all the relevant facts and circumstances.
Therefore, we strongly urge each investor to consult its tax advisor regarding the determination of value for these purposes. The price
allocated to each ordinary share and right should constitute the holder’s initial tax basis