Company: CGCT
Filing Date: 2025-03-05
Form Type: S-1/A
Source: 0001104659-25-020969
Chunk: 308

Company: Cartesian Growth Corp III
Filing Date: 2025-03-05
Form: S-1/A
Chunk 308
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 test for our current taxable year. However, pursuant to a startup exception, a corporation will not be a PFIC for the first taxable year in which the corporation has gross income (the “startup year”), if (i) no predecessor of the corporation was a PFIC; (ii) the corporation satisfies the IRS that it will not be a PFIC for either of the first two taxable years following the startup year; and (iii) the corporation is not in fact a PFIC for either of those years. The applicability of the startup exception to us is uncertain and will not be known until after the close of our current taxable year and, perhaps, until after the end of our two taxable years following our startup year.Depending upon the structure and domicile of a company we acquire in a business combination, it is possible that our taxable year may close at approximately the same time as the closing date, which would result in a short taxable year.After the acquisition of a company or assets in a business
combination, we may still meet one of the PFIC tests depending on the timing of the acquisition and the amount of our passive income
and assets as well as the passive income and assets of the acquired business. If the company that we acquire in a business combination
is a PFIC, then we will likely not qualify for the startup exception and will be a PFIC for our current taxable year. Our actual PFIC
status for our current taxable year or any subsequent taxable year will not be determinable until after the end of such taxable year
(and, in the case of the startup exception to our current taxable year, perhaps until after the end of our two taxable years following
our startup year). Accordingly, there can be no assurance with respect to our status as a PFIC for our current taxable year or any future
taxable year. In addition, our U.S. counsel expresses no opinion with respect to our PFIC status for our current or future taxable years.
It is not entirely clear how various aspects of the PFIC rules apply to the warrants. Section 1298(a)(4) of the Code provides
that, to the extent provided in Treasury regulations, any person who has an option to acquire stock in a PFIC shall be considered to
own such stock in the PFIC for purposes of the PFIC rules. No final Treasury regulations are currently in effect under Section 1298(a)(4) of
the Code. However, proposed Treasury regulations under Section 1298(a)(4) of the Code have been