Company: CGCT
Filing Date: 2025-01-29
Form Type: S-1
Source: 0001104659-25-006780
Chunk: 314

Company: Cartesian Growth Corp III
Filing Date: 2025-01-29
Form: S-1
Chunk 314
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 adjusted tax basis in its warrants or possibly in other
shares constructively owned by it.

U.S. Holders who actually or constructively
own five percent (or if our Class A ordinary shares are not then publicly traded, U.S. Holders who actually or constructively
own one percent) or more of our shares (by vote or value) may be subject to special reporting requirements with respect to a redemption
of Class A ordinary shares, and such holders are urged to consult with their own tax advisors with respect to their reporting requirements.

Exercise, Lapse or Redemption of a Warrant

A U.S. Holder generally will not recognize
gain or loss upon the acquisition of a Class A ordinary share upon the exercise of a warrant for cash. A U.S. Holder’s
tax basis in a Class A ordinary share received upon exercise of the warrant generally will equal the sum of the U.S. Holder’s
initial investment in the warrant (that is, the portion of the U.S. Holder’s purchase price for the units that is allocated
to the warrant, as described above under “— Allocation of Purchase Price and Characterization of a Unit”)
and the exercise price. It is unclear whether a U.S. Holder’s holding period for the Class A ordinary share received
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 generally will recognize a capital loss equal to such holder’s tax basis in the warrant.

The tax consequences of a cashless exercise of
a warrant are not clear under current law. Subject to the PFIC rules discussed below, a cashless exercise may not be taxable, either
because the exercise is not a realization event or because the exercise is treated as a recapitalization for United States federal
income tax purposes. In either situation, a U.S. Holder’s tax basis in the Class A ordinary shares received generally
should equal the U.S. Holder’s tax basis in the warrants exercised therefor. If the cashless exercise was not a realization
event, it is unclear whether a U.S. Holder’s holding period for the Class A ordinary shares received would be treated
as commencing on the date of exercise of the warrants or the day following the date of exercise of the warrants; in either case,
the holding period will not