Company: FSTWF
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-044386
Chunk: 135

Company: FST Corp.
Filing Date: 2025-05-15
Form: 20-F
Item: Item 10
Chunk 135
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below and except as discussed below with respect to the cashless exercise of a warrant, a U. S. Holder generally will not recognize
gain or loss upon the acquisition of ordinary shares on the exercise of a warrant for cash. A U. S. Holder’s initial tax basis
in ordinary shares received upon exercise of the warrant generally will equal the sum of the U. S. Holder’s initial investment
in the warrant and the exercise price. It is unclear whether a U. S. Holder’s holding period for the ordinary shares 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 its tax basis in the warrant.

The tax consequences of a cashless
exercise of a warrant are not clear. 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 U. S. federal income tax purposes. In either situation, a U. S. Holder’s
tax basis in the ordinary shares received generally would equal the U. S. Holder’s tax basis in the warrants surrendered. If
the cashless exercise were not a realization event, it is unclear whether a U. S. Holder’s holding period for the ordinary shares
will commence on the date of exercise of the warrants or the day following the date of exercise of the warrants. If the cashless
exercise were treated as a recapitalization, the holding period of the ordinary shares would include the holding period of the warrants.

It is also possible that a
cashless exercise may be treated as a taxable exchange of a portion of the warrants surrendered in which gain or loss would be recognized.
In such event, a U. S. Holder may be deemed to have surrendered a number of warrants having a value equal to the exercise price for
the total number of warrants to be exercised. Subject to the PFIC rules discussed below, the U. S. Holder would recognize capital
gain or loss in an amount equal to the difference between the fair market value of the warrants deemed surrendered and the U. S. Holder’s
tax basis in such warrants. In this case, a U. S. Holder’s tax basis in the ordinary shares received would equal the