Company: ATMCW
Filing Date: 2025-11-17
Form Type: DEFM14A
Source: 0001493152-25-023842
Chunk: 204

Company: ALPHATIME ACQUISITION CORP
Filing Date: 2025-11-17
Form: DEFM14A
Chunk 204
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 PubCo Ordinary Shares and PubCo Warrants

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

A U.S. Holder generally will recognize capital gain or loss on the sale or other taxable disposition of PubCo Ordinary Shares or PubCo Warrants in an amount equal to the difference between the amount realized on the disposition and such U.S. Holder’s adjusted tax basis in its PubCo Ordinary Shares or PubCo Warrants so disposed of, each determined in U.S. dollars. Any such capital gain or loss generally will be long-term capital gain or loss if the U.S. Holder’s holding period for such PubCo Ordinary Shares or PubCo Warrants exceeds one year. Long-term capital gain realized by a non-corporate U.S. Holder is currently eligible to be taxed at reduced rates. See “ - Exercise, Lapse or Redemption of a Warrant” below for a discussion regarding a U.S. Holder’s basis in a PubCo Ordinary Share acquired pursuant to the exercise of a PubCo Warrant. The deduction of capital losses is subject to certain limitations.

Exercise, Lapse or Redemption of PubCo Warrants

Subject to the PFIC rules discussed below, and except as discussed below with respect to the cashless exercise of a PubCo Warrant, a U.S. Holder generally will not recognize gain or loss upon the acquisition of a PubCo Ordinary Share on the exercise of a PubCo Warrant for cash. A U.S. Holder’s tax basis in a PubCo Ordinary Share received upon exercise of the PubCo Warrant generally will equal the sum of the U.S. Holder’s tax basis in the PubCo Warrant and the exercise price. It is unclear whether a U.S. Holder’s holding period for the PubCo Ordinary Share will commence on the date of exercise of the PubCo Warrant or the day following the date of exercise of the PubCo Warrant; in either case, the holding period will not include the period during which the U.S. Holder held the PubCo Warrant. If a PubCo 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 PubCo Warrant. Such capital loss will be long-term capital loss if the U.S. Holder held the PubCo Warrant for more than one year at the time of such lapse.

The tax consequences of a cashless exercise of a PubCo Warrant are not clear under current