Company: FGMCU
Filing Date: 2025-01-21
Form Type: S-1/A
Source: 0001104659-25-004764
Chunk: 274

Company: FG Merger II Corp.
Filing Date: 2025-01-21
Form: S-1/A
Chunk 274
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without regard to their citizenship or residency
and including as individuals for this purpose certain entities such as certain tax-exempt organizations, pension funds and charitable
trusts) own 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. 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 imposed at a rate of 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 one share of our common stock and one right to receive one-tenth (1/10) of a share of common stock. For U.S. federal income tax purposes,
each holder of a unit must allocate the purchase price paid by such holder for such unit between the one share of common stock and the
right 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 his or her own determination of such value based on all the relevant facts and circumstances. Therefore, we strongly urge