Company: PLSAY
Filing Date: 2025-05-09
Form Type: 20-F
Source: 0001884082-25-000012
Chunk: 278

Company: Polestar Automotive Holding UK PLC
Filing Date: 2025-05-09
Form: 20-F
Item: Item 10
Chunk 278
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 heading " - Passive Foreign Investment Company Rules", and except as discussed below with respect to a cashless conversion, a U. S. Holder generally will not recognize gain or loss upon the conversion of a Class C ADS to Class A ADSs. A U. S. Holder’s tax basis in Class A ADSs received upon conversion of Class C ADSs generally should be an amount equal to the sum of (i) the U. S. holder’s tax basis in the Class C ADSs exchanged therefor and (ii) the conversion price. The U. S. Holder’s holding period for Class A ADSs received upon conversion of Class C ADSs will begin on the date following the date of conversion (or possibly the date of conversion) of the Class C ADSs and will not include the period during which the U. S. Holder held the Class C ADSs. If a Class C ADS is not converted to a Class A ADS prior to the applicable expiration date (a “conversion expiration”), a U. S. Holder generally will recognize a capital loss equal to such U. S. Holder’s tax basis in the Class C ADS.

If the Class C ADSs are treated as warrants for U. S. federal income tax purposes, the tax consequences of a cashless conversion of a Class C ADS are not clear under current U. S. federal income tax law. If the cashless conversion is treated as tax-deferred, the consequences are as described in the section above titled “ - Class C ADSs Treated as Stock.”

It is also possible that a cashless exercise of Class C ADS could be treated in part as a taxable exchange in which gain or loss would be recognized. In such event, a U. S. Holder would recognize gain or loss with respect to the portion of the exercised Class C ADSs treated as surrendered to pay the exercise price of the Class A ADSs (the “ surrendered Class C ADSs”). The U. S. Holder would recognize capital gain or loss with respect to the surrendered Class C ADSs in an amount generally equal to the difference between (i) the fair market value of the Class C ADSs deemed surrendered and (ii) the U. S. Holder’s tax basis in the surrendered Class C ADSs. In this case, a U. S. Holder’s tax basis in the Class A ADSs received would equal the U. S. Holder’s tax basis in the Class C ADSs converted (meaning, the Class C ADSs disposed of by the U. S