Company: NCL
Filing Date: 2025-11-24
Form Type: PRE 14A
Source: 0001575872-25-000718
Chunk: 42

Company: Northann Corp.
Filing Date: 2025-11-24
Form: PRE 14A
Chunk 42
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 addresses stockholders
who hold common stock as capital assets. It does not purport to be complete and does not address stockholders subject to special tax
treatment under the Code, including, without limitation, financial institutions, tax-exempt organizations, insurance companies, dealers
in securities, foreign stockholders, stockholders who hold their pre-reverse stock split shares as part of a straddle, hedge or conversion
transaction, and stockholders who acquired their pre-reverse stock split shares pursuant to the exercise of employee stock options or
otherwise as compensation. If a partnership (or other entity treated as a partnership for U.S. federal income tax purposes) is the beneficial
owner of our common stock, the U.S. federal income tax treatment of a partner in the partnership will generally depend on the status
of the partner and the activities of the partnership. Accordingly, partnerships (and other entities treated as partnerships for U.S.
federal income tax purpose) holding our common stock and the partners in such entities should consult their own tax advisors regarding
the U.S. federal income tax consequences of the proposed Reverse Split to them. In addition, the following discussion does not address
the tax consequences of the Reverse Split under state, local and foreign tax laws. Furthermore, the following discussion does not address
any tax consequences of transactions effectuated before, after or at the same time as the Reverse Split, whether or not they are in connection
with the Reverse Split.

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In general, the federal income
tax consequences of a Reverse Split will vary among stockholders depending upon whether they receive solely a reduced number of shares
of common stock in exchange for their old shares of common stock or a full share in lieu of a fractional share. We believe that because
the Reverse Split is not part of a plan to increase periodically a stockholder’s proportionate interest in our assets or earnings
and profits, the Reverse Split should have the following federal income tax effects. The Reverse Split is expected to constitute a “recapitalization”
for U.S. federal income tax purposes pursuant to Section 368(a)(1)(E) of the Code. A stockholder who receives solely a reduced number
of shares of common stock will not recognize gain or loss. In the aggregate, such a stockholder’s basis in the reduced number of
shares of common stock will equal the stockholder’s basis in its old shares of common stock and such stockholder’s holding
period in the reduced number of shares will include the holding period in its old