Company: GCL
Filing Date: 2025-08-27
Form Type: DRS
Source: 0001213900-25-080905
Chunk: 76

Company: GCL Global Holdings Ltd
Filing Date: 2025-08-27
Form: DRS
Chunk 76
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 a result, whether Section 7874 applied to cause PubCo to be
treated as a U.S. corporation for U.S. federal income tax purposes following the Business Combination potentially depended on the satisfaction
of the modified ownership test.

Based upon the terms of the Business Combination, the rules for determining
share ownership under Section 7874 of the Code and the Treasury Regulations promulgated thereunder, and certain factual assumptions, the
Section 7874 ownership percentage of the RFAC stockholders in PubCo is expected to have been less than 60%. Accordingly, PubCo is not
expected to be treated as a U.S. corporation for U.S. federal income tax purposes under Section 7874 of the Code. However, the calculations
for determining share ownership for purposes of the ownership test under Section 7874 of the Code are complex, subject to detailed rules
and regulations (the application of which is uncertain in various respects and could be impacted by changes to applicable rules and regulations
under U.S. federal income tax laws, with possible retroactive effect), and subject to certain factual uncertainties. Furthermore, for
purposes of determining the ownership percentage of RFAC stockholders for purposes of Section 7874, among other adjustments required to
be taken into account, RFAC stockholders will be deemed to own an amount of PubCo Ordinary Shares in respect to certain redemptions by
RFAC prior to the SPAC Merger. Accordingly, given the inherently factual nature of the analysis, neither RFAC nor PubCo has sought a legal
opinion from counsel in respect of the potential applicability of Section 7874 to the Business Combination, and there can be no assurance
that the IRS would not assert a contrary position to those described above or that such an assertion would not be sustained by a court.

If PubCo were to be treated
as a U.S. corporation for U.S. federal income tax purposes, it could be subject to substantial liability for additional U.S. income taxes,
and the gross amount of any dividend payments to its non-U.S. investors could be subject to U.S. withholding tax.

The remainder of this discussion
assumes that PubCo will not be treated as a U.S. corporation for U.S. federal income tax purposes under Section 7874 of the Code.

U.S. Federal Income Tax Consequences of Ownership and Disposition of Ordinary Shares

Distribution on Ordinary Shares

Subject to the PFIC rules
discussed below “— Passive Foreign Investment Company Status,”