Company: GCL
Filing Date: 2025-08-27
Form Type: DRS
Source: 0001213900-25-080905
Chunk: 75

Company: GCL Global Holdings Ltd
Filing Date: 2025-08-27
Form: DRS
Chunk 75
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 for U.S. federal income tax purposes. These rules are complex and there is limited
guidance regarding their application.

<div align='center'>41</div>

Under Section 7874 of the Code, a corporation created or organized
outside the United States (i.e., a non-U.S. corporation) will nevertheless be treated as a U.S. corporation for U.S. federal income tax
purposes (and, therefore, as a U.S. tax resident subject to U.S. federal income tax on its worldwide income) if each of the following
three conditions are met: (i) the non-U.S. corporation, directly or indirectly, acquires substantially all of the properties held directly
or indirectly by a U.S. corporation (including through the acquisition of all of the outstanding shares of the U.S. corporation); (ii)
the non-U.S. corporation’s “expanded affiliate group” does not have “substantial business activities” in
the non-U.S. corporation’s country of organization or incorporation and (iii) after the acquisition, the former shareholders of
the acquired U.S. corporation hold at least 80% (by either vote or value) of the shares of the non-U.S. acquiring corporation by reason
of holding shares in the U.S. acquired corporation (taking into account the receipt of the non-U.S. corporation’s shares in exchange
for the U.S. corporation’s shares) as determined for purposes of Section 7874 (this test is referred to as the “ownership
test”). The ownership test in clause (iii) above is modified with respect to potential “third-country transactions”
such that the ownership test will be met if, after the acquisition, the former shareholders of the acquired U.S. corporation hold at least
60% (by either vote or value) of the shares of the non-U.S. acquiring corporation by reason of holding shares in the U.S. acquired corporation
(as modified, the “modified ownership test”). Because the Business Combination was a potential third-country transaction,
the potential Section 7874 treatment of PubCo was determined using the modified ownership test.

For purposes of Section 7874 of the Code, the first two conditions
described above were expected be met with respect to the Business Combination because PubCo acquired indirectly all of the assets of RFAC
through the SPAC Merger, and PubCo, including its “expanded affiliate group,” was not expected to satisfy the substantial
business activities test upon consummation of the Business Combination. As