Contract analysis

I. Executive Summary This memorandum analyzes the application of the Foreign Investment in Real Property Tax Act of 1980 ("FIRPTA"), codified in Sections 897 and 1445 of the Internal Revenue Code of 1986, as amended (the "Code"), and related withholding obligations under Sections 1445 and 1446 of the Code, to the de-SPAC business combination (the "Transaction") among Pinnacle Growth Acquisition Corp., a Cayman Island

1. Skybridge is not a "United States real property holding corporation" ("USRPHC") within the meaning of Section 897(c)(2) of the Code at any relevant testing date, including the anticipated closing date and at all times during the applicable five-year look-back period (or, if shorter, the period since Skybridge's incorporation on June 15, 2018). Skybridge has never owned any interest in real property located in the

2. FIRPTA does not apply to the merger consideration received by Skybridge shareholders in the Transaction. Because shares of Skybridge stock do not constitute "United States real property interests" ("USRPIs"), the disposition of those shares in the merger does not trigger taxation under Section 897(a) or withholding under Section 1445(a), regardless of the U.S. or foreign tax status of any particular Skybridge shar

3. No FIRPTA withholding is required under Section 1445 in connection with the issuance of merger consideration shares, earnout shares, or PIPE shares in the Transaction.

4. A FIRPTA certificate should nonetheless be delivered at closing as a condition to the BCA and as a protective measure for the Combined Company and its transfer agent. The form and delivery requirements for such certificate are described in Section VIII below.

5. Section 1446 withholding is not directly implicated by the merger itself. Certain partnership shareholders may have independent Section 1446(a) obligations with respect to their own foreign partners, but those obligations rest with the partnerships and not with the Combined Company or its agents. Separately, the domestication of Pinnacle from the Cayman Islands to Delaware raises potential withholding obligations

II. Scope and Limitations This memorandum has been prepared solely for the benefit of Skybridge Fintech Ltd. and the Calderwood & Harkness LLP deal team in connection with the Transaction. It is intended to analyze the application of FIRPTA (Sections 897 and 1445 of the Code) and related withholding provisions (Section 1446 of the Code) to the Transaction and does not address the full range of U.S. federal income tax

III. Background — Transaction Structure A. The Parties

1. Skybridge Fintech Ltd. Skybridge Fintech Ltd. is a Delaware corporation, incorporated on June 15, 2018, and assigned Employer Identification Number 83-2471560. Skybridge maintains its principal executive offices and corporate headquarters at 1200 Market Street, Suite 1400, Wilmington, Delaware 19801, and operates an engineering and product development office at 450 Folsom Street, 7th Floor, San Francisco, Californ

2. Key Skybridge Shareholders The principal shareholders of Skybridge on a fully diluted basis are as follows: Based on due diligence conducted by Calderwood & Harkness LLP and representations provided by Skybridge management, all material shareholders of Skybridge are believed to be "United States persons" within the meaning of Section 7701(a)(30) of the Code. The two principal institutional shareholders — Harborvie

3. Pinnacle Growth Acquisition Corp. Pinnacle Growth Acquisition Corp. is a Cayman Islands exempted company formed for the purpose of effecting a business combination with one or more operating businesses. Pinnacle's Class A ordinary shares are listed on the Nasdaq Stock Market under the ticker symbol "PGAC." Pinnacle completed its initial public offering on October 17, 2023, issuing 30,000,000 Class A ordinary share

4. Pinnacle Merger Sub Inc. Pinnacle Merger Sub Inc. is a Delaware corporation to be formed as a direct wholly owned subsidiary of Pinnacle (or, more precisely, of the Combined Company following domestication) immediately prior to the merger effective time. Merger Sub will have no assets, liabilities, or operations other than those incidental to its formation and its role as the merging entity in the forward triangul

5. Sponsor. Ridgeway Capital Holdings LLC is a Delaware limited liability company (EIN 87-1093847) controlled by Jonathan Mercer that serves as the sponsor of Pinnacle (the "Sponsor"). The Sponsor holds 7,500,000 Class B ordinary shares of Pinnacle (the "Founder Shares"), representing 20% of the total outstanding ordinary shares of Pinnacle on an as-converted basis (prior to giving effect to any redemptions), and 8,0

IV. FIRPTA Framework — Legal Overview A. Section 897 — Disposition of U.S. Real Property Interests

Section 897(a) of the Code provides that gain or loss of a nonresident alien individual or a foreign corporation from the disposition of a "United States real property interest" ("USRPI") shall be taken into account as if the taxpayer were engaged in a trade or business within the United States during the taxable year and as if such gain or loss were effectively connected with such trade or business. This provision e

Section 897(c)(1) of the Code defines a "United States real property interest" as: (A) an interest in real property (including an interest in a mine, well, or other natural deposit) located in the United States or the United States Virgin Islands; and (B) any interest (other than an interest solely as a creditor) in any domestic corporation unless the taxpayer establishes (at such time and in such manner as the Secre

3. United States Real Property Holding Corporation

Section 897(c)(2) of the Code defines a "United States real property holding corporation" ("USRPHC") as any corporation if the fair market value of its United States real property interests equals or exceeds 50 percent of the aggregate fair market value of: (A) its United States real property interests; (B) its interests in real property located outside the United States; and (C) any other assets used or held for use

4. Testing Dates and Look-Back Period The USRPHC determination must be made as of the date of disposition of the corporation's stock by the foreign shareholder. However, Section 897(c)(1)(A)(ii) of the Code provides that an interest in a domestic corporation is treated as a USRPI if the corporation was a USRPHC at any time during the shorter of: (i) the five-year period ending on the date of the disposition (the "Fiv

Section 897(c)(1)(B) provides an important exception: an interest in a domestic corporation is not treated as a USRPI if the taxpayer establishes that the corporation was not a USRPHC at any time during the applicable look-back period (or, if shorter, the period during which the taxpayer held the interest). This is commonly referred to as the "cleansing rule." If the corporation has never been a USRPHC during the app

1. Section 897(d) — Distributions

Section 897(d) of the Code provides that any distribution by a foreign corporation or by a domestic corporation that is (or was) a USRPHC to a foreign person shall, to the extent attributable to USRPIs, be treated as gain from the disposition of a USRPI. This provision is designed to prevent the extraction of value from USRPIs through corporate distributions that might otherwise escape FIRPTA taxation.

2. Section 897(e) — Nonrecognition Exchanges

Section 897(e)(1) of the Code addresses the interaction between FIRPTA and the Code's nonrecognition provisions (such as those applicable to tax-free reorganizations under Section 368). Under Section 897(e)(1), a nonrecognition provision applies to a disposition of a USRPI by a foreign person only to the extent that the foreign person receives a USRPI in exchange for the USRPI disposed of. In other words, if a foreig

1. General Withholding Obligation

Section 1445(a) of the Code imposes a withholding obligation on any transferee of a USRPI acquired from a foreign person. The transferee must deduct and withhold a tax equal to 15% of the "amount realized" by the foreign transferor on the disposition. The withholding obligation arises at the time of the transfer, and the withheld amounts must be remitted to the IRS within 20 days of the transfer using Form 8288 (U.S.

2. Exemption for Non-Foreign Transferors — Section 1445(b)(2)

Section 1445(b)(2) of the Code provides an exception to the withholding requirement if the transferor furnishes to the transferee an affidavit (commonly referred to as a "FIRPTA affidavit" or "FIRPTA certificate") stating, under penalty of perjury, that the transferor is not a "foreign person" within the meaning of the Code. The affidavit must include the transferor's name, address, and U.S. taxpayer identification n

3. Publicly Traded Exception — Section 1445(b)(3)

Section 1445(b)(3) of the Code provides that no withholding is required under Section 1445(a) on the disposition of an interest in a domestic corporation if the stock of the corporation is "regularly traded on an established securities market" within the meaning of Treasury Regulation Section 1.1445-2(c)(2)(iii). This exception recognizes the impracticability of imposing withholding obligations on routine stock marke

4. Transferred Entity Certification — Treasury Regulation Section 1.1445-2(c)(3) Treasury Regulation Section 1.1445-2(c)(3) provides an alternative basis for exemption from withholding in transactions involving the acquisition of an interest in a domestic corporation. Under this provision, a transferee may rely on a certification from the "transferred entity" — i.e., the domestic corporation whose stock is being acqu

1. Section 1446(a) — Partnership Withholding

Section 1446(a) of the Code requires any partnership that has effectively connected taxable income ("ECTI") allocable to one or more foreign partners to withhold tax on such income at the rates specified in Section 1446(b). The withholding obligation falls on the partnership itself, which must pay and report the withheld amounts on behalf of its foreign partners.

2. Section 1446(f) — Withholding on Transfers of Partnership Interests

Section 1446(f) of the Code, enacted as part of the Tax Cuts and Jobs Act of 2017, imposes a withholding obligation on the transferee of an interest in a partnership if any portion of the gain on the transfer would be treated as effectively connected with a U.S. trade or business under Section 864(c)(8). The withholding rate is generally 10% of the amount realized on the transfer. This provision is designed to enforc

3. Application to the Transaction

Section 1446 has limited direct relevance to the Transaction. Skybridge is a C corporation, not a partnership, and the merger does not generate effectively connected income allocable through a partnership. Similarly, Section 1446(f) applies to transfers of interests in partnerships and does not apply to transfers of stock in a corporation. However, certain Skybridge shareholders (including Harborview Partners and Atl

V. Analysis — Is Skybridge a USRPHC? A. Identification of Skybridge's Assets The determination of whether Skybridge is a USRPHC under Section 897(c)(2) of the Code requires a comprehensive analysis of the composition of Skybridge's assets. Based on our review of Skybridge's audited financial statements for the fiscal year ended December 31, 2024 (audited by Graystone Thornton LLP, engagement partner Helen Marchetti),

VI. Withholding Analysis — Section 1445 A. General Withholding Obligation Under Section 1445(a) of the Code, the transferee of a USRPI acquired from a foreign person is required to deduct and withhold a tax equal to 15% of the "amount realized" by the foreign transferor on the disposition. In the context of the merger, Merger Sub (and its successor, Skybridge as the surviving entity, or more broadly the Combined Comp

VII. Withholding Analysis — Section 1446 A. Section 1446(a) — Partnership Withholding on ECI

Section 1446(a) of the Code requires a partnership that has effectively connected taxable income allocable to a foreign partner to pay a withholding tax on behalf of such foreign partner. The rate of withholding is the highest applicable rate of tax under Section 1 (for individuals) or Section 11 (for corporations), as applicable.

Section 1446(a) is not directly applicable to the Transaction. Skybridge is a C corporation, not a partnership, and the merger does not generate effectively connected income that is allocated through a partnership to foreign partners. The effectively connected income rules applicable to partnerships are separate and distinct from the FIRPTA rules applicable to dispositions of USRPIs (which, as discussed above, are no

Section 1446(f) of the Code imposes a withholding obligation on the transferee of a partnership interest if any portion of the gain on the transfer would be treated as effectively connected with a U.S. trade or business under Section 864(c)(8). This provision applies exclusively to transfers of interests in partnerships; it does not apply to transfers of stock in a corporation. The Transaction involves the acquisitio

VIII. FIRPTA Certificate — Form and Delivery Requirements A. Legal Basis As discussed in Section IV.C.4 above, Treasury Regulation Section 1.1445-2(c)(3) provides that, in a transaction involving the acquisition of an interest in a domestic corporation, the transferee may rely on a certification from the corporation (the "transferred entity") that the corporation is not and has not been a USRPHC during the applicable

1. Statement of Non-USRPHC Status. A statement that Skybridge Fintech Ltd. is not, and has not been at any time during the five-year period ending on the date of the certificate (or, if shorter, the period of the corporation's existence beginning June 15, 2018 and ending on the date of the certificate), a "United States real property holding corporation" as defined in Section 897(c)(2) of the Internal Revenue Code of

2. Statement that Interests Are Not USRPIs. A statement that interests in Skybridge Fintech Ltd. are not "United States real property interests" within the meaning of Section 897(c)(1) of the Code.

3. Full Legal Name. The full legal name of the corporation: Skybridge Fintech Ltd.

4. Address. The address of the corporation's principal executive offices: 1200 Market Street, Suite 1400, Wilmington, Delaware 19801.

5. Employer Identification Number. The corporation's U.S. taxpayer identification number: 83-2471560.

6. Penalty of Perjury Declaration. An acknowledgment that the certificate is made under penalty of perjury and that the certifying officer understands that the certificate may be disclosed to the Internal Revenue Service and that any false statement contained therein could be punished by fine, imprisonment, or both.

7. Signature of Authorized Officer. The certificate must be signed by a responsible and authorized officer of Skybridge. We recommend that the certificate be executed by Priya Chandrasekaran, Chief Executive Officer, or Marcus Ellingham, Chief Financial Officer. Either officer has the authority and knowledge to execute the certificate on behalf of Skybridge.

8. Date. The certificate should be dated as of the Closing Date (projected to be July 21, 2025), or, if the closing occurs on a different date, as of the actual closing date. C. Delivery Mechanics The FIRPTA certificate is listed as a closing deliverable under Section [7.2(h)] of the BCA. The certificate must be delivered by Skybridge to the Combined Company (and, as a practical matter, to the Combined Company's coun