The product is N-[5-(2-chloroacetyl)-2,3-dihydrobenzofuran-6-yl]acetamide, with an aromatic substituent at position 5. Substitution of one aromatic hydrogen by gives the stated molecular formula. This positional assignment also agrees with the isolated intermediate reported in the original process study.[ref]
GaCl3 activates chloroacetyl chloride by Lewis-acid coordination and chloride abstraction, represented by the acylium/contact-ion-pair limit . The position-5 aromatic bond attacks the acyl carbon, giving a Wheland intermediate. Removal of the proton at that carbon restores aromaticity. Product–Lewis-acid coordination is reversed on work-up. The carbon-bound chlorine survives; the chlorine on the acyl carbon is the leaving group.

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