Company: GCL
Filing Date: 2025-08-27
Form Type: DRS
Source: 0001213900-25-080905
Chunk: 61

Company: GCL Global Holdings Ltd
Filing Date: 2025-08-27
Form: DRS
Chunk 61
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 which could have a material adverse effect on our financial position and results from operations and on non-U.S. holders’ securities.

Although we are incorporated
under the laws of the Cayman Islands, the IRS may assert that we should be treated as a U.S. corporation (and, therefore, a U.S. tax
resident) for U.S. federal income tax purposes pursuant to section 7874 of the Code. For U.S. federal income tax purposes, a corporation
is generally considered a tax resident in the jurisdiction of its organization or incorporation. Because we are incorporated under the
laws of the Cayman Islands, we would generally be classified as a foreign corporation (and, therefore, a non-U.S. tax resident) for U.S.
federal income tax purposes. Section 7874 provides an exception pursuant to which a foreign incorporated entity may, in certain circumstances,
be treated as a U.S. corporation for U.S. federal income tax purposes. These rules are complex and require analysis of all relevant facts
and circumstances, and there is limited guidance and significant uncertainties as to their application. If it were determined that we
should be taxed as a U.S. corporation for U.S. federal income tax purposes under section 7874, we would be subject to U.S. federal income
tax on our taxable income like any other U.S. corporation and certain distributions made by us to non-U.S. holders’ securities
would be subject to U.S. withholding tax at the rate of 30% or such lower rate as provided by an applicable treaty. Taxation as a U.S.
corporation could also have a material adverse effect on our financial position and results from operations.

We may be or become a passive foreign investment company (“PFIC”), which could result in adverse U.S. federal income tax consequences to U.S. Holders of our Ordinary Shares.

In general, we will be treated
as a PFIC for any taxable year in which either (1) at least 75% of our gross income (looking through certain 25% or more-owned subsidiaries)
is passive income or (2) at least 50% of the average value of our assets (looking through certain 25% or more-owned subsidiaries) is
attributable to assets that produce, or are held for the production of, passive income. Passive income generally includes, without limitation,
dividends, interest, rents, royalties, and gains from the disposition of passive assets. If we are determined to be a PFIC for