Company: GCL
Filing Date: 2025-08-27
Form Type: DRS
Source: 0001213900-25-080905
Chunk: 263

Company: GCL Global Holdings Ltd
Filing Date: 2025-08-27
Form: DRS
Chunk 263
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ation
Shares VWAP in cash.

As
of March 31, 2025, the Company had remitted $5,000,000 cash consideration towards investment
in Nekcom’s Series B preferred Share and the remaining $2,500,000 will be paid on or
before August 16, 2025. However, the Nekcom Consideration Shares and Nekcom Additional Consideration
Share are being held in escrow yet to be released as the contingency of recoupment of the
minimum guarantee has not yet been met.

The Company’s investment
in Nekcom’s Series B Preferred Shares are classified as equity securities but do not meet the criteria to be considered in-substance
common stock under ASC 323-10-15-13. These shares possess substantive liquidation preferences , fixed returns, and conditional participation
rights that distinguish them from common stock. Consequently, the Nekcom investment is not accounted for under the equity method. As
a result, the investment Nekcom’s Series B Preferred Shares does not qualify for equity method accounting under ASC 323 and is
instead accounted for under ASC 321 as an equity investment to measure it at cost, with subsequent remeasurement to fair value only upon
impairment or when there are observable prince changes in orderly transactions for identical or similarly investments. As of the acquisition
date, the $7,500,000 cash consideration, $364,229 acquisition cost, and $7,500,000 share consideration were determined to be included
in the initial investment cost. And the Company will assess the impairment as subsequent measurement. As of March 31, 2025, no impairment
was recorded against investment in Nekcom.

Investment in Cloudshelf Limited (“Cloudshelf”)

On November 8, 2022, the
Company entered into a subscription and shareholders agreement with Cloudshelf, a private limited company incorporated in England and
Wales. Pursuant to the agreement, the Company subscribed for ordinary shares in Cloudshelf for a total consideration of $71,045, representing
a 13.5% equity interest of Cloushelf.

As the Company does not
have significant influence over Cloudshelf, the investment is accounted for in accordance with ASC 321, The investment is measured at
cost, with subsequent remeasurement to fair value only upon impairment or when there are observable prince changes in orderly transactions
for identical or similarly investments. As of March 31, 2025, no impairment