Company: GCL
Filing Date: 2025-08-27
Form Type: DRS
Source: 0001213900-25-080905
Chunk: 230

Company: GCL Global Holdings Ltd
Filing Date: 2025-08-27
Form: DRS
Chunk 230
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 the fair value is based on discounted cash flows, the key assumptions include the probability
of meeting each performance target and the discount factor.

The Company accounts for
convertible notes in accordance with ASC 470, Debt, and ASC 815, Derivatives and Hedging. Convertible notes that contain embedded features—such
as conversion rights, bonus shares, top-up shares, or other contingent settlement provisions—are evaluated to determine whether
the features require bifurcation and separate accounting. If the embedded features do not meet the criteria for separate accounting but
result in the instrument being accounted for as a hybrid financial instrument, the Company applies the fair value option and measures
the entire convertible note at fair value, with changes in fair value recognized as a gain or loss in the consolidated statements of
operations and comprehensive income (loss) until conversion.

Embedded features that are
not clearly and closely related to the host instrument and do not qualify for equity classification are accounted for as derivative liabilities.
These derivative liabilities are measured at fair value upon initial recognition and remeasured at each reporting date, with changes
in fair value recognized in the consolidated statements of operations and comprehensive income (loss) until the instruments are settled.

The Company accounts for
its ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities
from Equity”, where equity interests are determined to be conditionally redeemable upon the occurrence of certain events that are
not solely within the control of the Group, and upon such event, the shares would become redeemable at the option of the holders, they
are classified as mezzanine equity (temporary equity). As of March 31, 2025 and 2024, ordinary shares subject to possible redemption
were 0 and 217,724 shares, respectively, as temporary equity, outside of the shareholders’ equity section of the Company’s
consolidated balance sheet. The Company recognizes changes in redemption value immediately as they occur and adjusts the carrying value
of redeemable Common Stock to equal the redemption value at the end of each reporting period. Increases or decreases in the carrying
amount of redeemable ordinary shares are affected by charges against additional paid-in capital or accumulated deficit if additional
paid-in capital equals to zero. On November 22, 2023, 466,164 ordinary shares were fully redeemed for cash consideration of $163,905.
On February 13, 2025, 217,724 ordinary shares subject to possible redemption were being reclassified to permanent