Company: GCL
Filing Date: 2025-07-31
Form Type: 20-F
Source: 0001213900-25-069672
Chunk: 118

Company: GCL Global Holdings Ltd
Filing Date: 2025-07-31
Form: 20-F
Item: Item 4A
Chunk 118
---
Other than as disclosed elsewhere
in this annual report and below, we are not aware of any trends, uncertainties, demands, commitments or events that are reasonably likely
to have a material effect on our revenues, income from continuing operations, profitability, liquidity or capital resources, or that
would cause reported financial information not necessarily to be indicative of future operating results or financial condition.

5E. Critical Accounting Estimates

Financial statements and accompanying notes have been prepared in accordance
with U. S. GAAP. The preparation of these financial statements and accompanying notes requires us to make estimates and judgments that
affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities.
Estimates are based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances,
the results of which form the basis of making judgments about the carrying values of assets and liabilities that are not readily apparent
from other sources. Certain accounting estimates are particularly sensitive because of our significance to financial statements and because
of the possibility that future events affecting the estimate may differ significantly from management’s current judgments. We believe
that the following accounting estimates are critical to our business operations and understanding our consolidated financial results.

Contingent consideration for acquisitions

We determined that the contingent
consideration related to the 2Game acquisition should be classified as a liability, as we are obligated to settle the arrangement in cash
or shares upon 2Game’s achievement of certain performance milestones. In accordance with ASC 815-40, Derivatives and Hedging,
we initially recognized the contingent consideration at fair value and remeasure it at each reporting date. We continue to adjust the
carrying amount until the contingency is resolved. Any changes in fair value are recognized as a gain or loss in our consolidated statements
of operations and comprehensive income (loss).

Contingent consideration
for acquisition was valued at the time of acquisitions and March 31, 2025, using unobservable inputs and the undiscounted cash flow methodology.
The determination of the fair value is based on discounted cash flows, the key assumptions take into consideration the probability of
meeting each performance target and the discount factor. As of the acquisition date of 2Game, the fair value of the contingent consideration
for acquisition was determined to be approximately $3.4 million.

Subsequently,
the change of fair value of the contingent consideration for acquisition was amounted to a loss of approximately $0.5 million, $0.3 million
and $0.9