Company: GCL
Filing Date: 2025-04-08
Form Type: 424B3
Source: 0001213900-25-029989
Chunk: 180

Company: GCL Global Holdings Ltd
Filing Date: 2025-04-08
Form: 424B3
Chunk 180
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 in accordance with the laws of the relevant taxing authorities.

An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination. For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. No penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred.

Contingent consideration for acquisitions

We recognized contingent consideration upon completion of the business combination. We determined the fair value of the contingent consideration for acquisition as the Company has the obligation to pay cash or issuing shares to settle the contingent consideration upon 2Game’s achievement of certain performance milestones. In accordance with ASC 815-40” Derivatives and Hedging”, we determined that the contingent consideration for acquisition should be classified as a liability and should be measured initially, and subsequently at each reporting date. We continue to adjust the carrying value of the contingent consideration for acquisitions until contingency is finally determined. Any changes in fair value will be recorded as a gain or loss in the statements of income and comprehensive income.

Contingent consideration for acquisition was valued at the time of acquisitions and September 30, 2024, using unobservable inputs and the undiscounted cash flow methodology. 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 gain of approximately $0.3 million and loss of $0.7 million for the six months ended September 30, 2024 and 2023, respectively. As of September 30, 2024 and March 31, 2024, the contingent consideration for acquisition was amounted to approximately $3.4 million and $3.7 million, respectively.

Goodwill impairment

For the six months ended September 30, 2024 and 2023, management evaluated the recoverability of goodwill by performing qualitative assessment on its reporting units and determined that it is less likely than not that the fair value of the reporting unit is less than its carrying amount, and therefore, no impairment loss on goodwill was recognized for the six months ended September