Company: GCL
Filing Date: 2025-04-03
Form Type: F-1
Source: 0001213900-25-028608
Chunk: 58

Company: GCL Global Holdings Ltd
Filing Date: 2025-04-03
Form: F-1
Chunk 58
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 Effective internal control over financial reporting is necessary to increase the reliability of financial reports.

The standards required for
a public company under Section 404(a) of the Sarbanes-Oxley Act are significantly more stringent than those required of the Company
as a privately held company. Management may not be able to effectively and timely implement controls and procedures that adequately respond
to the increased regulatory compliance and reporting requirements that will be applicable after the Business Combination. If PubCo is
not able to implement the additional requirements of Section 404(a) of the Sarbanes-Oxley Act in a timely manner or with adequate
compliance, it may not be able to assess whether its internal controls over financial reporting are effective, which may subject it to
adverse regulatory consequences and could harm investor confidence and the market price of PubCo ordinary shares.

Prior to the Business Combination,
neither the Company nor its auditors were required to perform an evaluation of internal control over financial reporting as of March 31,
2024 and 2023 in accordance with the provisions of the Sarbanes-Oxley Act as it was a private company. In connection with the preparation
of the Company’s consolidated financial statements for fiscal years 2024 and 2023, the Company identified material weaknesses in
its internal control over financial reporting, as defined in the standards established by the PCAOB. The material weakness identified
related to (i) lack of accounting staff and resources with appropriate knowledge of accounting principles generally accepted in the U.S.
GAAP and SEC reporting and compliance requirements to design and implement formal period-end financial reporting policies and procedures
to address complex technical accounting issue in accordance with GAAP and the SEC requirements, and (ii) lack of information technology
general controls in the areas of IT policies and procedures, user provisioning and termination, privileged access and service organization
monitoring who are responsible for change management over certain core business system and accounting system. To remediate the material
weaknesses, the Company has begun, and will continue, to (A) hire additional finance and accounting staff with qualifications and work
experience in GAAP and SEC reporting requirements to formalize the key internal control over financial reporting; (B) allocate sufficient
resources to prepare and review financial statements and related disclosures in accordance with GAAP and SEC reporting requirements; and
(C) hire experienced IT staff with qualifications of the CRISC (“Certified in Risk and Information Systems Control”) to formalize
and strengthen the key internal control over Information Technology General Control.

Following