Company: GCL
Filing Date: 2025-07-31
Form Type: 20-F
Source: 0001213900-25-069672
Chunk: 119

Company: GCL Global Holdings Ltd
Filing Date: 2025-07-31
Form: 20-F
Item: Item 4A
Chunk 119
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 million for the year ended March 31, 2025, 2024 and 2023, respectively. As of March 31, 2025 and 2024, the contingent consideration
for acquisition amounted to approximately $1.1 million and $3.7 million, respectively.

Convertible notes and derivative liabilities

We determined that the convertible notes issued
in connection with the Business Combination contained multiple embedded features, including conversion rights and a Top-Up Share provision.
Because our ordinary shares were not publicly traded at the time of issuance, the embedded features did not meet the net settlement criterion
under ASC 815. As such, we accounted for the entire instrument as a hybrid financial instrument measured at fair value, with changes in
fair value recognized in our consolidated statements of operations and comprehensive income (loss) until conversion. Upon the conversion
of the notes into equity on February 13, 2025, the embedded features were detached and separately evaluated.

As of the issuance date, we determined that the fair value of the convertible notes approximated their carrying amount. The
fair value was subsequently remeasured as of February 12, 2025 using a probability-weighted scenario analysis that considered expected
outcomes associated with the conversion feature. Key inputs included the number of shares issuable upon conversion, the fair value of
our ordinary shares at the measurement date, and relevant discount factors. The fair value of the convertible notes as of February 12,
2025 was approximately $25.0 million.

We concluded that the Top-Up Share feature met
the definition of a derivative liability under ASC 815-40 due to its variable settlement structure and the fact that it was not considered
indexed to our own stock. Accordingly, we accounted for the Top-Up Share provision as a standalone derivative liability, which is measured
at fair value upon initial recognition and remeasured at each reporting date until settlement or expiration. Changes in fair value are
recognized in our consolidated statements of operations and comprehensive income (loss).

The Top-Up Share liability was valued as of February
12, 2025 and March 31, 2025, using a Monte Carlo simulation model based on unobservable inputs. The fair value measurement incorporated
key assumptions, including our stock price, expected volatility, holding period, and the risk-free interest rate. As the conversion date
occurred shortly before our March 31, 2025 reporting date and no material changes in valuation inputs were identified, we did not record
a significant change in fair value between the