Company: GCL
Filing Date: 2025-08-27
Form Type: DRS
Source: 0001213900-25-080905
Chunk: 270

Company: GCL Global Holdings Ltd
Filing Date: 2025-08-27
Form: DRS
Chunk 270
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ation Shares will be returned to the Company for cancellation. In the event that the Consideration Shares VWAP is
below $7,500,000 but exceeds $1,200,000, Nekcom will receive such number of Nekcom Additional Consideration Shares from the escrow account
that would make up the shortfall, with the balance returned to the Company for cancellation. If the value of the Nekcom Additional Consideration
Shares so released from the escrow account is not sufficient to make up the shortfall, the Company has agreed to either pay Nekcom cash
to make up the shortfall, or issue additional shares to Nekcom and use its reasonable best efforts to register such shares for resale.
If the Consideration Shares VWAP is below $1,200,000, the Company has agreed to pay Nekcom the shortfall between $7,500,000 and the Consideration
Shares VWAP in cash.

As of March 31, 2025, the
Company had remitted $5,000,000 cash consideration towards investment in Nekcom’s Sereis B preferred Share and the remaining $2,500,000
will be paid on or before August 16, 2025. However, the Nekcom Consideration Shares and Nekcom Additional Consideration Share were being
held in escrow yet to be released as the contingency of recoupment of the minimum guarantee has not been met.

The Company’s investment
in Nekcom’s Series B Preferred Shares are classified as equity securities but do not meet the criteria to be considered in-substance
common stock under ASC 323-10-15-13. These shares possess substantive liquidation preferences that distinguish them from common stock.
Consequently, the Nekcom investment is not accounted for under the equity method. As a result, the investment Nekcom’s Series B
Preferred Shares does not qualify for equity method accounting under ASC 323 and is instead accounted for under ASC 321 as an equity
investment to measure it at cost, with subsequent remeasurement to fair value only upon impairment or when there are observable prince
changes in orderly transactions for identical or similarly investments. As of the acquisition date, the $7,500,000 cash consideration
and $7,500,000 share consideration were determined to be included in the initial investment cost. And the Company will assess the impairment
as subsequent measurement. As of March 31, 2025, no impairment was recorded against investment in Nek