Company: GCL
Filing Date: 2025-09-09
Form Type: 424B3
Source: 0001213900-25-086274
Chunk: 163

Company: GCL Global Holdings Ltd
Filing Date: 2025-09-09
Form: 424B3
Chunk 163
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 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 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.

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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