[6-K] GCL Global Holdings Ltd Current Report (Foreign Issuer)
GCL Global Holdings Ltd filed unaudited interim results for the six months ended September 30, 2025. Revenue rose to $98,723,121 from $50,905,705, driven mainly by console game, hardware, and accessories sales of $50,025,298 and console game code revenue of $30,982,542.
Despite higher gross profit of $10,839,254, operating expenses increased to $17,464,988, leading to a net loss attributable to shareholders of $5,098,857, versus $512,287 a year earlier. Total assets were $159,859,828, liabilities $123,853,292, and shareholders’ equity $36,006,536 as of September 30, 2025.
Positive
- None.
Negative
- None.
Insights
Revenue nearly doubled, but leverage and operating costs drove a much larger loss.
GCL Global generated
However, selling and marketing plus general and administrative costs expanded to a combined
The balance sheet shows rapid scaling: total assets rose to
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16
UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of January
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
29 Tai Seng Ave., #02-01
Singapore 534119
(Address of Principal Executive Offices and Zip Code)
Registrant’s telephone number, including area code: +65 80427330
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
GCL Global Holdings Ltd, a Cayman Islands exempted company, is furnishing this Form 6-K to provide its unaudited interim condensed consolidated financial statements as of September 30, 2025 and for the Six Months Ended September 30, 2025 and 2024.
| Exhibits | ||
| 99.1 | Unaudited Interim Condensed Consolidated Financial Statements as of September 30, 2025 and for the Six Months Ended September 30, 2025 and 2024 | |
| 99.2 | Operating and Financial Review and Prospects in Connection with the Unaudited Interim Condensed Consolidated Financial Statements for the Six Months Ended September 30, 2025 and 2024 | |
| 99.3 | Non-GAAP Performance Measures | |
| 99.4 | First Amendment to Series B Preferred Stock Purchase Agreement between GCL Global Limited and Nekcom Inc., dated May 15, 2025 |
1
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
| Dated: January 30, 2026 | ||
| GCL Global Holdings Ltd. | ||
| By: | /s/ Sebastian Toke | |
| Name: | Sebastian Toke | |
| Title: | Group CEO | |
2
Exhibit 99.1
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
TABLE OF CONTENTS
INDEX TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| Page | ||
| Unaudited Condensed Consolidated Balance Sheets – As of September 30, 2025 (Unaudited) and March 31, 2025 | F-2 | |
| Unaudited Condensed Statements of Changes in Shareholders’ Equity - For The Six Months Ended September 30, 2025 and 2024 | F-3 | |
| Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss – For The Six Months Ended September 30, 2025 and 2024 | F-4 | |
| Unaudited Consolidated Statements of Cash Flows - For The Six Months Ended September 30, 2025 and 2024 | F-5 | |
| Notes to Unaudited Condensed Consolidated Financial Statements | F-6 |
F-1
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Stated in U.S dollar, except for the number of shares)
| September 30 | March 31 | |||||||
| 2025 | 2025 | |||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Accounts receivable, net | ||||||||
| Investment in convertible note | - | |||||||
| Amount due from related parties | ||||||||
| Inventories, net | ||||||||
| Other receivable and other current assets, net | ||||||||
| Prepayments, net | ||||||||
| Loan to third party | ||||||||
| Derivative asset | ||||||||
| Total current assets | ||||||||
| NONCURRENT ASSETS | ||||||||
| Property and equipment, net | ||||||||
| Definite-lived intangible assets, net | ||||||||
| Indefinite-lived intangible assets | ||||||||
| Goodwill | ||||||||
| Long-term investments | ||||||||
| Prepayments, a related party | ||||||||
| Operating leases right-of-use assets | ||||||||
| Finance leases right-of-use assets | ||||||||
| Deferred tax assets, net | ||||||||
| Total noncurrent assets | ||||||||
| TOTAL ASSETS | $ | $ | ||||||
| LIABILITIES, AND SHAREHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES | ||||||||
| Bank Loans, current | $ | $ | ||||||
| Convertible notes, net of unamortized discounts of $ |
- | |||||||
| Accounts payable | ||||||||
| Accounts payable, a related party | ||||||||
| Contract liabilities | ||||||||
| Other payables and accrued liabilities | ||||||||
| Operating lease liabilities, current | ||||||||
| Contingent consideration for acquisition, current | ||||||||
| Finance leases liabilities, current | ||||||||
| Amount due to related parties | ||||||||
| Derivative liabilities | - | |||||||
| Tax payables | ||||||||
| Total current liabilities | ||||||||
| NON-CURRENT LIABILITIES | ||||||||
| Operating lease liabilities, non-current | ||||||||
| Finance leases liabilities, non-current | ||||||||
| Bank loans, non-current | ||||||||
| Deferred investment consideration payable | ||||||||
| Derivative liabilities, non-current | ||||||||
| Deferred tax liabilities | - | |||||||
| Total non-current liabilities | ||||||||
| TOTAL LIABILITIES | ||||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| SHAREHOLDERS’ EQUITY | ||||||||
| Ordinary share, par value $ |
||||||||
| Additional paid-in capital | ||||||||
| Retained earnings | ||||||||
| Accumulated other comprehensive (loss) income | ( | ) | ||||||
| TOTAL GCL Global Holdings Ltd shareholders’ equity | ||||||||
| Non-controlling interests | ||||||||
| TOTAL SHAREHOLDERS’ EQUITY | ||||||||
| TOTAL LIABILITIES, AND SHAREHOLDERS’ EQUITY | $ | $ | ||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-2
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
UNAUDITED CONDENSED STATEMENTS OF CHANGE IN SHAREHOLDERS’ EQUITY
For the Six Months Ended September 30, 2025 and 2024
(Stated in U.S. dollar, except for the number of shares)
| For the Six Months Ended September 30, 2025 | ||||||||||||||||||||||||||||
| Ordinary share* | Additional paid-in | Retained | Accumulated other comprehensive | Non-controlling | Total shareholders’ | |||||||||||||||||||||||
| Shares | Par value | capital | earnings | (loss) income | interest | equity | ||||||||||||||||||||||
| Balance as of March 31, 2025 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | - | ( | ) | ( | ) | ||||||||||||||||||
| Recognition of non-controlling interest of through business combination | - | - | - | - | - | |||||||||||||||||||||||
| Acquisition of additional non-controlling interest | - | - | - | - | - | ( | ) | ( | ) | |||||||||||||||||||
| Ordinary shares issued for conversion of convertible notes | - | - | - | |||||||||||||||||||||||||
| Ordinary shares issued from shares subscription agreement | - | - | - | |||||||||||||||||||||||||
| Share-based compensation | - | - | - | |||||||||||||||||||||||||
| Foreign currency translation adjustments | - | - | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Balance as of September 30, 2025 (Unaudited) | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||
| For the Six Months Ended September 30, 2024 | ||||||||||||||||||||||||||||
| Accumulated | ||||||||||||||||||||||||||||
| Additional | other | Total | ||||||||||||||||||||||||||
| Ordinary share* | paid-in | Retained | comprehensive | Non-controlling | shareholders’ | |||||||||||||||||||||||
| Shares | Par value | capital | earnings | (loss) income | interest | equity | ||||||||||||||||||||||
| Balance as of March 31, 2024 | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||
| Net loss | - | - | - | ( | ) | - | ( | ) | ( | ) | ||||||||||||||||||
| Foreign currency translation adjustments | - | - | - | - | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Balance as of September 30, 2024 (Unaudited) | $ | $ | $ | $ | ( | ) | $ | $ | ||||||||||||||||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-3
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Stated in U.S dollar, except for the number of shares)
| For
the Six Months Ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| REVENUES | ||||||||
| Revenues | $ | $ | ||||||
| Revenues, a related party | ||||||||
| TOTAL REVENUES | ||||||||
| COST OF REVENUES | ||||||||
| Cost of revenues | ( | ) | ( | ) | ||||
| Cost of revenues, related parties | ( | ) | ( | ) | ||||
| TOTAL COST OF REVENUES | ( | ) | ( | ) | ||||
| GROSS PROFIT | ||||||||
| OPERATING EXPENSES | ||||||||
| Selling and marketing | ( | ) | ( | ) | ||||
| General and administrative | ( | ) | ( | ) | ||||
| Provision for doubtful accounts | - | |||||||
| Total operating expenses | ( | ) | ( | ) | ||||
| LOSS FROM OPERATIONS | ( | ) | ( | ) | ||||
| OTHER INCOME (EXPENSE) | ||||||||
| Other income, net | ||||||||
| Interest expense, net | ( | ) | ( | ) | ||||
| Change in fair value of contingent consideration for acquisition | ||||||||
| Change in fair value of investment in convertible notes | ( | ) | - | |||||
| Change in fair value of derivative asset and derivative liabilities | - | |||||||
| TOTAL OTHER INCOME, NET | ||||||||
| LOSS BEFORE INCOME TAXES | ( | ) | ( | ) | ||||
| INCOME TAXES BENEFIT | ||||||||
| NET LOSS | ( | ) | ( | ) | ||||
| Less: net loss attributable to non-controlling interests | ( | ) | ( | ) | ||||
| NET LOSS ATTRIBUTABLE TO GCL GLOBAL HOLDINGS LTD’S SHAREHOLDERS | $ | ( | ) | $ | ( | ) | ||
| NET LOSS | ( | ) | ( | ) | ||||
| OTHER COMPREHENSIVE LOSS | ||||||||
| Foreign currency translation adjustments | ( | ) | ( | ) | ||||
| COMPREHENSIVE LOSS | ( | ) | ( | ) | ||||
| Less: total comprehensive loss attributable to noncontrolling interests | ( | ) | ( | ) | ||||
| Total comprehensive loss attributable to GCL Global Holdings Ltd’s shareholders | $ | ( | ) | $ | ( | ) | ||
| LOSS PER SHARE - BASIC AND DILUTED, ORDINARY SHARES | $ | ( | ) | $ | ( | ) | ||
| WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES OUTSTANDING* | ||||||||
| Basic and diluted | ||||||||
| * |
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-4
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Stated in U.S. dollar, except for the number of shares)
| For the Six Months Ended | ||||||||
| September 30, | ||||||||
| 2025 | 2024 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
| Depreciation of property and equipment | ||||||||
| Amortization of intangible assets | ||||||||
| Amortization of right of use assets- operating leases | ||||||||
| Amortization of right of use assets- finance leases | ||||||||
| Amortization of debt discount and debt issuance cost | - | |||||||
| Provision for (recovery from) credit loss and doubtful accounts | ( | ) | ||||||
| Loss from disposal of a finance lease | - | |||||||
| Deferred taxes benefit | ( | ) | ( | ) | ||||
| Change in fair value of contingent consideration for acquisition | ( | ) | ( | ) | ||||
| Change in fair value of investment in convertible notes | - | |||||||
| Change in fair value of derivative asset and derivative liabilities | ( | ) | - | |||||
| Stock based compensation | - | |||||||
| Change in operating assets and liabilities | ||||||||
| Accounts receivables | ||||||||
| Inventories | ( | ) | ( | ) | ||||
| Indefinite-lived intangible assets | ( | ) | ( | ) | ||||
| Other receivable and other current assets | ( | ) | ( | ) | ||||
| Amount due from related parties | - | |||||||
| Prepayments | ( | ) | ( | ) | ||||
| Prepayments, a related party | ( | ) | - | |||||
| Accounts payable | ( | ) | ||||||
| Accounts payable, a related party | ( | ) | ( | ) | ||||
| Contract liabilities | ||||||||
| Other payables and accrued liabilities | ( | ) | ||||||
| Operating Lease Liabilities | ( | ) | ( | ) | ||||
| Income tax payables | ( | ) | ||||||
| Net cash used in operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Purchases of equipment | ( | ) | ( | ) | ||||
| Cash paid in business combinations, net of cash acquired | ( | ) | - | |||||
| Loan to third party | ( | ) | - | |||||
| Repayment from third party | - | |||||||
| Cash paid in connection with long term investment payable | ( | ) | - | |||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceed from share subscription | - | |||||||
| Proceeds from bank loans | ||||||||
| Repayments to bank loans | ( | ) | ( | ) | ||||
| Advances proceeds related to convertible notes | - | |||||||
| Proceeds from convertible notes | - | |||||||
| Payments of debt issuance cost | ( | ) | - | |||||
| Repayments to related parties | ( | ) | ( | ) | ||||
| Principal payments of finance lease liabilities | ( | ) | ( | ) | ||||
| Cash paid in acquiring additional controlling interest in subsidiaries | ( | ) | - | |||||
| Payments of deferred merger costs | - | ( | ) | |||||
| Net cash provided by financing activities | ||||||||
| EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH | ( | ) | ( | ) | ||||
| (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH | ( | ) | ||||||
| CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH, beginning of period | ||||||||
| CASH AND CASH EQUIVALENTS, AND RESTRICTED CASH, end of period | $ | $ | ||||||
| SUPPLEMENTAL CASH FLOWS INFORMATION | ||||||||
| Income taxes paid | $ | $ | ||||||
| Interest paid | $ | $ | ||||||
| SUPPLEMENTAL NON-CASH FLOWS INFORMATION | ||||||||
| Right-of-use assets in exchange for operating lease liabilities | $ | $ | ||||||
| Disposal of finance lease right-of -use asset | $ | $ | - | |||||
| Recognition of non-controlling interest from acquisition of subsidiaries | $ | $ | - | |||||
| Recognition of derivative liability from convertible notes’ conversion feature | $ | $ | - | |||||
| Issuance of ordinary shares upon conversion of convertible notes | $ | $ | - | |||||
The table below reconciles cash and cash equivalents, along with restricted cash, as reported on the statement of financial position to the total amounts presented in the statement of cash flows:
| September 30, | September 30, | |||||||
| 2025 | 2024 | |||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Total cash and cash equivalents, and restricted cash | $ | $ | ||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-5
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 — Nature of business and organization
GCL
Global Holdings Ltd (the “Company” or “PubCo”) was incorporated as a Cayman Islands exempted company limited
by shares on
GCL Global was incorporated and registered as an exempted Company with limited liability on September 8, 2023, under the laws of the Cayman Islands. GCL Global is a holding Company and has no substantive operations other than holding all of the outstanding equities of its directly and indirectly owned subsidiaries through various recapitalizations.
The
Company, through its subsidiaries in Singapore, Malaysia, Thailand, Hong Kong, China, Taiwan, Japan, Brazil, the United Kingdom, and
the United Arab Emirates, operates its business in
— Reorganization under GCL Global Pte. Ltd (“GCL Global SG”)
GCL Global SG was incorporated on July 26, 2021, under the laws of Singapore. GCL Global SG is a holding Company and has no substantive operations other than holding all of the outstanding equities of Epicsoft Asia, 4Divinity SG, 2Game, and Starlight.
On
June 30, 2023, GCL Global SG completed the acquisition of
On
July 18, 2023, GCL Global SG completed the acquisition of
— Reorganization under GCL Global
GCL BVI was incorporated on November 16, 2018, under the laws of British Virgin Island (“BVI”).
GCL BVI is a holding Company and has no substantive operations other than holding all of the outstanding equity of Epic MY after reorganization under GCL Global SG.
On
February 13, 2024, GCL BVI and GCL Global had completed a sequential two-step transaction involving (a) sale by GCL BVI of
all its equity interests in GCL Global SG to GCL Global in return for GCL Global shares being issued to the GCL Shareholders (defined
below), resulting in (i) GCL Global SG becoming a wholly-owned subsidiary of GCL Global; and (ii) GCL Shareholders holding
all issued and outstanding shares in GCL Global; and (b) sale by GCL BVI shareholders holding a total of
Before and after the Reorganizations, GCL Global, together with its subsidiaries (as indicated above), is effectively controlled by the major shareholders, and therefore the Reorganization is considered as a recapitalization of entities under common control in accordance with Accounting Standards Codification (“ASC”) 805-50-25. The consolidation of the Company and its subsidiaries have been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying unaudited condensed consolidated financial statements in accordance with ASC 805-50-45-5.
F-6
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
— Merger and reverse recapitalization
As described above and further discussed in Note 3, the Business Combination was consummated on February 13, 2025. As a result, RFAC and GCL Global, including its subsidiaries, became wholly-owned subsidiaries of the Company.
The Business Combination was accounted for as a “reverse recapitalization”. Under this method of accounting, RFAC was treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination was treated as the equivalent of GCL Global issuing shares for the net assets of RFAC, accompanied by a recapitalization. The net assets of RFAC are stated at historical costs. No goodwill or other intangible assets are recorded.
Upon closing of the Business Combination, PubCo and its subsidiaries are hereafter referred as the Company.
The accompanying unaudited condensed consolidated financial statements reflect the activities of the Company and each of the following subsidiaries as of September 30, 2025:
| Name | Background | Ownership | ||
| GCL Global Limited (“GCL Global”) | ● A Cayman Island company ● Incorporated on October 12, 2023 ● Holding company | |||
| RF Acquisition Corp (“RFAC”) | ● A Delaware, US Company ● Incorporated on January 11, 2021 ● Holding Company | |||
| Grand Centrex Limited (“GCL BVI”) | ● A BVI company ● Incorporated on November 16, 2018 ● Holding Company | |||
| GCL Global Pte. Ltd (“GCL Global SG”) | ● A Singapore company ● Incorporated on July 26, 2021 ● Holding Company | |||
| Titan Digital Media Pte. Ltd. (“Titan Digital”) (1) | ● A Singapore company ● Incorporated on January 08, 2018 ● An advertising Company that provides video production, and advertising in social media platform. | |||
| Epicsoft Asia Pte. Ltd (“Epicsoft Asia”) | ● A Singapore company ● Incorporated on September 23, 2014 ● A gaming Company that engage in operation of distribution of console games software, and console game code. | |||
| Epicsoft (Hong Kong) Limited (“Epic HK”) | ● A Hong Kong company ● Incorporated on April 15, 2005 ● A gaming Company that engage in operation of distribution of console games software, and console game code. | |||
| 4Divinity Pte. Ltd. (“4Divinity SG”) | ● A Singapore company ● Incorporated on September 30, 2022 ● Publishing of game software | |||
| 4Divinity UK Ltd. (“4Divinity UK”) | ● A United Kingdom company ● Incorporated on December 4, 2024 ● Publishing of game software | |||
| 4Divinity Japan Ltd. (“4Divinity JP”) (3) | ● A Japanese company ● Incorporated on April 1, 2025 ● Publishing of game software |
F-7
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| Epicsoft Malaysia Sdn. Bhd. (“Epic MY”) | ● A Malaysian company ● Incorporated on June 26, 2019 ● Distribution of console game software and hardware. | |||
| 2Game Digital Limited (“2Game”) (2) | ● A Hong Kong company ● Incorporated on May 11, 2022 ● Distribution of console game code | |||
| Starry Jewelry Pte. Ltd. (“Starry”) | ● A Singapore company ● Incorporated on June 16, 2020 ● Retail in jewelry. | |||
| Martiangear Pte. Ltd. (“Martiangear”) (1) | ● A Singapore company ● Incorporated on September 24, 2020 ● Retail in gaming desk and chair | |||
| Hainan GCL Technology Co. Ltd. (“Hainan GCL”) | ● A PRC company ● Incorporated on July 26, 2024 ● Distribution of console game code | |||
| 2 Game Pro LTDA (“2Game Brazil) | ● A Brazil company ● Incorporated on August 25, 2023 ● Distribution of console game code | |||
| 2 Game Digital DMCC (“2Game Dubai”) | ● A U.A.E. company ● Incorporated on October 1, 2024 ● Distribution of console game code | |||
| Ban Leong Technologies Limited (“Ban Leong”) (4) | ● A Singapore company ● Incorporated on June 18, 1993 ● Distribution of computer peripherals and accessories | |||
| Digital Hub Pte. Ltd. (“Digital Hub”) (4) | ● A Singapore company ● Incorporated on March 20, 2003 ● Distribution of computer peripherals and accessories | |||
| AV Labs International Pte. Ltd. (“AV Labs”) (4) | ● A Singapore company ● Incorporated on June 23, 2006 ● Marketing and distribution of computer and hardware | |||
| Ban Leong Technologies Sdn. Bhd. (“Ban Leong MY”) (4) | ● A Malaysia company ● Incorporated on August 15, 2003 ● Distribution of computer peripherals and accessories | |||
| Ban Leong Chin Inter Co., Ltd. (“Ban Leong Thailand”) (4) | ● A Thailand company ● Incorporated on July 16, 2004 ● Distribution of computer peripherals and accessories | |||
| BLC (China) Limited (“BLC China”) (4) | ● A PRC company ● Incorporated on November 27, 2008 ● Distribution of corporate gift cards |
| (1) |
| (2) |
| (3) |
F-8
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| (4) | On April 30, 2025, Epicsoft Asia launched a voluntary conditional cash offer to acquire all of the issued and paid-up ordinary shares of Ban Leong Technologies Limited (“Ban Leong”), a company listed on the Singapore Exchange Securities Trading Limited (“SGX-ST”), at an offer price of S$
The
offer was declared unconditional on May 27, 2025, at which time Epicsoft Asia and parties acting in concert owned, controlled, or had
valid acceptances for approximately
Subsequent
to the offer becoming unconditional, Epicsoft Asia continued to receive acceptances, resulting in ownership of more than |
Note 2 — Summary of significant accounting policies
Basis of presentation
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for information pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). The unaudited condensed consolidated financial statements as of September 30, 2025 and for the six months ended September 30, 2025 and 2024 included all adjustments considered necessary to present fairly the financial position, results of operations and cash flow for such interim periods. Certain information and footnote disclosures normally included in the financial statements prepared in conformity with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The results of operations for the six months ended September 30, 2025 and 2024 are not necessarily indicative of results to be expected for the full year of 2026 and 2025, respectively. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements as of and for the years ended March 31, 2025 and 2024.
Principles of consolidation
The unaudited condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation.
A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors.
Use of estimates
The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include lease liabilities, right-of-use assets, determinations of the useful lives and valuation of long-lived assets, estimates of allowances for credit loss and doubtful accounts, reserve for excess and obsolete inventory, estimates of impairment of long-lived assets and goodwill, valuation allowances for deferred tax assets, other provisions and contingencies, contingent consideration for acquisition, fair value of derivative liability and estimated fair value used in business acquisitions. Actual results could differ from these estimates, and as such, differences may be material to the unaudited condensed consolidated financial statements.
F-9
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Foreign currency translation and transaction
Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the unaudited condensed consolidated statements of operation and comprehensive loss.
The reporting currency of the Company is United States Dollars (“US$”) and the accompanying financial statements have been expressed in US$. The Company’s subsidiaries in Singapore, Hong Kong, Malaysia, China, Brazil, the United Kingdom, Japan, Thailand, and Dubai conduct their businesses and maintain their books and records in US$, or local currencies of Singapore Dollars (“SGD”), Hong Kong Dollar (“HKD”), Malaysian Ringgit (“MYR”), Chinese Yuan (“RMB”), Brazil Real (“BRL”), United Arab Emirates Dirham (“AED”), Japanese Yen (“JPY”), and Thai Baht (“THB”) as their respective functional currencies.
In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, “Translation of Financial Statement”, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the period. The gains and losses resulting from translation of financial statements of foreign subsidiary are recorded as a separate component of accumulated other comprehensive loss within the statements of change in shareholders’ equity. Cash flows are also translated at average translation rates for the periods. Therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the unaudited condensed consolidated balance sheets. Exchange rate presented below were quoted by the Federal Reserve of the United States.
Translation
of foreign currencies into US$
| As
of and for the Six Months ended September 30, | As
of March 31, | |||||||||||
| 2025 | 2024 | 2025 | ||||||||||
| Period-end SGD: US$1 exchange rate | ||||||||||||
| Period-end HKD: US$1 exchange rate | ||||||||||||
| Period-end MYR: US$1 exchange rate | ||||||||||||
| Period-end RMB: US$1 exchange rate | ||||||||||||
| Period-end BRL: US$1 exchange rate | ||||||||||||
| Period-end AED: US$1 exchange rate | - | |||||||||||
| Period-end THB: US$1 exchange rate | - | - | ||||||||||
| Period-end JPY: US$1 exchange rate | - | - | ||||||||||
| Period-average SGD: US$1 exchange rate | ||||||||||||
| Period-average HKD: US$1 exchange rate | ||||||||||||
| Period-average MYR: US$1 exchange rate | ||||||||||||
| Period-average RMB: US$1 exchange rate | ||||||||||||
| Period-average BRL: US$1 exchange rate | ||||||||||||
| Period-average AED: US$1 exchange rate | - | |||||||||||
| Period-average THB: US$1 exchange rate | - | - | ||||||||||
| Period-average JPY: US$1 exchange rate | - | - | ||||||||||
F-10
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Business Combination
The Company accounts for its business combinations using the acquisition method of accounting in accordance with ASC 805 “Business Combinations.” The cost of an acquisition is measured as the aggregate of the acquisition date fair value of the assets transferred to the sellers and liabilities incurred by the Company and equity instruments issued. Transaction costs directly attributable to the acquisition are expensed as incurred. Identifiable assets and liabilities acquired or assumed are measured separately at their fair values as of the acquisition date, irrespective of the extent of any non-controlling interests. The excess of (i) the total costs of acquisition, fair value of the non-controlling interests and acquisition date fair value of any previously held equity interest in the acquiree over (ii) the fair value of the identifiable net assets of the acquiree is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiaries acquired, the difference is recognized directly in the unaudited condensed consolidated statements of operation and comprehensive income (loss). During the measurement period, which can be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed with the corresponding offset to goodwill. Upon the conclusion of the measurement period or final determination of the values of assets acquired or liabilities assumed, whichever comes first, any subsequent adjustments are recorded to the unaudited condensed consolidated statements of operation and comprehensive loss.
Non-controlling interests
For the Company’s non-wholly owned subsidiaries, a non-controlling interest is recognized to reflect portion of equity that is not attributable, directly or indirectly, to the Company. The cumulative results of operations attributable to non-controlling interests are also recorded as non-controlling interests in the Company’s unaudited condensed consolidated balance sheets and unaudited condensed consolidated statements of operation and comprehensive loss. Cash flows related to transactions with non-controlling interests are presented under financing activities in the unaudited condensed consolidated statements of cash flows.
Segment reporting
The
chief executive officer is identified as the Company’s chief operating decision-maker who reviews financial information presented
on a consolidated basis, accompanied by disaggregated information about revenues by different revenues streams for purposes of allocating
resources and evaluating financial performance. Based on qualitative and quantitative criteria established by Accounting Standards Codification
(“ASC”) 280, “Segment Reporting”, the Company considers itself to be operating within
Cash and cash equivalents, and restricted cash
Cash is carried at cost and represents cash on hand. Cash equivalents consist of time deposits placed with banks or other financial institutions and all highly liquid investments with an original maturity of three months or less. In addition, cash equivalents also consist of funds received from customers, which were held at the third-party platform’s account, and which are unrestricted and immediately available for withdrawal and use.
Restricted
cash consists of fixed deposits being held as collateral to secure the banking facilities. As of September 30, 2025 and March 31,
2025, the Company had deposit amounted to $
Accounts receivable, net
Accounts
receivable are recognized and carried at the original invoiced amount less an allowance for credit losses and do not bear interest. Customers
who owed accounts receivables, are granted credit terms based on their credit metrics. The Company measured the credit loss against its
accounts receivable and records the allowance for credit losses as an offset to accounts receivable, and the estimated credit losses
charged to the allowance is classified as “general and administrative” in the unaudited condensed consolidated statements
of operation and comprehensive loss. The Company assesses collectability by reviewing accounts receivable on a collective basis where
similar characteristics exist, primarily based on similar business line, service or product offerings and on an individual basis when
the Company identifies specific customers with known disputes or collectability issues. In determining the amount of the allowance for
credit losses, the Company considers historical collectability based on past due status, the age of the accounts receivable balances,
credit quality of the Company’s customers based on ongoing credit evaluations, current economic conditions, reasonable and supportable
forecast of future economic conditions and other factors that may affect the Company’s ability to collect from customers. As of
September 30, 2025 and March 31, 2025, the Company provided allowance for credit loss of $
F-11
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Inventories, net
Inventories
are stated at the lower of cost or net realizable value. Weighted average method is the inventory valuation method applied to these inventories.
Inventories mainly include physical console game compact disc, gaming hardware, computer peripherals, and accessories which are purchased
from the Company’s suppliers as merchandized goods. Inventories are reviewed for potential write-down for estimated obsolescence
or unmarketable inventories which equals the difference between the costs of inventories and the estimated net realizable value based
upon forecasts for future demand and market conditions. When inventories are written down to net realizable value, it is not marked up
subsequently based on changes in underlying facts and circumstances. For the six months ended September 30, 2025 and 2024, $
Other receivables and other current assets, net
Other
receivables primarily include receivables from the marketing expense related to promoting console games that the Company paid on behalf
of vendors, and refundable deposit such as rental deposit. The Company measures credit loss against its other receivables using the current
expected credit loss model under ASC 326. As of September 30, 2025 and March 31, 2025, the Company provided allowance for credit
loss of $
Prepayments, net
Prepayments
are mainly cash deposited or advanced to suppliers for future inventory purchases. These amounts are refundable if the purchases are
not completed and bear no interest. For any prepayments determined by management that such advances will not be in receipts of inventories,
services, or refundable, the Company will recognize an allowance account to reserve such balances. Management regularly reviews the aging
of such balances and changes in payment and realization trends and records allowances when management believes collection or realization
of amounts due are at risk. Delinquent account balances are written-off against allowance after management has determined that the likelihood
of completion or collection is not probable. As of September 30, 2025 and March 31, 2025, the Company provided allowance related
to prepayment of $
Property and equipment, net
Property
and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated
useful lives of the assets with no residual value.
| Expected useful lives | ||
| Office equipment | ||
| Furniture & fitting | ||
| Office and warehouse renovation | Shorter of the lease term or 3 years |
The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the unaudited condensed consolidated statements of operation and comprehensive loss. Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives.
Indefinite-lived intangible assets (Console Game Codes)
The Company’s indefinite-lived intangible assets consisted of the console game codes. The console game codes represent sequences of code providing users with access to specific video games. Acquired from vendors in batches, their primary purpose is for resale. Each console game code grants single access right to the user and is individually identified at cost upon purchase from its vendor.
F-12
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Each console game code is defined as an intangible asset, due to its lack of physical form. The useful life of an intangible asset should be considered indefinite if no legal, regulatory, contractual, competitive, economic, or other factors limit its useful life to the reporting entity in accordance with ASC 350-30-35-4. Consequently, each console game code is recorded at cost on the Company’s unaudited condensed consolidated balance sheet and is not subject to amortization. Instead, the cost of each game code will be transferred to cost of goods sold upon the sale of each individual code. Additionally, the remaining balance of the console game codes will continue to generate cash flows from sales activities until the last code is sold, with the total balance and the number of console game codes decreasing as individual codes are sold.
Impairment testing for indefinite-lived intangible assets is conducted on both an interim and annual basis to assess whether the carrying value of an individual asset exceeds its fair value. When the carrying value exceeds fair value, the carrying amount is reduced to the fair value. The assessment for impairment incorporates a review of external factors, including current market prices for console game codes, market demand trends, and market competition. Additionally, the evaluation considers the long-term viability of the console game codes, factoring in elements such as platform support and the lifespan of the gaming ecosystem in which the console game codes operate.
If the fair market value of an indefinite-lived intangible asset is determined to be lower than its carrying value at any point during the reporting period, an impairment loss equal to the difference is recognized in the unaudited condensed consolidated statements of operations and comprehensive loss. For the six months ended September 30, 2025 and 2024, no impairment loss was recorded against indefinite-lived intangible assets.
Definite-lived intangible assets
Definite-lived intangible assets consisted primarily of customer relationships, trademark and license. The estimated useful life and amortization methodology of intangible assets are determined based on the period in which they are expected to contribute directly to cash flows in accordance with ASC Topic 350 “Intangibles — Goodwill and Other”. Intangible assets that are determined to have a definite life are amortized over the life of the asset.
Definite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of any impairment loss for identifiable intangible assets is based on the amount by which the carrying amount of the assets exceeds its fair value determined by using a discounted cash flow model.
Long-term investments
The Company accounts for equity investments without a readily determinable fair value under ASC 321, Investments - Equity Securities. Such investments are initially measured at cost and subsequently adjusted for observable price changes and impairments, if applicable. Impairment assessments are conducted at each reporting date, and any impairment losses are recognized in the unaudited condensed consolidated statement of operations and comprehensive loss. Equity investments are evaluated to determine whether they meet the definition of in-substance common stock under ASC 323, Investments - Equity Method and Joint Ventures. Investments that fail to meet this definition are not accounted for under the equity method. Instead, they are classified and measured in accordance with ASC 321.
Investment in convertible note
The
Company holds an investment in convertible note with a fair value of $
F-13
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Goodwill
Goodwill represents the excess of the consideration paid of an acquisition over the fair value of the net identifiable assets of the acquired subsidiaries at the date of acquisition. Goodwill is not amortized and is tested for impairment at least annually, or more often when circumstances indicate impairment may have occurred. Goodwill is carried at cost less accumulated impairment losses. If impairment exists, goodwill is immediately written off to its fair value and the loss is recognized in the unaudited condensed consolidated statements of operations and comprehensive loss. Impairment losses on goodwill are not reversed.
The Company reviews the carrying value of intangible assets not subject to amortization, including goodwill, to determine whether impairment may exist annually or more frequently if events and circumstances indicate that it is more likely than not that an impairment has occurred. Management has determined that the Company has two reporting units within the entity at which goodwill is monitored for internal management purposes.
The table below summarizes the changes in the carrying amount of goodwill for each reporting unit:
| Console Game | Publishing | Media Advertising service | Others | Total | ||||||||||||||||
| Balance at March 31, 2024 | $ | $ | - | $ | - | $ | $ | |||||||||||||
| Impairments | - | - | - | - | - | |||||||||||||||
| Balance at March 31, 2025 | - | - | ||||||||||||||||||
| Acquired goodwill | - | - | - | |||||||||||||||||
| Impairments | - | - | - | - | - | |||||||||||||||
| Balance at September 30, 2025 (unaudited) | $ | $ | - | $ | - | $ | $ | |||||||||||||
An entity performs its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount. An entity should recognize a goodwill impairment charge for the amount by which the reporting unit’s carrying amount exceeds its fair value. If fair value exceeds the carrying amount, no impairment should be recorded. Any loss recognized should not exceed the total amount of goodwill allocated to that reporting unit.
An entity may still perform the optional qualitative assessment for a reporting unit to determine if it is more likely than not that goodwill is impaired. However, this ASU eliminates the requirement to perform a qualitative assessment for any reporting unit with zero or negative carrying amount.
For the six months ended September 30, 2025 and 2024, management evaluated impairment of goodwill by performing qualitative assessment on its reporting units and determined that it is not more 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 30, 2025 and 2024.
Impairment for long-lived assets
In accordance with ASC 360-10, long-lived assets, including property and equipment with finite lives, are reviewed for impairment loss whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognizes an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the assets. If an impairment loss is identified, the Company will reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach, or, when available and appropriate, comparable market values. As of September 30, 2025 and March 31, 2025, no impairment of long-lived assets was recognized.
F-14
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Derivative asset
In
connection with the share sale and purchase Agreement (“2Game SPA”) executed on March 19, 2025 between the Company and 2Game’s
minority shareholders for the acquisition of an additional
Contingent consideration for acquisitions
In connection with the business combination set forth in Note 4, the Company recognized contingent consideration for acquisition upon completion of the business combination in accordance with ASC 805-10-55-28. The Company 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”, the Company determined that the contingent consideration for acquisition should be classified as a liability as it is not considered indexed to the Company’s stock. As a result, the contingent consideration for acquisition shall be measured initially, and subsequently at fair value on each reporting date. The Company will 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 operations and comprehensive loss.
Contingent consideration for acquisition was valued at the time of acquisitions and each of the financial statement date, using unobservable inputs and discounted cash flow methodology. The determination of the fair value is based on discounted cash flows, and the key assumptions include the probability of meeting each performance target and the discount factor.
Convertible notes and derivative liabilities
The Company accounts for convertible notes in accordance with ASC 470, Debt, and ASC 815, Derivatives and Hedging. Convertible notes that contain embedded features—such as conversion rights, bonus shares, top-up shares, or other contingent settlement provisions—are evaluated to determine whether the features require bifurcation and separate accounting. If the embedded features do not meet the criteria for separate accounting but result in the instrument being accounted for as a hybrid financial instrument, the Company applies the fair value option and measures the entire convertible note at fair value, with changes in fair value recognized as a gain or loss in the unaudited condensed consolidated statements of operations and comprehensive loss until conversion.
Embedded features that are not clearly and closely related to the host instrument and do not qualify for equity classification are accounted for as derivative liabilities. These derivative liabilities are measured at fair value upon initial recognition and remeasured at each reporting date, with changes in fair value recognized in the unaudited condensed consolidated statements of operations and comprehensive loss until the instruments are settled.
Warrants
The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.
F-15
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance. Upon further review of the warrant agreements, the Company concluded that its warrants qualify for equity accounting treatment.
Upon
completion of the Business Combination, all of RFAC’s public and private placement warrants that were then outstanding were replaced
by the Company’s public and private placement warrants. The Company treated such warrants replacement as a warrant modification
and recognized incremental fair value of $
Revenue recognition
The Company follows the revenue accounting requirements of Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“Accounting Standards Codification (“ASC”) 606”). The core principle underlying the revenue recognition of this ASU allows the Company to recognize revenue that represents the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This requires the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer.
To achieve that core principle, the Company applies five-step model to recognize revenue from customer contracts. The five-step model requires the Company to (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation.
The Company recognizes a contract with a customer when the contract is committed in writing, the rights of the parties, including payment terms, are identified, the contract has commercial substance and collectability is probable.
Revenue recognition policies for each type of revenue stream are as follows:
| (1) | Revenue from sales of console game, gaming hardware, computer accessories and other multimedia products including data storage devices. |
The Company generates revenue from distributing gaming content that are compatible with major gaming consoles such as Sony PlayStation, Microsoft Xbox, and personal computers (“PC”) to retailers. In addition, the Company sells gaming hardware and accessories, primarily consisting of computer peripherals, multimedia products such as data storage devices, and other gaming-related hardware.
The Company recognized the revenue from sales of console game, gaming hardware, and accessories at a point in time when control of the product is passed to the retailers, generally after the retailers pick up the products or the Company delivers the products to the retailers’ appointed forwarding agent, which is the point in time that the retailers are able to direct the use of and obtain substantially all of the economic benefit of the goods. The transfer of control typically occurs at a point in time based on when the retailers have the obligation to pay for the goods, and physical possession of, legal title to, and the risks and rewards of ownership of the goods has been transferred, and the retailers have accepted the goods. Revenue is recognized net of estimates of variable consideration, including product returns, and customer discounts. Historically, the product return was immaterial.
Certain customers have the right to return products, primarily computer accessories and other multimedia products, including data storage devices, within 180 days of sale. Customer remedies may include the exchange of returned products. As a result, the Company estimates and records right-of-return assets and related refund liabilities as a reduction of revenue, when necessary. The Company uses its accumulated historical experience to estimate expected product returns at a portfolio level using the expected value method. As of the September 30, 2025 and March 31, 2025, the estimate expected product returns were immaterial.
F-16
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The Company determined that the shipping and handling activities are performed before the customer obtains control of the good. The Company elects to account for shipping and handling as activities to fulfill the promise to transfer the good, and accrue the related shipping cost.
Cost of revenue from sales of console game, gaming hardware, and accessories consist of cost of purchase of console game compact discs, gaming hardware and accessories, and multimedia products from vendors.
| (2) | Revenue from sales of console game code |
The Company derives its revenue from the sale of console game codes through the following settlement arrangement: (1) fixed price settlement with sales price being predetermined in the contract, and (2) variable price settlement with sales price being variable and to be settled based on retailer’s monthly sales.
The Company recognized the revenue from sales of console game code at a point in time when control of the goods is passed to retailers or end users, generally after the console game code was E-delivered to the retailers or end users, which is the point in time that the customers are able to direct the use of, and obtain substantially all of the economic benefit of, the goods. The transfer of control typically occurs at a point in time based on when the retailers or end users have an obligation to pay for the goods, and physical possession of, legal title to, and the risks and rewards of ownership of the goods has been transferred, and the retailers or end users has accepted the goods.
For settlement arrangement under the fixed price settlement, the transaction price is generally fixed and does not contain any variable considerations such as sales returns, discounts, or rebates, as the Company settles the sales with customers on a sales contract basis.
For settlement arrangement under the variable price settlement, the transaction price varies and is determined based on the retailer’s monthly sales. The pricing for individual game codes is calculated based on their wholesale price and the quantity sold. Additionally, a proportionate adjustment is made based on the total sales of each specific game code. As a result, the consideration received from retailer can fluctuate, making it a variable component of the overall consideration.
The Company accounts for revenue from sales of console game code under both settlement arrangements as mentioned above on a gross basis as the Company is acting as a principal in these transactions and is responsible for fulfilling the promise to provide specified goods, of which the Company has control and has the ability to direct the use to obtain substantially all the benefits of the goods.
In making this determination, the Company assesses whether it is responsible to fulfill the performance obligation in these transactions, is subject to inventory risk, has latitude in establishing prices, or has met several but not all of these indicators in accordance with ASC 606-10-55-36 through 40. The Company determined that it is primarily responsible for fulfilling the promise to provide the specified good as the Company directly purchases the console game codes from the vendors prior to posting any sale to retailers or end users. Meanwhile, the Company maintained the console game codes electronically which demonstrates that Company has control over the goods and is subject to inventory risk. Furthermore, the Company has discretion in establishing the price of the goods, further demonstrating the Company’s ability to direct the use of the goods and obtain substantially all the benefits of the goods.
Cost of revenue from sales of console game code consist of cost of console game codes purchased from vendors.
| (3) | Revenue from game publishing |
The Company generates its revenue from game publishing by providing a non-exclusive license to reproduce, publicly display and perform, transmit, sell, license and otherwise distribute the PC games in object code form (“console game code”) to gaming platforms such as Sony’s PlayStation Network, Valve’s Steam, and Microsoft’s Xbox for distribution. In these sales arrangements, the gaming platforms are considered as the Company’s customers.
F-17
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The Company recognizes revenue from game publishing at the point in time when control of the console game code is transferred to the gaming platform, which specifically occurs when the console game code is activated. Since the transaction price for publishing varies and is determined based on a predetermined rate applied to the gaming platform’s monthly sales, the Company recognizes revenue based on the consideration expected to be received from the gaming platform.
The Company accounts for revenue from game publishing on a gross basis as the Company is acting as a principal who is primarily responsible for fulfilling the promise to publishing the game on the gaming platform.
Cost of revenue from game publishing consist of game development cost from developers.
| (4) | Video marketing campaign services |
The Company provides video marketing campaign services, which include video production, content alteration based on the customer’s specifications, and video publishing on designated influencers’ social media platforms. The Company identifies video marketing campaign services as a single performance obligation because the services in the contract cannot be distinct.
The customer cannot simultaneously receive and consume the benefits provided by the Company throughout the performance obligation process, and the customer does not have control on the video content as it is produced. Therefore, none of the criteria of ASC 606-10-25-27 is met, and the Company recognizes revenue from video marketing campaign services at a point in time when the customer takes control of the video. The transfer of control typically occurs when customers are able to direct the use of and obtain substantially all of the economic benefits of the video, which happens when the video production is completed and accepted by the customer.
Cost of revenue from video marketing campaign service consist of video production related cost such as labor and production supplies.
| (5) | Social media advertising |
The Company generates revenue from social media advertising by monetizing video content on social media platforms by allowing advertisement to be displayed within the Company’s video posting during the playback process.
Revenue from social media advertising is recognized by the Company when it fulfills its performance obligation at a point in time, which occurs when the Company grants the right to use of the license of the video content to the social media platform, and when the social media platform can derive substantial economic benefit from monetizing the video content. The revenue generated is contingent on a profit- sharing arrangement with the social media platform and is assessed based on multiple factors. These factors include viewer engagement, viewer location, the type of advertisements, the number of advertisements engaged with, and more. The transaction price will be entitled to be received by the Company upon monthly settlement with the social media platform. Consequently, the Company has determined that revenue from social media advertising is recognized at a point in time when it is probable that a significant reversal of the revenue recognized will not occur.
Cost of revenue from social media marketing service consist of video production related cost such as labor and production supplies.
The Company has elected to apply the practical expedient to expense costs as incurred for incremental costs to obtain a contract when the amortization period would have been one year or less. As of September 30, 2025 and March 31, 2025, the Company did not incur any incremental costs to obtain contract.
F-18
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As of September 30, 2025 and March 31, 2025, the Company did not have any contract assets.
The
Company recognized advance payments from its customer prior to revenue recognition as contract liability until the revenue recognition
performance obligations are met. As of September 30, 2025 and March 31, 2025, the contract liabilities amounted to $
Disaggregated information of revenues by products/services are as follows:
| For the Six Months Ended | ||||||||
| September 30,
2025 | September 30,
2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Console game | $ | $ | ||||||
| Gaming hardware, computer accessories and other multimedia products | - | |||||||
| Console game code | ||||||||
| Console game– subtotal | ||||||||
| Game publishing | ||||||||
| Video marketing campaign services | ||||||||
| Social media advertising services | ||||||||
| Media advertising services- subtotal | ||||||||
| Other revenue | ||||||||
| Total revenues | $ | $ | ||||||
Warranty
The Company generally provides limited warranties for its products sold. At the time a sale is recognized, the Company records estimated future warranty costs under ASC 460. Such estimated costs for warranties are estimated at time of delivery and these warranties are not service warranties separately sold by the Company. Generally, the estimated claim rates of warranty are based on actual warranty experience or the Company’s best estimate. As the historical claim rates of warranty were immaterial, the Company did not accrue warranty reserves as of September 30, 2025 and March 31, 2025.
Advertisement expense
Advertising
is mainly through online and offline promotion activities. Advertisement expenses amounted to $
Deferred merger costs
Deferred merger costs consist primarily of expenses paid to attorneys, underwriters, and others direct costs related to the merger. Should the merger prove to be unsuccessful, these deferred costs, as well as additional expenses to be incurred, will be charged to expenses.
Defined contribution plan
Full-time
employees of the Company are entitled to government-mandated defined contribution plan. The Company is required to accrue and pay for
these benefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in accordance with
the relevant government regulations, and make cash contributions to the government-mandated defined contribution plan. Total expenses
for the plans were $
F-19
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The related contribution plans include:
Singapore subsidiaries
| — | Central Provident Fund (“CPF”) — |
| — | Skill Development Levy (“SDL”) — up to |
Malaysian subsidiary
| — | Social Security Organization (“SOSCO”) — |
| — | Employees Provident Fund (“EPF”) — |
| — | Employment Insurance System (“EIS”) — |
Hong Kong subsidiaries
| — | Mandatory Provident Fund (“MPF”) — |
Brazil subsidiary
| — | Employees’ Severance Indemnity Fund (“FGTS”) — |
| — | Social Security Contribution (“INSS”) — up to |
United Kingdom subsidiary
| — | National Insurance Contribution (“NIC”) — up to |
| — | Workplace Pension — minimum |
Dubai subsidiary
| — | General Pension and Social Security Authority (“GPSSA”) — |
People of republic of China (“PRC”) subsidiary
| — | Social Security and Housing Provident Fund Contributions — Employers are required to contribute to five statutory social insurance programs (pension, medical, unemployment, maternity, and work-related injury) and the housing provident fund. The total employer contribution rate typically ranges from approximately |
F-20
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Thailand subsidiary
| — | Social Security and Statutory Employer Contributions — Under Thai law, employers are required to make statutory contributions on behalf of employees to the national Social Security Fund at a rate of |
Japan subsidiary
| — | Social Security and Statutory Employer Contributions — Employers are required to make statutory contributions on behalf of employees to various social insurance programs, including employees’ pension insurance, health insurance (including nursing care insurance), employment insurance, and workers’ accident compensation insurance. Total employer contributions generally range from approximately |
Goods and Services Taxes (“GST”) and Value Added Taxes (“VAT”)
Revenue
represents the invoiced value of service, net of applicable GST or VAT. The GST is chargeable on gross sales price. In Singapore, GST
rate is
Income taxes
The Company accounts for income taxes in accordance with ASC 740, Income tax. The charge for taxation is based on the results for the fiscal year and adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date
Deferred tax is calculated using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the unaudited condensed consolidated financial statements and the corresponding tax basis. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is more likely than not that taxable income will be utilized with prior net operating loss carried forwards using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be utilized. Current income taxes are provided for in accordance with the laws of the relevant tax 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 were incurred related to underpayment of income tax for the six months ended September 30, 2025 and 2024.
The Company recognizes interest and penalties related to unrecognized tax benefits, if any, on the other expense line in the accompanying unaudited condensed consolidated statement of operation and comprehensive loss. Accrued interest and penalties are included on the other payables and accrued liabilities line in the unaudited condensed consolidated balance sheets.
F-21
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The Company conducts a significant portion of its business activities in Singapore, Malaysia, Hong Kong, Thailand and the People’s Republic of China (“PRC”) and is subject to taxation in these jurisdictions. As a result of these activities, the Company’s subsidiaries file separate tax returns that are subject to examination by the respective foreign tax authorities. As of September 30, 2025, the tax returns for the Company’s Singapore entities for the years 2022 through 2025 remain open for statutory examination by the Singapore tax authorities. Similarly, the tax returns for the Company’s Hong Kong entities for the years 2020 through 2025 remain open for examination by the Hong Kong tax authorities. The tax returns for the Company’s Malaysia entity for the years 2021 through 2025 also remain open for examination by the Malaysian tax authorities. In addition, the tax return for the Company’s PRC entity for the year 2024 remains open for statutory examination by the PRC tax authorities. The tax returns for the Company’s Thailand entity for the years 2021 through 2025 remain open for examination by the Thai tax authorities.
Debt discount and issuance Costs
Debt discounts arise when the proceeds received from issuing debt, including convertible notes, are less than the principal amount due to embedded features, beneficial conversion features, or other allocated components. Debt issuance costs consist primarily of legal fees, professional fees, and other direct costs incurred in connection with the issuance of debt instruments. For debt instruments that are not measured at fair value under the fair value option, both the debt discount and debt issuance costs are recorded as direct reductions of the carrying amount of the related debt and are amortized to interest expense over the contractual term of the debt using the effective interest method.
When certain embedded features are required to be bifurcated and accounted for separately as derivative liabilities or other components, the related debt discount and debt issuance costs are allocated between the debt host and the bifurcated components using an approach that is consistent with the allocation of proceeds between the freestanding financial instruments. The portion allocated to the debt host is amortized to interest expense over the term of the debt, while the portion allocated to bifurcated derivative components is expensed as incurred. If the Company has elected to account for the convertible notes at fair value under the fair value option, all related debt issuance costs are expensed immediately in the period incurred.
The Company incurred debt issuance costs in connection with the issuance of bank loan (See Note 14), and convertible notes (See Note 16).
Share-based compensation
The Company accounts for share-based compensation awards to non-employees in accordance with FASB ASC Topic 718 amended by ASU 2018-07. Under FASB ASC Topic 718, stock compensation granted to non-employees has been determined as the fair value of the consideration received or the fair value of equity instrument issued, whichever is more reliably measured and is recognized as an expense as the goods or services are received. For awards settled in ordinary shares, fair value is determined based on the quoted market price of the Company’s ordinary shares on the measurement date. Compensation cost is recognized on a straight-line basis over the requisite service period.
Comprehensive loss
Comprehensive loss consists of two components, namely net loss and other comprehensive loss. Other comprehensive loss refers to revenue, expenses, gains and losses that under U.S. GAAP are recorded as an element of shareholders’ equity but are excluded from net loss. Other comprehensive loss includes items such as results of foreign currency translation adjustment.
Loss per share
The
Company computes earnings or loss per share (“EPS”) in accordance with ASC 260, “Earnings per Share”. ASC 260
requires companies to present basic and diluted EPS. Basic EPS is measured as net income attributable to the Company divided by the weighted
average ordinary share outstanding for the period. Diluted EPS presents the diluted effect on a per share basis of the potential ordinary
shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented,
or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or
decrease loss per share) are excluded from the calculation of diluted EPS. For the six months ended September 30, 2025 and 2024, the
Company had the
F-22
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Fair value measurements
Fair value is defined as the price that would be received for an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. Valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs. When determining the fair value measurements for assets and liabilities, we consider the principal or most advantageous market in which it would transact and consider assumptions that market participants would use when pricing the asset or liability. The following summarizes the three levels of inputs required to measure fair value, of which the first two are considered observable and the third is considered unobservable:
Level 1 — Unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2 — Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The fair value for certain assets and liabilities such as cash and restricted cash, accounts receivable, net, amount due from related parties, other receivables and other current assets, prepayments, banking facilities, accounts payable, contract liabilities, amount due to related parties, other payables and accrued liabilities, and tax payables have been determined to approximate carrying amounts due to the short maturities of these instruments. The Company believes that its long-term bank facilities approximate the fair value based on current yields for debt instruments with similar terms.
The following table sets forth by level within the fair value hierarchy our financial asset and liability that were accounted for at fair value on a recurring basis As of September 30, 2025 and March 31, 2025:
| Carrying
Value at September 30, 2025 | Fair
Value Measurement at September 30, 2025 | |||||||||||||||
| (Unaudited) | Level 1 | Level 2 | Level 3 | |||||||||||||
| Derivative asset attributable to Buy-Back Feature embedded in 2Game SPA | $ | $ | - | $ | - | $ | ||||||||||
| Investment in convertible notes | $ | $ | - | $ | - | $ | ||||||||||
| Contingent consideration for acquisition of 2Game | $ | $ | - | $ | - | $ | ||||||||||
| Derivative liabilities (Top-Up Shares) | $ | $ | - | $ | - | $ | ||||||||||
| Derivative liabilities (conversion feature) | $ | $ | - | $ | - | $ | ||||||||||
| Carrying
Value at March 31, | Fair
Value Measurement at March 31, 2025 | |||||||||||||||
| 2025 | Level 1 | Level 2 | Level 3 | |||||||||||||
| Derivative asset attributable to Buy-Back Feature embedded in 2Game SPA | $ | $ | - | $ | - | $ | ||||||||||
| Contingent consideration for acquisition of 2Game | $ | $ | - | $ | - | $ | ||||||||||
| Derivative liabilities (Top-Up Shares) | $ | $ | - | $ | - | $ | ||||||||||
F-23
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following is a reconciliation of the beginning and ending balance of the financial assets and liability measured at fair value on a recurring basis for the six months ended September 30, 2025 and years ended March 31, 2025:
| Derivative Asset | ||||
| Initial fair value of derivative assets attributable to Buy-Back Feature embedded in 2Game SPA | $ | |||
| Change in fair value of derivative asset | - | |||
| Ending balance As of March 31, 2025 | ||||
| Change in fair value of derivative asset | ( | ) | ||
| Exchange rate difference | ||||
| Ending balance As of September 30, 2025 (unaudited) | $ | |||
| Investment in convertible notes | ||||
| Acquired upon acquisition of Ban Leong | $ | |||
| Change in fair value of investment in convertible note | ( | ) | ||
| Exchange rate difference | ( | ) | ||
| Ending balance as of September 30, 2025 (unaudited) | $ | |||
| Contingent consideration for acquisition | ||||
| Ending balance as of March 31, 2024 | ||||
| Payments of cash and share consideration | ( | ) | ||
| Change in fair value of contingent consideration for acquisition | ||||
| Exchange rate difference | ( | ) | ||
| Ending balance as of March 31, 2025 | ||||
| Change in fair value of contingent consideration for acquisition | ( | ) | ||
| Exchange rate difference | ||||
| Ending balance as of September 30, 2025 (unaudited) | $ | |||
| Convertible notes | ||||
| Initial fair value of convertible notes | $ | |||
| Conversion of the convertible notes | ( | ) | ||
| Change in fair value of convertible notes upon conversion of the convertible notes | ( | ) | ||
| Fair value allocated to Top-Up Shares upon conversion of the convertible notes | ( | ) | ||
| Ending balance as of March 31, 2025 and September 30, 2025 (unaudited) | $ | - | ||
| Derivative liabilities (Top-Up Shares) | ||||
| Fair value allocated to Top-Up Shares upon conversion of the convertible notes | $ | |||
| Change in fair value of derivative liability | ||||
| Ending balance as of March 31, 2025 | ||||
| Change in fair value of derivative liability | ( | ) | ||
| Ending balance as of September 30, 2025 (unaudited) | $ | |||
F-24
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| Derivative liabilities (Conversion feature) | ||||
| Fair value allocated to conversion feature | $ | |||
| Conversion | ( | ) | ||
| Change in fair value of derivative liability | ( | ) | ||
| Ending balance as of September 30, 2025 (unaudited) | $ | |||
Leases
The Company accounts for leases in accordance with ASU 2016-02, “Leases” (Topic 842).
If any of the following criteria are met, the Company classifies the lease as a finance lease:
| ● | The lease transfers ownership of the underlying asset to the lessee by the end of the lease term; |
| ● | The lease grants the lessee an option to purchase the underlying asset that the Company is reasonably certain to exercise; |
| ● | The lease term is for 75% or more of the remaining economic life of the underlying asset, unless the commencement date falls within the last 25% of the economic life of the underlying asset; |
| ● | The present value of the sum of the lease payments equals or exceeds 90% of the fair value of the underlying asset; or |
| ● | The underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. |
Leases that do not meet any of the above criteria are accounted for as operating leases.
The Company combines lease and non-lease components in its contracts under Topic 842, when permissible.
Finance and operating lease right-of-use (“ROU”) assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Since the implicit rate for the Company’s leases is not readily determinable, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in a similar economic environment and over a similar term.
Lease terms used to calculate the present value of lease payments generally do not include any options to extend, renew, or terminate the lease, as the Company does not have reasonable certainty at lease inception that these options will be exercised. The Company generally considers the economic life of its finance or operating lease ROU assets to be comparable to the useful life of similar owned assets. The Company has elected the short-term lease exception, therefore operating lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. Its leases generally do not provide a residual guarantee.
The finance or operating lease ROU asset also excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term for operating lease. Meanwhile, the Company recognizes the finance leases ROU assets and interest on an amortized cost basis. The amortization of finance ROU assets is recognized on straight-line basis as amortization expense, while the lease liability is increased to reflect interest on the liability and decreased to reflect the lease payments made during the period. Interest expense on the lease liability is determined each period during the lease term.
F-25
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The Company reviews the impairment of its ROU assets consistent with the approach applied for its other long-lived assets. The Company reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. The Company has elected to include the carrying amount of operating lease liabilities in any tested asset group and include the associated operating lease payments in the undiscounted future pre-tax cash flows. For the six months ended September 30, 2025 and 2024, the Company did not recognize impairment loss on its finance and operating lease ROU assets.
Related parties
The Company identifies related parties, accounts for and discloses related party transactions in accordance with ASC 850, “Related Party Disclosures” and other relevant ASC standards.
Corporations or individual parties are considered to be related if they have the ability, directly or indirectly, to control the Company or exercise significant influence over the Company in making financial and operating decisions. Entities are also considered to be related if they are subject to common control or common significant influence.
Transactions involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive, free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations can be substantiated.
Commitments and contingencies
The Company adheres to ASC 450, “Contingencies” for the recognition, measurement, and disclosure of commitments and contingencies. Contingencies, representing uncertainties related to potential liabilities or gains stemming from past events, are evaluated based on available information, legal counsel advice, and historical experience. The Company records accruals for losses when it is probable and reasonably estimable.
Recent accounting pronouncements
The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies.
New Accounting Standards That Have Been Adopted:
On November 27, 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2023-07, Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 amends ASC 280, Segment Reporting(“ASC 280”) to expand segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the Company’s chief operating decision maker (“CODM”), the amount and description of other segment items, the title and position of the CODM, and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. ASU 2023-07 further permits disclosure of more than one measure of segment profit or loss and extends the full disclosure requirements of ASC 280 to companies with single reportable segments. The Company adopted ASU 2023-07 on April 1, 2024, and retrospectively apply to all periods presented in the unaudited condensed consolidated financial statement. The adoption of this ASU did not have a material impact on the unaudited condensed consolidated financial statements and related disclosures.
F-26
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
New Accounting Standards That Have Not Yet Been Adopted:
In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements — codification amendments in response to SEC’s disclosure Update and Simplification initiative which amend the disclosure or presentation requirements of codification subtopic 230-10 Statement of Cash Flows—Overall, 250-10 Accounting Changes and Error Corrections— Overall, 260-10 Earnings Per Share— Overall, 270-10 Interim Reporting— Overall, 440-10 Commitments—Overall, 470-10 Debt—Overall, 505-10 Equity—Overall, 815-10 Derivatives and Hedging—Overall, 860-30 Transfers and Servicing—Secured Borrowing and Collateral, 932-235 Extractive Activities— Oil and Gas—Notes to Financial Statements, 946-20 Financial Services— Investment Companies— Investment Company Activities, and 974-10 Real Estate—Real Estate Investment Trusts—Overall. The amendments represent changes to clarify or improve disclosure and presentation requirements of above subtopics. Many of the amendments allow users to more easily compare entities subject to the SEC’s existing disclosures with those entities that were not previously subject to the SEC’s requirements. Also, the amendments align the requirements in the Codification with the SEC’s regulations. For entities subject to existing SEC disclosure requirements or those that must provide financial statements to the SEC for securities purposes without contractual transfer restrictions, the effective date aligns with the date when the SEC removes the related disclosure from Regulation S-X or Regulation S-K. Early adoption is not allowed. For all other entities, the amendments will be effective two years later from the date of the SEC’s removal. The Company is currently evaluating the impact of the update on the Company’s unaudited condensed consolidated financial statements and related disclosures.
In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The ASU requires the annual financial statements to include consistent categories and greater disaggregation of information in the rate reconciliation, and income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for public business entities for annual periods beginning after December 15, 2024, and interim periods within those annual periods; early adoption is permitted. Adoption is either with a prospective method or a fully retrospective method of transition. The Company is currently evaluating the impact of the update on the Company’s unaudited condensed consolidated financial statements and related disclosures.
In November 2024, the FASB issued ASU 2024-04, Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments, which clarifies the accounting guidance for induced conversions of convertible debt. The amendments clarify that, to account for a settlement as an induced conversion, an inducement offer must provide at least the consideration (in form and amount) issuable under the original conversion terms, even for instruments with cash conversion features. The amendments also clarify that the guidance applies to instruments not currently convertible, provided they had a substantive conversion feature at issuance and at the time of the inducement offer. The amendments aim to improve the relevance and consistency in application of the induced conversion guidance and are effective for annual periods beginning after December 15, 2025, with early adoption permitted for entities that have adopted ASU 2020-06. The Company is currently evaluating the impact of the update on the Company’s unaudited condensed consolidated financial statements and related disclosures.
On November 4, 2024, the FASB issued ASU No. 2024-03, Expense Disaggregation Disclosures (“ASU 2024-03”). ASU 2024-03 amends ASC 220, Comprehensive Income to expand income statement expense disclosures and require disclosure in the notes to the financial statements of specified information about certain costs and expenses. ASU 2024-03 is required to be adopted for fiscal years commencing after December 15, 2026, with early adoption permitted. The Company is currently evaluating the impact of adopting the standard on the unaudited condensed consolidated financial statements.
Except as mentioned above, the Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed consolidated balance sheets, statements of operations and comprehensive income (loss) and statements of cash flow.
F-27
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 3 — Reverse recapitalization
On February 13, 2025 (the “Closing Date”), the Company consummated the transactions contemplated by that certain agreement and plan of merger dated October 18, 2023 (as amended on December 1, 2023, December 15, 2023, January 31, 2024, and September 30, 2024, the “Merger Agreement”), entered by and among (i) the Company, (ii) RFAC, (iii) GCL BVI, (iv) GCL Global, and, (v) Sponsor. Pursuant to the Merger Agreement, the Company formed two wholly-owned subsidiaries for the purpose of participating in the contemplated transactions: (i) a Cayman Islands exempted company limited by shares (“Merger Sub 1”), and (ii) a Delaware corporation (“Merger Sub 2”). Capitalized terms used but not otherwise defined herein shall have the meanings set forth in the Merger Agreement. On the Closing Date, pursuant to the Merger Agreement: (a) Merger Sub 1 merged with and into GCL Global, with GCL Global continuing as the surviving entity in the merger (the “Initial Merger”), as a result of which: (i) GCL Global became a wholly-owned subsidiary of the Company and (ii) each issued and outstanding security of GCL Global immediately prior to the consummation of the Merger was no longer outstanding and automatically cancelled, in exchange for the right of the holder thereof to receive such number of newly issued shares of the Company specified below; and (b) Merger Sub 2 merged with and into RFAC, with RFAC surviving such merger as a wholly owned subsidiary of the Company (the “SPAC Merger” and together with the Initial Merger, the “Mergers”, and together the other transactions and ancillary agreements contemplated by the Merger Agreement and the Ancillary Agreements (as defined below), the “Business Combination” or “Transactions”). As a result of the Transactions, RFAC and GCL Global each became a wholly-owned subsidiary of the Company.
Upon the consummation of the Business Combination, the following transaction (“collectively, the “Transaction”) were completed, based on the Company’s capitalization as of February 13, 2025:
| ● | Each ordinary share of GCL Global issued and outstanding immediately prior to the Initial Merger Effective Time (other than any treasury shares or Dissenting Shares), was automatically cancelled and ceased to exist in exchange for the right to receive, such number of newly issued ordinary shares of PubCo, par value $ |
| ● | Each share of RFAC common stock, including RFAC Class A Common Stock and RFAC Class B Common Stock, issued and outstanding immediately prior to the effective time of the Business Combination (other than any redeemed shares) was automatically cancelled and ceased to exist and, for each share of RFAC common stock, the Company issued to each RFAC shareholder (other than RFAC shareholders who exercised their redemption rights in connection with the Business Combination) |
| ● | Each RFAC warrant issued and outstanding immediately prior to effective time of the Business Combination converted into a Company warrant to purchase |
| ● | Every 10 RFAC Rights issued and outstanding immediately prior to the effective time of the Business Combination converted into |
| ● |
F-28
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following table presents the number of the Company’s ordinary shares issued and outstanding immediately following the Reverse Recapitalization:
| Ordinary Share | ||||
| RFAC’s common stock outstanding prior to Reverse Recapitalization | ||||
| Ordinary shares issued at the Closing as an incentive to certain investors designated by RFAC Sponsor in connection with Transaction Financing | ||||
| Conversion of GCL Global’s ordinary shares | ||||
| Minus ordinary share placed in escrow: | ||||
| Bonus Shares in connection with convertible note (See Note 16) | ( | ) | ||
| Issuance of ordinary shares in connection with long-term investment in Nekcom Inc. (“Nekcom”) (See Note 6) | ( | ) | ||
| Rounding | ( | ) | ||
| Total ordinary share issued and outstanding | ||||
GCL Global was determined to be the accounting acquirer given GGL Global effectively controlled the combined entity after the SPAC Transaction. The transaction is not a business combination because RFAC was not a business. The transaction is accounted for as a reverse recapitalization, which is equivalent to the issuance of shares by GCL Global for the net monetary assets of RFAC, accompanied by a recapitalization. GCL Global is determined as the accounting acquirer and the historical financial statements of GCL Global became the Company’s historical financial statements, with retrospective adjustments to give effect of the reverse recapitalization. The net assets of RFAC were recognized as of the closing date at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Merger are those of GCL Global and GCL Global’s operations are the only ongoing operations of GCL.
In
connection with the Reverse Recapitalization, the Company raised approximately $
The following table reconciles the elements of the Reverse Recapitalization to the consolidated statements of cash flows, changes in shareholders’ equity, and net deficit of RFAC as of the closing date.
| At
Closing date February 13, 2025 | ||||
| Funds held in RFAC’s trust account | $ | |||
| Funds held in RFAC’s operating cash account | ||||
| Proceeds from the Reverse Recapitalization | ||||
| Less: non-cash net deficit assumed from RFAC | ( | ) | ||
| Net deficit from issuance of ordinary shares upon the Reverse Recapitalization | $ | ( | ) | |
Note 4 — Business Combination
— Acquisition of 2Game
On
July 31, 2022, GCL Global SG entered into a share purchase agreement (the “SPA”) with three unrelated parties to acquire
a
| ● | Tranche 1 — A cash consideration of $ |
| ● | Tranche 2 — A consideration of $ |
| ● | Tranche 3 — A consideration of $ |
F-29
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| ● | Tranche 4 — A consideration of $ |
| ● | Tranche 5 — A consideration of $ |
Under Tranche 3 to 5, in the event that either one or both the gross revenue and NPAT are below the gross revenue target and NPAT target, the consideration shares shall be reduced on a pro rata basis.
Additionally, in the event of 2Game’s net profit after tax (“NPAT”) is in excess of the NPAT target set out in financial performance milestones, the above mentioned third parties shall be entitled to the additional cash and shares consideration (“Outperformance Consideration”).
On October 17, 2023, parties, through a contract addendum, changed the consideration payment schedule to the following:
| ● | Tranche 2 — A consideration of $ |
| ● | Tranche 4 — A consideration of $ |
| ● | Tranche 5 — A consideration of $ |
On December 29, 2024, parties, through another addendum, changed the consideration payment schedule.
| ● | Tranche 2 — A consideration of $ |
On
August 12, 2025, parties entered into an addendum (“Final Addendum”) to the existing share purchase agreements to provide
a final and conclusive settlement (“Final Settlement”) of the share-based consideration previously issued to the sellers
in connection with the 2Game acquisition. The addendum establishes a limited price-protection mechanism, subject to a cap of $
As of the date of issuance of these unaudited condensed consolidated financial statements, the Company has achieved or partially achieved the milestones associated with Tranches 1 through 5 and Final Settlement. The corresponding cash or share consideration for Tranches 1 through 5 and final settlement of the share-based consideration has been fully settled.
The
Company’s acquisition of 2Game was accounted for as a business combination in accordance with ASC 805. The Company has allocated
the purchase price of 2Game based upon the fair value of the identifiable assets acquired and liabilities assumed on the acquisition
date. The Company estimated the fair values of the assets acquired and liabilities assumed at the acquisition date in accordance with
the business combination standard issued by the FASB using the fair value approach. Management of the Company is responsible for determining
the fair value of assets acquired, liabilities assumed, and intangible assets identified as of the acquisition date. Acquisition-related
costs incurred for the acquisitions amounted to $
F-30
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The
Company concluded that the acquisition of 2Game was not significant based on assessments using the income test, asset test, and investment
test pursuant to S-X Rule 3-05. Pursuant to ASC 805-10-50-2 (h). the unaudited pro forma information of the Company for the year ended
March 31, 2023 set forth below gives effect to the business combination as if it had occurred on April 1, 2022 and combines the results
of operations of the Company since then. The unaudited pro forma information is presented after applying the Company’s accounting
policies and elimination intra-entity transactions, as applicable.
| For the Year ended March 31, | For the Year ended March 31, | |||||||
| 2023 | 2022 | |||||||
| Unaudited pro forma revenue | $ | $ | ||||||
| Unaudited pro forma net income | $ | $ | ||||||
| Cash | $ | |||
| * Contingent consideration for acquisition | ||||
| Total consideration at fair value | $ |
| * |
The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date, which represents the net purchase price allocation at the date of the acquisition of 2Game:
| Fair
value as of acquisition date | ||||
| Total consideration | $ | |||
| Non-controlling interest | ||||
| Less: net assets of 2Game: | ||||
| Cash | ||||
| Prepayments | ||||
| Intangible assets | ||||
| Total assets | ||||
| Accounts payable | ( | ) | ||
| Deferred tax liability | ( | ) | ||
| Total liabilities | ( | ) | ||
| Total net assets of 2Game | ||||
| Goodwill | $ | |||
F-31
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The
purchase price was allocated to the identifiable intangible assets acquired and liabilities assumed based on their acquisition date estimated
fair values. The identifiable intangible assets principally included customer relationships, with estimated useful lives of
The
Company, with the assistance of a third-party appraiser, assessed the fair value of the
The fair value of the non-controlling interest in 2Game’s was measured based on significant inputs that are not observable in the market and thus represents a Level 3 measurement. Key assumption includes adjustments because of the lack of control that market participants would consider when estimating the fair value of the noncontrolling interest in 2Game.
The fair value of client relationships was estimated using a multi-period excess earnings method. To calculate fair value, the Company estimated the attribution rate and used cash flows discounted at a rate considered appropriate given the inherent risks associated with each client grouping.
The goodwill is not deductible for income tax purposes and is related primarily to the expected synergies from combining the operations into the Company’s console games business.
— Acquisition of Ban Leong
On
April 30, 2025, Epicsoft Asia made a voluntary conditional cash offer to acquire
The
acquisition became effective on May 27, 2025 (“Acquisition Date”), when Epicsoft Asia received valid acceptances representing
approximately
On
July 2, 2025, Epicsoft Asia announced the successful close of its voluntary unconditional cash offer, having received valid acceptances
for
Ban Leong is a leading Singapore-based distributor of IT hardware, gaming components, and smart technology, with operations across Singapore, Malaysia, and Thailand. Ban Leong serves as an authorized distributor for major brands such as Razer, NVIDIA, and Samsung. The acquisition aligns with the Company’s strategy to expand its bundled gaming product offerings and enhance its distribution network in Asia.
The Company’s acquisition of Ban Leong was accounted for as a business combination in accordance with ASC 805. The Company has allocated the purchase price of Ban Leong based upon the fair value of the identifiable assets acquired and liabilities assumed on the acquisition date. The Company estimated the fair values of the assets acquired and liabilities assumed at the acquisition date in accordance with the business combination standard issued by the FASB using the fair value approach. Management of the Company is responsible for determining the fair value of assets acquired, liabilities assumed, and intangible assets identified as of the acquisition date. Acquisition-related costs incurred for the acquisitions are not material and have been expensed as incurred in general and administrative expenses.
F-32
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The
Company concluded that the acquisition of Ban Leong was significant based on assessments using the income test, asset test, and investment
test pursuant to S-X Rule 3-05. Pursuant to ASC 805-10-50-2 (h). the unaudited pro forma information of the Company for the six months
ended September 30, 2025 and 2024 set forth below gives effect to the business combination as if it had occurred on April 1, 2024 and
combines the results of operations of the Company since then. The unaudited pro forma information is presented after applying the Company’s
accounting policies and elimination intra-entity transactions, as applicable.
| For the Six Months Ended September 30, |
For
the Six Months Ended September 30, |
|||||||
| 2025 | 2024 | |||||||
| Unaudited pro forma revenue | $ | $ | ||||||
| Unaudited pro forma net (loss) income | $ | ( |
) | $ | ||||
| Cash consideration | $ | |||||||
The following table summarizes the fair value of the identifiable assets acquired and liabilities assumed at the Acquisition Date, which represents the net purchase price allocation at the date of the acquisition of Ban Leong:
| Fair
value as of Acquisition Date | ||||
| Total consideration | $ | |||
| Non-controlling interest | ||||
| Less: net assets of 2Game: | ||||
| Cash | ||||
| Accounts receivable, net | ||||
| Inventories, net | ||||
| Other receivable and other current assets, net | ||||
| Investment in convertible notes | ||||
| Prepayments | ||||
| Property and equipment, net | ||||
| Operating leases right-of-use assets | ||||
| Intangible assets | ||||
| Deferred tax assets | ||||
| Total assets | ||||
| Bank Loans, current | ( | ) | ||
| Accounts payable | ( | ) | ||
| Operating lease liabilities | ( | ) | ||
| Other payables and accrued liabilities | ( | ) | ||
| Contract liabilities | ( | ) | ||
| Deferred tax liabilities | ( | ) | ||
| Tax payables | ( | ) | ||
| Total liabilities | ( | ) | ||
| Total net assets of Ban Leong | ||||
| Goodwill | $ | |||
F-33
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The
purchase price was allocated to the identifiable intangible assets acquired and liabilities assumed based on their acquisition date estimated
fair values. The identifiable intangible assets principally included customer relationships, with estimated useful lives of
The
Company, with the assistance of a third-party appraiser, assessed the fair value of the
Since Ban Leong was a publicly listed company on the Singapore Exchange on the Acquisition Date, the fair value of the noncontrolling interest was determined based on the observable offer price per share under the voluntary cash offer, which represents a quoted price in an orderly transaction. As the fair value measurement is based on observable market inputs, it is classified as a Level 1 fair value measurement under ASC 820.
The fair value of client relationships was estimated using a multi-period excess earnings method. To calculate fair value, the Company estimated the attribution rate and used cash flows discounted at a rate considered appropriate given the inherent risks associated with each client grouping.
The goodwill is not deductible for income tax purposes and is related primarily to the expected synergies from combining the operations into the Company’s business operation in console game.
Note 5 — Investment in convertible note
The
convertible note was issued by an unrelated privately held company and earned fixed interest at
By
electing the fair value option, the embedded conversion feature is not separately bifurcated or accounted for as a derivative. Instead,
the fair value of the instrument as a whole captures the economic effect the embedded features. As of September 30, 2025, the fair value
of investment in convertible note was $
Changes
in fair value are recognized in earnings in the period in which they occur. Changes in fair value amounted to $
The Company believes this accounting treatment best reflects the economic substance of the investment and aligns with the way the instrument is managed and evaluated internally.
The
aggregate principal amount of the convertible note was $
F-34
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 6 — Long-term investments
As of September 30, 2025 and March 31, 2025, long-term investments comprised of the following:
| September 30, | March 31, | |||||||
| 2025 | 2025 | |||||||
| Investment in Nekcom | $ | $ | ||||||
| Investment in Cloudshelf Limited | ||||||||
| Total | $ | $ | ||||||
Investment in Nekcom
On
November 20, 2024, the Company, Nekcom and certain significant shareholders of Nekcom entered into a Series B Preferred Stock Purchase
Agreement (the “Nekcom SPA”) pursuant to which the Company has agreed to purchase
In
connection with the Nekcom SPA,
On
May 15, 2025, parties amended the Nekcom SPA (the “First Amendment”) to provide that, among other things, the Company shall
have the right to instruct the escrow agent to return to the Company the full amount of the Nekcom Consideration Shares if either (i)
the Company has not recouped in full both the minimum guarantee (as defined in the Publishing Agreement) and its investments related
to SHOWA American Story (the “Licensed Game”) as specified in the First Amendment within 12 months of the commercial launch
of the Licensed Game; or (ii) the Licensed Game has not been commercially launched on or before December 31, 2026. In that case, the
Company shall be required to return to Nekcom
As
of September 30, 2025, the Company had remitted $
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, fixed returns,
and conditional participation rights 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 $
F-35
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Investment in Cloudshelf Limited (“Cloudshelf”)
On
November 8, 2022, the Company entered into a subscription and shareholders agreement with Cloudshelf, a private limited company incorporated
in England and Wales. Pursuant to the agreement, the Company subscribed for ordinary shares in Cloudshelf for a total consideration of
$
As the Company does not have significant influence over Cloudshelf, the investment is accounted for in accordance with ASC 321, The investment is measured 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 September 30, 2025 and March 31, 2025, no impairment indicators were identified, and no loss was recorded.
Note 7 — Accounts receivable, net
As of September 30, 2025 and March 31, 2025, accounts receivables comprised of the following:
| September 30, | March 31, | |||||||
| 2025 | 2025 | |||||||
| (Unaudited) | ||||||||
| Receivables from console game, gaming hardware, computer accessories and other multimedia products, and console game code | $ | $ | ||||||
| Receivables from game publishing | ||||||||
| Receivables from advertising service | ||||||||
| Less: Allowance for credit loss | ( | ) | ( | ) | ||||
| Accounts receivable, net | $ | $ | ||||||
Movement of credit loss for the six months ended September 30, 2025 and 2024 are as follows:
| September 30, | September 30, | |||||||
| 2025 | 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Beginning balance | $ | $ | ||||||
| Credit loss carried forward from acquisition of Ban Leong | - | |||||||
| Addition | ||||||||
| Translation adjustment | ||||||||
| Ending balance | $ | $ | ||||||
Note 8 — Inventories, net
Inventories are stated at lower of cost or net realizable value, which is determined using the weighted average method.
| September 30, | March 31, | |||||||
| 2025 | 2025 | |||||||
| (Unaudited) | ||||||||
| Physical console game compact discs | $ | $ | ||||||
For
the six months ended September 30, 2025 and 2024, the impairment for inventories amounted to $
F-36
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 9 — Other receivables and other current assets, net
As of September 30, 2025 and March 31, 2025, other receivables and other current assets, net comprised of the following:
| September 30, | March 31, | |||||||
| 2025 | 2025 | |||||||
| (Unaudited) | ||||||||
| Deposits (i) | $ | $ | ||||||
| Prepaid expenses (ii) | ||||||||
| Prepaid income tax (iii) | ||||||||
| Right-of-return assets (vi) | - | |||||||
| GST recoverable (iv) | ||||||||
| Other receivables (v) | ||||||||
| Less: allowance for credit loss | ( | ) | ( | ) | ||||
| Total other receivables and other current assets, net | $ | $ | ||||||
| (i) | Deposits |
The balance of deposit mainly comprised deposits made for rental and utility service of the Company.
| (ii) | Prepaid expenses |
The balance of prepaid expenses represented prepayment for services, such as subscription fees, advertising expenses, and director & officer insurance.
| (iii) | Prepaid income tax |
The balance of prepaid income tax represents prepaid estimated income tax from the Company’s Singapore subsidiary.
| (iv) | GST recoverable |
The balance of GST recoverable represented the amount of GST, which resulted from historical purchasing activities and could be further used for deducting future GST in Singapore.
| (v) | Other receivables |
The balance of other receivables mainly represented balance due from vendor for marketing expense paid on behalf, and recoverable claims receivable from suppliers.
| (vi) | Right- of- return assets |
The balance of right-of-return assets primarily represents amounts recognized in connection with Company’s product return arrangements from hardware, computer accessories and other multi- media products and reflects the estimated recovery of inventory expected to be returned by customers.
F-37
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Movement of allowance for credit loss for the six months ended September 30, 2025 and 2024 are as follows:
| September 30, | September 30, | |||||||
| 2025 | 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Beginning balance | $ | $ | ||||||
| Addition (Recovery) | ( | ) | ||||||
| Translation adjustment | ( | ) | ||||||
| Ending balance | $ | $ | ||||||
Note 10 — Prepayments, net
| September 30, | March 31, | |||||||
| 2025 | 2025 | |||||||
| (Unaudited) | ||||||||
| Prepayment | $ | $ | ||||||
| Less: allowance for prepayment | ( | ) | ( | ) | ||||
| Total prepayments, net | $ | $ | ||||||
Movement of allowance for credit loss for the six months ended September 30, 2025 and 2024 are as follows:
| September 30, | September 30, | |||||||
| 2025 | 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Beginning balance | $ | $ | ||||||
| Addition (Recovery) | - | ( | ) | |||||
| Translation adjustment | ( | ) | ( | ) | ||||
| Ending balance | $ | $ | ||||||
Note 11 — Loan to third party
Loan to third party consist of the following:
| Name of third party* | Maturities | Interest Rate | As of September 30, 2025 | As of March 31, 2025 | ||||||||
| (Unaudited) | ||||||||||||
| 2Game LLC | ||||||||||||
| Total | $ | $ | ||||||||||
2Game LLC is an e-sports company engaged in digital gaming and online tournament operations. In order to promote 2Game’s platform and create potential business synergies between both parties, the Company provided a loan to 2Game LLC.
F-38
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 12 — Property and equipment, net
Property and equipment consist of the following:
| September 30, | March 31, | |||||||
| 2025 | 2025 | |||||||
| (Unaudited) | ||||||||
| Office equipment | $ | $ | ||||||
| Motor vehicle | - | |||||||
| Furniture & Fitting | ||||||||
| Office and warehouse renovation | ||||||||
| Subtotal | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Total property and equipment, net | $ | $ | ||||||
Depreciation
expenses for the six months ended September 30, 2025 and 2024 amounted to $
Note 13 — Definite-lived Intangible assets, net
Definite-lived intangible assets consisted of the following:
| September 30, | March 31, | |||||||
| 2025 | 2025 | |||||||
| (Unaudited) | ||||||||
| Customer relationships | $ | $ | ||||||
| License | ||||||||
| Trademark | ||||||||
| Less: accumulated amortization | ( | ) | ( | ) | ||||
| Total definite-lived intangible assets | $ | $ | ||||||
Amortization
expense for six months ended September 30, 2025 and 2024 amounted to $
The following table sets forth the Company’s amortization expense for the next five years ending:
| Amortization | ||||
| expenses | ||||
| Twelve months ending September 30, 2026 | $ | |||
| Twelve months ending September 30, 2027 | ||||
| Twelve months ending September 30, 2028 | ||||
| Twelve months ending September 30, 2029 | ||||
| Twelve months ending September 30, 2030 and thereafter | ||||
| Total | $ | |||
F-39
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 14 — Bank Loans
Outstanding balance of banking facilities consisted of the following:
| Bank name | Maturity date | Interest rate | Collateral/Guarantee | September 30, 2025 | March 31, 2025 | |||||||||||
| (Unaudited) | ||||||||||||||||
| United Overseas Bank Limited (“UOB”) | (Repaid in July 2025) | $ | - | $ | ||||||||||||
| United Overseas Bank Limited (“UOB”) | - | |||||||||||||||
| Citi Bank | December 2025 (Repaid in December 2025) | |||||||||||||||
| HSBC Bank | February 2026 | |||||||||||||||
| HSBC Bank (1) | - | |||||||||||||||
| HSBC Bank | February 2026 | - | ||||||||||||||
| HSBC Loan (2) | February 2027 | |||||||||||||||
| DBS Bank Ltd | - | |||||||||||||||
| DBS Bank Ltd | ||||||||||||||||
| Total | $ | $ | ||||||||||||||
| Bank Loans, current | $ | $ | ||||||||||||||
| Bank Loans, non-current | $ | $ | ||||||||||||||
| (1) |
| (2) |
The
interest expense pertained to above banking facilities for the six months ended September 30, 2025 and 2024 were $
F-40
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 15 — Other payables and accrued liabilities
| September 30, | March 31, | |||||||
| 2025 | 2025 | |||||||
| (Unaudited) | ||||||||
| Accrued payroll and welfare | $ | $ | ||||||
| Accrued expenses (i) | ||||||||
| Other payables (ii) | ||||||||
| Refund liability (iv) | - | |||||||
| Investment payable (iii) | - | |||||||
| Total accrued expenses and other liabilities | $ | $ | ||||||
| (i) |
| (ii) |
| (iii) |
| (iv) | |
Note 16 — Convertible Notes and Derivative Liabilities
Note Purchase Agreements
From
September 30, 2024 to December 2024, the Company, GCL Global, and Epicsoft Asia, entered into convertible note purchase agreements
(the “Note Purchase Agreements”) with each of certain accredited investors (the “Transaction Investors”) pursuant
to which the Transaction Investors have agreed to pay GCL Global an aggregate of $
In
addition, the issuance costs in connection with these Notes amounted to $
Upon
completion of the Business Combination on February 13, 2025, the aggregate principal amount of the Notes, net of unamortized discount,
amounted to $
F-41
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The Company evaluated the convertible notes agreement under ASC 470 Debt (“ASC 470”), and ASC 815 Derivatives and Hedging (“ASC 815”). ASC 815 generally requires the analysis embedded terms and features that have characteristics of derivatives to be evaluated for bifurcation and separate accounting in instances where their economic risks and characteristics are not clearly and closely related to the risks of the host contract.
The Company elected to measure the entire convertible note, including all embedded features, at fair value option under ASC 825 on the issuance date, with changes in fair value recognized through earnings until conversion. The fair value of the convertible notes was determined the same as its carrying value at issuance than reevaluated upon conversion by using a scenario-based probability-weighted approach for the conversion and bonus share components and a Monte Carlo simulation model for the top-up share feature. Subsequently, the component of fair value changes relating to the instrument specific credit risk of the convertible note is minimal. Key assumptions included stock price volatility, share price at measurement dates, risk-free rate, and the expected holding period.
Upon the closing of the Business Combination, the convertible notes automatically converted into equity, and the related embedded features were detached and re-evaluated. The bonus share provision was determined to be clearly and closely related to equity and was not bifurcated. However, the Top-Up Shares feature was determined to be derivative liabilities under ASC 815-40, as it is not considered indexed to the Company’s own stock due to variable settlement provisions.
The Top-Up Shares liabilities were measured at fair value on the conversion date and at each subsequent reporting date until settlement, with changes in fair value recognized in the unaudited condensed consolidated statements of operations and comprehensive loss. The fair value of the Top-Up Shares liability is determined using unobservable inputs and a Monte Carlo simulation model. Key assumptions include the Company’s stock price volatility, the price floor, the expected holding period, and the risk-free discount rate.
As
of February 12, 2025, immediately prior to the conversion upon completion of
Senior Unsecured Notes
Between
May 2025 and August 2025, the Company entered into three Securities Purchase Agreements with an investor for the issuance of senior unsecured
notes (“Senior Unsecured Notes”) with an aggregate principal amount of $
The
Senior Unsecured Notes are convertible at the holder’s option at any time after issuance into the Company’s ordinary shares
at a conversion price of $
F-42
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
During
the six months ended September 30, 2025, an aggregate principal amount of $
The Company evaluated the embedded features of the Senior Unsecured Notes in accordance with ASC 470, ASC 815 and ASC 825. Based on this evaluation, the embedded conversion feature is required to be bifurcated from the host debt instrument and accounted for separately as a derivative liability. The conversion feature is not considered clearly and closely related to the debt host and meets the definition of a derivative under ASC 815. In addition, the Senior Unsecured Notes are not otherwise measured at fair value through earnings, and the conversion feature does not qualify for the scope exception for instruments indexed to the Company’s own stock due to variable-priced settlement provisions.
Accordingly, the conversion feature is initially measured at fair value and recorded as a derivative liability, with subsequent changes in fair value recognized in earnings in the period in which they occur. The redemption feature was determined to be clearly and closely related to the debt host and, therefore, does not require separate accounting.
At issuance, the Company allocated the proceeds between the conversion feature derivative liability and the host debt using an allocation approach consistent with the measurement basis of each component. The conversion feature derivative liability was recorded at its fair value, with the residual proceeds attributed to the host debt. The fair value of the conversion feature was determined using a binomial valuation model applied to the convertible notes, with the host debt valued separately using a discounted cash flow model. Key assumptions include the Company’s stock price, expected volatility, conversion price and floor price, contractual term of the notes, and the risk-free interest rate.
As
of the issuance date of the Senior Unsecured Notes, the fair value of the conversion feature from the Senior Unsecured Notes amounted
to $$
Debt discount and issuance costs were allocated between the derivative liability and the host debt on a relative fair value basis, with the portion attributable to the derivative liability expensed as incurred and the portion attributable to the host debt recorded as a reduction of the carrying amount of the debt and amortized to interest expense over the term of the Senior Unsecured Notes using the effective interest method.
The Company has convertible notes, net of unamortized discounts as follows:
| Face
value of convertible notes payable | Unamortized debt discounts | Convertible
notes payable, net of unamortized discounts | ||||||||||
| Issuance of convertible notes | $ | $ | ( | ) | $ | |||||||
| Fair value allocation of conversion feature | ( | ) | - | ( | ) | |||||||
| Amortization of debt discounts | - | |||||||||||
| Conversion | ( | ) | ( | ) | ||||||||
| September 30, 2025 balance (Unaudited) | $ | $ | ( | ) | $ | |||||||
F-43
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 17 — Deferred investment consideration payable
| September 30, | March 31, | |||||||
| 2025 | 2025 | |||||||
| (Unaudited) | ||||||||
| Deferred investment consideration payable | $ | $ | ||||||
The
balance of contingent investment consideration payable relates to the Company’s investment in Nekcom of $
Note 18 — Related party balances and transactions
Related party balances
Amount due from related parties
| Name of related party | Relationship | Nature | As of September 30, 2025 | As of March 31, 2025 | ||||||||
| (Unaudited) | ||||||||||||
| Epicsoft Ventures Ltd | $ | - | $ | |||||||||
| SEGA Corporation | - | |||||||||||
| Joseph Thomas Van Heeswijk | ||||||||||||
| Jianhao Tan Brand Ventures Pte Ltd | - | |||||||||||
| Total | $ | $ | ||||||||||
Prepayment, a related party
| Name of related party | Relationship | Nature | As of September 30, 2025 | As of March 31, 2025 | ||||||||
| (Unaudited) | ||||||||||||
| Nekcom Inc | $ | $ | ||||||||||
F-44
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Accounts payable, a related party
| Name of related party | Relationship | Nature | As of September 30, 2025 | As of March 31, 2025 | ||||||||
| (Unaudited) | ||||||||||||
| SEGA Corporation | $ | $ | ||||||||||
Amount due to related parties
| Name of related party | Relationship | Nature | As of September 30, 2025 | As of March 31, 2025 | ||||||||
| (Unaudited) | ||||||||||||
| Choo See Wee (“Jacky”) | $ | $ | ||||||||||
| Tan Jian Hao | ||||||||||||
| Joseph Thomas Van Heeswijk | ||||||||||||
| Shaun Amah Goz | ||||||||||||
| Wong Wan Ping Mario | - | |||||||||||
| Debbie Soon | - | |||||||||||
| Mr. Shaun | ||||||||||||
| Total | $ | $ | ||||||||||
Related parties’ transactions
Revenue from a related party
| Name of Related Party | Relationship | For the Six Months Ended September 30, 2025 | For the Six Months Ended September 30, 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||||
| SEGA Corporation | $ | $ | ||||||||
Cost of revenue from related parties
| Name of related party | Relationship | Nature | For the Six Months Ended September 30, 2025 | For the Six Months Ended September 30, 2024 | ||||||||
| (Unaudited) | (Unaudited) | |||||||||||
| SEGA Corporation | $ | $ | ||||||||||
| Jianhao Tan | ||||||||||||
| Total | $ | $ | ||||||||||
F-45
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 19 — Shareholders’ equity
Ordinary shares
GCL
Global was established under the laws of Cayman Islands on September 8, 2023, and authorized to issue
Private Placement
On
September 3, 2025, the Company issued
Settlement of Mezzanine Equity
On
February 13, 2025,
Settlement of Contingent Consideration from 2Game Acquisition
At
the closing of the Business Combination, the Company collectively issued an additional
Conversion of convertible notes
On
February 13, 2025, convertible notes issued under the Note Purchase Agreements with an aggregate principal amount of $
During
the six months ended September 30, 2025, an aggregate principal amount of $
Stock based compensation
| - | Consultancy Agreements |
On
November 8, 2022, the Company entered into two separate SPAC listing consultancy agreements (collectively, the “Consultancy Agreements”)
with two third-party consultants (the “Consultants”) to assist in facilitating the Business Combination. Pursuant to the
Consultancy Agreements, the Company agreed to compensate the Consultants an aggregate amount of $
F-46
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Because the services provided by the Consultants were directly related to the Business Combination and contingent upon its successful closing, the Company determined that the associated stock-based compensation should be accounted for as a direct and incremental cost of the transaction. Accordingly, the fair value of the shares issued was recorded as a reduction to additional paid-in capital in accordance with ASC 340-10-S99-1, “Expenses of Offering.”
| - | Marketing Services Agreement |
On April 28, 2025, the Company entered into a marketing services agreement
with Outside The Box Capital Inc.(“Marketing Consultant”) to provide investor awareness and marketing support services for
a six-month period ending October 28, 2025. The services included strategic planning, distribution of Company-approved messaging across
various digital and social media platforms, and content creation to enhance investor engagement, and expressly exclude investor solicitation,
securities transactions, or broker-dealer activities. In consideration for the services, the Company agreed to pay cash compensation of
$
Reverse Recapitalization
On
February 13, 2025, upon the consummation of the Business Combination, the Company issued an aggregate total of
The following table presents the number of the Company’s ordinary shares issued upon the Reverse Recapitalization:
| Ordinary
Share | ||||
| RFAC’s ordinary shares outstanding prior to Reverse Recapitalization | ||||
| Ordinary shares issued at the Closing as an incentive to certain investors designated by RFAC Sponsor in connection with Transaction Financing | ||||
| Conversion of RFAC rights | ||||
| Total shares issued upon the Reverse Recapitalization | ||||
Recognition of non-controlling interests from acquisition of subsidiaries
| - | Noncontrolling interest in Martiangear |
On
December 12, 2024, Titan Digital sold its entire equity interest in Martiangear to GCL Global SG for total consideration of SGD10. As
a result, the Company increased its equity interest in Martiangear to
| - | Noncontrolling interest in 2Game |
On
March 19, 2025, GCL Global SG acquired an additional
F-47
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The
valuation of fair value of the Buy-Back Feature was performed using a weighted average probability scenario analysis, incorporating two
mutually exclusive outcomes: (i) if the performance targets are not met, the fair value was calculated using a forward pricing model;
and (ii) if the performance targets are met, the fair value was estimated using the Black-Scholes option pricing model. A probability
of
As
of September 30, 2025, the fair value of the Buy-Back Feature was determined to be $
All adjustments to additional paid-in capital were made in accordance with ASC 810-10-45-23, “Change in a parent’s ownership interest in a subsidiary,” as there was no change in control.
| - | Noncontrolling interest in Ban Leong |
Subsequent
to the acquisition date of the Ban Leong acquisition, the remaining portion of the total offer consideration was utilized to acquire
the remaining equity interests in Ban Leong as additional acceptances were received, for an aggregate cash consideration of $
Public and Private Placement Warrant (“Warrant”)
In
connection with the reverse recapitalization, the Company assumed
Warrants
may only be exercised for a whole number of shares at an exercise price of $
Once the warrants become exercisable, the Company may redeem the Warrants:
| ● | in whole and not in part; |
| ● | at a price of $ |
| ● | at any time after the warrants become exercisable; |
F-48
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
| ● | upon not less than |
| ● | if, and only if, the reported last sale price of the ordinary shares equals or exceeds $ |
| ● | if, and only if, there is a current registration statement in effect with respect to the Ordinary shares underlying such warrants. |
If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of shares of Ordinary share issuable upon exercise of the warrants may be adjusted in certain circumstances including in the event of a stock dividend, or recapitalization, reorganization, merger or consolidation. However, except as described below, the warrants will not be adjusted for issuance of Ordinary share at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the warrants. If the Company is unable to complete a Business Combination within the Combination Period and the Company liquidates the funds held in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution from the Company’s assets held outside of the Trust Account with the respect to such warrants. Accordingly, the warrants may expire worthless.
In
addition, if (x) the Company issues additional shares of Ordinary share or equity-linked securities, for capital raising purposes
in connection with the closing of a Business Combination at an issue price or effective issue price of less than $
The summary of warrants activity is as follows:
| Warrants Outstanding | Ordinary Shares Issuable | Weighted Average Exercise Price | Average Remaining Contractual Life | |||||||||||||
| March 31, 2024 | - | - | $ | - | - | |||||||||||
| Granted | $ | |||||||||||||||
| Forfeited | - | - | $ | - | - | |||||||||||
| Exercised | - | - | $ | - | - | |||||||||||
| March 31, 2025 | $ | |||||||||||||||
| Granted | - | - | $ | |||||||||||||
| Forfeited | - | - | $ | - | - | |||||||||||
| Exercised | - | - | $ | - | - | |||||||||||
| September 30, 2025 (Unaudited) | $ | |||||||||||||||
F-49
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 20 — Income tax
Cayman Islands
GCL Global is incorporated in Cayman Islands and is not subject to tax on income or capital gains under current Cayman Island law. Additionally, upon payments of dividends to the shareholders, no Cayman Islands withholding tax will be imposed.
British Virgin Islands
GCL BVI is incorporated in British Virgin Islands and are not subject to tax on income or capital gains under current British Virgin Island law. Additionally, upon payments of dividends to the shareholders, no British Island withholding tax will be imposed.
Singapore
The
Company’s subsidiaries incorporated in Singapore, are subject to Singapore Profits Tax on the taxable income as reported in its
statutory financial statements adjusted in accordance with relevant Singapore tax laws. The applicable corporate income tax rate is
Hong Kong
The
Company’s subsidiaries incorporated in Hong Kong, are subject to Hong Kong Profits Tax on the taxable income as reported in its
statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. Under the two-tiered profits tax rates regime,
the first
Malaysia
The
Company’s subsidiary incorporated in Malaysia is governed by the income tax laws of Malaysia and the income tax provision in respect
of operations in Malaysia is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation,
interpretations and practices in respect thereof. Under the Income Tax Act of Malaysia, enterprises that incorporated in Malaysia are
usually subject to a unified
Brazil
The
Company’s subsidiary incorporated in Brazil is subject to Brazilian Corporate Income Tax (“IRPJ”). The IRPJ levied
at a base rate of
United Kingdom
The
Company’s subsidiary incorporated in the United Kingdom is subject to UK Corporation Tax on taxable profits in accordance with
UK tax legislation. The applicable statutory corporate income tax rate was
People’s Republic of China (“PRC”)
The
Company’s subsidiaries incorporated in the PRC are subject to PRC Enterprise Income Tax at a unified tax rate of
F-50
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Dubai (United Arab Emirates)
The
Company’s subsidiary incorporated in Dubai is governed by the corporate tax regime established under UAE Federal Decree-Law No.
47 of 2022 on the Taxation of Corporations and Businesses. Effective from June 1, 2023, the UAE implemented a corporate tax regime at
a standard rate of
Thailand
The
Company’s subsidiary incorporated in Thailand is governed by the income tax laws of Thailand and the income tax provision in respect
of operations in Thailand is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation,
interpretations and practices in respect thereof. The applicable corporate income tax rate is
Japan
The
Company’s subsidiary incorporated in Japan is governed by the income tax laws of Japan, and the income tax provision related to
operations in Japan is calculated at the applicable statutory tax rates on taxable income for the periods based on existing legislation,
interpretations, and practices. The statutory corporate income tax rate in Japan is
United States
The
Company’s subsidiary incorporated in the United States is subject to U.S. federal corporate income tax at a statutory rate of
Income
tax benefit for the six months ended September 30, 2025 and 2024 amounted to $
Significant components of the provision for income taxes are as follows:
| For
the Six Months Ended September 30, 2025 | For
the Six Months Ended September 30, 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Current | $ | $ | ||||||
| Deferred | ( | ) | ( | ) | ||||
| Income taxes benefit | $ | ( | ) | $ | ( | ) | ||
Loss before income tax by jurisdiction are as following:
| For
the Six Months Ended September 30, 2025 | For
the Six Months Ended September 30, 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Singapore | $ | ( | ) | $ | ( | ) | ||
| Hong Kong | ||||||||
| Malaysia and others | ( | ) | ( | ) | ||||
| Total loss before income tax | $ | ( | ) | $ | ( | ) | ||
F-51
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following table sets forth the significant components of the aggregate deferred tax assets and liabilities of the Company as of:
| September 30,
2025 |
March 31, 2025 |
|||||||
| (Unaudited) | ||||||||
| Deferred Tax Assets | ||||||||
| Net operating loss carryforwards | $ | $ | ||||||
| Allowance for credit loss | ||||||||
| Lease liabilities | ||||||||
| Inventory write-off | ||||||||
| Less: valuation allowance | ( |
) | ( |
) | ||||
| Deferred tax assets, net | $ | $ | ||||||
| Deferred tax liabilities: | ||||||||
| Right of use assets | $ | $ | ||||||
| Amortization of intangible assets | ||||||||
| Deferred tax liabilities | $ | $ | ||||||
| Deferred tax (liabilities) assets, net | $ | ( |
) | $ | ||||
As
of September 30, 2025, the Company’s net operating losses carry forward from all subsidiaries amounted to $
As
of March 31, 2025, the Company’s net operating losses carry forward from GCL Global SG, Titan Digital, Starry, Martiangear, 2Game
Brazil, 2 Game Dubai, RFAC, and Epicsoft Malaysia combined amounted to $
The movements of the valuation allowance are as follows:
| Balance as of March 31, 2024 | $ | |||
| Allowance made during the year | ||||
| Foreign exchange difference | ( | ) | ||
| Balance as of March 31, 2025 | ||||
| Allowance made during the period | ||||
| Foreign exchange difference | ||||
| Balance as of September 30, 2025 (Unaudited) | $ |
F-52
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Movement in deferred tax (liabilities) assets, net are as following:
| Balance at March 31, 2024 | $ | |||
| Recognized in profit or loss | ||||
| Foreign exchange differences reserve | ||||
| Balance at March 31, 2025 | ||||
| Recognized in Ban Leong acquisition | ( | ) | ||
| Recognized in profit or loss | ||||
| Foreign exchange differences reserve | ||||
| Balance at September 30, 2025 (Unaudited) | $ | ( | ) |
Uncertain tax positions
The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measures the unrecognized benefits associated with the tax positions. As of September 30, 2025 and March 31, 2025, the Company did not have any significant unrecognized uncertain tax positions.
Taxes payable consist of the following:
| September 30, 2025 | March 31, 2025 | |||||||
| (Unaudited) | ||||||||
| GST taxes payable | $ | $ | ||||||
| Income taxes payable | ||||||||
| Totals | $ | $ | ||||||
Note 21 — Concentration of Credit risk
(1) Major customers
For
the six months ended September 30, 2025, one customer C accounted for approximately
As
of September 30, 2025, four customers A, B, H and C from the Company’s distribution of console game segment and game publishing
segment accounted for approximately
(2) Major vendors
For
the six months ended September 30, 2025, one vendor a accounted for approximately
As
of September 30, 2025, two vendors e and a accounted for approximately
F-53
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(3) Credit risk
Financial
instruments that are potentially subject to significant concentrations of credit risk consist primarily of cash. The Singapore Deposit
Insurance Corporation Limited (SDIC) insures deposits in a Deposit Insurance (DI) Scheme member bank or finance company up to approximately
$
While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness.
The Company is also exposed to risk from accounts receivable and other receivables. These assets are subjected to credit evaluations. An allowance has been made for estimated unrecoverable amounts which have been determined by reference to past default experience and the current economic environment.
Note 22 — Leases
As of September 30, 2025 and March 31, 2025, the Company has engaged in multiple offices and warehouse leases which were classified as operating leases. In addition, the Company engaged in a few automobiles’ leases under finance lease agreements.
The Company occupies various offices under operating lease agreements with a term shorter than twelve months which it elected not to recognize lease assets and lease liabilities under ASC 842. Instead, the Company recognized the lease payments in profit or loss on a straight-line basis over the lease term and variable lease payments in the period in which the obligation for those payments is incurred.
The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
The Company recognized lease expense on a straight-line basis over the lease term for operating lease. Meanwhile, the Company recognized the finance leases ROU assets and interest on an amortized cost basis.
The amortization of finance ROU assets is recognized on straight-line basis as amortization expense, while the lease liability is increased to reflect interest on the liability and decreased to reflect the lease payments made during the period.
F-54
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Operating and finance lease expenses consist of the following:
| For the Six Months Ended September 30, | ||||||||||
| Classification | 2025 | 2024 | ||||||||
| (Unaudited) | (Unaudited) | |||||||||
| Operating lease cost | ||||||||||
| Lease expenses | General and administrative | |||||||||
| Finance lease cost | ||||||||||
| Amortization of leased asset | General and administrative | |||||||||
| Interest on lease liabilities | Interest expenses on finance leases | |||||||||
| Total lease expenses | $ | $ | ||||||||
Weighted-average remaining term and discount rate related to leases were as follows:
| As of September 30, 2025 | As of March 31, 2025 | |||||||
| (Unaudited) | ||||||||
| Weighted-average remaining term | ||||||||
| Operating lease | ||||||||
| Finance leases | ||||||||
| Weighted-average discount rate | ||||||||
| Operating lease | % | % | ||||||
| Finance leases | % | % | ||||||
The following table sets forth the Company’s minimum lease payments in future periods:
| Operating | Finance | |||||||||||
| lease | lease | |||||||||||
| payments | payments | Total | ||||||||||
| Twelve months ending September 30, 2026 | $ | $ | $ | |||||||||
| Twelve months ending September 30, 2027 | ||||||||||||
| Twelve months ending September 30, 2028 | ||||||||||||
| Twelve months ending September 30, 2029 | - | |||||||||||
| Twelve months ending September 30, 2030 | - | - | - | |||||||||
| Total lease payments | ||||||||||||
| Less: discount | ( |
) | ( |
) | ( |
) | ||||||
| Present value of lease liabilities | $ | $ | $ | |||||||||
| Present value of lease liabilities, current | $ | $ | $ | |||||||||
| Present value of lease liabilities, non-current | $ | $ | $ | |||||||||
Note 23 — Commitments and contingencies
Contingencies
Legal
From time to time, the Company is party to certain legal proceedings, as well as certain asserted and un-asserted claims. Amounts accrued, as well as the total amount of reasonably possible losses with respect to such matters, individually and in the aggregate, are not deemed to be material to the unaudited condensed consolidated financial statements.
Commitment
On
December 18, 2024, the Company, through its subsidiary 4Divinity SG, entered into a Publishing Agreement with NEKCOM Private Limited
and its PRC affiliate (collectively, “NEKCOM”), pursuant to which 4Divinity SG was appointed as the global publisher and
distributor of the video game SHOWA American Story (the “Licensed Game”) for all platforms and territories, excluding
certain regions previously licensed to other parties. Under the terms of the agreement, 4Divinity SG committed to a fully recoupable
minimum sales guarantee of $
F-55
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
In
connection with that certain Facility Letter dated as of October 1, 2024, as supplemented by the Supplemental Letter dated as of March
12, 2025 and July 7, 2025 between the Company and Oversea-Chinese Banking Corporation Limited (“OCBC”) for a financing of
up to SGD
Note 24 —Loss per share
For the purpose of calculating loss per share, the number of shares used in the calculation reflects the outstanding shares of the Company as if the reverse recapitalization as described in Note 3 took place at the beginning of the earliest period presented.
| For
the Six Months Ended September 30, | ||||||||
| 2025 | 2024 | |||||||
| Loss per share – basic and diluted: | ||||||||
| Numerator: | ||||||||
| Net loss attributable to the Company’s shareholders | $ | ( | ) | $ | ( | ) | ||
| Denominator: | ||||||||
| Weighted average number of ordinary shares outstanding | ||||||||
| Loss per ordinary share – basic and diluted | $ | ( | ) | $ | ( | ) | ||
The following ordinary shares equivalents were excluded from the computation to eliminate any antidilutive effect:
| For the Six Months Ended | For the Six Months Ended | |||||||
| September 30, 2025 | September
30, 2025 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Warrant (1) | - | |||||||
| Ordinary shares placed in escrow (2) | - | |||||||
| (1) |
| (2) |
Note 25 — Segment information
The
Company presents segment information after elimination of inter-Company transactions. In general, revenue, cost of revenue and operating
expenses are directly attributable, or are allocated, to each segment. The Company allocates costs and expenses that are not directly
attributable to a specific segment, such as those that support infrastructure across different segments, to different segments mainly
on the basis of usage, revenue or headcount, depending on the nature of the relevant costs and expenses.
By
assessing the qualitative and quantitative criteria established by Accounting Standards Codification (“ASC”) 280, “Segment
Reporting”, the Company considers itself to have
F-56
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The following tables present the summary of each segment’s revenue, interest expense, depreciation and amortization, income or loss from operations, loss before income taxes, net income and capital expenditure which are considered as a segment operating performance measure, for the six months ended September 30, 2025 and 2024:
The segment disclosure is as follows:
For the Six Months Ended September 30, 2025 (Unaudited) | ||||||||||||||||||||
| Console game, hardware, computer accessories and Other multi- media products | Game Publishing | Advertising Service | Other | Total | ||||||||||||||||
| Revenues | $ | $ | $ | $ | $ | |||||||||||||||
| Revenues, a related party | - | - | - | |||||||||||||||||
| Reconciliation of revenue | ||||||||||||||||||||
| Elimination of intersegment revenues | ( | ) | ||||||||||||||||||
| Total consolidated revenues | $ | |||||||||||||||||||
| Less: | ||||||||||||||||||||
| Cost of revenues | $ | |||||||||||||||||||
| Cost of revenues, related parties | - | - | ||||||||||||||||||
| Reconciliation of cost of revenue | ||||||||||||||||||||
| Elimination of intersegment cost of revenues | ( | ) | ||||||||||||||||||
| Total consolidated cost of revenues | $ | |||||||||||||||||||
| Segment gross profits | $ | |||||||||||||||||||
| Less: | ||||||||||||||||||||
| Advertising and marketing expenses | ||||||||||||||||||||
| Amortization and depreciation | ||||||||||||||||||||
| Provision for credit loss | - | |||||||||||||||||||
| Other operating expenses* | ||||||||||||||||||||
| Professional fee | ||||||||||||||||||||
| R&D Expense | - | - | - | |||||||||||||||||
| Rent | - | |||||||||||||||||||
| Salary expenses | ||||||||||||||||||||
| Other income (expense), net | ( | ) | ( | ) | ||||||||||||||||
| Interest expenses | - | |||||||||||||||||||
| Segment (loss) profit | ( | ) | ( | ) | ( | ) | $ | ( | ) | |||||||||||
| Reconciliation of profit or loss | ||||||||||||||||||||
| Less: Unallocated amounts | ||||||||||||||||||||
| Advertising and marketing expenses | ||||||||||||||||||||
| Amortization and depreciation | ||||||||||||||||||||
| Other operating expenses | ||||||||||||||||||||
| Professional fee | ||||||||||||||||||||
| Rent | ||||||||||||||||||||
| Salary expenses | ||||||||||||||||||||
| Other (income) expense, net | ( | ) | ||||||||||||||||||
| Interest expenses | ||||||||||||||||||||
| Change in fair value of investment in convertible notes | ||||||||||||||||||||
| Change in fair value of derivative asset and liabilities | ( | ) | ||||||||||||||||||
| Change in fair value of contingent consideration for acquisition | ( | ) | ||||||||||||||||||
| Elimination of intersegment profit | ( | ) | ||||||||||||||||||
| Loss before income taxes | $ | ( | ) | |||||||||||||||||
F-57
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Six Months Ended September 30, 2024 (Unaudited) | ||||||||||||||||||||
| Console game, hardware, computer accessories and other multi-media products | Game Publishing | Advertising Service | Other | Total | ||||||||||||||||
| Revenues | $ | $ | $ | $ | $ | |||||||||||||||
| Revenues, a related party | - | - | - | |||||||||||||||||
| Reconciliation of revenue | ||||||||||||||||||||
| Elimination of intersegment revenues | ( | ) | ||||||||||||||||||
| Total consolidated revenues | $ | |||||||||||||||||||
| Less: | ||||||||||||||||||||
| Cost of revenues | $ | |||||||||||||||||||
| Cost of revenues, related parties | - | - | ||||||||||||||||||
| Reconciliation of cost of revenue | ||||||||||||||||||||
| Elimination of intersegment cost of revenues | ( | ) | ||||||||||||||||||
| Total consolidated cost of revenues | $ | |||||||||||||||||||
| Segment gross profits | $ | |||||||||||||||||||
| Less: | ||||||||||||||||||||
| Advertising and marketing expenses | ||||||||||||||||||||
| Amortization and depreciation | - | |||||||||||||||||||
| Provision for (recovery from) credit loss | ( | ) | ( | ) | - | |||||||||||||||
| Other operating expenses* | ||||||||||||||||||||
| Professional fee | - | |||||||||||||||||||
| R&D Expense | - | - | - | |||||||||||||||||
| Rent | - | |||||||||||||||||||
| Salary expenses | ||||||||||||||||||||
| Other income (expense), net | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||
| Interest expenses | - | - | ||||||||||||||||||
| Segment profit (loss) | ( | ) | ( | ) | $ | |||||||||||||||
| Reconciliation of profit or loss | ||||||||||||||||||||
| Less: Unallocated amounts | ||||||||||||||||||||
| Other operating expenses | ||||||||||||||||||||
| Professional fee | ||||||||||||||||||||
| Salary expenses | ||||||||||||||||||||
| Other (income) expense, net | ( | ) | ||||||||||||||||||
| Change in fair value of convertible notes and derivative liabilities | ( | ) | ||||||||||||||||||
| Elimination of intersegment profit | ( | ) | ||||||||||||||||||
| Loss before income taxes | $ | ( | ) | |||||||||||||||||
| * |
As
of September 30, 2025, the Company’s total assets comprised of $
F-58
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
As
of March 31, 2025, the Company’s total assets comprised of $
For
the six months ended September 30, 2025, capital expenditures comprised of $
For
the six months ended September 30, 2024, capital expenditures comprised of $
Disaggregated information of revenues by regions are as follows:
| For
the Six Months Ended September 30, 2025 | For
the Six Months Ended September 30, 2024 | |||||||
| (Unaudited) | (Unaudited) | |||||||
| Singapore | $ | $ | ||||||
| Hong Kong | ||||||||
| Malaysia | ||||||||
| China | ||||||||
| United Kingdom | - | |||||||
| Thailand | - | |||||||
| Other | - | |||||||
| Total revenue | $ | $ | ||||||
The following table presents long-lived assets by geographic area, which includes property and equipment, net operating leases right-of-use assets, and finance leases right-of-use assets:
| As of | As of | |||||||
| September 30 | March 31, | |||||||
| 2025 | 2025 | |||||||
| (Unaudited) | ||||||||
| Singapore | $ | $ | ||||||
| Hong Kong | ||||||||
| Malaysia | ||||||||
| Thailand | - | |||||||
| Others | ||||||||
| Total long-lived assets | $ | $ | ||||||
F-59
GCL GLOBAL HOLDINGS LTD AND ITS SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 26 — Subsequent Events
The Company evaluated all events and transactions that occurred after September 30, 2025 and up through January 30, 2026, which is the date the unaudited condensed consolidated financial statements are available to be issued, and concluded that other than the events disclosed below and elsewhere, there is no other subsequent event occurred that would require recognition or disclosure in the Company’s unaudited condensed consolidated financial statements.
On
October 13, 2025 and January 15, 2026, the Company’s subsidiary, 4Divinity SG, entered into a share subscription agreements
with an accredited investor, pursuant to which the investor agreed to subscribe for an aggregate total of
On
October 15, 2025, the Company’s Compensation Committee recommended, and the Board approved of, a one-time grant of
On
November 19 2025, the Company entered into a banking facility letter with a financial institution in providing a committed term loan
facility of up to $
From
October 2025 to December 2025, the aggregate principal amount of the Senior Unsecured Notes and interest payable of $
On November 6, 2025, the Company incorporated GCL Taiwan Co, Ltd, a wholly owned subsidiary organized under the laws of Taiwan, to engage primarily in the distribution and sales of gaming-related products and related services.
F-60
FAQ
How did GCL (GCL Global Holdings Ltd) perform for the six months ended September 30, 2025?
What are GCL Global Holdings Ltd’s main revenue streams in the latest period?
Did GCL Global Holdings Ltd improve profitability despite revenue growth?
What does GCL Global Holdings Ltd’s balance sheet look like as of September 30, 2025?
How leveraged is GCL Global Holdings Ltd based on the interim financials?
What cash flow trends did GCL Global Holdings Ltd report for the six months ended September 30, 2025?
