Company: ZCARW
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001213900-25-014437
Chunk: 28

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-02-14
Form: 10-Q
Item: Part I, Item 1
Chunk 28
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 value option election of ASC 825, Financial Instruments (“ASC-825”) as discussed below.

The Notes and SSCPN accounted under
the FVO election which were debt host financial instruments containing conversion features which otherwise would be required to be assessed
for bifurcation from the debt-host and recognized as separate derivative liabilities subject to measurements under ASC 815. Notwithstanding,
ASC 825-10-15-4 provides for the “fair value option” (“FVO”) election, to the extent not otherwise prohibited
by ASC 825-10-15- 5, to be afforded to financial instruments, wherein bifurcation of an embedded derivative is not necessary, and the
financial instrument is initially measured at its issue-date estimated fair value and then subsequently remeasured at estimated fair
value on a recurring basis at each reporting period date.

The estimated fair value adjustment,
as required by ASC 825-10-45-5, was recognized as a component of other comprehensive income (“OCI”) with respect to the portion
of the fair value adjustment attributed to a change in the instrument-specific credit risk, with the remaining amount of the fair value
adjustment recognized under Finance costs shown as “Change in fair value of Notes” and “Change in fair value of SSCPN”
in the accompanying Condensed Consolidated Statement of Operations. With respect to the above Notes and SSCPN, as provided for by ASC
825-10-50- 30(b), the estimated fair value adjustments were presented as a separate line item in the accompanying Condensed Consolidated
Statement of Operations, since the change in fair value of the Notes and SSCPN payable were not attributable to instrument specific credit
risk.

During the year ended March 31, 2024,
as a result of consummation of the Business Combination by way of Reverse Recapitalization, the Notes and SSCPN outstanding were converted
into 59,757 shares (5,975,686 shares prior to the Reverse Stock Split) of the Company’s Common Stock.

The SSCPN and Notes were adjusted
for their carrying value through Condensed Consolidated Statement of Operations as on date of Reverse Recapitalization and credited at
carrying value to the capital accounts upon conversion to reflect the stock issued.

During the year ended March 31, 2024,
the Company issued an unsecured convertible note (“Atalaya Note) which had features similar to that of SSCPN and were accounted
accordingly as enumerated above.

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ZOOMCAR HOLDINGS, INC.