Company: ZCARW
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001213900-25-014437
Chunk: 339

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-02-14
Form: 10-Q
Item: Part I, Item 8
Chunk 339
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 an underlying, can only be net settled and required no initial net investment. Accordingly, the derivative instruments
were measured at fair value and subsequently revalued at each reporting date. Upon issuance of these instruments, the Company had applied
the with and without method and allocated a portion of the proceeds from the issuance to the Series A and Series B warrants based on
the fair values of these warrants at initial measurement. The remaining proceeds were then allocated between the Common Stock and the
pre-funded warrants using the relative fair value method.

(b)Warrants issued along with Redeemable Promissory Note:

During the nine months ended December
31, 2024, the Company issued warrants along with Redeemable Promissory Note and as consideration to the placement agent for the issuance
of the Redeemable Promissory Note.

These warrants were classified as equity
in accordance with ASC 815-40 since all the conditions required for equity classification are met. Upon issuance of the warrants, the
Company had allocated a portion of the proceeds from the issuance of its Redeemable Promissory Note to the warrant based on the relative
fair values of warrants and Redeemable Promissory Note in accordance with ASC 820.

(c)Warrants issued along with SSCPN and to placement agent (‘Derivative
financial instrument’):

During the year ended March 31, 2024, the Company
issued warrants along with Senior Subordinated Convertible Promissory Note (“SSCPN)” and as consideration to the placement
agent for the issuance of SSCPN.

These warrants were deemed derivative instruments
in accordance with ASC 815-10-15-83 since they contained an underlying, had cash less payment provisions, that could have been net settled
in shares and had a very minimal initial net investment. Accordingly, the derivatives were measured at fair value and subsequently revalued
at each reporting date until the close of Reverse Recapitalization consummated during year ended March 31, 2024.

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(d)Warrants issued to preferred stockholders:

Before the date of reverse recapitalization, the
Company had warrants issued to preferred stockholders convertible into shares of preferred stock and common stock which were issued during
the year ended March 31, 2022, and were classified as liabilities and equity respectively.

Each unit issued by the Company consisted of one
share of Series E preferred stock and a warrant which entitled the holder to purchase one share of common stock of the Company on the
satisfaction