Company: ZCARW
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001213900-25-014437
Chunk: 341

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-02-14
Form: 10-Q
Item: Part I, Item 8
Chunk 341
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 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.

Troubled debt restructuring

As per ASC 470-60 Troubled
Debt Restructuring (TDR) refers to a situation where the creditor, grants concessions to a borrower experiencing financial difficulties.
These concessions may include modifications to the terms of the payable, such as reducing the interest rate, extending the repayment period,
or forgiving a portion of