Company: ZCARW
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001213900-25-014437
Chunk: 115

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-02-14
Form: 10-Q
Item: Part I, Item 1
Chunk 115
---
 equity so long as it is “indexed to the Company’s equity”
and several specific conditions for equity classification are met. A warrant is not considered indexed to the Company’s equity,
in general, when it contains certain types of exercise contingencies or adjustments to exercise price. If a warrant is not indexed to
the Company’s equity or it has net cash settlement that results in the warrants to be accounted for under ASC 480, Distinguishing
Liabilities from Equity, or ASC 815-40, it is classified as a derivative liability which is carried on the Condensed Consolidated Balance
Sheets at fair value with any changes in its fair value recognized currently in the Condensed Consolidated Statement of Operations.

(a)Warrants issued towards the November 2024 and December 2024
offering:

During the nine
months ended December 31, 2024, the Company issued shares of Common Stock, pre-funded, Series A and Series B warrants in the November
2024 and December 2024 offering (Refer to Note 22) and as consideration to the placement agents for the issuance. The Common stock and
pre-funded warrants were classified as equity in accordance with ASC 815-40 since all the conditions required for equity classification
are met. The Series A warrants and Series B warrants were classified as derivative financial instruments in accordance with ASC 815-10-15-83
since they contain 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