Company: ZCARW
Filing Date: 2025-06-30
Form Type: 10-K
Source: 0001213900-25-059675
Chunk: 1866

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-06-30
Form: 10-K
Item: Item 6
Chunk 1866
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 per ASC 815-10, the outstanding Series A Series B warrants
for both November 2024 and December 2024 offering have been reclassified to equity at the reclassification date fair value.

Warrants exercised before the reclassification
have been reclassified at their respective exercise date fair value and warrants exercised after the reclassification were adjusted with
additional paid in capital.

F-17

ZOOMCAR HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

2.Summary of Significant Accounting Policies (Continued)

(b)Warrants issued along with Redeemable Promissory Note:

During the year ended March 31,
2025, 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 on the initial recognition.

(c)Warrants to be converted into common stock:

The Company’s warrants to purchase
common stock were classified as equity. Upon issuance of the warrant, the Company had allocated a portion of the proceeds from the issuance
of its preferred stock to the warrant based on the relative fair values of warrants and preferred stock. These warrants were converted into common stock on the date of reverse recapitalization during the year ended
March 31, 2024.

xxiii.Financial liabilities measured at fair value

Convertible Promissory notes (“Notes”),
Senior Subordinated Convertible Promissory Note (“SSCPN”) and Unsecured Convertible Note (“Atalaya Note”)

During the year ended March 31, 2024
the Company issued Notes and SSCPN. The Company evaluated the balance sheet classification for these instruments either as liabilities
or equity, and accounting for conversion feature. As per ASC 480-10-25-14, the Notes and SSCPN were classified as liabilities because
the Company intended to settle them by issuing variable number of shares with a fixed and known monetary value at the time of inception.
However, the Company had elected fair value option for these Notes and SSCPN, as discussed below and thus did not bifurcate the embedded
conversion feature.

Fair Value Option (“FVO”)
Election

The Company accounted
for Notes and SSCPN under the fair 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