Company: ZCARW
Filing Date: 2025-06-30
Form Type: 10-K
Source: 0001213900-25-059675
Chunk: 1445

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-06-30
Form: 10-K
Item: Item 4
Chunk 1445
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 basis. The Redeemable Promissory Notes liabilities
have been presented net off the discount and issue expenses.

Debt Issuance costs 

Debt issuance costs consist
primarily of arrangement fees paid to Placement agent, professional fees and legal fees. These costs are netted off with the related
debt and are being amortized to interest expense over the term of the related.

The debt has been classified
into current or non-current based on the payment terms of the debt instruments. Non-current obligations are those scheduled to mature
beyond twelve months from the date of the Company’s Consolidated Balance Sheets.

Warrants

When the Company issues
warrants, it evaluates the balance sheet classification of the warrant to determine whether the warrant should be classified as equity
or as a derivative liability on the Consolidated Balance Sheets. In accordance with ASC 815- 40, Derivatives and Hedging- Contracts in
the Entity’s Own Equity (ASC 815-40), the Company classifies a warrant as 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 Consolidated Balance Sheets
at fair value with any changes in its fair value recognized currently in the Consolidated Statement of Operations.

80

Warrants issued towards the November 2024 and
December 2024 offering:

During the year ended March 31, 2025, 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