Company: ZCARW
Filing Date: 2025-06-30
Form Type: 10-K
Source: 0001213900-25-059675
Chunk: 670

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-06-30
Form: 10-K
Item: Item 1B
Chunk 670
---
 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 Statements of Operations.

(a)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. The Series A warrants and Series B warrants were initially classified
as derivative financial instruments in accordance with ASC 815-10-15-83.

Subsequently,
during the year ended March 31, 2025, the variability in number of warrants exercisable towards Series A and Series B of both the November
2024 and December 2024 offering was fixed in accordance with agreement. Hence, as 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