Company: ZCARW
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001213900-25-014437
Chunk: 26

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-02-14
Form: 10-Q
Item: Part I, Item 1
Chunk 26
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 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 agent 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. 

(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. During the nine months ended December 31, 2024, these were exercised
and were converted into common stock.

(c)Warrants issued along with
                                            SSCPN and to placement agent (‘Derivative financial instrument’):

During the year ended March 31, 2024, the Company issued warrants along
with Senior Subordinated Convertible Promissory Note (“SSCPN)” and as consideration to the placement agent for the issuance
of SSCPN.

These warrants were deemed derivative
instruments in accordance with ASC 815-10-15-83 since they contained an underlying, had cash less payment provisions, that could have
been net settled in shares and had a very minimal initial net investment. Accordingly, the derivatives were measured at fair value and
subsequently revalued at each reporting date until the close of Reverse Recapitalization consummated during year ended March 31, 2024.

16

ZOOMCAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(d)Warrants issued to preferred
                                            stockholders:

Before the date
of reverse recapitalization, the Company had warrants issued to preferred stockholders convertible into shares of preferred stock
and common stock which were issued during the year ended March 31, 2022, and were classified as liabilities and equity
respectively.