Company: ZCARW
Filing Date: 2025-05-12
Form Type: S-1/A
Source: 0001213900-25-041769
Chunk: 339

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-05-12
Form: S-1/A
Chunk 339
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 to purchase one share of common stock of the Company on the satisfaction of certain conditions. Warrants were also issued to placement agencies of the Series E and Series E1 which included the following two categories: a) warrants to purchase common stock of the company; and b) warrants to purchase Series E and Series E1 shares.

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 issue of its preferred stock to the warrant based on the relative fair values of warrants and preferred stock.

Warrants to be converted into preferred stock (“Preferred stock warrant liability”):

The Company’s warrants to purchase convertible preferred stock were classified as a liability and were held at fair value as the warrants were exercisable for contingently redeemable preferred stock, which was classified outside of stockholders’ deficit.

The warrant instruments classified as liabilities were subject to re-measurement at each balance sheet date, and any change in fair value was recognized as a component of finance costs.

The Company continued to adjust
the liability classified warrant for changes in the fair value until the Reverse Recapitalization transaction at which time the warrants
have been reclassified to additional paid-in-capital. Refer note 18 and 19.

F-73 ZOOMCAR HOLDINGS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

| 2. | Summary                                        
 of Significant Accounting Policies (Continued) |

| xxii. | 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 and March 31, 2023 the Company issued Notes and SSCPN. The Company evaluated the balance sheet classification for these instruments into debt 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 accounts for Notes and SSCPN under the fair value option election of ASC 825, Financial Instruments (“ASC-825”) as discussed below