Company: ZCARW
Filing Date: 2025-06-30
Form Type: 10-K
Source: 0001213900-25-059675
Chunk: 181

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-06-30
Form: 10-K
Item: Item 1
Chunk 181
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 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 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)