Company: ZCARW
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076590
Chunk: 85

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 1
Chunk 85
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 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.

59

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 Unaudited Condensed 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 Unaudited Condensed Consolidated
Balance Sheets at fair value with any changes in its fair value recognized currently in the Unaudited Condensed 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
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