Company: ZCARW
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-110391
Chunk: 246

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 246
---
s on Debt

Debt
issuance costs consist primarily of initial discount provided, 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 Condensed Consolidated Balance Sheets.

xxii.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 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 Condensed Consolidated Balance Sheets at fair value with any changes in its fair value recognized currently in the 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 was fixed in accordance with agreement. Hence,