Company: ZCARW
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001213900-25-014437
Chunk: 70

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-02-14
Form: 10-Q
Item: Part I, Item 1
Chunk 70
---
 payment.

The assumptions for the valuation of
Atalaya Note as on December 31, 2024 have been updated since the last valuation. Until March 31, 2024, the settlement of Atalaya Note
could have been through either issue of shares or repayment of outstanding amount. During the nine months ended December 31, 2024, the
stock price of the Company was reduced below $25 ($ 0.25 prior to Reverse Stock Split) and in accordance with the agreement on the breach
of this stock price threshold, the Atalaya Note is to be settled mandatorily in cash. The Company adopted discounted cash flow method
to fair value the lability of Atalaya Note. The Company used the discount rate as per CCC+ bond i.e., 14.60% for discounting the future
cash outflow.

Derivative financial instruments

The Company measures its derivative
financial instruments at fair value based on significant inputs not observable in the market, which caused them to be classified as Level
3 measurements within the fair value hierarchy and used the Monte Carlo pricing model to calculate the fair value of the instruments.
Changes in the fair value of derivative financial instruments related to updated assumptions and estimates were recognized as change in
fair value of derivative financial instruments within the Condensed Consolidated Statements of Operations.

48

ZOOMCAR HOLDINGS, INC.

NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS (UNAUDITED)

The changes in the fair value are summarized below:

    Preferred
 stock
 warrant
 liability  
    Notes  
    SSCPN  
    Unsecured
 Convertible
 Note
 (‘Atalaya Note’)  
    Derivative
 financial
 instruments 
  
    Balance as of April 1, 2023 
    $1,190,691  
    $10,944,727  
    $17,422,132  
    $-  
    $14,373,856 
  
    Issue of SSCPN and warrants 
     -  
     -  
     8,655,330  
     -  
     - 
  
    Change in fair value of convertible preferred stock warrant 
     (245,143) 
     -  
     -  
     -  
     - 
  
    Change in fair value of SSCPN 
     -  
     -  
     10,