Company: ZCARW
Filing Date: 2025-05-12
Form Type: S-1/A
Source: 0001213900-25-041769
Chunk: 268

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-05-12
Form: S-1/A
Chunk 268
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been net settled in shares and had a very minimal initial net investment. Accordingly, the derivatives were measured at fair value and
subsequently revalued at each reporting date until the close of Reverse Recapitalization consummated during year ended March 31, 2024.

| (d) | Warrants issued to preferred stockholders: |

Before the date of reverse recapitalization,
the Company had warrants issued to preferred stockholders convertible into shares of preferred stock and common stock which were issued
during the year ended March 31, 2022, and were classified as liabilities and equity respectively.

Each unit issued by the Company
consisted of one share of Series E preferred stock and a warrant which entitled the holder to purchase one share of common stock of the
Company on the satisfaction of certain conditions. Warrants were also issued to the placement agent 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 issuance 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
were reclassified to additional paid-in-capital.

F-16 ZOOMCAR HOLDINGS, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

| (k) | 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 the Company issued
Notes and SSCPN. The Company evaluated the balance sheet classification