Company: ZCARW
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-110391
Chunk: 323

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 8
Chunk 323
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 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, 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.

(b)Warrants issued along with Redeemable Promissory Note:

During the year ended March 31, 2025, the Company
issued warrants along with Redeemable Promissory Note and as consideration to the placement agent for the issuance of the Redeemable Promissory
Note. These warrants were classified as equity in accordance with ASC 815-40 on the initial recognition.

Fair value measurements and financial instruments

Fair value is defined as the price that would
be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement
date. In accordance with ASC 820, Fair Value Measurement (“ASC 820”), the Company uses the fair value hierarchy, which