Company: ZCARW
Filing Date: 2025-06-30
Form Type: 10-K
Source: 0001213900-25-059675
Chunk: 1834

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-06-30
Form: 10-K
Item: Item 6
Chunk 1834
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 Hence, as of March 31, 2025, the number of warrants exercisable
towards Series A and Series B of both the November 2024 and December 2024 offering is fixed and hence there is no variability w.r.t.
the number of warrants due to changes in the share price of the Company. Hence, 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 at their respective fair value on such date and warrants exercised after the
reclassification were directly adjusted with additional paid in capital. 

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 placement agents for the issuance
of the Redeemable Promissory Note.

These warrants were classified
as equity in accordance with ASC 815-40 since all the conditions required for equity classification are met. Upon issuance of the warrant,
the Company had allocated a portion of the proceeds from the issuance of its Redeemable Promissory Note to the warrant based on the relative
fair values of warrants and Redeemable Promissory Note in accordance with ASC 820.

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.

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 for these instruments either as liabilities
or equity, and accounting for conversion feature. As per ASC 480-10-25-14, the Notes and SSCPN were classified as liabilities because
the Company intended to settle them by issuing variable number of shares with a fixed and known monetary value at the time of inception.
However, the Company had elected fair value option for these Notes and SSCPN, as discussed below and thus did not bifurcate the embedded
conversion feature.