Company: ZCARW
Filing Date: 2025-03-28
Form Type: DRS
Source: 0001013762-25-003498
Chunk: 168

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-03-28
Form: DRS
Chunk 168
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 for the “fair value option” (“FVO”) election, to the extent not otherwise
prohibited by ASC 825-10-15- 5, to be afforded to financial instruments, wherein bifurcation of an embedded derivative is not necessary,
and the financial instrument is initially measured at its issue-date estimated fair value and then subsequently remeasured at estimated
fair value on a recurring basis at each reporting period date.

The estimated fair value
adjustment, as required by ASC 825-10-45-5, was recognized as a component of other comprehensive income (“OCI”) with respect
to the portion of the fair value adjustment attributed to a change in the instrument-specific credit risk, with the remaining amount of
the fair value adjustment recognized under Finance costs shown as “Change in fair value of Notes” and “Change in fair
value of SSCPN” in the accompanying Condensed Consolidated Statement of Operations. With respect to the above Notes and SSCPN, as
provided for by ASC 825-10-50- 30(b), the estimated fair value adjustments were presented as a separate line item in the accompanying
Condensed Consolidated Statement of Operations, since the change in fair value of the Notes and SSCPN payable were not attributable to
instrument specific credit risk.

During the year ended March
31, 2024, as a result of consummation of the Business Combination by way of Reverse Recapitalization, the Notes and SSCPN outstanding
were converted into 59,757 shares (5,975,686 shares prior to the Reverse Stock Split) of the Company’s Common Stock.

The SSCPN and Notes were
adjusted for their carrying value through Condensed Consolidated Statement of Operations as on date of Reverse Recapitalization and credited
at carrying value to the capital accounts upon conversion to reflect the stock issued.

During the year ended March
31, 2024, the Company issued an unsecured convertible note (“Atalaya Note) which had features similar to that of SSCPN and were
accounted accordingly as enumerated above.

Troubled debt restructuring

As per ASC 470-60 Troubled
Debt Restructuring (TDR) refers to a situation where the creditor, grants concessions to a borrower experiencing financial difficulties.
These concessions may include modifications to the terms of the payable, such as reducing the interest rate, extending the repayment period,
or forgiving a portion of the payable. Such restructuring is done with the intent to provide relief to the borrower and to maximize the
potential