Company: ZCARW
Filing Date: 2025-03-04
Form Type: S-1
Source: 0001213900-25-020176
Chunk: 330

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-03-04
Form: S-1
Chunk 330
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 of Operations.

| (a) | Warrants issued along with SSCPN                            
 and to placement agent (‘Derivative financial instrument’): |

During the year ended March 31, 2024 and March 31, 2023, the Company had issued warrants along with Senior Subordinated Convertible Promissory Note (“SSCPN)” as defined in SSCPN policy and as consideration to placement agents for the issuance of SSCPN.

These warrants were derivative in accordance with ASC 815-10-15-83 since they contained an underlying, had cash less payment provisions, that could have 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.

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

The Company also had preferred stocks and common stocks warrants (as described below) issued during the year ended March 31, 2022, and were classified as liabilities and equity respectively in Consolidated Balance Sheet as of March 31, 2023.

Each unit of Series E preferred stock issued by the Company consisted of one 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 placement agencies 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 issue 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 have been reclassified to additional paid-in-capital. Refer note 18 and 19.