The following is a summary of the Company’s Atalaya Note payable for which it elected fair value option as on March 31, 2026 and March 31, 2025:

The Atalaya Note was initially recorded at the fair value of $10,167,194 on issuance. The Atalaya Note was issued at 7.5% discount on principal amounting to $632,596 and bears an interest of 8% and an additional interest on default of 8% compounded monthly.

During the year ended March 31, 2025, partial liability was settled by issue of 6,257 shares to the Atalaya Note holders for a settlement of $2,324,696.

Subsequently, the Company received notices from Atalaya/(ACM Zoomcar Convert LLC) regarding equity line transactions and incurring debt without the Purchaser’s consent. Atalaya filed a case against the Company seeking relief from the above mentioned defaults. On March 28, 2025, the Supreme Court of the State of New York ordered the Company to pay the outstanding principal and accrued interest totaling $5,997,833, with additional interest at 9% per annum until full payment.

During the year ended March 31, 2026, the outstanding liability is $6,554,074, representing the outstanding principal, accrued interest and attorney fees and costs. The Company has recognised a loss on settlement of litigation of $12,000 in the Consolidated Statements of Operations on account of this.

The change in fair value resulted in loss of $539,805 that is recorded for the year ended March 31, 2026 respectively (gain of $1,740,636 for the year ended March 31, 2025) in the Consolidated Statements of Operations (as no portion of such fair value adjustment resulted from instrument-specific credit risk). Also, Refer Note 29.