Company: ZCARW
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001213900-25-014437
Chunk: 373

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-02-14
Form: 10-Q
Item: Part I, Item 8
Chunk 373
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from certain of our warrant holders related to the purported cashless exercise of their warrants. 

On January 30, 2024, we received
a statement of arbitration claim before Judicial Arbitration and Mediation Services, Inc., with Aegis Capital Corp., Adam Stern, and the
Robert J. Eide Pension Plan being the claimants therein. The Claim alleges breaches of certain agreements between (a) the Company and
Aegis, and (b) Adam Stern and the Robert J. Eide Pension Plan as warrant holders, on the one hand, and the Company on the other; it seeks
damages “preliminarily believed to be” at least $10,000,000 purportedly arising from the alleged breaches. The Claim also
seeks amounts for attorneys’ fees and costs, as well as an order of rescission with respect to the issuance of certain allegedly
wrongfully dilutive shares of Common Stock issued in connection with the Business Combination or, alternatively, an order mandating
a purportedly anti-dilutive issuance of additional shares of Common Stock to the claimants. On January 31, 2024, the claimants filed
an action in the New York State Supreme Court in aid of the arbitration, including seeking by order to show cause substantially the same
relief as the Claim on a declaratory basis. The Court denied the application for a mandatory injunction granting ultimate relief on the
record. Claimants filed a separate order to show cause seeking attachment of the Company’s assets arguing the Company did not have
sufficient working capital to satisfy a potential award based on its public filings. The Court found that while Claimants had not shown
a likelihood of success in their theory of the case, it was likely something would be owed. An order, granting claimants the right to
attach up to $3,399,878 of Zoomcar’s assets in New York along with other relief, was issued and later modified by the New York Appellate
Division, First Department. A motion seeking to stay or modify that order is currently pending in the First Department and the parties
are awaiting the start of arbitration. While the Company believes that the claims are not supported by the facts or law and there
was no breach of agreements as alleged, there can be no assurance that the Company will be successful in their efforts to have the matter
vacated, and such efforts may be time-consuming, costly and may have reputational and other negative effects on