Company: ZCARW
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076590
Chunk: 693

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part II, Item 1A
Chunk 693
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 Offering, and the Placement Agent. Since we expect to issue shares of Common Stock
and Common Stock Equivalents to ACM, in connection with any settlement, and to register such shares of Common Stock and shares of Common
Stock underlying Common Stock Equivalents for resale in one or more registration statements, such actions could result in a breach of
these restrictive covenants and we could be liable for damages to the investors in the November Offering, and the Placement Agent, which
could have a material adverse effect on our financial situation and operations.

If the pre-programmed IoT devices distributed
to our Hosts to affix to registered cars, which IoT devices enable GPS tracking and data collection by Zoomcar and keyless, digital access
to booked vehicles by Guests, do not function as they are intended to function, our business, financial condition, and results of operations
could be adversely affected.

As part of our vehicle registration
process, all Hosts are provided with an option to install a variety of customized software-enabled IoT devices These devices, which Zoomcar
obtains from several suppliers and then programs prior to distribution to Hosts, serve multiple functions, including enabling Guests to
access Host vehicles by digitized keyless access and start and end bookings using Zoomcar’s mobile app. The IoT devices also facilitate
GPS monitoring by Zoomcar of in-trip vehicles, which serves a data collection function that is important to Zoomcar.

We have no control over the
quality or functionality of the IoT devices distributed to Hosts and such devices may not function as intended or may be out of service
during the course of a booking or while a Guest is attempting to access a booked vehicle. In such scenarios, Guests are able to contact
Hosts via number masking call or text chat enabled by Zoomcar Guest App. However, failures to provide the seamless keyless functions may
deny or delay Guests’ quick access to the vehicles, thus reducing Guests’ interest in utilizing our platform. Hosts, in turn,
may rely on Zoomcar’s customer support functionality to facilitate connecting Guests to emergency services in the event of a vehicle
accident or other situation that, if unresolved, could result in damage to a Host vehicle. If Zoomcar is unable to help Guests that encounter
problems during bookings, it could result in complaints and negative reviews from both Hosts and Guests, and higher incidents of damages
claims to Zoomcar by Hosts, leading to adverse consequences to our reputation, brand, business, prospects, and operating results.

We