Company: ZCARW
Filing Date: 2025-11-14
Form Type: 10-Q
Source: 0001213900-25-110391
Chunk: 502

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-11-14
Form: 10-Q
Item: Part I, Item 2
Chunk 502
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 be able to realize a fair price from their shares when they determine to sell
them or may have to hold them for a substantial period of time until the market for our Common Stock improves.

81

Because our Common Stock is quoted on the
OTCQB and not listed on a national exchange, U.S. broker-dealers may be discouraged from effecting transactions in shares of our Common
Stock because it may be considered a penny stock and thus be subject to the penny stock rules.

The SEC has adopted a number
of rules to regulate a “penny stock” that restricts transactions involving stock which is deemed to be a penny stock. Such
rules include Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, 5g-7, and 15g-9 under the Exchange Act. These rules may have the
effect of reducing the liquidity of penny stocks. “Penny stocks” generally are equity securities with a price of less than
$5.00 per share (other than securities registered on certain national securities exchanges or traded on Nasdaq if current price and volume
information with respect to transactions in such securities is provided by the exchange or system). Our shares of common stock may, in
the future constitute, a “penny stock” within the meaning of the rules. The additional sales practice and disclosure requirements
imposed upon U.S. broker-dealers may discourage such broker-dealers from effecting transactions in shares of our common stock, which could
severely limit the market liquidity of such shares of common stock and impede their sale in the secondary market.

A U.S. broker-dealer selling
a penny stock to anyone other than an established customer or “accredited investor” (generally, an individual with a net worth
in excess of $1,000,000 or an annual income exceeding $200,000, or $300,000 together with his or her spouse) must make a special suitability
determination for the purchaser and must receive the purchaser’s written consent to the transaction prior to sale, unless the broker-dealer
or the transaction is otherwise exempt. In addition, the “penny stock” regulations require the U.S. broker-dealer to deliver,
prior to any transaction involving a “penny stock”, a disclosure schedule prepared in accordance with SEC standards relating
to the “penny stock” market