Company: ZCARW
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001213900-25-014437
Chunk: 485

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-02-14
Form: 10-Q
Item: Part II, Item 1
Chunk 485
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 default notice during May 2024. . Thereafter, Orix had initiated mediation proceedings on August 13, 2024 at Delhi HC
legal service committee for settlement of outstanding dues. Based on the most recent discussions with Orix, the Company has received an
in-principal approval to the settlement terms proposed by the Company on November 7, 2024 from Orix which has agreed to extend the timeline
for repayment of the outstanding dues. The terms of the settlement were also presented to the appointed mediator on November 7, 2024 and
the final settlement agreement was executed and taken on record at the mediation proceedings on November 20, 2024. As of January 15, 2025,
Zoomcar has also made payment of two tranches amounting to $224,355 (approx.) towards partial settlement of the outstanding debts. If
we fail to honor the obligations under the settlement agreement as executed, Orix may pursue debt recovery measures against the Company
and further impose a penal interest at the rate of 18 percent p.a. Such an outcome may have a material adverse impact on our business,
operations, or financial condition.

Further we are in violation of the final payment obligation of $538,695
on our loan with Mahindra & Mahindra Financial Services Limited (“Mahindra”). As of the date hereof, Mahindra has
not formally extended or provided a waiver of such overdue payment. Mahindra may initiate legal action for resolution of the dispute.
Such outcomes may have a material adverse impact on our business, operations, or financial condition.

92

Additionally, we are in various
stages of discussion on deferment with our other lenders with regards to the scheduled loan payments from November 2023 onwards and extending
up to January 2025. However, we have not received any formal notice of default from these other lenders, but such lenders have not formally
extended or provided waivers of such overdue payments. While the Company is actively engaging in discussions with its lenders and vendors
to restructure the existing indebtedness by means of haircuts and deferment of payment timelines, no assurance can be made that the Company
will be successful in restructuring these outstanding liabilities.

As a result of the foregoing,
the Company is at material risk that the above parties including certain vendors could initiate insolvency proceedings under Indian Insolvency
and Bankruptcy Code 2016 (IBC). As per the provisions of IBC, an operational creditor can initiate an insolvency resolution process against