Company: ZCARW
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001213900-25-014437
Chunk: 595

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-02-14
Form: 10-Q
Item: Part II, Item 1A
Chunk 595
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 A Warrants issued
at the First closing will be reduced to the Dilutive Issuance Price, subject to the Floor Price, and there will be a proportionate adjustment
to the number of shares underlying the such warrants. Further, the June Warrants, the November Series A Warrants and the Series A Warrants
issued at the First Closing provide that if the Company enters into a Variable Rate Transaction (as defined in each class of warrant),
then such warrants will automatically adjust down to the lowest price that the Company shall be deemed to have issued shares of Common
Stock at the lowest exercise price at which such Warrants herein may be exercised. As a result, to the extent that this Offering is deemed
a Variable Rate Transaction (in particular, upon receipt of stockholder approval), the June Warrants and the November Series A Warrants
will be adjusted down to the lowest respective Floor Price in each of the Offerings (which will trigger an adjustment of the Series A
Warrants down to the Floor Price as well) and in the future may be adjusted down to their respective Floor Prices if lower than the Floor
Price in this Offering. The exercise price of Series A Warrants issued at the First Closing would be similarly reduced in the event of
any subsequent Variable Rate Transaction, subject to the $0.312 Floor Price.

In connection with the Business
Combination, we also issued the Notes to ACM in satisfaction of certain transaction expenses associated with the Business Combination.
The Notes, which are presently in default (and are the subject of a demand letter sent by the ACM to the Company for immediate payment
and a notice of motion for summary judgement as described in more detail herein), contain price based anti-dilution protection on the
conversion price of such Notes down to a floor price of $25 per share which has already been reached. Additionally, while the holder of
the Notes is unable to convert any additional amounts under the Notes since the Notes have already been converted into the maximum number
of shares permissible under the terms of the Notes without receiving stockholder approval, we may seek stockholder approval in the future
to allow for the Notes to convert into additional shares. To the extent that we raise additional capital through the sale of equity or
convertible debt securities, your ownership interest will be diluted, the MFN Noteholder Rights and anti-dilution provision may be triggered,
and the terms of the newly issued securities may include liquidation or other preferences that adversely affect your rights.

Any future adjustments to
the exercise