Company: ZCARW
Filing Date: 2025-02-14
Form Type: 10-Q
Source: 0001213900-25-014437
Chunk: 925

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-02-14
Form: 10-Q
Item: Part I, Item 2
Chunk 925
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Proceedings over time or from time to time, in the ordinary course of our business and as our business continues to grow and expand over
time. Becoming involved with Legal Proceedings, regardless of the outcome, may result in substantial cost and diversion of our resources,
including our management’s time and attention.

As a result of our business
operations in India, we are regularly subject to legal proceedings, many of which are de minimis in nature and amount and the majority
of which relate to local tax matters. Many of these tax and vehicle accident-related Legal Proceedings are pending before various forums
in India and involve localized practices and interpretations of regulatory matters that make the ultimate outcomes or resolution of these
Legal Proceedings inherently uncertain and difficult to predict. Management’s views and estimates related to these matters may change
in the future, as new events and circumstances arise and the matters continue to develop.

On August 4, 2023, a former
consultant (Mr. Randall Yanker) to Zoomcar filed a complaint against Zoomcar in the United States District Court for the Southern District
of New York. The complaint contains breach and anticipatory breach of contract claims arising from a letter agreement, effective as of
May 2020, between Zoomcar and the former consultant, which engagement letter was terminated by Zoomcar in January 2022. The plaintiff
alleges that the terms of the engagement letter entitle him to cash and warrants to purchase Zoomcar shares in relation to prior Zoomcar
transactions and upon consummation of the proposed Business Combination. The complaint seeks declaratory relief affirming the plaintiff’s
alleged continuing right to receive compensation from Zoomcar under the engagement letter, together with attorneys’ fees, costs,
and interests, as well as punitive damages. A motion to dismiss filed by the Company has been denied vide the orders passed on October
9 and October 16, 2024. Subsequently the Company has filed its response to the allegations levelled in the complaint. Subsequently
on February 4, 2025, the parties executed a settlement agreement wherein the Company agreed to issue to Mr. Randall Yanker and/or his
designees an aggregate of (i) 1,000,000 Shares and/or Pre-Funded Warrants, (ii) Series A Warrants to initially purchase up to an aggregate
of 2,500,000 shares of Common Stock, subject to certain adjustments, and (iii) Series B Warrants (all of the warrants collectively referred
to