Company: ZCARW
Filing Date: 2025-08-14
Form Type: 10-Q
Source: 0001213900-25-076590
Chunk: 307

Company: Zoomcar Holdings, Inc.
Filing Date: 2025-08-14
Form: 10-Q
Item: Part I, Item 2
Chunk 307
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and other obligations imposed by various rules and regulations applicable to public companies has and is expected to continue to increase
legal and financial compliance costs and the costs of related legal, auditing, accounting, and administrative activities. These increased
costs will require us to divert a significant amount of money that could otherwise be used to expand the business and achieve strategic
objectives. Advocacy efforts by shareholders and third parties may also prompt additional changes in governance and reporting requirements,
which could further increase costs.

Our current indebtedness, and to the extent
we incur indebtedness in the future, our future indebtedness could adversely affect our financial condition, our ability to raise additional
capital to fund our operations, our ability to operate our business, our ability to react to changes in the economy or our industry and
our ability to pay our debts and could divert our cash flow from operations for debt payments.

We are in default of a majority
of our indebtedness of $25.50 million as of June 30, 2025 as more fully described under the Unaudited Condensed Consolidated Financial
Statements, which has had and will continue to have an adverse effect on our financial condition, our ability to raise additional capital
to fund our operations, and our ability to operate our business. Further, in the future, we may continue to incur a material amount of
indebtedness. Our level of indebtedness increases the possibility that we may be unable to generate cash sufficient to pay the principal
of, interest on, or other amounts due with respect to our indebtedness. Our leverage and debt service obligations could adversely impact
our business, including by:

●impairing our ability to generate cash sufficient to pay
interest or principal, including periodic principal payments;

●increasing our vulnerability to general adverse economic
and industry conditions;

103

●requiring the dedication of a portion of our cash flow from
operations to service our debt, thereby reducing the amount of our cash flow available for other purposes, including capital expenditures,
dividends to stockholders or to pursue future business opportunities;

●requiring us to sell debt or equity securities, possibly
on unfavorable terms, to meet payment obligations;

●limiting our flexibility in planning for, or reacting to,
changes in our business and the industries in which we compete; and

●placing us at a possible competitive disadvantage with less
leveraged competitors and competitors that may have better access to capital resources.

The Company may be subject to securities
litigation, which is expensive and could divert