EDGAR 10-K Filing

Company CIK: 1854275
Filing Year: 2025
Filename: 1854275_10-K_2025_0001213900-25-059675.json

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ITEM 1. BUSINESS
Item 1. Business
Mission
Zoomcar’s mission is to transform the urban mobility landscape across emerging market countries by connecting individuals with short and medium-term transportation needs with vehicle owners through the convenience of our scalable digital platform designed to provide persons seeking short-term vehicle use with personalized travel solutions while also providing entrepreneurial opportunities for vehicle owners to financially benefit from sharing their car within their community.
Overview
Zoomcar, headquartered in Bangalore, India, is a leading emerging market-focused online car sharing marketplace, based on the number of current vehicles and active users on our platform. Our platform enables car owners (“Hosts”) and persons in temporary need of vehicles (“Guests”) to connect and share the use of a Host’s car, made available to Guests at mutually convenient locations.
Founded in 2012, our online platform facilitates mobility in emerging markets, where convenient, cost-efficient transportation options are limited. Guests on our platform browse and choose from a range of available car models, makes, sizes and price points to book vehicles listed on our platform by Hosts. Hosts, in turn, can turn underutilized vehicles into revenue-generating opportunities by sharing their cars with individuals who require a car to satisfy leisure, work or other short to medium-term transportation needs. Further, in October 2022, we entered into the Merger Agreement with IOAC, a special purpose acquisition company with securities traded on the Nasdaq Stock Market pursuant to which we agreed, subject to satisfaction of certain conditions and the terms of the Merger Agreement, to engage in and consummate the Business Combination transaction. The Business Combination was consummated on December 28, 2023. Pursuant to the Business Combination, Merger Sub, a Delaware corporation and a wholly owned subsidiary of IAOC, merged with Zoomcar, Inc. with the Company continuing as the surviving entity. Zoomcar, Inc. thus became a wholly owned subsidiary of IAOC and IAOC was renamed as Zoomcar Holdings, Inc. with its securities traded on the Nasdaq Stock Market. As a result of this Business Combination, the stockholders (including common and preferred stock) of Zoomcar, Inc. were issued common stock of the Company. Subsequently, on May 6, 2025, Zoomcar Holdings, Inc. (the “Company”) received notice Nasdaq that the Nasdaq Hearings Panel (the “Panel”) has determined to delist the Company’s common stock and public warrants after it failed to meet certain continuing listing standards within the prescribed time period. Following the delisting of its common stock from the Nasdaq Global Market, the Company continues to be a reporting company under the Securities Exchange Act of 1934. The Company’ common stock and public warrants have commenced trading on the OTC Markets Group trading platform at the open of trading on May 8, 2025, under the symbols “ZCAR” and “ZCARW,” respectively. The Company has applied for trading on the OTCQX Best Market for its common stock and on the OTCQB Venture Market for its public warrants.
We believe our business model is particularly well-suited to emerging markets because of the transportation challenges faced by urban residents in these areas. In India, the market that Zoomcar serves, the costs of car ownership can be prohibitively high relative to average personal income levels, with less than ten percent of persons in these markets owning a car. At the same time, these individuals typically lack access to alternative transportation modalities that are sufficiently convenient or affordable. The market also has growing middle classes, rapidly urbanizing metropolitan areas, and vast numbers of young, tech-fluent citizens. In total, these overarching demographic trends all contribute to management’s estimated total addressable market for year ended March 31, 2025 in emerging markets of $108 billion, of which India accounts for $11 billion, making India the most important market for us. The opportunity around the growing total addressable market is further described under the heading “Market Opportunity” below.
Already present in over 94 cities across India, we plan to continue evolving our platform offerings to meet Guests’ mobility needs in ways that are convenient, modern and cost-efficient, providing both transportation solutions and entrepreneurship opportunities within the communities where we operate. Our business model has evolved since our inception, as our platform originally offered short-term rental of vehicles owned or leased directly by Zoomcar. Between 2018 and 2020, we began shifting the focus of our technology and product development efforts towards capabilities relevant to our current “asset-light” business model focused on our digital platform for peer-to-peer car sharing. We completed our business model shift during the second half of 2021. Over time, we have expanded our platform’s functionality, and we continue to evolve our offerings as consumer preferences change.
Our technology is the backbone of our peer-to-peer car sharing platform. As of March 31, 2025, nearly half of our full-time employees are employed as technical staff that develop and refine the artificial intelligence and machine-learning algorithms that, among other things, help to optimize pricing models, determine appropriate damage coverage options for Guests, present Hosts and Guests with opportunities for ratings-based rewards and to monitor appropriate use of our platform. Our platform provides powerful tools for vehicle searching and discovery, Host and Guest chat and vehicle and driver tracking and ratings features. Highly-ranked Hosts with multiple vehicle offerings and highly rated prior hosting experiences can earn favorable placements for their vehicles on our platform. Guests can use the Host ratings and reviews shared on our platform to choose vehicles that best suit their needs and preferences. Our customized GPS-enabled vehicle tracking systems allow us to integrate Guest driving data into our computation of “driver scores” which comprise an important part of the feedback and review systems that collectively foster a trust-based community of Zoomcar platform users. We supplement our core platform technology through a software-enabled keyless entry application that is deployed across the vast majority of Host vehicles, thereby enabling Guests to access booked vehicles in a contactless fashion through their personal smartphones.
As of March 31, 2025, we had approximately 40,221 registered Host vehicles and approximately 4 million active Guests (defined as Guests who have searched our platform for vehicles or bookings within the preceding twelve (12)-month period) participating in our marketplace.
We expanded our business outside of India in 2021 to Indonesia, Egypt and Vietnam. After carefully managing return on investment in these markets, we confirmed that our business model fits the needs of customers in Indonesia, Vietnam and Egypt, however, scaling in these countries requires investments in marketing which we do not currently have capital to achieve. Accordingly, we decided to cease operations in Vietnam in 2023, and in Indonesia and Egypt in 2024, so that we can concentrate our engineering and financial resources in India. Over time, Zoomcar plans to further increase penetration within India and, in the future, to expand into additional countries, subject to our financial condition.
How our Platform Works
Accessing Our Platform
● Hosts: Our platform is designed to make it quick and easy for vehicle owners to create a “Host” account, complete our onboarding and registration process (i.e., add basic profile and vehicle information, which is then validated by Zoomcar), create attractive vehicle listings and connect with Guests seeking to book trips. Our platform includes AI and machine-learning- developed functionality that enable Hosts to manage their vehicle listings and rewards, pre-set booking parameters, optimize discretionary booking price elements and exchange messages with Guests as needed. Prior to listing a vehicle on the Zoomcar platform, the Host is encouraged to install a customized IoT device pre-programmed by Zoomcar to enable GPS tracking and data collection by Zoomcar and keyless, digital vehicle access by Guests.
● Guests: Guests seeking vehicles establish an account on our platform by providing basic identification, driver’s license and payment information. Guests browse our vehicle catalogue to find cars sorted by a variety of criteria to meet their transportation needs. Our platform is intended to be both efficient and highly personalized, incorporating search-and ranking-based algorithms powered by back-end data science models that use historical bookings and recent search data, to offer the most personalized vehicle catalogue results to the Guest. Our platform functionality is constantly evolving and improving, often in response to feedback from Guests, whose ratings and reviews are at the core of the community-driven ethos of our platform.
Browsing and Selecting Vehicles
Our platform allows Guests to search listed vehicles in our catalogue across multiple criteria, including price, location, car type, rating, and other relevant parameters. Although listings on our platform change over time, there are generally a wide variety of vehicles available to Guests, including numerous options for compact cars, sedans, SUVs and oftentimes luxury, electric, or other premium vehicles; many listed vehicles have specific features, such as luggage racks, extra trunk storage, children’s car seats and other criteria that Guests find desirable for specific use cases (such as, for example, a weekend get-away trip, moving homes or a family vacation). The density of vehicles available to Guests across cities within our current markets, particularly in the largest urban areas, enables most Guests to identify and book vehicles at locations close to their homes or workplaces. The platform also allows certain highly-ranked Hosts to provide Guests an option of doorstep delivery, therein providing incremental last-mile convenience to the Guest. Guests can observe reviews by other Guests when choosing vehicles, which helps to further build out a community of trust and transparency between Guests and Hosts.
Bookings
Guests book and pay for the use of vehicles directly through our platform through our mobile applications (Android and iOS) or website. We refer to a scheduled trip or other vehicle use case (e.g., booking a car for a three-day leisure outing) as a “trip,” and a trip arranged through our platform as a “booking.” We consider a trip booking process to be complete when a Guest selects a listed vehicle for a trip and pays Zoomcar the upfront portions of the total trip fees, as further described under the heading “Payments/Revenues” below. Guests can view upcoming and past bookings within our app and can also extend or modify bookings through the platform (with associated fees, as applicable). Guests can also start and end bookings remotely from their mobile app and have opportunities to accumulate or redeem rewards and incentives associated with trips they complete with booked vehicles, as further described below.
Trips
Once a Guest has booked a vehicle, the Guest receives information from our platform to access the vehicle and start their trip. To access the booked vehicle, the Guest most commonly unlocks the booked car through a keyless entry process connected to the in-vehicle hardware installed on the Host vehicle. Our mobile apps enable Guests and Hosts to communicate via messenger and email as necessary to coordinate any logistical details or answer any other related question. Once a trip is complete, the Guest must return the booked car in the same condition as when the trip commenced and pay any additional associated fees that were not due upon booking, such as fuel charges or vehicle damage penalties.
Payments/Revenues
Guests pay Zoomcar certain fees upon booking a vehicle. These fees typically include an “upfront booking fee” (less any applicable discounts and credits), a trip protection fee and a platform convenience fee. Other charges, such as fuel refilling or vehicle damage related charges, if incurred, are paid by Guests upon trip completion. We currently accept online payments via credit card debit card, online banking, and digital payment alternatives such as UPI (in India) and other digital wallet platforms. We plan to accept additional forms of payment as new digital payment modes become available in our market.
We refer to the total payment from a Guest in respect of a completed trip as the “Gross Booking Value” or “GBV”; we use “Average Transaction Value,” or “ATV,” to refer to the average GBV per booking during a particular time period and “booking days” to refer to the total days (24 hours, measured in minutes) during a given measurement period that one or more vehicles on our platform is booked and used for a trip. Certain portions of the GBV associated with each trip are paid 100% to the Host (e.g., fuel costs) and other portions are retained 100% by Zoomcar (e.g., value added trip protection fees); the balance of fees paid by Guests are apportioned 60% to the Host and 40% to Zoomcar. For more information on allocation of revenue between Hosts and Zoomcar, please see the section titled “Management’s Discussion and Analysis - Standard Booking Flow.”
Rewards and Incentives
We utilize certain rewards and incentives to encourage repeat and incremental transactions on our platform. For example, Guests that refer new customers to Zoomcar receive redeemable credits when new users complete bookings; These credits are also issued as a part of loyalty program which involves discounts or credits offered to Guests that they can redeem when booking subsequent trips on our platform.
Industry and Consumer Preferences
Our platform is designed around consumer preferences and aims to provide smart transportation solutions within urban communities across emerging market countries. Mobility options are currently limited in the markets we serve and the transportation options that are currently available are often outdated, expensive and, in many cases, inflexible and inconvenient for short-term needs. Our business model and platform offerings continue to evolve with changing consumer expectations and the observable shift in emerging market populations toward personalized, digitized goods and services offered on-demand. We believe that our positioning in most major cities in India, together with our scalable technology and platform features, make Zoomcar well-positioned to continue attracting customers from addressable markets with few parallels in terms of scale and size. As further described below, based on publicly available population and economic data published by the United Nations, Fitch and other sources, coupled with Zoomcar management estimates informed by professional experience, as of March 31,2025, our platform has a serviceable addressable market in emerging markets of approximately $25 billion, assuming a penetration rate of less than 25% among potential customers expected to fall within certain demographic parameters, and a total addressable market of $108 billion in emerging markets, assuming broader adoption across a potential customer base that includes Hosts and Guests across the 25 countries we identify as our potential target markets. Based on the estimates and the bookings catered by our platform we estimate that the size of the total addressable market in India is $43.2 billion, and hence, at present we are focused on investing our technology and financial resources in India. Currently all of our revenue is derived in India and as of the date of this Form 10-K have ceased operations outside India. There is no guarantee we will be able to expand into any additional markets or raise significant revenue in any new markets in which we might operate in the future.
Limitations of Current Mobility Offerings in Emerging Markets
With the rapid transition to digitally enabled consumer services, the limitations of the present mobility options in emerging markets have become more apparent:
● Personal car ownership is expensive, inefficient and not scalable for most of the urban population. Publicly available predictive demographic data suggest that, by 2025, there will be an estimated population of 1.8 billion across “our target urban centers within these emerging market countries,” defined to include 25 countries located within Southeast Asia, countries situated in and around the Middle East and North Africa, Latin America and Central Asia (“MENA”), with corresponding vehicle ownership which we estimate (assuming a 5% compound annual growth rate) to exceed 200 million cars across our target emerging markets during the same time period. Even with this seemingly large number of cars, personal vehicle ownership rates currently remain below 10% across a majority of our target emerging markets economies. Further, in contrast to Western markets, owning a car in emerging markets can be prohibitively expensive relative to average incomes. High import duties and excise taxes in many emerging markets contribute to expensive upfront vehicle prices. At the same time, the used car market in emerging markets remains largely decentralized, unorganized and offline, thereby making it more challenging for consumers to obtain transparent, affordable pricing for quality vehicles. Additionally, the vehicle financing market remains largely undeveloped in our target emerging markets, as interest rates may be between 10% and 15%, with many financiers requiring down payments of 20% to 30% or higher. Additionally, even traditional car leasing options are in short supply in many emerging markets given the relatively high interest rate environment and lack of robust, reliable credit data, combined with other barriers to entry that may be presented by local regulatory considerations.
● Ride sharing solutions (similar to Uber or other local market equivalent) cover very different consumer use cases and do not meet longer-distance travel requirements. Ride sharing solutions generally serve limited use cases that are focused on intra-city point-to-point travel. We believe the majority of ride sharing use cases are for trips under 15 miles, above which the pricing becomes unattractive to most consumers, as pricing models need to take into account the costs associated with the driver’s return trip, which we believe may add between 20-30% to the overall trip price. In addition to being a more cost-effective alternative to ride sharing, we believe that car sharing offers advantages relating to autonomy, privacy, convenience and comfort. Moreover, the range of vehicle options available through a car sharing platform greatly outweigh those options available under a ride-hailing option.
● Traditional car rental and chauffer services in our target emerging markets are generally unorganized, largely offline, and oftentimes still come with a driver included. A collection of smaller, largely offline operators provides car rental services to the end consumers needing cars for personal use in our target emerging markets. In the absence of traditional car rental companies, these local “mom and pop” providers offer less standardized services that do not provide the driver with significant choice or price transparency (e.g., many still require an upfront cash deposit). Additionally, the offline providers typically do not have broad local presences and are thus unable to offer value added services like home delivery or flexible vehicle extensions. The unorganized rental providers also focus on offline fulfilment which is not digitally enabled and therefore require significant manual intervention to start the trip. A final key distinction with traditional car rental service providers in our target emerging markets is that many remain focused on providing the vehicle alongside a chauffeured driver, thereby adding to the expense of the car use.
Evolving Consumer Expectations
In parallel with the limitations of present mobility options in our target emerging markets, consumer expectations are also evolving, with discernible and dynamic shifts among tech-enabled emerging market populations. The following are some key developments that Zoomcar management views as shaping current evolutions in personal mobility:
● Mobile-app-based, on-demand solutions offer improved levels of customer convenience and flexibility. Over the past decade, mobile technology usage has proliferated across our target emerging markets, and we believe consumers now expect digital access to a wide range of goods and services including dining, personal shopping, travel and tourism, hospitality and entertainment services. Industries that were once largely offline have become more digitally connected to their end consumers, thus creating expectation among consumers of on-demand access to transactions and services. Successful businesses have effectively leveraged technology to provide personalized, dynamic experiences that adjust to meet the ever-evolving needs of the consumer.
● Consumers have come to expect seamless, frictionless mobility options as the default across our target emerging markets. We believe on-demand, hyper-local mobility options are becoming readily available, standard experiences for consumers. Micro-mobility options, such as scooters and point-to-point cab trips (ride-hailing) are examples of transportation services that have become or are becoming digitized across emerging market cities. As these trends continue, we believe consumers expect agile, convenient modes of transportation, in contrast to legacy chauffeur driven or traditional rent-a-car services. We believe that consumers are increasingly expecting a digitally enabled, frictionless travel experience representing a fundamental paradigm shift from just a decade ago when consumer travel experiences such as ride-hailing and car rental tended to occur primarily offline. The new mobility services of recent years help offer the consumer exceptional convenience with greater flexibility and affordability. We believe the fundamental insight behind these newer platforms is that today’s consumers value access over ownership and prefer to save time while also enjoying more personalized experiences.
● Solutions combining micro-entrepreneurship and efficient use of assets at scale are gaining momentum. In recent years, we believe global technology platforms have consistently offered individuals more opportunities to participate in their “scale-up” journeys. Mobile apps focusing on consumer services offer individuals an opportunity to rent out or sell products as part of their broader marketplace participation. These platforms allow individuals to essentially grow and scale a business on the applicable platform. Combined with trends toward more flexible working arrangements following the COVID-19 pandemic and less commuting, individuals are able to leverage additional available time by collaborating with a technology platform on bespoke entrepreneurial arrangements.
● As urban incomes across our target emerging markets rise, domestic tourism is also flourishing. Among the more pronounced macro trends across our target emerging markets during the past decade is what we believe to be the increasingly high urbanization rates in the largest emerging-market cities. During this time, populations in these cities have generally trended younger, with a strong emphasis on upward mobility. Zoomcar believes that the trend towards domestic, short-term travel will continue, given the increased emphasis on domestic travel destinations for consumers across our target emerging markets.
Market Opportunity
Transportation ranks among the top household expenses across emerging markets, representing, in many cases, as much as 20% of average annual income per household. As a peer-to-peer car sharing platform that emphasizes convenience and affordability for Guests and income-generating potential for Hosts, we believe that our scalable platform is well-positioned to provide mobility solutions to Guests and Hosts across the markets in which we currently operate and those in which we may operate in the future. Zoomcar management evaluates potential revenue opportunity for our platform in terms of serviceable addressable market, representing an estimate of total potential platform revenue opportunities, assuming, among other inputs, that a portion of the aggregate population meeting certain core demographic criteria described below engages in transaction on our platform, and total addressable market, representing an estimate of total potential platform revenue opportunities, assuming, among other inputs, that the entire population meeting the core demographic criteria engage in transactions on our platform. Our estimates of serviceable addressable market and total addressable market are based on a number of assumptions, discussed in greater detail below, many of which are forward-looking and are premised on facts and circumstances that may or may not reflect actual results. In addition to incorporating Zoomcar management assumptions based on industry knowledge and professional experience, our addressable market estimates reflect publicly-available demographic, economic and transportation-related information published by the United Nations, Fitch and other sources.
Serviceable Addressable Market
We regard serviceable addressable market as an indicator of our near-term or medium-term revenue potential based on our current platform offerings, subject to various contingencies and assumptions. Zoomcar management estimates our annual global serviceable addressable market opportunity to be approximately $25 billion, taking into account publicly-available demographic and other predictive population data and assuming that, within the same time period, our customer base expands to a total of 75 million Guests from among the total estimated population expected, by 2025, to have the following attributes (collectively, our “core demographic criteria”): residing in an urban center within one of Zoomcar’s 25 potential emerging market countries; having annual reported income within the top 65th percentile within the country of residence; between 18 and 50 years of age; and holding active drivers licenses. Based on publicly-available demographic and economic data and Zoomcar management analysis, 310 million people across our target emerging markets was expected to meet these demographic criteria by 2025; we estimate, for purposes of serviceable addressable market, that approximately 24% of this total population cohort, or 75 million persons, can now book vehicles on our platform by 2025. We have also assumed, for purposes of estimating serviceable addressable market, that, for year ended on March 31 2025, our ATV was $60 of which Zoomcar’s revenue share of total GBV is ~45%. Our estimate of serviceable addressable market is not a forecast or prediction of Zoomcar’s expected operating results and is merely an estimate of Zoomcar management’s view of our addressable market, assuming, among other things, availability of quality vehicles, participation in our platform by Guests and Hosts, consistency of economic, global health and other conditions that affect our business, our customers and the markets in which we operate.
Total Addressable Market
We view total addressable market as an estimate of our platform’s total revenue potential by 2025, reflecting publicly-available demographic and economic data, as well as management estimates informed by industry knowledge and professional experience. Based on the bookings served on our platform and management estimates that, our annual global total addressable market opportunity has expand to approximately $108 billion for the year ended on March 31, 2025, using the same broad-based criteria and methodology as our estimate of serviceable addressable market, and assuming, for purposes of estimating total addressable market, that all of the persons expected to meet our core demographic criteria in 2025 are Guests engaging in transactions on our platform. For Zoomcar to achieve results approaching this total addressable market would require, among other things, expansion of our current platform functions and capabilities to meet a broader range of mobility needs and use cases and significant increases in listed vehicles and density of listings, resulting in more bookings and increased booking days by customers within our target emerging markets. As with our estimate of serviceable addressable market, Zoomcar management’s estimate of total addressable market is not a forecast or prediction of Zoomcar’s expected operating results but is intended solely as an estimate of the total market and revenues potentially available to us based on demographic data and management’s assumptions, informed by professional experience and industry knowledge, without attempting to take into consideration the numerous additional factors impacting our business, our customers and our target emerging markets.
Comparison to Western Markets
Compared to Western markets, we believe our addressable market, and by extension, our total potential for revenue generation, to be larger than if we operated in Western markets. Among the reasons for this belief, the infrastructure, traffic challenges and low vehicle ownership rates among emerging market cities and populations create a broader need for shorter-distance transportation solutions in emerging markets, where current offerings tend to be more expensive, less flexible and less personalized than booking a vehicle through our platform to meet specific travel needs.
Zoomcar’s Platform Solutions
We believe Zoomcar is positioned to lead a shift in emerging market mobility solutions to a digitally enabled, hyper-local, personalized service offering for end consumers. Through our car sharing marketplace, we are pioneering a form of mobility offering that connects Guests with a network of privately owned vehicles from which they can select cars and Hosts that align with specific, short and medium-term travel needs. Zoomcar’s hyper-local, peer-to-peer car sharing marketplace provides Guests with an affordable and flexible way to access the convenience of having a private car of their choosing without the expense of having to purchase or finance and maintain a vehicle. Our platform also provides Hosts with the ability monetize otherwise underutilized assets, thus facilitating micro-entrepreneurship through a socially-conscious, community-based asset-sharing model.
● Economics: Affordable for Guests and Income-Generating for Hosts. For many Guests, we believe that owning a car is not economical, given prohibitive vehicle pricing in our target emerging markets, coupled with lack of financing opportunities and limited pre-owned vehicle markets. Instead of buying a car that, for most consumers is likely to sit idle during large portions of a day (e.g., in a parking lot during working hours), and even more likely to be underutilized among emerging market customers in view of constraints arising from prohibitive traffic patterns and poor infrastructure, our platform offers Guests the opportunity to temporarily use a car on an as-needed basis, paying only for use of a car as required. For Hosts, Zoomcar’s platform provides the chance to offset some of the cost of vehicle ownership through income generation opportunities. Our platform, through its flexible, multi-purpose technology, is also able to identify times when a Host is most likely to profit from car sharing and highlights these entrepreneurial opportunities to allow Hosts to optimize pricing for bookings, thereby assisting Hosts in maximizing income generation by listing vehicles on our platform.
● Flexible Use Cases. Our platform allows Guests and Hosts to tailor and customize the way cars are used. Longer car trips (above 15 miles), which are not economical through ride sharing services, represent the vast majority of bookings on our platform. However, given the numerous listed vehicles distributed across nearly all parts of our most populous urban markets, our platform also enables users to book cars for shorter, intracity errands or short-duration leisure trips. Our platform also enables Guests to transition seamlessly from short duration usage to long duration usage depending on the Guests plans, thus removing the rigidity that comes with a rental car or chauffeured transaction.
● Accessibility and Ease of Use. Our online, app-based platform allows Guests to set up accounts and transact in just minutes. Through a higher personalized search function, which can filter results by price, location, type of car, rating and other salient features, Guests are afforded the ability to bypass tedious phone calls with agents and waiting times that are associated with traditional car rental. Hosts are able to install our keyless entry devices within their vehicles at one of our authorized installers in under an hour and can effortlessly optimize their vehicle pricing and specific listing terms, thus becoming the Hosts’ “back office” for their car sharing.
Competitive Advantages
Zoomcar’s primary value proposition as a platform stem from the incredible depth and breadth of vehicles offered to Guests combined with an innate ability to provide consistent hyper-local convenience and flexibility across each transaction:
● Unique Inventory. As on March 31, 2025, we had approximately 542 vehicle models that were listed on our platform by Hosts at thousands of pick-up locations mainly in India (which was our main market and is currently our only market). The number, size, model and makes of the vehicles listed by Hosts change from time to time but generally include a wide range of different vehicles, including SUVs, compact cars, sedans and electric vehicles. As of March 31, 2025, around 49% of our GBV was generated by trips booked with SUVs or other premium-segment vehicles and around 61% of GBV was generated from trips involving newer-model cars (manufactured in 2022, 2023, 2024 and 2025).We believe that the volume and diversity of vehicles offered by Hosts through our platform is one of our greatest assets in attracting Guests, particularly when contrasted with the cars that tend to be available through many traditional car leasing businesses in our core markets, many of which offer a more limited selection of vehicles. By offering Guests greater choice, convenience, flexibility, and comfort, we are able to reinforce positive associations with our brand and are more likely to receive positive feedback from Guests, who, consequently, are more likely to remain loyal to our platform once they have had a positive experience with a first booking or initial trip.
● Convenience. The number of Host vehicles available on our platform, as well as the high geographic concentration of such vehicles, particularly in the largest urban areas in which we operate, maximizes Guest convenience by reducing travel time to vehicle pick-up locations. Even if part of an individual’s travel plan involves other modes of transportation such as plane travel, Zoomcar’s substantial presence in the urban areas where we operate make our platform a good option for seamless last-mile connectivity. Further, our strong hyper-local proximity helps unlock a litany of shorter-duration, in-city use cases that encourage more frequent platform usage and complements robust organic demand for longer-duration, out-of-city travel. Strong vehicle density also helps enhance overall demand (particularly related to augmenting demand for shorter duration weekday use cases) for car sharing in our core markets, as it dramatically helps improve the convenience of the platform. As our platform increasingly benefits from network effects, we expect to further improve listed vehicle density in our largest cities.
● Affordability. Compared to more traditional transportation offerings in our target emerging markets, such as chauffeured car services, we believe our platform offers an economically better value proposition to our Guests. For example, depending on the distance and use case, we estimate, based on our experience and customer feedback, that the cost of booking a mid-range priced car on our platform would cost significantly less than it would cost to rent a chauffeured car for the same trip. As our marketplace continues to grow, we believe that our platform’s affordability advantages over alternative mobility solutions will continue to improve, due to increasing numbers and varieties of vehicles being offered to Guests at a broader range of prices.
● Customer Loyalty. We have a highly engaged community of Hosts and Guests, many of whom regularly share their feedback on our platform. We monitor platform feedback on an ongoing basis, and the input we receive from Hosts and Guests informs us of the ways in which we continue to evolve platform tools and functionality. We track Host and Guest bookings over time and use the data to determine incentives and rewards and to develop customized offerings upon subsequent bookings. Highly-ranked Hosts have access to particular benefits that are intended to reinforce their continued participation in our marketplace, including by opening to them additional price optimizing and revenue-earning features. Guests, in turn, also receive rewards and benefits based on repeat bookings. Our referral program, which is currently offered to Guests and Hosts, rewards existing customers for bringing new customers to our platform.
● Culture and Team. Our team’s commitment to building a marketplace to facilitate better use of personal vehicles through car sharing is critical to our success. Our management team has deep domain experience across marketplaces in our core geographies and the largest addressable markets, including India and Southeast Asia. Over the years, we have been recognized by several publications for our employee-centric work culture, and we view our retention levels, particularly in technical roles, as an indicator of the strength and longevity of our team.
Our Technology
The backbone of Zoomcar’s peer-to-peer car sharing platform is our technology - a mobile-focused platform that connects Hosts and Guests and enables them to transact in a customer feedback-informed marketplace designed to make better use of community resources. Our applications leverage data science, machine learning and advanced computer vision capabilities to offer Hosts real-time dynamic pricing capabilities, algorithmically designed ratings-based listing positioning and enhanced protection through image recognition technology, among other features. With Zoomcar, Hosts enjoy significant flexibility in listing their vehicles and dynamically adjusting availability and price. The platform also provides Hosts with powerful tools that help them to understand Guest demand at a granular, near-real-time level so they can better optimize their offering to prospective Guests. Guests, in turn, are able to search listings by vehicle type, location, price, trip types and other categories to identify cars to fit specific needs. Our platform does not restrict use cases and, instead, allows for a wide array of trip lengths ranging from a few hours up to several months.
Core Platform Technologies
Our platform technologies are comprised of several key elements that underpin the essence of the customer experience that our platform provides for Hosts and Guests:
Catalogue and Filtering. We structure our listed vehicle “catalogue” in a manner designed to allow Hosts to easily add new vehicle listings and which places listed vehicles in the categories designed to enables Guests to search for cars that meet their needs quickly and efficiently. The vehicle catalogue is highly personalized for each Guest based on previous booking and search history on the platform, thereby augmenting the likelihood of an ultimate booking conversion.
Search and Sort Relevance. Our search-and-ranking-based algorithms are powered by back-end data science models that take into consideration Guest preferences based on historical bookings, combined with most-recent search data. The overarching system goal is to improve Guests’ search experience to aid the platform to convert searches into bookings. Among the key variables that our search-and-ranking-based algorithms take into consideration are a Guest’s desired booking timeframe, location, vehicle category, duration, and price point.
Pricing. Our pricing engine is highly dynamic and is layered over our Host-selected pricing and discounting capabilities to create a more optimized overall Host earning experience. This dynamic pricing engine complements a core platform pricing structure that allows, and recommends, Hosts to set minimum and maximum prices for their platform listings. This pricing engine helps the host to maximize earnings on the platform and provides them with a powerful tool to best position their listing(s) relative to other Hosts on the platform.
Ratings and Review. Our rating and review system is connected back to our search-and-ranking-based algorithms in order to provide a more holistic, more relevant overall search experience for the Guest. By combining Host ratings and reviews into our overall search-and-ranking-based algorithms, the platform is able to highlight particular Hosts who are more likely to deliver a better overall booking experience to the Guest. Prominently featuring highly rated Hosts helps to ensure a high-quality assortment of options for Guests and helps inculcate more platform trust and transparency. In turn, this helps to improve the Guest’s booking conversion on the platform. By indexing strongly toward highly rated Host listings with positive reviews at the top of our search algorithm, Hosts are strongly incentivized to keep delivering a stellar booking experience for the Guest. We believe that incorporating ratings and reviews prominently into our search-and-ranking-based algorithms also creates an opportunity to build a stronger long term brand loyalty with the platform.
Payments. We accept payments from Guests through various third-party payment platforms, including debit cards, credit cards, online banking, and digital wallet-based payment methods, to book vehicles. Further, to account for occasional hold-ups in processing payments that occur from time to time in our target emerging markets, our back-end payment processing tools incorporate an automatic retry framework combined with a dynamic switching engine when payment success rates are low on a particular payment gateway. Regarding our Hosts, we have designed our payment system with a view towards prompt disbursement of funds, which Hosts usually opt to receive via direct deposit into the Host’s bank account. Hosts are generally paid promptly following the completion of a trip by a Guest.
Risk and Oversight. Our driver score combined with our machine-learning-based risk models help to customize and personalize the trip protection fee for each booking. Drivers scores for Guests also form the basis for our determination, from time to time, though infrequent, whether a Guest must be permanently expelled from our platform because of behavior that does not comport with our policies, terms and conditions or that may be detrimental to our trust-based community. Our customized computer vision capabilities also allow us to match images of a Guest based on multiple forms of government identification at the time of Guest onboarding, upon a Completed Booking and upon commencement of a trip or use case, which provides another safety and accountability “check” for the benefit of platform participants.
Communication. Our communication platform allows for a dynamic customer engagement through SMS, WhatsApp, push notification and email to connect with Guests and Hosts based on specific parameters developed based on customer segment data. Our platform also provides capabilities for direct communication between a Guest and a Host, which we believe increases overall trust on the platform and which can help maximize convenience if bookings require adjustment or, for example, if Guests have trouble locating or returning vehicles or in the event a repair or safety question arises.
Photos. Our platform encourages Hosts to take high-quality images of their vehicles in order to create compelling listings intended to attract bookings. Guidance and instruction on taking and uploading high-quality images and creating vehicle listing descriptions likely to attract Guests are provided to Hosts through our platform as part of the onboarding and listing process. The platform also shares Guest-sourced image-quality feedback directly to Hosts to help improve the overall quality of the images associated with particular vehicle listings.
Data and Tracking
At the core of our custom-built tools and machine-learning-driven insights is our proprietary data collected from millions of trips completed since inception. We use the data that we collect from Hosts and Guests to inform us of our evolving platform functionality to meet customer needs and preferences. For example, our platform provides Guests with personalized pricing and specific catalogue-based recommendations depending on the Guest’s prior search and booking history. For Hosts, Zoomcar offers specific pricing and discounting recommendations to help them maximize earnings on the platform.
Most of our driver data is collected via the customized software-enabled devices that we recommend to Hosts as part of the onboarding process. Zoomcar recommends the Host visits a Zoomcar pre-approved service location to affix the device prior to their vehicle listing.
The devices also facilitate 24/7 GPS monitoring by Zoomcar of in-trip vehicles. GPS tracking is critical to our ability to offer Guests roadside connectivity assistance services (as further described below) and to help identify and resolve problems in the event of an emergency or damage to a Host vehicle. Through this GPS monitoring, our propriety technology collects the driving data we use to customize, and continually improve, our platform tools and capabilities.
Platform Participants: Hosts and Guests
Zoomcar has built a leading sharing marketplace currently in India. Our peer-to-peer platform connects Hosts and Guests through our marketplace and enables Guests to book from a wide variety of vehicles that are conveniently located in their community. As of March 31, 2025 we had approximately 40,221 registered Host vehicles and 4.04 million active Guests (defined as unique Guests who have searched our platform for vehicles or bookings within the preceding twelve (12)-month period at least one time) participating in our marketplace.
Hosts
Our platform provides Hosts, whether they own a single car or several, to realize their entrepreneurial potential and obtain a new form of financial independence. We provide a way for Hosts to generate income from their underutilized vehicles. The following are some of the most typical categories of Hosts using our platform:
● Retail Hosts. Many Hosts list a single car on the Zoomcar platform with the objective of using car-sharing income as a way to reduce their monthly costs associated with car ownership. We refer to such Hosts as “Retail” Hosts. For these Hosts, their monthly vehicle usage is generally low and, therefore, they look to monetize the vehicle’s downtime through listing on the Zoomcar platform. This provides them with an incremental monthly income to supplement their full-time employment. The majority of Zoomcar’s active hosts fall under the category of Retail Hosts.
● Entrepreneurial Hosts. We refer to Hosts with two to 10 listed vehicles on the Zoomcar platform as “Entrepreneurial” Hosts. Many of these Hosts started out listing just one vehicle part-time and, over time, have come to regard our marketplace as a place where they can fulfil their entrepreneurial ambition and earn a consistent income. In many instances, these Hosts use the Zoomcar platform as an opportunity to build their own small business within their own neighborhoods and broader communities. Over time, Entrepreneurial Hosts may establish long-term “fleets” of vehicles and many Entrepreneurial Hosts may become experts in leveraging Zoomcar’s platform tools and recommendations to further maximize the income they can generate from the platform. While a minority of Zoomcar’s active hosts fall under the category of Entrepreneurial Hosts, these Hosts do contribute to a majority of Zoomcar’s bookings and overall business volume.
● Professional Hosts. Professional Hosts list more than 10 cars at a time on our platform. Their participation in our marketplace often supplements a small offline rental car operation or a group of vehicles part of a prior rental business, most commonly in more tourist-centric locations. For these Hosts, Zoomcar’s marketplace allows them an opportunity to increase fleet utilization and earn incremental income on their broader vehicle portfolio. Professional Hosts do not typically start as retail or entrepreneurial Hosts and are typically onboarded through offline business development channels and use our platform as incremental lead generation. Less than 1% of all Zoomcar Hosts currently fall under the category of professional Hosts.
Benefits to Hosts
Our goal relative to Hosts is to make our platform as easy and efficient to use as possible, so that Hosts can quickly create new accounts, add vehicle listings and generate income from bookings. Following are key elements of the benefits our platform provides to Hosts:
● Income Generation. Our platform represents a marketplace of engaged Guests to which Hosts gain access when they complete our on-boarding process. Instead of leaving vehicles idle, car-owners in the emerging markets in which we operate can monetize underutilized assets in a process designed to be seamless and frictionless for Hosts. As illustrated by the example set forth above, revenues to Hosts generated through our platform can accumulate quickly and, in many cases, may not only significantly offset the costs associated with owning a personal vehicle but also represent a major potential source of income when compared to average annual income per capita in certain of the emerging markets where we operate currently, such as India. In many instances, the Host’s earnings through the Zoomcar platform are able to supplement other earnings they might enjoy from participating in other shared economy platforms.
● Scalability and Flexibility. Our platform is designed to allow Hosts flexibility, with increasing numbers of customizable tools and functionality to accommodate Host preferences and maximize opportunities for income generation and mutual benefit. Zoomcar allows Hosts to customize their pricing and vehicle listing preferences along with the vehicle specifications that Hosts include for listing in our catalogue. Hosts can list multiple vehicles simultaneously and manage listings and bookings by mobile app or on our website.
● Ease of Use. As our business model depends on Hosts listing vehicles on our platform, making onboarding, listing and payment processes seamless and frictionless is a major focus of our development efforts. Our platform allows Hosts to begin monetizing their vehicles from the date they register on our platform. We also provide Hosts with information, updated as our technology continues to evolve, on how to build a successful business utilizing our platform.
● Community Ecosystem. Our ratings and feedback processes, together with continuous monitoring of the usage of our platform, contribute to the sense of community and mutual trust that our platform participants value. We aim for continuous improvement and to be of service to the communities in which we operate by providing entrepreneurial pathways for Hosts and shared personal vehicles for Guests that did not previously exist.
Platform Features for Hosts
Our platform currently provides an Android mobile application, an iOS mobile application, a website, and other associated digital tools designed to facilitate our Hosts’ ability to earn income through our marketplace. Zoomcar continues to invest in efforts to enhance our capabilities and intends to keep building incremental tools and developing functionality that will provide value to our Hosts and improve their experience using our platform.
● Seamless Onboarding. We aim to make the onboarding and listing process efficient and easy for Hosts to register on our site, have their profiles verified and then onboard, and ultimately listed, on the platform. Standardized IoT devices are provided by Zoomcar to Hosts to affix to vehicles to allow for a keyless, digital guest entry to more seamlessly fulfil bookings.
● Listing Management. Our platform technology includes tools designed to help Hosts create and manage their listings in a seamless, frictionless manner. Currently available tools include timing selection, preferential bookings, optional messaging and other settings, discretionary pricing and reward selection programs. Listing management tools are a major focus of our continued development efforts and we offer regular updates to Hosts as new functionalities become available on a routine basis.
● Pricing Optimization. Our core technology incorporates elements of dynamic pricing at an individual Guest search level, taking into account the duration, lead time and general locational-based supply and demand on the platform. More recently, our platform began offering Hosts the ability to set a minimum and maximum hourly booking price that adjusts based on the core parameters mentioned above as well as other variables. The platform’s technology provides a recommended booking pricing range based on historical data factoring in the car type, vehicle location, and Host rating. Along with this recommended pricing range, the platform also provides the Host with comprehensive pricing analytics and broader demand-based visualizations by location so that Hosts can better customize their pricing to maximize their earnings. In addition to this baseline pricing range, the platform also allows the Host to create flexible pricing offerings such as specific duration-based discounts and last-minute booking convenience charges. Hosts can manage pricing offerings for bookings on our mobile apps and website through their performance dashboard. This serves as a one-stop location for all host related analytics and performance metrics (for each respective vehicle).
● Customizable Tools. We offer certain highly-ranked Hosts the ability to offer doorstep delivery to Guests, allowing an associated higher booking fee, when selected and, over time, we plan to introduce additional personalized services that Hosts can offer to Guests through our platform. We are also building tools to allow entrepreneurial Hosts the ability to offer features such as a flexible one-way drop-off to another city. We believe these additional personalized service offerings will be beneficial to Hosts and Guests alike and may help Zoomcar increase penetration and market share by offering further transportation options to a more diverse set of customers.
● Entrepreneurial Host Support. Our platform provides Hosts with a suite of tools to build supportive ecosystems around their vehicle businesses with Zoomcar. These tools currently include performance analytics, Guest demand heat maps, sophisticated earnings calculators and vehicle recommendations based on the Host’s personalized earnings history. This support in turn helps further grow the platform of Hosts.
● Damage Protection. Each of our Guests is required to select a trip protection coverage package to be applied to the costs of repairs in the event a Host vehicle is damaged during a trip.
● Host Support Services. Zoomcar offers 24-hour support to Hosts through customer support centers and chatbots. The customer support particularly focuses on any potential dispute resolution between Guest and Host (usually focused on trip level charges or fees applied post booking) or any support in the event of an in-trip accident or breakdown.
● Preferential Placements. Top-rated Hosts qualify for special placement within the Zoomcar vehicle catalogue, ensuring that their vehicles are more prominently and favorably displayed to Guests. In certain instances, highly-rated Hosts also qualify for certain platform badges and tags which raise further awareness of those Hosts and their listed vehicles among Guests searching our platform.
Guests
During the year ended March 31, 2025, around 316,528 Guests booked approximately 678,708 booking days on our platform. The low average vehicle ownership rates across Zoomcar’s core addressable markets, present us with opportunities to solve a variety of Guests’ transportation needs through our platform. Guest “use cases” can be grouped as “in-city” and “outside-the-city” trips. Examples of typical in-city use cases include short errands, airport pickup, work-related tasks, travel to events and social gatherings, extended test drives and temporary vehicle repair replacement. Typical outside-the city use cases include vacation travel, religious pilgrimages, visits to other cities and work-related site visits.
Benefits to Guests
Our platform mission relative to Guests is to create a seamless, frictionless platform experience that makes account set-up and onboarding, browsing, booking and payment processes as convenient as possible for Guests, building upon our customers’ expectations of personalized travel solutions accessible through our digital platform. City dwellers in emerging markets currently face limited travel options, and we aim to provide community-based solutions built upon a system enhanced by peer reviews and 24/7 support functionality.
● Convenient Access. As of March 31, 2025, Zoomcar had approximately 40,221 registered Host vehicles on its platform, with many of the densest urban areas in the locations where we operate providing Guests with cars to book at multiple convenient locations of their choosing. Given the infrastructure and traffic challenges in most of our core markets, our platform therefore offers travel solutions not currently available when contrasted with unorganized, offline traditional car leasing businesses that tend to require Guests to travel to a fixed destination that may be miles from where they live or work to even pick up the car that they want to use. Recently, some of our highly-ranked Hosts have begun offering doorstep delivery options; in the future we expect to offer one-way bookings where vehicles can be dropped off at a location other than the original pick-up location. The cars listed by Hosts on our platform also tend to include a variety of vehicle makes and models, with many including specific add-ons useful to Guests for particular trips needs; participation by our Entrepreneurial Hosts bolsters our ability to offer Guests an assortment of vehicles at consistent times. Instead of being restricted to pricing models, advanced reservation processes and limited selection more typical of old-fashioned leasing businesses, Zoomcar’s platform is more agile, personalized and suitable to the needs of emerging markets’ younger, tech-enabled urban populations who demand more choice, convenience and flexibility.
● Choice. Our platform listings tend to include a wide variety of vehicle makes and models and participation by our Hosts bolsters our ability to offer Guests an assortment of vehicles at consistent times. While exact vehicle selection varies over time, our Hosts regularly list compact cars, sedans, SUVs, luxury, and electric vehicles, often with specific add-ons such as luggage or bicycle racks, extra storage, children’s car seats, USB cables or other features that meet Guests’ specific travel needs. This diverse range of vehicle options allows Guests to find the right vehicle for the right trip.
● Community Input. Our platform is oriented around customer feedback and Guests are encouraged to provide reviews of their booking experiences, which we monitor and make public for the benefit of Hosts and other platform users. Transparency and trust are critical values to the Zoomcar community, and we strive to monitor use of the platform in keeping with these principles, cancelling platform access in cases of abuse of the platform or commission of bad acts during bookings. Consistently negative Guest inputs result in Hosts not receiving prominent placement within Zoomcar’s vehicle search catalogue. Over time, this will result in materially fewer bookings for that respective Host. We believe this is a strong inducement for the Host to perform their duties in accordance with the expectation of the broader Guest community.
● Frictionless Experience. Our marketplace is set up to foster efficiencies of resource-sharing and maximize positive, frictionless experiences between Hosts and Guest. We promote these values, and protect the privacy of Guests and Hosts alike, through our keyless entry system and various communications features and settings. Hosts and Guests can exchange messages through our apps, to coordinate on certain details, but there is no need for prolonged exchanges or negotiations, as pricing and booking details are confirmed before a trip begins.
● Flexibility. Our platform seeks to accommodate Guests’ changing travel needs through the design of our booking modification system, as well as an in-trip extension offering. These features help ensure that the Guest has access to the vehicle for the exact amount of time required, subject to vehicle availability. We also support a number of Guest payment options, including payment by credit card, debit card, online banking, digital wallet and various other payment platforms, subject to availability in relevant markets.
Platform Features for Guests
Our platform provides a number of capabilities and specific features to support Guests:
● Accounts. We aim to make it easy for individuals in search of vehicles to join our platform, but we also require community members who want to use Host vehicles to provide basic identification and driver’s license information, which Zoomcar checks against publicly available information for verification purposes.
● Vehicle Catalogue. Our platform is designed to provide vehicle-seekers with an exciting, engaging car browsing experience. Guests can search listed vehicles by a variety of criteria, including booking price, location, car type, prior ratings and other parameters. Hosts are provided with instructions and tips on taking and uploading high-quality images and preparing listing information so that Guests have information and choice at their fingertips when searching our catalogue of available vehicles.
● Bookings. Guests select vehicles and pay for bookings directly through our platform on our mobile applications (Android and iOS) or website. We intend for our booking process to be easy to navigate, and convenient to complete and we aim to provide Guests with visibility and transparency into pricing, damage protection costs and the platform’s policies. We currently accept online payments via credit, debit card, online banking or digital payment alternatives like UPI (in India) or other country specific digital wallet providers. As part of our booking experience, Guests select from several trip protection options, at different price levels based on algorithmically-determined formulae. Hosts and Guests in India (but not in the other countries in which we operate currently) enter into a contractual lessor-lessee arrangement using “click-through” acceptance technology via our platform at the time of a booking.
● Trips. Guests can view their upcoming and past trips within our app and can extend a trip or modify a booking based on their specific preferences. Guests can also start and end their booking remotely from their mobile app via a seamless keyless entry process through in-vehicle hardware equipped in the majority of Host vehicles. For airport bookings, Guests can request the vehicle at the terminal location. Select high-rated hosts can also offer the Guests a doorstep delivery option for an additional fee set by the Host.
● Messaging. Guests can message Hosts through our app if additional information is required to complete a booking or if a mid-booking issue arises, which can help reduce overall process friction. In-app messaging also allows Guests to communicate special requests to the Host prior to the trip. Direct messaging between the Host and Guest help to dramatically smooth out any last mile challenges such as precise directions to the vehicle, starting the vehicle, specific vehicle control usage, among others.
● Support. Our app provides Guests with instructions on our onboarding, booking (including booking modifications and extensions) and payment processes, along with frequently asked questions; we also offer real-time customer support 24 hours per day, seven days per week by telephone, email, social media, and, in some cases, direct chat. Connection to roadside assistance through most major providers in our core markets is available for Guests through our app and we track Guest locations during trips using our GPS-connected hardware devices.
Environmental, Social and Governance (“ESG”) Attributes
Among the benefits associated with our peer-to-peer car sharing model is our ability to make positive contributions to the communities in which we operate. At the core of our mission is helping emerging market populations make better use of underutilized and scare resources. We also provide our Hosts with micro-entrepreneurship opportunities and have established an international community built on shared benefits and feedback. Our business model is also inherently sustainability-focused, as we are demonstrating to our customers and other observers how smart car sharing is a viable and scalable solution to reduce the total number of vehicles necessary to meet transportation needs.
● Community Impact. Our platform affords Hosts opportunities to independently generate income and establish small businesses. Further, becoming a Host requires relatively little time and effort and affords participants a certain level of autonomy and flexibility that resonates with individuals compared to more traditional ways to supplement household income. Additionally, given that most completed trips are relatively local and rarely international, the entrepreneurial opportunities we create generally result in income generated and spent largely locally, within Guests’ and Hosts’ own community or adjacent neighborhoods, thereby potentially further benefiting other local businesses.
● Mobility Access. A significant portion of our Guests do not own a personal car, which we believe reflects, among other factors, the space and financial constraints affecting urban residents of many urban markets. Our car sharing approach provides a more economical solution than vehicle ownership for people who only need, or can only afford to obtain, access to a car on a short-term or intermittent basis.
● Environmental Benefits. Traffic and air pollution are commonplace in many emerging markets and environmental conditions are expected to deteriorate further as population growth continues. Our fundamental proposition is to offer vehicle access to Guests who require it for a fixed, finite interval, which is inherently more efficient than a personal ownership model. A sharing model such as our platform, in which costs are directly correlated with utilization, discourages over-utilization of cars, thus reducing miles driven on a per capita basis. A 2017 study by Transport & Environment, a leading European clean transport campaign group, suggests that car sharing platforms may reduce the number of personal vehicles purchased by 5 to 15 cars per shared car in markets where car sharing becomes prevalent. Accordingly, based on the huge volume of Hosts registered on our Platform we believe that our platform could have an effect of reducing CO2 outputs. . Additionally, should the proportion of electric vehicles on our platform increase, we expect such increased proportions, if any, would further impact the CO2 output that our platform can reduce. Furthermore, these positive effects would be amplified if we are able to add more and more dense cities globally (such as Dhaka, Lagos, São Paulo and others), as the usage per car per month on our platform would likely continue to increase.
The Zoomcar Network Effect
Our platform affords Hosts opportunities to independently generate income and establish small businesses in high growth economies where jobs and resources remain scarce relative to need. Further, becoming a Host requires relatively little time and effort and affords participants a certain level of autonomy and flexibility that resonates with individuals compared to more traditional ways to supplement household income. Additionally, given that most completed trips are relatively local and rarely international, the entrepreneurial opportunities we create generally result in income generated and spent largely locally, within Guests’ and Hosts’ own community or adjacent neighborhoods, thereby potentially further benefiting other local businesses.
Trip-based Vehicle Protection
One of the concepts fundamental to our platform is that a Host should not be responsible for vehicle repair costs if the vehicle was damaged during a Guest booking. At the time of a booking, our Guests select from several possible trip protection options at different pricing levels. In these packages, Guest liability for vehicle damage costs is typically capped at a set amount depending on the coverage fee selected by the Guest. If damage to a listed vehicle occurs during a booking, the Host completes any necessary repairs at pre-approved service centers and Zoomcar, on a case to case basis, bears the repair costs which falls within a standardized pre-approved range. To date we have opted not to obtain third-party insurance for Host vehicle damage or for Guest or Host theft or other losses, as we believe it is more cost-effective to manage the associated costs in-house through the collection of the Guest’s trip protection fees. We will continue to assess this determination as our business grows and evolves over time.
Our Growth Strategy
Going forward, we plan to continue improving platform functionality and offerings to better serve the mobility needs of additional Hosts and Guests within our current core markets. Improvement of the core product combined with the development of additional features will likely provide the greatest sustainable growth lever to the platform. We believe that additional spending on sales and marketing efforts may be useful in these efforts, as most of our platform expansion to date has resulted from word-of-mouth and brand reputational effects, as opposed to dedicated marketing spend. While we are not currently looking to expand our operations, we expect to continue to assess expansion opportunities as they become available to us over time and, in the near term, plan to continue focusing on our efforts to provide high-quality experiences for Hosts and Guests, with expanding functionalities that we believe will, over time, further expand the variety of use cases for which Guests rely on our platform. Some of the key elements of our near-term growth strategy include:
● Evolving Platform Functionalities to Capture Additional Bookings. We plan to continue improving our core product offering for both Guests and Hosts, incorporating enhancements to our core technology and data science platforms to improve functionality and convenience for Guests, while also further strengthening listing, monitoring, and customization experiences available to Hosts. We believe that such improvements will support increasing levels of organic traffic to the platform and, in turn, increased volumes of transactions on the marketplace.
● Increasing High-Quality Listings. While the density of listed vehicles available in the largest urban areas where we currently operate has improved significantly during the past year, we believe there is considerable opportunity to further enhance our offerings in such areas. Robust future growth depends on our ability to continue attracting Hosts offering high-quality vehicles onto the platform. We plan to continue our efforts to reward and encourage highly-ranked Hosts and expect to continue growing our Host referral program.
● Encouraging Post-Booking Engagement by Guests. At present, most Guests use our platform during discrete time periods, such as when planning a specific trip. In the future, we aim to achieve greater post-trip and between-booking engagement with our Guests. Through awareness building for a wider array of vehicle use cases, we believe that we can meaningfully deepen our Guest engagement following trips. Additionally, as our “supply” of high-quality Host vehicles improves over time, we believe it will become apparent to Guests that they can conveniently access cars in their neighborhood for a broader variety of purposes than just specific longer trips, hence stimulating further engagement and more frequent bookings. Going forward, we expect to rely more heavily on rewards and loyalty programs intended to further encourage post-booking engagement with our platform by Guests.
● Expanding Use Cases by Partnering with Adjacent Businesses. Considering the wide array of Guest use cases that our platform is able to facilitate, it is essential that we continue to focus on bolstering our brand’s awareness to the wider consumer community. As part of our strategy, we intend to explore an increasing number of strategic partnerships to improve our broader distribution with various potential customer segments. To enhance our prospective Guest acquisition efforts, we consider it important to associate with partners who have consistent access to key consumer segments. This will allow us to widen our reach and communicate more consistently with different audiences of prospective Guests. This will also help the platform to better serve the increasingly mixed-use cases that are likely to emerge as we continue to grow. Select prospective partners include, but are not limited to airlines, travel platforms, and accommodation providers.
Marketing and Sales
While our current principal sales and marketing activities are largely focused on encouraging incremental bookings and platform transactions among our existing Hosts and Guests, we also selectively invest in certain brand awareness and advocacy efforts, such as partnerships with adjacent brands and businesses, to help improve brand and platform awareness among new customers. For example, through our partnerships with dealerships and service centers, Hosts are offered preferential financing and service packages, among other benefits. We also view our efforts to encourage existing Hosts to share feedback with other platform users as part of our marketing efforts, together the with Host referral incentives. Additionally, we encourage supplemental and repeat vehicle listing by Hosts through the tools we offer to maximize pricing and revenue generation and by continually offering Hosts supplemental tips and instructions on creating successful vehicle listings so that they are likely to enjoy more frequent bookings and, consequently, earn more from the vehicles they list on our platform. We have a dedicated sales team that provides support to Hosts during the onboarding and vehicle registration process with a goal of ensuring a positive, seamless process for Hosts, thereby encouraging Hosts to maintain existing listings for longer periods and also to list new vehicles on our platform over time. In general, we view our efforts, including the creation of Guest ratings system and tags and badges (e.g., “Five Star” reviews) and other functionality to encourage highest-quality offerings and behavior by our Hosts as ultimately creating a self-perpetuating flywheel effect, as Hosts and Guests benefit mutually from increased platform transactions and high degrees of satisfaction by all participants in bookings through our platform. With respect to Guest-oriented sales and marketing efforts, we utilize certain paid media efforts, together with our Guest referral program, and new app installs and retargeting efforts, to attract and retain Guests to our platform. The overarching goals of our marketing and communications programs are growing brand awareness and creating Zoomcar advocates through the development and distribution of proprietary customer engagement content (e.g., destination/vehicle photography and social media posts) that helps communicate the platform’s value proposition for both Guests and Hosts. We also maintain a dedicated media and external communications team to help manage the brand’s reputation across the various public relations mediums in our operating markets.
As a platform, we remain intensely focused on our brand and our relative positioning across the ecosystem. As such, we rely extensively on user generated content from both Guests and Hosts to help tell the story of the platform and communicate our core value propositions for both customers respectively. From time to time, we partner with other third-party content creators to help further articulate our story to a wider audience of prospective customers. We expect to continue this practice in perpetuity since we believe this helps spread the most positive word of mouth for our brand.
Competition
While we maintain a leading market share within digital car rental in India, potential competitors and competitive businesses can be assessed in multiple ways and overall competition for our offerings increases dramatically if offline car rental and other non-car rental-based transportation alternatives are considered as among our competitors. As we look to grow our business, we believe that our primary “competition” lies in attracting and retaining Guests, while our prime challenge with Host acquisition and retention lies in building awareness around the entrepreneurial opportunities tied to vehicle Hosting on a digital car sharing marketplace.
Competition for Hosts
As an early mover and among the first to scale in India, we do not currently see any competition with other digital platforms or marketplaces as it relates to attracting and retaining Hosts to share vehicles on our platform. Instead, our core challenge lies in building the initial brand awareness for the category so that relevant, qualified individuals take notice of the economic opportunity tied to sharing their vehicle on a digital platform such as Zoomcar. We believe that once individuals are made aware of the broader value proposition, our inherent platform strengths, including core technology and product offering along with our associated guest booking scale should help provide the necessary incentive for Hosts to join the platform and become part of our trusted community.
In certain cities in India, prospective hosts commercially share their vehicle in an offline format without benefit of an organized platform. Through targeted communication and outreach, we should be able to reach these potential users and communicate the platform’s core value proposition.
Competition for Guests
We compete to attract and retain Guests that might otherwise utilize a variety of different competitive sources, primarily from offline, unorganized car rental companies and from other transportation alternatives such as taxis and bus services. Compared to our offline, unorganized car rental competitors, our primary differentiating factors tie back to our stronger depth and breadth of vehicle choice that is situated in denser, more conveniently located urban environments. Combined with a wider range of pricing options and more personalized search and sorting, we believe that we are better positioned to match the right vehicle to the right guest for the right use case. Our ratings and review engine combined with 24/7 support provide an additional layer of support and reliability for our Guests compared to the offline, unorganized alternatives.
While global car rental operators like Hertz, Avis, Enterprise, Zipcar and Sixt do not currently operate in India, it is possible that they might enter or expand in our markets, or that we may enter into their markets, at some time in the future.
Additionally, global car sharing marketplaces such as Turo and Getaround do not operate in our current market. While their entry in our current market is possible, at present, these companies’ core offerings tend to be less oriented towards emerging market customers, as compared to Western guests, and to our knowledge, they do not yet have specific product customizations that are focused on the emerging market consumer.
If any of the global operators mentioned above were to enter our core market, we believe we would compare favorably to their customer offerings based on multiple factors, including that our platform permits localization and an easy-to-use customer experience, locally trained data models with personalized recommendation engines, and local team members who have spent their entire professional careers building similar businesses in our core geographies.
While we believe that we compare very favorably against the potential competitors described above, we believe that our strongest Guest-based competition comes in the form of other transportation alternatives such as mass transit, scooter/motorcycle, three-wheeler, or a chauffeur-driven car. We believe that our ability to offer a wide array of prices that can accommodate different prospective Guest segments is a major potential asset that we believe Favors our platform over these alternatives. Moreover, the convenience that comes from our geographical density can also help attract prospective Guests who might otherwise consider other transport modes. Consequently, we believe that we can attract a meaningful number of new Guests from these various other transport modes in the future.
Government Regulation
We are subject to a variety of laws and regulations in India, which include, without limitation, motor vehicle related laws, regulations relating to e-commerce, as well as those relating to intellectual property, consumer protection, taxation, consumer privacy and data protection, pricing, content, advertising, discrimination, consumer protection, payments, distribution, messaging, mobile communications, environmental matters, labor and employment matters, claims management, and anti-corruption and anti-bribery. These regulations are often complex and subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may change or develop over time through judicial decisions or as new guidance or interpretations are provided by regulatory and governing bodies. However, uncertainties regarding legal and regulatory frameworks and their application to our business are compounded by the fact that our current peer-to-peer car sharing business model, which is facilitated through the use of our platform, is uncommon, if not unprecedented, in India . See the section titled “Risk Factors - Legal and Regulatory Risks Related to Our Business,” as our business is subject to certain legal and regulatory risks that could have a material impact on our business.
Intellectual Property
Our business is dependent on a combination of trademarks, patents, copyrights, domain names, trade names, trade secrets and other proprietary rights in order to protect our intellectual property rights.
We currently have 21 registered trademarks and 1 recent trademark application that has passed the formalities check and is now under further examination along with 3 trademarks at variance - refused, abandoned and opposed, 3 patent applications under the abandonment process, 1 patent application in hearing and 1 patent application withdrawn in India; and 7 domain names.
Employee and Human Capital
Zoomcar focuses on building and maintaining an open, diverse, and inclusive workplace that emphasizes a collaborative, cross-functional ethos that also reflects the inherent interconnectedness tied to our core customer offering.
As of March 31, 2025, we had approximately 141 full-time employees, including 65 employees in engineering and product, 72 employees in operations and support, and 4 employees in sales and marketing. We also from time to time engage contractors and consultants for various durations to collaborate with our more permanent staff on specific projects or matters.
Our Culture and Values
At Zoomcar, the consistent focus on culture has resulted in the receipt of numerous awards over our history.
We focus our workplace culture on adhering to “Five Commandments” that serve as our guiding principles:
- Empathize always
- Cross-train continuously
- Experiment daily and measure holistically
- Forget the fear of failure
- Improve incessantly
We believe that by adhering to these core tenets, we help ensure a stronger employee bond as we consistently work toward achieving our broader mission. These guiding principles are also utilized to set employee performance ratings and compensation to further solidify the principles’ importance within the broader Zoomcar cultural hierarchy of importance. We also expect our employees to embrace these core Company principles when thinking about our customers (e.g., particularly regarding empathy).
Along with a strong adherence to these core tenets, we also routinely solicit employee feedback through various engagement activities and through an annually employer net promoter score (“eNPS”) survey administered by an outside third-party service, in order to ensure impartiality. These outside eNPS surveys also contain qualitative inputs from employees which are reviewed by top management in conjunction with our head of human resources on the same quarterly basis.
Facilities
Our principal executive office is located in Bangalore, India. We believe our facilities are adequate and suitable for our current needs, and that should it be needed, suitable additional or alternative space will be available to accommodate our operations.
Corporate Information
Zoomcar Holdings, Inc. is a Delaware corporation. Our principal executive offices are located at Anjaneya Techno Park, No.147, 1st Floor, Kodihalli, Bangalore, India 560008, and our telephone number is +9180488 21871. Our principal website address is www.zoomcar.com. Information contained in, or accessible through, our website is not a part of, and is not incorporated into, this 10-K form.
Our investor relations website address is https://investor-relations.zoomcar.com/. Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and any and all amendments thereto are available free of charge through our investor relations website as soon as reasonably practicable after they are filed or furnished to the Securities and Exchange Commission (the “SEC”). These materials are also accessible on the SEC’s website at www.sec.gov.

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ITEM 1A. RISK FACTORS
Item 1A. Risk Factors
An investment in our securities involves a high degree of risk. You should carefully consider the risks described below before making an investment decision. Our business, prospects, financial condition or operating results could be harmed by any of these risks, as well as other risks not currently known to us or that we currently consider immaterial. The trading price of our securities could decline due to any of these risks, and, as a result, you may lose all or part of your investment.
In the course of conducting our business operations, we are exposed to a variety of risks. Any of the risk factors we describe below have affected or could materially adversely affect our business, financial condition and results of operations. The market price of our securities could decline, possibly significantly or permanently, if one or more of these risks and uncertainties occurs. Certain statements in “Risk Factors” are forward-looking statements. See “Special Note Regarding Forward-Looking Statements.”
Risk Factors Summary
Our business is subject to numerous risks and uncertainties, including those highlighted in the section entitled “Risk Factors” immediately following this risk factors summary, that represent challenges that we face in connection with the successful implementation of our strategy and the growth of our business. Our business, prospects, financial condition or operating results could be harmed by any of these risks, as well as other risks not currently known to us or that we currently consider immaterial. In particular, the following considerations, among others, may offset our competitive strengths or have a negative effect on our business strategy, which could cause a decline in the price of shares of our Common Stock or Public Warrants and result in a loss of all or a portion of your investment.
Any of the risk factors we describe below have affected or could materially adversely affect our business, financial condition and results of operations. The market price of our securities could decline, possibly significantly or permanently, if one or more of these risks and uncertainties occurs:
● We have a history of operating losses and negative cash flow, we have limited cash resources, we will need to raise funds imminently to finance operations and as a result there is substantial doubt about our ability to continue as a going concern;
● Our Common Stock is quoted on an OTC Markets Group trading platform, the OTCQX, instead of a national exchange or quotation system. Accordingly, our investors may experience significant volatility in the market price of our Common Stock and have difficulty selling their shares.
● Because our Common Stock is quoted on the OTCQX and not listed on an 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.
● Our current business model’s limited operating history and financial results make our future results, prospects and the risks we may encounter difficult to predict.
● In addition to our defaults under current indebtedness described elsewhere here, certain of our debt financing arrangements are currently in default and we have delayed certain other payments to lenders, which may restrict our current and future business and operations;
● We require additional capital to support current operations and will require additional capital to support the growth of our business, which may not be available on terms acceptable to us, or at all.
● Future sales of our securities may affect the market price of the Common Stock and result in material dilution, including the anti-dilution protection in the warrants issued in 2024. We are also in default of various outstanding debt obligations, including under the Notes issued to ACM, and may issue shares of Common Stock or other securities to satisfy those obligations in the future (in the case of ACM, subject to receipt of shareholder approval). The issuance of shares of Common Stock or other securities in the future will dilute your percentage ownership interest and may also result in downward pressure on the price of our Common Stock.
● Our operating and financial forecasts are subject to various known and unknown contingencies and factors outside of our control and may not prove accurate, and we may not achieve results consistent with management’s expectations;
● We have issued a significant number of warrants and exercise of these securities and the sale of the shares of Common Stock issuable thereunder (along with the issuance of any similar securities in the future,) will dilute your percentage ownership interest and may also result in downward pressure on the price of our Common Stock.
● The market for online platforms for peer-to-peer car sharing is relatively new and rapidly evolving. If we fail to successfully adapt to developments in our market, or if peer-to-peer car sharing online platforms do not achieve general acceptance, it could adversely affect our business, financial condition and operating results.;
● Our operating and financial forecasts are subject to various known and unknown contingencies and factors outside of our control and may not prove accurate, and we may not achieve results consistent with management’s expectations;
● If we do not retain existing Hosts, or attract and maintain new Hosts, or if Hosts fail to provide an adequate supply of high-quality vehicles, our business, financial condition, and results of operations may be negatively impacted;
● If we fail to retain existing Guests, or attract and maintain new Guests, our business, financial condition, and results of operations may be negatively impacted;
● If we are unable to introduce new or upgraded platform features that Hosts or Guests recognize as valuable, we may fail to retain and attract such users to our platform and our operating results would be adversely affected;
● Our success depends upon our ability to maintain favorable customer reviews and ratings, and if our reputation suffers, our business, financial condition and operating results may be adversely affected
● Maintaining and enhancing our brand and reputation is critical to our business prospects. While we have taken significant steps to build and improve our brand and reputation, failure to maintain or enhance our brand and reputation will cause our business to suffer;
● Breaches and other types of security incidents of our networks or systems similar to the recent Cybersecurity Incident, or those of our third-party service providers, could negatively impact our business, our brand and reputation, our ability to retain existing Hosts and Guests and attract new Hosts and Guests, may cause us to incur significant liabilities and adversely affect our business, results of operations, financial condition, and future prospects
● Our business depends on attracting and retaining capable management, technology development and operating personnel;
● We may be exposed to risk if we cannot enhance, maintain, and adhere to our internal controls and procedures;
● We are in the process of remediating identified material weaknesses in our internal controls and if we fail to remediate these weaknesses or otherwise fail to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act, we may not be able to accurately or timely report our financial condition or results of operations, or comply with the accounting and reporting requirements applicable to public companies;
● Geographic areas in which Zoomcar operates and plans to operate in the future have been and may continue to be subject to political and economic instability
● We may incur liability for the activities of Hosts or Guests which could harm our reputation, increase our operating costs, and adversely affect our business, financial condition and operating results;
● Our business operations may result in losses for which we are not insured;
● Members of our management team have limited or no prior experience managing a public company;
● As a public company, we have incurred and expect to continue to incur increased expenses associated with the costs of being a public company.
● We are the subject of litigation and may not have the ability or the cash to successfully defend such litigation that has been and may in the future be brought against us;
● We are an “emerging growth company” within the meaning of the Securities Act, and, if we take advantage of certain exemptions from disclosure requirements available to emerging growth companies, this could make our securities less attractive to investors;
● Future sales, or the perception of future sales, by us or our stockholders in the public market could cause the market price for the Common Stock to decline;
● The requirements of being a public company may strain our resources, divert our management’s attention and affect our ability to attract and retain qualified independent board members.
● Uncertain global macro-economic and political conditions could materially adversely affect our results of operations and financial condition; and
● Natural disasters, including and not limited to unusual weather conditions, epidemic outbreaks, terrorist acts and political events could disrupt our business schedule.
Risks related to our Financial Condition
We have a history of operating losses and negative cash flow, we have limited cash resources, we will need to raise additional funds imminently to finance operations and as a result there is substantial doubt about our ability to continue as a going concern.
We have a history of operating losses and expect to continue incurring operating losses in the foreseeable future as we continue to develop our current business model and enhance our platform offerings. We also have indebtedness that is in default in excess of our current capital resources (see “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources” in in this Annual Report on Form 10-K for the year ended March 31, 2025). On June 18, 2024, the Company entered into a securities purchase agreement with certain institutional accredited investors (the “June Aegis Securities Purchase Agreement”) pursuant to which the Company issued and sold an aggregate of $3,600,000 in principal amount of notes (the “June Notes”) and warrants to purchase up to an aggregate of 1,267,728 shares of Common Stock (which takes into account an adjustment following the Company’s Share Combination Event that was effective on October 22, 2024, but not reflecting the Reverse Stock Splits) (the “June Warrants”) for gross proceeds of $3,000,000.
Additionally, on November 7, 2024, the Company closed the November 7 Placement for gross proceeds of $9.15 million (including $2.5 million of which was provided by one of the Company’s directors) (before deduction of fees to the placement agent and other offering expenses payable by the Company). The Placement Agent in this Offering acted as exclusive placement agent in the November 7 Placement. At closing of the November 7 Placement, the Company issued an aggregate of 2,137,850 units at a price of $4.28 per unit, each unit consisting of one share of Common Stock (or pre-funded warrant in lieu thereof), two November Series A Warrants (as hereinafter defined) each to purchase one share of Common Stock and a November Series B Warrant (as hereinafter defined) to purchase such number of shares of Common Stock, as determined on the November Reset Date, which does not reflect the Second Reverse Split. As a result of the November 7 Placement, the Company received $3.62 million of cash and cash equivalents after giving effect to offering fees and expenses, the payment of $3.8 million to the holders of the Company’s June 2024 notes and a holdback of $0.2 million for indemnification of the Placement Agent as described in more detail herein.
Further, on December 24, 2024, the Company held the First Closing of this Offering for gross proceeds of $5,484,843 (including $50,000 of which was provided by the Company’s former Chief Executive Officer i.e. Hiroshi Nishijima and $300,000 of which was provided by a consultant to the Company) (before deduction of fees to the placement agent and other offering expenses payable by the Company). The Placement Agent in this Offering acted as exclusive placement agent at the First Closing. At the First Closing, the Company issued an aggregate of (i) 3,095,925 shares of Common Stock, which does not reflect the Second Reverse Split (ii) Pre-Funded Warrants issued to certain of the investors, at their option, exercisable for an aggregate of up to 420,000 shares of Common Stock, which does not reflect the Second Reverse Split, to the extent that the issuance of shares of Common Stock would cause such Investors to beneficially own more than 4.99% or 9.99% of the shares of Common Stock outstanding. Also issued along with the shares of Common Stock and/or the Pre-Funded Warrants were (x) Series A Warrants to initially purchase up to an aggregate of 8,680,443 shares of Common Stock, which does not reflect the Second Reverse Split, subject to certain adjustments and (y) Series B Warrants to initially purchase no shares of Common Stock, subject to certain adjustments as provided in the Series B Warrants. As a result of the First Closing, the Company received $4,786,963 of cash and cash equivalents after giving effect to offering fees and expenses.
Further, on February 4, 2025, the Company held the Second Closing of this Offering for gross proceeds of $1,437,936 (before deduction of fees to the Placement Agent and other offering expenses payable by the Company). The Placement Agent in this Offering acted as exclusive placement agent at the Second Closing. At the Second Closing, the Company issued an aggregate of (i) 1,049,796 shares of Common Stock, which does not reflect the Second Reverse Split (ii) Pre-Funded Warrants issued to certain of the investors, at their option, exercisable for an aggregate of up to 872,000 shares of Common Stock, which does not reflect the Second Reverse Split, to the extent that the issuance of shares of Common Stock would cause such Investors to beneficially own more than 4.99% or 9.99% of the shares of Common Stock outstanding. Also issued along with the shares of Common Stock and/or the Pre-Funded Warrants were (x) Series A Warrants to initially purchase up to an aggregate of 4,804,491 shares of Common Stock, which does not reflect the Second Reverse Split, subject to certain adjustments and (y) Series B Warrants to initially purchase no shares of Common Stock, subject to certain adjustments as provided in the Series B Warrants. As a result of the First Closing, the Company received $1,249,911 of cash and cash equivalents after giving effect to offering fees and expenses.
We believe that the current cash and cash equivalents will allow us to continue operations through July 31, 2025 assuming do not make any payments on our currently outstanding indebtedness and future accruals, however there can be no assurance that this will be the case. Accordingly, we believe that additional funds will be required to support operations and, in the long term, the growth of our business. Our operations have consumed substantial amounts of cash, and we have incurred operating losses since we began operating in 2013. While our cash consumption has been reduced following our business transition from short-term rental of vehicles owned by or leased to Zoomcar to an online platform for peer-to-peer car sharing, we have consumed significant amounts of cash in effecting such transition in terms of technology and platform innovation, and our cash consumption has varied over time. Our cash needs will depend on numerous factors, including our revenues, upgrade and innovation of our peer-to-peer car sharing platform, customer and market acceptance and use of our platform, and our ability to reduce and control costs. We expect to devote substantial capital resources to, among other things, fund operations, continued improvement, upgrading or innovation of our platform, and expand our international outreach. If we are unable to secure such additional financing, it will have a material adverse effect on our business, and we may not be able to meet our obligations or continue as a going concern.
Our Common Stock is quoted on an OTC Markets Group trading platform, the OTCQX, instead of a national exchange or quotation system. Accordingly, our investors may experience significant volatility in the market price of our Common Stock and have difficulty selling their shares.
Our Common Stock is currently quoted on an OTC Markets Group trading platform, the OTCQX, under the ticker symbol “ZCAR.” The OTC Markets Group is a regulated quotation service that displays real-time quotes, last sale prices, and volume limitations in over-the-counter securities. Trading in shares quoted on an OTC Markets Group trading platform is often thin and characterized by volatility in trading prices. This volatility may be caused by a variety of factors, including the lack of readily available price quotations, the absence of consistent administrative supervision of bid and ask quotations, lower trading volume, and market conditions. As a result, there may be wide fluctuations in the market price of the shares of our Common Stock for reasons unrelated to operating performance, and this volatility, when it occurs, may have a negative effect on the market price for our securities. Moreover, the OTC Markets Group is not a stock exchange, and trading of securities on one of its trading platforms is often more sporadic than the trading of securities listed on a national quotation system or stock exchange. Accordingly, our stockholders may not 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.
Because our Common Stock is quoted on the OTCQX and not listed on an 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, unless the broker-dealer or the transaction is otherwise exempt. A U.S. broker-dealer is also required to disclose commissions payable to the U.S. broker-dealer and the registered representative and current quotations for the securities. Finally, a U.S. broker-dealer is required to submit monthly statements disclosing recent price information with respect to any “penny stock” held in a customer’s account and information with respect to the limited market in “penny stocks.”
You should be aware that, according to the SEC, the market for “penny stocks” has suffered in recent years from patterns of fraud and abuse. Such patterns include (i) control of the market for the security by one or a few broker-dealers that are often related to the promoter or issuer; (ii) manipulation of prices through prearranged matching of purchases and sales and false and misleading press releases; (iii) “boiler room” practices involving high-pressure sales tactics and unrealistic price projections by inexperienced sales persons; (iv) excessive and undisclosed bid-ask differentials and markups by selling broker-dealers; and (v) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, resulting in investor losses. Our management is aware of the abuses that have occurred historically in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, management will strive within the confines of practical limitations to prevent the described patterns from being established with respect to our securities.
We require additional capital to support current operations and will require additional capital to support the growth of our business, which may not be available on terms acceptable to us, or at all.
To continue current operations, we will need to raise capital imminently. Further, to continue to effectively compete thereafter, we will require additional funds to support the growth of our business. Our operations have consumed substantial amounts of cash, and we have incurred operating losses, since we began operating in 2013. While our cash consumption has been reduced following our business transition from short-term rental of vehicles owned by or leased to Zoomcar to an online platform for peer-to-peer car sharing, we have consumed significant amounts of cash in effecting such transition in terms of technology and platform innovation, and our cash consumption has varied over time. Because of our limited resources the company was not able to expand to emerging markets outside of India and in fact, discontinued operations in Vietnam during June 2023 and subsequently in Egypt, Indonesia during June 2024 as a result.
Further, as a result of the consummation of the Business Combination, our expenses have increased substantially in connection with actions and efforts required to operate as a public company. During the year ended March 31, 2025, we have incurred expenses in maintaining the listing requirements and complying with statutory filings with SEC along with significant professional and consultancy fee to professionals and we contemplate that we will continue to incur these expenses as long as we remain a public company to fulfill which we will need additional capital.
Moreover, we expect our expenses to increase significantly in connection with our ongoing activities, including the continuing increase in our technological capabilities with respect to IoT, machine learning, and artificial intelligence. We do not currently have sufficient cash resources to operate our business beyond June 2025 (assuming that we do not repay any of our currently outstanding indebtedness) and accordingly, will need to raise capital imminently to continue our operations and to fully execute our business plan. Additionally, circumstances could cause us to consume capital more rapidly than we currently anticipate and if our cash resources are insufficient to satisfy our cash requirements, we may seek to issue additional equity or debt securities or obtain new or expanded credit facilities or identify and secure additional sources of capital. Our ability to obtain external financing in the future is subject to a variety of uncertainties, including our future financial condition, results of operations, cash flows, share price performance, liquidity of capital and lending markets and governmental regulations in India. In addition, incurring indebtedness would subject us to increased debt service obligations and could result in operating and financing covenants that would restrict our operations. There can be no assurance that financing will be available in a timely manner or in amounts or on terms acceptable to us, or at all. Any failure to raise needed funds on terms favorable to us, or at all, will severely restrict our liquidity as well as have a material adverse effect on our business, financial condition and results of operations. In addition, any issuance of equity or equity-linked securities could result in significant dilution to our existing shareholders. Additionally, fundraising efforts may divert our management from its day-to-day duties and activities, which may affect our ability to execute on our business plan. If we do not raise substantial additional capital imminently to continue operations in the short term or otherwise when required or in sufficient amounts and on acceptable terms, we may need to:
● significantly delay, scale back or discontinue certain business initiatives, such as our international expansion;
● significantly delay key investments in IoT, advanced computer vision, machine learning and related artificial intelligence technology; or
● significantly delay our consumer brand-building initiatives, thereby delaying our broader expansion.
Our future funding requirements, both short-term and long-term, depend on many factors, including but not limited to:
● our ability to successfully scale our business within the market in which we currently operate, including by increasing the number and quality of Host vehicles and attracting and retaining more Guests to use our platform to meet a broader variety of mobility needs;
● our ability to successfully expand into additional emerging markets as opportunities to grow our operations become available to us;
● the pace of technological development in core focus areas such as IoT, computer vision, machine learning, and artificial intelligence;
● the cost to establish, maintain, expand and defend the scope of our intellectual property portfolio, including the amount and timing of any payments we may be required to make in preparing, filing, prosecution, defence and enforcement of any intellectual property rights;
● the effect of competing technological and market developments; and
● market acceptance of our platform and the functionality it provides to facilitate peer-to-peer car sharing.
If lack of available capital prevents us from proceeding with the execution of our business plan, our ability to become profitable will be compromised and our business will be harmed.
Future sales of our securities may affect the market price of the Common Stock and result in material dilution, including the anti-dilution protection in the warrants issued in 2024. We are also in default of various outstanding debt obligations, including under the Notes issued to ACM, and may issue shares of Common Stock or other securities to satisfy those obligations in the future (in the case of ACM, subject to receipt of shareholder approval). The issuance of shares of Common Stock or other securities in the future will dilute your percentage ownership interest and may also result in downward pressure on the price of our Common Stock.
We will finance our immediate cash needs (and expect to finance our future cash needs until we become profitable, if ever) through equity offerings, debt financings or other third-party funding, marketing and distribution arrangements and other collaborations, strategic alliances and licensing arrangements. We will require substantial funding to fund our business. In June 2024 we issued warrants that contain an “alternative cashless exercise” provision which gives the warrant holder the right to exchange the warrant on a one-for-one basis for shares of Common Stock at any time that the warrant is exercisable without any cash payment and without regard to the then market price of the Company’s Common Stock or exercise price of the warrant. In addition, the warrants include a provision that resets the warrant exercise price with a proportionate adjustment to the number of shares underlying the warrant in the event of a reverse split of the Company’s Common Stock at any time between the issuance date and the three year anniversary of the issuance date (a “Share Combination Event”). In the event of a Share Combination Event, the exercise price of the warrant will be reset to a price equal to the lesser of (i) the then exercise price and (ii) the lowest volume weighted average price (VWAP) during the period commencing five trading days immediately after the date the Company effects both the reverse stock splits, subject to a floor price of $283.2 (which is the “Minimum Price” under Nasdaq rules) prior to receipt of stockholder approval or $56.64 following receipt of stockholder approval (in each case, adjusted for any stock dividend, stock split, stock combination, reclassification or similar transaction, the “Floor Price”). The warrants are also subject to full ratchet anti-dilution protection for any issuances of Company securities (other than certain excluded issuances) at a price or effective price (as determined in accordance with the terms of the warrant, the “Dilutive Issuance Price”) that is less than the then current exercise price of the warrants following the issuance date (a “Dilutive Issuance”). In the event of a Dilutive Issuance, the exercise price of the warrants will be reduced to the lower of the Dilutive Issuance Price and the lowest VWAP during the five consecutive trading days commencing after the date of the Dilutive Issuance, in each case, subject to the Floor Price, and there will be a proportionate adjustment to the number of shares underlying the warrant. 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 contain price based anti-dilution protection on the conversion price of such Notes down to a floor price of $500 per share (considering both reverse stock splits effectuated by the Company) which has already been reached. While the Notes have already 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, 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 price of the warrants (or additional issuances to make the Financing Investors whole) may have a negative impact on the trading price of our Common Stock. Additionally, raising additional capital with new investors may be difficult as a result of anti-dilution protection. Sales of substantial amounts of Common Stock in the public market, or the perception that such sales could occur, could materially adversely affect the market price of the Common Stock and may make it more difficult for you to sell your securities at a time and price which you deem appropriate.
In addition to our defaults under current indebtedness described elsewhere here, certain of our debt financing arrangements are currently in default and we have delayed certain other payments to lenders, which may restrict our current and future business and operations.
Since November 2023, we are in violation of our scheduled monthly installment payment obligations of $215,337 per month on our lease liability with Ayvens Group (f/k/a Leaseplan India Private Limited) (“Leaseplan”). Leaseplan notified us on February 7, 2024, that we are in default of our November 2023 payment. As of the date hereof, we are in default beyond the 30-day extended cure period (as envisaged under the terms of our debt with Leaseplan) of our November 2023 payment and continue to be default of all EMIs thereafter. As a result of such defaults, as of the date hereof, Leaseplan (i) has initiated the process of repossession of all vehicles, and (ii) has invoked the bank guarantee of $120,482 which was a security created by Zoomcar in favor of Leaseplan. Such outcomes may have a material adverse impact on our business, operations or financial condition. Based on the most recent discussions with Leaseplan, the Company continues to negotiate a payment plan to the restructured debt proposal shared by the Company wherein the debt after certain waivers and discounts, will stand restructured to $4,755,942 and the Company is hopeful that Leaseplan will issue a comfort letter in this regard acknowledging the proposed payment schedule spread across six tranches repayment of the restructured debt. As of the date hereof, the Company has already cleared the first three tranches in accordance with the proposed payment schedule as per the comfort letter, amounting to $2,851,924 (approx.) towards the outstanding debt. Given the continuing negotiations and the expected comfort letter, we do not contemplate any immediate legal action against the Company in this regard. If we are unable to execute a settlement agreement or fail to honor the obligations under any agreement executed for the subject matter it may, possibly result in inter alia (a) the entire outstanding debt becoming due and payable, and (b) the withdrawal of a conditional waiver of $1.2 million which was given during a prior restructuring and will become immediately due and payable with interest of 1.5% per month.
The Company is in breach of the payment obligation of $408,351 pursuant to the terms of the settlement deed with Orix Leasing and Financial Services Limited (“Orix”). Orix has issued a 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 April 17, 2025, Zoomcar has also made payment of five tranches amounting to $293860 (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 per annum. 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 $422,968 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.
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 May 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 reductions 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 the Company where the minimum amount of the default is INR 1,00,00,000 (Rupees One crore) or ~USD 119,000. If insolvency proceedings were initiated and the petition is admitted, it could result in significant disruptions to our operations, loss of management control, and a substantial decrease in stockholder value. Furthermore, the outcomes of such proceedings are uncertain and could materially affect our financial position and results of operations.
The Zoomcar Board and Zoomcar management are evaluating options to improve liquidity and address Zoomcar’s long-term capital structure, however, there can be no assurance that any such option or plan will be available on favorable terms, or at all.
We have issued a significant number of warrants and exercise of these securities and the sale of the shares of Common Stock issuable thereunder (along with the issuance of any similar securities in the future,) will dilute your percentage ownership interest and may also result in downward pressure on the price of our Common Stock.
As of June 27, 2025, we have issued and outstanding options to purchase 16 shares of our Common Stock with a weighted average exercise price of $11,460, pre-funded warrants to purchase 2,461,911 shares of Common Stock, warrants to purchase 18,979 shares of Common Stock with an exercise price of $6,000 per share which were assumed by the Company in connection with the Business Combination, 11,500,000 Public Warrants to purchase 5,750 shares of our Common Stock, each Public Warrant exercisable into one two-thousandth of one share of Common Stock at an exercise price of $11,420.00 per full share, warrants to purchase 5,297 shares of Common Stock at a current exercise price of $56.64 per share which were issued to the Placement Agent in June 2024, November Series A Warrants to purchase 996,939 shares of Common Stock at a current exercise price of $16.12, November Series B Warrants to purchase up to 5,865 shares at an exercise price of $0.002 per share, November 2024 Placement Agent warrants to purchase 53,447 shares at a current exercise price of $16.12 per share, November 2024 Placement Agent Series A warrants to purchase 106,893 shares at a current exercise price of $16.12 per share.
As of June 27, 2025, we also have issued and outstanding December 2024 Series A Warrants to purchase 86,571 shares of Common Stock at a current exercise price of $6.24 per share, December Series B Warrants to purchase up to 177,572 shares of Common Stock at a current exercise price of $0.002 per share,
As of June 27, 2025, we also have issued and outstanding February 2025 Series B Warrants to purchase up to 89,744 shares of Common Stock at a current price of $0.002 per share,
As of June 27, 2025, we have also issued and outstanding March 2024 Series A Warrants to purchase 2,544,1343 shares of Common Stock at a current exercise price of $6.24 per share, and March Series B Warrants to purchase up to 591,275 shares of Common Stock at a current exercise price of $0.002 per share,
All Series B Warrants issued in the December Offering, the January/February Offering and the March Offering are exercisable for the maximum number of shares of Common Stock, because on March 18, 2025. the Board determined to fix the “Reset Price” of all of such Series B Warrants down to the “Floor Price” of $6.24 per share. The Company has agreed to deem the “Reset Date” of the Series B Warrants to be effective.
Because the market for our Common Stock is thinly traded, the sales and/or the perception that those sales may occur, could adversely affect the market price of our Common Stock. Furthermore, even though, as of the date hereof, the options and warrants are all currently out of the money (other than the Series B Warrants, which all have an exercise price of $0.002 per share), the mere existence of a significant number of shares of Common Stock issuable upon exercise of these securities may be perceived by the market as having a potential dilutive effect, which could lead to a decrease in the price of our Common Stock.
Risks related to our Business and Operations
Our current business model’s limited operating history and financial results make our future results, prospects and the risks we may encounter difficult to predict.
Although Zoomcar commenced operating in 2013, we have recently transitioned from a prior business model to our current business model, consisting of our asset-light online platform for peer-to-peer car sharing. As a result of this transition, certain components of our financial statements have experienced variation, and our operating history may not be indicative of our future growth or financial results. The limited history of our current business model makes predicting our future operating and other results difficult, if not impossible, and there is no assurance that we will be able to grow our revenues in future periods. Our results of operations are impacted by a number of factors, some of which are beyond our control, and we may suffer adverse impacts to our further development as a result of circumstances which include decreasing customer demand, increasing competition, declining growth of the car sharing industry in general, insufficient supply of vehicles on our platform, or changes in government policies or general economic conditions. We will continue to develop and improve the features, functions, technologies and other offerings on our platform to increase our Guest and Host bases and volume of bookings on our platform. However, the execution of our business plan is subject to uncertainty and bookings may not grow at the rate we expect. If our growth rates decline, investors’ perceptions of our business and prospects may be adversely affected and the market price of our common stock could decline.
Existing and potential holders of our securities should also consider the risks and uncertainties that a company with a limited history, such as ours, will face in the evolving personal mobility solutions market. In particular, there can be no assurance that we will:
● successfully execute on our business plan, particularly in light of our current liquidity and capital resources;
● facilitate sufficient bookings to become profitable in the near-term if at all;
● attract increasing numbers of Hosts and Guests within our current market and future potential additional markets;
● increase penetration within our current markets through continued improvements in vehicle density, platform features and strategic marketing efforts;
● enable us to successfully execute our business plans;
● enhance our brand recognition and awareness;
● acquire new Hosts and Guests by increasing our market penetration with deeper market coverage;
● develop new platform functionality and features that enhance our ability to retain Guests and Hosts;
● develop, improve or innovate our proprietary technology that allows for a sustainable competitive advantage;
● attract, retain, and manage a sufficient staff of management and technology personnel; or
● respond effectively to competitive pressures.
Our operating and financial forecasts are subject to various known and unknown contingencies and factors outside of our control and may not prove accurate, and we may not achieve results consistent with management’s expectations.
Our quarterly and annual operating results have fluctuated in the past and are likely to fluctuate in the future. During any given period, our operating and financial results may be influenced by numerous factors, many of which are unpredictable or are outside of our control. Additionally, our limited operating history with our current peer-to-peer car sharing business model makes it difficult for us to forecast our future results and subjects us to a number of uncertainties, including our ability to plan for and anticipate future growth. As a result, you should not rely upon our past quarterly and annual operating results as indicators of future performance. We have encountered, and will continue to encounter, risks and uncertainties frequently experienced by growing companies in rapidly evolving markets, such as the risks and uncertainties described herein.
The market for online platforms for peer-to-peer car sharing is relatively new and rapidly evolving. If we fail to successfully adapt to developments in our market, or if peer-to-peer car sharing online platforms do not achieve general acceptance, it could adversely affect our business, financial condition and operating results.
In December 2021, we transitioned to our current peer-to-peer cash sharing business model. The market for online peer-to-peer car sharing platforms is relatively new and unproven and the data and research available regarding the market or the industry may be limited and unreliable. It is uncertain whether the peer-to-peer car sharing market will continue to develop or if our platform will achieve and sustain a level of demand and market acceptance sufficient for us to generate meaningful revenue, net income, and cash flow. Our success will depend to a substantial extent on the willingness of Hosts and Guests to use our platform to identify car sharing opportunities. Some Hosts may be reluctant or unwilling to make their vehicles available for use on our platform because of concerns which may include, but are not limited to, potential decline in the value of their vehicle if listed on our platform, uncertainty of economic benefits from platform usage, ability to recover losses associated with lost or damaged property, compliance with our platform’s terms of use, data privacy and security concerns, or other reasons.
In addition, our success also requires utilization of our platform by Guests to book vehicles. Guests’ willingness to utilize our platform may depend, among other factors, on Guests’ belief in the ease-of use, integrity, quality, availability, safety, cost-effectiveness, convenience and reliability of our platform and the vehicles listed by Hosts for bookings thereon. Any shift in Guest preferences in the markets in which we operate could have a material adverse effect on our business. Additionally, Guests may be reluctant or unwilling to use a platform requiring Guests to provide personally identifiable information, payment information and driver’s license details, or have their driving behaviors monitored during bookings. Further, Guests may be reluctant to book vehicles containing GPS-enabled tracking or monitoring devices accessible by Zoomcar, or to use our platform at all due to the perception of the use of such devices.
If we do not retain existing Hosts, or attract and maintain new Hosts, or if Hosts fail to provide an adequate supply of high-quality vehicles, our business, financial condition, and results of operations may be negatively impacted.
Our success in a given geographic market depends on our ability to establish and grow the scale of our platform in that market by attracting Hosts and Guests to our platform. We depend upon having Hosts register high quality vehicles on our platform, maintain the safety and cleanliness of their vehicles, and ensure that the descriptions and availability of their vehicles on our platform are accurate and up-to-date. These practices are beyond our direct control and the number of vehicles shared by Hosts and resulting bookings options available to Guests on our platform may decline based on a number of factors including, among other things, public health and safety concerns, including pandemics/epidemics; economic, social, and political factors; state laws and regulations regarding car sharing, or the absence of such laws and regulations, challenges obtaining, insuring, financing and servicing vehicles to list on the platform, some of which may be exacerbated by infrastructure challenges in the emerging market where we operate our business. If Hosts register and offer fewer high-quality vehicles to Guests on our platform, our bookings and revenues may decline, and our results of operations could be materially adversely affected. Further, if Hosts with available vehicles choose not to offer their vehicles through our platform because competitive carsharing platforms emerge that Hosts find more attractive than our platform, Hosts may be unwilling to continue registering vehicles or making them available for bookings through the platform. For example, Hosts may cease or reduce vehicle registrations or the periods of time they make cars available for bookings for any number of reasons, such as competitor platforms having more Guests making bookings, risk of vehicle damage for which Hosts may not be able to recoup damages from Zoomcar or hesitancy to install the IoT GPS-enabled tracking device we require Hosts to affix to vehicles upon platform registration or for any other reason, we may lack sufficient supply of vehicles to attract Guests to utilize our platform. If Hosts do not share sufficient numbers of vehicles, or if the vehicles they register to our platform are less attractive to Guests than vehicles offered by competitors, our revenue would likely decline and our business, financial condition, and results of operations could be materially adversely affected.
Hosts are not required to make their vehicles available on our platform for a minimum sharing period or number of bookings and Hosts may choose not to share their vehicles on our platform at all if we cannot generate sufficient demand for their vehicles or if bookings through our platform are not sufficiently attractive to Hosts to retain and attract Hosts to use the platform. While we continue to invest in tools and resources to support Hosts, the pricing features and other capabilities of our platform may not be as attractive to Hosts as those developed by our competitors, and Hosts may not share their vehicles on our platform as a result. If Hosts perceive that listing vehicles on our platform may be insufficiently remunerative to, for example, offset any leasing, financing, parking, registration, maintenance, and repair costs of vehicles registered to the platform, we may lose or fail to attract Hosts and may not be able to make a sufficient number of vehicles available for use by our Guests.
If we fail to retain existing Guests, or attract and maintain new Guests, our business, financial condition, and results of operations may be negatively impacted.
Our business model depends on our ability to retain and attract Guests to make bookings on our platform. There are a number of trends in and aspects of Guest preferences which have an impact on us and the car sharing industry as a whole. These include, among others, preferences for types of vehicles, convenience of online bookings, and monetary savings associated with car sharing and platform bookings relative to other possible transportation solutions. Any shift in Guest preferences, which are susceptible to change, in the markets in which we operate could have a material adverse effect on our business. For example, if the vehicles registered to our platform are not popular or of sufficient quality or are not available at locations convenient for Guests, Guests may lose interest in utilizing our platform. Additionally, if Guests find our platform not to be user-friendly or to lack functions that Guests expect from a carsharing or other online platform, Guests may decrease or stop using our platform. Our competitiveness therefore depends on our ability to predict and quickly adapt to Guest trends, exploiting profitable opportunities for platform development, innovation and upgrades without alienating our existing Guest base or focusing excessive resources or attention on unprofitable or short-lived trends. If we are unable to respond on a timely and appropriate basis to changes in demand or Guest preferences, our business may be adversely affected.
Additionally, if we are unable to compete with other carsharing platforms and other mobility solutions in the markets in which we operate, our bookings will decrease, and our financial results will be adversely affected. Guests desiring to book vehicles through our platform must pay booking fees, which include, among other fees, “upfront booking fees,” less any applicable discounts and credits, and “value added” or trip-protection fees payable at the time of a booking; other charges may also be incurred by Guests after a booking, such as trip cancellation fees, gasoline fees, late fees and other charges. Many of these fees are generated through our platform functions and some of the fees are selected by Guests from a range of options presented to them at the time of a booking. If our booking and trip-related fees are not competitive, or our platform functionality is not appealing or outdated, or negative reviews or publications are released in connection with our platform, Guests may stop or reduce their use of our platform, our business, results of operations, reputation, and financial condition may be adversely affected.
If we are unable to introduce new or upgraded platform features that Hosts or Guests recognize as valuable, we may fail to retain and attract such users to our platform and our operating results would be adversely affected.
To continue to retain and attract Hosts and Guests to our platform, we will need to continue to introduce new or upgraded features, functions and technologies that add value for Hosts and Guests that differentiate us from our competitors. Developing and delivering these new or upgraded features, functions and technologies is costly, and the success of such features, functions and technologies depends on several factors, including the timely completion, introduction, and market acceptance of such features, functions and technologies. Moreover, any such new or upgraded features, functions and technologies may not work as intended or may not provide intended value to Hosts and Guests. If we are unable to continue to develop new or upgraded features, functions and technologies, or if Hosts and Guests do not perceive value in such new or upgraded features, functions and technologies, Hosts and Guests may choose not to use our platform, which would adversely affect our operating results.
We have made substantial investments to develop new or upgraded features, functions and technologies, and we intend to continue investing significant resources in developing new technologies, tools, features, services and other platform offerings. If we are unable to attract/retain and pay qualified technical staff required to continue our platform feature development efforts, we may not realize the expected benefits of our developments.
There can be no assurance that the new developments will exist or be sustained at the levels that we expect, or that any of these new developments will gain sufficient traction or market acceptance to generate enough revenue to offset any new expenses or liabilities associated with these new investments. Our development efforts with respect to new features, functions and technologies on our platform could distract management from current operations and will divert capital and other resources from our more established functions and technologies. Even if we are successful in developing new features, functions or technologies, or otherwise update or upgrade our platform, regulatory authorities may subject us to new rules or restrictions in response to our innovations that could increase our expenses or prevent us from successfully commercializing the new features, functions, technologies, updates or upgrades of our platform. If we are unable to adapt in a cost-effective and timely manner in response to the changing market conditions or platform users’ preferences, either for technical, legal, financial or other reasons, our business, financial condition and results of operations may be materially and adversely affected.
Our success depends upon our ability to maintain favorable customer reviews and ratings, and if our reputation suffers, our business, financial condition and operating results may be adversely affected.
We have a customized rating and review system connected to our search-and-ranking-base algorithm in order to provide a more holistic, more relevant overall search experience for the Guests. By combining Host ratings and reviews into the overall sort algorithm, our platform is able to highlight particular Hosts who are more likely to receive bookings. The reliable and trustworthy ratings and reviews of our Hosts and Guests are crucial to our business, which will to a substantial extent affect our Hosts and Guests’ determination as to whether to utilize the platform to book cars.
Monitor the rating and review system on an ongoing basis to enforce quality standards and build trust among members of our community. We have procedures in place to combat fraud or abuse of our rating and review system, but there is no assurance that these procedures are or will be effective, or at all. Further, Hosts and Guests can leave reviews or ratings on third-party platforms or websites, which are out of our control and off platform reviews and ratings or other statements about the platform, or a business or brand may have adverse impact on our business operations. If any Hosts and Guests leave negative ratings and reviews, it may not only cause a decrease in the number of existing Hosts and Guests, but also may negatively affect acquisitions of new Hosts and Guests, which may adversely affect our business, financial conditions and results of operations. Unreliable ratings and reviews could also make it more difficult for us to enforce quality standards, which could damage our reputation and reduce trust within our community.
Additionally, our ability to attract and retain Hosts and Guests is dependent in part on our ability to provide high-quality customer support services. Hosts and Guests depend on our customer support centers to resolve any issues relating to our platform both during and after their trips. As we continue to grow our business and improve our platform, we will face challenges related to providing high-quality support services at scale. In addition, as we continue to grow our international business and the number of international users on our platform, our customer support organization will face additional challenges, including those associated with delivering support in additional languages and locations. Any failure to maintain high-quality support, or a market perception that we do not maintain high-quality support, could harm our reputation and adversely affect our ability to scale our platform and business, our financial condition, and results of operations.
A former employee of Zoomcar India has instituted a wrongful termination suit and claims that certain Zoomcar options have vested.
In February 2023, a former employee of Zoomcar India instituted a suit before the City Civil and Sessions Judge at Mayo Hall, Bengaluru against Zoomcar India, Zoomcar and IOAC challenging his termination, claiming approximately $400,000 in damages and claiming that 100,000 options to purchase shares of Zoomcar have vested. On March 3, 2023, the City Civil and Sessions Judge at Mayo Hall, Bengaluru, issued an interim injunction to restrain each of Zoomcar and IOAC from “alienating or dealing” the 100,000 shares of Zoomcar claimed by the former employee while the suit is pending. Zoomcar believes that such claims are baseless and is attempting to have the interim order vacated. In addition, Zoomcar India filed an application in the former employee’s suit, seeking that IOAC be deleted from the array of parties in the suit, inter alia since (i) IOAC is neither a necessary nor a proper party to the suit; (ii) no reliefs have been sought by the former employee from IOAC; and (iii) there is no cause of action against IOAC. However, there can be no assurance that Zoomcar India and Zoomcar will be successful in their efforts to have the matter vacated or IOAC deleted from the parties, and such efforts may be time-consuming, costly and may have reputational and other negative effects on Zoomcar.
The founder and former CEO of the Company has initiated a civil complaint against the Company contesting the reasons for his termination and has raised certain other claims with regards to his ownership of the Company and compensation for termination of his employment.
On September 26, 2024, we received a copy of a complaint filed with the United States District Court for the District of Delaware wherein our founder and former CEO Greg Moran has challenged the Company’s termination of his employment for cause, effective as of June 18, 2024. Mr. Moran has contested the facts leading up to the grounds on which his termination was based and has also claimed that this alleged wrongful termination has deprived him of his vested right to 8% of the Company’s outstanding equity that he claims was owed to him under his Employment Agreement. He has also claimed that in connection with his termination he is entitled to the payment of certain amounts for unused paid leave during his employment with Zoomcar, along with certain other compensation he claims to be owed under the terms of his Employment Agreement, including “Owed Severance” equal to approximately $72,000. In total, Mr. Moran seeks damages of at least $238,000 plus damages associated with the 8% of shares. He also seeks damages under the New York Labor Law, under which he seeks liquidated damages equal to 100% of any unpaid wages. He claims that all of the above constitute wages under New York Labor Law.
Zoomcar believes that the termination of Mr. Moran’s employment for cause was proper in accordance with the terms of his Employment Agreement. Mr. Moran’s case in the District Court was dismissed on account of Mr. Moran’s stated intention to refile the case in Delaware Superior Court. Mr. Moran refiled his lawsuit in the Superior Court of the State of Delaware on November 1, 2024. On November 27, 2024, the Company filed a motion to dismiss certain of the causes of action for failure to state a cause of action, and the briefing on that motion was filed on January 7, 2025. Mr. Moran filed opposition to Zoomcar’s motion on February 5, 2025 and Zoomcar filed a reply in further support of its motion on February 20, 2025. Zoomcar’s oral arguments in its motion to dismiss were heard on April 29, 2025. The court granted the motion to dismiss Mr. Moran’s quasi-contractual claims and reserved decision on the balance of the motion. Zoomcar believes the allegations are without merit, intends to defend them vigorously and expects to prevail either at the motion stage or at a hearing on the merits. However, there can be no assurance that the Company will be successful in defending these claims in its entirety and such efforts may be time-consuming, costly and may have reputational and other negative effects on Zoomcar.
ACM has filed a notice of motion for summary judgement in lieu of complaint against Zoomcar in New York courts for payment of amounts due under the Note pursuant to breach of the terms of the Note
On November 7, 2024, ACM filed a notice of motion for summary judgement in in lieu of complaint (“Motion”) against Zoomcar in New York State Supreme Court, New York County, alleging it was entitled to accelerated payment of $5,997,832.72 pursuant to the terms of an unsecured promissory note issued by Zoomcar to ACM on December 28, 2023 (“Note”) as consideration for certain alleged, bona fide expenses that ACM’s members had aggregated and assigned to ACM for collection from Zoomcar. As alleged by ACM in its moving papers, two “Events of Default” (as defined in the Note) had occurred thereby entitling ACM to full and accelerated payment of the Note. The first was a Form 8-K, filed by Zoomcar on May 9, 2024, which allegedly disclosed that on May 6, 2024, Zoomcar had entered into an equity line arrangement and “Variable Rate Transaction” (as defined in the Note) with White Lion Capital LLC (“White Lion”). The second was a Form 8-K, filed by Zoomcar on June 21, 2024, which allegedly disclosed that on June 18, 2024, Zoomcar had incurred a form of debt that was not “Excluded Debt” (as defined in the Note) arising from its placement agent agreement with Aegis Capital Corp. without ACM’s prior consent. The Note generally provides that, upon the occurrence of an Event of Default, all accrued but unpaid interest plus liquidated damages and other amounts thereof shall become immediately due and payable to the Note holder.
Zoomcar believes it has meritorious defenses to the Motion and intends to zealously defend itself. As such, on January 14, 2025, Zoomcar filed opposition to the Motion. In relevant part, Zoomcar challenged the fact allegations concerning: (i) the first Form 8-K by tendering to the Court evidence confirming that the subject transaction with White Lion in fact had been terminated and the underlying filing of a Form S-1 registration statement contemplated in that transaction was never effectuated; and (ii) the second Form 8-K by tendering to the Court evidence confirming that the subject transaction involved Excluded Debt. The effect of the foregoing is the transactions were excluded from the definitions of Events of Default and extinguished ACM’s alleged entitlement to accelerated payment under the Note. Additional defenses were also presented by Zoomcar to the Motion. On March 28, 2025, New York County Supreme Court Justice granted a summary judgment in favor of ACM in the amount of $5,656,086.72, as well as default interest in the amount of $346,481.00, post-judgment interest at the statutory rate, attorneys’ fees, and costs. The issue of attorneys’ fees was referred to a special referee to report and recommend on submission from the parties. On May 9, 2025, the Court reduced the award of attorneys’ fees and costs to $12,000.00. On April 22, 2025, the Company filed a Notice of Appeal seeking to reverse the March 28, 2025, order granting summary judgment in favor of ACM. Zoomcar intends to vigorously prosecute its appeal.
However, there can be no assurance that the Company will be successful in its appeal or in resolving these claims in its entirety, and such efforts may be time-consuming, costly and may have reputational and other negative effects on Zoomcar.
Our entering into a settlement with ACM could result in a breach of standstill provisions in agreements we entered into in connection with the investors in the November Offering
We have in the past and may continue in the future to negotiate a settlement of a claim against us by ACM, the terms of which could breach certain restrictive covenants in the securities purchase agreements we entered into with investors, and the Placement Agent Agreement we entered into with the Placement Agent, each in connection with the November Offering. These restrictive covenants prohibit us, subject to certain exceptions, from issuing additional shares of Common Stock or securities convertible into or exercisable for shares of Common Stock (“Common Stock Equivalents”), and from filing any registration statements to register for resale any of such securities, without the consent of the investors, who were issued 50.1% of the securities issued in the November Offering, and the Placement Agent. Since we expect to issue shares of Common Stock and Common Stock Equivalents to ACM, in connection with any settlement, and to register such shares of Common Stock and shares of Common Stock underlying Common Stock Equivalents for resale in one or more registration statements, such actions could result in a breach of these restrictive covenants and we could be liable for damages to the investors in the November Offering, and the Placement Agent, which could have a material adverse effect on our financial situation and operations.
If the pre-programmed IoT devices distributed to our Hosts to affix to registered cars, which IoT devices enable GPS tracking and data collection by Zoomcar and keyless, digital access to booked vehicles by Guests, do not function as they are intended to function, our business, financial condition, and results of operations could be adversely affected.
As part of our vehicle registration process, all Hosts are provided with an option to install a variety of customized software-enabled IoT devices These devices, which Zoomcar obtains from several suppliers and then programs prior to distribution to Hosts, serve multiple functions, including enabling Guests to access Host vehicles by digitized keyless access and start and end bookings using Zoomcar’s mobile app. The IoT devices also facilitate GPS monitoring by Zoomcar of in-trip vehicles, which serves a data collection function that is important to Zoomcar.
We have no control over the quality or functionality of the IoT devices distributed to Hosts and such devices may not function as intended or may be out of service during the course of a booking or while a Guest is attempted to access a booked vehicle. In such scenarios, Guests are able to contact Hosts via number masking call or text chat enabled by Zoomcar Guest App. However, failures to provide the seamless keyless functions may deny or delay Guests’ quick access to the vehicles, thus reducing Guests’ interest in utilizing our platform. Hosts, in turn, may rely on Zoomcar’s customer support functionality to facilitate connecting Guests to emergency services in the event of a vehicle accident or other situation that, if unresolved, could result in damage to a Host vehicle. If Zoomcar is unable to help Guests that encounter problems during bookings, it could result in complaints and negative reviews from both Hosts and Guests, and higher incidents of damages claims to Zoomcar by Hosts, leading to adverse consequences to our reputation, brand, business, prospects, and operating results.
We do not have long term contracts with the third-party suppliers of the IoT devices distributed to our Hosts and such suppliers can reduce quantities or terminate their sales of IoT devices to us at any time. Any adverse changes in such supply or the costs of such products or services may adversely affect our operations.
We collaborate with third-party suppliers who regularly provide products and services, including but not limited to IoT devices and software integrations, to us. We do not have long term purchase agreements in place with our current suppliers of the IoT devices that we program and require our Hosts to affix to vehicles that they register to our platform and our suppliers could reduce the quantity of or discontinue providing IoT devices suitable for our needs. Given that the Hosts now have an option to install/not install these devices, we do not currently anticipate material challenges to identifying replacement suppliers if shortages of IoT devices occur, we are reliant on third parties to provide such devices and unanticipated shortages or an inability to identify new suppliers if our existing suppliers cease to be willing or able to provide the IoT devices on terms and at costs acceptable to Zoomcar may occur. Any such shortages, reductions or terminations in IoT device supply arrangements may have an adverse impact on our revenues, profits and financial condition. Additionally, if the market prices for IoT devices that are suitable for our needs goes up, we may need to purchase the devices at a comparatively higher price, which may adversely affect our business, financial condition and results of operations.
We have limited control over the operations of our suppliers and other business partners and any significant interruption in their operations may have an adverse impact on our operations. For example, a significant interruption in the operations of our supplier’s production facilities could cause delay or termination of shipment of the IoT devices to us, which may, in turn, reduce or delay our ability to pre-program and distribute such devices to Hosts which may in turn affect the retention of Hosts who are more inclined towards installing the devices leading to a lower availability of inventory on our Platform.
As our operations continue to scale and grow, we anticipate needing increased numbers of IoT devices, and our demand therefore may exceed the capabilities of our existing suppliers. If our suppliers cease to supply adequate numbers of IoT devices to us, or if we need alternative sources of supply for any other reason, those devices may not be immediately available to us. If alternative suppliers are not immediately available, we will have to identify and qualify alternative suppliers, and the installation of such devices on vehicles which Hosts wish to add to our platform may be delayed. We may not be able to find adequate alternative or additional suppliers in a reasonable period of time or on commercially acceptable terms, if at all. An inability to obtain sufficient supply of IoT devices which we can program for platform use may delay installation of such devices on vehicles that would otherwise become registered or more promptly registered to our platform, harm our relationships with Hosts, which could adversely affect our business and operations.
Maintaining and enhancing our brand and reputation is critical to our business prospects. While we have taken significant steps to build and improve our brand and reputation, failure to maintain or enhance our brand and reputation will cause our business to suffer.
As our platform continues to scale and becomes increasingly interconnected, resulting in increased media coverage and public awareness of our brand, future damage to our brand and reputation could have an amplified effect on our platform offerings. Our brand and reputation may also be harmed by events outside of our control, including by perceptions of our business or our platform which are subjective in nature. For example, if Hosts misrepresent the features or safety of their vehicles in platform listings or otherwise provide diminished quality of vehicles, Guests may not have positive experiences with bookings and may not return to the platform for future transportation needs. If Guests, in turn, do not treat Host vehicles with care, engage in reckless driving or other malfeasance during booked trips or violate platform terms and conditions or use Host vehicles in the commission of crimes or illegal acts, their actions could cause Hosts to withdraw vehicles from our platform or pursue damages claims against Zoomcar. Events ranging from unanticipated litigation involving Zoomcar to trip cancellations by Guests may affect perceptions of our business by individual Hosts and Guests or of larger numbers of persons or groups of persons about our platform and the perceived benefits or risks to booking cars through our platform. Because our ratings and review system encourages and facilitates public sharing of Hosts’ and Guests’ experience with bookings and with our platform, platform users have a forum to express describe their individual, subjective experiences with Host vehicles, bookings and any other aspect of our business, which may not always be favorable. Although we monitor usage of our platform review and ratings systems, we cannot control behaviors of our customers and from time to time, platform features designed to encourage productive information sharing may lead to dissemination of information which is misleading, misrepresentative, false and which may be damaging to our reputation. Any of the foregoing, among other facts and circumstances, may result in unfavorable press coverage about Zoomcar and our reputation and, consequently, our business may be harmed.
The acceptance of our brand will depend partially on maintaining a good reputation, minimizing the number of safety incidents, continuing an improved culture and workplace practices, improving existing functions, feature and technologies, developing new functions, features and technologies of our platform, maintaining a high quality of customer service and ethical behavior and continuing our marketing and public relations efforts. Our brand promotion, reputation building, and media strategies involve and will continue to involve significant costs, yet may not be successful. We anticipate that other competitors and potential competitors will scale and expand their business, which will make maintaining and enhancing our reputation and brand increasingly more difficult and expensive. If we fail to successfully maintain our brand in the current or future competitive environment or if events occur in the future which negatively affect public perception of our Company, our brand and reputation would be further damaged, and our business may suffer.
The impact of adverse or changing economic conditions, including the resulting effects on consumer spending or mobility patterns, may adversely affect our business, financial condition, and results of operations.
Our business depends on the overall demand for vehicle bookings. Any significant weakening of the economy in our operating jurisdictions or of the global economy, including the current macroeconomic downturn, more limited availability of credit, economic uncertainty, inflation, financial turmoil affecting the banking system or financial markets, increased unemployment rates, restrictions and reduction in domestic or international travel, fluctuations in the price or availability of gasoline, and other adverse economic or market conditions may adversely impact our business and operating results. Global economic and political events or uncertainty may cause some of our current or potential Hosts and Guests to curtail their use of our platform. In addition, travel has been disproportionately impacted by a macroeconomic downturn. In response to such downturns, Hosts and Guests may not use or spend on our platform at rates we expect, thus further reducing demand for vehicle bookings. These adverse conditions, have in the past resulted, and could in the future result, in reductions in consumer spending, slower adoption of new technologies, and increased competition. We cannot predict the timing, strength, or duration of any economic slowdown, including the current macroeconomic downturn, or any subsequent recovery generally. In addition, increases in inflation may cause Guests to decrease travel or choose alternative or lower cost methods of transportation versus utilizing our platform. If the conditions in the general economy significantly deviate from present levels and continue to deteriorate as a result of any such macroeconomic downturns, our business, financial condition, and results of operations could be adversely affected.
Increases in, labor, energy, and other costs could adversely affect our operating results.
Factors such as inflation, increased labor and employee benefit costs, and increased technology upgrade and update costs, as well as other inflationary pressure, may increase our operating costs. Many of the factors affecting such costs are beyond our control cause these increased costs may cause us to pass costs on to Hosts and Guests by increasing certain fees paid by them to us, which may cause booking volume to decline which would harm our business and operating results.
Our operations have grown substantially since our inception, and we expect that they will continue to do so, subject to our financial condition. If we are unable to effectively manage that growth, our financial performance and future prospects will be adversely affected.
Since our inception, we have experienced significant growth in the scale of our operations. This expansion increases the complexity of our business and places significant strains on our management, personnel, operations, systems, technical performance, financial resources, and internal financial control and reporting functions. We may not be able to manage growth effectively, which could damage our reputation, limit our growth, increase our costs, and negatively affect our results of operations. Our business is becoming increasingly complex, and this complexity and our rapid growth have demanded, and will continue to demand, substantial resources and attention from our management.
Further, to accommodate our expected growth, we must improve and maintain our platform, technology, systems, and network infrastructure. Failure to effectively upgrade our technology or network infrastructure to support the expected increased traffic on our platform could result in unanticipated system disruptions, slow response times, or poor experiences for Hosts and Guests. To manage the expected growth of our operations and to support financial reporting requirements, we will need to improve our transaction processing and reporting, operational and financial systems and reporting, procedures, and controls. These improvements will be particularly challenging to realize if we acquire new operations with different systems or if we continue to rely on manual financial reporting practices. Our current and planned personnel, systems, procedures, and controls may not be adequate to support our future operations. If we are unable to expand our operations, improve our financial reporting processes, and hire additional qualified personnel in an efficient manner, it could adversely affect our business, customer and investor satisfaction, compliance with regulations and laws, and cause our expenses to grow disproportionately relative to our revenue, and our financial performance and future prospects will be adversely affected.
Breaches and other types of security incidents of our networks or systems similar to the recent Cybersecurity Incident, or those of our third-party service providers, could negatively impact our business, our brand and reputation, our ability to retain existing Hosts and Guests and attract new Hosts and Guests, may cause us to incur significant liabilities and adversely affect our business, results of operations, financial condition, and future prospects.
In the regular course of our business, we collect, use, store, transmit, and process data and information about Hosts, Guests, employees, and others, some of which may be sensitive, personal, or confidential and make us an attractive target and potentially vulnerable to cyberattacks, computer viruses, electronic break-ins or similar disruptions. Recently on June 9, 2025, the Company identified a Cybersecurity Incident involving unauthorized access to its information systems. The Company became aware of the incident after certain employees received external communications from a threat actor alleging unauthorized access to Company data. Upon discovery, the Company promptly activated its incident response plan. Although based on its initial assessment the Company determined that an unauthorized third party accessed a limited dataset containing certain personal information of a subset of approximately 8.4 million users, including names, phone numbers, car registration numbers, personal addresses and email addresses associated with such users, it found no evidence to suggest that financial information, plaintext passwords, or other sensitive identifiers were compromised. To date, the incident has not resulted in any material disruption to the Company’s operations. The Company continues to evaluate the scope and potential impacts of the event, including legal, financial, and reputational considerations, as well as any associated remediation costs.
Accordingly, any such unauthorized access to or use of such data and information, or breach of our security measures or those of our third-party service providers, could adversely affect our business, operations, and future prospects. While we have taken steps to mitigate our cyberattack risks and protect the confidential information that we have access to, including but not limited to installation and periodical updates of antivirus software and backup of information on our computer systems, our security measures may be vulnerable to such security breaches. In response to the Cybersecurity Incident, the Company took immediate actions to contain the threat and enhance its security posture. These measures include implementing additional safeguards across the cloud and internal network, increasing system monitoring, and reviewing access controls. The Company is also engaging with third-party cybersecurity experts to further assist with the investigation. The Company has also notified the appropriate regulatory and law enforcement authorities and is cooperating fully with their inquiries.
Even though the Company has taken the relevant steps to ensure that such breach does not occur again, because techniques used to sabotage or obtain unauthorized access to systems change frequently and generally are not recognized until they are launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. Any cybersecurity incident like the one we recently experienced, accidental or willful security breaches or other unauthorized access to our systems could cause confidential information to be stolen and used for criminal purposes. Cybersecurity incidents, security breaches or unauthorized access to confidential information could also expose us to liability related to the loss of the information, time-consuming and expensive litigation and negative publicity. If security measures are breached because of third-party action, employee error, malfeasance or otherwise, or if design flaws in our technology infrastructure are exposed and exploited, our relationships with our Hosts and Guests could be severely damaged, we could incur significant liability, and our business and operations could be adversely affected. Additionally, if we fail to protect confidential information, we may be susceptible to potential claims such as breach of contract, negligence or other claims. Such claims will require significant time and resources to defend and there can be no assurances that favorable final outcomes will be obtained.
An increasing number of organizations, including large online and offline merchants and businesses, other large Internet companies, financial institutions, and government institutions have disclosed breaches of their information security systems and other information security incidents, some of which have involved sophisticated and highly targeted attacks. In addition, users on our platform could have vulnerabilities on their own mobile devices that are entirely unrelated to our systems and platform, but which could mistakenly be attributed to us and our system and platform. Further, breaches experienced by other companies may also be leveraged against us. For example, credential stuffing and ransomware attacks are becoming increasingly common, and sophisticated actors can mask their attacks, making them increasingly difficult to identify and prevent. Certain efforts may be state-sponsored or supported by significant financial and technological resources, making them even more difficult to detect. If a third party or employee circumvents any of our security measures or those of our third-party service providers, they may access, misappropriate, delete, alter, publish, or modify this information, which could cause interruptions in our business and operations, fraud or loss to third parties, regulatory enforcement actions, litigation, indemnity obligations, competitive harm, and other possible liabilities, as well as negative publicity. Widespread negative publicity may also result from real, threatened, or perceived security compromises (or lack of adequate security measures) of our industry, competitors, Hosts, and Guests. Concerns regarding privacy and data security could cause some Hosts and Guests to stop using our services, and for employees to be less satisfied with their employment with us and potentially leave the Company or institute claims against us. This discontinuance in use and the potential failure to acquire new Hosts and Guests, and similar personnel issues, could substantially harm our business, results of operations, financial condition, and future prospects.
Our information technology systems, internal computer systems, cloud-based computing services, and those of our current and any future third-party service providers are vulnerable to interruption and intrusion. Cyberattacks and other malicious internet-based activity, such as insider threats, computer malware, hacking, and phishing attempts continue to increase. Any cybersecurity incident or material disruption or slowdown of our systems could cause outages or delays in our services, which could harm our brand and adversely affect our operating results. Our failure to implement adequate cybersecurity protections could subject us to claims for any breach of security, particularly if it results in disclosure of information relating to our Hosts or Guests. If changes in technology cause our systems to become obsolete, or if our systems are inadequate to facilitate our growth, we could lose Hosts or Guests, and our business and operating results could be adversely affected. From time to time, and most recently in 2018, we have experienced security incidents or attempted attacks, and in some instances, individuals have had their personal information compromised. We conduct investigations when we become aware of such incidents and/or attempted attacks (although our investigations may not be able to determine the method of attack) and may notify affected persons, as necessary. In addition to traditional computer “hackers” employing malicious code (such as viruses, worms, and ransomware) to breach our systems and platform, we are susceptible to and monitor for social engineering, cyber extortion, and personnel theft or misuse.
We may also be the subject of denial of service attacks, server malfunction, software or hardware failures, loss of data or other computer assets, adware, or other similar issues. Threat actors, nation states, and nation state-supported actors engage in cyberattacks, including for geopolitical reasons, continued opportunistic monetary reasons, and in connection with military conflicts and operations. During times of war and other major conflicts, we and our third-party service providers may be vulnerable to these attacks, including cyberattacks that could materially disrupt our systems, platform and operations. While we have security measures in place to protect customer information and prevent data loss, service interruption, and other security breaches, we cannot guarantee that our security measures or our third-party service providers’ security measures will be sufficient to protect against unauthorized access to, or other compromise of, personal information, confidential information, or proprietary information or of disruptions or damage to our systems. The techniques used to sabotage or to obtain unauthorized access to our platform, systems, networks, and/or physical facilities in which data is stored or through which data is transmitted change frequently, and we may be unable to anticipate such techniques or implement adequate preventative measures or stop security breaches that may arise from such techniques. As a result, our safeguards and preventive measures may not be adequate to prevent current or future cyberattacks and security incidents, including security breaches that may remain undetected for extended periods of time, which can substantially increase the potential for a material and adverse impact resulting from the breach.
We are required to comply with laws, rules, industry standards, and regulations that require us to maintain the security of personal information in India. We may also have contractual and other legal obligations to notify relevant stakeholders of security breaches. Failure to prevent or mitigate cyberattacks could result and has in the past resulted in unauthorized access to such data, including personal information. India has enacted laws requiring companies to notify individuals, regulatory authorities, and others of security breaches involving certain types of data. In addition, our agreements with certain partners may require us to notify them in the event of a security breach. Such disclosures are and could be costly, could lead to negative publicity, may cause Hosts and Guests to lose confidence in the effectiveness of our security measures and to not use our services, and may require us to expend significant capital and other resources to respond to and/or alleviate problems caused by the actual or perceived security breach. In addition, the costs to respond to a cybersecurity event or to mitigate any identified security vulnerabilities could be significant, including costs for remediating the effects of such an event, paying a ransom, restoring data from backups, and conducting data analysis to determine what data may have been affected by the breach. In addition, our efforts to contain or remediate a security breach or any system vulnerability may be unsuccessful, and our efforts and any related failures to contain or remediate any breach or vulnerabilities could result in interruptions, delays, loss in customer trust, harm to our reputation, and increases in our insurance premiums.
We do not currently have insurance coverage for security incidents or breaches, including fines, judgments, settlements, penalties, costs, attorney fees, and other impacts that arise out of incidents or breaches. While we may obtain cyber liability insurance in the future, we cannot assure you that such insurance coverage will adequately cover liabilities actually incurred or that insurance will continue to be available to us on economically reasonable terms, or at all. The successful assertion against us of one or more large claims that exceeds available insurance coverage, or that results in changes to insurance policies (including premium increases or the imposition of large deductible or co-insurance requirements), could have an adverse effect on our business. Our risks are likely to increase as we continue to expand, grow our Host and Guest base, and process, store, and transmit increasingly large amounts of confidential, proprietary and sensitive data. See Part I, Item 1C - Cybersecurity - for a more detailed discussion of our procedures relating to cybersecurity.
We face competition and could lose market share to competitors, which could adversely affect our business, financial condition and operating results.
We face and expect to continue to face competition from ride sharing companies, car rental and taxi companies. The car sharing market in particular is intensely competitive and is characterized by rapid changes in technology, shifting guest needs and preferences, and frequent introductions of new services and offerings. We expect competition to increase, both from existing competitors and new entrants in the markets in which we operate or plan to operate, and such competitors may be well-established and enjoy greater resources or other strategic advantages. If Zoomcar is unable to anticipate or successfully react to these competitive challenges in a timely manner, Zoomcar’s competitive position could weaken, or fail to improve, and Zoomcar could experience a decline in revenue or growth stagnation that could adversely affect Zoomcar’s business, financial condition and operating results.
Certain of our current and potential competitors may have greater financial, technical, marketing, research and development skills and other resources, greater name recognition, longer operating histories or a larger global user base than we do. Such competitors may be able to devote greater resources to the development, promotion and sale of offerings, and they may be able to offer lower prices in certain markets than we do, which could adversely affect our business, financial condition and operating results. These and other factors may allow our competitors to derive greater revenue and profits from their existing user bases, attract and retain Hosts and Guests at lower costs or respond more quickly to new and emerging technologies and trends. Current and potential competitors may also establish cooperative or strategic relationships, or consolidate, amongst themselves or with third parties, which may further enhance their resources and offerings relative to ours.
We believe that our ability to compete effectively depends upon many factors both within and beyond our control, including but not limited to:
● acceptance of car-sharing and the use of our platform to solve transportation needs in the emerging markets in which we operate;
● our ability to attract and retain Guests and Hosts to use our platform;
● the popularity and perceived utility, ease of use, performance and reliability of our platform;
● our brand strength and recognition;
● our pricing models and the prices of our offerings;
● our ability to manage our business and operations during a pandemic and related travel restrictions if and when imposed upon outbreak of a pandemic;
● our ability to continue developing platform features which appeal to changing customer preferences;
● our ability to continue leveraging and enhancing our data collection and analytics capabilities;
● our ability to establish and maintain relationships with strategic partners and third-party suppliers or providers;
● changes mandated by legislation, regulatory authorities or litigation, including settlements, judgments, injunctions and consent decrees, as well as changes that we may elect to make ourselves in the face of potential litigation, legislation, or regulatory scrutiny;
● our ability to attract, retain and motivate talented employees; and
● our ability to raise additional capital.
If we are unable to compete successfully, our business, financial condition and operating results could be adversely affected.
We rely on mobile operating systems and application marketplaces to make its platform available to Hosts and Guests, and failure to effectively operate with or receive favorable placements within such application marketplaces could adversely affect Zoomcar’s business, financial condition and operating results.
We depend in part on mobile operating systems, such as Android and iOS, and their respective app marketplaces, to make our app available to Hosts and Guests. Any changes in such systems and app marketplaces that degrade the functionality or popularity of our app could adversely affect our platform’s usage on mobile devices and may adversely affect our user ratings and reviews in app marketplaces. If such mobile operating systems or app marketplaces limit or prohibit us from making our app available to Hosts and Guests, or if such systems or marketplaces make changes that degrade the functionality of our app, slow the rollout of our app on other app marketplaces, increase the cost of using our app, impose terms of use that are unsatisfactory to us, require users to opt in to enable marketing or advertising features, or modify their search or ratings algorithms in ways that are detrimental to us, our Guest growth may be negatively affected. Any of the foregoing risks could adversely affect our business, financial condition, and results of operations.
Our business depends on attracting and retaining capable management, technology development and operating personnel.
Our success depends in large part on our ability to attract and retain high-quality management, technology development and operating personnel. Competition for qualified employees is intense in our industry. There can be no assurance that members of our management team will continue to work for Zoomcar, or that we will be able to continue to attract or retain employees focused on technology development or other important aspects of our business and operations. Our employees, including members of our management team, could leave our Company with little or no prior notice and would be free to work for a competitor. The loss of even a few qualified employees, or an inability to attract, retain, and motivate additional highly skilled employees required to carry out our business plans, could harm our operating results and impair our ability to grow. If we were to lose key members of our management or technology teams, we would need to replace them with qualified individuals in a timely manner or else our business, results of operations and financial condition could be adversely impacted. Additionally, certain of our executive officers and directors may allocate their time to other businesses, thereby causing potential conflicts of interests which could have a negative impact on our business operations.
We also do not maintain “key person” life insurance on any of our employees. The departure of one or more of our senior management team members or other key employees could be disruptive to our business until we are able to hire qualified successors.
To attract and retain key personnel, we use various measures, including an equity incentive program for key executive officers and other employees. These measures may not be enough to attract and retain the personnel we require to operate and grow our business effectively. If we fail to identify, hire, train and retain the qualified management or technology personnel in the future, it may materially and adversely affect our business, financial condition, results of operations and prospects.
We are subject to payments-related risks.
We accept payments using a variety of methods, including credit or debit cards, or digital payment alternatives like UPI or other specific digital wallet platforms. As our payment policies are subject to change from time to time in accordance with evolving legal requirements and market availability of mobile and other payment systems in different jurisdictions where we operate, we offer new payment options to Hosts and Guests from time to time, subject to additional regulations, compliance requirements, and fraud risks. For certain payment methods, including credit and debit cards, we pay interchange and other fees that may increase over time and raise our operating costs and lower profitability.
We rely on third-party payment processors to process payments, refunds, and reimbursements. Under our commercial agreements with these third parties, they may terminate the relationships with us at any time in their sole discretions. If one of these third parties terminates its relationship with us, or refuses to renew its agreement with us on commercially reasonable terms, we could incur substantial delays and expenses in locating and integrating an alternative payment service provider to process payments from Hosts and Guests, and the quality and reliability of any such alternative payment service provider may not be comparable. Further, the software and services provided by these third parties may not meet our expectations, may contain errors or vulnerabilities, and could be compromised or experience outages. Additionally, payment processing software is complex and involves automated processes implemented by us and the third parties that we engage. Therefore, the payment processing software can be misinterpreted and may be susceptible to errors. These risks could cause us, to lose our ability to accept and account for online payment or other payment transactions, make timely payments to Hosts, or result in over- or underpayments to Hosts, any of which could disrupt our business for an extended period of time, make our platform less convenient and attractive to users, expose user information to unauthorized disclosures and abuse, and adversely affect our ability to attract and retain Hosts and Guests, or materially adversely affect our business, financial condition, ability to forecast accurately, and results of operations.
If we are unable to maintain our chargeback or refund rates at levels that credit or debit card issuers, or payment processors deem acceptable, these entities may increase fees for chargeback transactions or for many or all categories of transactions; they may also increase the rates of declining transactions or terminate their relationships with us. Any increases in fees could adversely affect our operating results, particularly if we elect not to raise the prices for transactions on our platform to offset the increase. The termination of our ability to process payments on any major credit or debit cards or through certain online payment service providers or payment processors could significantly impair our ability to operate our business.
We may also be subject to, or may voluntarily comply with, a number of other laws and regulations relating to money laundering, money transmission, international money transfers, privacy and information security, and electronic fund transfers. If we are found to be in violation of such applicable laws or regulations, we could be subject to civil and criminal penalties or forced to cease our payments processing services or otherwise make changes to our business practices.
Any major disruption or failure of our information technology systems, or our failure to successfully implement new technology effectively, could adversely affect our business and results of operations or the effectiveness of internal controls over financial reporting.
We rely on various information technology systems, owned by us and third parties, to manage our operations. Over the last several years, we have been and continue to implement modifications and upgrades to our systems, including making changes to legacy systems, replacing legacy systems with successor systems with new functionality, and acquiring new systems with new functionality. These activities subject us to inherent costs and risks associated with replacing and upgrading these systems, including impairment of our ability to fulfil trip bookings, maintain books and records, potential disruption of our internal control structure, substantial capital expenditures, additional administration and operating expenses, retention of sufficiently skilled personnel to implement and operate the new systems, demands on management time, and other risks and costs of delays or difficulties in transitioning to new or upgraded systems or of integrating new or upgraded systems into our current systems. Our system implementations may not result in productivity improvements at a level that outweighs the costs of implementation, or at all. In addition, the difficulties with implementing new or upgraded technology systems may cause disruptions in our business operations and may have an adverse effect on our business and operations if not anticipated and appropriately mitigated.
The successful operation of our business depends upon the performance and reliability of internet, mobile, and other infrastructures that are not under our control.
Our business depends on the efficient, uninterrupted and reliable operations of internet, mobile, and other infrastructures that are not under our control. We may operate in certain geographic areas with limited internet connectivity. Internet access and access to a mobile device are frequently provided by companies with significant market power, which could result in corporate action that degrades, disrupts, or increases the cost of users’ ability to access our platform. Failure to effectively upgrade our technology or internet infrastructure to support the expected increased utilization of our platform by larger numbers of Hosts and Guests could result in unanticipated system disruptions, slow response times, or poor experiences for Hosts and Guests. In addition, the internet infrastructure that we and users of our platform rely on in any particular geographic area may be unable to support the demands placed upon it. Any such failure in internet or mobile device or computer accessibility, even for a short period of time, could interfere with the speed and availability of our platform. In addition, we have no control over the costs of the services provided by national telecommunications operators. If mobile internet access fees or other charges to internet users increase, consumer traffic may decrease, which in turn may cause our revenue to significantly decrease. If our platform is unavailable when users attempt to access it, or if our platform does not load as quickly as users expect, Hosts and Guests may not return to our platform as often in the future, or at all, and may use our competitors’ products, services, or offerings more often. Although we have attempted to prepare for contingencies through redundancy measures and disaster recovery plans, such preparation may not be sufficient, and we do not carry business interruption insurance. Despite any precautions we may take, the occurrence of a natural disaster, such as an earthquake, flood or fire, or other unanticipated problems in the jurisdictions where we operate, including power outages, telecommunications delays or failures, break-ins to our systems or computer viruses, could result in delays or interruptions to our platform, our app and website, and loss of data and business interruption for us and our Hosts and Guests. Any of these events could damage our reputation, significantly disrupt our operations and subject us to liability, which could materially and adversely affect our business, financial condition and results of operations.
Our business operations may result in losses for which we are not insured.
Our current business model consists of a peer-to-peer car-sharing platform which facilitates sharing of vehicles between Hosts and Guests. In this context, we are a facilitator of vehicle bookings but disclaim legal responsibility for cars owned by Hosts and for actions by Hosts and Guests on our platform and during bookings. Our platform terms and conditions, inform Hosts and Guests that booking, sharing and using cars through the platform is undertaken at their own risk; the lease agreement entered into between Hosts and Guests prior to each booking that occurs in India also disclaims our responsibility for Host and Guest property and for other damages incurred in relation to bookings. We also include in our platform terms and conditions a limit on our overall liability equal to the greater of the booking value of each trip and $120. However, we cannot be certain of the extent to which such disclaimers and limitations would be upheld as legally enforceable in every jurisdiction or circumstance. We regularly receive communication from Hosts (and from time to time, Guests) asserting that we are responsible, and requesting reimbursement, for damages to vehicles, lost property and other losses. All of our Guests pay a “value added” trip protection fee as part of a booking, however, the amount available to us from Guest trip protection fees is not sufficient to offset the amounts requested to cover the cost of all damages claims, nor do we attempt to offset all such requests to cover vehicle damage. As a result, we often remain at a risk of residual claims that we may have to absorb in absence of a third-party insurance. For further information regarding the trip protection fees and related matters, please review information contained in this 10-K under the heading “Business - Other Matters.”
Further, we currently do not carry any insurance to protect against third-party damage claims tied to death, personal injury, Host vehicle damages, or Guest or Host theft or other losses, or third-party property damage. Although Hosts may insure their own vehicles to varying extents and are required to do so by law, we do not carry out independent verification of Host insurance coverage, nor does Host vehicle insurance coverage, to the extent it exists, insulate us, in full or in part, from all types of damages claims or claims for third-party indemnification associated with damages. We may therefore be subject to claims of significant liability based on any of the foregoing or based on other events or circumstances which occur during a booking or relate in some other manner to our platform or our business. We do not maintain balance sheet reserves to cover costs of defending, disputing, adjudicating, satisfying or settling any such claims if they are asserted against us and we may not be able to succeed in any such actions, should they materialize and be determined to result in liability to us. While we intend to expand our insurance coverage in the future, there can be no guarantee that we will be able to obtain additional insurance coverage in the future, and even if we are able to obtain additional coverage, we may not carry sufficient insurance coverage to satisfy potential claims. As our business continues to grow, incidences of such claims may also increase and, unless we obtain insurance coverage for such matters, we may choose or be required to absorb larger parts of such uninsured claims to avoid becoming subject to legal proceedings that could be resolved against us, which could lead to business losses and adversely affect our business, financial conditions and results of operations. Should uninsured losses occur, they could adversely affect our business, results of operations and financial condition. Further, our being subject to claims of liability, we may be subject to negative publicity and incur additional expenses, which could harm our business, financial condition, and operating results.
We are in the process of remediating identified material weaknesses in our internal controls and if we fail to remediate these weaknesses, or if we experience additional material weaknesses in the future, or otherwise fail to maintain effective internal controls in accordance with Section 404 of the Sarbanes-Oxley Act, we may not be able to accurately or timely report our financial condition or results of operations, or comply with the accounting and reporting requirements applicable to public companies, which may adversely affect investor confidence in the Company and the market price of our stock.
Zoomcar has identified certain material weaknesses in Zoomcar’s internal controls over financial reporting as more particularly described under Item 9A Controls and Procedures described elsewhere in this Annual Report on Form 10-K. These material weaknesses have been recurring from prior reporting periods and remain unresolved as of the date of this filing. Based on the assessment performed as of March 31, 2025, we identified five material weaknesses in our internal control over financial reporting related to:
(i) Our controls over independent review and documentation of third-party advisors’ reports were not operating effectively. We rely on third-party advisors for assistance with the preparation of key schedules and financial statements. However, we failed to establish a consistent process for independently reviewing these third-party advisor documents before incorporating them into our financial statements.
(ii) Our controls over financial reporting, specifically related to the inadequacy of our financial reporting policies and procedures, were not operating effectively. The Company lacks financial reporting policies and procedures that are commensurate with GAAP and SEC reporting requirements.
(iii) Our controls over the financial statement close process do not provide sufficient evidence of review.
(iv) Our resources are deficient in comprehensive knowledge and expertise pertaining to technical accounting and SEC reporting requirements.
(v) Our controls were not adequately designed to provide sufficient documentation and review of the operating effectiveness of Information Technology General Controls (ITGC’) for information systems that are relevant to the preparation of the Company’s consolidated financials. Specifically, our user access controls were not adequately designed or implemented and our monitoring of ITGC controls was insufficient.
In light of the aforementioned material weaknesses, our management has performed additional analyses, reconciliations, and other post-closing procedures and has concluded that, notwithstanding the material weaknesses in our internal control over financial reporting, the consolidated financial statements included in this Annual Report on Form 10-K fairly present, in all material respects, our financial position, results of operations and cashflows for the periods presented in conformity with GAAP.
To address the above material weaknesses, management is undertaking the following remediation measures:
(i) We have been working with Deloitte to assist in the preparation and presentation of financial statements in accordance with US GAAP and PCAOB guidelines. Furthermore, we are putting a framework in place to properly manage the review and approval process of work prepared by our third-party advisors.
(ii) We will work on scheduling training sessions on a quarterly basis to provide relevant USGAAP knowledge. In addition to this management would look to hire people with USGAAP knowledge to bridge the gap over the next few quarters.
(iii) Management will be finalizing work commenced on developing accounting manuals, policies, and standard operating procedures in consultation with Deloitte, our external SOX consultants.
(iv) We are designing and implementing additional review procedures within our accounting and finance department to provide more robust and comprehensive internal controls over financial reporting.
(v) We have properly concluded that ITGC controls over SAP (our accounting software) are operating effectively as of March 31, 2025. We are in the midst of reviewing and implementing proper ITGC controls in all other areas relevant to the preparation of the Company’s financial statements.
We intend to continue to take steps to remediate the material weaknesses described above and further evolving our accounting processes. The actions we are taking are subject to ongoing executive management review and are also subject to the oversight of the Audit Committee. We will not be able to fully remediate these material weaknesses until these steps have been completed and have been operating effectively for a sufficient period of time. If we are unable to successfully remediate these material weaknesses, or if in the future, we identify further material weaknesses in our internal control over financial reporting, we may not detect errors on a timely basis and our consolidated financial statements may be materially misstated.
While the Company has identified remediation plans and is working on remediating these material weaknesses, no assurance can be made that the Company will be successful in remediating any or all of the material weaknesses within the requisite timelines.
We are required to comply with the SEC’s rules implementing Sections 302 and 404 of the Sarbanes-Oxley Act, which require management to certify financial and other information in our quarterly and annual reports and provide an annual management report on the effectiveness of controls over financial reporting. Although we are required to disclose changes made in its internal controls and procedures on a quarterly basis, we will not be required to make our first annual assessment of its internal control over financial reporting pursuant to Section 404 until the year following our first annual report required to be filed with the SEC.
To comply with the requirements of being a public company, we have undertaken various actions, and will need to take additional actions, such as implementing numerous internal controls and procedures and hiring additional accounting or internal audit staff or consultants. Testing and maintaining internal control can divert Zoomcar’s management’s attention from other matters that are important to the operation of Zoomcar’s business. Additionally, when evaluating Zoomcar’s internal control over financial reporting, we may identify material weaknesses that we may not be able to remediate in time to meet the applicable deadline imposed upon us for compliance with the requirements of Section 404. Investors may lose confidence in the accuracy and completeness of our financial reports and the market price of our Common Stock could be negatively affected if any of the following occurs: (i) we identify any material weaknesses in its internal control over financial reporting; (ii) we are unable to comply with the requirements of Section 404 in a timely manner; (iii) we assert that our internal control over financial reporting is ineffective; or (iv) our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting once we are no longer an emerging growth company. We could also become subject to investigations by the SEC, the stock exchange on which its securities are listed, or other regulatory authorities, which could require additional financial and management resources. In addition, if we fail to remedy any material weakness, our financial statements could be inaccurate, and we could face restricted access to capital markets.
If we do not adequately protect our intellectual property and our data, our business, results of operations, and financial condition could be materially adversely affected.
We rely on a combination of trademark, copyright, domain names, trade names and trade secret laws, international treaties, our terms of service, other contractual provisions, user policies, restrictions on disclosures, and confidentiality agreements with our employees and consultants to protect our intellectual property rights from infringement and misappropriation. We currently have 21 registered trademarks and 1 recent trademark application that has passed the formalities check and is now under further examination along with 3 trademarks at variance - refused, abandoned and opposed, 1 patent application published, 3 patent applications under the abandonment process, and 1 patent application withdrawn in India; and 7 domain names.
There is no assurance that our pending or future trademark, patent, and copyright applications will be approved. Furthermore, effective intellectual property protection may not be available in every country in which we operate or intend to operate our business and some of the platform features and other customization of software that is important to our operations is not protected by registered intellectual property rights. There can be no assurance that others will not offer technologies, functions, features, or concepts that are substantially similar to ours and compete with our business, or copy or otherwise obtain, disclose and/or use our brand, platform features, design elements, our search-and-ranking algorithms and machine-learning and artificial intelligence-enhanced tools and capabilities or other information that we consider proprietary without authorization. We may be unable to prevent third parties from seeking to register, acquire, or otherwise obtain trademarks, copyrights or domain names that are similar to, infringe upon or diminish the value of our trademarks, copyrights, and our other proprietary rights. Third parties may obtain or misappropriate certain of our data through website scraping, robots, or other means to launch copycat sites, aggregate our data for their internal use, or to feature or provide our data through their respective websites, and/or launch businesses monetizing this data. While we routinely employ technological and legal measures in an attempt to divert, halt, or mitigate such operations, we may not always be able to detect or halt the underlying activities as technologies used to accomplish these operations continue to rapidly evolve.
If the protection of our proprietary rights and data is inadequate to prevent unauthorized use or misappropriation by third parties, the value of our brand and other intangible assets may be diminished and our competitors may be able to more effectively mimic our technologies, offerings, or features or methods of operations. Even if we do detect violations or misappropriations and decide to enforce our rights, litigation that may be necessary to enforce our rights may not be pursued by us, as it may be time-consuming and expensive, and divert our management’s attention. Additionally, a court of a competent jurisdiction may determine that certain of our intellectual property rights are unenforceable. If we fail to protect our intellectual property and data in a cost-effective and meaningful manner, our competitive standing could be harmed; our Hosts, Guests, other consumers, and corporate and community partners could devalue the content of our platform; and our brand, reputation, business, results of operations, and financial condition could be materially adversely affected.
We have been, and may in the future be, subject to claims that we or others violated certain third-party intellectual property rights, which, even where meritless, can be costly to defend and could materially adversely affect our business, results of operations, and financial condition.
The internet and technology industries are characterized by significant creation and protection of intellectual property rights and by frequent litigation based on allegations of infringement, misappropriation, or other violations of such intellectual property rights. There may be intellectual property rights, including registered or pending patents, trademarks, and copyrights, and applications of the foregoing, held by others that they allege cover significant aspects of our platform, technologies, content, branding, or business methods. Moreover, companies in the Internet and technology industries are frequent targets of practicing and non-practicing entities seeking to profit from royalties in connection with grants of licenses.
We have received communications alleging unauthorized use of third-party trademarks in the past, and may receive in the future, communications from third parties, including practicing and non-practicing entities, claiming that we have infringed, misused, or otherwise misappropriated their intellectual property rights. Additionally, we have been, and may in the future be, involved in claims, suits, regulatory proceedings, and other proceedings involving alleged infringement, misuse, or misappropriation of third-party intellectual property rights, or relating to our intellectual property holdings and rights. Intellectual property claims against us, regardless of merit, could be time consuming and expensive to litigate or settle and could divert our management’s attention and other resources.
Claims involving intellectual property could subject us to significant liability for damages and could result in our having to stop using certain technologies, content, branding, or business methods found to be in violation of another party’s rights. We might be required or may opt to seek a license for rights to intellectual property held by others, which may not be available on commercially reasonable terms, or at all. Even if a license is available, we could be required to pay significant royalties, which would increase our operating expenses. We may also be required to develop alternative non-infringing technology, content, branding, or business methods, which could require significant efforts and expenses and make us less competitive. Any of these results could materially adversely affect our business, results of operations, and financial condition.
We may introduce new platform offerings or changes to existing platform offerings or make other business changes, including in areas where we currently do not compete, which could increase our exposure to patent, copyright, trademark, and other intellectual property rights claims from competitors, other practicing entities, and non-practicing entities. Any failure in maintaining, protecting or enforcing our intellectual property rights could have a material adverse effect on our business, financial condition and results of operations.
Risks related to International, Regulatory and Legal Matters
Our business is subject to certain laws and regulations in the jurisdictions in which it operates, many of which are currently evolving, and the risk of unfavorable interpretations or failure to comply with such laws and regulations could harm Zoomcar’s business, financial condition and results of operations.
Our platform currently operates across 94 cities in India. We are subject to differing, and sometimes conflicting, laws and regulations in the various states in which we operate our business, which are evolving and may change from time to time, which may give rise to inconsistent or ambiguous interpretations among local, regional, or national laws or regulations applicable to our business. Compliance with laws and regulations of different states imposing varying standards and requirements is burdensome for businesses like ours, imposes added cost, increases potential liability to our business, and makes it difficult to realize business efficiencies and economies of scale.
Relative to India, which is the location of our headquarters and the market where we currently have the largest number of bookings, we operate as an asset-light peer-to-peer carsharing business based on an interpretation of current legal and regulatory requirements. The operation of our business is informed by a regulatory framework which includes but is not limited to, the India Motor Vehicle Act, 1988 (“MVA”), which informs how we operate and the ways in which we promote our business. However, there can be no assurance that our interpretation of relevant Indian laws and regulations, including the MVA, is complete or correct, or that transportation authorities in India will interpret the MVA or other applicable regulations the same way that we do. In the event that the MVA or other applicable laws and regulations are interpreted in a manner unfavorable to us, we could become the subject of investigations and could potentially face fines, duties, judgments or other negative consequences, which could materially adversely affect our business and results of operations. Additionally, as our business continues to grow and evolve, laws and regulations will be amended to address the evolution of our business, resulting in new and unpredictable legal and regulatory obligations in emerging markets. It may be difficult for us to comply with the new laws and regulations that will be developed to address changes in our industry and business, and we cannot guarantee that we will be able to comply with such new laws and regulations. If our current or future business models are determined to be noncompliant with the national, regional, and local laws and regulations, we may be required to make costly adjustments to our business model, which could result in negative consequences, many of which may be outside of our control and impossible to predict.
In addition to laws and regulations directly applicable to the peer-to-peer car sharing businesses, we are subject to laws and regulations governing other aspects of our business practices, including laws and regulations relating to use of the Internet, e-commerce, and electronic devices, as well as those relating to taxation, online payments, automobile-related liability, consumer privacy and data protection, pricing, content, advertising, discrimination, consumer protection, protection of intellectual property rights, distribution, messaging, mobile communications, environmental matters, labor and employment matters, claims management, electronic contracts, communications, Internet access, securities and public disclosure, corruption and anti-bribery, and unfair commercial practices. In addition, climate change and greater emphasis on sustainability could lead to regulatory efforts to address the carbon impact of transportation and mobility, which could have a negative impact on our business.
In addition, the jurisdictions in which we have business operations may in the future enact new laws and regulations relating to emissions and other environmental matters associated with peer-to-peer car sharing operations, the peer-to-peer car sharing industry generally, and the operation of our business. The interpretation and enforcement of such laws may involve significant uncertainties. New laws and regulations that affect our existing and proposed future businesses may also be applied retroactively in ways that we cannot predict with certainty.
We cannot predict the effect that the interpretation of existing or new laws or regulations may have on our business. Any of the foregoing or similar occurrences or developments could significantly disrupt our business operations and restrict us from conducting a substantial portion of our business operations in these jurisdictions, which could adversely affect our business, financial condition or operating results.
Any failure or perceived failure to comply with existing or new laws and regulations, including the ones described in these risk factors, or with orders of any governmental authority, including changes to or expansion of their interpretations, may subject us to significant fines, penalties, criminal and civil lawsuits, forfeiture of significant assets or enforcement actions in one or more jurisdictions. This failure or perceived failure could also result in the imposition of additional compliance and licensure requirements on us, as well as increased regulatory scrutiny of our business. In addition, we may be forced to restrict or change our operations or business practices, make updates or upgrades of our platform, or delay planned launches or improvements of new features, functions and technologies. Any of the foregoing could materially adversely affect our brand, reputation, business, financial condition, and results of operations.
Geographic areas in which Zoomcar operates and plans to operate in the future have been and may continue to be subject to political and economic instability.
We currently conduct all of our business operations in India (as of the date of this Form 10-K, we have closed our operations in Indonesia and Egypt). Our growth strategy is premised on the rapid expansion of our platform into emerging markets. Several of the countries in which we plan to operate our business in the future may be, subject to instances of political instability, civil unrest, hostilities, terrorist activities and economic volatility. Any such events may lead to, among other things, declines in Host and Guest demand for our platform, whether arising from safety concerns, a drop in consumer confidence, a general deterioration of economic conditions, currency volatility, adverse changes to the political and regulatory environment, or otherwise. Any such developments and any other forms of political or economic instability in our markets may harm our business, financial condition and operating results.
We are subject to risks associated with operating in rapidly evolving emerging markets.
To continue growing our business, we plan, in the future, to strengthen our operations and presence in existing emerging markets and to expand into other emerging markets, which may include, without limitation, markets in Southeast Asia, Middle East/North Africa, and Latin America. We have limited experience operating in jurisdictions outside India and plan to continue our efforts to expand into other jurisdictions. Business operations in multiple jurisdictions and markets is difficult, time consuming and expensive, and any international expansion efforts that we may undertake may not be successful. In addition, conducting international operations subjects us to risks associated with operating in emerging markets, including but not limited to the following:
● operational and compliance challenges caused by distance, language, and cultural differences, including but not limited to the additional cost and resources required to localize our services, the translation of our mobile app, website and platform into foreign languages, and the adaptation of our operations to local cultures and practices, and any changes in such cultures and practices;
● unexpected and more restrictive laws and regulations, as amended from time to time, including those laws and regulations governing internet activities, peer-to-peer car sharing platforms, leasing or renting cars, insurance requirements, licensing and usage of vehicles, employment, tax, licensing and permitting, identify verification and screening, email and text messaging, collection and use of personal information, privacy and data protection, payment processing, currency regulation, auto insurance scores, or other third-party data sources for trust and safety screening purposes, and other activities important to our online business practices;
● differing levels of technological compatibility with our platform and social acceptance of our brand and platform, and competition with companies that understand the local market better than we do or that have preexisting relationships with potential Hosts and Guests in those markets;
● legal uncertainty regarding our liability for the actions of Hosts and Guests, including uncertainty resulting from unique local laws or a lack of clear precedent of applicable law;
● dependency on third-party suppliers for the provision of essential business products/services including but not limited to IoT devices and software integrations in different jurisdictions.
● difficulties in managing and staffing international operations, including uncertainties and difficulties related to our foreign employees’ membership in labor unions and work councils, as well as complexities associated with foreign employees’ entry into collective bargaining agreements that require less oversight and training by Zoomcar;
● fluctuations in currency exchange rates;
● higher levels of credit risk and payment fraud;
● potentially adverse tax consequences, including the complexities of foreign value added tax systems and restrictions on the repatriation of earnings;
● increased financial accounting and reporting burdens, in addition to complexities and difficulties relating to the implementation and maintenance of adequate internal controls;
● difficulties in implementing and maintaining the financial systems and processes needed to enable compliance across multiple offerings and jurisdictions;
● public health concerns or emergencies, such as pandemic and other highly communicable diseases or viruses, outbreaks of which have from time to time occurred in various parts of the world in which we operate;
● managing operations in markets in which cash transactions are favored over credit or debit cards;
● political, social, and economic instability abroad;
● terrorist attacks, including data breaches and security concerns;
● breakdowns in infrastructure, utilities, and other services;
● exposure to a business culture in which improper business practices may be prevalent;
● compliance with various anti-bribery laws; and
● reduced or varied protection of intellectual property rights in some countries.
While we believe that the present regulatory environment in our target markets is generally favorable, this could and may change over time. If the regulatory environment in our target markets becomes more unfavorable for car sharing businesses, this could have a negative impact on our operations in these markets and could adversely impact our ability to achieve sustainable profitability in these markets.
Political changes in the Government of India could delay or affect the further liberalization of the Indian economy and materially and adversely affect economic conditions in India, generally, and our business, in particular.
Our business could be significantly influenced by economic policies adopted by the government of India. Since 1991, successive governments have pursued policies of economic liberalization and financial sector reforms. The government has at various times announced its general intention to continue India’s current economic and financial liberalization and deregulation policies. However, protests against such policies, which have occurred in the past, could slow the pace of liberalization and deregulation. The rate of economic liberalization could change, and specific laws and policies affecting foreign investment, currency exchange rates and other matters affecting investment in India could change as well. While we expect any new government to continue the liberalization of India’s economic and financial sectors and deregulation policies, there can be no assurance that such policies will be continued.
The government of India has traditionally exercised and continues to exercise influence over many aspects of the economy. Our business may be affected by interest rates, changes in policy, taxation, social and civil unrest and other political, economic or other developments in or affecting India.
A change in the government’s economic liberalization and deregulation policies could disrupt business and economic conditions in India generally, and specifically our business and operations, as substantially all of our business and operations are located in India. This could have a material adverse effect on our business, prospects, financial condition and results of operations.
We may incur liability for the activities of Hosts or Guests, which could harm our reputation, increase our operating costs, and adversely affect our business, financial condition and operating results.
We may be found to be subject to liability for the activities of Hosts and Guests on our platform. For example, we have in the past received, and expect to continue to receive, complaints from Hosts regarding damage to, or loss, theft, or impounding of, their vehicles and requests for damage reimbursement, and from Guests regarding quality or serviceability of the vehicles, other safety and security issues, and actual or perceived discrimination in connection with Hosts declining trips and requests for reimbursement of their trip fees, as well as actual or threatened legal action against us if no reimbursement or perceived incomplete reimbursement is made. In addition, some of our Hosts may list or have listed vehicles on our platform in violation of their lease or financing agreements or personal automobile insurance policies, or in violation of applicable legal restrictions on subleasing. Except for the examination of vehicle registration certificates at the time of the Host onboarding and listing process, we do not screen vehicles for compliance with safety standards or make efforts to determine whether they are legally registered to be driven on public roads, and it is possible that some vehicle registration certificates may be forged, or some of our Hosts may list or have listed vehicles on our platform that fail to meet basic safety or legal requirements for a vehicle. Our trust and safety checks and qualification procedures may not be capable of identifying all quality and safety issues, including safety recalls, and our systems are not designed to identify legal, quality, and safety issues that may occur after initial sign-up. Consequently, we could be and have been subject to liabilities incurred from local or state regulators and courts regarding the activities of Hosts and Guests on our platform or related legal, safety, and security issues.
If we are found to be subject to liability or claims of liability relating to the acts of Hosts or Guests, or for failure to pay fees, fines, or taxes owed by them, we may be subject to negative publicity or other reputational harm, even if we are not found to be subject to such liability, and this may cause us to incur additional expenses, which could harm our business, results of operations, and financial condition.
Host, Guest, or third-party actions that are criminal, violent, inappropriate, dangerous, or fraudulent may undermine the trust and safety or perception of trust and safety of our marketplace and our ability to attract and retain Hosts and Guests, which could materially and adversely affect our reputation, business, results of operations, and financial condition.
We have no control over or ability to predict the actions of our Hosts, Guests, and other third parties, such as additional passengers in, or drivers of, vehicles booked on our platform, and we cannot guarantee the safety of our Hosts, Guests, and such third parties. From time to time, we may be subject to legal proceedings, including personal injury suits, claims, arbitrations, administrative proceedings, and government investigations or enforcement actions in the ordinary course of business. The actions of Hosts, Guests, and other third parties may result in fatalities, injuries, other bodily harm, assault, fraud, invasion of privacy, property damage, trespass, theft, including cases in which we are unable to recover the vehicle, discrimination, harassment, and libel, among other negative impacts, which could create potential legal or other substantial liabilities for us, Hosts, or Guests. For example, Hosts may incur and have incurred liability due to the unlawful actions of their Guests or other third parties Guests allow in the vehicle, such as traffic violations or other legal violations, and Guests may incur and have incurred liability due to the unlawful actions of their Hosts, such as vehicle or registration violations. In addition, there have been rare instances where Guests were pulled over or detained by police because the vehicles they were driving had been reported as stolen by the vehicle owner. Depending on the circumstances, Hosts or Guests may also attempt to assert liability on the part of Zoomcar for unlawful actions stemming from the use of vehicles available on our platform. Such liabilities could materially and adversely affect our reputation, business, results of operations, and financial condition.
In addition, we do not, and may not in the future, undertake to independently verify the safety, suitability, quality, and compliance with our policies or standards of our Hosts’ vehicles. We have created policies and standards to respond to certain issues reported with listings, but certain bookings may pose heightened safety risks to individual users because the underlying issues had never been reported to us. We rely, at least in part, on Hosts and Guests to investigate and enforce many of our policies and standards and report any issues with listings to us, and we cannot guarantee that they will do this promptly or accurately.
Moreover, we cannot conclusively verify the identity of all Guests, nor do we verify or screen third parties who may be present during a trip using a vehicle booked through our platform. While we do some limited screening of Hosts, our trust and safety processes focus primarily on Guests to reduce the risk of vehicle theft and motor vehicle accidents. Our identity verification processes rely on, among other things, information provided by users at onboarding and booking, and our ability to validate that information and we do not require users to re-verify their identity following their successful completion of the initial verification process or require Guests to provide documentation or notification of any updates regarding their driving record or license status. We may not identify instances of identity fraud where a Guest books a vehicle under another person’s identity for criminal or other unlawful purposes. Furthermore, we do not conduct criminal background checks or any other screening processes on Guests and their invitees in a vehicle booked through our platform. Given this ambiguity or potential change, it is possible that we are not now, or may not be in the future, compliant with those laws. Further, the use of criminal background checks or credit checks in our marketplace may open us up to allegations of discrimination. Therefore, we may be subject to negative publicity and incur additional expenses, which could harm our business, results of operations, and financial condition.
Our exposure to exchange rate fluctuations and the translation of local currency results into U.S. dollars could negatively impact our results of operations.
All of our business is transacted and/or denominated in foreign currencies, and fluctuations in currency exchange rates could have a significant impact on our results of operations, financial condition and cash flows. Increased currency volatility, particularly in the Indian Rupee, could also positively or negatively impact our foreign-currency-denominated costs, assets and liabilities. In addition, any devaluation of the Rupee relative to other foreign currencies could increase our operating expenses, adversely affecting our results of operations. Any of these factors could adversely affect our financial condition and results of operations in the future.
The effective tax rates governing car rental and car subscription in India could change.
The tax environment continues to evolve in India on a routine basis and remains relatively fluid compared to other more mature markets. The indirect tax rates associated with the Goods and Services Tax (GST) have changed on multiple occasions since the GST’s introduction in 2017. Any further increase in these indirect tax rates could result in a reduction in the Company’s operating cash flow, which could impair our future profitability.
We may have exposure to materially greater than anticipated tax liabilities.
The tax laws applicable to our business activities are subject to uncertainty and can be varied in the relevant jurisdictions. Like many other multinational companies, we are subject to tax in diverse jurisdictions and have structured our business to reduce our effective tax rate. The taxing authorities of the jurisdictions in which we operate have in the past, and may in the future, examine or challenge our methodologies for valuing developed technology, which could increase our worldwide effective tax rate and harm our financial position and operating results. Furthermore, our future income taxes could be adversely affected by earnings being lower than anticipated in jurisdictions that have lower statutory tax rates and higher than anticipated in jurisdictions that have higher statutory tax rates, changes in the valuation of our deferred tax assets and liabilities, or changes in tax laws, regulations, or accounting principles. We are subject to regular review and audit by the tax authorities in the jurisdictions where we operate, and currently face numerous income and other tax claims pending appeals before higher authorities in India. Any adverse outcome of such appeals or an adverse interpretation from the tax authorities on the tax compliances and tax rates applicable to our car sharing business could have an adverse effect on our financial position and operating results. In addition, the determination of our worldwide provision for income taxes and other tax liabilities requires significant judgment by our management, and we have engaged in many transactions for which the ultimate tax determination remains uncertain. The ultimate tax outcome may differ from the amounts recorded in our financial statements and may materially affect our financial results in the period or periods for which such determination is made. Our tax positions or tax returns are subject to change, and therefore we cannot accurately predict whether we may incur material additional tax liabilities in the future, which could impact our financial position.
Our business is subject to extensive government regulation and oversight relating to the provision of payment and financial services.
The jurisdictions in which we operate and jurisdictions we may enter may have laws that govern payment and financial services activities. These laws govern, among other things, money transmission, prepaid access instruments, electronic funds transfers, anti-money laundering, counter-terrorist financing, banking, systemic integrity risk assessments, and cyber-security of payment processes. Our business operations, including our payments to Hosts and Guests, may not always comply with these financial laws and regulations. Regulators s may determine that certain aspects of our business are subject to these laws and could require us to obtain licenses to continue to operate in India . We have evaluated and will continue to critically evaluate our options for seeking applicable licenses and approvals in the jurisdictions where we operate to optimize our payment solutions and support the future growth of our business. Laws related to money transmission and online payments are evolving, and changes in such laws could affect our ability to provide payment processing on our platform in the same form and on the same terms as we have historically, or at all.
Historical or future non-compliance with these laws or regulations could result in significant criminal and civil lawsuits, penalties, forfeiture of significant assets, or other enforcement actions. Costs associated with fines and enforcement actions, as well as reputational harm, changes in compliance requirements, or limits on our ability to expand our product offerings, could harm our business.
Further, our payment system may be susceptible to illegal and improper uses, including money laundering, terrorist financing, fraudulent transactions, and payments to sanctioned parties. We have invested and will continue to invest substantial resources to comply with applicable anti-money laundering and sanctions laws, and conduct appropriate risk assessments and implement appropriate controls. Government authorities may seek to bring legal action against us if our payment system is used for improper or illegal purposes or if our enterprise risk management or controls are not adequately assessed, updated, or implemented appropriately, and any such action could result in financial or reputational harm to our business.
Our reported financial results may be adversely affected by changes in accounting principles.
The accounting for our business is complicated, particularly in the area of revenue recognition, and is subject to change based on the evolution of our business model, interpretations of relevant accounting principles, enforcement of existing or new regulations, and changes in SEC or other agency policies, rules, regulations, and interpretations, of accounting regulations. Changes to our business model and accounting methods could result in changes to our financial statements, including changes in revenue and expenses in any period, or in certain categories of revenue and expenses moving to different periods, may result in materially different financial results, and may require that we change how we process, analyze, and report financial information and our financial reporting controls.
We are subject to privacy laws and regulations, and compliance with these laws and regulations could impose significant compliance burdens.
The regulatory framework for privacy issues worldwide is currently in flux and is likely to remain so for the foreseeable future. Practices regarding the collection, use, storage, transmission and security of personal information by companies operating over the internet have recently come under increased public scrutiny. The European Union’s privacy and data security regulation, the General Data Protection Regulation (“GDPR”), that went into effect in May 2018, requires companies to implement and remain compliant with regulations regarding the handling of personal data, including its use, protection and the ability of persons whose data is stored to correct or delete such data about themselves. Other countries in Asia, Europe and Latin America have passed or are considering similar privacy regulations, resulting in additional compliance burdens and uncertainty as to how some of these laws will be interpreted.
We receive, collect and store a large volume of personally identifiable data by processing car sharing transactions on our platform. This data is increasingly subject to legislation and regulations in numerous jurisdictions around the world.
For example, the Indian Information Technology Act, 2000, as amended, would subject us to civil liability to compensate for wrongful loss or gain arising from any negligence by us in implementing and maintaining reasonable security practices and procedures with respect to sensitive personal data or information that we possess in our computer systems, networks, databases and software. India has also implemented privacy laws, including the Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules, 2011, which impose limitations and restrictions on the collection, use and disclosure of personal information. The Digital Personal Data Protection Act, 2023 has been introduced in August of 2023 which has significant impact on the current regulatory environment with respect to the lawful use of digital personal data, cross border data transfers and additional compliances that may be invoked for organizations collecting and/or processing personal data.
Further, in India, the draft of Digital Personal Data Protection Rules which aims to operationalize the Digital Personal Data Protection Act, 2023 (DPDP Act), in line with India’s commitment to create a robust framework for protecting digital personal data, has been published in January 2025 for public comments. While the rules are yet to be finalized and formally adopted, the entire framework for data protection legislation is fairly new in India and going through the phases of implementation right now. However, it may affect us in ways that we are currently unable to predict.
Any liability we may incur for violation of such laws and regulations and related costs of compliance and other burdens may adversely affect our business and profitability. We could be adversely affected if legislation or regulations are expanded to require changes in our business practices or if governing jurisdictions interpret or implement their legislation or regulations in ways that negatively affect our business, results of operations or financial condition.
Failure to comply with labor laws and regulations may cause us to incur additional costs, which may affect our business, financial conditions and results of operations.
Our business operations are governed by various labor laws, regulations and government policies in multiple jurisdictions. The requirements for labor law compliance, may change from time to time in each jurisdiction. We may be unable to comply with all these requirements in time, or at all, or we may need to incur substantial costs to be compliant, which may adversely affect our business operations and financial condition.
In India, provisions were released between 2019 and 2021 relating to the contribution of provident fund, employee state insurance, and professional taxes by employers for the certain employees. Any delay or failure to make such contribution may result in penalties, interests, notices or other administrative actions by the relevant local authorities in India. As of March 31, 2025, Zoomcar India has incurred a penalty of less than $35,999 (based on the foreign exchange rates as of March 31, 2025) for failure to make timely contribution, which Zoomcar India plans to remit, with associated interest due, as instructed by the relevant local authority. This outstanding penalty and interest will continue to accrue unless paid in full, which could adversely affect our business, financial conditions and results of operations.
Uncertain global macro-economic and political conditions could materially and adversely affect our results of operations and financial condition.
Our results of operations could be materially affected by economic and political conditions in the United States and internationally, including inflation, deflation, interest rates, availability of capital, war, terrorism, aging infrastructure, pandemics, energy and commodity prices, trade laws, election cycles and the effects of governmental initiatives to manage economic conditions. Current or potential business and consumer members may delay or decrease spending on our products and services sold through our platform as their business and/or budgets are impacted by economic conditions. The inability of current and potential business and consumer members to pay us for products and services sold through our platform may adversely affect our earnings and cash flows.
Natural disasters, including and not limited to unusual weather conditions, epidemic outbreaks, terrorist acts and political events could disrupt our business schedule.
The occurrence of one or more natural disasters, including and not limited to tornadoes, hurricanes, fires, floods and earthquakes, unusual weather conditions, pandemics and endemic outbreaks, terrorist attacks or disruptive political events in certain regions where our facilities are located, or where our third-party contractors’ and suppliers’ facilities are located, could adversely affect our business. Natural disasters including tornados, hurricanes, floods and earthquakes may damage our facilities or those of our suppliers, which could have a material adverse effect on our business, financial condition and results of operations. Terrorist attacks, actual or threatened acts of war or the escalation of current hostilities, or any other military or trade disruptions impacting our domestic or foreign suppliers of components of our products, may impact our operations by, among other things, causing supply chain disruptions and increases in commodity prices, which could adversely affect our raw materials or transportation costs. These events also could cause or act to prolong an economic recession in the United States or abroad. In addition, the disaster recovery and business continuity plans we have in place currently are limited and are unlikely to prove adequate in the event of a serious disaster or similar event. We may incur substantial expenses as a result of the limited nature of our disaster recovery and business continuity plans and, more generally, any of these events could cause consumer member confidence and spending to decrease, which could adversely impact our operations.
We may be unable to successfully grow our business if we fail to compete effectively with others to attract and retain our executive officers and other key management and technical personnel.
We believe our future success depends upon our ability to attract and retain highly competent personnel. Our employees are at-will and not subject to employment contracts. We could potentially lose the services of any of our senior management personnel at any time due to a variety of factors that could include, without limitation, death, incapacity, military service, personal issues, retirement, resignation or competing employers. Our ability to execute current plans could be adversely affected by such a loss. We may fail to attract and retain qualified technical, sales, marketing and managerial personnel required to continue to operate our business successfully. Personnel with the expertise necessary for our business are scarce and competition for personnel with proper skills is intense.
In addition, new hires frequently require extensive training before they achieve desired levels of productivity. Additionally, attrition in personnel can result from, among other things, changes related to acquisitions, retirement and disability. We may not be able to retain existing key technical, sales, marketing and managerial employees or be successful in attracting, developing or retaining other highly-qualified technical, sales, marketing and managerial personnel, particularly at such times in the future as we may need to fill a key position. If we are unable to continue to develop and retain existing executive officers or other key employees or are unsuccessful in attracting new highly-qualified employees, our financial condition, cash flows, and results of operations could be materially and adversely affected.
Risks Related to Our Operations as a Public Company
The requirements of being a public company may strain our resources, divert our management’s attention and affect our ability to attract and retain qualified independent board members.
As a public company, we are subject to the reporting and corporate governance requirements of the Exchange Act, the listing requirements of OTC Markets Group and other applicable securities rules and regulations, including the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act”). Compliance with these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources, particularly after we are no longer an “emerging growth company” as defined in the JOBS Act. Among other things, the Exchange Act requires that we file annual, quarterly and current reports with respect to our business and results of operations and maintain effective disclosure controls and procedures and internal control over financial reporting. In order to improve our disclosure controls and procedures and internal control over financial reporting to meet this standard, significant resources and management oversight may be required. As a result, management’s attention may be diverted from other business concerns, which could harm our business, financial condition, results of operations and prospects. Although we have already hired additional personnel to help comply with these requirements, we may need to further expand our legal and finance departments in the future, which will increase our costs and expenses.
In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time-consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidance is provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expense and a diversion of management’s time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies, regulatory authorities may initiate legal proceedings against us and our business and prospects may be harmed. As a result of disclosure of information in the filings required of a public company and in this annual report, our business and financial condition will become more visible, which may result in threatened or actual litigation, including by competitors and other third parties. If such claims are successful, our business, financial condition, results of operations and prospects could be materially harmed, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary to resolve them, could divert the resources of our management and materially harm our business, financial condition, results of operations and prospects.
We may have increasing difficulty attracting and retaining qualified outside independent board members.
The directors and management of publicly traded corporations are increasingly concerned with the extent of their personal exposure to lawsuits and shareholder claims, as well as governmental and creditor claims that may be made against them in connection with their positions with publicly held companies. Outside directors are becoming increasingly concerned with the availability of directors’ and officers’ liability insurance to pay on a timely basis the costs incurred in defending shareholder claims. Directors’ and officers’ liability insurance is expensive and difficult to obtain. The SEC and OTCQX have also imposed higher independence standards and certain special requirements on directors of public companies. Accordingly, it may become increasingly difficult to attract and retain qualified outside directors to serve on our Board.
Stock trading volatility could impact our ability to recruit and retain employees.
Volatility or lack of appreciation in our stock price may also affect our ability to attract and retain our key employees. Employees may be more likely to leave us if the shares they own or the shares underlying their vested equity have not significantly appreciated in value relative to the original purchase price of the shares or the exercise price of the options, or conversely, if the exercise price of the options that they hold are significantly above the market price of our common stock. If we are unable to retain our employees, or if we need to increase our compensation expenses to retain our employees, our business, operating results, and financial condition could be adversely affected.
Members of our management team have limited or no prior experience managing a public company.
Except a few, most of the members of our senior management team have no experience managing a publicly traded company, interacting with public company investors, and complying with the increasingly complex laws pertaining to public companies. Our management team may not successfully or efficiently manage our transition to being a public company, which will subject us to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts, investors and regulators. These new obligations and constituents will require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could harm our business, results of operations, and financial condition.
We may be exposed to risk if we cannot enhance, maintain, and adhere to our internal controls and procedures.
As a public company trading on OTCQX, we have significant requirements for enhanced financial reporting and internal controls. The process of designing and implementing effective internal controls is a continuous effort that will require us to anticipate and react to changes in our business accounting, auditing and regulatory requirements and to expend significant resources to maintain a system of internal controls that is adequate to satisfy our reporting obligations as a public company, and we are still early in the process of generating a mature system of internal controls and integration across business systems. If we are unable to establish or maintain appropriate internal financial reporting controls and procedures, it could cause us to fail to meet our reporting obligations on a timely basis, result in material misstatements in our financial statements, and harm our operating results.
Matters impacting our internal controls may cause us to be unable to report our financial information in an accurate manner or on a timely basis and thereby subject us to adverse regulatory consequences, including sanctions by the SEC or violations of OTCQX rules. There also could be a negative reaction in the financial markets due to a loss of investor confidence in us and the reliability of our financial statements. Confidence in the reliability of our financial statements also could suffer if we or our independent registered public accounting firm continue to report a material weakness in our internal controls over financial reporting. This could materially adversely affect us and lead to a decline in the market price of our common stock.
As a public company, we have incurred and expect to continue to incur increased expenses associated with the costs of being a public company.
We have and expect to continue to face a significant increase in insurance, legal, auditing, accounting, administrative and other costs and expenses as a public company that we did not currently incur as a private company. The Sarbanes-Oxley Act, including the requirements of Section 404 of that Act, as well as rules and regulations subsequently implemented by the SEC, the Dodd-Frank Act and the rules and regulations promulgated and to be promulgated thereunder, the Public Company Accounting Oversight Board (“PCAOB”), the SEC and OTCQX , impose additional reporting and other obligations on public companies. Compliance with public company requirements have and will continue to increase our costs and make certain activities more time-consuming. A number of those requirements require us to carry out activities that we have not done previously. For example, we recently created new board committees and adopted new internal controls and disclosure controls and procedures. In addition, additional expenses associated with SEC reporting requirements have and will continue to be incurred. Furthermore, if any issues in complying with those requirements are identified (for example, if our independent registered accounting firm identifies a material weakness or significant deficiency in the information technology general controls for information systems that are relevant to the preparation of the Company’s consolidated financial statements), we could incur additional costs to remediate those issues, and the existence of those issues could adversely affect our reputation or investor perceptions of it. Being a public company has and may in the future make it more difficult or costly for us to obtain certain types of insurance, including director and officer liability insurance. We may ultimately be forced to accept reduced policy limits and coverage with increased self-retention risk or incur substantially higher costs to obtain the same or similar coverage in the future. Furthermore, if we are unable to satisfy our obligations as a public company, we could be subject to delisting of our common stock, fines, sanctions and other regulatory action and potentially civil litigation.
The additional reporting 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(which includes vendor payables), 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 $ 25.37 million as of March 31, 2025 (as more fully described under Item 8 Financial Statements; the Audited 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;
● 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 or to sell some of our core assets, 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.
Any of the foregoing factors could have negative consequences on our financial condition and results of operations.
Zoomcar has limited operating history as a publicly traded company, and its historical financial information is not necessarily representative of the results we would have achieved as a publicly traded company and may not be a reliable indicator of its future results.
The historical financial information included in this annual report from Zoomcar’s operation as a private company prior to the Business Combination does not necessarily reflect the results of operations and financial position we would have achieved as a publicly traded company during the periods presented, or those that we will achieve in the future. This is primarily because of the following factors:
● Prior to the Business Combination, we operated as a private company. Our historical financial information reflects allocations of corporate expenses as a private company. These allocations may not reflect the costs we will incur for similar services in the future as a publicly traded company.
● Our historical financial information does not reflect changes that we expect to experience in the future as a result of becoming a publicly traded company, including changes in the financing, insurance, cash management, operations, cost structure and personnel needs of our business. As a publicly traded entity, we may be unable to purchase goods, services and technologies, such as insurance and health care benefits and computer software licenses, or access capital markets, on terms as favorable to us as those we obtained as a private company prior to the Business Combination, and our results of operations may be adversely affected.
We also face additional costs and demands on management’s time associated with being a publicly traded company, including costs and demands related to corporate governance, investor and public relations and public reporting. Stockholder activism, the current political and social environment and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which will likely result in additional compliance costs and could impact the manner in which Zoomcar operates its business in ways we cannot currently anticipate. For additional information about our past financial performance, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our Consolidated Financial Statements and the Notes thereto included elsewhere in this annual report filing.
The Company may be subject to securities litigation, which is expensive and could divert management’s attention.
Following the Business Combination, the per share price of the Common Stock has been and may continue to be volatile and, in the past, companies that have experienced volatility in the market price of their stock have been subject to securities litigation, including class action litigation. Litigation of this type could result in substantial costs and diversion of management’s attention and resources, which could have a material adverse effect on our business, financial condition, and results of operations. Any adverse determination in litigation could also subject the Company to significant liabilities.
Risks Related to Ownership of Our Common Stock
Future sales of our Common Stock could cause the market price for our Common Stock to further decline.
We cannot predict the effect, if any, that market sales of shares of our Common Stock or the availability of shares of our Common Stock, including upon exercise or conversion of any of our outstanding securities, for sale will have on the market price of our Common Stock prevailing from time to time. Sales of substantial amounts of shares of our Common Stock in the public market, or the perception that those sales will occur, including sales pursuant to this annual report, could cause the market price of our Common Stock to decline or be depressed.
As described elsewhere herein, we expect to issue additional securities in the future to raise capital to continue our operations. Additionally, we may issue our securities if we need to raise capital in connection with a capital expenditure, working capital requirement or acquisition. The number of shares of our Common Stock issued in connection with a capital expenditure, working capital requirement or acquisition could constitute a material portion of our then-outstanding shares of Common Stock. Any perceived excess in the supply of our shares in the market could negatively impact our share price and any issuance of additional securities in connection with investments or acquisitions may result in additional dilution to you.
The market price and trading volume of our common stock may continue to be highly volatile, which could lead to a loss of all or part of a stockholder’s investment.
The market price of our Common Stock has fluctuated widely since the closing of our Business Combination. During the period from January 1, 2024 to April 30, 2025, the trading price of our Common Stock has fluctuated from an intra-day high of $15,220 on January 12, 2024, to an intra-day low of $2.61 on April 8, 2025.
The market price of our common stock is affected by a variety of factors, including but not limited to:
● our ability to execute our anticipated business plans and strategy;
● actual or anticipated fluctuations in our quarterly or annual operating results;
● our ability to obtain additional capital which will be necessary to continue our business and operations;
● changes in financial or operational estimates or projections;
● changes in the economic performance or market valuations of companies similar to ours;
● the impact of pandemics, inflation, war, other hostilities and other disruptive events on our business or that of our customers, partners, and supply chain or on the global economy; and
In addition, the trading price and trading volume of our common stock has very recently and at certain other times in the past exhibited, and may continue to exhibit, extreme volatility, including within a single trading day. Such volatility could cause purchasers of our common stock to incur substantial losses. With respect to certain such instances of trading volatility, we are not aware of any material changes in our financial condition or results of operations that would explain such price volatility or trading volume, which we believe reflect market and trading dynamics unrelated to our operating business or prospects and outside of our control. We are thus unable to predict when such instances of trading volatility will occur or how long such dynamics may last. Under these circumstances, we would caution you against investing in our common stock unless you are prepared to incur the risk of incurring substantial losses.
A proportion of our common stock may be traded by short sellers which may put pressure on the supply and demand for our common stock, creating further price volatility. In particular, a possible “short squeeze” due to a sudden increase in demand of our common stock that largely exceeds supply may lead to sudden extreme price volatility in our common stock. Investors may purchase our common stock to hedge existing exposure in our common stock or to speculate on the price of our common stock. Speculation on the price of our common stock may involve long and short exposures. To the extent aggregate short exposure exceeds the number of shares of common stock available for purchase in the open market, investors with short exposure may have to pay a premium to repurchase our common stock for delivery to lenders of our common stock. Those repurchases may in turn dramatically increase the price of our common stock until investors with short exposure are able to purchase additional common stock to cover their short position. This is often referred to as a “short squeeze.” Following such a short squeeze, once investors purchase the shares necessary to cover their short position, the price of our common stock may rapidly decline. A short squeeze could lead to volatile price movements in our shares that are not directly correlated to the performance or prospects of our company and could cause purchasers of our common shares to incur substantial losses.
Further, shareholders may institute securities class action litigation following periods of market volatility. If we were involved in securities litigation, we could incur substantial costs and our resources and the attention of management could be diverted from our business.
If securities or industry analysts do not publish or cease publishing research or reports about us, our business, or our market, or if they change their recommendations regarding our securities adversely, the price and trading volume of our securities could decline.
The trading market for our securities will be influenced by the research and reports that industry or securities analysts may publish about us, our business, markets, revenue streams, and competitors. Securities and industry analysts do not currently, and may never, publish research on us. If no securities or industry analysts commence coverage of us, our share price and trading volume would likely be negatively impacted. If any of the analysts who may cover us adversely change their recommendation regarding our shares of common stock, or provide relatively more favorable recommendations with respect to competitors, the price of our shares of common stock would likely decline. If any analyst who may cover us were to cease coverage of us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our share price or trading volume to decline.
We do not intend to pay cash dividends for the foreseeable future.
We currently intend to retain our future earnings, if any, to finance the further development and expansion of our business and do not intend to pay cash dividends in the foreseeable future. Any future determination to pay dividends will be at the discretion of our Board and will depend on our financial condition, results of operations, capital requirements, and future agreements and financing instruments, business prospects and such other factors as our Board deems relevant.
Because there are no current plans to pay cash dividends on our Common Stock for the foreseeable future, you may not receive any return on investment unless you sell your Common Stock at a price greater than what you paid for it.
We intend to retain future earnings, if any, for future operations, expansion and debt repayment and there are no current plans to pay any cash dividends for the foreseeable future. The declaration, amount and payment of any future dividends on shares of our Common Stock will be at the sole discretion of the Board. The Board may take into account general and economic conditions, our financial condition and results of operations, our available cash and current and anticipated cash needs, capital requirements, contractual, legal, tax and regulatory restrictions, implications of the payment of dividends by us to our stockholders or by our subsidiaries to us and such other factors as the Board may deem relevant. As a result, you may not receive any return on an investment in the Common Stock unless you sell your Common Stock for a price greater than that which you paid for it.
Future sales, or the perception of future sales, by us or our stockholders in the public market could cause the market price for the Common Stock to decline.
The sale of shares of our Common Stock in the public market, or the perception that such sales could occur, could harm the prevailing market price of shares of Common Stock. These sales, or the possibility that these sales may occur, also might make it more difficult for the us to sell equity securities in the future at a time and at a price that it deems appropriate.
As of June 27, 2025 we have a total of 6,284,491 shares of Common Stock outstanding (i) without giving effect to any awards that may be issued under the Incentive Plan and (ii) assuming no exercise of the outstanding options and warrants. All shares currently held by public stockholders and all of the shares issued in the Business Combination to former Zoomcar Stockholders are freely tradable without registration under the Securities Act (except for the Common Stock that are the subject of resale registration statement pending effectiveness or filing ), and without restriction by persons other than our “affiliates” (as defined under Rule 144 under the Securities Act, (“Rule 144”)), including our directors, executive officers and other affiliates.
We filed resale registration statements on December 12, 2024, to register for resale a total of shares of Common Stock 660,320 (13,206,386 shares of Common Stock prior to giving effect to the Second Reverse Split) including shares of Common Stock issuable upon exercise of outstanding warrants.
We also filed resale registration statements March 4, 2025, to register for resale a total of 6,682,720 shares of Common Stock (133,654,397 shares of Common Stock prior to giving effect to the Second Reverse Split) including shares of Common Stock issuable upon exercise of outstanding warrants.
All of the remaining Registrable Securities in the above mentioned offerings were included in those registration statements. These registration statements are still pending and a large number of such Registrable Securities continue to be unregistered, but upon effectiveness of that registration statement, it is likely that many of the securities registered for resale thereunder will be sold.
As of March 31, 2025, the Company entered into a securities purchase agreement, substantially in the same form as the December 2024 SPA and the January 2025 SPA with certain additional accredited investors in connection with the third closing of the Offering (the “Third Closing”). The Company did not receive any cash proceeds in the Third Closing. The securities were issued to the investors either (i) as consideration for waiving certain rights that such investors may have had in connection with a most favored nations provision included in the transaction documents for a prior financing of Zoomcar, Inc. or (ii) to settle outstanding amounts owed by the Company to its Placement Agent and the Legal Counsels (Aegis Settlement and Law Firm Settlement described below). Pursuant to the terms and conditions of the Securities Purchase Agreement, the Company issued to such investors an aggregate of $15,639,099 of securities consisting of 501,318 shares of common stock of the Company, par value $0.0001 per share (the Common Stock). The Company along with the Common Stock issued (i) Series A Warrants to purchase up to an aggregate of 6,706,192 shares of Common Stock at an exercise price of $6.24 per share, which takes into account a “share combination event” adjustment effective following the issuance of such warrants as a result of the Reverse Split (the “Series A Warrants”) and (ii) Series B Warrants to purchase initially no shares of Common Stock and then up to a maximum of 2,004,955 shares of Common Stock subject to certain adjustments, at an initial exercise price of $0.002.
The Company has yet to file a resale registration statement for resale of the securities that were issued in the Third Closing. While these securities continue to be unregistered, upon filing of a resale registration statement and subsequent effectiveness of that registration statement, it is likely that most of the securities registered for resale thereunder will be sold.
In addition, the shares of Common Stock reserved for future issuance under the Incentive Plan will become eligible for sale in the public market once those shares are issued, subject to any applicable vesting requirements, lock-up agreements and other restrictions imposed by law. As of June 27, 2025, a total of 370,955 shares of Common Stock have been reserved for future issuance under the Incentive Plan, 19,609 shares of which have been registered in a Form S-8 Registration Statement filed with SEC on February 11, 2025. On March 31, 2025, the number of shares of Common Stock reserved under the Incentive Plan was increased by a number of shares of Common Stock equal to 15% of the number of shares of Common Stock issued and outstanding on March 31, 2025, or an additional 369,311 shares. We intend to file a registration statement on Form S-8 under the Securities Act to register these additional shares of Common Stock or securities convertible into or exchangeable for shares of Common Stock issued pursuant to the Incentive Plan. Accordingly, shares to be registered under such a registration statement will be available for sale in the open market upon the effectiveness of the registration statement.
In the future, we may also issue our securities to raise capital or in connection with investments or acquisitions. We may also issue additional securities upon adjustments included in our existing securities. For example, on June 18, 2024, we closed a private placement transaction of notes and warrants for $3 million of gross proceeds, on November 7, 2024, we closed a private placement transaction of shares and warrants for $9.15 million of gross proceeds, on December 24, 2024, we consummated the December Offering in which we issued shares and warrants for $5,484,843 of gross proceeds, and on February 4, 2025, we consummated the January/February Offering in which we issued shares and warrants for $1,400,000 of gross proceeds. The amount of shares of Common Stock issued or issuable upon exercise or conversion of securities issued in connection with a capital raise or an investment or acquisition could constitute a material portion of the then-outstanding shares of the Common Stock. Any issuance of additional securities in connection with capital raising activities, investments or acquisitions may result in additional dilution to our stockholders.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
Item 1B. Unresolved Staff Comments
None.

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ITEM 2. PROPERTIES
Item 2. Properties
Our corporate headquarters is located at Anjaneya Techno Park, No.147, 1st Floor, Kodihalli, Bangalore, India 560008, where we lease approximately 19,200 sq ft within a multi-tenant building pursuant to a lease agreement that expires in April 2029. We also had leased/rented office spaces in Jakarta, Indonesia, and Cairo, Egypt but following cessation of operations in those jurisdictions, each of those leases have been terminated. We believe our facilities are adequate and suitable for our current needs, and that should it be needed, suitable additional or alternative space will be available to accommodate our operations.

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ITEM 3. LEGAL PROCEEDINGS
Item 3. Legal Proceedings
Except as described below, we are not currently subject to any material claims, lawsuits, arbitration proceedings, administrative actions, government investigations and other legal and regulatory disputes and proceedings (collectively, “Legal Proceedings”) We have received communications relating to certain legal proceedings, as described in “Risk Factors - A former employee of Zoomcar India has instituted a wrongful termination suit and claims that certain Zoomcar options have vested.”, “Risk Factor - The founder and former CEO of the Company has initiated a civil complaint against the Company contesting the reasons for his termination and has raised certain other claims with regards to his ownership of the Company and compensation for termination of his employment.,” and “ACM has filed a notice of motion for summary judgement in lieu of complaint against Zoomcar in New York courts for payment of amounts due under the Note pursuant to breach of the terms of a note.” We may become subject to other Legal 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.
Litigation with Former Consultant
On August 4, 2023, a former consultant 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. Zoomcar and former consultant executed a Settlement Agreement in February 2025, settling the disputes between them. In connection with this settlement, affiliates of the former consultant were issued, in the January/February Offering, shares of Common Stock, January/February Pre-Funded Warrants, January/February Series A Warrants and January/February Series B Warrants with an aggregate value of $1,482,000 (the “Former Consultant Settlement”). The action was terminated on February 19, 2025.
Arbitration with Aegis Capital Corp. and Affiliates
On January 30, 2024, we received a statement of arbitration claim before Judicial Arbitration and Mediation Services, Inc., with Aegis Capital Corp. (“Aegis”), Adam Stern, and the Robert J. Eide Pension Plan being the claimants therein. The Claim alleges breaches of certain agreements between (a) the Company and Aegis, and (b) Adam Stern and the Robert J. Eide Pension Plan as warrant holders, on the one hand, and the Company on the other; it seeks damages “preliminarily believed to be” at least $10,000,000 purportedly arising from the alleged breaches. The Claim also seeks amounts for attorneys’ fees and costs, as well as an order of rescission with respect to the issuance of certain allegedly wrongfully dilutive shares of Common Stock issued in connection with the Business Combination or, alternatively, an order mandating a purportedly anti-dilutive issuance of additional shares of Common Stock to the claimants. On January 31, 2024, the claimants filed an action in the New York State Supreme Court, including an order to show cause seeking substantially the same relief as the Claim on a declaratory basis along with temporary injunctive relief. The Court denied the temporary injunctive relief and has scheduled a hearing on the order to show cause for February 21, 2024. The Company believes that the claims are baseless and there was no breach of agreements as alleged. Claimants filed a separate order to show cause seeking attachment of the Company’s assets arguing the Company did not have sufficient working capital to satisfy a potential award based on its public filings. The Court found that while Claimants had not shown a likelihood of success on their theory of the case, it was likely something would be owed. An order granting claimants the right to attach up to $3,399,878 of Zoomcar’s assets in New York along with other relief, was issued and later modified by the New York Appellate Division, First Department. A motion seeking to stay or modify that order is currently pending in the First Department and the parties are awaiting the start of arbitration. On June 18, 2024, in connection with the Company’s agreement to engage Aegis as placement agent for the bridge financing that closed in June 2024, the parties agreed to defer all further action with respect to the arbitration and associated litigation until June 18, 2025.
Effective as of March 31, 2025, the Company entered into a settlement (the “Aegis Settlement”) with Aegis and certain affiliated parties (the “Aegis Settlement Parties”). Pursuant to the Aegis Settlement, the Aegis Settlement Parties agreed to settle and dismiss the arbitration claim in consideration for the issuance of $7,000,000 of securities of the Company in a private placement consisting of an aggregate of (a) 224,360 shares of Common Stock, (b) Series A Warrants to purchase up to 3,505.627 shares of Common Stock at an exercise price of $6.24 per share and (c) Series B Warrants to purchase up to 897,440 shares of Common Stock at an exercise price of $0.002 per share. These securities were issued in the March Offering (defined hereafter).
Litigation with Former Employee
In February 2023, a former employee of Zoomcar India instituted a suit before the City Civil and Sessions Judge at Mayo Hall, Bengaluru against Zoomcar India, Zoomcar and IOAC challenging his termination, claiming approximately $400,000 in damages and claiming that 100,000 options to purchase shares of Zoomcar have vested. On March 3, 2023, the City Civil and Sessions Judge at Mayo Hall, Bengaluru, issued an interim injunction to restrain each of Zoomcar and IOAC from “alienating or dealing” the 100,000 shares of Zoomcar claimed by the former employee while the suit was pending. Zoomcar believes that such claims are baseless and is attempting to have the interim order vacated. In addition, Zoomcar India filed an application in the former employee’s suit, seeking that IOAC be deleted from the array of parties in the suit, inter alia since (i) IOAC is neither a necessary nor a proper party to the suit; (ii) no reliefs have been sought by the former employee from IOAC; and (iii) there is no cause of action against IOAC.
Litigation with the Founder and Former CEO
On September 26, 2024, we received a copy of a complaint filed with the United States District Court for the District of Delaware wherein our founder and former CEO Greg Moran has challenged the Company’s termination of his employment for cause, effective as of June 18, 2024. Mr. Moran has contested the facts leading up to the grounds on which his termination was based and has also claimed that this alleged wrongful termination has deprived him of his vested right to 8% of the Company’s outstanding equity that he claims was owed to him under his Employment Agreement. He has also claimed that in connection with his termination he is entitled to the payment of certain amounts for unused paid leave during his employment with Zoomcar, along with certain other compensation he claims to be owed under the terms of his Employment Agreement, including “Owed Severance” equal to approximately $72,000. In total, Mr. Moran seeks damages of at least $238,000 plus damages associated with the 8% of shares. He also seeks damages under the New York Labor Law, under which he seeks liquidated damages equal to 100% of any unpaid wages. He claims that all of the above constitute wages under New York Labor Law.
Zoomcar believes that the termination of Mr. Moran’s employment for cause was proper in accordance with the terms of his Employment Agreement. Mr. Moran’s case in the District Court was dismissed on account of Mr. Moran’s stated intention to refile the case in Delaware Superior Court. Mr. Moran refiled his lawsuit in the Superior Court of the State of Delaware on November 1, 2024. On November 27, 2024, the Company filed a motion to dismiss certain of the causes of action for failure to state a cause of action, and the briefing on that motion was filed on January 7, 2025. Mr. Moran filed opposition to Zoomcar’s motion on February 5, 2025 and Zoomcar filed a reply in further support of its motion on February 20, 2025. Zoomcar’s oral arguments in its motion to dismiss were heard on April 29, 2025. The court granted the motion to dismiss Mr. Moran’s quasi-contractual claims and reserved decision on the balance of the motion. Zoomcar believes the allegations are without merit, intends to defend them vigorously and expects to prevail either at the motion stage or at a hearing on the merits.
Litigation with ACM
The Company received two default notices from ACM. The first notice was issued on May 22, 2024 which stated that the Company is in default of the terms of the Unsecured Convertible Note issued to ACM on December 28, 2023(“Note”), since the Company had entered into an equity line arrangement with White Lion Capital LLC, a variable rate transaction, without the prior consent of ACM. Further, on June 25, 2024, the Company received the second notice of default from ACM stating that the Company has incurred indebtedness in the form of $3,600,000 in principal amount of notes in a transaction involving Aegis Capital Corp. (“Aegis”) acting as the placement agent prior to which, the consent of ACM was not obtained. As per the terms of the ACM note, in the event of any default, all accrued but unpaid interest plus liquidated damages and other amounts thereof, shall become immediately due and payable in cash. On November 7, 2024, ACM filed a notice of motion for summary judgement in in lieu of complaint against Zoomcar in New York courts for accelerated payment of $5,997,832.72 due under the ACM note and related legal expenses, pursuant to breach of the terms of the note. ACM alleged that, two “Events of Default” (as defined in the Note) had occurred thereby entitling ACM to full and accelerated payment of the Note. The first was a Form 8-K, filed by Zoomcar on May 9, 2024, which allegedly disclosed that on May 6, 2024, Zoomcar had entered into an equity line arrangement and “Variable Rate Transaction” (as defined in the Note) with White Lion Capital LLC (“White Lion”). The second was a Form 8-K, filed by Zoomcar on June 21, 2024, which allegedly disclosed that on June 18, 2024, Zoomcar had incurred a form of debt that was not “Excluded Debt” (as defined in the Note) arising from its placement agent agreement with Aegis Capital Corp. without ACM’s prior consent. The Note generally provides that, upon the occurrence of an Event of Default, all accrued but unpaid interest plus liquidated damages and other amounts thereof shall become immediately due and payable to the Note holder. On January 14, 2025, Zoomcar filed opposition to the Motion. In relevant part, Zoomcar challenged the fact allegations concerning: (i) the first Form 8-K by tendering to the Court evidence confirming that the subject transaction with White Lion in fact had been terminated and the underlying filing of a Form S-1 registration statement contemplated in that transaction was never effectuated; and (ii) the second Form 8-K by tendering to the Court evidence confirming that the subject transaction involved Excluded Debt. The effect of the foregoing is the transactions were excluded from the definitions of Events of Default and extinguished ACM’s alleged entitlement to accelerated payment under the Note. Additional defenses were also presented by Zoomcar to the Motion. On March 28, 2025, New York County Supreme Court Justice granted a summary judgment in favor of ACM in the amount of $5,656,086.72, as well as default interest in the amount of $346,481.00, post-judgment interest at the statutory rate, attorneys’ fees, and costs. The issue of attorneys’ fees was referred to a special referee to report and recommend on submission from the parties. On May 9, 2025, the Court reduced the award of attorneys’ fees and costs to $12,000.00. On April 22, 2025, the Company filed a Notice of Appeal seeking to reverse the March 28, 2025, order granting summary judgment in favor of ACM. Zoomcar intends to vigorously prosecute its appeal.
Litigation with Prior Placement Agent
On March 14, 2025, the Company received a demand letter (the “Demand Letter”) from the attorneys for the placement agent (the “Prior Placement Agent”), with which the Company had entered into an engagement agreement on or about May 23, 2024 (the “Prior Placement Agreement”). A claim has been made, pursuant to the terms of the Prior Placement Agreement, for the payment of cash fees and the issuance of warrants to the Prior Placement Agent, as and for “tail fees” owed in connection with any financings within 18 months after the expiration or termination of the Prior Placement Agreement. The claims are made with respect to the sales of securities in the offerings closed by the Company in June 2024, November 2024, December 2024 and February 2025. The demand is for 7% of the aggregate gross proceeds received by the Company in each of those offerings from investors on a “tail list” provided by the Prior Placement Agent and warrants to purchase up to 7% of the aggregate number of shares of common stock issued in each of the offerings to investors on the “tail list,” which warrants are to have the same terms and warrants offered to investors in each of the offerings, with an exercise price equal to 125% of the applicable offering price.
With respect to the offering closed in June 2024, the claim is made with respect to one investor claimed to be on the “tail list,” for a cash fee of 7% of the aggregate gross proceeds received from such investor and 7% warrant coverage, with respect to that investor, but no specific amount is claimed. With respect to the offering closed in November 2024, there is a claim for a cash fee of $77,000 and warrants to purchase an aggregate of 17,900 shares of common stock at an exercise price of $107 per share, for the same investor.” With respect to the offering closed in December 2024, there is a claim for a cash fee of 7% of the aggregate gross proceeds received from the same investor and 7% warrant coverage, with respect to that investor, but no specific amount is claimed. A similar claim was also made to the extent that such investor participated in the offering closed in February 2025.
The Company has taken necessary financial provisions of $185,077 as recorded in the “Other expense/(income), net” in the Consolidated Financial Statements for the year ending on March 31, 2025.
Other Matters
Zoomcar utilizes a set of Terms and Conditions (“T&Cs”) tailored specifically for each of the jurisdictions in which we operate which includes privacy policy, platform use policy, terms and conditions for Host and Guest. These T&Cs are in the form of a clickwrap agreement which lays down the duties, risks, and the liabilities of Zoomcar, Hosts and the Guests in relation to use of services rendered by Zoomcar through its Platform. These T&Cs inter alia cover the eligibility criteria for listing/leasing of vehicles, facilitation of booking, cancellation and incident reporting via the platform, processing of payments/refunds etc. and they further lay out the risks, rights and obligations of the Hosts and the Guests with respect to handling of the vehicles, responsibility for damage, accident, traffic violations and/or for any incidents in violation of applicable law.
In addition to the T&Cs, due to regulatory requirements in India, an additional lease agreement is executed between the Host and the Guest which encompasses the allocation of risks and responsibilities of the Hosts and Guests with respect to listing and use of the relevant vehicle. The execution of such lease agreement is facilitated through the Zoomcar Platform in the form of a clickwrap agreement.
Given that Zoomcar operates as a peer-to-peer carsharing marketplace which facilitates sharing of vehicles between the Hosts and Guests through its platform, the responsibility and liability of Zoomcar under the T&Cs is limited to being a facilitator of such transaction and the obligations for liabilities arising out of listing and/or use of the vehicle booked through the platform is on the Guests and the Hosts. The use of the Zoomcar platform and sharing of vehicle through the platform is undertaken by the Host and Guests entirely at their own risk. Zoomcar’s liability is further capped under the T&Cs at approximately $120 (across all jurisdictions) for any claims arising out of the use of Zoomcar platform. However, Zoomcar, as part of the facilitation services to Hosts and Guests, also provides for trip-based vehicle protection whereby Zoomcar collects and pools the “value-add” damage coverage fee to be applied to the costs of repairs or other damage or loss of vehicle in the event a Host vehicle is involved in an incident, such as an accident, during a trip and this value-add trip protection fee pool may not always help set off the damage claims. Therefore, Zoomcar often remains at a risk of residual claims that it may have to absorb in absence of a third-party insurance. See the section titled “Risk Factors - Insurance Risks Related to Our Business,” as our business is subject to certain risks in absence of third-party insurance cover that could have a material impact on our business.

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ITEM 4. MINE SAFETY DISCLOSURE
Item 4. Mine Safety Disclosures
Not applicable.
Part II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market information
Our Common Stock was listed on the Nasdaq Global Market until May 06, 2025, and our Public Warrants were also listed on the Nasdaq Global Market until May 06, 2025. From May 08, 2025, until the date of this Report, our Common Stock has been quoted on the OTCQX (OTC Markets Group Inc.) under the symbol “ZCAR.” From May 08, 2025, until June 8, 2025 our Public Warrants have been quoted on the OTCQB under the symbol “ZCARW.” From June 9, 2025, until the date of this Report, our Public Warrants have been quoted on the Pink Markets (OTC Markets Group Inc.) under the symbol “ZCARW.”
Market Information:
The range of high and low bid prices for our Common Stock and Public Warrants, since May 08, 2025, the date such securities began being quoted in the OTC Markets, are set forth below as reported by the OTC Markets. The table below provides the high and low bid prices of the Common Stock and Public Warrants, during the period indicated. These prices represent quotations between dealers without adjustment for retail mark-up, markdown or commission and may not represent actual transactions.
May 08, 2025 to June 27, 2025 $ 4.5000 $ 0.4841
Public Warrants
May 08, 2025 to June 27, 2025
$ 0.0300 $ 0.0041
The closing price of our Common Stock and Public Warrants as reported by OTCQX and OTC pink market as of June 27, 2025, was $0.71 and $ 0.0121, respectively.
Holders of Record
As of June 27, 2025, there were 731 holders of record of our Common Stock and 1 holder of record of our Public Warrants. A substantially greater number of holders are “street name” or beneficial holders, whose shares of record are held by banks, brokers, and other financial institutions.
Dividend Policy
We have not paid any cash dividends on our Common Stock to date. It is the present intention of our Board to retain all earnings, if any, for use in our business operations and, accordingly, our Board does not anticipate declaring any dividends in the foreseeable future. The payment of cash dividends in the future will be dependent upon our revenues and earnings, if any, capital requirements and general financial condition. The payment of any cash dividends is within the discretion of our Board. Further, our ability to declare dividends may be limited by the terms of financing or other agreements entered into by us or our subsidiaries from time to time.
Securities Authorized for Issuance Under Equity Incentive Plans
The following information is as of March 31, 2025 under the 2023 Equity Incentive Plan.
Plan Category Number of
securities to
be issued upon
exercise of
outstanding
options Weighted-
average
exercise price
of
outstanding
options Number of
granted
restricted
stock unit
awards
outstanding Number of
securities
remaining
available for
future
issuance
under equity
compensation
plans
Equity compensation plans approved by security holders (1) - - 17,966 370,955
Options assumed during the Business Combination approved by security holders(2) $ 120 - -
Options assumed during the Business Combination approved by security holders(2) $ 300
-
$ 420 17,966 370,955
(1) The Company adopted the 2023 Equity Incentive Plan in connection with the Business Combination. As of the date of this Form 10-K a total of 17,966 RSUs have been granted to the employees and the Board and 370,955 are reserved for future issuance.
(2) In connection with the Business Combination, the Company assumed options to purchase 16 shares from the Zoomcar, Inc. 2012 Equity Incentive Plan with the remaining options being cancelled, other than 100,000 options of 2012 Equity Incentive Plan to purchase 2(two) shares of the Company (arrived at after taking into account the conversion ratio 0.0281:1 for the business combination event and after giving effect to the First and Second Reverse Split) which were neither assumed nor cancelled and remain the subject of a litigation (see “Risk Factors - A former employee of Zoomcar India has instituted a wrongful termination suit and claims that certain Zoomcar options have vested”).
Recent Sales of Unregistered Securities and Use of Proceeds
There were no sales of equity securities during the period covered by this Report that were not registered under the Securities Act and were not previously reported in a Current Report on Form 8-K filed by the Company.
Issuer Repurchases of Securities
None.

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ITEM 6. SELECTED FINANCIAL DATA
Item 6. Reserved.

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
Item 7. Management’s Discussion and Analysis Of Financial Condition And Results Of Operations
The following “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with our audited consolidated financial statements and related notes thereto included elsewhere in this Annual Report on Form 10-K for the year ended March 31, 2025 and 2024. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from such forward-looking statements. Factors that could cause or contribute to those differences include, but are not limited to, those identified below and those discussed in the sections titled “Risk Factors” and “Special Note Regarding Forward-Looking Statements” included in this Form 10-K. Additionally, our historical results are not necessarily indicative of the results that may be expected in any future period. Amounts are presented in U.S. dollars.
Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “Zoomcar,” “we”, “us”, “our”, and the “Company” are intended to refer to (i) following the Business Combination, the business and operations of Zoomcar Holdings, Inc. and its consolidated subsidiaries, and (ii) prior to the Business Combination, Zoomcar, Inc. (the predecessor entity in existence prior to the consummation of the Business Combination) and its consolidated subsidiaries.
Overview
Zoomcar’s current business model is an online peer-to-peer car sharing platform which connects Hosts (car owners) with Guests (persons in temporary need of vehicles). Our business model is explained in details under the “Standard booking Flow” section below.
As of June 27, 2025 we had 6,284,491 shares of our Common Stock issued and outstanding. Except as otherwise indicated, all share and per share information in this report gives effect to a second reverse stock split effected on March 21, 2025 at a ratio of 1-for-20.
Standard Booking Flow
We operated a peer-to-peer car sharing platform in emerging markets across three countries and generated revenues from bookings by our Guests of vehicles listed on our Zoomcar platform by our Hosts. Zoomcar receives a portion of the associated booking fee charged to the Guest (less any credits or discounts applied), as well as platform fees charged to Guests and Hosts and trip protection fees (which we refer to as “value-added fees”) charged to Guests. As further described below, other fees charged to Guests, such as fuel charges, are paid fully to Hosts, who also receive a revenue share equal to approximately 60% of booking fees and between 0% and 40% of certain other charges. We use our customized algorithm to price trips dynamically on the platform, leveraging our data from the millions of miles driven on our platform to intelligently price the risks of trips and the market, incorporating information about Guests informed by data we collect and Zoomcar management’s professional experience. While Hosts can opt to offer bookings at prices that are different from those the platform generates as recommendations, most Hosts tend to select the algorithmically derived pricing for their bookings. The functionality enabled by our customized pricing tools is reflected in both Guest booking fees and in the trip protection or “value-added fees” charged to Guests, who are presented with three algorithmically derived trip protection pricing options from which to choose. The revenue- generating components of a trip booked on our peer-to-peer car sharing platform include:
● Charges to Guests: For each booking on our platform, the aggregate amount we charge the Guest consists of the upfront booking fee, value-added fees, the Guest platform fees, and certain other charges (e.g., late fees, trip extension fees, etc.). We refer to these fees collectively as the “gross booking value (GBV).” The booking fee and trip protection fees are determined algorithmically by our system at the time of booking inception, while other fees may be charged during or after the trip, depending on events arising during the trip. Neither Zoomcar nor our Host subsidize fuel costs for Guests. Guests cover their own fuel costs, which are in addition to the booking fee.
● Charges to Hosts: For each booking on our platform, we charge a “revenue share” to the Host based on a percentage of the booking fee plus other fees that are transferable to the Host. The average revenue share that Zoomcar receives from a booking on our platform is approximately 40%, with the Host retaining the remaining 60%. Our platform provides Hosts with a menu of incentives related to specific factors such as bookings served and minimum host ratings. We charge Hosts minimum marketplace fees to offset the costs of our installed devices.
Key Business Metrics
In addition to the measures presented in our audited consolidated financial statements, we use the following key business metrics to help us evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions. We are not aware of any uniform standards for calculating these key metrics, which may hinder comparability with other companies that may calculate similarly titled metrics in a different way.
For the Years ended
March 31, March 31,
(In thousands)
Booking Days
Gross Booking Value $ 25,283 $ 26,721
Booking Days
We define “Booking Days” as total days (24 hours measured in minutes) that a vehicle is booked by Guests on our platform in a given period, for trips ended, net of total days relating to cancelled bookings in that period. We believe Booking Days is a key business metric to help investors and others understand and evaluate our results of operations in the same manner as our management team, as it represents a standardized unit of transaction volume on our platform in any given time period.
(1) Refers to calendar quarters (i.e., Q2-21 = April 01 to June 30, 2021).
For the year ended March 31, 2025, Booking Days on the platform totaled approximately 678,708 , compared to 669,454 during the year ended March 31, 2024.
Gross Booking Value
We define the Gross Booking Value, or GBV, as the total dollar value of Booking Days booked on our platform, including upfront booking fee (less discounts and credits), value-added fees (i.e., trip protection fees), Guest and Host platform fees, and other charges. GBV includes applicable pass-through taxes and other fees required to be remitted to local authorities, which are excluded from net revenue. GBV is driven by the number of Booking Days and related trip pricing. Revenue from bookings is recognized ratably over the duration of the trip; accordingly, we consider GBV a “leading indicator” of revenue.
(1) Refers to calendar quarters (i.e., Q2-21 = April 01 to June 30, 2021).
(2) Booking Days and GBV for bookings ended, excludes cancelled bookings.
During the year ended March 31, 2025, Gross Booking Value on the platform totaled approximately $25.28 million, compared to approximately $26.72 million during the year ended March 31, 2024.
Components of results of operations
Net revenue
Our peer-to-peer car sharing platform, enables Hosts to connect with Guests. We act as an agent under this model and thus, our primary source of revenue is recording revenue from services (on a net basis) for trips fulfilled by Host vehicles.
Our revenue for the year ended March 31, 2025, and March 31, 2024, consists of revenue from services and other operating revenue.
Revenue from Services
Support and facilitation services offered by the Company include services like assistance in execution of a lease agreement, payment facilitation, vehicle delivery, on-road assistance, prospective renter diligence and vehicle usage/location tracking (in cases of loss or theft).
Revenue from services consists of our share of GBV. The fees that are components of GBV are charged as a percentage of the value of certain components of the gross booking value, excluding taxes. Our revenue from services consists of our share of the service fees charged to the Hosts, net of incentives and refunds. We collect these fees from the Guest and share a portion of the booking fee and trip extension with the Host post recovery of our share of facilitation revenue. Daily we, or our third-party payment processors, disburse a portion of the GBV to the Hosts, less the fees due from the Host to us. The amounts charged for the booking fee vary based on factors such as the vehicle type, the day of the week, time of the trip, and the duration of the trip. Revenue is recognized ratably over the trip period as we satisfy our performance obligations.
We also require our Guests to choose one of the three trip protection options. A per-trip amount (included in the booking fee) is charged for trip protection, which is collected upon the booking. We recognize revenue from trip protection charges over the trip completion period.
Recorded revenue from services is reduced by the portion of those incentives and credits paid to our Hosts and Guests that cannot be directly attributable to distinct services performed by the Hosts and Guests. These incentives are treated as contra-revenue and reduce our net Revenue recorded in each period. Those incentive costs that can be attributed to a distinct service (e.g., referral bonuses paid to referrer) are included in sale and marketing expenses.
Others
We exclude from revenue the taxes assessed by governmental authorities that are imposed on specific revenue- producing transactions and collected from customers/subscribers.
Cost of Revenue
Cost of revenue primarily consists of, (1) personnel-related compensation costs of local operations teams and teams that provide phone, email and chat support to users, (2) repair and maintenance expenses of vehicles, (3) payment gateway charges, (4) depreciation of devices for keyless entry system and GPS which are installed in the vehicles of Hosts, (5) software support and maintenance, and (6) other direct expenses. We expect that the cost of revenue will continue to increase on an absolute dollar basis for the foreseeable future to the extent that we continue to see growth on the platform. However, cost of revenue may vary as a percentage of revenue from period to period based on activity on the platform.
Technology and Development
Technology and development expenses primarily consist of personnel-related compensation expenses for technology, product, and engineering teams, as well as expenses associated with our information technology and data science platforms. We expect that our technology and development expenses will increase on an absolute dollar basis but vary from period to period as a percentage of net revenue for the foreseeable future as we continue to invest in technology and development activities relating to ongoing improvements to and maintenance of our platform, including the potential hiring of additional personnel to support these efforts.
Sales and Marketing
Sales and marketing expenses primarily consist of online marketing expenses, marketing promotion expense, marketing partnerships with third parties, sales and marketing personnel compensation expenses and certain incentives and referral bonuses paid to Hosts (reflecting the portion of incentive costs not adjusted against net revenue). Sales and marketing expenses also include allocated overhead. We expect that our sales and marketing expenses will increase on an absolute dollar basis but vary from period to period as a percentage of net revenue for the foreseeable future.
General and Administrative
General and administrative expenses primarily consist of personnel-related expenses for executive management and administrative functions, including finance and accounting, legal, and human resources. General and administrative expenses also include certain travel expenses, professional service fees, including legal expenses, rent expenses, office expenses, repairs and maintenance of office equipment and furniture, directors’ and officers’ insurance and other expenses. We further expect to continue incurring general and administrative expenses of operating as a public company, including expenses for insurance, costs to comply with the rules and regulations applicable to companies listed on a Nasdaq, costs related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, investor relations, and professional services expenses. We expect general and administrative expenses will reduce on absolute dollar basis owing to our efforts to manage costs.
Finance Costs
Finance costs consist primarily of interest on vehicle loans, finance leases and redeemable promissory note. Costs recognized on account of change in fair valuation of Senior Subordinated Convertible Promissory Notes, convertible promissory notes and derivative financial instruments are included. In addition, it also includes Note issue expenses, bank charges, other borrowing costs.
Other (Income) and Expense, Net
Other (income) and expense, net consists primarily of change in fair value of the preferred stock warrant and the unsecured convertible note, interest income, (gain)/loss on sale of assets & assets held for sale, Loss on assets written off, loss on foreign currency transactions and balances, and other expenses.
Gain on troubled debt restructuring
Gain on troubled debt restructuring includes the gain consists of gains on account of restructuring of loans from lenders and gains on account of concluded negotiations with vendors for reduction in outstanding liabilities.
Results of Operations
The following table sets forth our results of operations for the periods presented:
For the Years Ended
March 31,
Net revenue $ 9,105,891 $ 9,897,233
Costs and expenses
Cost of revenue 5,296,841 10,331,595
Technology and development 2,965,631 4,345,748
Sales and marketing 1,466,047 5,767,036
General and administrative 9,778,371 17,245,096
Impairment of balances with government authorities - 3,875,767
Total costs and expenses $ 19,506,890 $ 41,565,242
Loss from operations (10,400,999 ) (31,668,009 )
Finance costs 8,607,173 13,898,735
Finance costs to related parties - 38,203
Gain on troubled debt restructuring (1,171,161 ) -
Other income, net 7,785,291 (11,316,471 )
Other income from related parties - (11,224 )
Loss before provision for income taxes (25,622,302 ) (34,277,252 )
Provision for income taxes - -
Net loss $ (25,622,302 ) $ (34,277,252 )
The following table sets forth our results of operations as a percentage of net revenue:
For the Years Ended
March 31,
Net revenue 100 % 100 %
Costs and expenses
Cost of revenue 58 % 104 %
Technology and development 33 % 44 %
Sales and marketing 16 % 58 %
General and administrative 107 % 174 %
Impairment of balances with government authorities 0 % 39 %
Total costs and expenses 214 % 420 %
Loss from operations -114 % -320 %
Finance costs 95 % 140 %
Finance costs to related parties 0 % 0 %
Gain on troubled debt restructuring -13 % 0 %
Other income, net 85 % -114 %
Other income from related parties 0 % 0 %
Loss before provision for income taxes -281 % -346 %
Provision for income taxes 0 % 0 %
Net loss income -281 % -346 %
Net Revenue
For the Years Ended March 31,
Change Change %
Revenues from services 9,024,576 9,836,434 (811,858 ) -8 %
Other revenues 81,315 60,799 20,516 34 %
Net Revenue 9,105,891 9,897,233 (791,342 ) -8 %
Our total net revenue for the year ended on March 31, 2025, and March 31, 2024, was $9.11 million and $9.90 million, respectively, representing a decline of $0.79 million, or 8%. While the total number of Bookings and Booking Days increased by 10% and 1% respectively, GBV declined by 5%, during the year ended March 31, 2025, versus the previous comparable period, but the revenue has decreased majorly due to a reduction of average rate per hour.
In the peer-to-peer car sharing model, we continued to take several measures to improve profitability, such as (i) reduction of cash incentives paid to Hosts and (ii) introduction of cancellation fees for Host and Guest. These and other cost rationalization strategies resulted in improved unit profitability at the expense of reducing GBV and Net revenue for the year ended March 31, 2025, versus the previous comparable period.
Costs and Expenses
Cost of Revenue
For the Years Ended March 31,
Change Change %
Cost of revenue 5,296,841 10,331,595 (5,034,754 ) -49 %
Cost of revenue was $5.30 million during the year ended March 31, 2025, as compared to $10.33 million during the year ended March 31, 2024, a decrease of $5.03 million, or 49%. This decrease was driven by overall Company-wide efforts to drive greater operational efficiency. Key drivers of the cost savings include $1.93 million reduction of repair and maintenance cost by optimizing the network of third-party vehicle garages, entering into new pricing contracts with these garages and reducing the accident rate by strengthening the Guest verification process, $1.36 million reduction in personnel costs (driven by headcount reductions in India, and discontinuation of operations in Vietnam, Egypt and Indonesia during the year ending March 31, 2025), a decrease of $0.16 million of uncollected customer charges which were paid to the Host by the Company as part of its business customary practice, a decrease of $0.18 million of Toll charges as the Toll is now settled between Host and Guest directly. Due to discontinuation of operations in Egypt, Indonesia and Vietnam there was a savings of $0.22 million during the year ended in March 31, 2025 as compared to the year ended March 31, 2024, under other expenses.
We further achieved savings of $0.32 million for software support and maintenance charges due to optimization of cloud cost and google maps services which were comparatively higher during the year ending March 31 2024, owing to the higher spending on brand marketing which brought more customers on the platform, increased searches without any material impact on booking. Further, there were cost savings of $0.49 million on account of depreciation on tracking devices during the year ended March 31,2025, as compared to year ended March 31, 2024, since these devices were completely depreciated in the previous Fiscal year ending March 31, 2024.
Technology and Development
For the Years Ended March 31,
Change Change %
Technology and development 2,965,631 4,345,748 (1,380,117 ) -32 %
Technology and development expenses totaled $2.97 million during the year ended March 31,2025, as compared to $4.35 million during the year ended March 31,2024, a decrease of $1.38 million, or 32%. This decrease was driven by employee benefit costs reductions of $1.04 million (including $0.16 million of additional ESOP charges during the year ended March 31,2024 vs $ 0.01 million during the year ended March 31,2025), and a further reduction of $0.34 million in IT platforms support costs as the Company continues to optimize usage of cloud-based IT services while enabling more in-app features for Guests and Hosts.
Sales and Marketing
For the Years Ended March 31,
Change Change %
Sales and marketing 1,466,047 5,767,036 (4,300,989 ) -75 %
Sales and marketing expense totaled $1.47 million during the year ended March 31,2025, as compared to $5.77 million during the during the year ended March 31,2024, a decrease of $4.30 million, or 75%, primarily driven by $3.64 million reduction in marketing expenses, Personnel-related costs decreased by $0.40 million due to reductions in headcount. Further there was a reduction of $0.26 million in Host incentives (this reflects the portion of the host incentives accounted for as sales and marketing expense during the year ended March 31,2025.
General and Administrative
For the Years Ended March 31,
Change Change %
General and administrative 9,778,371 17,245,096 (7,466,725 ) -43 %
General and administrative expenses were $9.78 million during the year ended March 31, 2025, as compared to $17.25 million during the year ended March 31,2024, a reduction of $7.47 million, or 43%. Professional fees reduced by $5.65 million driven by elimination of SPAC related expenses during the year ended March 31, 2025 as compared to the previous comparable period. Personnel-related costs decreased by $1.79 million due to reductions in headcount during the year ended March 31, 2025.
Impairment of balances with government authorities
For the Years Ended March 31,
Change Change %
Impairment of balances with government authorities - 3,875,767 (3,875,767 ) -100 %
The impairment of balances with government authorities were Nil during the year ended March 31, 2025, as compared to $3.88 million during the year ended March 31, 2024. This impairment is a one-time charge due to non-utilization of Goods and Service Tax (GST) input accumulated over the past few years.
Finance Costs
For the Years Ended March 31,
Change Change %
Finance costs 8,607,173 13,898,735 (5,291,562 ) -38 %
Finance costs to related parties - 38,203 (38,203 ) -100 %
Finance costs were $8.61 million during the year ended March 31, 2025, as compared to $13.94 million during the year ended March 31, 2024, a reduction of $5.33 million, or 38%. There were Non-cash expenses related to change in fair valuation of derivative financial instrument amounting to $3.47 million, change in the value of preferred stock warrants amounting to $5.28 million, SSCPN note issue expenses of $1.56 million, change in the fair value of Atalaya note $1.63 million and discount on issue of Atalaya note amounting to $0.63 million during the year ended March 31, 2024, majority of which was converted into equity at the close of deSPAC in the fiscal year ending March 31, 2024.These reductions were partially offset by $3.29 million in Issuance cost towards common stock and warrants, $2.00 million interest on redeemable promissory notes, $0.42 million incremental other borrowing cost and amortisation of discount and debt issuance cost on redeemable promissory notes amounting to $1.77 million incurred during the year ended March 31, 2025, compared to the year ended March 31, 2024.
Gain on troubled debt restructuring
For the Years Ended March 31,
Change Change %
Gain on troubled debt restructuring (1,171,161 ) - (1,171,161 ) 100 %
Gain on troubled debt restructuring during the year ended March 31, 2025 was $1.22 million vs Nil during the year ended March 31, 2024. The gain on troubled debt restructuring was on account of debt restructurings and trade payable vendor restructurings.
Other expense/(income), net
For the Years Ended March 31,
Change Change %
Other expense (income), net 7,785,291 (11,316,471 ) 19,101 ,762 -169 %
Other (income) from related parties - (11,224 ) 11,224 -100 %
Other expenses were $7.79 million during the year ended March 31, 2025, versus other income of $11.33 million during the year ended March 31, 2024, an increase in expense of $19.11 million or 169%.
This increase in expenses is due to recognition of loss on litigation settlement amounting to $12.74 million, additional loss on assets written off amounting to $0.76 million, loss on extinguishment of liability amounting to $3.46 million, Bad debts written off on Receivables from car sale amounting to $ 0.45 million, Liquidated damages payable to Investors amounting to $ 0.57 million and loss on modification of finance lease amounting to $0.46 million respectively during the year ended March 31, 2025, further income recognized in the year ended March 31, 2024, on account of change in the fair value of SSCPN and Notes amounting to $3.45 million and $6.99 million vs nil for the year ended March 31, 2025, as the same was converted into equity at the close of deSPAC in the fiscal year ending March 31, 2024. This increase in expenses is offset by recognizing other income on account of the change in the fair value of unsecured convertible note of $1.74 million and gain on change in fair value of derivative financial instrument amounting to $9.04 million during the year ending March 31, 2025, as compared to Nil during the year ending March 31, 2024.
Non-GAAP Financial Measures
In addition to our results determined in accordance with GAAP, we believe the following non-GAAP financial measures help us to evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions. We use the following non-GAAP financial measures, collectively, to evaluate our ongoing operations and for internal planning and forecasting purposes.
We believe that these non-GAAP financial measures, when taken collectively, may be helpful to investors because they provide consistency and comparability with past financial performance and assist in comparisons with other companies, some of which use similar non-GAAP financial measures to supplement their GAAP results. The non-GAAP financial measures are presented for supplemental informational purposes only, should not be considered as a substitute for financial information presented in accordance with GAAP, and may be different from similarly titled non-GAAP financial measures used by other companies. Because of these limitations, we consider, and you should consider, our non-GAAP financial measures alongside other financial performance measures presented in accordance with GAAP. A reconciliation of each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP is provided below. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures.
The following table summarizes our non-GAAP financial measures, along with the most directly comparable GAAP measure, for each period presented below.
For the Years Ended
March 31,
Gross profit /(loss) $ 3,809,050 $ (434,362 )
Gross margin 42 % -4 %
Contribution profit/(loss) 4,250,778 (979,154 )
Contribution margin 47 % -10 %
Net (loss) income (25,622,302 ) (34,277,252 )
Adjusted EBITDA (9,914,632 ) (17,845,538 )
Contribution Profit (Loss) and Contribution Margin
We define contribution profit (loss) as our gross profit (loss) plus (a) depreciation expense included in cost of revenue, (b) stock-based compensation expense included in cost of revenue, (c) other general costs included in cost of revenue (rent, software support, insurance, travel); less (i) Host incentive payments and (ii) marketing and promotional expenses (excluding brand marketing).
We use contribution profit (loss) and contribution margin as indicators of the economic impact of a new booking on our platform, as they capture the direct expenses attributable to a new booking on our platform and the cost required to generate revenue. While certain contribution profit (loss) adjustments may not be non-recurring, non-cash, non-operating, or unusual, contribution profit (loss) is a metric our management and board of directors find useful, and we believe investors may find useful in understanding the costs most directly associated with our revenue-generating activities.
We recorded a contribution profit of $4.25 million during the year ended March 31, 2025, versus a contribution loss of $0.98 million during the year ended March 31, 2024. Our gross profit improved to $3.81 million during the year ended March 31, 2025, versus a gross loss of $0.43 million during the year ended March 31, 2024, which was driven by significant reductions in cost of revenue due to the overall improvements in Companywide operational efficiencies accomplished over the past few quarters. In addition, host incentives and marketing costs (excl. brand marketing) were reduced significantly to $0.74 million during the year ended March 31, 2025, versus $2.73 million during the same period in 2024, which further contributed to the Company achieving contribution profit as compared to contribution loss in the previous comparable period.
Contribution profit (loss) and contribution margin are non-GAAP financial measures with certain limitations regarding their usefulness; they should be considered as supplemental in nature and are not meant as substitutes for gross profit /(loss) and gross margin, which are measures prepared in accordance with GAAP. For purposes of calculating the non-GAAP financial measures, we utilize the GAAP financial measure of gross profit (loss), which is defined as revenue minus cost of revenue, each of which is presented in our audited consolidated statements of operations. Our definitions of contribution profit (loss) and contribution margin may differ from the definitions used by other companies in our industry and, therefore, comparability may be limited. In addition, other companies may not publish these or other similar metrics. Further, our definition of contribution profit (loss) does not include the impact of certain expenses that are reflected in our audited consolidated statements of operations. Thus, our contribution profit (loss) should be considered in addition to, not as a substitute for or in isolation from, gross profit (loss) prepared in accordance with GAAP.
The following tables present reconciliations of gross profit/(loss) to contribution profit/(loss) and gross margin to contribution margin for each of the periods indicated:
Contribution Profit/(Loss)
For the Years Ended
March 31,
Net revenue $ 9,105,891 $ 9,897,233
Cost of revenue 5,296,841 10,331,595
Gross profit/(loss) 3,809,050 (434,362 )
Add: Depreciation and amortization in COR 340,188 828,111
Add: Stock-based compensation in COR 3,650 134,883
Add: Overhead costs in COR (rent, software support, insurance, travel) 840,289 1,218,583
Less: Host Incentives and Marketing costs (excl. brand marketing) C=(A+B) 742,399 2,726,369
Less: Host incentives (A) 147,180 403,069
Less: Marketing costs (excl. brand marketing) (B) 595,219 2,323,300
Contribution profit / (loss) $ 4,250,778 $ (979,154 )
Contribution margin 47 % -10 %
Adjusted EBITDA is a non-GAAP financial measure that represents our net income or loss adjusted for (i) provision for income taxes; (ii) other income and (expense), net; (iii) depreciation and amortization; (iv) stock-based compensation expense; and (v) finance costs.
We use adjusted EBITDA in conjunction with net income or loss, its corresponding GAAP measure, as a performance measure that we use to assess our operating performance and operating leverage in our business. The above items are excluded from our adjusted EBITDA measure because these items are non-cash in nature, or because the amount and timing of these items is unpredictable, or they are not driven by core results of operations, thereby rendering comparisons with prior periods and competitors less meaningful.
We believe that adjusted EBITDA provides useful information to investors and others in understanding and evaluating the results of our operations, as well as provides a useful measure for period-to-period comparisons of our business performance. Moreover, we have included adjusted EBITDA because it is a key measurement used by our management internally to make operating decisions, including those related to analyzing operating expenses, evaluating performance, and performing strategic planning and annual budgeting.
Our adjusted EBITDA loss has reduced to $9.91 million during the year ended March 31, 2025, as compared to an adjusted EBITDA loss of $17.85 million during the year ended March 31, 2024.
This improvement is a result of broad-based cost reduction and optimization initiatives that reduced our cost of revenue, technology and development costs, sales and marketing costs, and general and administrative costs (as described above) during the year ended March 31, 2025, as compared to the same period in 2025.
Adjusted EBITDA has limitations as a financial measure, should be considered as supplemental in nature, and is not meant as a substitute for the related financial information prepared in accordance with GAAP. These limitations include the following:
● Adjusted EBITDA does not reflect other (income)/expense, net, which includes interest income on cash, cash equivalents, restricted cash and investments, net of interest expense, and gains and losses on foreign currency transactions and balances;
● Adjusted EBITDA excludes certain recurring non-cash charges, such as depreciation of property and equipment and amortization of intangible assets; although these are non-cash charges, the assets being depreciated and amortized may need to be replaced in the future, and adjusted EBITDA does not reflect all cash requirements for such replacements or for new capital expenditure requirements;
● Adjusted EBITDA excludes stock-based compensation expense, which has been, and will continue to be for the foreseeable future, a recurring expense in our business and an important part of our compensation strategy: and
● Adjusted EBITDA excludes all finance charges.
Because of these limitations, you should consider adjusted EBITDA alongside other financial performance measures, including net loss and our other GAAP results.
The following is a reconciliation of adjusted EBITDA to the most comparable GAAP measure, Net (Loss) / Income:
For the Years Ended
March 31,
Net (Loss) $ (25,622,302 ) $ (34,277,252 )
Add/ (deduct)
SPAC transaction closing costs - 7,061,350
Stock-based compensation 52,461 1,883,733
Depreciation and amortization 433,906 1,001,621
Finance costs 8,607,173 13,898,735
Finance costs to related parties - 38,203
Other expense/(income), net 7,785,291 (11,316,471 )
Other income from related parties - (11,224 )
Gain on troubled debt restructuring (1,171,161 ) -
Impairment of balances with government authorities - 3,875,767
Adjusted EBITDA $ (9,914,632 ) $ (17,845,538 )
Liquidity and Capital Resources
During the year ended March 31, 2025, and 2024 respectively, we generated negative cash flows from operations of $9.08 million and $22.20 million, respectively, reflecting greater operating cost efficiencies and reduced overhead expenditures in 2025. The Company incurred a net loss of $25.62 million and $34.28 million during the year ended March 31, 2025, and 2024, respectively, and the accumulated deficit amounts to $333.17 million and $307.55 million as of March 31, 2025, and 2024, respectively.
As of March 31, 2025, our cash and cash equivalents totaled $1.08 million, consisting of cash on hand, fixed deposits, Restricted cash and cash equivalents included under other non-current assets and other bank balances.
Our primary use of cash is to fund our existing operations. If we have sufficient working capital, we will continue to invest in product development and in our technology platform. We expect that our general and administrative expenses will be reduced on an absolute dollar basis due to our efforts to manage cost, use of our cash effectively and improve profitability while managing our research and development programs. As on March 31, 2025, the Company’s cash position was critically deficient and critical payments to the operational and financial creditors of the Company are not being made in the ordinary course of business, all of which raises substantial doubt about the Company’s ability to continue as a going concern.
In October 2022, we entered into a Business Combination Agreement (BCA) for merger with Innovative International Acquisition Corp. (“IOAC”) In October 2022, we entered into a note purchase agreement with Ananda small business trust, an affiliate of the SPAC sponsor. Ananda small business trust has purchased notes worth $10.00 million. Additionally, pursuant to signing the BCA, the Company has entered into a warrant and convertible note agreement in February 2023 with new investors and raised a total of $21.28 million (before fees) as of August 16, 2023 (which has converted at a discount in the deSPAC). On December 28, 2023, we completed our deSPAC transaction with IOAC and received cash of $5.77 million, assumed liabilities amounting to $21.5 million and unsecured promissory notes of $3.26 million were also assumed.
On June 18, 2024, the Company entered into a securities purchase agreement with certain institutional accredited investors (the “June Aegis Securities Purchase Agreement”) pursuant to which the Company issued and sold an aggregate of $3.60 million in principal amount of notes (the “June Notes”) and warrants to purchase up to an aggregate of 1,267,728 shares (52,966,102 shares prior to Reverse Stock Split) shares of Company Common Stock (the “June Warrants”) for gross proceeds to the Company of $3.00 million. The June Notes are due nine (9) months from the date of issuance, provided that the Company is required to use the proceeds at the closing date of one or more subsequent equity, debt or other capital raise(s) or any sale of tangible or intangible assets with net proceeds sufficient to repay all or any portion of the amounts due under the June Notes, and bear interest at a rate of 15% per annum (up to 20% per annum during the occurrence of an Event of Default). The June Notes are also subject to optional redemption at the option of the Note Holder in the event of a change of control or upon occurrence of an Event of Default (in which case the June Notes are redeemable at a premium of 125% of the amount due thereunder). The June Notes contain certain negative covenants including, but not limited to, a prohibition on incurring indebtedness (other than certain permitted indebtedness) or allowing or suffering to exist any liens or encumbrances (other than permitted liens), repaying or redeeming any outstanding indebtedness other than the June Notes, redeeming or repurchasing any equity interests of the Company, declaring any dividends or distributions, changing the Company’s business, entering into any related party transactions or issuing any securities that would cause a breach or default of the June Notes. The June Notes also contain certain affirmative covenants, including, but not limited to, maintaining good standing, maintaining the Company’s property and intellectual property, maintaining current insurance policies and providing prompt notice in the event of an Event of Default or the commencement of voluntary bankruptcy or liquidation proceedings.
Our future capital requirements will depend on many factors, including, but not limited to, our growth, our ability to attract and retain Hosts and Guests, and the scope of future sales and marketing activities.
The Company expects to continue to incur net losses and have significant cash outflows from operating activities for at least the next 12 months. Management has evaluated the significance of the conditions described above in relation to the Company’s ability to meet its obligations and concluded that, without additional funding, the Company will not have sufficient funds to meet its obligations within one year from the date of the audited Consolidated Financial Statements were issued. On November 5, 2024, the Company had entered into a private placement transaction for gross proceeds of $9.15 million (before deduction of fees to the placement agent and other offering expenses). On November 7, 2024, the Company closed on private placement financing pursuant to which it raised gross proceeds of approximately $9.15 million. After the deduction of commissions and expenses, the Company received net proceeds of approximately $7.625 million and used $3.804 million of such net proceeds to repay the outstanding principal balance and accrued interest on outstanding indebtedness relating to financing from institutional investors in June 2024. There was also a holdback of $0.2 million for indemnification of the placement agent in the financing, leaving proceeds of approximately $3.621 million to the Company. While this financing resulted in the payment of certain outstanding indebtedness, the Company will still need to raise substantial additional capital imminently in order to have sufficient capital. The Company believes that current cash and cash equivalents will allow the Company to continue operations through July 31, 2025, assuming that the Company makes part payments on its currently outstanding indebtedness and future accruals. The Company was advised by its largest investor and director that he would no longer commit to continuing his support to the Company in the event that any liquidity requirements arise in the future.
There can be no assurance that the Company will be able to achieve its business plan, raise any additional capital or secure the additional financing necessary to implement its current operating plan. The ability of the Company to continue as a going concern is dependent upon its ability to increase its revenues and eventually achieve profitable operations. No adjustments have been made to the financial statements based on this uncertainty.
Financing Arrangements
We have financed our operations through revenue generated from sales, borrowings, and issuance of Common Stock, preferred stock, senior subordinated convertible promissory notes, convertible promissory note and unsecured convertible notes and redeemable promissory notes.
Debentures and Other Borrowings from Financial Institutions
We have obtained loan facilities from various financial institutions during earlier time periods, which remained outstanding as of March 31, 2025.
Issue of Common Stock
The Company’s shareholders authorized, and the Board of Directors approved for a 1-for-100 Reverse Stock Split, which became effective on October 21, 2024.
In December 2023, we raised $5,000,000 against issuance of 16,667 shares (1,666,666 prior to Reverse Stock Split) to Mohan Ananda, Chairman of Board of Directors and our largest shareholder.
In May 2024, we issued 125,120 shares (12,512,080 prior to Reverse Stock Split) to Atalaya Note holders to settle a part of the unsecured promissory note liability.
Issue of Unsecured Convertible Note
In December 2023, we issued an Unsecured Convertible Note bearing a principal amount of $8,434,605.
Issue of Redeemable Promissory Note
On June 18, 2024 , the Company entered into a Securities Purchase Agreement with certain institutional accredited investors pursuant to which the Company issued and sold an aggregate of $3,600,000 in principal amount of notes and warrants to purchase up to an aggregate of 1,267,728 shares (52,966,102 shares prior to Reverse Stock Split) of Company Common Stock for gross proceeds of $3,000,000. The closing occurred on June 20, 2024.
Private Placement of Equity
On November 5, 2024, the Company had entered into a private placement transaction for gross proceeds of $9.15 million (before deduction of fees to the placement agent and other offering expenses payable by the Company). Aegis Capital Corp. is acting as the Exclusive Placement Agent for the private placement. The Company intends to use the net proceeds from the private placement to repay approximately $3.80 million of outstanding indebtedness (including accrued interest).
On December 23, 2024, the Company entered into a securities purchase agreement in connection with a private placement offering pursuant to which the Company raised gross proceeds of $5.48 million and after the deduction of fees and expenses payable to the Placement Agent and other offering expenses, including legal fees payable to the Company’s and Placement Agent’s counsel, the net proceeds to the Company was approximately $4.79 million.
On January 31, 2025, the Company entered into a securities purchase agreement, in connection with the second closing of the Offering (the “Second Closing”) pursuant to a Confidential Private Placement Memorandum, dated December 3, 2024. The Securities were offered at a for an aggregate amount of $3 million; provided, however, that the Company did not receive any cash proceeds with respect to Securities with a subscription price of $1.56 million of such amount, as those Securities were issued in consideration for the settlement of litigation with a claimant. The Company received balance net proceeds of approximately $1.25 million after the deduction of fees and expenses payable to the Placement Agent and other offering expenses, including legal fees payable to the Company’s and Placement Agent’s counsel.
The following table summarizes our cash flows for the periods presented:
Statements of Cash Flows Data: For the Years Ended
March 31,
Net cash used in provided by operating activities (9,076,067 ) (22,199,149 )
Net cash flows generated from investing activities 492,140
Net cash generated from financing activities 8,269,234 20,202,013
Effect of foreign exchange on cash and cash equivalents. (9,415 ) (194,275 )
Net decrease in cash and cash equivalents (314,693 ) (1,996,322 )
Operating Activities
Net cash used in operating activities was $9.08 million and $22.20 million for the year ended March 31, 2025, and March 31, 2024, respectively. The major drivers contributing to the decrease of $13.12 million during the current financial year compared to previous financial year included the following:
Decrease in net loss of $13.11 million after adjustments for non-cash items. These adjustments include fair value changes in financial instruments, loss on Litigation settlement, loss on extinguishment of liability, interest on redeemable promissory note, loss on extinguishment of redeemable promissory note, issuance cost towards issue of common stock and warrants, gain on troubled debt restructuring, change in fair value of Unsecured Convertible Note and other adjustments.
Investing Activities
Net cash generated from investing activities totaled $0.49 million for the year ended March 31, 2025, as compared to Nominal cash generated for investing activities during the same period in 2024. The increase in cash generated during year ended March 31, 2025, is largely attributable to receipt of proceeds from maturity of investment in fixed deposits and proceeds from sale of assets held for sale.
Financing Activities
Net cash generated from financing activities totaled $8.27 million and $20.20 million during the year ended March 31, 2025, and March 31, 2024, respectively. The Company received proceeds from the issuance of equity and warrants amounting to $16.07 million, redeemable promissory note amounting to $3.00 million and from issuance of debt $1.07 million, further payments towards issuance cost of equity and warrants amounting to $2.37 million, further the payments include repayment of redeemable promissory note amounting to $3.80 million along with interest, repayment of debt $3.10 million and payment towards finance lease amounting to $2.10 million during the year ended March 31, 2025 as compared to higher proceeds from the issuance of Senior Subordinated convertible promissory note of $13.18 million , proceeds from issuance of unsecured convertible note amounting to $7.80 million, proceeds from merger $5.77 million, proceeds from issuance of debt of $1.08 million, further there are cash outflows towards payment of unsecured promissory note $1.23 million, payment towards offering costs $2.84 million, payment towards issuance cost of Senior Subordinated convertible promissory note $1.56 million, repayment of debt $1.46 million, payment of finance lease obligations $0.53 million during the year ended March 31, 2024. As the Company’s cash position decreased, critical payments and debt repayments were not being made in the ordinary course of business.
Contractual Obligations and Commitments
Contractual obligations are cash amounts that we are obligated to pay as part of certain contracts that we have entered into during the normal course of business.
Below is a table that shows our contractual lease obligations as of March 31, 2025:
March 31, 2025
Maturities of lease liabilities are as follows: Operating
Leases Finance
Leases
337,044 4,285,354
353,429 -
370,634 -
388,699 -
- -
Total Lease Payments $ 1,449,806 $ 4,285,354
Less : Imputed Interest 331,069 318,392
Total Lease Liabilities $ 1,118,737 $ 3,966,962
Borrowings
The contractual commitment amounts in the table below are associated with agreements that are enforceable and legally binding. Obligations under contracts that we can cancel without a material penalty are not included in the table above.
As at March 31,
Current
From Others
- Mahindra & Mahindra Financial Services Limited 439,415
- TATA Motors Finance Limited 1,749,415
- Kotak Mahindra Financial Services Limited 376,861
- Orix Leasing and Financial Services India LTD 58,978
- Clix Finance India Private Limited 64,621
- AON Risk Insurance Services West, Inc 162,051
2,851,341
Total maturity for the year ending on March 31, 2026 $ 2,851,341
Contingencies
The Company is subject to legal proceedings and claims that arise in the ordinary course of business. The Company accrues for losses associated with legal claims when such losses are probable and can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change.
(A) Claims filed by customers and third-parties not acknowledged as liability amounted to $4,503,122 and $4,565,949 as at March 31, 2025 and March 31, 2024, respectively. The claims made by the customers against the Company includes claims that have been made for amounts charged to customers by the Company as damages for improper use of vehicles and/or physical damages made to vehicles during an active trip ; or claims made by customers for unavailability of the booked vehicle or for any mechanical default in the booked vehicle ; or claims against any similar issue faced by either the host or the customer. Under the erstwhile business model of the Company , the Company had procured third-party insurance policies for fleet under its management which indemnifies against personal death and/or injuries suffered either by the customer or third-parties during the use of its vehicles. Based on the insurance coverage, the Company is confident that liability, if any, arising from the claims under the previous business model will be covered by the insurance. Further, under the current business model of the Company, wherein the Company acts only as a facilitator, any issues arising from breach of any terms including improper use of vehicles and/or physical damages made to the vehicles or any mechanical issues in the vehicle will be the responsibility of either the host or the customer. While uncertainties are inherent in the final outcome of these matters, the Company believes that the disposition of these proceedings will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.
(B) The Company has received various orders and show cause notices from Indian indirect tax authorities relating to disputes on input tax credits, service tax liabilities, GST dues, and taxability of car rental revenue for periods between 2014 and 2023, totaling $9,514,651 (March 31, 2024: $7,984,418). These disputes include disallowance of input credits, service tax liabilities on booking fees and penalty charges, disputes on goods and service tax input availed, and GST demands on gross booking value. The Company has taken necessary steps, including filing appeals, submissions, and deposits, and is awaiting further communication from the authorities. In relation to the GST demands on gross booking value, the Company has filed a writ petition with various authorities challenging the order. Based on the submissions provided and documents available, management believes that no significant outflow is expected, and therefore, no provision has been recorded as of March 31, 2025, and March 31, 2024.
(C) In February 2023, a former employee of Zoomcar India instituted a suit before the City Civil and Sessions Judge at Mayo Hall, Bengaluru against Zoomcar India, Zoomcar, Inc. and Zoomcar Holdings, Inc. (formerly IOAC) challenging his termination, claiming damages amounting to $397,023 and claiming that 100,000 options to purchase shares of Zoomcar, Inc. have vested. On March 3, 2023, the City Civil and Sessions Judge at Mayo Hall, Bengaluru, issued an interim injunction to restrain each of Zoomcar, Inc. and Zoomcar Holdings, Inc. from “alienating or dealing” the 100,000 shares of Zoomcar, Inc. claimed by the former employee while the suit is pending. Zoomcar believes that such claims are baseless and is attempting to have the interim order vacated. In addition, Zoomcar India filed an application in the former employee’s suit, seeking that Zoomcar Holdings, Inc. be deleted from the array of parties in the suit.
(D) On November 1, 2024, Gregory Moran, a former employee of Zoomcar India, has filed a case with the Superior Court, Delaware, challenging his termination without a cause or a sufficient notice, claiming $100,000 payment that was agreed to be paid on the 6 month anniversary of the effective date of closing of the SPAC transaction along with a 8% fully diluted equity interest in Zoomcar Holdings, Inc., non-payment of “vacation” valued at approximately $30,000, leave encashment of approximately $42,000, $96,000 entitled to him for severance pay and gratuity as per India’s Payment of Gratuity Act, 1972. Additionally, he has claimed 210,520 stock units already existing, fully vested. The Company filed a motion to dismiss the matter on November 27, 2024. On January 7, 2025, the Company subsequently filed the opening brief in support of the motion to dismiss filed on November 27, 2024. The Company further filed the opening brief in support of the motion to dismiss on 7 January 2025. Mr. Moran filed opposition to Zoomcar’s motion on February 5, 2025 and Zoomcar filed a reply in further support of its motion on February 20, 2025. Oral arguments on Zoomcar’s motion to dismiss were heard on April 29, 2025. The court granted the motion to dismiss Mr. Moran’s quasi-contractual claims and reserved decision on the balance of the motion.
(E) Zoomcar Holdings, Inc. files tax returns in the U.S. federal, various state, and foreign jurisdictions. In the normal course of business, the Company is subject to examination by tax authorities. Our major tax jurisdiction is in India. The Indian tax authority is currently examining our 2016 through 2023 tax returns. There are other ongoing audits in various other jurisdictions that are not material to our financial statements. The Company received an order for fiscal year 2015-16 in relation to non-deduction of tax deducted at source withholding taxes on certain payments to resident payees/service providers amounting to $125,839 (March 31, 2024: $129,027). Penalty of $125,839 has been claimed but the proceedings are kept under abeyance until the above order is disposed off. The Company has filed appeals against the above orders before higher authority.
The Company has not recognized any uncertain tax position as at March 31, 2025 and March 31, 2024, respectively. The Company believes these orders are unlikely to be sustained at the higher appellate authorities.
Critical Accounting Policies and Estimates
The Company prepared its financial statements in accordance with GAAP. Our preparation of these financial statements requires us to make estimates, assumptions and judgments that affect the reported amounts of assets, liabilities, and related disclosures at the date of the financial statements, as well as revenue and expense recorded during the reporting periods. The Company evaluates our estimates and judgments on an ongoing basis.
The Company bases its estimates on historical experience and/or other relevant assumptions that the Company believes to be reasonable under the circumstances. Actual results may differ materially from management’s estimates.
See Note 2, Summary of Significant Accounting Policies, to our audited consolidated financial statements for further information related to our critical accounting policies and estimates, which are as follows:
Stock-Based Compensation
The Company accounts for stock-based compensation expense in accordance with the fair value recognition and measurement provisions of US GAAP, which requires compensation cost for grant-date fair value of stock-based awards to be recognized over the requisite service period. The Company includes a forfeiture estimate in the amount of compensation expense being recognized based on the Company’s estimate of equity instruments that will eventually vest. The fair value of stock-based awards, granted or modified, is determined on the grant date at fair value, using appropriate valuation techniques.
For stock options with service-based vesting conditions only, the valuation model, typically the Black-Scholes option-pricing model, incorporates various assumptions including expected stock price volatility, expected term, and risk-free rates. Stock options with graded vesting the fair- value-based measure is estimated of the entire award by using a single weighted-average expected term. The Company estimated the volatility of common stock on the date of the grant based on weighted-average historical stock price volatility of comparable publicly traded companies in its industry group. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant with a term equal to the expected term. The Company estimates the term based on the simplified method for employee stock options considered to be “plain vanilla” options as the Company’s historical share option exercise experience does not provide a reasonable basis upon which to estimate the expected term. The expected dividend yield is 0.0% as the Company has not paid and does not anticipate paying dividend on its common stock.
The Company estimates a forfeiture rate on an annual basis for the purpose of computation of stock-based compensation expense. The rate is used consistently across the subsequent interim periods during the year.
In case of cancellation of stock-based awards with no concurrent grant of a replacement award or other valuable consideration, any unrecognized compensation cost is recognized immediately on the cancellation date.
Debt
The debt instruments of the Company consist of debentures and term loans from financial institutions. The Company based on available proceeds makes periodic prepayments of scheduled instalments and the same has been accounted for under ASC 470-50.
Redeemable Promissory Notes
During the year ended March 31, 2025, the Company has issued Redeemable Promissory Notes which are repayable at the principal value on maturity date and has been accounted for under ASC 470-10. The Company issued these Redeemable Promissory notes on discount and incurred expenses on issue of the Redeemable Promissory Notes. As per ASC 835, the discount and the expenses incurred on issue of the Redeemable Promissory Notes have been amortized over the period of the Redeemable Promissory note on a straight-line basis. The Redeemable Promissory Notes liabilities have been presented net off the discount and issue expenses.
Debt Issuance costs
Debt issuance costs consist primarily of arrangement fees paid to Placement agent, professional fees and legal fees. These costs are netted off with the related debt and are being amortized to interest expense over the term of the related.
The debt has been classified into current or non-current based on the payment terms of the debt instruments. Non-current obligations are those scheduled to mature beyond twelve months from the date of the Company’s Consolidated Balance Sheets.
Warrants
When the Company issues warrants, it evaluates the balance sheet classification of the warrant to determine whether the warrant should be classified as equity or as a derivative liability on the Consolidated Balance Sheets. In accordance with ASC 815- 40, Derivatives and Hedging- Contracts in the Entity’s Own Equity (ASC 815-40), the Company classifies a warrant as equity so long as it is “indexed to the Company’s equity” and several specific conditions for equity classification are met. A warrant is not considered indexed to the Company’s equity, in general, when it contains certain types of exercise contingencies or adjustments to exercise price. If a warrant is not indexed to the Company’s equity or it has net cash settlement that results in the warrants to be accounted for under ASC 480, Distinguishing Liabilities from Equity, or ASC 815-40, it is classified as a derivative liability which is carried on the Consolidated Balance Sheets at fair value with any changes in its fair value recognized currently in the Consolidated Statement of Operations.
Warrants issued towards the November 2024 and December 2024 offering:
During the year ended March 31, 2025, the Company issued shares of Common Stock, pre-funded, Series A and Series B warrants in the November 2024 and December 2024 offering (Refer to Note 22) and as consideration to the placement agents for the issuance. The Common stock and pre-funded warrants were classified as equity in accordance with ASC 815-40 since all the conditions required for equity classification are met. The Series A warrants and Series B warrants were classified as derivative financial instruments in accordance with ASC 815-10-15-83 since they contain an underlying, can only be net settled and required no initial net investment. Accordingly, the derivative instruments were measured at fair value and subsequently revalued at each reporting date.
During the year ended March 31, 2025, the exercise price of Series A warrants for both November 2024 and December 2024 offering was adjusted to equal the floor price and the number of warrants were adjusted such that aggregate exercise price remains same.
During the year ended March 31, 2025, the reset price of Series B warrants for both November 2024 and December 2024 offering was adjusted to equal the floor price and the warrant holders are entitled to the maximum warrants that could be issued as per the agreement. Hence, as of March 31, 2025, the number of warrants exercisable towards Series A and Series B of both the November 2024 and December 2024 offering is fixed and hence there is no variability w.r.t. the number of warrants due to changes in the share price of the Company. Hence, the outstanding Series A Series B warrants for both November 2024 and December 2024 offering have been reclassified to equity at the reclassification date fair value.
Warrants exercised before the reclassification have been reclassified at their respective exercise date at their respective fair value on such date and warrants exercised after the reclassification were directly adjusted with additional paid in capital.
Warrants issued along with Redeemable Promissory Note:
During the year ended March 31, 2025, the Company issued warrants along with Redeemable Promissory Note and as consideration to placement agents for the issuance of the Redeemable Promissory Note.
These warrants were classified as equity in accordance with ASC 815-40 since all the conditions required for equity classification are met. Upon issuance of the warrant, the Company had allocated a portion of the proceeds from the issuance of its Redeemable Promissory Note to the warrant based on the relative fair values of warrants and Redeemable Promissory Note in accordance with ASC 820.
Warrants to be converted into Common Stock:
The Company’s warrants to purchase Common Stock were classified as equity. Upon issuance of the warrant, the Company had allocated a portion of the proceeds from the issuance of its preferred stock to the warrant based on the relative fair values of warrants and preferred stock.
Financial liabilities measured at fair value
Convertible Promissory notes (“Notes”), Senior Subordinated Convertible Promissory Note (“SSCPN”) and Unsecured Convertible Note (“Atalaya Note”)
During the year ended March 31, 2024 the Company issued Notes and SSCPN. The Company evaluated the balance sheet classification for these instruments either as liabilities or equity, and accounting for conversion feature. As per ASC 480-10-25-14, the Notes and SSCPN were classified as liabilities because the Company intended to settle them by issuing variable number of shares with a fixed and known monetary value at the time of inception. However, the Company had elected fair value option for these Notes and SSCPN, as discussed below and thus did not bifurcate the embedded conversion feature.
Fair Value Option (“FVO”) Election
The Company accounted for Notes and SSCPN under the fair value option election of ASC 825, Financial Instruments (“ASC-825”) as discussed below.
The Notes and SSCPN accounted under the FVO election which were debt host financial instruments containing conversion features which otherwise would be required to be assessed for bifurcation from the debt-host and recognized as separate derivative liabilities subject to measurements under ASC 815. Notwithstanding, ASC 825-10-15-4 provides for the “fair value option” (“FVO”) election, to the extent not otherwise prohibited by ASC 825-10-15- 5, to be afforded to financial instruments, wherein bifurcation of an embedded derivative is not necessary, and the financial instrument is initially measured at its issue-date estimated fair value and then subsequently remeasured at estimated fair value on a recurring basis at each reporting period date.
The estimated fair value adjustment, as required by ASC 825-10-45-5, was recognized as a component of other comprehensive income (“OCI”) with respect to the portion of the fair value adjustment attributed to a change in the instrument-specific credit risk, with the remaining amount of the fair value adjustment recognized under Finance costs shown as “Change in fair value of Notes” and “Change in fair value of SSCPN” in the accompanying Consolidated Statement of Operations. With respect to the above Notes and SSCPN, as provided for by ASC 825-10-50- 30(b), the estimated fair value adjustments were presented as a separate line item in the accompanying Consolidated Statement of Operations, since the change in fair value of the Notes and SSCPN payable were not attributable to instrument specific credit risk.
During the year ended March 31, 2024, as a result of consummation of the Business Combination by way of Reverse Recapitalization, the Notes and SSCPN outstanding were converted into 59,757 shares (5,975,686 shares prior to the Reverse Stock Split) of the Company’s Common Stock.
The SSCPN and Notes were adjusted for their carrying value through Consolidated Statement of Operations as on date of Reverse Recapitalization and credited at carrying value to the capital accounts upon conversion to reflect the stock issued.
During the year ended March 31, 2024, the Company issued an unsecured convertible note (“Atalaya Note) which had features similar to that of SSCPN and were accounted accordingly as enumerated above. As at March 31, 2025, the Atalaya Note is measured at cost and no longer carried at fair value. Refer Note 18.
Troubled debt restructuring
As per ASC 470-60 Troubled Debt Restructuring (TDR) refers to a situation where the creditor, grants concessions to a borrower experiencing financial difficulties. These concessions may include modifications to the terms of the payable, such as reducing the interest rate, extending the repayment period, or forgiving a portion of the payable. Such restructuring is done with the intent to provide relief to the borrower and to maximize the potential for payable recovery by the Company.
In accordance with ASC 470-60, when the total future cash payments under the new terms are less than the carrying amount of the payable at the date of restructuring, the difference between the carrying amount and the total future cash payments is recognized as a ‘Gain on Troubled Debt Restructuring’ in the Consolidated Financial Statements. This gain is recorded immediately in the period the restructuring occurs.
If the total future cash payments under the new terms exceed the carrying amount of the payable at the date of restructuring, no adjustment to the carrying amount of the payable is made. Instead, the company calculates a New Effective Interest Rate (EIR) based on the revised terms of the restructured payable. The debt is then amortized over the remaining life of the payable using the new EIR, with interest expense recognized based on this rate in future periods.
Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risks in the ordinary course of our business, which primarily relate to fluctuations in inflation and foreign currencies. Such fluctuations to date have not been significant.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
As a “smaller reporting company” as defined by Item 10 of Regulation S-K, we are not required to provide information required by this Item.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Item 8. Financial Statements and Supplementary Data
ZOOMCAR HOLDINGS, INC.
INDEX TO CONSOLIDATE FINANCIAL STATEMENTS
Report of Independent Registered Public Accounting Firm (Grant Thornton Bharat LLP, PCAOB ID: 2416)
Consolidated Balance Sheets as of March 31, 2025 and 2024
Consolidated Statements of Operations for the years ended March 31, 2025 and 2024
Consolidated Statements of Comprehensive Income/(Loss) for the years ended March 31, 2025and 2024
Consolidated Statements of Redeemable Non-Controlling Interests, Mezzanine Equity and Stockholders Equity for the years ended March 31, 2025 and 2024
Consolidated Statements of Cash Flows for the years ended March 31, 2025 and 2024
Notes to Consolidated Financial Statements
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
Board of Directors and Shareholders
Zoomcar Holdings, Inc.
Opinion on the financial statements
We have audited the accompanying consolidated balance sheets of Zoomcar Holdings, Inc. and subsidiaries (the “Company”) as of March 31, 2025 and 2024, the related consolidated statements of operations, comprehensive loss, stockholders' deficit, and cash flows for each of the two years in the period ended March 31, 2025, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of March 31, 2025 and 2024, and the results of its operations and its cash flows for each of the two years in the period ended March 31, 2025, in conformity with accounting principles generally accepted in the United States of America.
Going concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has suffered recurring losses from operations and has a net capital deficiency. In addition, the Company’s cash position is critically deficient and critical payments are not being made in the ordinary course of business, all of which raises substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in the aforesaid note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.
GRANT THORNTON Bharat LLP
We have served as the Company’s auditor since 2021.
Gurugram, India
June 30, 2025
ZOOMCAR HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(in USD, except number of shares)
As at March 31,
March 31,
Assets
Current assets :
Cash and cash equivalents (Refer Note 32- VIE) $ 1,077,275 $ 1,496,144
Accounts receivable, net of allowance for credit losses (Refer Note 32- VIE) 200,650 194,197
Balances with government authorities 187,458 427,702
Short term investments -
298,495
Prepaid expenses (Refer Note 32- VIE) 1,020,170 1,445,336
Other current assets (Refer Note 32- VIE) 261,200 523,746
Other current assets with related parties -
44,168
Assets held for sale 267,293 629,908
Total current assets $ 3,014,046 $ 5,059,696
Property and equipment, net of accumulated depreciation $6,717,519 and $6,189,452 respectively (Refer Note 32- VIE) 327,124 1,558,980
Operating lease right-of-use assets 1,021,898 1,290,608
Intangible assets, net of accumulated amortisation of $10,941 and $14,640 respectively (Refer Note 32- VIE) 5,451 18,393
Long term investments (Refer Note 32- VIE) 25,653 91,947
Balances with government authorities, (Refer Note 32- VIE) -
18,126
Prepaid expenses (Refer Note 32- VIE) 257,385 326,109
Other non-current assets, net of allowance for credit losses 705,767 808,739
Total assets $ 5,357,324 $ 9,172,598
Liabilities and stockholders’ deficit
Current liabilities :
Accounts payable (Refer Note 32- VIE) $ 12,396,147 $ 14,279,152
Accounts payable towards related parties 152,435 152,435
Current maturities of long-term debt 2,851,341 5,049,483
Current portion of operating lease liabilities 316,756 365,542
Finance lease liabilities 3,966,962 5,738,239
Contract Liabilities (Refer Note 32- VIE) 471,720 716,091
Current portion of pension and other employee obligations (Refer Note 32- VIE) 152,872 183,655
Unsecured Convertible Note 6,002,269 -
Unsecured promissory note to related parties -
2,027,840
Other current liabilities (Refer Note 32- VIE) 3,199,649 2,783,618
Total current liabilities $ 29,510,151 $ 31,296,055
Operating lease liabilities, less current portion 801,981 1,009,681
Pension and other employee obligations, less current portion (Refer Note 32- VIE) 394,030 491,449
Unsecured Convertible Note -
10,067,601
Total liabilities $ 30,706,162 $ 42,864,786
Commitments and contingencies (Note 34)
Stockholders’ deficit:
Common stock, $0.0001 par value per share, 250,000,000 shares authorized as of March 31, 2025 and March 31, 2024; 2,462,418 shares and 32,160 shares issued and outstanding as of March 31, 2025 and March 31, 2024 respectively *
Additional paid-in capital 305,693,199 272,063,319
Accumulated deficit (333,173,805 ) (307,551,502 )
Accumulated other comprehensive income 2,131,522 1,795,992
Total stockholders’ deficit $ (25,348,838 ) $ (33,692,188 )
Total liabilities and stockholders’ deficit $ 5,357,324 $ 9,172,598
* Prior period numbers have been adjusted to reflect the First Reverse Stock Split and the Second Reverse Stock Split of the Common Stock at a ratio of 1-for-100 and 1-for-20 respectively. (Refer Note 3)
The accompanying notes are an integral part of these Consolidated Balance Sheets.
ZOOMCAR HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In USD, except number of shares)
Year ended March 31,
March 31,
Revenue :
Revenues from services $ 9,024,576 $ 9,836,434
Other revenues 81,315 60,799
Total revenue $ 9,105,891 $ 9,897,233
Cost and Expenses
Cost of revenue 5,296,841 10,331,595
Technology and development 2,965,631 4,345,748
Sales and marketing 1,466,047 5,767,036
General and administrative 9,778,371 17,245,096
Impairment of balances with government authorities -
3,875,767
Total costs and expenses $ 19,506,890 $ 41,565,242
Loss from operations before income tax (10,400,999 ) (31,668,009 )
Finance costs 8,607,173 13,898,735
Finance costs to related parties -
38,203
Gain on troubled debt restructuring (1,171,161 ) -
Other expense/(income), net 7,785,292 (11,316,471 )
Other income from related parties -
(11,224 )
Loss before income taxes $ (25,622,303 ) $ (34,277,252 )
Provision for income taxes -
-
Net loss attributable to common stockholders $ (25,622,303 ) $ (34,277,252 )
Net loss per share *
Basic $ (51.84 ) $ (3,839.73 )
Diluted $ (51.84 ) $ (3,839.73 )
Weighted average shares used in computing loss per share: *
Basic 494,276 8,927
Diluted 494,276 8,927
* Prior period numbers have been adjusted to reflect the First Reverse Stock Split and the Second Reverse Stock Split of the Common Stock at a ratio of 1-for-100 and 1-for-20 respectively. (Refer Note 3)
The accompanying notes are an integral part of these Consolidated Statements of Operations.
(This space has been left intentionally blank)
ZOOMCAR HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In USD, except number of shares)
Year ended March 31,
March 31,
Net loss $ (25,622,303 ) $ (34,277,252 )
Other comprehensive income/(loss), net of tax:
Foreign currency translation adjustment 399,817 37,710
Loss for defined benefit plan (57,663 ) (48,593 )
Reclassification adjustments:
Amortization of gains on defined benefit plan (6,624 ) (21,124 )
Other comprehensive income/(loss) attributable to common stockholders $ 335,530 $ (32,007 )
Comprehensive loss $ (25,286,773 ) $ (34,309,259 )
The accompanying notes are an integral part of these Consolidated Statements of Comprehensive Loss
(This space has been left intentionally blank)
ZOOMCAR HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
FOR THE YEAR ENDED MARCH 31, 2025 AND 2024
Mezzanine equity
Preferred stock Zoomcar Holdings, Inc.
(In USD, except number of shares) Redeemable
Non-controlling
Interest
Amounts Shares Amounts Shares Amounts Additional
paid-in
capital Accumulated
Deficit Accumulated
other
comprehensive
income/(loss) Total
equity
(deficit)
Balance as at April 01, 2023 25,114,751 99,309,415 168,974,437 16,987,064 1,699 22,140,866 (270,002,280 ) 1,827,999 (246,031,716 )
Retroactive application of Reverse Recapitalization* - (77,466,242 ) - (16,504,250 ) (1,651 ) 1,651 - - -
Retroactive application of First Reverse Stock Split (Note 3) **
(477,472 ) (48 )
Retroactive application of Second Reverse Stock Split (Note 3) ** - - - (4,538 ) (0 ) - - -
Balance as at April 01, 2023 25,114,751 21,843,173 168,974,437 - 22,142,565 (270,002,280 ) 1,827,999 (246,031,716 )
Stock based compensation - - - - - 617,905 - - 617,905
Accelerated vesting of stock based awards on cancellation - - - - - 1,265,828 - - 1,265,828
Gain on employee benefit, (net of taxes amounts to $ NIL) - - - - - - - (69,717 ) (69,717 )
Net loss - - - - - - (34,277,252 ) - (34,277,252 )
Conversion of redeemable non-controlling interest into common stock upon Reverse Recapitalization (25,114,751 ) - - 25,114,751 - - 25,114,751
Conversion of redeemable convertible preferred stock into common stock upon Reverse Recapitalization - (21,843,173 ) (168,974,437 ) 18,914 168,974,435 - - 168,974,437
Issuance of shares to vendors against services - - - 1,809 19,052,000 - - 19,052,000
Issuance of common stock upon settlement of SSCPN - - - 3,679 27,148,313 - - 27,148,313
Issuance of common stock upon settlement of convertible promissory notes - - - 3,953,856 - - 3,953,856
Reclassification on conversion of preferred stock warrants and derivative financial instruments of Zoomcar, Inc. to common stock warrants of the Company - - - - - 24,314,334 - - 24,314,334
Issuance of Common Stock upon Reverse Recapitalization - - - 5,607 (20,520,668 ) (3,271,970 ) - (23,792,637 )
Net common share settlement of private warrants
(0 ) - - -
Foreign currency translation adjustment, (net of taxes amounts to $ NIL) - - - - - - - 37,710 37,710
Balance as at March 31, 2024 - - - 32,160 272,063,319 (307,551,502 ) 1,795,992 (33,692,188 )
Balance as at April 01, 2024 - - - 63,185,881 6,319 272,057,003 (307,551,502 ) 1,795,992 (33,692,188 )
Retroactive application of First Reverse Stock Split (Note 3) **
(62,553,508 ) (6,256 ) 6,256 -
-
Retroactive application of Second Reverse Stock Split (Note 3) ** - - - (600,213 ) (60 ) - - -
Balance as at April 01, 2024 - - - 32,160 272,063,319 (307,551,502 ) 1,795,992 (33,692,188 )
Stock based compensation - - - - - 52,461 - - 52,461
Issue of common stock against Atalaya note - - - 6,257 2,324,695 - - 2,324,696
Issue of common stock warrants along with redeemable promissory notes - - - - - 2,047,925 - - 2,047,925
Issue of common stock warrants to placement agents against Redeemable Promissory Note - - - - - 418,157 - - 418,157
Issuance of common stock upon conversion of unsecured promissory note to related party - - - - 2,027,840 - - 2,027,840
Issue of common stock upon exercise of warrants along with redeemable promissory notes - - - 46,527 (5 ) - - -
Issue of common stock and warrants on fund raise*** - - - 250,429 2,568,530 - - 2,568,555
Issue of common stock and warrants on settlement*** - - - 523,317 16,158,761 - - 16,158,813
Issue of common stock warrants to placement agents - - - - - 48,405 - - 48,405
Issuance costs towards common stock and warrants - - - - - (616,440 ) - - (616,440 )
Issue of common stock upon exercise of warrants*** - - - 1,521,097 232,909 - - 233,061
Reclassification of debt to equity (Note 23 and Note 33) - - - - - 8,366,650 - - 8,366,650
Reverse stock split rounding adjustment - - - 82,293 (8 ) - - -
Gain on employee benefit, (net of taxes amounts to $NIL) - - - - - - - (64,287 ) (64,287 )
Net loss - - - - - - (25,622,303 ) - (25,622,303 )
Foreign currency translation adjustment, (net of taxes amounts to $NIL) - - - - - - - 399,817 399,817
Balance as at March 31, 2025 - - - 2,462,418 305,693,199 (333,173,805 ) 2,131,522 (25,348,838 )
* Both the number of stock outstanding and their par value have been retroactively recast for all prior periods presented to reflect the par value of the outstanding stock of Zoomcar Holdings, Inc. as a result of the successful Reverse Recapitalization.
** Prior period numbers have been adjusted to reflect the First Reverse Stock Split and the Second Reverse Stock Split of the Common Stock at a ratio of 1-for-100 and 1-for-20 respectively. (Refer Note 3) The accompanying notes are an integral part of these Consolidated Statements of Stockholders’ Deficit
*** Refer Note 23 for the details of the common stock and warrants issued and exercised during the year.
ZOOMCAR HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year ended March 31,
March 31,
A. Cash flows from operating activities
Net loss (25,622,303 ) (34,277,252 )
Adjustments to reconcile net loss to net cash used in operating activities :
Depreciation and amortization 433,906 1,001,621
Stock-based compensation 52,461 1,883,733
Impairment of balances with government authorities -
3,875,767
Change in fair value of preferred stock warrant -
5,284,494
Change in fair value of convertible promissory note -
(6,990,870 )
Change in fair value of Senior Subordinated Convertible Promissory Notes -
(3,448,845 )
Change in fair value of derivative financial instruments (9,035,085 ) 3,465,293
Loss on Litigation settlement 12,738,865 -
Loss on extinguishment of liability 3,458,248 -
Interest on redeemable promissory note 1,995,967 -
Amortisation of discount and debt issuance cost on redeemable promissory notes 1,765,615 -
Issuance cost towards issue of warrants 3,294,526 -
Change in fair value of Unsecured Convertible Note (1,740,636 ) 1,632,996
Discount on issue of Unsecured Convertible Note -
632,595
SSCPN issue expenses -
1,564,210
(Gain)/Loss on sale and disposal of assets, net (114 ) 82,640
(Gain)/Loss on sale and disposal of assets held for sale, net (1,054 ) 207,706
Impairment on assets held for sale 448,484 -
Assets written off 853,194 90,750
Liabilities written back (219,284 ) (382 )
Payable to customers and provision written back (227,643 ) -
Allowance for credit losses -
13,869
Gain on troubled debt restructuring (1,171,161 ) -
Loss on modification of finance leases 456,714 -
Other income/expense 2,137 4,943
Bad debts against receivables from car sale 452,014 -
Host receivable written off 202,944 -
(11,862,205 ) (24,976,732 )
Changes in operating assets and liabilities :
(Increase)/Decrease in Accounts receivable (13,668 ) 33,030
Decrease/(Increase) in Balances with government authorities 200,769 (194,278 )
Decrease/(Increase) in Prepaid expenses 481,521 (872,639 )
(Increase)/Decrease in Other assets (230,295 ) 181,699
Increase in Accounts payables 2,122,791 3,587,669
Increase in Other liabilities 615,550 43,153
(Decrease)/Increase in Pension and other employee obligations (175,963 ) 27,192
Decrease in Operating lease right of use asset 239,335 381,109
(Decrease) in Operating lease liabilities (224,868 ) (352,682 )
(Decrease) in Contract liabilities (229,034 ) (56,670 )
Net cash used in operating activities (A) (9,076,067 ) (22,199,149 )
B. Cash flows from investing activities
Proceeds from sale/payment for purchase of property and equipment, including intangible assets and capital advances (12,012 ) (108,158 )
Payment towards investments in fixed deposits -
(168,761 )
Proceeds from sale of property, plant and equipment -
(34,571 )
Proceeds from sale of asset held for sale 144,538 121,315
Proceeds from maturity of investments in fixed deposits 359,614 190,989
Net cash generated/(used) in investing activities (B) 492,140
C. Cash flows from financing activities
Proceeds from issue of equity and warrants 16,073,284 -
Payment of issuance cost towards issue of common stock and warrants (2,370,799 ) -
Proceeds from issue of Senior Subordinated Convertible Promissory Notes -
13,175,025
Proceeds from issue of Unsecured Convertible Note -
7,802,010
Proceeds from issue of redeemable promissory notes 3,000,000 -
Payment of redeemable promissory note issue expenses (491,500 ) -
Repayment of redeemable promissory note (3,804,000 ) -
Payment of unsecured promissory note -
(1,231,368 )
Payment of offering costs -
(2,836,626 )
Payment of Senior Subordinated Convertible Promissory Notes issue expenses -
(1,564,210 )
Proceeds from merger -
5,770,630
Proceeds from issue of debt 1,069,500 1,078,050
Repayment of debt (3,104,032 ) (1,464,539 )
Principal payment of finance lease obligation (2,103,219 ) (526,959 )
Net cash generated from financing activities (C) 8,269,234 20,202,013
Net increase in cash and cash equivalents and restricted cash (A+B+C) (314,693 ) (1,996,322 )
Effect of foreign exchange on cash and cash equivalents. (9,414 ) (194,275 )
Cash and cash equivalents and restricted cash
Beginning of period 1,496,144 3,686,741
End of period 1,172,037 1,496,144
Reconciliation of cash, cash equivalents and restricted cash to the Consolidated Balance Sheets
Cash and cash equivalents 1,077,275 1,496,144
Restricted cash included under other non-current assets 94,762 -
Total cash and cash equivalents and restricted cash shown in Consolidated Statement of Cash Flows 1,172,037 1,496,144
Supplemental disclosures of cash flow information
Cash (paid) for income taxes (4,052 ) (95,839 )
Interest paid on debt (307,354 ) (431,136 )
Supplemental disclosures of non-cash investing and financing activities:
Issue of common stock upon conversion of SSCPN -
27,148,313
Issue of common stock upon conversion of warrants -
Non-cash liabilities assumed in the Reverse Recapitalization -
17,100,000
Warrants issued on completion of Reverse Recapitalization -
7,538,708
Issue of common stock upon conversion of convertible promissory notes -
3,953,856
Issue of Common Stock and warrants 16,158,811 -
Reclassification of warrants from liability to equity 8,366,650
Issue of Common Stock upon cashless exercise of warrants 92,791
Issue of Common stock upon conversion of Unsecured Convertible Note 2,324,696 -
Assumption of Unsecured promissory note on Reverse Recapitalization -
3,259,208
Issue of warrants to redeemable promissory note holders 2,047,925 -
Issue of common stock upon exercise of warrants issued with redeemable promissory notes -
Issue of common stock upon conversion of unsecured promissory note 2,027,840 -
Warrants issued to placement agents towards issue of redeemable promissory notes 418,157 -
Warrants issued to placement agents 1,540,167 -
Acquisition of assets held for sale by incurring a liability 238,689 -
The accompanying notes are an integral part of these Consolidated Statements of Cash Flows
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Organization, Business operation and Going concern
Zoomcar Holdings, Inc. (formerly “Innovative International Acquisition Corp”) a Delaware corporation provides mobility solutions to consumers and businesses. The accompanying Consolidated Financial Statements include the accounts and transactions of Zoomcar Holdings, Inc. and its subsidiaries (collectively, the “Company” or “the combined entity” or “Zoomcar”). The Company operates its facilitation services under the Zoomcar brand with its operations in India.
Going concern
The accompanying Consolidated Financial Statements have been prepared in accordance with U.S. GAAP and the rules and regulations of the SEC. The Consolidated Financial Statements have been prepared using U.S. GAAP applicable to a going concern that contemplates the realization of assets and settlement of liabilities in the normal course of business. The Company incurred a net loss of $25,622,303 and $ 34,277,252 during the year ended March 31, 2025 and March 31, 2024, and cash used in operations was $9,076,067 for the year ended March 31, 2025. The Company’s accumulated deficit amounts to $333,173,805 (March 2024: $307,551,502). The Company has negative working capital of $26,496,105 as on March 31, 2025. In addition, the Company’s cash position is critically deficient and critical payments to the operational and financial creditors of the Company are not being made in the ordinary course of business, all of which raises substantial doubt about the Company’s ability to continue as a going concern.
The Company expects to continue to incur net losses and have significant cash outflows from operating activities for at least the next 12 months. Management has evaluated the significance of the conditions described above in relation to the Company’s ability to meet its obligations and concluded that, without additional funding, the Company will not have sufficient funds to meet its obligations within one year from the date of the Consolidated Financial Statements are issued.
Management is evaluating plans with respect to these adverse financial conditions that caused to express substantial doubt about the Company’s ability to continue as a going concern. Management’s plan is to seek funding through additional debt or equity financing arrangements, implement business initiatives to improve customer experience and incremental expense reduction measures or a combination thereof to continue financing its operations. The Company has filed Registration Statement under Form S-1 on May 5, 2025 to raise upto $15 million. No amount has been raised against the same. Further, on June 23, 2025, the Company received a net proceed of $350,000 by way of issue of a bridge note to certain investors totaling $402,000 at a discount of $42,000 and an issuance cost of $10,000.
While these financing arrangements shall result in the payment of certain outstanding indebtedness, the Company will still need to raise additional capital imminently in order to have sufficient capital. There can be no assurance that the Company will be able to achieve its business plan, raise any additional capital or secure the additional financing necessary to implement its current operating plan.
The ability of the Company to continue as a going concern is dependent upon its ability to increase its revenues and eventually achieve profitable operations. The accompanying Consolidated Financial Statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies
i. Basis of presentation
The accompanying Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the United States of America (US GAAP) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Any reference in these notes to applicable guidance is meant to refer to the authoritative GAAP as found in the Accounting Standards Codification (“ASC”) and an Accounting Standards Update (“ASU”) of the Financial Accounting Standards Board (“FASB”).
The Consolidated Financial Statements include the accounts of the Company and its wholly owned subsidiaries and variable interest entities in which the Company is the primary beneficiary, including an entity in India and in other geographical locations. All intercompany accounts and transactions have been eliminated in the Consolidated Financial Statements herein.
ii. Principles of consolidation
The Consolidated Financial Statements include the accounts of Zoomcar Holdings, Inc. and of its wholly owned subsidiaries and Variable Interest Entities (“VIE”) in which the Company is the primary beneficiary, including an entity in India and in other geographical locations (collectively, the “Company”).
The Company determines, at the inception of each arrangement, whether an entity in which it has made an investment or in which it has other variable interest is considered a VIE in accordance with ASC 810.
Periodically, the Company determines whether any changes in its interest or relationship with the entity impact the determination of whether the entity is still a VIE and, if so, whether the Company is the primary beneficiary.
As at March 31, 2025, following are the list of subsidiaries and step-down subsidiaries:
Name of Entity Place of Incorporation Investor Entity Method of consolidation
Zoomcar, Inc. USA Zoomcar Holdings, Inc. Voting Interest
Zoomcar India Private Limited India Zoomcar, Inc. Voting Interest
Zoomcar Netherlands Holding B. V Netherlands Zoomcar, Inc. Voting Interest
Fleet Holding Pte ltd Singapore Zoomcar, Inc. Voting Interest
PT Zoomcar Indonesia Mobility Service Indonesia Fleet Holding Pte ltd Voting Interest
Fleet Mobility Philippines Corporation Philippines Zoomcar, Inc. VIE
Zoomcar Egypt Car Rental LLC Egypt Zoomcar Netherlands Holding VIE
Zoomcar Vietnam Mobility LLC Vietnam Fleet Holding Pte ltd VIE
The assets/liabilities consolidated for the VIE are not material. Refer note 31 for details.
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies (Continued)
iii. Use of estimates and assumptions
The use of estimates and assumptions as determined by management is required in the preparation of Consolidated Financial Statements in conformity with US GAAP. These estimates are based on management’s evaluation of historical trends and other information available when the Consolidated Financial Statements are prepared and may affect the amounts reported and related disclosures. Actual results could differ from those estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis.
The significant estimates, judgments and assumptions that affect the Consolidated Financial Statements include, but are not limited to; are:
a. Estimation of defined benefit obligation
b. Fair value measurement of financial instruments
c. Estimation of utilization of loyalty points
d. Leases - assumption to determine the incremental borrowing rate
e. Valuation allowance on deferred tax assets
f. Estimation of utilization of balances with government authorities
Changes in accounting estimates are accounted for in the period of change and for prospective periods, if applicable. A change to an accounting estimate is recorded based on events, facts, or circumstances that occurred during the period in which the estimate was changed.
iv. Currency translation
The consolidated financial statements are presented in US Dollars (“$”) which is the reporting currency of the Company.
Monetary assets and liabilities, and transactions denominated in currencies other than the functional currency are remeasured at the exchange rate on the Balance Sheet date and non- monetary assets and liabilities are measured at historical exchange rates. The gains and losses resulting from remeasurement are recorded as foreign exchange gains (losses), within other income (expense), in the Consolidated Statement of Operations.
The functional currency of the Company’s foreign subsidiaries is either the local currency or U.S. dollar depending on the nature of the subsidiaries’ activities. The Company determines the functional currency for each of its foreign subsidiaries by reviewing their operations and currencies used in their primary economic environments.
Assets and liabilities of the subsidiaries with functional currency other than U.S. Dollar are translated into U.S. Dollar at the rate of exchange existing at the Balance Sheet date. Retained earnings and other equity items are translated at historical rates, revenues and expenses are translated at average exchange rates during the year. Foreign currency translation adjustments are recorded within accumulated other comprehensive income, a separate component of total equity (deficit).
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies (Continued)
v. Comprehensive Income (Loss)
Comprehensive income (loss) consists of two components, net income (loss) and other comprehensive income (loss), net of tax. Other comprehensive income (loss), net of tax, refers to revenue, expenses, gains, and losses that under generally accepted accounting principles are recorded as an element of members’ equity but are excluded from net income (loss). The Company’s other comprehensive income (loss), net of tax, consists of foreign currency translation adjustments that result from consolidation of its foreign entities and actuarial gain/ (loss) on defined benefit obligations.
vi. Revenue recognition
During the year ended March 31, 2025 and March 31, 2024, the Company derives its revenue principally from the following:
Facilitation revenue
Zoomcar Host Services is a marketplace feature of the platform that helps owners of vehicles (“Hosts/ Customer/Lessors”) connect with users (“Renters/Lessee”) in temporary need of a vehicle on leasehold basis for their personal use.
Facilitation Services revenue consists of facilitation fees charged to Hosts, net of incentives and refunds and trip protection charged to the Renters. The Company’s primary performance obligation in the transaction towards the Host is to facilitate the successful completion of the rental transaction and towards the renter is to offer trip protection.
Customer support is rendered to both the Host (customer/lessor) and the renter (lessee). Company being the intermediary between the two provides its platform through which all communication takes place related to any services e.g., extension of trip period. Such services also include the normal customer support related to any vehicle breakdowns, tracking of vehicles, renter background checks, vehicle ownership checks and various other activities which are part of an ongoing set of series required for successful listing, renting and completion of trip. These activities are not distinct from each other and are not separate performance obligations. As a result, these series of services integrate together to form a single performance obligation.
In case of booking value collected from the renter on behalf of the Host, the Company evaluated the presentation of revenue on a gross versus net basis based on factors given under ASC 606 whether or not it is the principal (gross) or the agent (net) in the transaction and concluded that it is acting in an agent capacity, and revenue is presented net reflecting the facilitation fees received from the Marketplace service. The customer simultaneously receives and consumes the benefits provided by the entity’s performance as the entity performs. Revenue is recognized ratably over the trip period on straight line basis using the output method as its performance obligation is satisfied over time.
The Company offers various incentive programs to hosts. The incentives are recorded in accordance with ASC 606- 10-32-25 and ASC 606-10-32-27 as a reduction to revenue and in cases where the amount of incentive paid to the Host are above the facilitation fees earned from that Host on cumulative basis, the excess of the revenue amount is recorded as a marketing expense in the Consolidated Statements of Operations. These incentives are offered as part of overall marketing strategy of the Company and incentivize the hosts to refer the platform.
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies (Continued)
Loyalty program
The Company offers loyalty program, Z-Points, wherein customers are eligible to earn loyalty points that are redeemable for payment towards facilitation fees. Under ASC 606, each transaction that generates loyalty points results in the deferral of revenue equivalent to the retail value at the date the points are earned. The associated revenue is recognized when the customer redeems the loyalty points. The retail value of points is estimated based on the current retail value measured as of the date the loyalty points are earned, less an estimated amount representing loyalty points that are not expected to be redeemed (“breakage”). Breakage is reviewed on an annual basis and includes significant assumptions such as historical breakage trends, internal Company forecasts and extended redemption period, if any. As at March 31, 2025 and March 31, 2024, the Company’s deferred revenue balance amounted to $21,365 and $96,710 respectively and is included in Contract liabilities in the Consolidated Balance Sheets.
Contract liabilities
Contract liabilities primarily consist of obligations to customers for advance received against bookings, revenue-share payable to customers for vehicles listed by them on Company’s portal for short-term rentals and related to Company’s points-based loyalty program. As per ASC 606- 10-50-14 the Company does not aggregate amount of transaction price allocated to remaining performance obligations as required under ASC 606-10-50-13, since the company’s performance obligation is a part of a contract that has an original expected duration of one year or less.
vii. Cash and cash equivalents
Cash and cash equivalents include cash on hand, bank balances. Cash and cash equivalents are recorded at cost, which approximates fair value.
Cash and cash equivalents include amounts collected on behalf of but not yet remitted to the Hosts which are included in accrued and other current liabilities in the Consolidated Financial Statements.
viii. Restricted Cash
The Company is required to place cash in an indemnification escrow fund with the placement agent for all indemnification liabilities and expenses payable by the Company as per the placement agent agreement for a period of 3 years from closing of the November 2024 Offering. Such cash is classified as restricted cash and reported as a component of other non-current assets in the Consolidated Balance Sheets.
ix. Accounts receivable, net of allowance
Accounts receivables are stated net of allowances and primarily represent corporate debtors and dues from payment gateways for amounts paid by customers. In case of corporate debtors, the payment terms generally include a credit of 30-60 days. The amounts receivable from payment gateways are settled within 2 days.
The Company records an allowance for credit losses for amounts owed for completed transactions that may never settle or be collected. The Company estimates its exposure to balances deemed to be uncollectible based on factors including known facts and circumstances, historical experience, and the age of the uncollected balances. Accounts receivable balances are written off against the allowance of credit losses after all means of collection has been exhausted and potential recovery is considered remote.
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies (Continued)
x. Other receivables
Other receivables include amounts recoverable from host. The receivable from host is adjusted for an allowance on account of host which are not active on the platform for more than 90 days.
xi. Balances with government authorities - Input Tax Credit
Balances with government authorities represent the tax credit with government agencies which are recognized when the Company has performed the required services and when they meet the eligibility criteria outlined in the applicable government regulations.
The input tax credits are related to Indian Goods and Service Tax (“GST”). These balances are classified based on their expected period of utilization of future GST credit and GST debit that comes from domestic purchases and sales of services, respectively. If the tax credits are expected to be utilized within twelve months from the reporting date, they are classified as current assets. If the tax credits are not expected to be utilized within twelve months from the reporting date, they are classified as non-current assets.
xii. Concentration of credit risk
Cash and cash equivalents, investments, other receivables, and accounts receivable are potentially subject to credit risk concentration. The Company has not experienced any material losses related to these concentrations during the years presented. No customers accounted for 10% or more of revenue for the years ended March 31, 2025 and 2024.
xiii. Property and equipment, net
Property and equipment are stated at cost less accumulated depreciation and amortization. Depreciation is calculated using the straight-line method over the estimated useful lives.
The devices installed on host vehicles in the marketplace business have been depreciated over 5 years. During the year ended March 31, 2025, the Company revised its estimate of the salvage value of the devices from 30% to 0%.
When assets are retired or otherwise disposed of, the cost and accumulated depreciation are removed from the Consolidated Balance Sheets and any resulting gain or loss is reflected on the Consolidated Statements of Operations in the period realized.
xiv. Assets held for sale
The Company classifies vehicles to be disposed of as held for sale in the period in which they are available for immediate sale in their present condition and the sale is probable and expected to be completed within one year. The Company initially measures assets held for sale at the lower of their carrying value or fair value less costs to sell and assesses their fair value annually until disposed. The fair value of Assets held for sale not traded in an active market is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an asset are observable, the Valuation is included in Level 2.
In case of certain vehicles which are not sold within one year from date of classification, the Company reassess the carrying value of the assets to adjust it for the realizable value.
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies (Continued)
xv. Impairment
Long-lived assets such as property and equipment, right-of-use assets and intangible assets that are held and used by the Company are reviewed for impairment when events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. The Company monitors the long-lived assets for impairment indicators on an on-going basis. If impairment indicators exist, the Company determines the recoverability of the asset by comparing the undiscounted cash flows expected to be generated from the use and eventual disposition the long-lived asset groups to the related net book values. If the net book value of the asset group exceeds the undiscounted cash flows, an impairment loss is recognized as the difference between the carrying value of the asset and its estimated fair value.
The Company estimate cash flows and fair value using internal budgets based on recent sales data and economic uncertainties. The key factors that affect estimates are (1) future revenue estimates; (2) customer preferences and decisions; and (3) product pricing. Any differences in actual results from the estimates could result in fair values different from the estimated fair values, which could materially affect our future results of operations and financial condition. The Company believes the projections of anticipated future cash flows and fair value assumptions are reasonable; however, changes in assumptions underlying these estimates could affect its valuations.
xvi. Leases
The Company determines if an arrangement is a lease at inception of the contract. The Company’s assessment is based on whether: (1) the contract involves the use of a distinct identified asset, (2) the Company obtains the right to substantially all the economic benefit from the use of the asset throughout the term of the contract, and (3) the Company has the right to direct the use of the asset. A lease is classified as a finance lease if any one of the following criteria are met: (1) the lease transfers ownership of the asset by the end of the lease term, (2) the lease contains an option to purchase the asset that is reasonably certain to be exercised, (3) the lease term is for a major part of the remaining useful life of the asset or (4) the present value of the lease payments equals or exceeds substantially all of the fair value of the asset.
Operating leases are presented within “Operating lease right-of-use assets,” “Current portion of operating lease liabilities” and “Operating lease liabilities, less current portion” in the Company’s consolidated balance sheets. The current portion of finance lease liabilities are presented within “Finance lease liabilities” in the Company’s consolidated balance sheets.
ROU assets represent the Company’s right to use an underlying asset during the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease arrangement. Lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. Operating lease ROU assets are recognized at commencement date in an amount equal to lease liability, adjusted for any lease prepayments, initial direct costs, and lease incentives. For leases in which the rate implicit in the lease is not readily determinable, the Company uses its incremental borrowing rate based on the information available at commencement date. Lease terms includes the effects of options to extend or terminate the lease when it is reasonably certain at commencement of the lease that the Company will exercise that option. Lease expense for operating lease arrangements is recognized on a straight-line basis over the lease term reflecting single operating lease cost. The Company evaluates lease agreements to determine lease and non- lease components, which are accounted for separately.
Lease payments that depend on factors other than an index or rate are considered variable lease payments and are excluded from the operating lease assets and liabilities and are recognized as expense in the period in which the obligation is incurred. The Company accounts for lease-related concessions in accordance with guidance in Topic 842, Leases, to determine, on a lease-by-lease basis, whether the concession provided by lessor should be accounted for as a lease modification.
The Company accounts for a modification as a separate contract when it grants an additional right of use not included in the original lease and the increase is commensurate with the standalone price for the additional right of use, adjusted for the circumstances of the particular contract. Modifications which are not accounted for as a separate contract are reassessed as of the effective date of the modification based on its modified terms and conditions and the facts and circumstances as of that date. Upon modification, the Company remeasures the lease liability to reflect changes to the remaining lease payments and discount rates and recognizes the amount of the remeasurement of the lease liability as an adjustment to the ROU assets. However, if the carrying amount of the ROU assets is reduced to zero as a result of modification, any remaining amount of the remeasurement is recognized as an expense in consolidated statements of income.
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies (Continued)
The Company reviews ROU assets for impairment whenever events or changes in circumstances indicate that the related carrying amount may not be recoverable.
xvii. Expenses
Cost of revenue
Cost of revenue expenses primarily consist of personnel-related compensation costs of local operations teams and teams who provide phone, email and chat support to users, repairs and maintenance expenses of vehicles, vehicle site rentals, devices depreciation, power, software support charges, payment gateway charges and other direct expenses.
Technology and development
Technology and development expenses primarily consist of personnel-related compensation costs and information technology and data science expenses. Technology and development costs are expensed as incurred.
Sales and marketing
Sales and marketing expenses primarily consist of personnel-related compensation costs, advertising expenses and marketing partnerships with third parties. Sales and marketing costs are expensed as incurred. Advertising expenses incurred for the year ended March 31, 2025 amounts to $829,619 (March 31, 2024: $4,479,219).
General and administrative
General and administrative expenses primarily consist of personnel-related compensation costs, professional services fees, administrative fees, depreciation, facility costs, and other corporate costs. General and administrative expenses are expensed as incurred.
xviii. Finance costs
Finance costs comprises interest cost on debt, transaction costs, fair value changes in financial instruments, SSCPN issue expenses, and interest expense on lease liabilities. Borrowing costs and interest on leases are recognized in the Consolidated Statements of Operations using the effective interest method.
xix. Employee benefits
Defined benefit plan
Employees in India are entitled to a defined benefit retirement plan covering eligible employees of the Company. The plan provides for a lump-sum payment to eligible employees, at retirement, death, and incapacitation or on termination of employment, of an amount based on the respective employees’ salary and tenure of employment. The Company’s benefit plan is unfunded.
Management makes certain assumptions relating to discount rates, salary growth, retirement rates, mortality rates and other factors when calculating annual amounts to be recognized. These assumptions are reviewed annually by management, assisted by the enrolled actuary, and updated as warranted.
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies (Continued)
Amortization of a net gain or loss included in accumulated other comprehensive income shall be included as a component of net pension cost for a year if, as of the beginning of the year, that net gain or loss exceeds 10 percent of the greater of the projected benefit obligation or the market- related value of plan assets. If amortization is required, the minimum amortization shall be that excess divided by the average remaining service period of active employees expected to receive benefits under the plan. Prior service cost is amortized on a straight-line basis from the date recognized over the average remaining service period of active participants, when applicable.
Compensated absences
The Company’s liability for compensated absences is determined based on an actuarial valuation using the projected unit credit method and is charged to Consolidated Statements of Operations in the year in which they accrue.
Defined contribution plan
Eligible employees of the Company in India participate in a defined contribution fund in accordance with the regulatory requirements in the Indian jurisdiction. Both the employee and the Company contribute an equal amount to the fund which is equal to a specified percentage of the employee’s salary.
The Company has no further obligation under defined contribution plans beyond the contributions made under these plans. Contributions are charged to profit or loss and are included in the Consolidated Statements of Operations in the year and/or period in which they accrue.
xx. Stock-based compensation
The Company accounts for stock-based compensation expense in accordance with the fair value recognition and measurement provisions of US GAAP, which requires compensation cost for grant-date fair value of stock-based awards to be recognized over the requisite service period. The Company includes a forfeiture estimate in the amount of compensation expense being recognized based on the Company’s estimate of equity instruments that will eventually vest. The fair value of stock-based awards, granted or modified, is determined on the grant date at fair value, using appropriate valuation techniques.
For stock options or restricted stock units with service-based vesting conditions only, the valuation model, typically the Black-Scholes option-pricing model, incorporates various assumptions including expected stock price volatility, expected term, and risk-free rates. For stock options or restricted stock units with graded vesting, the fair- value-based measure is estimated of the entire award by using a single weighted-average expected term. The Company estimated the volatility of common stock on the date of the grant based on weighted-average historical stock price volatility of comparable publicly traded companies in its industry group. The risk-free rate is based on the U.S. Treasury yield curve in effect at the time of grant with a term equal to the expected term. The Company estimates the term based on the simplified method for employee stock options considered to be “plain vanilla” options as the Company’s historical share option exercise experience does not provide a reasonable basis upon which to estimate the expected term. The expected dividend yield is 0.0% as the Company has not paid and does not anticipate paying dividend on its common stock.
The Company estimates a forfeiture rate on an annual basis for the purpose of computation of stock-based compensation expense. The rate is used consistently across the subsequent interim periods during the year.
In case of cancellation of stock-based awards with no concurrent grant of a replacement award or other valuable consideration, any unrecognized compensation cost is recognized immediately on the cancellation date.
xxi. Debt
The debt instruments of the Company consist of debentures and term loans from financial institutions. The Company based on available proceeds makes periodic prepayments of scheduled instalments and the same has been accounted for under ASC 470-50.
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies (Continued)
Redeemable Promissory Notes
During the year ended March 31, 2025, the Company has issued Redeemable Promissory Notes which are repayable at the principal value on maturity date and has been accounted for under ASC 470-10. The Company issued these Redeemable Promissory notes on discount and incurred expenses on issue of the Redeemable Promissory Notes. As per ASC 835, the discount and the expenses incurred on issue of the Redeemable Promissory Notes have been amortized over the period of the Redeemable Promissory note on a straight-line basis. The Redeemable Promissory Notes liabilities have been presented net off the discount and issue expenses.
The Company had allocated a portion of the proceeds from the issue of its Redeemable Promissory Note to the warrants and Redeemable promissory note based on the relative fair values of warrants and Redeemable Promissory Note. Redeemable Promissory Notes may contain embedded features, such as accelerated redemption options, which are evaluated under ASC 815 to determine if bifurcation is required. If the embedded feature meets the definition of a derivative and is not clearly and closely related to the host, it is measured at fair value with changes recognized in earnings. The embedded feature was assessed and determined to be immaterial.
Issuance costs on Debt and Equity
Debt issuance costs consist primarily of arrangement fees paid to Placement agent, professional fees and legal fees. These costs are netted off with the related debt and are being amortized to interest expense over the term of the related.
The debt has been classified into current or non-current based on the payment terms of the debt instruments. Non-current obligations are those scheduled to mature beyond twelve months from the date of the Company’s Consolidated Balance Sheets.
Issuance cost incurred towards equity primarily consist of arrangement fees paid to Placement agent, professional fees and legal fees and are netted off against additional paid in capital.
xxii. Warrants
When the Company issues warrants, it evaluates the balance sheet classification of the warrant to determine whether the warrant should be classified as equity or as a derivative liability on the Consolidated Balance Sheets. In accordance with ASC 815- 40, Derivatives and Hedging- Contracts in the Entity’s Own Equity (ASC 815-40), the Company classifies a warrant as equity so long as it is “indexed to the Company’s equity” and several specific conditions for equity classification are met. A warrant is not considered indexed to the Company’s equity, in general, when it contains certain types of exercise contingencies or adjustments to exercise price. If a warrant is not indexed to the Company’s equity or it has net cash settlement that results in the warrants to be accounted for under ASC 480, Distinguishing Liabilities from Equity, or ASC 815- 40, it is classified as a derivative liability which is carried on the Consolidated Balance Sheets at fair value with any changes in its fair value recognized currently in the Consolidated Statements of Operations.
(a) Warrants issued towards the November 2024 and December 2024 offering:
During the year ended March 31, 2025, the Company issued shares of Common Stock, pre- funded, Series A and Series B warrants in the November 2024 and December 2024 offering (Refer to Note 22) and as consideration to the placement agents for the issuance. The Common stock and pre-funded warrants were classified as equity in accordance with ASC 815-40. The Series A warrants and Series B warrants were initially classified as derivative financial instruments in accordance with ASC 815-10-15-83.
Subsequently, during the year ended March 31, 2025, the variability in number of warrants exercisable towards Series A and Series B of both the November 2024 and December 2024 offering was fixed in accordance with agreement. Hence, as per ASC 815-10, the outstanding Series A Series B warrants for both November 2024 and December 2024 offering have been reclassified to equity at the reclassification date fair value.
Warrants exercised before the reclassification have been reclassified at their respective exercise date fair value and warrants exercised after the reclassification were adjusted with additional paid in capital.
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies (Continued)
(b) Warrants issued along with Redeemable Promissory Note:
During the year ended March 31, 2025, the Company issued warrants along with Redeemable Promissory Note and as consideration to the placement agent for the issuance of the Redeemable Promissory Note. These warrants were classified as equity in accordance with ASC 815-40 on the initial recognition.
(c) Warrants to be converted into common stock:
The Company’s warrants to purchase common stock were classified as equity. Upon issuance of the warrant, the Company had allocated a portion of the proceeds from the issuance of its preferred stock to the warrant based on the relative fair values of warrants and preferred stock. These warrants were converted into common stock on the date of reverse recapitalization during the year ended March 31, 2024.
xxiii. Financial liabilities measured at fair value
Convertible Promissory notes (“Notes”), Senior Subordinated Convertible Promissory Note (“SSCPN”) and Unsecured Convertible Note (“Atalaya Note”)
During the year ended March 31, 2024 the Company issued Notes and SSCPN. The Company evaluated the balance sheet classification for these instruments either as liabilities or equity, and accounting for conversion feature. As per ASC 480-10-25-14, the Notes and SSCPN were classified as liabilities because the Company intended to settle them by issuing variable number of shares with a fixed and known monetary value at the time of inception. However, the Company had elected fair value option for these Notes and SSCPN, as discussed below and thus did not bifurcate the embedded conversion feature.
Fair Value Option (“FVO”) Election
The Company accounted for Notes and SSCPN under the fair value option election of ASC 825, Financial Instruments (“ASC-825”) as discussed below.
The Notes and SSCPN accounted under the FVO election which were debt host financial instruments containing conversion features which otherwise would be required to be assessed for bifurcation from the debt-host and recognized as separate derivative liabilities subject to measurements under ASC 815. Notwithstanding, ASC 825-10-15-4 provides for the “fair value option” (“FVO”) election, to the extent not otherwise prohibited by ASC 825-10-15- 5, to be afforded to financial instruments, wherein bifurcation of an embedded derivative is not necessary, and the financial instrument is initially measured at its issue-date estimated fair value and then subsequently remeasured at estimated fair value on a recurring basis at each reporting period date.
The estimated fair value adjustment, as required by ASC 825-10-45-5, was recognized as a component of other comprehensive income (“OCI”) with respect to the portion of the fair value adjustment attributed to a change in the instrument-specific credit risk, with the remaining amount of the fair value adjustment recognized under Finance costs shown as “Change in fair value of Notes” and “Change in fair value of SSCPN” in the accompanying Consolidated Statements of Operations. With respect to the above Notes and SSCPN, as provided for by ASC 825-10-50- 30(b), the estimated fair value adjustments were presented as a separate line item in the accompanying Consolidated Statements of Operations, since the change in fair value of the Notes and SSCPN payable were not attributable to instrument specific credit risk.
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies (Continued)
During the year ended March 31, 2024, as a result of consummation of the Business Combination by way of Reverse Recapitalization, the Notes and SSCPN outstanding were converted into 4,215 shares (84,286 prior to the Second Reverse Stock Split and 8,428,621 shares prior to the First Reverse Stock Split) of the Company’s Common Stock.
The SSCPN and Notes were adjusted for their carrying value through Consolidated Statements of Operations as on date of Reverse Recapitalization and credited at carrying value to the capital accounts upon conversion to reflect the stock issued.
During the year ended March 31, 2024, the Company issued an unsecured convertible note (“Atalaya Note) which had features similar to that of SSCPN and were accounted accordingly as enumerated above.
xxiv. Net profit/(loss) per share attributable to common stockholders
The Company computes net profit/(loss) per share using the two-class method required for participating securities. The two-class method requires income available to common stockholders for the period to be allocated between common stock and participating securities based upon their respective rights to receive dividends as if all the income for the period had been distributed. The Company’s convertible preferred stock is participating security. The holders of the convertible preferred stock would be entitled in preference to common shareholders, at specified rate, if declared.
Then any remaining earnings would be distributed to the holders of common stock and convertible preferred stock on a pro-rata basis assuming conversion of all convertible preferred stock into common stock. This participating security do not contractually require the holders of such shares to participate in the Company’s losses. As such, net losses for the periods presented were not allocated to the Company’s participating securities.
The Company’s basic profit/(loss) per share is computed using the weighted-average number of ordinary shares outstanding during the period. The diluted profit/(loss) per share is computed by considering the impact of potential issuance of common stock on the weighted average number of shares outstanding during the period, except where the results would be anti-dilutive.
xxv. Provisions and accrued expenses
A provision is recognized in the Consolidated Balance Sheets when the Company has a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation. If the effect is material, provisions are recognized at present value by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money.
Provisions for onerous contracts are recognized when the expected benefits to be derived by the Company from a contract are lower than the unavoidable costs of meeting the future obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Company recognizes any impairment loss on the assets associated with that contract. The Company does not have any onerous contracts.
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies (Continued)
xxvi. Fair value measurements and financial instruments
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In accordance with ASC 820, Fair Value Measurement (“ASC 820”), the Company uses the fair value hierarchy, which prioritizes the inputs used to measure fair value. The hierarchy, as defined below, gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. The three levels of the fair value hierarchy are set forth below:
Level 1 Observable inputs such as quoted prices in active markets for identical assets or liabilities.
Level 2 Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities in active markets, quoted prices in markets that are not active or inputs other than the quoted prices that are observable either directly or indirectly for the full term of assets or liabilities.
Level 3 Unobservable inputs in which there is little or no market data and that are significant to the fair value of the assets or liabilities.
During the year ended March 31, 2025, the Company’s primary financial instruments included cash and cash equivalents, investments, accounts receivables, other financial assets, accounts payable, debt, unsecured convertible note, redeemable promissory note and other financial liabilities. The estimated fair value of cash equivalents, accounts receivable, accounts payable, redeemable promissory note and accrued liabilities approximate their carrying value due to short-term maturities of these instruments.
xxvii. Troubled debt restructuring
As per ASC 470-60 Troubled Debt Restructuring (TDR) refers to a situation where the creditor, grants concessions to a borrower experiencing financial difficulties. These concessions may include modifications to the terms of the payable, such as reducing the interest rate, extending the repayment period, or forgiving a portion of the payable. Such restructuring is done with the intent to provide relief to the borrower and to maximize the potential for payable recovery by the Company.
In accordance with ASC 470-60, when the total future cash payments under the new terms are less than the carrying amount of the payable at the date of restructuring, the difference between the carrying amount and the total future cash payments is recognized as a ‘Gain on Troubled Debt Restructuring’ in the Consolidated Financial Statements. This gain is recorded immediately in the period the restructuring occurs.
If the total future cash payments under the new terms exceed the carrying amount of the payable at the date of restructuring, no adjustment to the carrying amount of the payable is made. Instead, the company calculates a New Effective Interest Rate (EIR) based on the revised terms of the restructured payable. The debt is then amortized over the remaining life of the payable using the new EIR, with interest expense recognized based on this rate in future periods.
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies (Continued)
xxviii. Taxes
Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. A valuation allowance is recorded for deferred tax assets if it is more likely than not that some portion or all of the deferred tax assets will not be realized.
The Company recognizes the effect of income tax positions only if those positions are more likely than not of being sustained. Recognized income tax positions are measured at the largest amount that is greater than 50% likely of being realized. Changes in recognition or measurement are reflected in the period in which the change in judgment occurs. Interest related to unrecognized tax benefits in interest expense and penalties.
xxix. Contingencies
The Company is subject to legal proceedings and claims that arise in the ordinary course of business. The Company accrues for losses associated with legal claims when such losses are probable and can be reasonably estimated. These accruals are adjusted as additional information becomes available or circumstances change.
xxx. Segment information
Operating segments are defined as components of an entity for which discrete financial information is available and is regularly reviewed by the Chief Operating Decision Maker (“CODM”) in making decisions regarding resource allocation and performance assessment. The Company’s CODM is its Board of Directors. The Company has determined it has one operating and reportable segment as the CODM reviews financial information presented on a consolidated basis for purposes of allocating resources and evaluating financial performance.
xxxi. Common Stock Reverse Split
In October 2024 and March 2025, the Company effectuated a one-for-hundred and a one-for- twenty reverse stock split respectively. All share, stock option and warrant information has been retroactively adjusted to reflect these stock splits. See Note 3 for additional disclosure.
xxxii. Recent Accounting Pronouncements
Accounting Pronouncement Adopted
In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2023-07, “Segment Reporting (ASC 280): Improvements to Reportable Segment Disclosures” (“ASU 2023-07”). The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. The Company has adopted the same for the fiscal year beginning on April 1, 2024 and the disclosures presented in the Company’s Consolidated Financial Statements includes the same.
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. Summary of Significant Accounting Policies (Continued)
Accounting Pronouncement Pending Adoption
In December 2023, the FASB issued ASU 2023-09 “Income Taxes (Topic 740): Improvements to Income Tax Disclosures” to improve income tax disclosure requirements by requiring (1) consistent categories and greater disaggregation of information in the rate reconciliation and (2) the disaggregation of income taxes paid by jurisdiction. The guidance makes several other changes to the income tax disclosure requirements. The guidance in ASU 2023-09 will be effective for annual reporting periods in fiscal years beginning after December 15, 2024. The Company is currently evaluating the impact that the adoption of ASU 2023-09 will have on its Consolidated Financial Statements and disclosures.
In November 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2024-03, “Disaggregation of Income Statement Expenses, which requires public companies to disaggregate key expense categories such as inventory purchases, employee compensation and depreciation in their financial statements. Further, in January 2025, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2025-01, “Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date” which clarifies the effective date of ASU 2024-03. The guidance is effective for all public entities with fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted. The Company is evaluating the impact that adoption of the provisions of ASU 2024-03 will have on the Company’s Consolidated Financial Statements.
In December 2024, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2024-03, “Debt-Debt with Conversion and Other Options (Subtopic 470- 20): Induced Conversions of Convertible Debt Instruments”. The amendments in this ASU are effective for annual reporting periods beginning after December 15, 2025 (and interim reporting periods within those annual reporting periods). Early adoption is permitted as of the beginning of a reporting period if the entity has also adopted ASU 2020-06 for that period. This update does not have any impact on the Company’s Consolidated Financial Statements.
In March 2024, the FASB issued ASU 2024-02 Codification Improvements - Amendments to Remove References to the Concept Statements to provide amendments to the Codification that remove references to various FASB Concepts Statements. ASU 2024-02 is effective for our annual periods beginning December 15, 2024, with early adoption permitted. This update does not have any impact on the Company’s Consolidated Financial Statements.
In March 2025, the FASB issued ASU 2025-02 “Liabilities (Topic 405): Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No. 122” to remove the text of SAB Topic 5.FF, “Accounting for Obligations to Safeguard Crypto-Assets an Entity Holds for Its Platform Users.” The change is being made as a result of the release of SEC Staff Accounting Bulletin (SAB) 122, which rescinded SAB Topic 5.FF (added by SAB 121) that required an entity to recognize a liability and corresponding asset for its obligation to safeguard crypto assets. The entities shall apply SAB 122 on a fully retrospective basis in annual periods beginning after December 15, 2024. Additionally, entities have the option to apply SAB 122 in any earlier interim or annual financial statement period included in filings with the SEC after January 30, 2025 (the effective date of SAB 122). The above amendment does not have an impact on the Company’s Consolidated Financial Statements.
There are other new accounting pronouncements issued by the FASB that the Company has adopted or will adopt, as applicable, and the Company does not believe any of these accounting pronouncements have had, or will have, a material impact on its Consolidated Financial Statements or disclosures.
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Reverse Stock Split
The Company’s shareholders authorized, and the Board of Directors approved for a 1-for-100 Reverse Stock Split (the “First Reverse Stock Split”), which became effective on October 21, 2024. Any fractional shares that would have otherwise resulted from the First Reverse Stock Split were rounded up to the nearest whole share.
Every 100 shares of issued and outstanding Common Stock has been consolidated into one share, without affecting the par value. In addition, (i) a proportionate adjustment has been made to the number of outstanding warrants, per share exercise price and the number of shares issuable upon the exercise of all outstanding stock options and warrants to purchase shares of common stock as per the terms and conditions of the respective warrant agreements, and (ii) the number of shares reserved for issuance pursuant to the Company’s equity incentive plans was also reduced proportionately.
The Company’s shareholders authorized, and the Board of Directors approved for a 1-for-20 Reverse Stock Split (the “Second Reverse Stock Split”), which became effective on March 21, 2025. Any fractional shares that would have otherwise resulted from the Reverse Stock Split were rounded up to the nearest whole share.
Every 20 shares of issued and outstanding Common Stock has been consolidated into one share, without affecting the par value. In addition, (i) a proportionate adjustment has been made to the number of outstanding warrants, per share exercise price and the number of shares issuable upon the exercise of all outstanding stock options and warrants to purchase shares of common stock as per the terms and conditions of the respective warrant agreements, and (ii) the number of shares reserved for issuance pursuant to the Company’s equity incentive plans was also reduced proportionately.
Troubled Debt Restructuring
7.7% Debenture
On September 25, 2024, the Company entered into a settlement agreement with Blacksoil Capital Private Limited (lender). As per the agreement, the lender has agreed to waive off 25% of the outstanding amount and the Company agreed to make full settlement of its outstanding amount (net of 25% waiver) by November 15, 2024 (original date was October 31, 2024) and in case of default, the Company is liable to pay fixed coupon interest @10% p.a. on the revised outstanding amount for the period starting October 31, 2024 till December 15, 2024 (“Long stop date”). As of March 31, 2025, the Company has fully repaid its outstanding liability to the lender.
The Company has accounted for this transaction as troubled debt restructuring under ASC 470-60. The gain on troubled debt restructuring recorded during the year ended March 31, 2025 is $82,970.
Term Loans with Others
During the year ended March 31, 2025, the Company has entered into settlement agreements with Mercury Car Rentals Limited and Jain and Sons Services Limited, wherein the lenders have waived a portion of the outstanding liability amounting to $31,684 and $17,739 respectively. As of March 31, 2025, the Company has $NIL balance (March 31, 2024 $249,560) with Mercury Car Rentals Limited and $NIL balance (March 31, 2024 $47,992) with Jain and Sons Services Limited.
The Company has accounted for these transactions as troubled debt restructuring under ASC 470-60. The gain on troubled debt restructuring recognized during the year ended March 31, 2025, amounted to $31,684 for Mercury Car Rentals Limited and $17,739 for Jain and Sons Services Limited.
Accounts Payable
During the year ended March 31, 2025, the Company carried out negotiations with its vendors and as per the revised agreements with the vendors, they have granted a short-term deferral in payments and/or reduction in outstanding liability.
The Company has accounted for this transaction as troubled debt restructuring under ASC 470-60. The Company has recorded a net gain on troubled debt restructuring in the Consolidated Statements of Operations during the year ended March 31, 2025 amounting to $1,038,758 respectively.
The total gain on troubled debt restructuring recorded during the year ended March 31, 2025 amounts to $1,171,161. Basic EPS was increased by $2.37 ($47.39 prior to Second Reverse Stock Split and $4,738.89 prior to First Reverse Stock Split) as a result of these gains.
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5 Cash and cash equivalents
The components of cash and cash equivalents were as follows:
(In USD)
As at March 31,
March 31,
Balances in bank accounts* $ 1,077,275 $ 1,495,097
Cash -
1,047
Cash and cash equivalents $ 1,077,275 $ 1,496,144
* This includes $128,055 collected on behalf of but not yet remitted to the Hosts which are included in accounts payable. Refer note 16.
6 Accounts receivable, net of allowance for credit losses
The components of accounts receivable were as follows:
(In USD)
As at March 31,
March 31,
Accounts receivable $ 214,083 $ 207,971
Allowance for credit losses (13,433 ) (13,774 )
Net accounts receivable $ 200,650 $ 194,197
The Company records an allowance for credit losses for amounts owed for completed transactions that may never settle or be collected. For the year ended March 31, 2025, allowance amounting to $NIL was created for expected credit losses respectively (March 31, 2024 : $13,774).
Movement in allowance for expected credit loss
(In USD)
As at March 31,
March 31,
Balance at the beginning of the period $ 13,774 $ -
Allowance for expected credit loss -
13,774
Foreign currency translation adjustment (341 ) -
Closing balance $ 13,433 $ 13,774
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
7 Balances with government authorities
The components of balances with government authorities were as follows:
(In USD)
As at March 31,
March 31,
Current
Goods and service tax receivable $ 3,941,649 $ 4,277,019
Less: Impairment* (3,754,191 ) (3,849,317 )
$ 187,458 $ 427,702
Non-current
Other tax receivables $ -
$ 18,126
$ -
$ 18,126
* During the year ended March 31, 2025, the Company recorded an allowance for impairment of tax credits amounting to $NIL and (March 31, 2024: $3,849,317) for estimated losses resulting from substantial doubt about the utilization of the tax credits. The change in the closing balance of Impairment is on account of foreign exchange differences on remeasurement in reporting currency.
8 Short term investments
The components of short term investments were as follows:
(In USD)
As at March 31,
March 31,
Certificate of deposits $ -
$ 298,495
Short term investments $ -
$ 298,495
9 (a) Other current assets
The components of other current assets were as follows:
(In USD)
As at March 31,
March 31,
Security deposits $ 24,997 $ 98,813
Franchise tax refund receivable 84,490 84,490
Advance to employees 29,730 15,159
Receivables from car sale 57,892 90,244
Other receivables 64,091 235,040
Other current assets $ 261,200 $ 523,746
9 (b) Other current assets with related parties
The components of other current assets with related parties were as follows:
(In USD)
As at March 31,
March 31,
Advance to director $ -
$ 44,168
Other current assets with related parties $ -
$ 44,168
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
10 Assets held for sale
The components of assets held for sale were as follows:
(In USD)
As at March 31,
March 31,
Vehicles $ 267,293 $ 629,908
Total assets held for sale $ 267,293 $ 629,908
Vehicles represent the vehicles held for sale in the Indian subsidiary, Zoomcar India Private Limited. The gain or loss on sale of these assets is included in Loss/(Gain) on sale of assets held for sale under Other (income)/expense of Consolidated Statements of Operations. During the year ended March 31, 2025, total profit of $1,054 was recorded on sale of vehicles held for sale (total loss of $40,293 for the year ended March 31, 2024).
During the year ended March 31, 2025, the Company has recorded the impairment amount of $448,484. During the year ended March 31, 2024, the Company has recorded the impairment amount of $167,413. The impairment amount is included in ‘Impairment on assets held for sale’ under Other (income)/expense of Consolidated Statements of Operations.
11 Property and equipment, net
The components of property and equipment were as follows:
(In USD)
As at Estimated useful life March 31,
March 31,
Vehicles and devices 5 years $ 2,399,282 $ 3,274,998
Computer equipments 2 - 7 years 551,877 603,864
Office equipments 3 - 10 years 229,481 245,545
Furniture and fixtures 10 years 1,720 7,398
Total, at cost
3,182,360 4,131,805
Less: Accumulated depreciation
(2,855,236 ) (2,572,825 )
$ 327,124 $ 1,558,980
Right-of-use assets under finance leases:
Vehicles, at cost
$ 5,777,170 $ 5,923,555
Accumulated depreciation
(4,015,655 ) (4,117,406 )
Accumulated impairment
(1,761,515 ) (1,806,149 )
$ -
$ -
Total property and equipment, net
$ 327,124 $ 1,558,980
Depreciation expense for the year ended March 31, 2025 was $430,613 ($994,640 for the year ended March 31, 2024).
During the year ended March 31, 2025, the Company has retired the devices of the carrying value amounting to $727,145 ($NIL for the year ended March 31, 2024). Also, during the year ended March 31, 2025, the Company revised its estimate of the salvage value of the devices from 30% to 0%. The change in estimate resulted in a decrease in net income by $47,085 compared to the year ended March 31, 2024 or $0.19 per share (basic and diluted) for the year ended March 31, 2025.
(This space has been left intentionally blank)
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
12 Leases
The Company’s leases primarily include vehicles and corporate offices which have been classified as finance leases and operating leases, respectively. The lease term of operating and finance leases varies between 3 to 7 years. The lease agreements do not contain any covenants to impose any restrictions except for market-standard practice for similar lease arrangements. In assessment of the lease term, the Company considers the extension option as part of its lease term for those lease arrangements where the Company is reasonably certain of availing the extension option.
The components of lease expense were as follows:
(In USD)
Period ended March 31,
March 31,
Finance lease cost:
Amortization of right-of-use assets $ -
$ -
Interest on lease liabilities 550,903 625,523
Operating lease cost 363,435 516,219
Short term lease cost 486,289 423,693
Total lease cost $ 1,400,627 $ 1,565,435
Supplemental cash flow information related to leases was as follows:
(In USD)
Period ended March 31,
March 31,
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows for operating leases $ (338,626 ) $ (441,843 )
Financing cash outflows for finance leases $ (2,103,219 ) $ (526,959 )
Supplemental balance sheet information related to leases was as follows:
(In USD)
As at March 31,
2025 March 31,
Operating Leases
Operating lease right-of-use assets $ 1,021,898 $ 1,290,608
Current operating lease liabilities $ 316,756 $ 365,542
Non-current operating lease liabilities 801,981 1,009,681
Total operating lease liabilities $ 1,118,737 $ 1,375,223
Finance Leases
Property and equipment, at cost $ 5,777,170 $ 5,923,555
Accumulated depreciation (4,015,655 ) (4,117,406 )
Accumulated impairment (1,761,515 ) (1,806,149 )
Property and equipment, net $ -
$ -
Current finance lease liabilities $ 3,966,962 $ 5,738,239
Non-current finance lease liabilities -
-
Total finance lease liabilities $ 3,966,962 $ 5,738,239
Weighted Average Remaining Lease Term
Operating leases 48 months 58 months
Finance leases 18 months 30 months
Weighted Average Discount Rate
Operating leases 13.00 % 13.00 %
Finance leases 9.00 % 9.00 %
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
12 Leases (Continued)
The Company determines the incremental borrowing rate by adjusting the benchmark reference rates, with appropriate financing spreads applicable to the respective geographies where the leases were entered and lease specific adjustments for the effects of collateral.
March 31, 2025
Maturities of lease liabilities as of March 31 are as follows: Operating
Leases Finance
Leases
337,044 4,285,354
353,429 -
370,634 -
388,699 -
-
-
Total Lease Payments $ 1,449,806 $ 4,285,354
Less : Imputed Interest 331,069 318,392
Total Lease Liabilities $ 1,118,737 $ 3,966,962
During the year ended March 31, 2025, the Company entered into re-structuring agreements with Orix Leasing and Financial Services India Limited (Orix) and recorded a gain on modification of lease amounting to $760 in the Consolidated Statement of Operations. Under the restructured terms with Orix, the Company was to pay 50% of the outstanding liability by November 25, 2024, with the remaining 50% due in 12 monthly installments at 12% interest, starting January 15, 2025. If the Company defaults, the entire liability, plus 18% annual compounded interest, will be due after a 15-day grace period. As of March 31, 2025, the Company has fulfilled all payment obligations under the restructured terms. Refer Note 26.
As at March 31, 2025, the Company continues to default on equated monthly installments (EMI) payments owed to Leaseplan India Private Limited (Lender). In adherence to the agreement, the Company has accumulated penal interest at a simple interest rate of 1% per month on the overdue EMIs, amounting to $225,142 for the year ended March 31, 2025.
As per the terms of the agreement, an additional simple interest of 1.5% per month is levied on the overdue amount as it is still unpaid after 60 days from date of default.
Further, during the year ended March 31, 2025, the Company recorded a loss on modification of lease amounting to $457,474 in the Consolidated Statement of Operations due to changes in future lease payments as per the repayment schedule. Refer note 26.
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
13 Intangible Assets
The components of intangible assets, were as follows:
(In USD)
As at March 31, 2025 March 31, 2024
Average useful life Gross Carrying Amount Accumulated
Amortization Net Carrying
Amount Gross Carrying Amount Accumulated
Amortization Net Carrying
Amount
Computer software 5 years 16,392 $ (10,941 ) $ 5,451 $ 33,033 $ (14,640 ) $ 18,393
Total 16,392 (10,941 ) 5,451 33,033 (14,640 ) 18,393
Amortization expense for the year ended March 31, 2025 and March 31, 2024 was $3,292 and $6,981 respectively.
Future amortization of intangible assets that will be recorded in general and administrative expenses is estimated as follows.
Amount
($)
March 31, 2026 3,257
March 31, 2027 2,194
Total remaining amortization 5,451
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ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
14 Investments
The components of investments were as follows:
(In USD)
As at March 31,
March 31,
Long term investments
Investments in certificate of deposits* $ 25,653 $ 91,947
$ 25,653 $ 91,947
* Investments includes certificate of deposits and interest accrued on the same.
15 Other non-current assets
The components of other non-current assets were as follows:
(In USD)
As at March 31,
March 31,
Security deposits $ 188,723 $ 217,511
Deposits with tax authorities 422,282 132,638
Restricted cash* 94,762 -
Receivables from car sale** -
458,590
Other non-current assets $ 705,767 $ 808,739
* Restricted cash represents amount held as an indemnification escrow fund with the placement agent for all indemnification liabilities and expenses payable by the Company as per the placement agent agreement for a period of 3 years from closing of the November 2024 Offering.
** The Company has recorded bad debts against receivable from car sale amounting to $452,014 during the year ended March 31, 2025.
16 Accounts Payable
The components of accounts payable were as follows:
(In USD)
As at March 31,
March 31,
Current
Accounts payable towards related parties $ 152,435 $ 152,435
Accounts Payable towards others* 12,396,147 14,279,152
Total Accounts Payable $ 12,548,582 $ 14,431,587
* During the year ended March 31, 2025, the Company carried out negotiations with its vendors which resulted in a short-term deferral in payments and/or reduction in outstanding liability. The Company has accounted for this transaction as troubled debt restructuring under ASC 470-60 (Refer to Note 4).
(This space has been left intentionally blank)
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
17 Debt
The components of long term and short term debt were as follows:
(In USD)
As at Effective
interest
rates Original
Maturities* March 31,
2025 March 31,
Current
Non-convertible debentures
- 7.7% Debentures -
November 15, 2024 $ -
$ 335,549
From others
- Mahindra & Mahindra Financial Services Limited -
June 30, 2025 439,415 873,924
- TATA Motors Finance Limited 12.64 % May 31, 2027 1,749,415 2,187,128
- Kotak Mahindra Financial Services Limited 1.00 % June 30, 2025 376,861 348,599
- Jain and Sons Services Limited -
December 31, 2024 -
47,992
- Mercury Car Rentals Private Limited -
November 30, 2024 -
249,560
- Orix Leasing and Financial Services India LTD 12.00 % December 15, 2025 58,978 156,370
- Clix Finance India Private Limited 3.29 % July 2, 2025 64,621 124,931
- AON Premium Finance LLC -
September 28, 2024 -
725,430
- AON Risk Insurance Services West, Inc 8.25 % April 28, 2025 162,051 -
$ 2,851,341 $ 5,049,483
Total maturity for the year ending on March 31,
2026 $ 2,851,341
2027 -
2028 -
2029 -
Thereafter -
$ 2,851,341
* Maturities have been stated as per the respective agreements with the financiers. For Tata Motors Finance Limited, due to non-payment of scheduled EMIs, the loan is immediately payable and is classified as current. The debts are not associated with any restrictive covenants.
(1) Non-convertible debentures
(i) 7.7% Debenture
On September 25, 2024, the Company entered into a settlement agreement with Blacksoil Capital Private Limited, wherein the lender waived 25% of the outstanding amount. As of March 31, 2025, the Company had fully repaid its liability to the lender. This transaction was accounted for as troubled debt restructuring under ASC 470-60 (Refer to Note 4), resulting in a net gain of $82,971 and $NIL for the year ended March 31, 2025 and March 31, 2024, respectively.
The Company has recorded an interest expense amounting to $9,755 and $64,635 for the year ended March 31, 2025 and March 31, 2024, respectively.
(2) Term loans from Others
Includes loans outstanding as at March 31, 2025 and March 31, 2024 amounting to $2,851,341 and $4,713,936, respectively.
The Company has recorded an interest expense amounting to $311,826 and $415,422 for the year ended March 31, 2025 and March 31, 2024.
As of March 31, 2025, the Company has defaulted on debt obligations, totaling $820,679, owed to various lenders. The Company has also recorded a penal interest expense amounting to $159,269 and $29,757 for the year ended March 31, 2025 and March 31, 2024.
During the year ended March 31, 2025, the Company entered into settlement agreements with Mercury Car Rentals Limited and Jain and Sons Services Limited, resulting in waiver of partial liabilities. These transactions were accounted for as troubled debt restructuring under ASC 470-60 (Refer to Note 4), and all outstanding amounts owed to these lenders were fully repaid by March 31, 2025.
During the year ended March 31, 2025, the Company has entered into a contract with AON Risk Insurance Services West, Inc, in order to refinance its D&O insurance with Insurance companies. The loan needs to be repaid by April 28, 2025.
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
18 Redeemable Promissory Note
On June 18, 2024, the Company entered into a Securities Purchase Agreement with certain institutional accredited investors pursuant to which the Company issued and sold an aggregate of $3,600,000 in principal amount of notes and warrants to purchase up to an aggregate of 132,416 shares (1,267,728 shares prior to Second Reverse Stock Split and 52,966,102 shares prior to First Reverse Stock Split) of Company Common Stock for gross proceeds of $3,000,000. The closing occurred on June 20, 2024.
Out of the total proceeds of $3,000,000 received for the Redeemable Promissory notes and warrants. The Company has allocated $952,075 and $2,047,925 to redeemable promissory notes and warrants respectively, on the basis of their relative fair values. The warrants has been recorded under additional paid in capital in the Consolidated Statements of Stockholders’ Deficit. The discount on issue and issuance cost amounts to $2,647,925 and $909,657 (including consideration incurred towards placement agents of $788,157) respectively. These discount and issuance cost on Redeemable Promissory notes have been amortized over the contractual period on a straight-line basis. The Company assessed the fair value of the accelerated redemption option embedded in the redeemable promissory notes and determined that the value of this embedded feature was not material.
During the year ended March 31, 2025, the Company has paid the liability and the difference between the amount paid and the net carrying amount of the redeemable promissory notes (post amortization of discount on issue and issuance cost until the date of payment) i.e. unamortised portion of discount on issuance has been amortized and charged under finance costs in the Consolidated Statements of Operations as ‘Amortisation of discount and debt issuance cost on redeemable promissory notes’.
Terms of Redeemable Promissory Note
The redeemable promissory note is due nine months from the date of issuance, provided that the Company is required to use the proceeds at the Closing Date of one or more subsequent equity, debt or other capital raises or any sale of tangible or intangible assets with net proceeds sufficient to repay all or any portion of the amounts due under the redeemable promissory note (the “Maturity Date”). The redeemable promissory note bears interest at a rate of 15% per annum computed on the basis of a 360-day year and twelve 30-day months and payable in arrears on the Maturity Date.
The interest on the redeemable promissory note (including amortization of discount on issue and issuance cost) was $1,995,967 for the year ended March 31, 2025 ($NIL for the year ended March 31, 2024) which was recognized in the Condensed Consolidated Statements of Operations for their respective period.
Warrants issued along with Redeemable Promissory Note
The warrants are each exercisable for one share of Common Stock at an exercise price of $56.64 per share ($2.832 per share prior to Second Reverse Stock Split and $0.1416 per share prior to First Reverse Stock Split) and may be exercised at any time after six months and upto 5 years the date of issue. Additionally, in accordance with the agreement, the Warrant contains an “alternative cashless exercise” provision which gives the Warrant holder the right to exchange the Warrant on a one-for-one basis for shares of common stock at any time that the Warrant is exercisable without any cash payment and without regard to the then market price of the Company’s common stock or exercise price of the Warrant.
During the year ended March 31, 2025, 46,527 (930,522 prior to Second Reverse Stock Split) warrants have been exercised and are converted into Common Stock. As of March 31, 2025, 69,704 warrants (1,394,062 prior to Second Reverse Stock Split) are outstanding (after considering antidilution effect). Furthermore, the placement agent warrants outstanding as of March 31, 2025 are 5,297 warrants (105,934 prior to Second Reverse Stock Split).
These Warrants are classified as equity on the Consolidated Balance Sheets.
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
19 Unsecured promissory note to related parties
The following is a summary of the Company’s unsecured promissory note payable as of March 31, 2025 and March 31, 2024:
(In USD)
As at March 31,
March 31,
Unsecured promissory note $ -
$ 2,027,840
Total $ -
$ 2,027,840
During the year ended March 31, 2025, Ananda Small Business Trust has opted for conversion of the Unsecured promissory note into the common stock of the Company at the agreed conversion price of $6,000 ($300 prior to Second Reverse Stock Split and $3.00 prior to First Reverse Stock Split) per share. On October 2, 2024, 338 shares (6,759 shares prior to Second Reverse Stock Split and 675,946 shares prior to First Reverse Stock Split) have been issued to Ananda Small Business Trust on conversion of the Unsecured promissory note.
20 Unsecured Convertible Note (‘Atalaya Note’)
The following is a summary of the Company’s Atalaya Note payable for which it elected fair value option as on March 31, 2025 and March 31, 2024:
(In USD)
As at March 31,
March 31,
Non-current liability
Atalaya Note $ -
$ 10,067,601
Current liability
Atalaya Note $ 6,002,269 $ -
Total $ 6,002,269 $ -
The Atalaya Note was initially recorded at the fair value of $10,167,194 on issuance. The Atalaya Note was issued at 7.5% discount on principal amounting to $632,596 and bears an interest of 8% and an additional interest on default of 8% compounded monthly.
During the year ended March 31, 2025, partial liability was settled by issue of 6,256 (125,120 prior to Second Reverse Stock Split and 12,512,080 prior to First Reverse Stock Split) shares to the Atalaya Note holders for a settlement of $2,324,696.
The change in fair value resulted in gain of $1,740,636 that is recorded for the year ended March 31, 2025 ($NIL for the year ended March 31, 2024) in the Consolidated Statements of Operations (as no portion of such fair value adjustment resulted from instrument-specific credit risk). Also, Refer Note 33.
During the year ended March 31, 2025, the Company received notices from Atalaya regarding equity line transactions and incurring debt without the Purchaser’s consent. Atalaya filed a case against the Company seeking relief from the above mentioned defaults. On March 28, 2025, the Supreme Court of the state of New York ordered the Company to pay the outstanding principal amount along with interest accrued till date amounting to $5,997,833. Further as per the order of the court, the Company is liable to pay interest at 9% per annum till the date the ordered amount is paid in full.
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
21 Other current liabilities
The components of other current liabilities were as follows:
(In USD)
As at March 31,
March 31,
Payable to renters $ 273,591 $ 576,052
Statutory dues payable 1,588,047 1,550,688
Capital creditors 5,790 5,936
Employee benefit expenses payable 274,049 320,360
Other liabilities* 1,058,172 330,582
Other current liabilities $ 3,199,649 $ 2,783,618
* Includes payables related to operating leases and the residual value of vehicles acquired from Leaseplan India Private Limited.
* Also includes liquidated damages payable by the Company at 2% per months of the subscription amount paid by the subscribers at the closing, to the subscribers of the December 2024 offering and Second Closing of December 2024 offering, due to the late filing of the registration statement (Form S-1) and non-effectiveness of Form S-1 within a specified period of time including an interest of 15% p.a. on non payment of the liquidated damages on time.
22 Accumulated other comprehensive income/ (loss)
The components of accumulated other comprehensive income/(loss) were as follows:
(In USD)
As at March 31,
March 31,
(Loss)/ Gain on employee benefit
Balance, beginning of period $ 46,101 $ 115,818
Recognized during the period, net of taxes amounts to $NIL (57,663 ) (48,593 )
Reclassification to net income: Amortization losses/(gains) (6,624 ) (21,124 )
Balance, end of period $ (18,186 ) $ 46,101
Foreign currency translation adjustment
Balance, beginning of period $ 1,749,891 $ 1,712,181
Translation adjustments gain recognized during the period, net of taxes amounts to $NIL 399,817 37,710
Balance, end of period $ 2,149,708 $ 1,749,891
Accumulated other comprehensive income $ 2,131,522 $ 1,795,992
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ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Capital Stock and Warrants
During the year, the Company executed four equity offerings. These offerings involved the sale of Common Stock, Pre-Funded Warrants, Series A Warrants and a maximum number of Series B Warrants as defined in the respective agreements. All securities issued have been adjusted to reflect the Second Reverse Stock Split. During the year, the Company issued 773,785 common shares, 106,350 pre-funded warrants, and 4,217,882 Series A Warrants. Pre-funded warrants are exercisable at any time at nominal prices of $0.002. 21,750 Pre Funded Warrants were exercised and converted into common stock by March 31, 2025. On the Reset Date, as defined in the agreement, the exercise price of the warrants shall be adjusted to equal the lower of the exercise price and the Reset Price. Upon such reset, the number of warrant shares issuable upon exercise shall be increased such that aggregate exercise price remains unchanged.
Out of above, a total of 523,318 Common Stock, 28,000 Pre-Funded Warrants, 3,454,810 Series A Warrants and maximum number of Series B warrants as per agreement were issued in settlement of litigation with Randall Yanker, settlement of litigation with Aegis Capital Corp and Ellenoff Grossman & Schole LLP and to the investors in exchange for waivers of rights under prior financing agreements. These have been recorded as “Loss on litigation settlement” amounting to $12,738,865 and “Loss on extinguishment of liability” amounting to $3,458,248 under “Other expenses” in the Consolidated Statements of Operations based on the fair value of the instruments issued (Refer Note 26).
Placement agent compensation across all offerings, wherever applicable included warrants to purchase 10% of the shares of common stock and shares underlying the pre-funded warrants, Series A Warrants equal to 10% of those sold at closing, and Series B Warrants equal to 10% of those issued at or following the Reset Date. Specifically, 37,930 Common Stock Warrants were issued, exercisable at prices ranging from $39.00 to $80.60 per share (1.95 to 4.03 prior to the Second Reverse Stock Split), and classified as equity instruments.
Holders of common stock are entitled to one vote per share, dividends at the discretion of the Board of Directors, and a pro-rata share of residual assets upon liquidation. This comprehensive activity reflects the Company’s capital restructuring and financing strategy during the reporting period.
Series A warrants were issued with initial exercise prices of $80.60 ($4.03 prior to the Second Reverse Stock Split), $39.00 ($1.95 prior to the Second Reverse Stock Split), and $6.24, each exercisable for five years from the initial exercise date. Series B warrants were issued with zero initial eligibility, subject to increase on the Reset Date based on the Reset Share Amount formula. All warrants were adjusted for the Second Reverse Stock Split. Placement agents received 10% of the Series A and Series B warrants issued to investors, along with Common Stock Warrants, as compensation. The Company classified all Series A and Series B warrants as derivative financial instruments under ASC 815- 10-15-83 upon initial recognition. Due to anti-dilution and reset provisions, the exercise prices of Series A and Series B warrants were adjusted to the floor price during the year, and the number of warrants was increased to maintain the aggregate exercise price. As a result, the number of exercisable warrants became fixed, eliminating variability, and the outstanding Series A and Series B warrants were reclassified to equity at their respective reclassification date fair values. Warrants exercised before reclassification were reclassified at their exercise date fair value, while those exercised after were adjusted through additional paid-in capital. As of March 31, 2025, 1,103,832 Series A warrants exercisable at $16.12, 11,008,310 Series A warrants exercisable at $6.24 and 2,250,996 Series B warrants exercisable at $0.002 remained outstanding. A total of 56,074 shares were issued upon Series A warrant exercises and 1,443,272 shares upon Series B warrant exercises. The Company recognized a gain of $9,035,085 from the change in fair value of these derivative instruments in the Consolidated Statements of Operations.
As of March 31, 2025, the Company has 1,909,833 number of restricted shares and 552,585 number of unrestricted shares.
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
24 Revenue
The components of revenue, net were as follows:
(In USD) March 31,
March 31,
Revenue from services
Facilitation revenue (net) $ 9,024,576 $ 9,836,434
Other operating revenues 81,315 60,799
Total $ 9,105,891 $ 9,897,233
Revenue by geographical location March 31,
March 31,
India $ 9,088,885 $ 9,759,318
Egypt 13,094 114,680
Vietnam -
17,755
Indonesia 3,912 5,480
$ 9,105,891 $ 9,897,233
Contract balances
The Company’s contract liabilities for consideration collected prior to satisfying the performance obligations against scheduled trips is $450,355 and $619,381 as at March 31, 2025 and March 31, 2024 respectively.
The Company offers loyalty program, Z-Points, that results in the deferral of revenue equivalent to the retail value at the date the points are earned. The Company had accumulated deferred revenue amounting to $21,365 and $96,710 as at March 31, 2025 and March 31, 2024, respectively in relation to Loyalty program.
The total balance under contract liability as at March 31, 2025 and March 31, 2024 is $471,720 and $716,091, respectively.
Revenue recognized during the year ended March 31, 2025 which was included in contract liabilities balance at the beginning of the respective period amounts to $262,940 ($341,585 recognized during the year ended March 31, 2024).
25 Finance costs
The components of finance costs were as follows:
(In USD) March 31,
March 31,
Finance costs -other than related parties
Interest on vehicle loans $ 293,430 $ 392,933
Interest on finance leases 550,903 625,523
Interest on subcontractor liability 91,891 93,869
Issuance cost towards issue of warrants 3,294,526 -
Change in fair value of preferred stock warrant liability -
5,284,494
Discount on issue of Atalaya Note -
632,595
Interest on redeemable promissory notes 1,995,967 -
Amortisation of discount and debt issuance cost on redeemable promissory notes 1,765,615 -
Change in fair value of Atalaya Note -
1,632,996
Change in fair value of derivative financial instrument -
3,465,293
SSCPN issue expenses -
1,564,210
Bank charges 25,067 33,933
Other borrowings cost 589,774 172,889
Total $ 8,607,173 $ 13,898,735
Finance costs -to related parties
Interest on vehicle loans $ -
$ 38,203
Total $ -
$ 38,203
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
26 Other expense/(income), net
The components of other (income)/expense, net were as follows:
(In USD) March 31,
March 31,
Other expense/(income), net - other than related parties
Interest income $ (40,428 ) $ (36,687 )
Change in fair value of Notes -
(6,990,870 )
Change in fair value of SSCPN -
(3,448,845 )
Change in fair value of derivative financial instruments (9,035,085 ) -
Loss on modification of finance leases 456,715 -
Change in fair value of Atalaya Note (1,740,636 ) -
Loss on litigation settlement* 12,738,865 -
Loss/(Gain) on sale of property & equipment (114 ) 82,640
Loss/(Gain) on sale of assets held for sale (1,054 ) 40,293
Loss on extinguishment of liability# 3,458,248 -
Bad debts written off on Receivables from car sale 452,014 -
Liquidated damages payable to Investors** 570,893 -
Impairment on assets held for sale 448,484 167,413
Loss on assets written off 853,194 92,462
Payable to customers and provision written back (227,643 ) (215,418 )
Other, net (148,161 ) (1,007,459 )
Total $ 7,785,292 $ (11,316,471 )
* During the year, the Company entered into agreements with Randall Yanker, Aegis Capital Corp and Ellenoff Grossman & Schole LLP for settlement of litigations. Pursuant to the settlement agreements, the Company agreed to issue shares and warrants to them. (Refer note 23)
** This relates to damages payable to Investors on account of delay in filing of registration statements for securities issued under multiple offerings made during the year.
# On March 31, 2025, the Company entered into settlement agreement with certain investors in exchange for waivers of rights under prior financing agreements. Pursuant to the Settlement Agreement, the Company agreed to issue shares and warrants to them. (Refer note 23).
Other (income) - from related parties
Interest income $ -
$ (11,224 )
Total $ -
$ (11,224 )
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
27 Income taxes
The components of (loss)/gain before income taxes consist of the following:
(In USD) March 31,
March 31,
Domestic $ (17,567,764 ) $ (11,618,649 )
Foreign (8,054,539 ) (22,658,603 )
Profit/(Loss) before income taxes $ (25,622,303 ) $ (34,277,252 )
The following is a reconciliation of the statutory federal income tax rate to our effective tax rate
March 31,
March 31,
Accounting profit/(loss) before tax (25,622,303 ) (34,277,252 )
Tax using the Company’s domestic tax rate (5,380,684 ) (7,198,223 )
Federal statutory income tax rate 21.0 % 21.0 %
Tax impact of :
U.S. state and local taxes 0.3 % 1.5 %
Federal benefit for state taxes -0.3 % -1.5 %
Valuation allowance -22.2 % -23.6 %
Difference in tax rates 1.2 % 2.6 %
Effective tax rate 0.0 % 0.0 %
Current Tax expense -
-
Deferred Tax expense -
-
Income tax expense reported in the Statement of profit and loss/Effective Tax Rate -
-
Zoomcar Holdings, Inc. has unused tax losses amounting to $7,419,217 and $57,385 as at March 31, 2025 and March 31, 2024 which can be carried forward indefinitely.
Zoomcar , Inc. has unused tax losses amounting to $44,313,887 and $43,682,141 as at March 31, 2025 and March 31, 2024. $43,498,761 can be carried forward indefinitely, whereas $64,347 can be carried forward upto 2033; $294,720 upto 2034; $220,520 upto 2035; $115,253 upto 2036 and $120,286 upto 2037.
The Company’s operations are primarily based out of Indian jurisdiction. There are unused tax losses amounting to $113,344,007 and $138,314,491 as at March 31, 2025 and March 31, 2024, respectively in the Indian subsidiary. The tax benefit for these losses, if not utilized, will expire on various dates starting from financial year 2024 to 2031. Additionally, net operating losses amounting to $38,896,865 (March 31, 2024: $39,298,484) is available for set-off against future income without any expiration date. Under the Indian jurisdiction, a period of 3 financial years remain open to assessment by tax authorities or a period of 10 financial years if the assessing officer has evidence that undeclared income exceeds certain limit.
The Company has created valuation allowance on the deferred tax asset resulting from such losses due to Company’s history of past losses and lack of conclusive evidence to support the view that sufficient taxable profit will be generated in the future by the Company to offset such losses.
Zoomcar Holdings, Inc. files tax returns in the U.S. federal, various state, and foreign jurisdictions. In the normal course of business, the Company is subject to examination by tax authorities. Our major tax jurisdiction is in India. The Indian tax authority is currently examining our 2016 through 2023 tax returns. There are other ongoing audits in various other jurisdictions that are not material to our financial statements.
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
27 Income taxes (Continued)
The Company has filed appeals against the above orders before higher authority.
The Company has not recognized any uncertain tax position for the year ended March 31, 2025 and March 31, 2024, respectively. The Company believes these orders are unlikely to be sustained at the higher appellate authorities.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company’s deferred income tax assets and liabilities as of March 31, 2025 and 2024 consisted of the following:
Year ended March 31,
March 31,
Deferred tax assets:
Net operating loss carryforwards 39,199,954 44,873,459
Trade Receivable 3,358 -
Assets held for sale 110,941 -
Restricted stock units 11,950 -
Provision for expenses 1,062,347 -
Gratuity 76,127 -
Leave encashment 59,273 -
Bonus 52,526 -
Total deferred tax assets 40,576,476 44,873,459
Less: Valuation allowance (39,174,653 ) (43,709,941 )
Deferred tax assets, net of valuation allowance 1,401,823 1,163,518
Deferred tax liabilities:
Right of use assets, net of Lease liability (444,747 ) (172,747 )
Depreciation on property plant and equipment and intangible assets (358,219 ) (361,674 )
Borrowings (598,857 ) (629,097 )
Others -
-
Total deferred tax liabilities (1,401,823 ) (1,163,518 )
Net deferred tax assets -
-
In assessing the realization of the deferred tax assets, management considers whether it is more likely than not that some portion of all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which temporary differences representing net future deductible amounts become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. After consideration of all of the information available, management believes that significant uncertainty exists with respect to future realization of the deferred tax assets and has therefore established a full valuation allowance. For the year ended March 31, 2025, the change in the valuation allowance was $4,535,288.
The Company has computed income tax expense/(benefit) for the year ended March 31, 2025 and March 31, 2024 by using a forecasted annual effective tax rate and adjust for any discrete items arising during the period. The Company has recorded $NIL tax expense for all of the periods. Our effective tax rate was 0.00%, 0.00% for the year ended March 31, 2025 and March 31, 2024, respectively. The Company has computed a valuation allowance on deferred tax assets for the year ending March 31, 2025 and hence no deferred tax asset is recognized as of March 31, 2025. The effective tax rate differs from the statutory tax rate of 21% for the years ended March 31, 2025 and 2024, due to changes in valuation allowance on the deferred tax assets.
The Company has received various orders from Indian tax authorities, for details Refer Note 34.
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
28 Net loss per share
The components of basic and diluted loss per share were as follows:
(In USD, except loss per share) March 31,
March 31,
Net loss available for common shareholders (A) $ (25,622,303 ) $ (34,277,252 )
Weighted average outstanding shares of common stock (B) 494,276 8,927
Dilutive effect of potentially dilutive outstanding securities -
-
Common stock and common stock equivalents (C) 494,276 8,927
Loss per share
Basic (A/B) $ (51.84 ) $ (3,839.73 )
Diluted (A/C) $ (51.84 ) $ (3,839.73 )
Share related amounts have been retroactively adjusted to reflect the reverse stock-split for all periods presented.
Since the Company was in a loss position for the year ended March 31, 2025 and year ended March 31, 2024, basic loss per share was same as diluted net loss per share for the periods presented. The following potentially dilutive outstanding securities as of March 31, 2025 and March 31, 2024 were excluded from the computation of diluted loss per share because their effect would have been anti-dilutive for the periods presented, or issuance of such shares is contingent upon the satisfaction of certain conditions which were not satisfied by the end of the period.
March 31,
March 31,
Stock options*
Restricted Stock Units (Refer Note 30) 17,966 -
Public warrants** 11,500,000 11,500,000
Private warrants*** 19,416 19,416
Unsecured convertible note (Refer Note 20) -
1,653
Warrants issued in November 2024 and December 2024 offering (including Second and Third closing of December offering) (Refer Note 23) 12,335,519 -
Total 23,872,917 11,521,085
* In 2012, the Company adopted its 2012 Equity Incentive Plan, under which the Company may grant options and restricted stock to eligible participants. The plan is equity settled. Options are generally granted for a term of ten years. Options have a graded vesting period of up to four years and the expenses are recorded on a straight-line basis over the requisite service period for each separately vesting portion of the awards. The Company cancelled certain outstanding options at the time of Reverse Recapitalization. The remaining 16 fully vested options were assumed by the Company on the Reverse Recapitalization date, exercisable at exercise price ranging from $120 to $300.
** Prior to the Reverse Recapitalization date, the SPAC issued Public Warrants. On the Closing Date, there were 11,500,000 Public Warrants issued and outstanding where 2,000 warrants are exercisable into 1 share of Common stock of the Company for $11,420 per share.
*** The common stock, preferred stock and SSCPN warrants have been converted into private warrants of the Company at the Exchange Ratio at the time of Reverse Recapitalization. As of March 31, 2025, each warrant is exercisable into one share of Common Stock of the Company at an exercise price of $6,000 per share.
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
29 Employee benefit plans (unfunded)
Employee benefit plans includes gratuity and compensated absences payable to employees. These benefit plans consist of a defined benefit plan for gratuity payable by the Indian subsidiary of the Company under Indian regulations. These are determined under the projected unit credit method, with actuarial valuations being carried out at each reporting date. The retirement benefit obligations recognized in the Consolidated Balance Sheets represents the present value of the defined obligations. Under an employee benefit plan, it is the Company’s obligation to provide agreed benefits to the employees. The related actuarial and investment risks fall on the Company. The summary of current and non-current employee benefit plans obligations along with its components are as below:
Pension and other employee obligations
As at March 31,
March 31,
Current
Gratuity $ 82,547 $ 93,967
Compensated absences 70,325 89,688
$ 152,872 $ 183,655
Non-current
Gratuity $ 221,961 $ 258,524
Compensated absences 170,062 232,925
Other statutory dues 2,007 -
$ 394,030 $ 491,449
(This space has been left intentionally blank)
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
29 Employee benefit plans (unfunded) (Continued)
I. Gratuity
March 31,
March 31,
Changes in projected benefit obligation (PBO)
PBO at the beginning of the year $ 352,492 $ 286,714
Service cost 68,406 96,167
Interest cost 18,298 17,541
Actuarial loss/ (gain) 57,663 48,593
Benefits paid (184,057 ) (91,798 )
Effect of exchange rate changes (8,294 ) (4,725 )
PBO at the end of the period $ 304,508 $ 352,492
Accrued pension liability
Current liability $ 82,547 $ 93,967
Non-current liability 221,961 258,525
$ 304,508 $ 352,492
Accumulated benefit obligation $ 245,162 $ 260,054
Net gratuity cost recognized in income statement
March 31, 2025 March 31, 2024
Service cost $ 68,406 $ 96,167
Interest cost 18,298 17,541
Amortization of net actuarial (gains)/loss (6,624 ) (21,124 )
Net periodic benefit cost $ 80,080 $ 92,584
Re-measurement (gains) / losses in other comprehensive income
March 31, 2025 March 31, 2024
Actuarial (gain)/loss $ 57,663 $ 48,593
Amortization loss (6,624 ) (21,124 )
Total $ 64,287 $ 69,717
Components of actuarial gain:
March 31,
March 31,
Actuarial (gain)/loss due to demographic assumption changes in defined benefit obligation $ (3,524 ) $ (4,289 )
Actuarial (gain)/ loss due to financial assumption changes in defined benefit obligation 8,720 1,977
Actuarial (gain)/loss due to experience on defined benefit obligation 52,467 50,904
Total $ 57,663 $ 48,592
The assumptions used in accounting for the gratuity plan are as follows:
March 31, 2025 March 31, 2024
Discount rate - staff 6.54 % 7.17 %
Discount rate - independent service provider* 6.54 % 7.12 %
Attrition rate - staff 42.61 % 39.54 %
Attrition rate - independent service provider* 82.00 % 85.68 %
Rate of increase in compensation levels - staff 12.98 % 12.63 %
Rate of increase in compensation levels - independent service provider* 10.96 % 11.43 %
* Independent service provider are contract employees responsible for maintaining the fleet of the Company.
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
29 Employee benefit plans (unfunded) (Continued)
During the year ended March 31, 2025 and March 31, 2024, actuarial gain was driven by changes in actuarial assumptions, offset by experience adjustments on present value of benefit obligations.
The Company evaluates these assumptions annually based on its long-term plans of growth and industry standards. The discount rates are based on current market yields on government securities adjusted for a suitable risk premium.
Sensitivity analysis for the :
Year ended March 31, 2025 March 31, 2024
Increase Decrease Increase Decrease
Discount rate (- / + 1%) $ (10,343 ) $ 11,236 $ (13,591 ) $ 14,904
Salary growth rate (- / + 1%) 5,206 (5,074 ) 6,933 (6,668 )
Attrition rate (- / + 1%) (2,647 ) 2,691 (2,864 ) 2,918
Mortality rate (- / + 10% of mortality rates) (8 ) -
-
Expected benefit payments for the year ending March 31,
$ 82,547
54,645
28,571
17,032
11,407
Thereafter
110,306
Total
$ 304,508
II. Compensated absences
The employees are permitted to encash a maximum of 45 days of accumulated leave balance on separation. The Company has provided liability for compensated absences as per an actuarial valuation carried out by an independent actuary as of the Balance Sheet dates. The amount of compensated absences cost is $37,723 for year ended March 31, 2025 ($139,965 for year ended March 31, 2024).
III. Defined contribution plan
The Indian subsidiary makes provident fund contributions which are defined contribution plans, for qualifying employees. Under the Schemes, the Indian subsidiary is required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions are made to provident fund in accordance with the fund rules. The interest rate payable to the beneficiaries every year is notified by the Government. The amount of contributions made to provident fund is $266,053 for the year ended March 31, 2025 ($432,936 for the year ended March 31, 2024).
30 Stock-based compensation expense
The Company adopted the 2023 Equity Incentive Plan, which provides for grants of share-based awards, including Stock Options, Stock Appreciation Rights, Restricted Stock, Restricted Stock Units (“RSUs”), and other forms of share-based awards. The Company settles employee stock-based options with newly issued common stock of the Company. The Company has reserved 388,921 (7,778,414 prior to the Second Reverse Stock Split and 777,841,326 prior to First Reverse Stock Split) shares of common stock for the issuance of awards under the 2023 Plan.
In addition, the number of shares of common stock reserved and available for issuance under the 2023 Plan will automatically increase on January 1 of each year for a period of ten years, beginning on January 1, 2024 and on each January 1 thereafter until January 1, 2033, by a number equal to (i) 3% of the issued and outstanding number of shares of common stock of the Company on the preceding December 31, or (ii) a lesser number of shares as approved by the Company’s board of directors.
Additionally, during the year ended March 31, 2025, the stockholders approved a one-time increase in the number of Common Stock shares reserved for issuance under the 2023 Plan. The increase is equal to 15% of the total number of Common Stock shares issued and outstanding on that date.
On February 12, 2025, the Company granted 17,966 (358,208 prior to the Second Reverse Stock Split) RSUs to its employees wherein all the RSU’s granted will fully vest on the vesting commencement date i.e. March 31, 2025 pursuant to the amendment agreement dated March 31, 2025.
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
30 Stock-based compensation expense (Continued)
The following tables summarizes total stock-based compensation expense by function for the years ended March 31, 2025 and March 31, 2024:
March 31,
March 31,
Cost of revenue $ 3,650 $ 134,883
Technology expenses 10,273 162,789
Marketing expenses 1,778 19,228
General and administrative expenses 36,760 1,566,833
Total stock-based compensation expense 52,461 1,883,733
The stock-based compensation expense is recorded in the employee benefit cost and apportioned basis respective functions.
The fair value of options granted is considered as the market price of the Common Stock on the grant date.
The movement in number of stock-based options outstanding and their related weighted average exercise price for the 2023 Equity Incentive Plan are as follows:
No. of options Weighted average exercise price No. of options Weighted average exercise price
Outstanding at the beginning of the year -
$ -
-
$ -
Granted during the year 17,966 -
-
-
Outstanding at the end of the period 17,966
-
Exercisable at the end of the period 17,966 -
-
-
Unvested at the end of the period -
-
-
-
The weighted average grant date fair value of stock options granted during the year ended March 31, 2025 and March 31, 2024 were $2.92 and $NIL per share, respectively.
Weighted average remaining life (in years)
As at March 31,
March 31,
Vested options -
-
Unvested options -
-
The expected life of the stock is based on historical data and current expectations and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility over a period similar to the life of the options is indicative of future trends, which may also not necessarily be the actual outcome.
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
31 Related Party Transactions
Key managerial personnel (KMP)
Gregory Bradford Moran
Chief Executive Officer & Director (until June 20, 2024)
Hiroshi Nishijima
Chief Executive Officer (w.e.f. June 20, 2024)
Uri Levine*
Director (w.e.f. March 31, 2025)
David Ishag
Director (until January 31, 2024)
Evelyn D’An
Director (w.e.f. April 19, 2023)
Graham Gullan
Director (until June 18, 2024)
Swatick Majumdar
Director (w.e.f. August 9, 2023)
Mohan Ananda
Director (w.e.f. December 28, 2023)
Madan Menon
Director (w.e.f. December 28, 2023)
Lisbeth McNabb
Director (until April 18, 2023)
John Robert Clarke
Director (w.e.f. June 20, 2024)
Mark Bailey**
Director (until December 06, 2024)
Investor in Indian subsidiary
Mahindra & Mahindra Limited***
Investor in Indian subsidiary (until December 28, 2023)
Enterprises owned or significantly influenced by above
Mahindra & Mahindra Financial Services Limited***
Mahindra First Choice Wheels Limited***
Yard Management Services Limited***
Ananda Small Business Trust
Related party transactions pertaining to debt, investments, and other current liabilities have been stated on the face of the Consolidated Balance Sheets and Consolidated Statements of Operations.
The Company had following transactions with related parties:
March 31,
March 31,
Interest expense
Mahindra & Mahindra Financial Services Limited*** $ -
$ 38,203
Interest income
Mahindra & Mahindra Financial Services Limited*** $ -
$ 11,224
Parking charges
Yard Management Services Limited*** $ -
$ 241,866
Debt - principal repayment
Mahindra & Mahindra Financial Services Limited*** $ -
$ 119,576
Debt - foreclosure charges
Mahindra & Mahindra Financial Services Limited*** $ -
$ 153
Proceeds from sale of assets held for sale
Mahindra First Choice Wheels Limited*** $ -
$ (3,144 )
Amount received for November 2024 Offering
Mark Bailey** $ 2,499,959 $ -
Amount received for December 2024 Offering
Hiroshi Nishijima $ 50,001 $ -
Uri Levine* $ 300,000 $ -
Consultancy Charges
Uri Levine* $ 145,830 $ -
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
31 Related Party Transactions (Continued)
The Company has the following outstanding balances with related parties:
As at March 31,
March 31,
Convertible promissory note (non-current and current)
Ananda Small Business Trust $ -
$ 2,027,840
Payable to Director
Mohan Ananda $ 152,435 $ 152,435
Advance to director (net)
Gregory Bradford Moran $ -
$ 44,168
Accounts Payable
Uri Levine $ 62,176 $ -
$ 214,611 $ 2,224,443
* Uri Levine become related party on March 31, 2025. However, the transactions disclosed with Uri Levine were incurred before he become a related party.
** Mark Bailey was a related party until December 6, 2024. Accordingly, transactions until December 6, 2024 with him has been disclosed. However, outstanding balances as of March 31, 2025, have not been disclosed, as he was no longer classified as a related party on that date.
*** Mahindra & Mahindra Financial Services Limited, Mahindra First Choice Wheels Limited and Yard Management Services Limited were related parties until December 28, 2023, hence, the transactions until December 28, 2023 with these related parties have been disclosed. The outstanding balances with these related parties have not been disclosed since they were not related parties as on March 31, 2024 and March 31, 2025.
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ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
32 Variable Interest Entities
An entity is a VIE if it has any of the following characteristics :
● The entity does not have enough equity to finance its activities without additional subordinated financial support.
● The equity holders, as a group, lack the characteristics of a controlling financial interest.
● The entity is structured with non-substantive voting rights (i.e., an anti-abuse clause).
We consolidate VIEs in which Company hold a variable interest and are the primary beneficiary. Company is the primary beneficiary because it has the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance and the obligation to absorb losses of the VIE that potentially could be significant to the VIE and the right to receive benefits from the VIE that potentially could be significant to the VIE (benefits). As a result, we consolidate the assets and liabilities of these consolidated VIEs.
The VIEs have been incorporated in their respective locations to perform the business of providing mobility solutions to consumers and businesses.
The following table summarizes the assets and liabilities related to the Company’s consolidated VIEs:
March 31,
March 31,
Assets
Cash and Cash equivalents $ 2,878 $ 11,888
Accounts receivable $ -
$ 7,341
Other current assets $ 391 $ 3,868
Prepaid expenses $ -
$ 4,282
Property and equipment, net $ -
$ 41,849
Intangible assets, net $ -
$ 3,012
Long term Investments $ 3,991 $ 4,112
Receivable from government authorities - non-current $ 0 $ 18,126
Liabilities
Accounts payable $ 383,355 $ 374,692
Contract Liabilities $ -
$ 3,755
Current portion of pension and other employee obligations $ 80 $ 986
Other current liabilities $ 141,164 $ 148,950
Pension and other employee obligations, less current portion $ -
$ 1,189
Nature of investment in the VIEs is as follows:
Name of the VIE entity Place of incorporation Nature of investment Investor entity
Zoomcar Egypt Car Rental LLC*** Egypt Debt Zoomcar Netherlands Holding B.V
Zoomcar Egypt Car Rental LLC*** Egypt Debt Zoomcar Inc.
Fleet Mobility Philippines Corporation * Philippines Debt Zoomcar Inc.
Zoomcar Vietnam Mobility LLC** Vietnam Debt Fleet Holding Pte Ltd
Zoomcar Vietnam Mobility LLC** Vietnam Debt Zoomcar Inc.
Zoomcar Vietnam Mobility LLC** Vietnam Equity Fleet Holding Pte Ltd
These amounts have been eliminated during the process of consolidation
* In May 2022, Company had initiated the process of winding-up for Fleet Mobility Philippines Corporation. The assets consolidated for the VIE are not material.
** In August 2023, Zoomcar Vietnam Mobility LLC has filed for bankruptcy with the local authorities. In accordance with ASC 810-10-15-10, the Company consolidates the VIE as the bankruptcy application is pending with the authorities in Vietnam and unless the application is admitted, the Company holds a variable interest and still is the primary beneficiary. The assets/liabilities consolidated for the VIE are not material.
*** On June 3, 2024, Zoomcar Egypt Car Rental LLC has closed down its operations due to decrease in operations and rising economic difficulties. The assets consolidated for the VIE are not material. Additionally, On December 15 , 2024, Zoomcar Egypt Car Rental LLC held an extraordinary general meeting to initiate the liquidation process and appoint a liquidator.
The VIEs included in the Consolidated Financial Statements are separate legal entities and their assets are legally owned by them and are not available to the Company’s creditors or creditors of the Company’s other subsidiaries.
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
32 Variable Interest Entities (Continued)
Nature of, and changes (if any) in, the risks associated with a reporting entity’s involvement with the VIE
In case of all the entities, the reporting entity is exposed to foreign currency exchange risk of the subsidiaries since the subsidiaries are incorporated in countries other than the country in which the reporting entity has been incorporated.
Further, Zoomcar Netherlands Holding B.V has advanced loan to Zoomcar Egypt Car Rental LLC. Accordingly, Zoomcar Netherlands Holding B.V is exposed to the credit risk of Zoomcar Egypt Car Rental LLC.
33 Financial Instruments - Fair Value Measurements
ASC Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”) defines fair value as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date and in the principal or most advantageous market for that asset or liability. The fair value should be calculated based on assumptions that market participants would use in pricing the asset or liability as against assumptions specific to the entity. In addition, the fair value of liabilities should include consideration of non-performance risk, including the Company’s own credit risk.
The carrying value of financial instruments not carried at fair value by categories are as below:
As at March 31,
March 31,
Carrying
value Carrying
value
Financial assets
Cash and cash equivalents $ 1,077,275 $ 1,496,144
Accounts receivable 200,650 194,197
Short term investments -
298,495
Receivable from government authorities 187,458 445,828
Long term investments 25,653 91,947
Other financial assets 365,433 656,767
Total assets $ 1,856,469 $ 3,183,378
Financial liabilities
Accounts payable $ 12,548,582 $ 14,431,587
Debt 2,851,341 5,049,483
Other financial liabilities 1,611,602 1,232,930
Total liabilities $ 17,011,525 $ 20,714,000
The following tables present information about the Company’s financial assets and liabilities measured at fair value on a recurring basis:
March 31, 2025
Total Carrying value Level 1 Level 2 Level 3
Assets:
Assets held for sale $ 267,293 $ -
$ 267,293 $ -
Liabilities:
Atalaya Note $ 6,002,269 $ -
$ -
$ 6,002,269
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
33 Financial Instruments - Fair Value Measurements (Continued)
March 31, 2024
Total Carrying value Level 1 Level 2 Level 3
Assets:
Assets held for sale $ 629,908 $ -
$ 629,908 $ -
Liabilities:
Atalaya Note $ 10,067,601 $ -
$ -
$ 10,067,601
Level 2: The fair value of Assets held for sale not traded in an active market is determined using the quoted prices in markets that are not active or inputs other than the quoted prices that are observable either directly or indirectly considering all the relevant factors of assets.
Atalaya Note
On March 28, 2025, a court order was received for settlement of the Atalaya note. As of March 31, 2025, the Company’s fair value measurement of its Atalaya note reflects the carrying amount, as the obligation is immediately payable and no market premium or discount is applicable. This measurement is classified as Level 3 in the fair value hierarchy, with no valuation adjustments made due to the immediacy of settlement.
For March 31, 2024, the Company measures its notes at fair value based on significant inputs not observable in the market, which caused them to be classified as Level 3 measurements within the fair value hierarchy. Changes in the fair value of unsecured convertible note related to updated assumptions and estimates were recognized as change in fair value of Atalaya Note within the Consolidated Statements of Operations and Comprehensive Loss.
The Company used the following assumptions for the valuation of Atalaya Note as on March 31, 2024 in the model of Valuation of:
Atalaya Note
Remaining term (years) 4.75
Volatility1 80 %
Risk-free rate2 4.90 %
Conversion Price3 (after Second Reverse Stock Split and First Reverse Stock Split) $ 20,000.00
Fair Value per Share4 (after Second Reverse Stock Split and First Reverse Stock Split) $ 1,200.00
1. Expected volatility is based upon the historical volatility of a peer group of publicly traded companies.
2. The risk-free rate for the expected term of the warrant is based on U.S. Treasury constant maturities yield at measurement date.
3. Conversion Price prior to Second Reverse Stock Split and First Reverse Stock Split was $1,000 and $10 respectively.
4. Fair Value per share prior to Second Reverse Stock Split and First Reverse Stock Split was $600 and $0.6 respectively.
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
33 Financial Instruments - Fair Value Measurements (Continued)
The changes in the fair value are summarized below:
Preferred stock warrant liability Notes SSCPN Unsecured Convertible Note (‘Atalaya Note’) Derivative financial instruments
Balance as of April 1, 2023 $ 1,190,691 $ 10,944,727 $ 17,422,132 $ -
$ 14,373,856
Issue of unsecured convertible note at discount -
-
-
8,434,605 -
Issue of SSCPN and warrants -
-
13,175,026 -
-
Change in fair value of convertible preferred stock warrant 5,284,494 -
-
-
-
Change in fair value of SSCPN -
-
(3,448,845 ) -
-
Change in fair value of Notes -
(6,990,870 ) -
-
-
Change in fair value of derivative financial instrument -
-
-
-
3,465,293
Conversion to Common Stock -
(3,953,857 ) (27,148,313 ) -
-
Reclassification on conversion of preferred stock warrants and derivative financial instruments of Zoomcar, Inc. to common stock warrants of the Company (6,475,185 ) -
-
-
(17,839,149 )
Change in fair value of unsecured convertible note -
-
-
1,632,996 -
Balance as of March 31, 2024 $ -
$ -
$ -
$ 10,067,601 $ -
Balance as of April 1, 2024 $ -
$ -
$ -
$ 10,067,601 $ -
Shares issued to Atalaya Note holders -
-
-
(2,324,696 ) -
Change in fair value of unsecured convertible note -
-
-
(1,740,636 ) -
Issue of derivative financial instruments -
-
-
-
19,188,268
Change in fair value of derivative financial instruments -
-
-
-
(9,035,085 )
Warrants exercised and reclassified to equity -
-
-
-
(232,523 )
Reclassified to equity* -
-
-
-
(9,920,660 )
Balance as of March 31, 2025 $ -
$ -
$ -
$ 6,002,269 $ -
* This includes $1,554,010 of Series A and Series B warrants issued to Randy Yanker as settlement of litigation which were reclassified to equity and are presented under “Issue of common stock and warrants on settlement” in Consolidated Statement of Stockholder’s Deficit.
During the year ended March 31, 2025 and March 31, 2024, there were no non-recurring fair value measure of assets or liabilities subsequent to initial recognition.
ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Commitments and contingencies
Contingencies
(A) Claims filed by customers and third-parties not acknowledged as liability amounted to $4,503,122 and $4,565,949 as at March 31, 2025 and March 31, 2024, respectively. The claims made by the customers against the Company includes claims that have been made for amounts charged to customers by the Company as damages for improper use of vehicles and/or physical damages made to vehicles during an active trip ; or claims made by customers for unavailability of the booked vehicle or for any mechanical default in the booked vehicle ; or claims against any similar issue faced by either the host or the customer. Under the erstwhile business model of the Company , the Company had procured third-party insurance policies for fleet under its management which indemnifies against personal death and/or injuries suffered either by the customer or third-parties during the use of its vehicles. Based on the insurance coverage, the Company is confident that liability, if any, arising from the claims under the previous business model will be covered by the insurance. Further, under the current business model of the Company, wherein the Company acts only as a facilitator, any issues arising from breach of any terms including improper use of vehicles and/or physical damages made to the vehicles or any mechanical issues in the vehicle will be the responsibility of either the host or the customer. While uncertainties are inherent in the final outcome of these matters, the Company believes that the disposition of these proceedings will not have a material adverse effect on the Company’s financial position, results of operations or cash flows.
(B) The Company has received various orders and show cause notices from Indian indirect tax authorities relating to disputes on input tax credits, service tax liabilities, GST dues, and taxability of car rental revenue for periods between 2014 and 2023, totaling $9,514,651 (March 31, 2024: $7,984,418). These disputes include disallowance of input credits, service tax liabilities on booking fees and penalty charges, disputes on goods and service tax input availed, and GST demands on gross booking value. The Company has taken necessary steps, including filing appeals, submissions, and deposits, and is awaiting further communication from the authorities. In relation to the GST demands on gross booking value, the Company has filed a writ petition with various authorities challenging the order. Based on the submissions provided and documents available, management believes that no significant outflow is expected, and therefore, no provision has been recorded as of March 31, 2025, and March 31, 2024.
(C) In February 2023, a former employee of Zoomcar India instituted a suit before the City Civil and Sessions Judge at Mayo Hall, Bengaluru against Zoomcar India, Zoomcar, Inc. and Zoomcar Holdings, Inc. (formerly IOAC) challenging his termination, claiming damages amounting to $397,023 and claiming that 100,000 options to purchase shares of Zoomcar, Inc. have vested. On March 3, 2023, the City Civil and Sessions Judge at Mayo Hall, Bengaluru, issued an interim injunction to restrain each of Zoomcar, Inc. and Zoomcar Holdings, Inc. from “alienating or dealing” the 100,000 shares of Zoomcar, Inc. claimed by the former employee while the suit is pending. Zoomcar believes that such claims are baseless and is attempting to have the interim order vacated. In addition, Zoomcar India filed an application in the former employee’s suit, seeking that Zoomcar Holdings, Inc. be deleted from the array of parties in the suit.
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ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Commitments and contingencies (Continued)
(D) On November 1, 2024, Gregory Moran, a former employee of Zoomcar India, has filed a case with the Superior Court, Delaware, challenging his termination without a cause or a sufficient notice, claiming $100,000 payment that was agreed to be paid on the 6 month anniversary of the effective date of closing of the SPAC transaction along with a 8% fully diluted equity interest in Zoomcar Holdings, Inc., non-payment of “vacation” valued at approximately $30,000, leave encashment of approximately $42,000, $96,000 entitled to him for severance pay and gratuity as per India’s Payment of Gratuity Act, 1972. Additionally, he has claimed 210,520 stock units already existing, fully vested. The Company filed a motion to dismiss the matter on November 27, 2024. On January 7, 2025, the Company subsequently filed the opening brief in support of the motion to dismiss filed on November 27, 2024. The Company further filed the opening brief in support of the motion to dismiss on 7 January 2025. Mr. Moran filed opposition to Zoomcar’s motion on February 5, 2025 and Zoomcar filed a reply in further support of its motion on February 20, 2025. Oral arguments on Zoomcar’s motion to dismiss were heard on April 29, 2025. The court granted the motion to dismiss Mr. Moran’s quasi-contractual claims and reserved decision on the balance of the motion.
(E) Zoomcar Holdings, Inc. files tax returns in the U.S. federal, various state, and foreign jurisdictions. In the normal course of business, the Company is subject to examination by tax authorities. Our major tax jurisdiction is in India. The Indian tax authority is currently examining our 2016 through 2023 tax returns. There are other ongoing audits in various other jurisdictions that are not material to our financial statements. The Company received an order for fiscal year 2015-16 in relation to non- deduction of tax deducted at source withholding taxes on certain payments to resident payees/service providers amounting to $125,839 (March 31, 2024: $129,027). Penalty of $125,839 has been claimed but the proceedings are kept under abeyance until the above order is disposed off. The Company has filed appeals against the above orders before higher authority.
The Company has not recognized any uncertain tax position as at March 31, 2025 and March 31, 2024, respectively. The Company believes these orders are unlikely to be sustained at the higher appellate authorities.
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ZOOMCAR HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Subsequent events
(A) On May 6, 2025, the Company received a notice of delisting from the Nasdaq Stock Market. Suspension of trading in the Company’s common stock was effective at the open of trading on May 8, 2025. In connection with the delisting, the Company’s securities commenced quotation on the OTC Markets Group platform. Effective May 8, 2025, the Company’s common shares began trading on the OTCQX Best Market under the ticker symbol “ZCAR”, and its warrants began trading on the OTCQB Venture Market under the ticker symbol “ZCARW”.
(B) On April 22, 2025, the Company entered into a settlement agreement with Siddhartha Assets to settle payables related to it’s operating leases. They have granted a short-term deferral in payments and reduction in the outstanding liability. As per the terms, the outstanding liability shall be settled in four monthly installments starting from April 2025. If the Company defaults, penalty as specified in the agreement shall be payable for every defaulted installment until realisation of the entire settlement amount.
(C) During the year, a Supreme Court of the state of New York order was received towards settlement of litigation with ACM Zoomcar Convert LLC, ordering $6,002,269 payable by the Company immediately. On April 22, 2025, the Company filed an appeal with the Supreme Court of the state of New York contesting the order for settlement. The Company is currently awaiting the Court’s ruling on the appeal.
(D) On June 6, 2025, the Company entered into settlement arrangements with certain accredited investors, pursuant to which the Company agrees to issue an aggregate of 1,950,600 pre-funded warrants with a total value of $3,023,400 to the investors, in full settlement of liquidated damages claims. These Settlement Warrants, exercisable at $0.0001 per share, were valued based on the volume-weighted average price of the Company’s common stock over the five trading days preceding the settlement date.
The warrants are exercisable at any time (including cashless exercise), subject to beneficial ownership limitations (4.99% or 9.99%) and include customary terms for anti- dilution adjustments and participation in future corporate actions. The settlement releases the Company from all related claims under the applicable agreements.
(E) During June 2025, the final award in the Arbitration with Dbest was passed where the claims filed by the Company were rejected. Accordingly, the balance receivable from Dbest of $452,014 has been recorded as bad debts in the Consolidated Statements of Operations for the year ended March 31, 2025.
(F) On June 23, 2025, the Company issued a bridge note to certain investors totaling $402,000 at a discount of $42,000. The note is repayable in five monthly installments beginning November 30, 2025, and maturing on March 31, 2026, with interest accruing at 12% per annum on the outstanding principal. The Company received net proceeds of $350,000 after adjusting issuance cost of $10,000.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosures
None.

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ITEM 9A. CONTROLS AND PROCEDURES
Item 9A. Controls and Procedures
a) Evaluation of Disclosure Controls and Procedures
Our disclosure controls and procedures are designed to ensure that information we are required to disclose in reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.
Our management, with the participation and supervision of our Chief Executive Officer and our Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this annual report on Form 10 K . Based on such evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of such date, our disclosure controls and procedures were not effective due to the material weaknesses in our internal control over financial reporting described below. In light of this fact, our management has performed additional analyses, reconciliations, and other post-closing procedures and has concluded that, notwithstanding the material weaknesses in our internal control over financial reporting, the consolidated financial statements for the periods covered by and included in this annual report on Form 10-K fairly present, in all material respects, our financial position, results of operations and cashflows for the periods presented in conformity with GAAP.
b) Material Weaknesses in Internal Control over Financial Reporting
Management’s Report on Internal Controls Over Financial Reporting
This Annual Report on Form 10-K does not include an attestation report of our registered public accounting firm due to a transition period established by rules of the SEC for an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012.
Management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rule 13a-15(f) under the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions or because the degree of compliance with policies or procedures may deteriorate.
Management conducted, under the supervision of our Principal Executive Officer and Principal Financial Officer, an evaluation of the effectiveness of our internal control over financial reporting based on the framework in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, commonly referred to as the “COSO” criteria.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
Based on the assessment performed as of March 31, 2025, we identified five material weaknesses in our internal control over financial reporting related to:
(i) Our controls over independent review and documentation of third-party advisors’ reports were not operating effectively. We rely on third-party advisors for assistance with the preparation of key schedules and financial statements. However, we failed to establish a consistent process for independently reviewing these third-party advisor documents before incorporating them into our financial statements.
(ii) Our controls over financial reporting, specifically related to the inadequacy of our financial reporting policies and procedures, were not operating effectively. The Company lacks financial reporting policies and procedures that are commensurate with GAAP and SEC reporting requirements.
(iii) Our controls over the financial statement close process do not provide sufficient evidence of review.
(iv) Our resources are deficient in comprehensive knowledge and expertise pertaining to technical accounting and SEC reporting requirements.
(v) Our controls were not adequately designed to provide sufficient documentation and review of the operating effectiveness of Information Technology General Controls (ITGC’) for information systems that are relevant to the preparation of the Company’s consolidated financials. Specifically, our user access controls were not adequately designed or implemented and our monitoring of ITGC controls was insufficient.
Based on the assessment performed, as of March 31, 2025, our management concluded that the internal control over financial reporting was ineffective.
c) Changes in Internal Control over Financial Reporting
We are taking actions to remediate the material weaknesses relating to our internal control over financial reporting, as described above. Except as otherwise described herein, there were no changes in our internal control over financial reporting identified in connection with the evaluation required by Rule 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the period covered by this annual report on Form 10 K that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Remediation Plans
We have commenced measures to remediate the identified material weaknesses, including:
(i) We have been working with Deloitte to assist in the preparation and presentation of financial statements in accordance with US GAAP and PCAOB guidelines. Furthermore, we are putting a framework in place to properly manage the review and approval process of work prepared by our third-party advisors.
(ii) We will work on scheduling training sessions on a quarterly basis to provide relevant USGAAP knowledge. In addition to this management would look to hire people with USGAAP knowledge to bridge the gap over the next few quarters.
(iii) Management will be finalizing work commenced on developing accounting manuals, policies, and standard operating procedures in consultation with Deloitte, our external SOX consultants.
(iv) We are designing and implementing additional review procedures within our accounting and finance department to provide more robust and comprehensive internal controls over financial reporting.
(v) We have properly concluded that ITGC controls over SAP (our accounting software) are operating effectively as of March 31, 2025. We are in the midst of reviewing and implementing proper ITGC controls in all other areas relevant to the preparation of the Company’s financial statements.
We intend to continue to take steps to remediate the material weaknesses described above and further evolving our accounting processes. The actions we are taking are subject to ongoing executive management review and are also subject to the oversight of the Audit Committee. We will not be able to fully remediate these material weaknesses until these steps have been completed and have been operating effectively for a sufficient period of time. If we are unable to successfully remediate these material weaknesses, or if in the future, we identify further material weaknesses in our internal control over financial reporting, we may not detect errors on a timely basis and our consolidated financial statements may be materially misstated.
Inherent Limitations on Effectiveness of Controls
Our management, including our Chief Executive Officer and Chief Financial Officer, believes that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the company have been detected. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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ITEM 9B. OTHER INFORMATION
Item 9B. Other Information
Trading Arrangements
During the year ended March 31, 2025, none of our directors or officers (as defined in Rule 16a-1(f) promulgated under the Exchange Act) adopted or terminated any “Rule 10b5-1 trading arrangement” or any “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408 of Regulation S-K.
Additional Information
None.

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
Item 10. Directors, Executive Officers and Corporate Governance
Executive Officers and Board of Directors
The following table sets forth the name, age and position of each of our directors and executive officers as of the date of filing of this Form on 10-K:
Name
Age
Position
Executive Officers
Deepankar Tiwari(1)
Chief Executive Officer
Hiroshi Nishijima (1)
Former Chief Executive Officer
Sachin Gupta (2)
Chief Financial Officer
Shachi Singh (3)
Chief Legal Officer and General Counsel
Non-Employee Directors
Uri Levine (4)
Director and Chairman
Mohan Ananda
Director
Evelyn D’An
Director
Swatick Majumdar
Director
John Clarke (5)
Director
(1) Mr. Hiroshi Nishijima, resigned as Chief Executive Officer w.e.f May 2, 2025 and the Board appointed Mr. Deepankar Tiwari as the Chief Executive Officer of the Company on May 9, 2025, effective immediately.
(2) On April 4, 2024, the Company and Geiv Dubash, the then Chief Financial Officer of the Company, agreed to a mutual separation of employment, effective April 12, 2024. Mr. Dubash’s departure was not in connection with any disagreements with the Company. Mr. Sachin Gupta is served as Interim Chief Financial Officer from April 12, 2024, until January 16, 2025, on which date the Board appointed him as Chief Financial Officer of the Company.
(3) On January 6, 2024, the Board of Directors of the Company appointed Shachi Singh as the Chief Legal Officer and General Counsel of the Company.
(4) Effective as of March 31, 2025, the Board appointed Uri Levine, as a member and Chairman of the Board to serve as a Class III Director filling the vacancy created by the previous resignation of Mark Bailey
(5) On June 18, 2024, in connection with the June offering, Graham Gullans resigned from the Board, effective as of the closing of the offering. Mr. Gullans resignation was not due to a disagreement with a Company. Effective as of the closing of the offering, the Board appointed John Clarke to the Board as directors to fill one of the vacancies left by the resignations of Mr. Gullans and David Ishag. Mark Bailey, who was appointed to fill the other vacancy, resigned as a director of the Company, effective as of December 6, 2024.
Executive Officers
Mr. Deepankar Tiwari has over 25 years of experience in the Automotive / Mobility space. He spent over two decades with the Tata Group, being part of Tata Motors Passenger Car Business, followed by being at Tata Sons, the holding company of Tata Group. Subsequently he was the Asia-Pacific Head for Vehicle Solutions & Business Development at Uber Technologies. He serves as an Independent Director on the Board of Aiontech Solutions, a publicly listed data solutions company, and also sits on the Board of ETO Motors, which operates across electric vehicle manufacturing, vehicle retail, and energy-as-a-service business. Mr. Deepankar is the Director for India & Asia Pacific at Area9 Lyceum, a global leader in AI-driven adaptive learning platform, headquartered in Boston and Copenhagen. Additionally, he has been an advisor to Zoomcar since 2020.
Mr. Sachin Gupta has been Zoomcar’s Chief Financial Officer since April 12, 2025, and prior to that, since April 12, 2024, he served as Interim Chief Financial Officer. Prior to becoming Interim Chief Financial Officer, Mr. Gupta served as the Company’s Financial Controller since May 2019 and is responsible for all aspect of Accounting, Finance, Treasury, Taxation, Statutory Audits, and Internal Audits of all the entities of Zoomcar globally. Mr. Gupta has more than 12 years of accounting and business experience. Prior to Zoomcar, Mr. Gupta spent two years as a Financial Planning and Analysts (“FP&A”) Manager at Amazon, where he managed the FP&A for the FinOps team for all the verticals and all the entities of Amazon globally. Prior to Amazon, he had experience working on Accounting, Business Finance, Due Diligence and SAP (systems, applications & products) implementation for AGS Transact Technologies Limited, where he worked for 5 years. Mr. Gupta graduated from Calcutta University and is a professionally Qualified Chartered Accountant from the Institute of Chartered Accountants of India (equivalent to CPA in the United States) and Qualified Company Secretary from the Institute of Company Secretaries of India.
Ms. Shachi Singh has worked at Zoomcar since 2019 and has served as the Company’s General Counsel and Legal Head since July 2024. She was appointed by the Board as an executive officer on January 6, 2025. She is currently responsible for managing all aspects of legal and compliance matters of the Zoomcar entities globally. Prior to working at the Company, Ms. Singh practiced as a private equity / venture capital & M&A lawyer at leading law firms in India. During her practice, she advised inter alia strategic corporates, private equity funds and start-ups on a variety of domestic and cross-border transactions. Ms. Singh graduated from Symbiosis Law School (Pune) with a degree in law and business administration.
Directors
Mr. Uri Levine became a director and Chairman of the Board of the Company on March 31, 2025. He had served as a consultant to the Company, since October 21, 2024, until his position as a consultant was terminated effectively upon becoming a director and Chairman. Mr. Levine also previously served on the board of Zoomcar, Inc. from 2021 to 2023. Mr. Levine is a passionate serial entrepreneur and disruptor. He co-founded Waze in 2007, the world’s largest community-based driving traffic and navigation app, which was acquired by Google in June 2013 for more than $1.1 billion. He was a former investor in and initial board member of Moovit, a public transportation app, which Intel acquired for $1 billion in 2020. From 2021 to 2024, Mr. Levine served on the board of Infosys Ltd. (NYSE: INFY), including as a member of the Risk Management Committee, the Corporate Social Responsibility Committee, the Environment, Social and Governance Committee and Cybersecurity risk sub-committee. He is also currently serving on the boards of numerous private companies, including Pontera (formerly FeeX), FairFly, Pluro, Seetree, Kahun and more.
Mr. Levine has been in the high-tech business for the last 40 years, half of them in the startup scene, and has seen everything ranging from failure, middle success, and big success. He is also a world-class speaker on entrepreneurship, disruption, evolution vs. revolutions of markets, mobility and startups. Motivated to encourage the next generation of thinkers and innovators, he also leads an academic workshop entitled “How to Build a Startup,” aimed at undergraduate and graduate-level business students. Mr. Levine is a professor at IE University in Madrid, teaching entrepreneurship. Mr. Levine holds a Bachelor of Arts degree from Tel Aviv University. Before attending university, he served in the Israeli army in its special intelligence unit 8200. He is a trustee at the Tel Aviv University.
Mr. Mohan Ananda serves as our Chairman. Dr. Ananda was the founding Chairman, CEO, and President of Stamps.com (NASDAQ:STMP) and served on its board of directors. Stamps.com, established in 1996, is the leading provider of Internet-based mailing and shipping solutions and utilizes technology developed by Dr. Ananda and protected by a number of US patents. Dr. Ananda was instrumental in raising in excess of $400 million of capital for Stamps.com, which included multiple rounds of private raises, followed by its $55 million initial public offering on NASDAQ in 1999 and a $309.1 million follow-on public offering. In June 2021, Stamps.com agreed to settle claims in connection with a derivative suit brought by shareholders of Stamps.com in exchange for (i) payment of $30 million of insurance proceeds to Stamps.com on behalf of certain of the shareholders from D&O insurance policies purchased by Stamps.com for the benefit of its directors and officers and Stamps.com; and (ii) implementation of certain corporate governance changes by Stamps.com. n August 2021, Stamps.com agreed to pay $100 million to settle claims in connection with a class action lawsuit brought by investors alleging Stamps.com misled investors about Stamps.com’s relationship with the United States Postal Service to artificially inflate its stock price. Dr. Ananda also has been instrumental in entering into a definitive agreement for Stamps.com (STMP) to be acquired by Thoma Bravo, LP, a leading software investment firm, in an all-cash transaction that values Stamps.com at approximately $6.6 billion. Under the terms of the agreement, Stamps.com stockholders will receive $330.00 per share. Dr. Ananda was also the founder and director of a European-based investment firm, JAB Holdings Limited (“JAB”). JAB’s capital was raised through a public offering in the Alternative Investment Market of the London Stock Exchange in the United Kingdom. Dr. Ananda was also a founder of Envestnet, Inc. (NYSE:ENV) (“Envestnet”), which is a leading provider of solutions to financial advisors and institutions. Dr. Ananda served as a director on Envestnet’s board for a number of years. He is also the Chairman and CEO of Ananda Enterprises, Inc. a California company that provides technology and management consulting services. Dr. Ananda has been a managing partner in the law firm of Ananda & Krause, since 1986 and is the founding Chairman and CEO of Ananda Foundation (ananda-foundation.org). Ananda Foundation is a non-profit organization committed to bringing innovation in healthcare management to the lives of people by providing medical services online (telemedicine) for Neurology/Neurosurgery, Internal Medicine & Pediatric/Adolescent Medicine patients from all over the world. This includes clinical knowledge exchange, health technology implementation, and patient treatment in collaboration with the areas of telemedicine, tele-radiology services, and remote medical opinions/second opinions.
Dr. Ananda is also the Chairman of Paanini Foundation. The Paanini Foundation is focused on how technology can help employees do their jobs more innovatively and how human-machine collaboration can lead to a new paradigm of productivity. The Paanini Foundation’s mission is to prepare employees who may be impacted by AI and automation for the new opportunities that they will encounter. Dr. Ananda is also working with the Stanford Seed Transformation program organized by Stanford University though the Stanford Institute for Innovation in Developing Economies as a Seed Consultant assisting companies in India in the areas of improving management, growth, marketing and finances.
Dr. Ananda was the former Director of space systems at Jet Propulsion Laboratory, a NASA center from April 1970 to March 1980, and was the former Director of Research & Development for the Aerospace Corporation, a think tank for the US Air Force from March 1980 to December 1989 where Dr. Ananda was the primary architect for the development of the Global Positioning System (GPS) for the U.S. Department of Defence. Our board has determined that Dr. Ananda’s extensive experience qualifies him to serve as our Chairman, Chief Executive Officer, and a member of our board of directors.
Dr. Ananda received his B.S. degree with Honors in Mechanical Engineering from Coimbatore Institute of Technology, Coimbatore, India. He received his MS degree in Aeronautics from California Institute of Technology, Pasadena, California. He also obtained a Ph.D. from the University of California at Los Angeles in Astro-dynamics and Control. He also obtained his law degree, J.D. from the University of West Los Angeles and has been a member of the California Bar since 1986.
Ms. Evelyn D’An is an experienced Independent Board Director and experienced Chair of Audit, Compensation and Nominating/Governance committees. She is a Hispanic business leader, having served in various financial and operational leadership roles throughout her career. Ms. D’An was also a former audit partner with Ernst & Young, spending over 18 years serving clients across a variety of sectors including technology, retail and consumer products. Ms. D’An has served on numerous corporate boards since 2006.
Since August 2021, Ms. D’An has served on the board of Backblaze, Inc. (“Backblaze”) (NASDAQ:BLZE), a cloud storage and data backup company, where she chairs the Audit Committee and is a member of the Compensation Committee. Since March 2020, Ms. D’An has served on the board of directors of GHD Group Pty Ltd (“GHD”), an employee-owned global Australian based professional services firm specializing in engineering, advisory and digital services, with more than 12,000 employees across five continents. Ms. D’An is the chair of GHD’s Audit Committee and is also a member of GHD’s Global Inclusion & Diversity Council and Risk Committee.
From March 2018 until April 2021, Ms. D’An served on the board of directors of Enochian Biosciences Inc., (NASDAQ: ENOB), a pre-clinical stage biosciences technology start-up focused on clinical trials for HIV/AIDS and cancer and was a member of the audit committee, nominating and governance committee and compensation committee.
From November 2016 through June 2022, Ms. D’An served on the board of directors of Summer Infant, Inc., a formerly listed Nasdaq listed manufacturer of infant and juvenile products, with distribution into major retailers such as Target, Walmart and Amazon where she chaired the Compensation Committee and was a member of the Audit Committee. Summer Infant was sold in June 2022 to a private company.
Ms. D’An has extensive experience in corporate governance and brings a wealth of corporate governance, financial and accounting experience to the Zoomcar Board. Having graduated with a Bachelor of Science in Accounting from the State University of Albany, Ms. D’An was previously a licensed Certified Public Accountant in New York from July 9, 1990. She frequently speaks about governance topics and is currently chair of the Board of Florida National Association of Corporate Directors. We believe that Ms. D’An is qualified to serve as a member of our Board because of her extensive experience advising technology companies, including other public companies as both a director and executive.
Mr. Swatick Majumdar is a seasoned investment banker and venture capitalist. He possesses several decades of advising Indian companies on their US-India activities such as Pipavav Shipyard India, IDFC, Satyam Computer Services, Indian Infrastructure Opportunity Fund and Lava International Ltd. Most recently, Mr. Majumdar assisted in the capital raise for Zoomcar. His core expertise is in growth stage companies for capital raise, growth, product, and market fit.
Mr. Majumdar is currently serving as a Managing Director at Chatsworth Securities, LLC (“Chatsworth”). At Chatsworth, he directs all his attention to investment banking activities in the US-India corridor, assisting and advising in sectors such as Mobility, Technology, Media and Telecommunication, as well as Renewable Energy. He has been serving as a board advisor at Easy Energy Systems, a renewable energy company that is working to utilize waste to create energy in India, since January 2020. Mr. Majumdar is also a co-founder of Survive and Thrive Today, a three-day startup bootcamp and media company. Mr. Majumdar is also the President of Global Path Capital, a role in which he has served since August 2009. From January 2017 to March 2019, Mr. Majumdar was a board advisor at Rental Uncle, India (P) Ltd.
Previously, Mr. Majumdar served as a Venture Partner at Digital Entertainment Venture, a New York-based VC fund, from July 2013 to December 2021. From November 2002 to December 2005, Mr. Majumdar was the owner-operator of Riverhead Sports Management. He is a mentor at the CUNY Startup Accelerator and at the German Accelerator. He brings a wealth of global relationships, expertise, and operating history to companies. Mr. Majumdar has participated as a speaker, panelist, and a moderator at several industry related events in the US, India and the United Arab Emirates.
Mr. Majumdar has a double master’s degree in Applied Economics from University of Lucknow, India and in Computer and Management Information Systems from University of Central Texas.
Mr. John Clarke has 40 years of experience providing specialty financing and capital advice regarding emerging private and public companies. In 2021, John joined Aegis Capital Corp and Stern Aegis Ventures as a Senior Managing Director. Previously, he has been President of H.C. Wainwright & Co and worked with Spencer Trask Ventures, as well as several Investment boutiques and NYSE brokerage firms. During his career, he has raised several hundred million dollars for over 100 private and public Offerings in a variety of emerging industries.
Mr. Clarke developed his career as a Branch Manager for Josepthal, Lyon & Ross and is currently registered with Representative, General Securities and Financial and Operations Principal Securities and Research Analyst Supervisory licenses. He is a graduate of the E. Claiborne Robbins School of Business and holds a B.S. in Finance, and lives in New Jersey. Mr. Clarke was designated to the Board by Aegis Capital Corp. pursuant to an arrangement between the Company and Aegis which provided that Aegis has the one-time right to designate two (2) independent directors to the Board.
Family Relationships
There are no family relationships among any of our directors or executive officers.
Certain Legal Proceedings
None of the Company’s directors or executive officers have been involved, in the past ten years and in a manner material to an evaluation of such director’s or officer’s ability or integrity to serve as a director or executive officer, in any of those “Certain Legal Proceedings” more fully detailed in Item 401(f) of Regulation S-K, which include but are not limited to, bankruptcies, criminal convictions and an adjudication finding that an individual violated federal or state securities laws.
Corporate Governance
Composition of the Board of Directors
Our business and affairs are organized under the direction of the Board, which consists of seven (5) members. Mohan Ananda serves as Chairman of the Board. The primary responsibilities of the Board are to provide oversight, strategic guidance, counselling and direction to our management. The Board meets on a regular basis and additionally as required.
In accordance with the terms of the Charter, the Board is divided into three classes, Class I, Class II and Class III, with only one class of directors being elected in each year and each class serving a three-year term, except that the Class I directors are appointed to an initial one-year term (and three-year terms subsequently), the Class II directors are appointed to an initial two-year term (and three-year terms subsequently) and the Class III directors are appointed to an initial three-year term (and three-year terms subsequently). There is no cumulative voting with respect to the election of directors, with the result that the holders of more than 50% of the shares voted for the election of directors can elect all of the directors.
The Board is divided into the following classes:
● Class I, which consists of Swatick Majumdar and John Clarke, whose terms will expire at the 2027 Annual Meeting of Stockholders, or until their successors are elected and qualified;
● Class II, which consists of Mohan Ananda, whose terms will expire at the 2025 Annual Meeting of Stockholders, or until his successor is elected and qualified; and; and
● Class III, which consists of Uri Levine and Evelyn D’An, whose term will expire at the 2026 Annual Meeting of Stockholders, or until his successor is elected and qualified.
This classification of the Board may have the effect of delaying or preventing changes in our control or management.
Board Leadership Structure
Director Independence
Section 3.2 of the OTCQX Rules for U.S. Companies (the “OTCQX Rules”), require that a minimum of two of the board of directors of a should be composed of “independent directors,”. As per the OTCQX Rules the following persons shall not be considered independent: A) a director who is, or at any time during the past three years was, employed by the Company; (B) a director who accepted or has a Family Member who accepted any compensation from the Company in excess of $120,000 during any fiscal year within the three years preceding the determination of independence, other than compensation for board or board committee service; compensation paid to a Family Member who is an employee (other than an executive officer) of the Company; or benefits under a tax-qualified retirement plan, or non-discretionary compensation; or (C) A director who is the Family Member of a Person who is, or at any time during the past three years was, employed by the Company as an executive officer. The Company’s Board has determined that each of Mohan Ananda, Evelyn D’An, Swatick Majumdar, and John Clarke are independent directors under the OTCQX Rules and the Audit Committee composes of independent directors and meets the heightened independence standards of Rule 10A-3 of the Exchange Act. In making these determinations, the Board considered the current and prior relationships that each non-employee director had with Zoomcar and has with the Company and all other facts and circumstances the Board deemed relevant in determining independence, including the beneficial ownership of our common stock by each non-employee director, and the transactions involving them described in the section entitled “Certain Relationships and Related Party Transactions.”
Committees of the Board of Directors
The standing committees of Company’s Board consists of an Audit Committee, a Compensation Committee, and a Nominating and Corporate Governance Committee. The composition and responsibilities of each of the committees of the Board are described below. Members serve on these committees until their resignation or until otherwise determined by the Board. The Board may establish other committees as it deems necessary or appropriate from time to time.
Audit Committee
The Company’s Audit Committee has been established in accordance with Section 3(a)(58)(A) of the Exchange Act and consists of Evelyn D’An, John Clarke and Swatick Majumdar, each of whom is an independent director and is “financially literate” as defined under the Nasdaq listing standards. Ms. D’An serves as chair of the Audit Committee. The Company’s Board has determined that Ms. D’An qualifies as an “audit committee financial expert,” as defined under rules and regulations of the SEC.
The primary purpose of the audit committee is to discharge the responsibilities of the Board with respect to corporate accounting and financial reporting processes, systems of internal control and financial statement audits, and to oversee Zoomcar’s independent registered public accounting firm. Specific responsibilities of the audit committee include:
● helping the Board oversee corporate accounting and financial reporting processes;
● managing the selection, engagement, qualifications, independence and performance of a qualified firm to serve as the independent registered public accounting firm to audit our consolidated financial statements;
● discussing the scope and results of the audit with the independent registered public accounting firm, and reviewing, with management and the independent accountants, our interim and year-end operating results;
● developing procedures for employees to submit concerns anonymously about questionable accounting or audit matters;
● reviewing related person transactions; obtaining and reviewing a report by the independent registered public accounting firm at least annually that describes our internal quality control procedures, any material issues with such procedures, and any steps taken to deal with such issues when required by applicable law; and
● approving or as permitted, pre-approving, audit and permissible non-audit services to be performed by the independent registered public accounting firm.
Compensation Committee
The Company’s Compensation Committee consists of Evelyn D’An and John Clarke, each of whom is an independent director under OTCQX’s listing standards, and Mr. Clarke serves as chair of the Compensation Committee.
The primary purpose of the compensation committee is to discharge the responsibilities of the Board in overseeing the compensation policies, plans and programs and to review and determine the compensation to be paid to executive officers, directors and other senior management, as appropriate. Specific responsibilities of the compensation committee include:
● reviewing and approving the compensation of the chief executive officer, other executive officers and senior management;
● reviewing and recommending to the board of directors the compensation of directors;
● administering the equity incentive plans and other benefit programs;
● reviewing, adopting, amending and terminating incentive compensation and equity plans, severance agreements, profit sharing plans, bonus plans, change-of-control protections and any other compensatory arrangements for the executive officers and other senior management; and
● reviewing and establishing general policies relating to compensation and benefits of the employees, including the overall compensation philosophy.
Nominating and Corporate Governance Committee
The Company’s Nominating and Corporate Governance Committee consists of Evelyn D’An and Swatick Majumdar, who is an independent director under Nasdaq’s listing standards, Mr. Majumdar serves as the chair of the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee is responsible for overseeing the selection of persons to be nominated to serve on the Board. The Nominating and Corporate Governance Committee considers persons identified by its members, management, shareholders, investment bankers and others.
The guidelines for selecting nominees, including nominees who will permit the Continuing Company to comply with applicable states and Nasdaq diversity standards, are specified in the Nominating and Corporate Governance Committee Charter.
Specific responsibilities of the nominating and corporate governance committee include:
● identifying and evaluating candidates, including the nomination of incumbent directors for re-election and nominees recommended by stockholders, to serve on the board of directors;
● considering and making recommendations to the board of directors regarding the composition and chairmanship of the committees of the Board;
● developing and making recommendations to the Board regarding corporate governance guidelines and matters, including in relation to corporate social responsibility; and
● overseeing periodic evaluations of the performance of the Board, including its individual directors and committees.
Compensation Committee Interlocks and Insider Participation
None of the Company’s executive officers currently serves, or in the past year has served, as a member of the board of directors or compensation committee of any entity that has one or more executive officers serving on the Company’s Board.
Code of Ethics
We have adopted a have a code of ethics that applies to all of its executive officers, directors and employees, including its principal executive officer, principal financial officer, principal accounting officer or controller or persons performing similar functions. The code of ethics is available on our website, www.zoomcar.com. In addition, we intend to post on our website all disclosures that are required by applicable laws concerning any amendments to, or waivers from, any provision of the code. The reference to the Zoomcar website address does not constitute incorporation by reference of the information contained at or available through Zoomcar’s website, and you should not consider it to be a part of this annual report.
Trading Policies
On December 29, 2023, we adopted insider trading policies and procedures governing the purchase, sale, and/or other dispositions of our securities by directors, officers and employees, which are reasonably designed to promote compliance with insider trading laws, rules and regulations (the “Insider Trading Policy”).
The foregoing description of the Insider Trading Policy does not purport to be complete and is qualified in its entirety by the terms and conditions of the Insider Trading Policy, a copy of which is attached hereto as Exhibit 19 and is incorporated herein by reference.
Compensation Recovery and Clawback Policy
Under the Sarbanes-Oxley Act, in the event of misconduct that results in a financial restatement that would have reduced a previously paid incentive amount, we can recoup those improper payments from our executive officers. The SEC also recently adopted rules which direct national stock exchanges to require listed companies to implement policies intended to recoup bonuses paid to executives if the company is found to have misstated its financial results.
On December 29, 2023 our Board of Directors approved the adoption of the Executive Compensation Clawback Policy (the “Clawback Policy”), with an effective date of December 29, 2023, in order to comply with the final clawback rules adopted by the SEC under Rule 10D-1 under the Exchange Act (the “Rule”), (the “Final Clawback Rules”).
The Clawback Policy provides for the mandatory recovery of erroneously awarded incentive-based compensation from our current and former executive officers as defined in the Rule (“Covered Officers”) in the event that we are required to prepare an accounting restatement, in accordance with the Final Clawback Rules. The recovery of such compensation applies regardless of whether a Covered Officer engaged in misconduct or otherwise caused or contributed to the requirement of an accounting restatement. Under the Clawback Policy, our Board of Directors may recoup from the Covered Officers erroneously awarded incentive compensation received within a lookback period of the three completed fiscal years preceding the date on which we are required to prepare an accounting restatement.
Role of our Board in Risk Oversight/Risk Committee
One of the key functions of our Board is the informed oversight of our risk management process. Our Board does not have a standing risk management committee, but rather administers this oversight function directly through our Board as a whole, as well as through various standing committees of our Board that address risks inherent in their respective areas of oversight. For example, our audit committee is responsible for overseeing the management of risks associated with our financial reporting, operational, privacy and cybersecurity, competition, legal, regulatory, compliance and reputational matters; and our compensation committee oversees the management of risks associated with our compensation policies and programs.
Oversight of Cybersecurity Risks
We face a number of risks, including cybersecurity risks and those other risks described under the section titled “Risk Factors” included in this annual report. Our Internal Security Team is responsible for overseeing the steps management has taken with respect to cybersecurity risk exposure. As part of this oversight, our Audit Committee will receives regular reports from our Internal Security Team on cybersecurity risk exposure and the actions taken by the Company to limit, monitor or control such exposures at its regularly scheduled meetings. Management will along with the Internal Security Team works with third party service providers to maintain appropriate controls. We believe this division of responsibilities is the most effective approach for addressing our cybersecurity risks and that our Board leadership structure supports this approach. See Part I, Item 1C - Cybersecurity - for a more detailed discussion of our procedures relating to cybersecurity.
Limitation on Liability and Indemnification of Directors and Officers
Our Charter limits directors’ liability to the fullest extent permitted under the DGCL. The DGCL provides that directors of a corporation will not be personally liable for monetary damages for breach of their fiduciary duties as directors, except for liability:
● for any transaction from which the director derives an improper personal benefit;
● for any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law;
● for any unlawful payment of dividends or redemption of shares; or
● for any breach of a director’s duty of loyalty to the corporation or its stockholders.
If the DGCL is amended to authorize corporate action further eliminating or limiting the personal liability of directors, then the liability of the directors will be eliminated or limited to the fullest extent permitted by the DGCL, as so amended.
Delaware law and our Bylaws provide that the Company will, in certain situations, indemnify its directors and officers and may indemnify other employees and other agents, to the fullest extent permitted by law. Any indemnified person is also entitled, subject to certain limitations, to advancement, direct payment, or reimbursement of reasonable expenses (including attorneys’ fees and disbursements) in advance of the final disposition of the proceeding.
In addition, we have entered into separate indemnification agreements with our directors and officers. These agreements, among other things, require the Company to indemnify its directors and officers for certain expenses, including attorneys’ fees, judgments, fines, and settlement amounts incurred by a director or officer in any action or proceeding arising out of their services as one of its directors or officers or any other company or enterprise to which the person provides services at its request.
Zoomcar believes these provisions in the Charter and Bylaws and these indemnification agreements are necessary to attract and retain qualified persons as directors and officers. Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers, or control persons, in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our executive officers, directors and persons who beneficially own more than 10% of a registered class of our equity securities to file with the SEC initial reports of ownership and reports of changes in ownership of our Common Stock and other equity securities. These executive officers, directors, and greater than 10% beneficial owners are required by SEC regulation to furnish us with copies of all Section 16(a) forms filed by such reporting persons. Based solely on our review of such forms furnished to us and written representations from certain reporting persons, we believe that during the fiscal year ended March 31, 2025, all reports applicable to our executive officers, directors and greater than 10% beneficial owners were filed in a timely manner in accordance with Section 16(a) of the Exchange Act except as set forth below:
Mark Bailey Sr. (former director), Hiroshi Nishijima(former CEO), Adarsh Menon (former President), Sachin Gupta (CFO) and Shachi Singh (CLO) each filed a late Form 3.
Mark Bailey (former director), John Clarke (Director), Hiroshi Nishijima (former CEO) each filed a late Form 4.

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ITEM 11. EXECUTIVE COMPENSATION
Item 11. Executive Compensation
EXECUTIVE COMPENSATION
We qualify as an “emerging growth company” within the meaning of the Securities Act for purposes of the SEC’s executive compensation disclosure rules. In accordance with those rules, we are required to provide a Summary Compensation Table and an Outstanding Equity Awards at Fiscal Year-End Table, as well as limited narrative disclosures regarding executive compensation for our last completed fiscal year. Further, our reporting obligations extend only to our “named executive officers,” who are the individuals who served as Zoomcar’s principal executive officer and Zoomcar’s next two other most highly compensated officers at the fiscal year ended March 31, 2025, the most recently completed fiscal year as of our first public filing. Our named executive officers as of March 31, 2025 were:
Name
Principal Position
Hiroshi Nishijima
Chief Executive Officer
Sachin Gupta
Chief Financial Officer
Shachi Singh
Chief Legal Officer and General Counsel
Summary Compensation Table
The following table summarizes the compensation awarded to, earned by, or paid to Zoomcar’s named executive officers for the fiscal year ended March 31, 2025 and 2024.
Name and Principal Position Year Salary
($)(1) Bonus
($) Option
Awards
($)(2) Non-Equity
Incentive
Plan
Award
($)(3) All Other
Compensation
($)(4) Total
($)
Greg Moran(5) 308,177 100,000 97,685 15,795 74,207 595,864
Former Chief Executive Officer 67,042
-
121,771 188,813
Sachin Gupta(6) 92,401 6,186 - - 37,528 136,115
Financial Officer 116,239 10,048 - 15,652 143,735
Hiroshi Nishijima﻿(7)
302,724 78,399
17,189 52,903 451,215
Chief Executive Officer 213,697 105,394 - - 125,145 348,554
Shachi Singh(8)﻿ 64,725 4,077
- 31,915 100,717
Chief Legal Officer and General Counsel 79,468 7,738 1,390 - 17,414 106,010
(1) The amounts in this column reflect the base salary actually paid to each named executive officer for the fiscal year ended March 31, 2025 and 2024, which is paid in Indian Rupees and reported above based on a rate of 84.56 Indian Rupees to $1 and 82.78 Indian Rupees to $1 respectively.
(2) The number in this column for Mr. Greg Moran represent the grant date fair value of 17,048 stock option awards granted under the 2012 Equity Plan which the Company has assumed under the 2012 Incentive Plan as was outstanding at the end of fiscal year ended March 31, 2024 computed in accordance with the Financial Accounting Standards Board’s (FASB) Accounting Standards Codification (ASC) Topic 718. For Mr. Sachin Gupta and Ms. Shachi Singh the numbers represent the grant date fair value of the RSUs issued under the 2023 Equity Incentive Plan.
(3) The amounts in this column represent the amount of variable pay earned by each named executive officer in respect of the fiscal year ended March 31, 2025, which is paid in Indian Rupees and reported above based on a rate of 84.56 Indian Rupees to $1.
(4) All Other Compensation include and constitute of leave encashments, gratuity, Zoomcar contribution to provident fund, retention bonus, directorship bonus, Zoomcar club incentive, and rent towards corporate apartment utilized. amounts reported for each named executive officer were paid in Indian Rupees and are reported for the fiscal year ended March 31, 2025 and 2024, based on a rate of 84.56 Indian Rupees to $1 and 82.78 Indian Rupees to $1 respectively.
(5)
On June 20, 2024, Greg Moran, the Company’s Chief Executive Officer, was terminated from his role. Pursuant to Mr. Moran’s employment agreement, Mr. Moran was required to resign from the Board of Directors of the Company (the “Board”) as a result of such termination.
(6) Mr. Geiv Dubash(former Chief Financial Officer) resigned as Chief Financial Officer effective April 12, 2024. Mr. Sachin Gupta served as our Interim Chief Financial Officer from April 12, 2024 until January 16, 2025 and then was appointed Chief Financial Officer with effect from January 17, 2025.
(7) Following such termination of Mr. Moran, effective June 20, 2024, the Board of Directors of the Company appointed Hiroshi Nishijima, the Company’s Chief Operating Officer, as Acting Chief Executive Officer and then as Chief Executive Officer on February 1, 2025. Pursuant to his employment agreement, Mr. Nishijima’s annual salary was $350,000 per annum. Mr. Nishijima resigned from his position as the Chief Executive Officer. Mr. Nishijima’s resignation was effective from May 02, 2025 and Mr. Deepankar Tiwari was appointed by the Board to replace Mr. Nishijima on May 9, 2025.
(8) On January 6, 2025, the board of directors (the “Board”) of Zoomcar Holdings, Inc. (the “Company”) approved the designation of Shachi Singh, the Company’s General Counsel and Chief Legal Officer, as an executive officer of the Company, effective immediately.
Narrative to Summary Compensation Table
Employment Agreements
For the fiscal year ended March 31, 2025, Zoomcar maintained employment agreements with its Chief Executive Officer, Chief Financial Officer, and Chief Legal Officer.
Effective upon the Closing of the Business Combination, Zoomcar amended and restated the existing employment agreements with each of the Company’s CEO, CFO and COO. The amended and restated employment agreements governs the terms of continuing employment with Zoomcar India and also provide that each executive agrees to serve as an executive officer of the Company following the completion of the Business Combination without additional compensation. Below is a summary of the material updates to each of the amended and restated employment agreements.
Amended and Restated Agreement with Greg Moran
The annual base salary for Mr. Moran was $332,500, plus an annual variable pay opportunity of up to $17,500. Mr. Moran was eligible for a one-time supplemental bonus of $100,000, payable six months following the amended and restated employment agreement becoming effective. Subject to the approval of the compensation committee of the Company’s Board and the terms of the amended and restated employment agreement, Mr. Moran’s amended and restated employment agreement provides for the grant of restricted stock units equal to 8% of the aggregate number of Common Stock issued and outstanding immediately after the Business Combination. The RSUs will vest over three years, with three-fourths of the RSUs vesting on the first anniversary of the Closing Date and the remaining one-fourth of the RSUs vesting monthly thereafter, subject to Mr. Moran’s continued service with the Company through each vesting date. As of the date hereof, no RSU’s have been granted under the 2023 Equity Incentive Plan.
On June 20, 2024, Greg Moran, the Company’s Chief Executive Officer, was terminated from his role. Pursuant to Mr. Moran’s employment agreement, Mr. Moran was required to resign from the Board as a result of such termination. Following such termination, effective June 20, 2024, the Board of Directors of the Company appointed Hiroshi Nishijima, the Company’s Chief Operating Officer, as Acting Chief Executive Officer and then as Chief Executive Officer on February 1, 2025. Mr. Nishijima has also resigned from his position as the Chief Executive Officer. Mr. Nishijima’s resignation is effective from May 02, 2025 and was finalized by the Board on May 07, 2025.
Consultant Agreement with Deepankar Tiwari
Mr. Deepankar Tiwari was appointed as the Chief Executive Officer of the Company on May 09, 2025 pursuant to the terms of a Consultant Agreement. His initial term is for one (1) year which can be extended upon mutual discussion. The monthly consultancy fee, bonuses, certain initial and kicker RSU grants for Mr. Deepankar Tiwari, are as contracted in the May 09, 2025, Consultant Agreement.
In accordance with the terms of the Consultant Agreement, the Company has agreed to (i) pay Mr. Tiwari a service fee of $14,874 per month, (ii) grant Mr. Tiwari 1,000,000 (one million) RSUs (“initial Grant”) of which 250,000 RSU shall vest at the end of each quarter beginning from the Effective Date of the Consultant Agreement (iii) grant another 1,000,000 (one million) RSUs (“Kicker Grant”), if Mr. Tiwari and the Board mutually agree to extend his term for an additional one (1) year beyond the initial term for which the vesting schedule and set of performance objectives and key performance indicators (KPIs) for this grant is to be decided mutually by him and the Board.
The Consultant Agreement specifies certain compensation following termination, including severance payments of three months of Mr. Tiwari’s last drawn salary if Mr. Tiwari is terminated by the Company without “Cause” (as defined in the consultant agreement) payable either in lumpsum or in instalments as decided by the Board in accordance with the Company’s normal policies and practices. The Consultant Agreement further provides that such severance compensation shall be subject to reduction or offset by any fees, compensation, or income earned or received by Mr. Tiwari for services rendered to any other party during the severance period.
Employment Agreement with Sachin Gupta
Effective April 12, 2024, the Board of Directors of the Company appointed Sachin Gupta, the Company’s Financial Controller, as Acting Chief Financial Officer and then as Chief Financial Officer on January 17, 2025. The annual base salary, annual variable pay opportunity, and supplemental bonus are as provided for Mr. Sachin Gupta, as contracted, in March 06, 2025 employment agreement.
The employment agreement specifies certain compensation following termination of employment, including severance payments of 45 days of Mr. Gupta’s last drawn salary if Mr. Gupta’s employment is terminated by the Company without “Cause” (as defined in the employment agreement). Mr. Gupta was also granted and issued 616 RSUs under the 2023 Equity Incentive Plan of the Company as per the terms of the restricted stock unit award agreement dated February 12, 2025.
Amended and Restated Agreement with Hiroshi Nishijima
The annual base salary, annual variable pay opportunity, and supplemental bonus remains the same for Mr. Nishijima, as contracted in his May 2, 2022, employment agreement. Subject to the approval of the compensation committee of the Board, Mr. Nishijima will be granted restricted stock units equal to 0.25% of the aggregate number of Common Stock issued and outstanding immediately after the Business Combination. The RSUs will vest over three years, with one-half of the RSUs vesting on the first anniversary of the Closing Date and the remaining one-half of the RSUs vesting monthly thereafter, subject to Mr. Nishijima’s continued service with the Company’s through each vesting date. As of the date hereof, no RSU’s have been granted under the 2023 Equity Incentive Plan.
The employment agreement specifies certain compensation following termination of employment, including severance payments of four months of Mr. Nishijima’s last drawn salary if Mr. Nishijima’s employment is terminated by the Company without “Cause” (as defined in the employment agreement) or if his employment is terminated by the acquiring company within one year of an acquisition of the Company.
Following the termination of Mr. Greg Moran as the Company’s Chief Executive Officer, effective June 20, 2024, the Board of Directors of the Company appointed Hiroshi Nishijima, the Company’s Chief Operating Officer as Acting Chief Executive Officer and then as Chief Executive Officer on February 1, 2025.
Mr. Nishijima has resigned from his position as the Chief Executive Officer. Mr. Nishijima’s resignation is effective from May 02, 2025 and was finalized by the Board on May 07, 2025. Mr. Nishijima’s resignation was not due to a disagreement with a Company.
Following his resignation the Board appointed Mr. Deepankar Tiwari as the Chief Executive Officer of the Company w.e.f. May 09, 2025.
Employment Agreement with Shachi Singh
The annual base salary, annual variable pay opportunity, and supplemental bonus are as provided for Ms. Shachi Singh, as contracted, in her January 8, 2025 employment agreement.
The employment agreement specifies certain compensation following termination of employment, including severance payments of three months of Ms. Singh’s last drawn salary if Ms. Singh’s employment is terminated by the Company without “Cause” (as defined in the employment agreement). Ms. Singh was also granted and issued 476 RSUs under the 2023 Equity Incentive Plan of the Company as per the terms of the restricted stock unit award agreement dated February 12, 2025.
Equity-Based Compensation
2012 Equity Plan
In 2012, the Zoomcar Inc. Board adopted, and Zoomcar Inc.’s stockholders approved, the Zoomcar, Inc. 2012 Equity Incentive Plan (the “2012 Equity Plan”). Each of the named executive officers hold stock options under the 2012 Equity Plan, as described below.
As the Zoomcar Holdings, Inc. 2023 Equity Incentive Plan was approved by the Company’s stockholders and adopted by the Board, the 2012 Equity Plan was terminated and no further awards will be granted under it.
2023 Incentive Plan
The following is a summary of the material features of the Incentive Plan, which was adopted by the Company’s stockholders in January 2024.
Purpose
The purpose of the Incentive Plan is to enhance the ability of Zoomcar to attract, retain and motivate persons who make (or are expected to make) important contributions by providing these individuals with equity ownership opportunities and/or equity-linked compensatory opportunities. Equity awards and equity-linked compensatory opportunities are intended to motivate high levels of performance and align the interests of directors, employees, and consultants with those of stockholders by giving directors, employees and providing a means of recognizing their contributions to Zoomcar’s success. The Board believes that equity awards are necessary to remain competitive in its industry and are essential to recruiting and retaining the highly qualified employees who help us meet our goals.
Eligibility
Persons eligible to participate in the Incentive Plan will be officers, employees, non-employee directors, and consultants of Zoomcar and its subsidiaries as selected from time to time by the plan administrator in its discretion, including prospective officers, employees, non-employee directors and consultants. Any awards granted to such a prospect before the individual’s start date may not become vested or exercisable, and no shares may be issued to such individual, before the date the individual first commences performance of services with Zoomcar.
Administration
The Incentive Plan will be administered by the compensation committee of the Zoomcar Board, the Zoomcar Board, or such other similar committee pursuant to the terms of the Incentive Plan. The plan administrator, which initially will be the compensation committee of the Zoomcar Board, will have full power to select, from among the individuals eligible for awards, the individuals to whom awards will be granted, to make any combination of awards to participants, and to determine the specific terms and conditions of each award, subject to the provisions of the Incentive Plan. The plan administrator may delegate to one or more officers of Zoomcar, the authority to grant awards to individuals who are not subject to the reporting and other provisions of Section 16 of the Exchange Act.
Share Reserve
The number of shares of Common Stock that may be issued under the Incentive Plan is currently 370,955 shares. At our Special Meeting of Stockholders on February 18, 2025, our stockholders approved a one-time increase in the number of shares of Common Stock available for issuance under the Incentive Plan in an amount equal to 15% of the number of our shares of Common Stock issued and outstanding on March 31, 2025, which resulted in the addition of 369,311 shares available for awards under the Inventive Plan. All of the shares initially available under the Incentive Plan may be issued upon the exercise of incentive stock options.
The number of shares available for issuance under the Incentive Plan also includes an automatic annual increase, or the evergreen feature, on the first day of each calendar year, and ceasing as described below, equal to the lesser of:
● a number of shares of Common Stock equal to 3% of the aggregate number of shares of Common Stock issued and outstanding as of December 31 of the immediately preceding calendar year; or
● such number of shares of Common Stock as the plan administrator may determine.
Shares issuable under the Incentive Plan may be authorized, but unissued, or reacquired shares of Common Stock.
Shares underlying any awards under the Incentive Plan that are forfeited, cancelled, held back upon exercise of an option or settlement of an award to cover the exercise price or tax withholding satisfied without the issuance of stock or otherwise terminated (other than by exercise) will be added back to the shares available for issuance under the Incentive Plan and, to the extent permitted under Section 422 of the Code and the regulations promulgated thereunder, the shares that may be issued as incentive stock options.
Annual Limitation on Awards to Non-Employee Directors
The Incentive Plan contains a limitation whereby the value of all awards under the Incentive Plan and all other cash compensation paid by Zoomcar to any non-employee director may not exceed $750,000 for the first calendar year a non-employee director is initially appointed to the Zoomcar Board, and $500,000 in any other calendar year.
Types of Awards
The Incentive Plan provides for the grant of stock options, stock appreciation rights, restricted stock, restricted stock units, and other-stock based awards (collectively, “awards”). Unless otherwise set forth in an individual award agreement, each award shall vest over a four (4) year period, with one-quarter (1/4) of the award vesting on the first annual anniversary of the date of grant, with the remainder of the award vesting monthly thereafter.
Stock Options. The Incentive Plan permits the granting of both options to purchase shares of Common Stock intended to qualify as incentive stock options under Section 422 of the Code and options that do not so qualify. Options granted under the Incentive Plan will be nonqualified options if they fail to qualify as incentive stock options or exceed the annual limit on incentive stock options. Incentive stock options may only be granted to employees of Zoomcar and its subsidiaries. Nonqualified options may be granted to any persons eligible to receive awards under the Incentive Plan.
The exercise price of each option will be determined by the plan administrator. The exercise price for an incentive stock option may not be less than 100% of the fair market value of the common stock of Zoomcar on the date of grant or, in the case of an incentive stock option granted to a 10% stockholder, 110% of such share’s fair market value. The term of each option will be fixed by the plan administrator and may not exceed ten (10) years from the date of grant (or five years for an incentive stock option granted to a 10% stockholder). The plan administrator will determine at what time or times each option may be exercised, including the ability to accelerate the vesting of such options.
Upon exercise of any option, the exercise price must be paid in full either in cash, check or, with approval of the plan administrator, by delivery (or attestation to the ownership) of shares of Common Stock that are beneficially owned by the optionee free of restrictions or were purchased in the open market. Subject to applicable law and approval of the plan administrator, the exercise price may also be made by means of a broker-assisted cashless exercise. In addition, the plan administrator may permit nonqualified options to be exercised using a “net exercise” arrangement that reduces the number of shares issued to the optionee by the largest whole number of shares with fair market value that does not exceed the aggregate exercise price.
Stock Appreciation Rights. The plan administrator may award stock appreciation rights subject to such conditions and restrictions as it may determine. Stock appreciation rights entitle the recipient to shares of Common Stock, or cash, equal to the value of the appreciation in Zoomcar’s stock price over the exercise price, as set by the plan administrator. The term of each stock appreciation right will be fixed by the plan administrator and may not exceed ten years from the date of grant. The plan administrator will determine at what time or times each stock appreciation right may be exercised, including the ability to accelerate the vesting of such stock appreciation rights.
Restricted Stock. A restricted stock award is an award of shares of Common Stock that vests in accordance with the terms and conditions established by the plan administrator. The plan administrator will determine the persons to whom grants of restricted stock awards are made, the number of restricted shares to be awarded, the price (if any) to be paid for the restricted shares, the time or times within which awards of restricted stock may be subject to forfeiture, the vesting schedule and rights to acceleration thereof, and all other terms and conditions of restricted stock awards. Unless otherwise provided in the applicable award agreement, a participant generally will have the rights and privileges of a stockholder as to such restricted shares, including without limitation the right to vote such restricted shares and the right to receive dividends, if applicable.
Restricted Stock Units. Restricted stock units are the right to receive shares of Common Stock at a future date in accordance with the terms of such grant upon the attainment of certain conditions specified by the plan administrator. Restrictions or conditions could include, but are not limited to, the attainment of performance goals, continuous service with Zoomcar or its subsidiaries, the passage of time or other restrictions or conditions. The plan administrator determines the persons to whom grants of restricted stock units are made, the number of restricted stock units to be awarded, the time or times within which awards of restricted stock units may be subject to forfeiture, the vesting schedule, and rights to acceleration thereof, and all other terms and conditions of the restricted stock unit awards. The value of the restricted stock units may be paid in shares of Common Stock, cash, other securities, other property, or a combination of the foregoing, as determined by the plan administrator.
The holders of restricted stock units will have no voting rights. Prior to settlement or forfeiture, restricted stock units awarded under the Incentive Plan may, at the plan administrator’s discretion, provide for a right to dividend equivalents. Such right entitles the holder to be credited with an amount equal to all dividends paid on one share of Common Stock while each restricted stock unit is outstanding. Dividend equivalents may be converted into additional restricted stock units. Settlement of dividend equivalents may be made in the form of cash, shares of Common Stock, other securities, other property, or a combination of the foregoing. Prior to distribution, any dividend equivalents shall be subject to the same conditions and restrictions as the restricted stock units to which they are payable.
Other Stock-Based Awards. Other stock-based awards may be granted either alone, in addition to, or in tandem with, other awards granted under the Incentive Plan and/or cash awards made outside of the Incentive Plan. The plan administrator shall have authority to determine the persons to whom and the time or times at which other stock-based awards will be made, the amount of such other stock-based awards, and all other conditions, including any dividend and/or voting rights.
Prohibition on Repricing
Except for an adjustment pursuant to the terms of the Incentive Plan or a repricing approved by shareholders, in no case may the plan administrator (i) amend an outstanding stock option or stock appreciation right to reduce the exercise price of the award, (ii) cancel, exchange, or surrender an outstanding stock option or stock appreciation right in exchange for cash or other awards for the purpose of repricing the award, or (iii) cancel, exchange, or surrender an outstanding stock option or stock appreciation right in exchange for an option or stock appreciation right with an exercise price that is less than the exercise price of the original award.
Tax Withholding
Participants in the Incentive Plan are responsible for the payment of any federal, state, or local taxes that Zoomcar or its subsidiaries are required by law to withhold upon the exercise of options or stock appreciation rights or vesting of other awards. The plan administrator may cause any tax withholding obligation of Zoomcar or its subsidiaries to be satisfied, in whole or in part, by the applicable entity withholding from shares of Common Stock to be issued pursuant to an award a number of shares with an aggregate fair market value that would satisfy the withholding amount due. The plan administrator may also require any tax withholding obligation of Zoomcar or its subsidiaries to be satisfied, in whole or in part, by an arrangement whereby a certain number of shares issued pursuant to any award are immediately sold and proceeds from such sale are remitted to Zoomcar or its subsidiaries in an amount that would satisfy the withholding amount due.
Equitable Adjustments
In the event of a merger, consolidation, recapitalization, stock split, reverse stock split, reorganization, split-up, spin-off, combination, repurchase or other change in corporate structure affecting shares of Common Stock, the maximum number and kind of shares reserved for issuance or with respect to which awards may be granted under the Incentive Plan will be adjusted to reflect such event, and the plan administrator will make such adjustments as it deems appropriate and equitable in the number, kind, and exercise price of shares of Common Stock covered by outstanding awards made under the Incentive Plan.
Change in Control
In the event of any proposed change in control (as defined in the Incentive Plan), the plan administrator will take any action as it deems appropriate, which action may include, without limitation, the following: (i) the continuation of any award, if Zoomcar is the surviving corporation; (ii) the assumption of any award by the surviving corporation or its parent or subsidiary; (iii) the substitution by the surviving corporation or its parent or subsidiary of equivalent awards; (iv) accelerated vesting of the award, with all performance objectives and other vesting criteria deemed achieved at targeted levels, and a limited period during which to exercise the award prior to closing of the change in control, or (v) settlement of any award for the change in control price (less, to the extent applicable, the per share exercise price). Unless determined otherwise by the plan administrator, in the event that the successor corporation refuses to assume or substitute for the award, a participant shall fully vest in and have the right to exercise the award as to all of the shares of Common Stock, including those as to which it would not otherwise be vested or exercisable, all applicable restrictions will lapse, and all performance objectives and other vesting criteria will be deemed achieved at targeted levels.
Transferability of Awards
Unless determined otherwise by the plan administrator, an award may not be sold, pledged, assigned, hypothecated, transferred, or disposed of in any manner, except to a participant’s estate or legal representative, and may be exercised, during the lifetime of the participant, only by the participant. If the plan administrator makes an award transferable, such award will contain such additional terms and conditions as the plan administrator deems appropriate.
Term
The Incentive Plan became effective upon adoption by the Board and, unless terminated earlier, the Incentive Plan will continue in effect for a term of ten (10) years.
Amendment and Termination
The Zoomcar Board may amend or terminate the Incentive Plan at any time. Any such termination will not affect outstanding awards. No amendment, alteration, suspension, or termination of the Incentive Plan will materially impair the rights of any participant, unless mutually agreed otherwise between the participant and Zoomcar. Approval of the stockholders shall be required for any amendment, where required by applicable law, as well as (i) to increase the number of shares available for issuance under the Incentive Plan and (ii) to change the persons or class of persons eligible to receive awards under the Incentive Plan.
Form S-8
Zoomcar filed with the SEC a registration statement on Form S-8 on February 11, 2025 to register an aggregate of 392,189 shares of Common Stock issuable under the Incentive Plan. Thereafter, at our Special Meeting of Stockholders on February 18, 2025, our stockholders approved a one-time increase in the number of shares of Common Stock available for issuance under the Incentive Plan in an amount equal to 15% of the number of our shares of Common Stock issued and outstanding on March 31, 2025, which resulted in the addition of 369,311 shares available for awards under the Incentive Plan. Thus, the total number of shares of Common Stock that may be issued under the Incentive Plan is currently 370,955 shares. Pursuant to this Stockholder Approval, the Company intends to further file a Form-S-8 to register these increased shares under the Incentive Plan and any other shares as necessary.
Outstanding Equity Awards at Fiscal Year-End Table
Certain employees hold 16 options(post Second Reverse Split). Each equity award was granted subject to the terms of the 2012 Equity Plan which was assumed by the company under the Incentive Plan.
Non-Employee Director Compensation Table
The following table presents the total compensation earned and paid to non-employee members (“Directors”) of the Zoomcar Board for the fiscal year beginning April 1, 2024, and ended March 31, 2025. Mr. Greg Moran, our former Chief Executive Officer, did not receive any compensation for his service as a member of the Zoomcar Board during any period presented. Mr. Moran’s compensation for service as an employee is presented above under the heading “Summary Compensation Table.” In addition to the compensation outlined below, we reimburse Directors for reasonable travel expenses and out-of-pocket costs incurred in attending meetings of the Zoomcar Board or events attended on behalf of Zoomcar.
Name Fees Earned
or Paid in
Cash
($) RSU
Awards
($)(6)(7) Total
($)
Uri Levine, Chairman (1) - - -
Graham Gullans (2) 9,500 - 9,500
Mohan Ananda 67,500 6,871 74,371
Madan Menon (3) 100,000 5,154 105,154
Evelyn D’An 101,000 5,154 106,154
Swatick Majumdar 81,000 5,154 86,154
John Clarke (4) 63,750 5,154 68,904
Mark Bailey (5) 40,500 - 40,500
(1) Mr. Levine was a director of Zoomcar, Inc., the Company’s predecessor, until his resignation in July 2023. He was appointed again, as Chairman and a director on March 31, 2025.
(2) Mr. Gullans resigned from the Board effective June 18, 2024.
(3) Mr. Menon was a director of Zoomcar, Inc. until his resignation effective April 17, 2025.
(4) Mr. Clarke began serving on the Board effective June 20, 2024.
(5) Mr. Bailey began serving on the Board on June 20, 2024 and resigned as of December 6, 2024.
(6) If any vesting date occurs during a blackout period on the trading of the Shares, the RSUs that were scheduled to vest on such date shall not vest until the first business day following the end of such blackout period, subject to the Participant’s continued engagement as a Service Provider through such date
(7) The amounts represent the Black Scholes fair value of $2.92 per RSU.
Director Compensation Policy
The Board approved a non-employee director compensation policy that became effective as of the Closing of the Business Combination. Under this policy, Zoomcar will pay non-employee directors a cash retainer for service on the Board and for service on each committee of which the director is a member. The chair of each committee will receive higher retainers for such service. These fees are expected to be payable in arrears in four equal quarterly instalments on the last day of each calendar quarter, provided that the amount of such payment will be prorated for any portion of such quarter that the director is not serving on the Board and no fee will be payable in respect of any period prior to the completion of the Business Combination.
In addition, under the new director compensation policy, following the effective date of a Registration Statement on Form S-8, each non-employee director will receive an initial equity award under the Incentive Plan in the form of RSUs with a value of $300,000 or, in the case of the Chairman of the Board, $400,000. Further, following the effective date of a Registration Statement on Form S-8, it is expected that on the date of the annual meeting of stockholders, each non-employee director then serving on the Board who has not received an initial equity award in the 12-month period preceding the date of the annual meeting, will receive an annual equity award under the Incentive Plan in the form of RSUs with a value of $100,000.
Each initial equity award and annual equity award is expected to vest over a three-year period, with one-third to vest on the first anniversary of the grant date and then quarterly thereafter (provided that any initial equity award granted to a non-employee director of Zoomcar as of immediately following the Closing is expected to vest on the first anniversary of the Closing). In each case, vesting is subject to the non-employee director’s service as a director through the vesting date. Each initial equity award and annual equity award is also expected to accelerate in full upon a change in control of Zoomcar.
Non-
Employee
Director
Fees
Annual Board Cash Retainer $ 75,000
Additional Retainer for Chairman of the Board $ 15,000
Retainers for Committee Members
● Audit $ 10,000
● Compensation $ 6,000
● Nominating and Corporate Governance $ 4,000
Additional Retainers for Committee Chairs
● Audit $ 10,000
● Compensation $ 6,000
● Nominating and Corporate Governance $ 4,000
Initial Equity Award $ 300,000
Additional Initial Equity Award for Chairman of the Board $ 100,000
Annual Equity Award $ 100,000
Zoomcar will also reimburse non-employee directors for reasonable travel and other expenses incurred in connection with attending meetings of the Board and any committee of the Board on which they serve.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
Item 12. Security Ownership of Certain Beneficial Owner and Management and Related Stockholder Matters
The following table sets forth information regarding the beneficial ownership of our voting shares as of the date of the filing of 10-K:
● each person who is known to be the beneficial owner of more than 5% of our voting shares;
● each of our named executive officers and directors; and
● all of our executive officers and directors as a group.
Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days. Except as described in the footnotes below and subject to applicable community property laws and similar laws, we believe that each person listed above has sole voting and investment power with respect to such shares. The beneficial ownership of shares of Company Common Stock is based on an aggregate of 6,284,491 shares of Common Stock issued and outstanding as of June 27, 2025; provided, that, the information below excludes the shares of Common Stock reserved for future awards under the Incentive Plan.
Unless otherwise indicated, the business address of each of the entities, directors and executives in this table is Anjaneya Techno Park, No.147, 1st Floor, Kodihalli, Bangalore, India 560008. Unless otherwise indicated and subject to community property laws and similar laws, the Company believes that all parties named in the table below have sole voting and investment power with respect to all shares of common stock beneficially owned by them.
Beneficial Ownership Table
Name and Address of Beneficial Owners Number of
Shares of
Common
Stock Percentage
Ownership
After the
Offering(**)
Directors and Executive Officers
Sachin Gupta 615 (1) *
Shachi Singh 476 (1) *
Mohan Ananda 6,196 (2) *
Evelyn D’An 1,765 (1) *
Swatick Majumdar 1,811 (3) *
John Clarke 1,798 (4) *
Uri Levine 82,282 (5) 1.31 %
All directors and executive officers as a group (7 individuals)
1.38 %
5% Stockholders
Randall Yanker Irrevocable Trust 617,817 9.87 %
Adam Stern 420,964 6.73 %
Isagen LLC 366,256 5.85 %
Alta Partners LLC 419,025 6.70 %
* Less than 1%
** The Ownership percentage is derived based on common stockholder register as on June 27 2025.
(1) These reflect the RSUs granted but not yet vested to the respective Directors and Officers.
(2) These shares include the 2,353 RSUs granted but not vested to Mohan Ananda and the 3,843 shares of common stock beneficially held by Mohan Ananda for Ananda Small Business Trust.
(3) These shares includes the 1765 RSUs granted but not vested and the 46 shares issuable upon exercise of outstanding warrants to purchase Common Stock.
(4)
These shares includes the 1765 RSUs granted but not vested and the 33 shares issuable upon exercise of outstanding warrants to purchase Common Stock.
(5)
Uri Levine, the Chairman of the Board of Directors, beneficially owns 82,282 shares of Common Stock

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Item 13. Certain Relationships and Related Transactions, and Director Independence
Pre-Closing Related Party Transactions
IOAC
On May 10, 2023, IOAC issued an unsecured promissory note (the “May 2023 Note”) in the amount of up to $500,000 to the Sponsor. The May 2023 Note bears no interest, and the principal balance is payable on the date of the consummation of the Company’s initial business combination. The May 2023 Note is subject to customary events of default, the occurrence of certain of which automatically triggers the unpaid principal balance of the note and all other sums payable with regard to the note becoming immediately due and payable.
On July 20, 2023, IOAC issued an unsecured promissory note (the “Second Extension Note”) in the aggregate principal amount of up to $180,000 to the Sponsor pursuant to which the Sponsor agreed to provide IOAC with equal instalments of the Second Extension Funds, or $90,000, to be deposited into the Trust Account for the first two months in which the date by which IOAC must consummate its initial business combination is extended past July 29, 2023.
On August 18, 2023, IOAC issued a promissory note (the “August 2023 Note”), in the amount of up to $500,000 to the Sponsor. The August 2023 Note bears no interest, and it is non-convertible. The principal balance is payable on the date of the consummation of IOAC’s initial business combination.
On October 3, 2023, IOAC issued a promissory note in favor of the Sponsor (the “October 2023 Note”) in the principal amount of up to $90,000 for expenses accrued in connection with the extension of the date by which IOAC must consummate its initial business combination from September 29, 2023 to October 29, 2023. The October 2023 Note is non-convertible and bears no interest, and the principal balance is payable by the Company on the date on which the Company consummates an initial business combination.
On December 1, 2023, IOAC issued an unsecured promissory note (the “December 2023 Note”), in the amount of up to $200,000 to the Sponsor. The December 2023 Note is non-convertible and bears no interest, and the principal balance is payable by the Company on the date on which the Company consummates an initial business combination.
On December 18, 2023, IOAC issued (i) an unsecured convertible promissory note (the “New Ananda Trust Note”), the principal amount of $2,027,840, which is equal to the total amount owed to Ananda Trust under the September 2022 Note, January 2023 Note, First Extension Note, May 2023 Note, Second Extension Note, August 2023 Note, October 2023 Note and December 2023 Note (collectively, the “Existing Notes”), and which bears no interest and the principal balance of the New Ananda Trust Note will be payable by the Company 90 days after the consummation of the Business Combination, or April 24, 2024 (the “Maturity Date”), and, on the Maturity Date, the holder of the New Ananda Trust Note may convert any amounts outstanding into shares of Common Stock, at a conversion price lower than the redemption price per public share in connection with the Business Combination; and (ii) unsecured promissory notes to certain passive investors of the Sponsor, the principal amounts of which are equal to the total amounts owed to such passive investors under the Existing Notes, with substantially the same terms of the Existing Notes issued to such passive investors (together with the New Ananda Trust Note, the “Replacement Notes”). The Replacement Notes replace the Existing Notes, which are considered satisfied and discharged in full, forever, and terminated and of no further effect. At the time of Merger Closing an aggregate of $3,257,518 was outstanding under the Replacement Notes.
Ananda Trust Subscription Agreements
Simultaneously with the execution of the Merger Agreement, on October 13, 2022, Ananda Trust entered into a subscription agreement with IOAC (the “Ananda Trust Signing Subscription Agreement”) to subscribe for 1,000,000 newly issued shares of Common Stock at a purchase price of $10.00 per share, contingent upon the Closing. Furthermore, simultaneously with the signing of the Merger Agreement, Ananda Trust invested an aggregate of $10,000,000 in Zoomcar (the “Ananda Trust Signing Investment”), in exchange for a convertible promissory note issued by Zoomcar to Ananda Trust (the “Ananda Trust Zoomcar Note”). At the Closing, Zoomcar’s repayment obligations under the Ananda Trust Zoomcar Note was offset against Ananda Trust’s payment obligations under the Ananda Trust Signing Subscription Agreement and Ananda Trust received newly issued shares of Common Stock in accordance with the terms of the Ananda Trust Signing Subscription Agreement.
The Ananda Trust Signing Subscription Agreement includes registration rights obligations on the part of IOAC and is conditioned on the concurrent Closing and other customary closing conditions. Among other things, Ananda Trust will not have any right, title, interest or claim of any kind in or to any monies in the Trust Account, and agreed not to, and waived any right to, make any claim against the trust account (including any distributions therefrom). In the event that the Business Combination is not consummated, the Ananda Trust Note issued by Zoomcar in consideration of the Ananda Trust Investment will be exchanged for a new convertible promissory note issued by Zoomcar, and such note will be convertible upon the consummation of a subsequent financing of Zoomcar in which Zoomcar raises an aggregate of at least $5 million, and the Ananda Trust Subscription Agreement will terminate automatically.
On December 19, 2023, IOAC and Ananda Trust, an affiliate of the Sponsor, entered into a subscription agreement (the “Ananda Trust Closing Subscription Agreement”), pursuant to which, upon the Closing, Ananda Trust purchased 1,666,666 IOAC Class A ordinary shares at a price of $3.00 per share (the “Ananda Trust Closing Investment”). Other than with respect to the per share purchase price, the terms of the Ananda Trust Closing Subscription Agreement were substantially similar to the terms of the Ananda Trust Signing Subscription Agreement.
Ananda Trust is an affiliate of the Sponsor. Further, the Trustee and control person with regard to the Ananda Trust, Mohan Ananda, was, prior to the Closing, the Chief Executive Officer and Chairman of the board of directors of IOAC; additionally, Mr. Ananda was a director of IOAC and has been appointed to serve as the initial chairman of the Company Board from and after the Closing. Additionally, based on the Company’s capitalization immediately after the Closing, Ananda Trust is the Company’s largest stockholder, though Ananda Trust’s proportionate interest and voting power with regard to the Company may change over time and from time to time.
The terms of the Ananda Trust Closing Investment are not necessarily reflective of the terms and conditions of a transaction negotiated at arm’s length, and it is possible that, if such terms were negotiated at arm’s length, they would have been different from, and more favorable to, the Company and its stockholders; however, the disinterested members of the IOAC Board approved the terms of the Ananda Trust Closing Investment, which they believed to be the best terms available, under the circumstances, to facilitate the consummation of the proposed Business Combination and deliver capital required by the Company to pursue its business plans.
Sponsor Support Agreement
In connection with entering into the Merger Agreement, on October 13, 2022, the Sponsor, IOAC and Zoomcar entered into the Sponsor Support Agreement. Pursuant to the Sponsor Support Agreement, in order to induce Zoomcar to enter into the Merger Agreement and for no additional consideration, the Sponsor agreed to (i) vote all ordinary shares of IOAC held by Sponsor at any meeting of the shareholders of IOAC in favor of the approval and adoption of the Merger Agreement and the Business Combination; and (ii) not to redeem or transfer any of the shares held by the Sponsor, or deposit into a voting trust or enter into a voting agreement in a manner inconsistent with the Sponsor Support Agreement. In addition, the Sponsor agreed to take all actions necessary to fulfil the conditions required in order to extend the expiration of the IOAC charter by six months or such shorter period as shall be mutually agreed by IOAC, the Sponsor and Zoomcar. The Sponsor also agreed to waive the anti-dilution rights associated with the shares held by Sponsor and Sponsor agreed that it shall use its best efforts to cooperate with IOAC and Zoomcar in connection with obtaining the financing transactions.
Stockholder Support Agreement
On October 13, 2022, Zoomcar delivered to IOAC the Stockholder Support Agreements with certain stockholders of Zoomcar, pursuant to which, among other things, such stockholders have agreed, respectively, to support the approval and adoption of the Business Combination. The Stockholder Support Agreements will terminate upon the earliest to occur of (a) the Closing, (b) the date of the termination of the Merger Agreement, and (c) the Expiration Time. Such Zoomcar stockholders also agreed, until the expiration time, to certain transfer restrictions.
Lock-Up Agreement
In connection with entering into the Merger Agreement, on October 13, 2022, IOAC and certain Zoomcar stockholders entered into the Lock-Up Agreement. Pursuant to the Lock-Up Agreement, each Zoomcar stockholder holding 1% or more of the total number of issued and outstanding Zoomcar shares on a fully diluted, as converted to common stock basis, will be subject to the restrictions described below from the Closing until the termination of applicable lock-up periods described below. Such Zoomcar stockholders agreed not to, without the prior written consent of the Zoomcar board and subject to certain exceptions, during the applicable lock-up period: (i) lend, sell, offer to sell, contract or agree to sell, hypothecate, pledge, grant any option, right or warrant to purchase or otherwise transfer, dispose of or agree to transfer or dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call equivalent position within the meaning of the Securities Exchange Act of 1934, as amended Exchange Act, and the rules and regulations of the SEC promulgated thereunder, any BC Lock-Up Shares; (ii) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any of the BC Lock-Up Shares, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise; or (iii) publicly announce any intention to effect any transaction specified in the foregoing clauses. Pursuant to the Lock-Up Agreement, IOAC and certain Zoomcar stockholders agreed to the foregoing transfer restrictions during the period beginning on the date of Closing and ending on the date that is the earlier of (i) six months after the Closing and (ii) subsequent to the Merger, (x) if the last sale price of Common Stock equals or exceeds $12.00 per share for any 20 trading days within any 30 trading day period commencing at least 150 days after the Closing; or (y) the date on which Zoomcar completes a liquidation, merger, capital stock exchange, reorganization or other similar transactions that result in all of Zoomcar’s stockholders having the right to exchange their shares for cash, securities or other property.
On December 18, 2023, OIAC and Ananda Trust entered into a First Amendment to Lock-Up Agreement, pursuant to which the lock-up period for the shares held by Ananda Trust were amended to terminate upon the earlier of (i) twelve months after the Closing Date or (ii) subsequent to the Business Combination, the date on which the Company completes a liquidation, merger, capital stock exchange, reorganization or other similar transactions that results in all of the Company’s stockholders having the right to exchange their shares of cash, securities or other property.
Zoomcar, Inc.
Amendment to Zoomcar’s Investors’ Rights Agreement
Prior to the Closing, Zoomcar solicited and received consents from requisite outstanding Zoomcar shares to a proposed amendment to an investor rights agreement (the “IRA”) between Zoomcar and holders of Zoomcar preferred shares (the “IRA Amendment”), which was adopted on December 28, 2023. Pursuant to the IRA Amendment, subject to certain exceptions, the securities issuable in the Business Combination to each investor party thereto would be restricted from disposing of or hedging any of Company securities beneficially owned by them, including shares of Company Common Stock issuable upon exercise or conversion of any convertible securities issuable to such investors in connection with the Merger, including, without limitation, any shares of Common Stock (“Company Shares”) issuable upon the exercise of options or warrants held by them immediately after the Effective Time, or any other securities convertible into or exercisable or exchangeable for Company Shares held by them immediately after the Effective Time during the period from the date of the Closing and ending (i) as to one-third of such shares, six (6) months after the Closing, (ii) as to one-third of such shares, nine (9) months after the Closing, and (iii) as to the remainder of such shares, twelve (12) months after the Closing, provided that all of such lock-up restrictions will terminate upon completion of a liquidation, merger, capital stock exchange, reorganization or other similar transactions that result in all of Company’s stockholders having the right to exchange their shares for cash, securities or other property. The IRA Amendment provides the foregoing lock-up restrictions supersede the transfer restrictions provided for in the IRA prior to the adoption of the IRA Amendment, assuming the consummation of the Business Combination. Prior to Closing, the board of directors of Zoomcar approved an exclusion from the lock-up terms under the IRA applicable to five (5%) of the Company Shares that would have otherwise been subject to lock-up pursuant to the trading restrictions described above resulting from the adoption of the IRA Amendment.
Post-Closing Related Party Transactions
Zoomcar Holdings, Inc.
Post the Closing Date, Mahindra & Mahindra Financial Services Limited, Mahindra First Choice Wheels Ltd and Yard Management Services Limited ceased to be related parties since their holding percentage was reduced to less than 5% of the total holdings in the Company.
Accordingly, post the Closing Date, the Director of the Company, Mohan Ananda, is a related party for the Company. The Company has payable to Mohan Ananda amounting to $152,435 towards sitting fees and other payables as on March 31, 2025.
Indemnification Agreements
In connection with the Closing, the Company entered into indemnification agreements (“Indemnification Agreements”) with each of the Company’s newly elected directors and newly appointed executive officers which provide that the Company will indemnify such directors and executive officers under the circumstances and to the extent provided for therein, from and against all losses, claims, damages, liabilities, joint or several, expenses (including legal fees and expenses), judgments, fines, penalties, interest, settlements or other amounts arising from any and all threatened, pending or completed claim, demand, action, suit or proceeding, whether civil, criminal, administrative or investigative, and whether formal or informal, and including appeals, in which he or she may be involved, or is threatened to be involved, as a party or otherwise, to the fullest extent permitted under Delaware law and our Bylaws.
The Charter contains provisions limiting the liability of directors, and the Bylaws provide that Zoomcar will indemnify each of its directors and officers to the fullest extent permitted under Delaware law. In addition, the Bylaws provide that, to the fullest extent permitted by Delaware law and subject to very limited exceptions, Zoomcar will advance all expenses incurred by its directors and officers in connection with a legal proceeding involving his or her status as a director or officer of Zoomcar. See the section titled “Description of Securities - Limitation on Liability and Indemnification of Directors and Officers” for information on the indemnification provisions of the Charter and Bylaws.
Participation of a former Director of Zoomcar in the November Offering
Mark Bailey, who was a director of the Company until December 6, 2024, was one of the investors in the November Offering, and invested $2.5 million of the aggregate investment amount of $9.15 million in the November Offering.
Participation of the former Chief Executive Officer Zoomcar and our Chairman in the December Offering. and payments made to the Chairman.
Hiroshi Nishijima, the former Chief Executive Officer of the Company (while holding the office of Acting Chief Executive Officer) and Uri Levine, our Chairman, each invested in the December Offering. Of the aggregate investment amount of $5.485 million, Mr. Nishijima invested $50,000 and Mr. Levine invested $300,000.
Payments to the Chairman as an erstwhile consultant
Uri Levine was also engaged with Zoomcar since October 21, 2024, as a consultant. His position as a consultant was terminated effectively upon becoming a director and Chairman. Effective as of March 31, 2025, the Board appointed Uri Levine, as a member and Chairman of the Board to serve as a Class III Director. During his term as a consultant to the Company Mr. Levine was processed a compensation of $174,996.
For the upcoming fiscal year Mr. Levine shall be eligible for the following compensation based on the Board Appointment Letter executed on March 28, 2025: (i) a service fee of $29,166 per month, (ii) a $500,000 cash bonus on September 30, 2025 and (iii) award Mr. Levine, subject to stockholder approval 1,000,000 shares of restricted stock all of which shall vest on the earlier of (A) the second anniversary of the date of grant and (B) Zoomcar India Private Limited, an Indian limited liability company and subsidiary of the Company, achieving $20 million or more in revenue in fiscal year 2026, in each case subject to the Stockholder Approval having been obtained on or before such date. Mr. Levine may not be awarded the Restricted Stock Award, unless and until Stockholder Approval has been obtained and if it is never obtained, he is not entitled to any other compensation in lieu thereof. Mr. Levine is also entitled to be reimbursed for all reasonable out-of-pocket expenses pursuant to the expense policy applicable to members of the Board.
Policies for Approval of Related Person Transactions
Zoomcar has adopted a written related person transaction policy that sets forth the following policies and procedures for the review and approval or ratification of related person transactions.
A “Related Person Transaction” is a transaction, arrangement or relationship in which Zoomcar or any of its subsidiaries was, is or will be a participant, the amount of which involved exceeds $120,000, and in which any related person had, has or will have a direct or indirect material interest.
A “Related Person” means:
● any person who is, or at any time during the applicable period was, one of the Zoomcar’s officers or one of Zoomcar’s directors;
● any person who is known by Zoomcar to be the beneficial owner of more than five percent (5%) of its voting stock;
● any immediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law, father-in-law, daughter-in-law, brother-in-law or sister-in-law of a director, officer or a beneficial owner of more than five percent (5%) of its voting stock, and any person (other than a tenant or employee) sharing the household of such director, officer or beneficial owner of more than five percent (5%) of its voting stock; and
● any firm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in which such person has a ten percent (10%) or greater beneficial ownership interest.
Zoomcar has policies and procedures designed to minimize potential conflicts of interest arising from any dealings it may have with its affiliates and to provide appropriate procedures for the disclosure of any real or potential conflicts of interest that may exist from time to time. Specifically, pursuant to its charter, the audit committee will have the responsibility to review related party transactions.
All of the transactions described in this section were entered into prior to the adoption of this policy. Certain of the foregoing disclosures are summaries of certain provisions of our related party agreements and are qualified in their entirety by reference to all of the provisions of such agreements. Because these descriptions are only summaries of the applicable agreements, they do not necessarily contain all of the information that you may find useful. Copies of certain of the agreements (or forms of the agreements) have been filed as exhibits to this Annual Report on 10-Kand are available electronically on the website of the SEC at www.sec.report.
Director Independence
Section 3.2 of the OTCQX Rules for U.S. Companies (the “OTCQX Rules”), require that a minimum of two of the board of directors of a should be composed of “independent directors,”. As per the OTCQX Rules the following persons shall not be considered independent: A) a director who is, or at any time during the past three years was, employed by the Company; (B) a director who accepted or has a Family Member who accepted any compensation from the Company in excess of $120,000 during any fiscal year within the three years preceding the determination of independence, other than compensation for board or board committee service; compensation paid to a Family Member who is an employee (other than an executive officer) of the Company; or benefits under a tax-qualified retirement plan, or non-discretionary compensation; or (C) A director who is the Family Member of a Person who is, or at any time during the past three years was, employed by the Company as an executive officer. The Company’s Board has determined that each of Mohan Ananda, Evelyn D’An, Swatick Majumdar, and John Clarke are independent directors under the OTCQX Rules and that the Audit Committee composes of independent directors and meets the heightened independence standards of Rule 10A-3 of the Exchange Act.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
Item 14. Principal Accounting Fees and Services
For the fiscal year ended March 31, 2025, Grant Thornton Bharat LLP (“GT”), served as our independent registered public accounting firm and during such time, billed the approximate fees set forth in the table below. On December 28, 2023, as contemplated by the Merger Agreement, Innovative International Acquisition Corp. merged with Zoomcar Inc., resulting in Zoomcar Holdings, Inc. The Merger was accounted for as a reverse recapitalization with Zoomcar, Inc. as the accounting acquirer and Innovative International Acquisition Corp.as the acquired company for accounting purposes. Accordingly, GT, which has been Zoomcar Inc., auditor since 2021, assumed the role of the Zoomcar Holdings independent registered public accounting firm.
The table below sets forth the aggregate fees billed to the Company by GT for services rendered in the fiscal year ended March 31, 2025.
March 31,
Audit fees $ 586,961
Audit-related fees -
Tax fees -
All other fees
Total $ 586,961
Audit Fees
Audit fees consist of fees billed for professional services rendered for the audit of our year-end financial statements and services that are normally provided by GT in connection with regulatory filings
Audit Related Fees
Audit-related services consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultations concerning financial accounting and reporting standards.
Tax Fees
Consists of fees for professional services for domestic and international tax advisory and compliance services.
All Other Fees
Consists of fees for permitted products and services other than those that meet the criteria above.
The Audit Committee concluded that the provision of the non-audit services if any listed above is compatible with maintaining the independence of Grant Thornton Bharat LLP.
Pre-Approval Policy
Our audit committee was formed upon the consummation of our Business Combination. As a result, the audit committee did not pre-approve all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our board of directors. Since the formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit).
Part IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
Item 15. Exhibits and Financial Statement Schedules
(1) Financial Statements - We have filed the consolidated financial statements listed in the Index to Consolidated Financial Statements, Schedules, and Exhibits included in Part II, Item 8, “Financial Statements and Supplementary Data” of this Annual Report on Form 10-K.
(2) Financial Statement Schedules
(3) Exhibits
The following is a complete list of exhibits filed as part of this Form 10-K. Exhibit numbers correspond to the numbers in the Exhibit Table of Item 601 of Regulation S-K.
Exhibit
Incorporated by Reference
Number
Description
Form
Exhibit
Filing Date
2.1+
Agreement and Plan of Merger and Reorganization, dated as of October 13, 2022, by and among Innovative International Acquisition Corp., Zoomcar, Inc. and the other parties thereto.
8-K
2.1
October 19, 2022
2.2
First Amendment to the Agreement and Plan of Merger and Reorganization, dated as of December 29, 2023 by and among Innovative International Acquisition Corp., Zoomcar, Inc. and the other parties thereto.
8-K
2.1
January 2, 2024
3.1
Amended and Restated Certificate of Incorporation of Zoomcar Holdings, Inc.
8-K
3.1
January 4, 2024
3.2
Amended and Restated Bylaws of Zoomcar Holdings, Inc.
8-K
3.2
January 4, 2024
4.1
Description of Registered Securities.
10-K
4.1
July 12, 2024
4.2
Form of Warrant.
8-K
4.1
June 21, 2024
4.3
Form of Pre-Funded Warrant
8-K
4.1
November 8, 2024
4.4
Form of Series A Warrant
8-K
4.2
November 8, 2024
4.5
Form of Series B Warrant
8-K
4.3
November 8, 2024
4.6
Form of Pre-Funded Warrant
8-K
4.1
December 26, 2024
4.7
Form of Series A Warrant
8-K
4.2
December 26, 2024
4.8
Form of Series B Warrant
8-K
4.3
December 26, 2024
4.9
Placement Agent Warrant
8-K
4.4
December 26, 2024
4.10
Form of Pre-Funded Warrant
8-K
4.1
February 6, 2025
4.11
Form of Series A Warrant
8-K
4.2
February 6, 2025
4.12
Form of Series B Warrant
8-K
4.3
February 6, 2025
4.13
Placement Agent Warrant
8-K
4.4
February 6, 2025
4.14
Form of Series A Warrant
8-K
4.1
April 4, 2025
4.15
Form of Series B Warrant
8-K
4.2
April 4, 2025
4.16
Form of Pre-Funded Warrant
8-K
4.1
June 18, 2025
10.1
Subscription Agreement, dated as of December 19, 2023, by and between Innovative International Acquisition Corp. and Ananda Small Business Trust.
8-K
10.1
December 19, 2023
10.2
Securities Purchase Agreement, dated as of December 28, 2023, by and among Zoomcar Holdings, Inc., Zoomcar, Inc. and ACM Zoomcar Convert LLC.
8-K
10.6
January 4, 2024
10.3
Unsecured Convertible Note Due December 28, 2028, of Zoomcar Holdings, Inc.
8-K
10.7
January 4, 2024
10.4
Registration Rights Agreement, dated as of December 28, 2023, between Zoomcar Holdings, Inc. (f/k/a Innovative International Acquisition Corp.) and ACM Zoomcar Convert LLC.
8-K
10.8
January 4, 2024
10.5
Amended and Restated Registration Rights Agreement, dated December 28, 2023, by and among Zoomcar Holdings, Inc. (f/k/a Innovative International Acquisition Corp.), Innovative International Sponsor I LLC, the undersigned parties listed under IOAC Holders, Zoomcar Holders and Additional Zoomcar Holders on Schedule A thereto.
8-K
10.9
January 4, 2024
10.6
Non-Redemption Agreement dated as of December 27, 2023 by and among Innovative International Acquisition Corp. and the investor thereto.
8-K
10.1
December 28, 2023
10.9
Form of Indemnification Agreement.
8-K
10.13
January 4, 2024
10.10
Amended and Restated Employment Agreement, dated December 22, 2023, by and between Zoomcar India Private Limited and Greg Moran.
8-K
10.14
January 4, 2024
10.11
Amended and Restated Employment Agreement, dated December 23, 2023, by and between Zoomcar India Private Limited and Geiv Dubash.
8-K
10.15
January 4, 2024
10.12
Amended and Restated Employment Agreement, dated December 27, 2023, by and between Zoomcar India Private Limited and Hiroshi Nishijima.
8-K
10.16
January 4, 2024
10.13
Employment Agreement, dated January 8, 2025, by and between Shachi Singh and Zoomcar India Private Limited.
8-K
99.1#
January 10, 2025
10.14
Board Appointment Letter dated March 28, 2025, by and between Zoomcar Holdings, Inc and Uri Levine.
8-K
10.1
April 3, 2025
10.15
Zoomcar Holdings, Inc. 2023 Equity Incentive Plan.
8-K
10.17
January 4, 2024
10.16
First Amendment to Lock-Up Agreement, dated as of December 18, 2023, Innovative International Acquisition Corp.
S-1
10.18
February 5, 2024
10.17
Promissory Note, dated December 18, 2023, issued by Innovative International Acquisition Corp. to Ananda Small Business Trust.
8-K
10.1
December 19, 2023
10.18
Form of Promissory Note, dated December 18, 2023, issued by Innovative International Acquisition Corp. to the Payee.
8-K
10.2
December 19, 2023
10.19
Lock-Up Release Agreement, dated February 1, 2024, by and among Zoomcar Holdings, Inc., ASJC Global LLC - Series 24 and Cohen Sponsor LLC - A24 RS (certain information has been redacted in the marked portions of the exhibit).
8-K
10.1
February 2, 2024
10.20
Amendment to Lock-Up Release Agreement, dated March 18, 2024, by and among Zoomcar Holdings, Inc., ASJC Global LLC - Series 24 and Cohen Sponsor LLC - A24 RS.
8-K
10.1
March 18, 2024
10.21
Common Stock Purchase Agreement, between Zoomcar Holdings, Inc. and White Lion Capital, LLC, dated May 6, 2024.
8-K
10.1
May 9, 2024
10.22
Registration Rights Agreement, between Zoomcar Holdings, Inc. and White Lion Capital, LLC, dated May 6, 2024.
8-K
10.2
May 9, 2024
10.23
Form of Securities Purchase Agreement, dated June 18, 2024, by and among Zoomcar Holdings, Inc. and certain institutional investors.
8-K
10.1
June 21, 2024
10.24
Form of Note.
8-K
10.2
June 21, 2024
10.25
Form of Registration Rights Agreement.
8-K
10.3
June 21, 2024
10.26
Securities Purchase Agreement
8-K
10.1
November 8, 2024
10.27
Form of Registration Rights Agreement
8-K
10.2
November 8, 2024
10.28
Form of Securities Purchase Agreement
8-K
10.1
December 26, 2024
10.29
Form of Registration Rights Agreement
8-K
10.2
December 26, 2024
10.30
Form of Securities Purchase Agreement
8-K
10.1
February 6, 2025
10.31
Form of Registration Rights Agreement
8-K
10.2
February 6, 2025
10.32
Settlement Agreement between Zoomcar, Inc. and Randall Yanker
8-K
10.4
February 6, 2025
10.33
Form of Securities Purchase Agreement
8-K
10.1
April 4, 2025
10.34
Form of Registration Rights Agreement
8-K
10.2
April 4, 2025
10.35
Settlement Letter dated June 6, 2025
8-K
10.1
June 18, 2025
Insider Trading Policy.
10-K
July 12, 2024
21.1
Subsidiaries of Zoomcar Holdings, Inc.
10-K
July 12, 2024
23.1
Consent of Independent Registered Public Accounting Firm
31.1
Certification of the Principal Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2
Certification of the Principal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1
Certification of the Principal Executive Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
32.2
Certification of the Principal Financial Officer pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.**
Policy Related to Recovery of Erroneously Awarded Compensation.
10-K
July 12, 2024
101.INS
Inline XBRL Instance Document.*
101.SCH
Inline XBRL Taxonomy Extension Schema Document.*
101.CAL
Inline XBRL Taxonomy Extension Calculation Linkbase Document.*
101.DEF
Inline XBRL Taxonomy Extension Definition Linkbase Document.*
101.LAB
Inline XBRL Taxonomy Extension Label Linkbase Document.*
101.PRE
Inline XBRL Taxonomy Extension Presentation Linkbase Document.*
Cover Page Interactive Data File (Embedded as Inline XBRL document and contained in Exhibit 101).*
* Filed herewith.
** Furnished herewith.
† Schedules and similar attachments to this Exhibit have been omitted pursuant to Item 601(a)(5) of Registration S-K. The registrant hereby agrees to furnish a copy of any omitted schedules to the SEC upon request.