Annual Report for Fiscal Year Ending March 31, 2026 (Form 10-K)

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, 2026 and 2025. 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 July 13, 2026 we had 8,488,485 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.

		Twelve Months Ended March 31, 2026
(In thousands)		2026				2025
Booking Days			743				679
Gross Booking Value		$	25,268			$	25,283

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., Q1-24 = January 01 to March 31, 2024).

For the year ended March 31, 2026, Booking Days on the platform totaled approximately 743,239, compared to 678,708 during the year ended March 31, 2025.

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., Q1-24 = January 01 to March 31, 2024).

(2)	Booking Days are for bookings completed and GBV also includes a small portion of cancellation fee charged to the Guests in the case of cancelled bookings.

During the year ended March 31, 2026, Gross Booking Value on the platform totaled approximately $25.27 million, compared to approximately $25.28 million during the year ended March 31, 2025.

Components of results of operations

Net revenue

During the fiscal year ended March 31, 2022, we began offering a peer-to-peer car sharing platform, which 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 those trips fulfilled by Host vehicles. Prior to August 2021, vehicles available on our platform consisted solely of Company-owned or leased vehicles that we offered for short-term rental or longer-term subscription.

Our revenue for the year ended March 31, 2026 and 2025, 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 public companies, 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, bridge loan, changes in fair value of Atalaya note, interest on unsecured and convertible notes and redeemable promissory note. In addition, it also includes Note issue expenses, bank charges, other borrowing costs.

Other (Income) and Expense, Net

Other expense and (income), net consists primarily of interest income, change in fair value of Atalaya note, Loss on assets written off, Liquidated damages to Investors and Gain on derecognition of subsidiary and other expenses.

Gain on troubled debt restructuring

Gain on troubled debt restructuring consists of gains on account of restructuring of loans from lenders and dues from vendors.

Results of Operations

The following table sets forth our results of operations for the periods presented:

		For the Years Ended March 31,
		2026				2025
Net revenue			9,156,025				9,105,891
Costs and expenses
Cost of revenue			4,428,965				5,296,841
Technology and development			2,655,570				2,965,631
Sales and marketing			657,032				1,466,047
General and administrative			8,182,041				9,778,371
Total costs and expenses			15,923,608				19,506,890
Loss from operations			(6,767,583	)			(10,400,999	)
Finance costs			3,183,148				8,607,173
Gain on troubled debt restructuring			(72,912	)			(1,171,161	)
Other income, net			4,743,294				7,785,292
Loss before income taxes			(14,621,113	)			(25,622,303	)
Provision for income taxes			-				-
Net loss			(14,621,113	)			(25,622,303	)

The following table sets forth our results of operations as a percentage of net revenue:

		For the Years Ended March 31,
		2026				2025
Net revenue			100	%			100	%
Costs and expenses
Cost of revenue			48	%			58	%
Technology and development			29	%			33	%
Sales and marketing			7	%			16	%
General and administrative			89	%			107	%
Total costs and expenses			174	%			214	%
Loss from operations			-74	%			-114	%
Finance costs			35	%			95	%
Gain on troubled debt restructuring			-1	%			-13	%
Other income, net			52	%			85	%
Loss before provision for income taxes			-160	%			-281	%
Provision for income taxes			0	%			0	%
Net loss income			-160	%			-281	%

Net Revenue

		For the Years Ended March 31,
		2026				2025				Change				% Change
Revenues from services			9,072,184				9,024,576				47,608				1	%
Other revenues			83,841				81,315				2,526				3	%
Net Revenue			9,156,025				9,105,891				50,134				1	%

Our total net revenue for the year ended on March 31, 2026, and March 31, 2025, was $9.16 million and $9.11 million, respectively, representing an increase of $0.05 million, or 1% year over year.

Costs and Expenses

Cost of Revenue

		For the Years Ended March 31,
		2026				2025				Change				% Change
Cost of revenue			4,428,965				5,296,841				(867,876	)			-16	%

Cost of revenue was $4.43 million during the year ended March 31, 2026, as compared to $5.30 million during the year ended March 31, 2025, a reduction of $0.87 million, or 16%. These reductions in expenses were driven by overall Company-wide efforts to achieve greater operational efficiency. Key drivers of the savings include reduction of $0.30 million on account of depreciation of tracking devices during the year ending March 31, 2026 since these devices were fully depreciated in the previous fiscal year ended March 31, 2025, $0.24 million reduction in software support and maintenance expenses during the year ending March 31, 2026 as compared to previous fiscal year due to migration of cloud infrastructure from Amazon web services to Google cloud platform, savings include $0.21 million reduction in personnel costs (driven by headcount reductions in India, and discontinuation of operations in Egypt and Indonesia) and savings of $0.10 million reduction in customer outstandings due to introduction of security deposit which is used to offset customer outstandings.

Technology and Development

		For the Years Ended March 31,
		2026				2025				Change				% Change
Technology and development			2,655,570				2,965,631				(310,061	)			-10	%

Technology and development expenses totaled $2.66 million during the year ended March 31, 2026 as compared to $2.97 million during the year ended March 31, 2025 a decrease of $0.31 million, or 10%. These savings were driven by reduction of $ 0.17 million reduction in employee benefit expenses during the year ended March 31, 2026 as compared to previous Fiscal year ended March 31, 2025 and reduction of $0.14 million in IT platforms support costs as the Company continues to optimize usage of SAAS tools and cloud-based IT services while enabling more in-app features for Guests and Hosts.

Sales and Marketing

		For the Years Ended March 31,
		2026				2025				Change				% Change
Sales and marketing			657,032				1,466,047				(809,015	)			-55	%

Sales and marketing expense totaled $0.66 million during the year ended March 31, 2026, as compared to $1.47 million during the year ended March 31, 2025, a decrease of $0.81 million, or 55%, primarily driven by $0.58 million reduction in performance and brand marketing related expenses and reduced incentivization of the hosts during the year ended March 31, 2026 as compared to the previous Fiscal year. Further Personal-related costs decreased by $0.23 million during the year ended March 31,2026 as compared to the previous comparable period.

General and Administrative

		For the Years Ended March 31,
		2026				2025				Change				% Change
General and administrative			8,182,041				9,778,371				(1,596,330	)			-16	%

General and administrative expenses were $8.18 million during the year ended March 31, 2026, as compared to $9.78 million during the year ended March 31, 2025, a reduction of $1.60 million, or 16%. This reduction in general and administrative expenses is primarily due to the cost rationalization and optimization efforts resulting in reduction of $1.23 million in professional fees during the year ended March 31, 2026 as compared to the year ended March 31, 2025 and reduction $0.38 million in rental expense pertaining to parking sites where assets held for sale was parked, due to sale of majority of these assets coupled with closure of certain regional offices during the year ended March 31, 2026 as compared to the year ended March 31, 2025.

Finance Costs

		For the Years Ended March 31,
		2026				2025				Change				% Change
Finance Costs			3,183,148				8,607,173				(5,424,025	)			-63	%

Finance costs were $3.18 million during the year ended March 31, 2026, as compared to $8.61 million during the year ended March 31, 2025, a reduction of $5.42 million, or 63%. The higher costs recoded during the Fiscal year ended March 31, 2025 was primarily due to non-cash expenses of $3.29 million, $2,00 million and $1.77 million related to cost of issuance of warrants other expenses related to private placement round of November 2024, December 2024, January 2025 and March 2025, Interest on redeemable promissory notes and amortization of discount and debt issuance cost on redeemable promissory notes which was fully paid back in November 2024 respectively as compared to nil cost recorded during the year ended March 31, 2026. These savings are offset on account of Loss on withdrawal of lease waiver amounting to $ 1.13 Mn during the year ended March 31, 2026 due to continued default in payment of lease rentals by the company and Change in the fair value of Atalaya note amounting to $0.54 million and increase in other borrowing cost amounting to $0.14 million during the year ended March 31, 2026.

Gain on troubled debt restructuring

		For the Years Ended March 31,
		2026				2025				Change				% Change
Gain on troubled debt restructuring			(72,912	)			(1,171,161	)			1,098,249				-94	%

Gain on troubled debt restructuring during the year ended on March 31, 2026, was $ 0.07 million as compared to $1.17 million during the year ended March 31, 2025.

Other expense /(income), net

		For the Years Ended March 31,
		2026				2025				Change				% Change
Other (income) expense, net			4,743,294				7,785,292				(3,041,998	)			-39	%

The Company reported net Other expenses of $4.74 million during the year ended March 31, 2026, versus other expenses of $7.79 million during the year ended March 31, 2025, an decrease of $3.04 million or 39%.

The Company recorded a non-cash gain of $9.04 million and $1.74 million on account of change in fair value of derivative financial instruments and fair value of Atalaya notes respectively. These non-cash gains recorded during the fiscal year ended March 31, 2025, was partially offset by non-cash loss amounting to $3.46 million and $0.46 million recorded due of loss on extinguishment of liability on account of most favored nation clause provided to senior secondary convertible promissory notes issued prior to deSPAC and loss on modification of finance leases. Further loss amounting to $0.45 million recorded on account of bad debts written off on receivable from car sales during the fiscal year ended March 31, 2025, all of which was nil during the fiscal year ended March 31, 2026. This net gain of $6.41 million which was not recorded coupled with a $2.00 million increase in liquidated damages owed to investors for non-registration of shares issued during the December 2024 private placement round during the fiscal year ended March 31, 2026 as compared to Fiscal year ended March 31, 2025 was offset significant decline of $7.14 million loss on litigation settlement, Gain amounting to $1.75 million, $1.05 million and $0.44 million on account of derecognition of subsidiary, write off of liabilities and recovery of goods and service taxes receivable amount recoded during the fiscal year ended March 31, 2026 as compared to Fiscal year ended March 31, 2025. Further loss on assets written off and impairment of assets held for sale declined by $0.74 million and $0.42 million respectively during the current fiscal year ended March 31, 2026, as compared to previous comparable period.

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 Mar 31,
		2026				2025
Gross profit		$	4,727,060			$	3,809,050
Gross margin			52	%			42	%
Contribution profit			5,065,269				4,250,778
Contribution margin			55	%			47	%
Net Loss			(14,621,113	)			(25,622,303	)
Adjusted EBITDA		$	(5,221,849	)		$	(9,914,633	)

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 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 $5.07 million during the year ended on March 31, 2026, versus a contribution profit of $4.25 million during the year ended on March 31, 2025. Our gross profit improved to $4.73 million during the year ended on March 31, 2026, versus $3.81 million during the year ended on March 31, 2025, which was driven by reductions in cost of revenue due to the overall improvements in Companywide operational efficiencies accomplished over the past few quarters.

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,
		2026				2025
Net revenue		$	9,156,025			$	9,105,891
Cost of revenue			4,428,965				5,296,841
Gross profit			4,727,060				3,809,050
Add: Depreciation and amortization in COR			43,534				340,188
Add: Stock-based compensation in COR			40,110				3,650
Add: Overhead costs in COR (rent, software support, insurance, travel)			566,815				840,289
Less: Host Incentives and Marketing costs (excl. brand marketing)			312,250				742,399
Less: Host incentives			109,475				147,180
Less: Marketing costs (excl. brand marketing)			202,775				595,219
Contribution profit		$	5,065,269			$	4,250,778
Contribution margin			55	%			47	%

Adjusted EBITDA is a non-GAAP financial measure that represents our net income or loss adjusted for (i) other income and (expense), net; (ii) depreciation and amortization;(iii) finance costs; (iv) stock based compensation; (v) gain on troubled debt restructuring; (vi) any other exceptional nonrecurring expenses.

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 providing 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 reduced to $5.22 million during the year ended on March 31, 2026, as compared to an adjusted EBITDA loss of $9.91 million during the year ended on March 31, 2025. This improvement is a direct result of broad-based cost reduction and optimization initiatives. These initiatives successfully lowered our cost of revenue, technology and development costs, sales and marketing costs, and general and administrative costs (as detailed in the preceding section).

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 and 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, etc. 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.

●

Adjusted EBITDA excludes gains on account of Trouble debt restructuring. .

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,
		2026				2025
Net Loss		$	(14,621,113	)		$	(25,622,303	)
Add/ (deduct)
Stock-based compensation			1,453,968				52,461
Depreciation and amortization			91,766				433,905
Finance costs			3,183,148				8,607,173
Other (income)/expense, net			4,743,294				7,785,292
Gain on troubled debt restructuring			(72,912	)			(1,171,161	)
Adjusted EBITDA		$	(5,221,849	)		$	(9,914,633	)

Liquidity and Capital Resources

During the year ended March 31, 2026, and 2025 respectively, we used cash flows from operations of $1.36 million and $ 8.53 million, respectively, reflecting greater operating cost efficiencies and reduced overhead expenditures in 2026. The Company incurred a net loss of $14.62 million and $25.62 million during the years ended March 31, 2026, and 2025, respectively, and the accumulated deficit amounts to $347.79 million and $333.17 million as of March 31, 2026, and 2025, respectively.

As of March 31, 2026, our cash and cash equivalents totaled $0.33 million.

Our primary use of cash is to fund our existing operations. If we have sufficient working capital, we will continue to invest in growth of our business, product development and 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, 2026, 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.

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 Consolidated Financial Statements were issued. The Company underwent various rounds of financing as described in the "Financing Arrangements" section (see Management's Discussion and Analysis of Financial Condition and Results of Operations of this form 10-K), which resulted in the payment of certain outstanding indebtedness, the Company will still need to raise additional capital imminently to have sufficient growth capital. The Company believes that current cash and cash equivalents will allow the Company to continue operations through September 30, 2026, if the Company makes partial payment towards its currently outstanding indebtedness and future accruals.

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, convertible promissory note and unsecured convertible notes and redeemable promissory notes. The transactions pertaining to issuance of common stock, debt instruments and other financing arrangements are listed below:

Reverse Stock Splits

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.

The Company's shareholders authorized, and the Board of Directors approved for a 1-for-20 Reverse Stock Split, which became effective on March 21, 2025.

Issuances of Common Stock

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, the former 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.

Private Placement of Equity

On November 5, 2024, the Company 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. acted as the Exclusive Placement Agent for the private placement. The Company used 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.

Debt Financings

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, 2026.

Unsecured Convertible Notes

In December 2023, we issued an Unsecured Convertible Note bearing a principal amount of $8,434,605.

Redeemable and Bridge Notes

June 2024 Redeemable Promissory Notes

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.

Convertible Notes

On August 19, 2025, the Company entered into Securities Purchase Agreement with certain institutional accredited investor pursuant to which the Company issued Promissory note for a total principal amount of $180,000 with an initial issue discount of $18,000. The net proceeds disbursed to the Company were $158,500 after deduction of legal and due diligence fees of $3,500. Hence, the total debt issuance costs amounts to $3,500.

On August 24, 2025, the Company entered into Securities Purchase Agreements with certain institutional accredited investors pursuant to which the Company issued convertible redeemable notes for a total principal amount of $225,000 with an initial issue discount of $15,000. The net proceeds disbursed to the Company were $201,000 after deduction of legal and due diligence fees of $9,000. Hence, the total debt issuance costs amounts to $9,000.

On January 8, 2026 , the Company entered into Securities Purchase Agreements with certain institutional accredited investors pursuant to which the Company issued convertible redeemable notes for a total principal amount of $ 42,614 with an initial issue discount of $ 5,114. The net proceeds disbursed to the Company were $ 35,000 after deduction of legal and due diligence fees of $ 2,500. Hence, the total debt issuance costs amounts to $ 7,614.

Aggregate Unsecured Notes

During the year ended March 31, 2026, the Company entered into Securities Purchase Agreements with certain institutional accredited investors pursuant to which the Company issued Bridge notes for a total principal amount of $1,427,825 with an initial issue discount of $ 152,825. The net proceeds disbursed to the Company were $1,223,500 after deduction of legal and due diligence fees of $ 51,500.

Additionally, $45,500 (i.e. 13% of net proceeds for the note issued in June) is due to the placement agent relating to the issuance of these bridge notes which is directly attributable to the loan raised, thereby bringing the total debt issuance costs to $97,000.

The following table summarizes our cash flows for the periods presented:

		For the Years Ended Mar 31,
Statements of Cash Flows Data:		2026				2025
Net cash used in operating activities			(1,359,300	)			(8,525,164	)
Net cash flows generated from investing activities			11,040				492,140
Net cash generated from financing activities			608,353				7,718,331
Effect of foreign exchange on cash and cash equivalents.			(103,008	)			(9,414	)
Net decrease in cash and cash equivalents			(739,907	)			(314,693	)

Operating Activities

Net cash used in operating activities was $1.36 million and $ 8.53 million for the year ended March 31, 2026, and 2025, respectively. The major drivers contributing to the decrease of $7.17 million during the current year compared to previous year, included the following:

1.

Decrease in net loss of $4.28 million after adjustments for non-cash items. These adjustments include Depreciation and amortization, fair value changes in financial instruments, Interest on subcontractor liability, Gain on recovery of goods and service tax receivable, Gain on derecognition of subsidiary, interest on redeemable promissory note, gain on troubled debt restructuring, Stock based compensation, Interest on finance leases, Gain on sale and disposal of assets, net, Gain on sale and disposal of assets held for sale, net, Payable to customers and provision written back, Assets written off, Liquidated damages, Host receivable written off, Amortisation of discount and debt issuance cost on redeemable promissory notes, Interest on unsecured loans, Interest on Convertible notes, Loss on modification of finance leases, Change in fair value of Unsecured Convertible Note, Issuance cost towards issue of warrants, Liabilities written off, Bad debts against receivables from car sale, Loss on extinguishment of liability, Impairment on assets held for sale, Loss on litigation settlement, Loss on settlement and Unrealized foreign currency exchange loss, net ,etc.

2.

The company reported a positive working capital movement of $5.01 million during the current year compared to $2.12 million in the previous year, indicating a larger release of cash from working capital and improved working capital efficiency.

Investing Activities

Net cash generated from investing activities totaled $ 11,040 for year ended on March 31, 2026, as compared to $0.49 million during the same period in 2025. The cash generated during the year ended on 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 $0.61 million and $7.72 million during the year ended on March 31, 2026, and March 31, 2025, respectively. The Company received net proceeds from the issuance of unsecured notes, convertible notes and debt amounting to $1.18 million, $0.39 million and $0.60 million respectively, further the payments include repayment of debt $0.67 million, repayment of unsecured note amounting to $0.60 million and payment towards finance lease amounting to $0.29 million during the year ended March 31, 2026 as compared to higher proceeds from the issuance of redeemable promissory note net of issuance cost amounting to $2.51 million, issuance of equity warrants net of issuance cost amounting to $13.70 million and proceeds from issuance of Debt $1.07 million, further there are cash outflows towards repayment of Debt, redeemable promissory notes and towards finance lease amounting to $3.10 million,$3.80 million and $2.65 million respectively during the year ended March 31, 2025. 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, 2026:

		Mar 31, 2026
Maturities of lease liabilities are as follows:		Operating Leases				Finance Leases
2027		$	320,092			$	2,084,656
2028			335,673				-
2029			352,034				-
Total Lease Payments		$	1,007,799			$	2,084,656
Less : Imputed Interest			180,385				26,375
Total Lease Liabilities		$	827,414			$	2,058,281

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		Mar 31, 2026
Current
From NBFCs
- Mahindra & Mahindra Financial Services Limited		$	344,977
- TATA Motors Finance Limited			1,172,688
- Kotak Mahindra Financial Services Limited			370,416
- Clix Finance India Private Limited			71,085
From Others
- Honor PCF Trust I			552,278
Total		$	2,511,444
Total maturity for the year ending on March 31, 2027		$	2,511,444

Contingencies

(A)

Claims filed by customers and third-parties not acknowledged as liability amounted to $368,616 and $220,868 as at March 31, 2026 and March 31, 2025, 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 $3,363,842 (March 31, 2025: $9,514,651). 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, 2026 and March 31, 2025.

(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 $359,573 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)

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 $113,969 (March 31, 2025: $125,839). Penalty of $113,969 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, 2026 and March 31, 2025, 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:

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.

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.

Unsecured Notes

During the year ended March 31, 2026, the Company has issued Bridge Notes which are repayable at the principal value along with an interest of 10-12% p.a. on the maturity date and has been accounted for under ASC 470-10. The Company issued these Bridge Notes at discount and incurred expenses on the issue of these Notes. As per ASC 835, the discount and the expenses incurred on issue of the Bridge Notes have been amortized over the contractual period using the effective interest method. The Bridge Notes liabilities have been presented net off the discount and issue expenses.

Convertible Notes

During the year ended March 31, 2026, the Company has issued Convertible Notes which are repayable at the principal value along with an interest of 6-12% p.a. on the maturity date or the holder as an option to convert those in variable number of equity shares and the same has been accounted for as a share settled debt under ASC 480-10. The Company issued these Convertible Notes at discount and incurred expenses on the issue of these Convertible Notes. As per ASC 835, the discount and the expenses incurred on issue of the Convertible Notes have been amortized over the contractual period using the effective interest method. The Convertible Notes liabilities have been presented net off the discount and issue expenses.

Issuance costs on Debt

Debt issuance costs consist primarily of initial discount provided, 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 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 note 19)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.

(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.

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, 2026, the Company's primary financial instruments included cash and cash equivalents, investments, accounts receivables, other financial assets, accounts payable, debt, unsecured notes, convertible redeemable note, unsecured convertible note and other financial liabilities. The estimated fair value of cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their carrying value due to short-term maturities of these instruments.

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.

Subsequent Events

Tender Offer / Warrant Exchange

(A) On January 23, 2026, Zoomcar Holdings, Inc. (the "Company") filed a Current Report on Form 8-K announcing a voluntary offer to exchange multiple classes of its outstanding warrants for shares of the Company's common stock. Under the offer, holders of each Common Warrant are entitled to receive 20,000 shares of common stock for each warrant tendered and accepted, and holders of each Series A Warrant, Series B Warrant, Pre-Funded Warrant, Bridge Placement Agent Warrant, Placement Agent Warrant and Series A Placement Agent Warrant are entitled to receive 10 shares of common stock for each such warrant tendered and accepted. The exchange offer is subject to customary terms and stockholder approval of an increase in authorized common shares and is intended to simplify the Company's capital structure.

On April 15, 2026, the Company extended the time period for offer to exchange to May 11, 2026. Subsequently, on May 12, 2026, the Company further extended the time period for offer to exchange to June 30, 2026. On June 25, 2026, the Company further extended the time period for offer to exchange to July 24, 2026.

Concurrently, the Company also commenced a private placement offering of up to $5 million of units, each consisting of one share of Series A convertible preferred stock initially convertible at $0.05 per share of common stock and one warrant exercisable at $0.0625 per share of common stock, subject to customary anti-dilution adjustments, with a minimum raise of $2 million and proceeds intended for general corporate purposes, including working capital. On February 12, 2026, the Company filed an amendment to the Form 8-K to reflect revised terms, including the addition of an overallotment option exercisable by the placement agent for up to an additional $5.0 million of units, an updated offering termination date of March 31, 2026, and clarification that subscription funds will be returned if the minimum offering amount of $2 million is not achieved. On April 15, 2026 the scheduled termination date of the Offering was extend to May 11, 2026. On May 12, 2026, the Company further extend the termination date for the Offering to June 30, 2026. Subsequently on June 26, 2026 the Company extended the scheduled termination date of the Offering from June 30, 2026 to July 30, 2026.

(B) On May 11, 2026, the Company entered into a Letter of Understanding with ACM Zoomcar Convert LLC ("ACM") for settlement of a liability with respect to a previous judgement order of $6,009,833 (together with interest and other amounts). Refer Note 16 for further details. The liability shall be settled partly by cash to the extent of $2,500,000 on or before October 31, 2026 and the remaining balance by issuance of equity at a price and on the economic terms of the next financing closed by the Company prior to the date the cash payment is made in full. Further, ACM is entitled to receive at least 10% of the gross proceeds of any capital raising activity of the Company.

(C) On April 28, 2026, Shachi Singh notified the Company of her resignation as Chief Legal Officer & General Counsel of the Company.

(D) On May 10, 2026, Mohan Ananda notified the Company of his resignation from the Board of Directors of the Company, effective as of May 10, 2026.

(E) On May 14, 2026, the Company entered into a standstill agreement with CFI Capital LLC ("CFI") relating to the Convertible Redeemable notes issued to CFI on August 24, 2025, with an original principal amount of $150,000 (the "CFI Note"). Pursuant to the agreement, CFI agreed not to exercise any conversion rights under the CFI Note that would permit conversion into shares of the Company's common stock at a market-based conversion price prior to September 30, 2026.

(F) On May 15, 2026, the Company entered into a standstill agreement with Labrys Fund II, L.P. ("Labrys") relating to the Promissory note issued to Labrys on August 19, 2025, with an original principal amount of $180,000 (the "Labrys Note"). Pursuant to the agreement, Labrys agreed to forbear from exercising any rights to convert the Labrys Note into shares of the Company's common stock at a market-based conversion price following an event of default prior to September 30, 2026.

(G) On April 13, 2026, the Company entered into a Termination Letter and an Indemnification Agreement with Aegis Capital Corp. ("Aegis") (collectively, the "Aegis Documents"). Pursuant to the Aegis Documents, the Company's prior placement agent and underwriting engagement agreements with Aegis will terminate in exchange for the future issuance to Aegis of units of securities, on the same terms as the units issued to investors in the Company's contemplated private placement of Series A Convertible Preferred Stock and warrants, with an aggregate value of $2,000,000. The Aegis Documents are executory and will not become effective until the issuance of such consideration securities, which is expected to occur on the earlier of (i) the date that is 60 days following the consummation of the Company's contemplated uplisting to a national securities exchange and (ii) December 31, 2026. Refer to Exhibit 10.56 and Exhibit 10.57 for more details on the Aegis Documents.

(H) During June 2026, Zoomcar Holdings, Inc. entered into a securities purchase agreement with accredited investors for a private placement of Series A units, each consisting of one share of Series A Convertible Preferred Stock and one warrant to purchase common stock at a purchase price of $1,000 per unit. At the first closing on June 2, 2026, the Company issued 1,143 units, raising approximately $1.143 million before fees and expenses. At the second closing on June 18, 2026, the Company issued an additional 537 Units, raising approximately $537,000 before fees and expenses. On June 30, 2026, the Company completed the third closing of the Offering, issuing 195 Units for gross proceeds of approximately $0.2 million, before deducting placement agent fees and offering expenses.

The Offering allows for the sale of up to $5,000,000 of Units, plus an additional $5,000,000 issuable under the exercise of the placement agent's overallotment option in one or more closings, with a minimum subscription threshold of $1,000,000 to be satisfied. The Preferred Shares and warrants are both convertible into common stock at an initial price of $0.05 per share and $0.0625 per warrant respectively. ThinkEquity LLC acted as the exclusive placement agent for the Offering and is entitled to receive a cash fee equal to 10% of the gross proceeds from each closing, a non-accountable expense allowance of 1% of the gross proceeds of each closing, reimbursement of expenses, and warrants representing 10% of the common shares underlying the sold units. The Company is required to issue Placement Agent Warrants to purchase up to 2,186,000 shares of Common Stock for the first closing, Placement Agent Warrants to purchase up to 1,074,000 shares of common stock for the second closing, and Placement Agent Warrants to purchase up to 390,000 shares of common stock for the third closing, in each case on substantially similar terms to those offered to investors.

(I) Subsequently, the Company entered into Securities Purchase Agreements with certain institutional accredited investors and issued Bridge Notes with a total principal amount of $300,800. These notes were issued with an initial issue discount of $32,800. After deducting legal and due diligence fees of $23,000, the net proceeds received by the Company amounted to $245,000. The Bridge Notes bear interest at an annual rate ranging from 10% to 12% and require scheduled monthly installment repayments beginning November 30, 2026, through July 2, 2027. The Company has the option to prepay the notes, in full or in part, at a discounted rate applied to the outstanding balance. Additionally, the notes carry a default interest rate ranging from 8% to 22% per annum and include customary events of default.

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.