ZCARW Zoomcar Holdings, Inc.

Price Chart

Executive Summary

Zoomcar has entered into a securities purchase agreement to sell up to $10 million of Series A Units (convertible preferred stock and warrants) in a private placement, with a minimum of $1 million required to close. The proceeds will be used for general corporate purposes, including working capital and repayment of certain convertible notes. The filing also includes amendments to the company's certificate of incorporation to authorize the Series A Convertible Preferred Stock, and a registration rights agreement for the resale of the underlying common shares. This capital raise is critical for the company given its precarious financial condition, including ongoing litigation settlements, debt defaults, and limited cash reserves.

Key Financial Metrics

Actionable Insight

Key Facts

• Up to $10 million in Series A Units offered (base $5M + $5M overallotment), with a $1 million minimum closing.
• Each Series A Unit priced at $1,000, consisting of one share of Series A Convertible Preferred Stock and one Series A Warrant.
• Series A Preferred Stock has a stated value of $1,000 per share, convertible into common stock at an initial conversion price of $0.05 per share (subject to full-ratchet anti-dilution).
• Warrants have an exercise price of $0.0625 per share, are exercisable for five years, and also carry full-ratchet anti-dilution protection.
• Proceeds will be used for general corporate purposes, working capital, and repayment of certain outstanding convertible notes, including the Atalaya Note.
• The company has ~7.9 million shares of common stock outstanding as of June 1, 2026, with a highly dilutive capital structure including multiple series of warrants and convertible notes.
• Net proceeds from the offering are partially committed: 50% to repay the Atalaya Note, plus payments to ACM per the ACM Letter Agreement, and payoff of the AES, Quick Capital, and certain bridge notes.
• The company's entry into this transaction constitutes an event of default under the Atalaya Note, and the company does not intend to obtain consent from that noteholder.
• The offering is a private placement under Section 4(a)(2)/Rule 506(c), with shares subject to registration rights for resale.
• The preferred shares automatically convert into common stock upon an 'Approved Uplisting' to NYSE American or Nasdaq.

Financial Impact

Up to $10 million gross proceeds, but a significant portion is pre-committed to debt repayments and settlements (Atalaya Note, ACM cash payment, bridge note payoffs), leaving limited free cash flow for operations. The offering is highly dilutive given the conversion price of $0.05 per common share, implying up to 200 million common shares from the preferred conversion alone if $10M is raised, dwarfing the current ~7.9M shares outstanding.

Risk Factors

• Massive dilution: Conversion of preferred at $0.05 implies ~20,000 common shares per $1,000 preferred unit, far exceeding current outstanding shares.
• The company is in default on its Atalaya Note and has limited cash ($0.4M as of Feb 2026); this offering may not provide sufficient liquidity to avoid further restructuring or bankruptcy.
• Settlement agreements with ACM ($2.5M cash due by Oct 2026) and Reimer plaintiffs ($39M shares) add significant obligations.
• Trading on OTC markets with no minimum bid price requirement — risk of further decline or loss of listing.
• Full-ratchet anti-dilution on both preferred and warrants means any future lower-priced issuance would further depress conversion/exercise prices.
• Registration rights require the company to file a resale registration statement, accelerating dilution into the market.
• The company needs to obtain stockholder approval for share increases and the exchange offer, which may not be forthcoming.

Market Snapshot

Documents Analyzed

This report is based on 3 SEC documents filed with EDGAR.

US Market Status

Related Tickers