Zoomcar closes third offering round, issues $15.6M in securities

Zoomcar Holdings, Inc. (NASDAQ:ZCAR), a company specializing in auto rental and leasing without drivers, has concluded a third round of private placement offerings, issuing securities valued at $15.6 million on March 31, 2025. According to InvestingPro data, the company operates with a market capitalization of just $1.46 million and faces significant financial challenges, with a weak Financial Health Score of 1.38 out of 10. The round did not generate cash proceeds but was aimed at settling claims and waiving certain investor rights from previous financings of its predecessor, Zoomcar, Inc.

The issued securities included 501,318 shares of common stock, Series A Warrants exercisable for up to 6,706,192 shares at $6.24 each, and Series B Warrants potentially covering 2,004,955 shares at $0.002 each. This issuance reflects adjustments due to a 1-for-20 reverse stock split effective March 21, 2025, with trading on a post-split basis commencing on March 24, 2025. InvestingPro analysis reveals the stock has experienced a dramatic decline, falling 99.58% over the past year, with particularly concerning metrics showing the company is quickly burning through cash.

The terms of the Securities Purchase Agreement for this round were consistent with previous agreements from December 2024 and January 2025, with adjustments for the reverse stock split. The Series A Warrants have a five-year exercisability period from the date they become exercisable, with no further adjustments to their exercise price or share quantity. The Series B Warrants’ exercise price and share count are subject to determination on a future reset date.

Zoomcar also entered into settlement agreements with Aegis Capital Corp. and its affiliated parties (collectively, "Aegis") and the company’s corporate securities attorneys (the "Law Firm"). Aegis settled an arbitration claim for $7 million in securities, while the Law Firm settled outstanding legal fees for services rendered through December 31, 2023, for $4 million in securities.

These transactions, which are part of a private placement offering, were made under an exemption from registration under the Securities Act of 1933, as amended, specifically Section 4(a)(2) and Section 506(b) of Regulation D.

The company did not pay Aegis any cash compensation or issue any Placement Agent Warrants in connection with this closing, as no proceeds were received. The offering and its securities have not been registered under the Securities Act and were sold in compliance with exemption provisions.

This information is based on a press release statement and indicates Zoomcar Holdings, Inc.’s continued efforts to manage its capital structure and obligations through strategic financial maneuvers. Financial metrics from InvestingPro highlight the urgency of these efforts, showing a concerning current ratio of 0.13 and negative EBITDA of -$11.95 million. For deeper insights into Zoomcar’s financial position and future prospects, investors can access the comprehensive Pro Research Report, available exclusively to InvestingPro subscribers.

In other recent news, Zoomcar Holdings reported its financial results for the fourth quarter of 2024, highlighting a 1% revenue increase to $2.45 million. The company also saw a significant rise in contribution profit from $210,000 to $1.28 million, marking its fifth consecutive quarter of positive contribution profit. Additionally, Zoomcar reduced its adjusted EBITDA loss from $10.17 million to $3.15 million. In a strategic move, Zoomcar announced a 1-for-20 reverse stock split, which aims to elevate the per-share trading price and attract institutional investors. The company also made adjustments to its Series B Warrants and authorized management to settle certain outstanding claims. In leadership changes, Uri Levine was appointed as the new Chairman of Zoomcar’s Board of Directors. Levine, known for co-founding Waze, is expected to bring valuable expertise to Zoomcar’s growth strategies, especially in the Indian market. Zoomcar continues to focus on operational efficiency and repeat user growth as part of its strategic initiatives.

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