Material Agreement Form 8 K

Item 1.01. Entry into a Material Definitive Agreement

Securities Purchase Agreement and the Closing

On November 5, 2024, Zoomcar Holdings, Inc. (the "Company") entered into a securities purchase agreement (the "Securities Purchase Agreement") with certain institutional accredited investors (the "Investors"), in connection with a private placement offering (the "Offering"), pursuant to which the Company agreed to sell to such Investors an aggregate of 2,137,850 units at a price of $4.28 per unit for an aggregate investment of $9.15 million, $2.5 million of which was provided by one of the Company's directors. Each unit consists of one share of the Company's common stock, par value $0.0001 per share ("Common Stock"), two Series A Warrants each to purchase one share of common stock (the "Series A Warrants") and a Series B Warrant to purchase such number of shares of Common Stock, as determined on the Reset Date (as described below). Investors were provided with the option to have all or a portion of the shares of Common Stock issued pursuant to pre-funded warrants (the "Pre-Funded Warrants") to the extent that the issuance of shares of Common Stock would cause any of such Investors to beneficially own more than 4.99% or 9.99% of the shares of Common Stock outstanding, at the option of the Investor. The Series A Warrants are exercisable for a period of five years from the date that they are initially exercisable, at an initial exercise price of $4.03 per share. The exercise price and the number of shares available for exercise pursuant to the Series A Warrants are subject to adjustment, as provided below. The Series B Warrants are exercisable until they are exercised, at an exercise price of $0.0001. The closing occurred on November 7, 2024 (the "Closing Date"). On the Closing Date, the Company issued to the Investors 1,302,850 shares of Common Stock and Pre-Funded Warrants to purchase 835,000 shares of Common Stock. Purchasers of Pre-Funded Warrants paid the per unit price of $4.28 less $0.0001 for each Pre-Funded Warrant purchased. The Company raised gross proceeds of $9.15 million and after the deduction of fees and expenses payable to the Placement Agent (defined hereafter) and other offering expenses, including legal fees payable to the Company's and Placement Agent's counsel, the net proceeds to the Company was $7.625 million. Proceeds were also used to repay $3.804 million of outstanding indebtedness to debt investors pursuant to an offering in June 2024. Further, $200,000 of the proceeds were held back in a separate escrow account for the payment of any indemnification liabilities suffered by the Placement Agent. After all of such deductions the Company retained net proceeds of $3.621 million.

The Securities Purchase Agreement contains representations, warranties and covenants of the Company and the Investors customary for this type of transaction. Additionally, the Company has agreed, subject to the Company's right to raise additional capital currently contemplated in a private placement offering and certain other exceptions, (a) not to issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents (as such term is defined in the Securities Purchase Agreement) or (b) file any registration statement, without the consent of a majority-in-interest of the Investors, until 90 days after the later of (x) the earlier of (i) the date that the shares of Common Stock and the shares of Common Stock underlying the Pre-Funded Warrants on the Closing Date, and the maximum number of shares of Common Stock issuable under the Series B Warrants have become registered pursuant to an effective resale registration statement (the "Resale Registration Statement" and such date, the Resale Registration Effective Date") and (ii) the date the securities can be sold pursuant to Rule 144 of the Securities Act of 1933, as amended (the "Securities Act"), or (y) the date that the Company obtains the Stockholder Approval (described below) (the "Release Date"). The Company has also agreed not to conduct any variable rate transactions, without the consent of a majority-in-interest of the Investors, for a period of six months after the Closing Date.

Also, pursuant to the terms of the Securities Purchase Agreement, the Company is required to hold a special meeting of stockholders (which may also be at the annual meeting of stockholders) at the earliest practicable date after the issuance date, but in no event later than 60 days after the Closing Date for the purpose of obtaining stockholder approval ("Stockholder Approval") for the exercisability of the Warrants and for certain of the provisions included therein, including, adjustments to the exercise price and number of shares issuable upon exercise of the Series A Warrants following a Dilutive Issuance (as defined herein) or Share Combination Event (as defined herein) or a reset adjustment under the Series A Warrants (as provided below) and a reset adjustment under the Series B Warrants (as provided below). If the Company does not obtain Stockholder Approval at the first meeting, the Company required to call a meeting every 60 days thereafter to seek Stockholder Approval until the earlier of the date Stockholder Approval is obtained or the Series A Warrants and Series B Warrants are no longer outstanding. In the event that the Company is unable to obtain Stockholder Approval, the Warrants will not be exercisable and therefore will have no value.