ZCAR 10-K & 10-Q changes, risk factors and insider trading

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 inthis this Annual Report on Form 10-K for the year ended March 31, 20252026). 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.

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 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. Warrants. As a result of the FirstSecond 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 JulySeptember 31,30, 20252026 assuming do notwe make anypartial 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,OTCQB, 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,OTCQB, 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 OTCQB and not listed on ana national 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.

To continue current operations, we will need to raise capital imminently. Further, to continue to effectively compete thereafter, we will require 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 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 the entity was thereafter adjudged bankrupt in January 2026 and subsequently operations in Egypt, Indonesia were also discontinued during June 2024 as a result.

Further, as a result of the consummation of the Business Combination,Our our expenses have increased substantially in connection with actions and efforts required to operate as a public company. During the year ended March 31, 2025,2026, 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 ourOur expenses to increase significantly moderately in connection with our ongoing activities, including the continuing increasegrowth in our technologicalbusiness capabilities with respect to IoT, machine learning, and artificial intelligence.operations. We do not currently have sufficient cash resources to operate our business beyond JuneSeptember 20252026 (assuming that we do notpartially repay anysome 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:

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 and the shares issued during the Tender Offer and preferred stock issued in the Bridge Financing 2026 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 (whichprior 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. 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.

Since November 2023, we are have been 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, theThe Company continues to negotiate a deferred 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,Currently, 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$2,847,177 (approx.) towards the outstanding debt. GivenThe Company is yet to clear the continuingfourth negotiationstranche andof payment (as per the expectedproposed comfortpayment letter,schedule) wewhich dowas notdue contemplateas anyof immediateJuly legal31, action2025. The Company also againstrequested a further extension to repay the remaining three tranches. However, on December 22, 2025, the Company received a Demand Notice from LeasePlan demanding the outstanding dues payable per the resolution agreement initially entered into by the Company and Leaseplan in thisAugust regard.2021 be released promptly. The Company is still discussing a deferred payment plan with LeasePlan and has made certain part payments towards these dues and awaits LeasePlan’s confirmation on the extension sought. As of May 05, 2026, the Company still has $3,536,123 pending dues towards LeasePlan. If LeasePlan refuses to provide us an extension for making the deferred payments, or if we are unable to execute a settlement agreement with respect to the restructured debt, or fail to honor the obligations under any proposals accepted or 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 givengranted during a prior restructuring making and will becomeit immediately due and payable with interest of 1.5% per month.

Further,The Company we areis in violation breach of the final payment obligation of $422,968$ 346,295 (approx.) (inclusive of interest accrued) on ourits 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. MahindraFor maythe initiateperiod legalthe action foroverdue resolutionamount remains unpaid, interest accrues at the rate of the3% dispute.per Such outcomes may have a material adverse impact on our business, operations or financial condition.month.

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 MayJune 2025.2026. 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 of JuneJuly 27,13, 2025,2026, we have issued and outstanding options to purchase 1615 and 1 shares of our Common Stock with a weighted average exercise priceprices of $11,460,$300 and $120 respectively, pre-funded warrants to purchase 2,461,911 5,306,013 shares of Common Stock, warrants to purchase 18,97919,831 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, 11,500,00011,499,991 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 996,939763,294 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 JuneJuly 27,13, 2025,2026, we also have issued and outstanding December 2024 Series A Warrants to purchase 86,5715,009 shares of Common Stock at a current exercise price of $6.24 per share, December Series B Warrants to purchase up to 177,57294,238 shares of Common Stock at a current exercise price of $0.002 per share, As of JuneJuly 27,13, 2025,2026, 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 JuneJuly 27,13, 2025,2026, we have also issued and outstanding March 2024 Series A Warrants to purchase 2,544,13432,544,134 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.

As of JuneJuly 27,13, 20252026 we had 6,284,4918,488,485 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.

For the year ended March 31, 2025,2026, Booking Days on the platform totaled approximately 678,708 ,743,239, compared to 669,454678,708 during the year ended March 31, 2024.2025.

OurDuring the fiscal year ended March 31, 2022, we began offering a peer-to-peer car sharing platform, which enables Hosts to connect with Guests. 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, 2025,2026 and March 31, 2024,2025, consists of revenue from services and other operating revenue.

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 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 companiespublic listedcompanies, 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 consist primarily of interest on vehicle loans, finance leasesleases, bridge loan, changes in fair value of Atalaya note, interest on unsecured and convertible notes 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 expense and (income), and expense, net consists primarily of interest income, change in fair value of the preferred stock warrant and the unsecured convertibleAtalaya note, interest income, (gain)/loss on sale of assets & assets held for sale, Loss on assets written off, lossLiquidated damages to Investors and Gain on foreignderecognition currencyof transactions and balances,subsidiary and other expenses.

Gain on troubled debt restructuring includes the gain consists of gains on account of restructuring of loans from lenders and gainsdues onfrom account of concluded negotiations with vendors for reduction in outstanding liabilities.vendors.

Our total net revenue for the year ended on March 31, 2025,2026, and March 31, 2024,2025, was $9.11$9.16 million and $9.90$9.11 million, respectively, representing aan declineincrease of $0.79$0.05 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 endedover March 31, 2025, versus the previous comparable period, but the revenue has decreased majorly due to a reduction of average rate per hour.year.

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 31,2025,31, as2025 compareda todecrease $4.35of $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 31,2024,31, 2026 as compared ato decreaseprevious 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 theFiscal year ended March 31,202431, vs $ 0.01 million during the year ended March 31,2025),2025 and a further reduction of $0.34$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.

Gain on troubled debt restructuring during the year ended on March 31, 20252026, was $1.22$ 0.07 million vsas Nilcompared to $1.17 million during the year ended March 31, 2024. The gain on troubled debt restructuring was on account of debt restructurings and trade payable vendor restructurings.2025.

Other expense expense/(income), net

The Company reported net Other expenses wereof $7.79$4.74 million during the year ended March 31, 2025, 2026, versus other incomeexpenses of $11.33$7.79 million during the year ended March 31, 2024,2025, an increase in expensedecrease of $19.11$3.04 million or 169%.39%.

We define contribution profit (loss) as our gross profit (loss) plus (a) depreciation expense included in cost of revenue, (b) stock-basedStock based compensation expenseincluded 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 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, 2025,2025. versusOur agross contributionprofit lossimproved ofto $0.98$4.73 million during the year ended on March 31, 2024.2026, Our gross profit improved toversus $3.81 million during the year ended endedon 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 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.

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; (iiiii) depreciation and amortization;(iii) finance costs; (iv) stock-basedstock based compensation expense; and (v) financegain costs.on troubled debt restructuring; (vi) any other exceptional nonrecurring expenses.

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 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 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 thatsuccessfully reducedlowered our cost of revenue, technology and development costs, sales and marketing costs, and general and administrative costs (as describeddetailed above) duringin the yearpreceding ended March 31, 2025, as compared to the same period in 2025.section).

During the year ended March 31, 2025,2026, and 20242025 respectively, we generated negativeused cash flows from operations of $9.08$1.36 million and $22.20$ 8.53 million, respectively, reflecting greater operating cost efficiencies and reduced overhead expenditures in 2025.2026. The Company incurred a net loss of $25.62$14.62 million and $34.28$25.62 million during the yearyears ended March 31, 2025,2026, and 2024,2025, respectively, and the accumulated deficit amounts to $333.17$347.79 million and $307.55$333.17 million as of March 31, 2025, 2026, and 2024,2025, respectively.

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 inour 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, 2025,2026, 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.

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, theThe Company hadunderwent enteredvarious into a private placement transaction for gross proceedsrounds 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 fromas institutional investors in June 2024. There was alsodescribed a holdback of $0.2 million for indemnification of the placement agent in the financing,“Financing leavingArrangements” proceedssection (see Management’s Discussion and Analysis of approximatelyFinancial $3.621Condition millionand Results toof theOperations Company. Whileof this financingform 10-K), which resulted in the payment of certain outstanding indebtedness, the Company will still need to raise substantial additional capital imminently in order to have sufficient growth capital. The Company believes that current cash and cash equivalents will allow the Company to continue operations through JulySeptember 31,30, 2025,2026, assuming thatif the Company makes partpartial paymentspayment ontowards 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.

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. The transactions pertaining to issuance of common stock, debt instruments and other financing arrangements are listed below:

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.

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 actingacted as the Exclusive Placement Agent for the private placement. The Company intends to useused the net proceeds from the private placement to repay approximately $3.80 million of outstanding indebtedness (including accrued interest).

Our business is subject to numerous risks and uncertainties, including but not limited to 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.section. 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.

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 this Quarterly Report on Form 10-Q for the ninethree months ended DecemberJune 31,30, 20252026). 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.

On June 24, 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 deduction of legal and due diligence fees of $10,000. Additionally, $45,500 (i.e., 13% of net proceeds) 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 $55,500. The repayment obligations under these notes have been fully discharged as of the date of filing of this Form 10-Q.

On July 31, 2025 , 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 $206,225 with an initial issue discount of $23,725. The net proceeds disbursed to the Company were $175,000 after deduction of legal and due diligence fees of $7,500. The repayment obligations under these notes have been fully discharged as of the date of filing of this Form 10-Q.

Quick Capital Note: On January 8, 2026 we entered into a Securities Purchase Agreement with Quick Capital LLC (“Quick Capital”) and issued a convertible note for principal amount of $42,613.64 with an original discount of $5,113.64 (“Quick Capital noteNote”). The Quick Capital Note bears interest at 12% per annum with a guaranteed interest at issuance, matures 6 months after issuance, and is subject to default interest of 22% per annum and includes customary events of default and covenants. It is convertible anytime or upon default and has piggyback registration rights. We received net proceeds of approximately $35,000 after fees.

We believe that the current cash and cash equivalents will allow us to continue operations through MarchSeptember 31,30, 2026 assuming we do not make anypartial payments on our currently outstanding indebtedness and withhold some 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.

On November 4, 2025, the Company’s ordinaryCommon sharesStock commenced trading on the OTCQB under the ticker symbol “ZCAR.” The transition from the OTCQX to the OTCQB does not affect the Company’s reporting obligations under the Securities Exchange Act of 1934, as amended, or the public trading of its securities in the United States.

On November 4, 2025, the Company’s ordinaryCommon sharesStock commenced trading on the OTCQB under the ticker symbol “ZCAR.” The transition from the OTCQX to the OTCQB does not affect the Company’s reporting obligations under the Securities Exchange Act of 1934, as amended, or the public trading of its securities in the United States.

Our expenses have remained substantial in connection with actions and efforts required to operate as a public company. During the ninethree months ended DecemberJune 3130, 2025,2026, 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, weWe expect our expenses to increase moderately in connection with growth in our business operations. We do not currently have sufficient cash resources to operate our business beyond March 31, 20262027 (assuming that we do notpartially repay anysome 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:

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 and the shares issued during the Tender Offer and preferred stock issued in the Bridge Financing 2026 will dilute your percentage ownership interest and may also result in downward pressure on the price of our Common Stock.

Since November 2023, we have been 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. The Company continues to negotiate a deferred payment plan to the restructured debt proposal shared by the CompanyCompany. wherein the debt after certain waivers and discounts, will stand restructured to $4,755,942 and theThe 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.schedule. As of the date of this Form 10-Q, the Company has already cleared the first three tranches in accordance with the proposed payment schedule as per the comfort letter, amounting to $2,847,177 (approx.) towards the outstanding debt. The Company is yet to clear the fourthremaining trancheoutstanding of payment amount(as per the proposed payment schedule) which was due as of July 31, 2025 and has sought further extension of time to repay the remaining three tranches. However, on December 22, 2025, the Company received a Demand Notice from LeasePlan demanding the outstanding dues payable per the resolution agreement initially entered into by the Company and Leaseplan in August 2021 be released promptly. The Company is still discussing a deferred payment plan with LeasePlan toand clearhas made certain partial payments towards these dues andwhile it awaits LeasePlan’s confirmation on the extension sought. If LeasePlan refuses to provide us an extension for making the deferred payments, or if we are unable to execute a settlement agreement with respect to the restructured debt, or fail to honor the obligations under any proposals accepted or 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 granted during a prior restructuring making it immediately due and payable with interest of 1.5% per month.

Further,As weon arequarter ended June 30, 2026 Company is in violation breach of the final payment obligation of $371,805$322,465 (approx.) (inclusive of interest accrued) on ourits 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. MahindraFor maythe initiateperiod legalthe action foroverdue resolutionamount remains unpaid, interest accrues at the rate of the3% dispute.per Such outcomes may have a material adverse impact on our business, operations or financial condition.month.

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 DecemberJune 2025.2026. 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 of FebruaryJuly 12,13, 2026, we have issued and outstanding options to purchase 1615 and 1 shares of our Common Stock with a weighted average exercise priceprices of $11,460,$300 and $120 respectively, pre-funded warrants to purchase 5,306,013shares 5,306,013 shares of Common Stock, warrants to purchase 19,36919,831 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, 11,500,00011,499,991 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 763,294 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 FebruaryAugust 12,13, 2026, we also have issued and outstanding December 2024 Series A Warrants to purchase 5,009 shares of Common Stock at a current exercise price of $6.24 per share, December Series B Warrants to purchase up to 94,238 shares of Common Stock at a current exercise price of $0.002 per share, As of FebruaryAugust 12,13, 2026, 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 FebruaryAugust 12,13, 2026, we have also issued and outstanding March 2025 Series A Warrants to purchase 2,544,134 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.

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 our Form 10-Q for the ninethree months ended DecemberJune 3130 20252026). 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) (the “June Warrants”) for gross proceeds of $3,000,000.

On June 24, 2025, the Company closed two Securities Purchase Agreements (each, a “Purchase Agreement”) with 1800 Diagonal Lending LLC, a Virginia limited liability company (“DLL”), and Boot Capital LLC, a Delaware limited liability company (“Boot”) (both investors collectively “June 2025 Noteholders”), respectively, in connection with a private placement offering of convertible bridge notes (each, a “Note” and collectively, the “Notes”) in the aggregate principal amount of $290,240.00 and $111,760.00, respectively. Pursuant to the Purchase Agreements, DLL purchased a Note in the original principal amount of $290,240.00 with an original issue discount of $30,240.00 and net proceeds to the Company of $250,000.00, after fees. Boot purchased a Note in the original principal amount of $111,760.00 with an original issue discount of $11,760.00 and net proceeds to the Company of $100,000.00. Each Note bears interest at a rate of 12% per annum and is due on March 30, 2026. The Notes include scheduled installment repayments, and may be prepaid in full by the Company at a discount to the outstanding balance. The Notes are subject to default interest at a rate of 22% per annum and include customary events of default and covenants. The repayment obligations under these notes have been fully discharged as of the date of filing of this Form 10-Q.

On July 31, 2025 , the Company further entered into two Securities Purchase Agreements (each a “Purchase Agreement”) with 1800 Diagonal Lending LLC, a Virginia limited liability company (“DLL”), and Boot Capital LLC, a Delaware limited liability company (“Boot”) (both investors collectively “July 2025 Noteholders”), respectively pursuant to which the Company issued convertible Bridge Notes(“July Bridge Notes”) for a total principal amount of $206,225 with an initial issue discount of $23,725. The net proceeds disbursed to the Company were $175,000 after deduction of legal and due diligence fees of $7,500. Hence, the total debt issuance costs amounts to $7,500. The Bridge notes have a maturity date of May 31, 2025, and bear interest at an annual rate of 12%. The notes include scheduled monthly installment repayments and interest payments starting August 30, 2025 and may be prepaid in part or full, by the Company at a discount to the outstanding balance. The notes are subject to default interest rate of 22% per annum and include customary events of default. The repayment obligations under these notes have been fully discharged as of the date of filing of this Form 10-Q.

Quick Capital Note: On January 8, 2026 we entered into a Securities Purchase Agreement with Quick Capital LLC (“Quick Capital”) and issued a convertible note for principal amount of $42,613.64 with an original discount of $5,113.64 (“Quick Capital Note”) resulting in net proceeds of approximately $35,000 after fees. The Quick Capital Note bears interest at 12% per annum with a guaranteed interest at issuance, matures 6 months after issuance on July 08, 2026, and is subject to default interest of 22% per annum and includes customary events of default and covenants. It is convertible anytime or upon default and bears piggyback registration rights. The repayment obligations under these notes have been fully discharged as of the date of filing of this Form 10-Q.

The following “Management’s Discussion and Analysis of Financial Condition and Results of Operations” should be read in conjunction with our Unaudited Condensed Consolidatedcondensed Financialconsolidated Statementsfinancial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q for the three and nine months ended DecemberJune 31,30, 20252026 and 2024.2025. 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-Q. 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.

As of February12,August 2026,13, 2026 we had 7,151,3438,770,836 shares of our Common Stock issued and outstanding and 10,000,000 shares of Preferred Stock, $0.0001 par value per share, 2,323 of which are issued or 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.

For the three months ended December 31,June 2025,30, 2026, Booking Days on the platform totaled approximately 197,327,183,560, compared to 170,830190,931 during the three months ended December 31,June 2024.30, 2025.

During the three months ended December 31,June 2025,30, 2026, Gross Booking Value on the platform totaled approximately $6.60$5.83 million, compared to approximately $6.54$6.47 million during the three months ended DecemberJune 31,30, 2024.2025.

Our revenue for the three and nine months ended DecemberJune 31,30, 2025,2026 and December 31, 2024,2025, consists of revenue from services and other operating revenue.

Finance costs consist primarily of interest on vehicle loans, finance leases, bridgeInterest loanon ,Subcontractor liability Discount on issue of Series A convertible units, Financing issuance costs, changes in fair value of Atalaya note, interestPenalty on unsecured andnotes, interest on unsecured, convertible notes and redeemable promissory note. In addition, it also includes Note issue expenses,include bank charges, other borrowing costs.

Other expense and (income), net consists primarily of interestInterest income, changeLoss inon fairlitigation valuesettlement, Loss on settlement of Atalayaliability, note,Loss on sale of assets previously held for sale, Payable to customers and provision written back, Gain on recovery of goods and service tax receivable, Gain on write off of liabilities, Loss on assets written off, Liquidated damages to Investors and Gain on derecognition of subsidiary and other expenses.

Our total net revenue for the three months ended on DecemberJune 31,30, 2026, and June 30, 2025, and December 31, 2024, was $2.30$2.35 million and $2.45$2.31 million, respectively, representing decrease an increase of $0.15$0.04 million, or 6%.2%.

Technology and development expenses totaled $2.12$0.50 million during the ninethree months ended DecemberJune 31,30, 2025,2026 as compared to $2.39$0.71 million during the nine three months ended DecemberJune 31,30, 20242025, a declinedecrease of $0.27$0.20 million, or 11%.29%. These savings were driven by a reduction of $0.16$ 0.19 million in employee benefit expenses during three months ended June 30, 2026 as compared to the previous three months ended June 30, 2025 and a reduction of $0.02 million in IT platforms support costs as the Company continues to optimize usage of artificial intelligence, SAAS tools and cloud-based IT services while enabling more in-app features for Guests and Hosts and $ 0.11 million reduction in employee benefit expenses during the nine months ended December 31, 2025 as compared to previous comparable period.Hosts.

Sales and marketing expense totaled $0.52$0.11 million during the ninethree months ended DecemberJune 31,30, 2025,2026, as compared to $1.21$0.18 million during the ninethree months ended DecemberJune 31,30, 2024,2025, a decrease of $0.69$0.06 million, or 57%,37%, primarily driven by $0.49a $0.05 million reduction in performance and brand marketing related expenses expenses and reduced incentivization of the hosts during the ninethree months endingended DecemberJune 31,30, 20252026 as compared toprior nineyear monthscomparable endingperiod. DecemberFurther 31, 2024. Personal-relatedPersonnel-related costs decreased by $0.19$0.02 million during the ninethree months ending Decemberended 31,June 202530, 2026 as compared to the previous comparable period.

General and administrative expenses were $1.92$1.80 million during the three months ended DecemberJune 31,30, 2025,2026, as compared to $3.25$1.87 million during the three months ended DecemberJune 31,30, 2024,2025, a reduction of $1.32$0.07 million, or 41%.4%. This reduction in general and administrative expenses is was primarily due to the cost rationalization and optimization efforts resulting in reduction of $1.12$0.08 million in professional fees during the three months ended DecemberJune 31,30, 20252026 as compared to the threeprior monthsyear endedcomparable December 31, 2024 and reduction $0.30 million in rental expense pertaining to parking sites where assets held for sale was parked, due to sale of majority of these assets and also closure of certain regional offices during the three months ended December 31, 2025 as compared to the three months ended December 31, 2024.period.

Gain on troubled debt restructuring during the three months ended on DecemberJune 31,30, 2025,2026, was Nil as compared to $0.12$0.07 million during the three months ended DecemberJune 31,30, 2024.2025.

OtherThe incomeCompany wasreported $1.23 million during the three months ended December 31, 2025, versusnet other expenses of $0.76$3.09 million during the three months ended DecemberJune 31, 2024,30, 2026, versus net other expenses of $2.08 million during the three months ended June 30, 2025, an increase of $1.98$1.01 million or 262%.48%.

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.

Our adjusted EBITDA loss reduced to $0.83$0.61 million during the three months ended on DecemberJune 31,30, 2025,2026, as compared to an adjusted EBITDA loss of $3.15$1.73 million during the three months ended on DecemberJune 31,30, 2024.2025. 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).

During the ninethree months ended December 31,June 2025,30, 2026, and 20242025 respectively, we used cash flows from operations of $1.31$0.48 million and $ 5.040.19 million, respectively, reflecting greater operating cost efficiencies and reduced overhead expenditures in 2025.respectively. The Company incurred a net loss of $5.72$5.37 million and $13.81 $4.21 million during the ninethree months ended DecemberJune 31,30, 2025,2026, and 2024,2025, respectively, and the accumulated deficit amounts to $338.89$311.81 million and $321.36$308.48 million as of DecemberJune 31,30, 2026, and 2025, and 2024, respectively.

As of DecemberJune 31,30, 2025, 2026, our cash and cash equivalents totaled $0.21$0.41 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 DecemberJune 31,30, 2025,2026, 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.

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 thethis Unaudited Condensed 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-Q), 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 March 31, 2026,2027, if the Company doesmakes notpartial makeor no payment towards its currently outstanding indebtedness and future accruals.

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. The transactions pertaining to issuance of common stock, debt instruments and other financing arrangements are listed below:

We have obtained loan facilities from various financial institutions during earlier time periods, which remained outstanding as of DecemberJune 31,30, 2025.2026.

On AugustJanuary 11,8, 2025,2026 , the Company entered into Securities Purchase AgreementAgreements with certain institutional accredited investorinvestors pursuant to which the Company issued Promissory noteconvertible redeemable notes for a total principal amount of $180,000$ 42,614 with an initial issue discount of $18,000.$ 5,114. The net proceeds disbursed to the Company were $158,500$ 35,000 after deduction of legal and due diligence fees of $3,500.$ 2,500. Hence, the total debt issuance costs amounts to $3,500.$ 7,614.

During the nine monthsyear ended December March 31, 2025,2026, 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 $1,162,275$1,427,825 with an initial issue discount of $122,275.$ 152,825. The net proceeds disbursed to the Company were $998,500$1,223,500 after deduction of legal and due diligence fees of $41,500.$ 51,500.

Net cash (used in ) generated from operating activities was $1.31$(0.48) million and $ 5.040.19 million for the ninethree months ended DecemberJune 31,30, 2026, and 2025, andrespectively. December 31, 2024, respectively. The major drivers contributing to the decreaseincrease of $3.74$0.68 million during the current ninethree months compared to previous nine months,period, included the following:

Net cash generated from/(used in) financing activities totaled $0.38$0.56 million and $7.70($0.93) million during the ninethree months ended on DecemberJune 31,30, 2026, and June 30, 2025, andrespectively. December 31, 2024, respectively. The Company received net proceeds from the issuance of unsecured notesnotes, andnet proceeds form Series A convertible notes amounting to $0.96$0.31 million and $0.36$1.43 million respectively, further the payments include repayment of debt $0.47$0.36 million, repayment of unsecured note amounting to $0.41$0.44 million, repayment of unsecured convertible note amounting to $ 0.15 million, repayment of convertible note amounting to $0.04 million and payment towards finance lease amounting to $0.06$0.17 million during the ninethree months ended DecemberJune 30, 20252026 as compared to higherlesser proceeds from the issuance of redeemableunsecured promissory notenotes amounting to $3.00 million and issuance of equity warrants net of issuance cost amounting to $12.45$0.30 million, further there are cash outflows towards redeemablerepayment promissory note issue expenses amounting to $0.49 million and repayment of Debt, redeemable promissory notesDebt and towards finance lease amounting to $1.85 million,$3.80$0.21 million and $1.60$1.02 million respectively during the ninethree months ended DecemberJune 31,30, 2024.2025. As the Company’s cash position decreased, critical payments and debt repayments were not being made in the ordinary course of business.

Below is a table that shows our contractual lease obligations as of DecemberJune 31,30, 20252026:

During the nine monthsyear ended December March 31, 2025,2026 and period ended June 30, 2026, the Company has issued Bridge Notes which are repayable at the principal value along with an interest of 12%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.