Zoomcar Holdings, Inc. (NASDAQ:ZCAR), a Delaware-incorporated auto rental and leasing services provider with a current market capitalization of $2.23 million, has successfully raised approximately $1.44 million in a private placement offering. The second round of funding, which closed on Monday, involved the issuance of common stock and pre-funded warrants, along with Series A and Series B Warrants. According to InvestingPro data, the company has been quickly burning through cash, making this funding crucial for operations.
The Bangalore-based company, which operates under the name 07 Trade & Services, entered into a securities purchase agreement on January 31, 2025, with accredited investors. This agreement mirrors the one from a previous offering detailed in a December 2024 SEC filing. The recent transaction saw Zoomcar issuing 1,049,796 shares of common stock and pre-funded warrants for 872,000 shares. The pre-funded warrants were an option for investors to avoid exceeding beneficial ownership thresholds.
The offering was priced at $1.56 per unit, which included both shares and warrants. However, securities worth $1,560,000 were issued in exchange for the settlement of litigation, hence no cash proceeds were received for that portion. The Series A Warrants, exercisable over five years at $1.95 per share, and the Series B Warrants, exercisable at $0.0001, were also part of the package. With the stock currently trading at $1.08, down over 99% in the past year, InvestingPro analysis reveals 16 additional key insights about the company’s financial health and market position.
Aegis Capital Corp. served as the placement agent for the offering, receiving a cash fee, non-accountable expense allowance, and warrants as compensation. The firm also secured a right of first refusal for future company financings for two years post-closing.
The funds raised, net of placement agent fees and other offering expenses, amount to approximately $1.25 million. The net proceeds are earmarked for general corporate purposes, although specific plans for the funds were not disclosed in the press release. This funding comes at a critical time, as InvestingPro data shows the company’s concerning financial position with a current ratio of 0.07 and negative EBITDA of $20.24 million, suggesting potential challenges in meeting short-term obligations.
The sale of these securities was conducted in accordance with exemptions from registration under the Securities Act, specifically Section 4(a)(2) and Regulation D Section 506(b).
Zoomcar Holdings also disclosed a settlement agreement with Randall Yanker, which was part of the second closing. The agreement resolved claims related to a consulting agreement from May 2020. In this settlement, Yanker or his designees received 1,000,000 shares or pre-funded warrants, along with Series A and Series B Warrants.
In separate board actions, Zoomcar Holdings announced Hiroshi Nishijima’s transition from Active Chief Executive Officer to Chief Executive Officer, effective February 1, 2025. Additionally, Sachin Gupta, the Chief Financial Officer, received a salary increase to $189,000 per annum.
This report is based on information from a SEC filing and provides a factual overview of Zoomcar Holdings’ recent financial activities and executive changes.
In other recent news, Zoomcar Holdings is currently facing potential delisting from the Nasdaq Stock Market due to non-compliance with certain listing requirements, including the minimum market value of publicly held shares. Despite an initial 180-day period to regain compliance, the company was unable to rectify the deficiency and is now preparing to present a compliance plan to the Nasdaq Hearing Panel. In executive news, Zoomcar Holdings has announced several changes. Shachi Singh, previously General Counsel and Chief Legal Officer, has been appointed as an executive officer, while Sachin Gupta has been appointed as the Chief Financial Officer. In contrast, Mark Bailey has resigned from the board of directors, with the company stating that his departure was not due to disagreements with Zoomcar’s operations, policies, or practices. Additionally, the company has entered into a material definitive agreement with select accredited investors as part of a private placement offering to raise between $4 million and $30 million. These are recent developments based on past articles.
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