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Zoomcar Holdings, Inc. Announces Closing of Sale of $3.6 Million Notes Private Placement

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private placement

Rhea-AI Summary

Zoomcar Holdings, a car-sharing marketplace in emerging markets, announced the closing of a $3.6 million private placement of promissory notes and investor warrants. The transaction is expected to generate gross proceeds of $3 million. The senior non-convertible notes, issued with a 16.67% discount, will bear interest at 15% per year, increasing to 20% in event of default, and mature within nine months or upon sufficient capital raises. Warrants issued allow for the purchase of 53 million shares at $0.1416 per share. These will be exercisable six months post-issuance or upon shareholder approval and expire five years post-approval. Aegis Capital Corp. acted as the exclusive placement agent. Proceeds will be used for corporate purposes and working capital.

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Positive

  • None.

Negative

  • Notes issued with a 16.67% discount, indicating potentially unfavorable borrowing terms.
  • High-interest rate of 15% per year on the notes, increasing to 20% in the event of default.
  • Short maturity period of nine months for the notes, adding financial pressure.
  • Potential dilution with warrants allowing purchase of 53 million shares at a low exercise price of $0.1416.

News Market Reaction – ZCAR

+3.08%
+3.08% Session move

In the trading session that priced this news, ZCAR gained 3.08%, reflecting a moderate positive market reaction.

Data tracked by StockTitan Argus on the day of publication.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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BANGALORE, India, June 20, 2024 /PRNewswire/ -- Zoomcar Holdings, Inc. (NASDAQ: ZCAR) (the "Company"), a marketplace for car sharing in emerging markets, today announces the closing of the purchase and sale of approximately $3.6 million of promissory notes and investor warrants for expected aggregate gross proceeds of $3 million with institutional investors.

The offering consisted of the sale of (i) senior non-convertible notes in an aggregate principal amount of $3,600,000 (the "Notes"), and (ii) warrants to purchase approximately 53 million shares of Company common stock with an exercise price of $0.1416 per share (the "Warrants").

The Notes will be the senior unsecured obligations of the Company and were issued with an original issue discount of approximately 16.67%. The Notes will bear interest at 15% per year unless an event of default has occurred, upon which interest accrues at 20% per year. The Notes will mature on the earlier of nine months after issuance or the closing of capital raises or sales of assets of the Company with net proceeds sufficient to repay the Notes (the "Maturity Date").

The Warrants are exercisable beginning on the later of (a) the six-month anniversary of issuance and (b) the date the Company obtains stockholder approval. The Warrants expire five years after the later of (x) stockholder approval and (y) the date the Warrant shares may be sold pursuant to an effective registration statement or exemption from registration. The Warrants are subject to exercise price and corresponding share adjustments for certain dilutive issuances and resets following reverse stock splits, in each case, subject to a floor price, and also contain an alternative cashless exercise provision permitting for the cashless exchange of the Warrants for an equal number of shares. The Warrants contain certain exercise limitations, providing that no exercise may be made if, after giving effect to the exercise, the holder, together with any of its affiliates, would own in excess of 4.99% of the Company's outstanding shares of common stock.

The Company expects to use the net proceeds from the offering, together with its existing cash, for general corporate purposes and working capital.

Aegis Capital Corp. acted as Exclusive Placement Agent for the private placement. 

The securities described above were sold in a private placement transaction not involving a public offering and have not been registered under the Securities Act of 1933, as amended (the "Securities Act"), or applicable state securities laws. Accordingly, the securities may not be reoffered or resold in the United States except pursuant to an effective registration statement or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws. The securities were offered only to accredited investors. Pursuant to a registration rights agreement with the investors, the Company has agreed to file one or more registration statements with the SEC covering the resale of the shares issuable upon exercise of the Warrants.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Zoomcar Holdings, Inc.

Founded in 2013 and headquartered in Bengaluru, India, Zoomcar is a marketplace for car sharing focused on emerging markets. The Zoomcar community connects Hosts with guests, who choose from a selection of cars for use at affordable prices, promoting sustainable, smart transportation solutions in growing markets.

Forward-Looking Statements

The foregoing material may contain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended. Forward-looking statements include all statements that do not relate solely to historical or current facts, including without limitation statements regarding the Company's product development and business prospects, and can be identified by the use of words such as "may," "will," "expect," "project," "estimate," "anticipate," "plan," "believe," "potential," "should," "continue" or the negative versions of those words or other comparable words. Forward-looking statements are not guarantees of future actions or performance. These forward-looking statements are based on information currently available to the Company and its current plans or expectations and are subject to a number of risks and uncertainties that could significantly affect current plans. Should one or more of these risks or uncertainties materialize, or the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, performance, or achievements. Except as required by applicable law, including the security laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Media Contacts:

Gateway Group, Inc. (U.S.)
ZCAR@gateway-grp.com 
(949) 574-3860

Zoomcar
Bhagyashree Rewatkar
bhagyashree.rewatkar@zoomcar.com 

Cision View original content:https://www.prnewswire.com/news-releases/zoomcar-holdings-inc-announces-closing-of-sale-of-3-6-million-notes-private-placement-302178501.html

SOURCE Zoomcar Holdings, Inc.

FAQ

What did Zoomcar Holdings announce on June 20, 2024?

Zoomcar Holdings announced the closing of a $3.6 million private placement of promissory notes and investor warrants.

What is the interest rate on Zoomcar Holdings' newly issued notes?

The notes will bear an interest rate of 15% per year, increasing to 20% in the event of default.

How many shares can be purchased through the warrants issued by Zoomcar Holdings?

The warrants allow for the purchase of approximately 53 million shares of Zoomcar Holdings' common stock.

What is the exercise price of the warrants issued by Zoomcar Holdings?

The exercise price of the warrants is $0.1416 per share.

What will Zoomcar Holdings use the net proceeds from the private placement for?

Zoomcar Holdings plans to use the net proceeds for general corporate purposes and working capital.

When do the warrants issued by Zoomcar Holdings become exercisable?

The warrants become exercisable six months after issuance or upon obtaining shareholder approval.

When do the warrants issued by Zoomcar Holdings expire?

The warrants expire five years after the later of stockholder approval or the date the warrant shares can be sold under an effective registration statement.