Zoomcar Holdings Small Convertible Note Financing Analysis

According to the SEC 8-K filing disclosure, Zoomcar Holdings entered into a small convertible note financing agreement with FirstFire Global Opportunities Fund, LLC on December 10, 2025 [1]. The specific terms include:

:

• Original principal amount: $220,000
• Actual net proceeds: $200,000 (including $20,000 original issue discount)
• Note interest rate: 12%
• Maturity period: 12 months
• Additional terms: Pre-financing warrants, which can purchase 1 million common shares [1]

:

• Current ratio is only 0.04, far below the healthy level of over 1.0 [0]
• Negative working capital reaches $27.8 million, indicating severe short-term solvency insufficiency [3]
• The company explicitly acknowledges that “without additional funds, it will be unable to fulfill its obligations within one year” [3]

:

• Current market capitalization is only $919,900, less than 5 times the financing scale [0]
• Annual stock price drop is 99.59%, 3-year drop is 100% [0]
• 52-week price range from $0.14 to $124, indicating a stock price crash [0]

:

• This $220,000 financing is seriously mismatched with the company’s needs
• The company originally planned to raise $15 million (applied in May 2025) but failed [3]
• Currently seeking to raise $5 million through “bridge financing” and $20 million through “listing financing” [3]

:

• The small financing scale reflects large institutional investors’ doubts about the company’s prospects
• FirstFire, as a small-scale investment fund, takes high risks in exchange for high returns (12% interest rate + stock options)

:

• 1 million pre-financing warrants may cause significant dilution
• Relative to the current ultra-low stock price, the exercise price may be very attractive
• If all are exercised, it will significantly dilute existing shareholders’ equity

:

• The high interest rate of 12% indicates that the company expects to reduce debt burden through equity conversion
• The stock price is at a historical low ($0.14), making conversion very attractive to investors
• The company may be forced to accept unfavorable conversion prices

:

• Management has acknowledged “substantial doubt” since November 2024 [3]
• Cumulative losses reach $337.4 million, indicating long-term operational difficulties [3]
• Multiple subsidiaries (Vietnam, Egypt) have entered bankruptcy or liquidation procedures [2]

:

• Achieved contribution profit for 8 consecutive quarters, indicating improvement in core business [2]
• Q2 net loss decreased by 76% YoY to $794,000 [2]
• Adjusted EBITDA improved by 14%, cost control effective [2]

:

• India’s self-drive car sharing market is expected to grow from 18.5 million users in 2025 to 65 million users in 2031 [2]
• The company has established a network of 10 million users and 42,000 vehicles [2]

Seriously Deteriorated
This small convertible note financing clearly reflects the extreme financial distress faced by Zoomcar. The $220,000 financing scale is negligible for a technology company operating in multiple markets, indicating that the company’s financing capacity in the capital market has been severely limited.

High
The 1 million stock options plus convertible terms, against the backdrop of low stock prices, pose an extremely high dilution risk in the future. Existing shareholders face the possibility of significant equity dilution.

1. Wait and see:
   Unless the company can raise large-scale financing of tens of millions of dollars
2. Focus on conversion terms:
   If participating in financing, carefully evaluate conversion prices and stock purchase conditions
3. Monitor cash flow:
   Focus on tracking the improvement of cash burn rate in Q3 2025

This financing is more of a “life-saving” measure rather than development capital, reflecting that the company’s voice in the capital market has been significantly weakened.

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[0] Jinling API Data - ZCAR Company Financial Data and Market Information
[1] Stocktitan - “Zoomcar Holdings enters $220K note and warrant financing” (https://www.stocktitan.net/sec-filings/ZCAR/8-k-zoomcar-holdings-inc-reports-material-event-ea6cc1c1044d.html)
[2] Inc42 Media - “Zoomcar’s Q2 Loss Declines 76% YoY To $794K On One-Time Gain” (https://inc42.com/buzz/zoomcars-q2-loss-declines-76-yoy-to-794k-on-one-time-gain/)
[3] Inc42 Media - “Zoomcar’s Loss Zooms 66% YoY To $4.2 Mn In June Quarter” (https://inc42.com/buzz/zoomcars-loss-zooms-66-yoy-to-4-2-mn-in-june-quarter/)