{"url_path":"/sec/zcar/10-k/2026/item-13","section_key":"item-13","section_title":"Item 13 ****Certain Relationships and Related Transactions, and Director Independence**","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-07-14","source_url":"https://www.sec.gov/Archives/edgar/data/1854275/0001213900-26-078029-index.html","accession_number":"0001213900-26-078029","cik":"0001854275","ticker":"ZCAR","issuer_name":"Zoomcar Holdings, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1854275/0001213900-26-078029-index.html","primary_entity_key":"0001854275","primary_entity_name":"Zoomcar Holdings, Inc."},"word_count":3793,"has_tables":true,"body_markdown":"**Item 13.****Certain Relationships and Related Transactions, and Director Independence**\n\n** **\n\n**Pre-Closing\nRelated Party Transactions**\n\n** **\n\n**IOAC**\n\n \n\nOn\nMay 10, 2023, IOAC issued an unsecured promissory note (the “**May 2023 Note**”) in the amount of up to $500,000 to the\nSponsor. The May 2023 Note bears no interest, and the principal balance is payable on the date of the consummation of the Company’s\ninitial business combination. The May 2023 Note is subject to customary events of default, the occurrence of certain of which automatically\ntriggers the unpaid principal balance of the note and all other sums payable with regard to the note becoming immediately due and payable.\n\n \n\nOn\nJuly 20, 2023, IOAC issued an unsecured promissory note (the “**Second Extension Note**”) in the aggregate principal amount\nof up to $180,000 to the Sponsor pursuant to which the Sponsor agreed to provide IOAC with equal instalments of the Second Extension\nFunds, or $90,000, to be deposited into the Trust Account for the first two months in which the date by which IOAC must consummate its\ninitial business combination is extended past July 29, 2023.\n\n \n\nOn\nAugust 18, 2023, IOAC issued a promissory note (the “**August 2023 Note**”), in the amount of up to $500,000 to the Sponsor.\nThe August 2023 Note bears no interest, and it is non-convertible. The principal balance is payable on the date of the consummation of\nIOAC’s initial business combination.\n\n \n\nOn\nOctober 3, 2023, IOAC issued a promissory note in favor of the Sponsor (the “**October 2023 Note**”) in the principal\namount of up to $90,000 for expenses accrued in connection with the extension of the date by which IOAC must consummate its initial business\ncombination from September 29, 2023 to October 29, 2023. The October 2023 Note is non-convertible and bears no interest, and the principal\nbalance is payable by the Company on the date on which the Company consummates an initial business combination.\n\n \n\nOn\nDecember 1, 2023, IOAC issued an unsecured promissory note (the “**December 2023 Note**”), in the amount of up to $200,000\nto the Sponsor. The December 2023 Note is non-convertible and bears no interest, and the principal balance is payable by the Company\non the date on which the Company consummates an initial business combination.\n\n \n\nOn\nDecember 18, 2023, IOAC issued (i) an unsecured convertible promissory note (the “**New Ananda Trust Note**”), the principal\namount of $2,027,840, which is equal to the total amount owed to Ananda Trust under the September 2022 Note, January 2023 Note, First\nExtension Note, May 2023 Note, Second Extension Note, August 2023 Note, October 2023 Note and December 2023 Note (collectively, the “**Existing\nNotes**”), and which bears no interest and the principal balance of the New Ananda Trust Note will be payable by the Company\n90 days after the consummation of the Business Combination, or April 24, 2024 (the “**Maturity Date**”), and, on the Maturity\nDate, the holder of the New Ananda Trust Note may convert any amounts outstanding into shares of Common Stock, at a conversion price\nlower than the redemption price per public share in connection with the Business Combination; and (ii) unsecured promissory notes to\ncertain passive investors of the Sponsor, the principal amounts of which are equal to the total amounts owed to such passive investors\nunder the Existing Notes, with substantially the same terms of the Existing Notes issued to such passive investors (together with the\nNew Ananda Trust Note, the “**Replacement Notes**”). The Replacement Notes replace the Existing Notes, which are considered\nsatisfied and discharged in full, forever, and terminated and of no further effect. At the time of Merger Closing an aggregate of $3,257,518\nwas outstanding under the Replacement Notes.\n\n \n\n119\n\n \n\n \n\n**Ananda\nTrust Subscription Agreement**s\n\n \n\nSimultaneously\nwith the execution of the Merger Agreement, on October 13, 2022, Ananda Trust entered into a subscription agreement with IOAC (the “**Ananda\nTrust Signing Subscription Agreement**”) to subscribe for 1,000,000 newly issued shares of Common Stock at a purchase price of\n$10.00 per share, contingent upon the Closing. Furthermore, simultaneously with the signing of the Merger Agreement, Ananda Trust invested\nan aggregate of $10,000,000 in Zoomcar (the “**Ananda Trust Signing Investment**”), in exchange for a convertible promissory\nnote issued by Zoomcar to Ananda Trust (the “**Ananda Trust Zoomcar Note**”). At the Closing, Zoomcar’s repayment\nobligations under the Ananda Trust Zoomcar Note was offset against Ananda Trust’s payment obligations under the Ananda Trust Signing\nSubscription Agreement and Ananda Trust received newly issued shares of Common Stock in accordance with the terms of the Ananda Trust\nSigning Subscription Agreement.\n\n \n\nThe\nAnanda Trust Signing Subscription Agreement includes registration rights obligations on the part of IOAC and is conditioned on the concurrent\nClosing and other customary closing conditions. Among other things, Ananda Trust will not have any right, title, interest or claim of\nany kind in or to any monies in the Trust Account, and agreed not to, and waived any right to, make any claim against the trust account\n(including any distributions therefrom). In the event that the Business Combination is not consummated, the Ananda Trust Note issued\nby Zoomcar in consideration of the Ananda Trust Investment will be exchanged for a new convertible promissory note issued by Zoomcar,\nand such note will be convertible upon the consummation of a subsequent financing of Zoomcar in which Zoomcar raises an aggregate of\nat least $5 million, and the Ananda Trust Subscription Agreement will terminate automatically.\n\n \n\nOn\nDecember 19, 2023, IOAC and Ananda Trust, an affiliate of the Sponsor, entered into a subscription agreement (the “**Ananda Trust\nClosing Subscription Agreement**”), pursuant to which, upon the Closing, Ananda Trust purchased 1,666,666 IOAC Class A ordinary\nshares at a price of $3.00 per share (the “**Ananda Trust Closing Investment**”). Other than with respect to the per share\npurchase price, the terms of the Ananda Trust Closing Subscription Agreement were substantially similar to the terms of the Ananda Trust\nSigning Subscription Agreement.\n\n \n\nAnanda\nTrust is an affiliate of the Sponsor. Further, the Trustee and control person with regard to the Ananda Trust, Mohan Ananda, was, prior\nto the Closing, the Chief Executive Officer and Chairman of the board of directors of IOAC; additionally, Mr. Ananda was a director of\nIOAC and has been appointed to serve as the initial chairman of the Company Board from and after the Closing. Additionally, based on\nthe Company’s capitalization immediately after the Closing, Ananda Trust is the Company’s largest stockholder, though Ananda\nTrust’s proportionate interest and voting power with regard to the Company may change over time and from time to time.\n\n \n\nThe\nterms of the Ananda Trust Closing Investment are not necessarily reflective of the terms and conditions of a transaction negotiated at\narm’s length, and it is possible that, if such terms were negotiated at arm’s length, they would have been different from,\nand more favorable to, the Company and its stockholders; however, the disinterested members of the IOAC Board approved the terms of the\nAnanda Trust Closing Investment, which they believed to be the best terms available, under the circumstances, to facilitate the consummation\nof the proposed Business Combination and deliver capital required by the Company to pursue its business plans.\n\n \n\n**Sponsor\nSupport Agreement**\n\n** **\n\nIn\nconnection with entering into the Merger Agreement, on October 13, 2022, the Sponsor, IOAC and Zoomcar entered into the Sponsor Support\nAgreement. Pursuant to the Sponsor Support Agreement, in order to induce Zoomcar to enter into the Merger Agreement and for no additional\nconsideration, the Sponsor agreed to (i) vote all ordinary shares of IOAC held by Sponsor at any meeting of the shareholders of IOAC\nin favor of the approval and adoption of the Merger Agreement and the Business Combination; and (ii) not to redeem or transfer any of\nthe shares held by the Sponsor, or deposit into a voting trust or enter into a voting agreement in a manner inconsistent with the Sponsor\nSupport Agreement. In addition, the Sponsor agreed to take all actions necessary to fulfil the conditions required in order to extend\nthe expiration of the IOAC charter by six months or such shorter period as shall be mutually agreed by IOAC, the Sponsor and Zoomcar.\nThe Sponsor also agreed to waive the anti-dilution rights associated with the shares held by Sponsor and Sponsor agreed that it shall\nuse its best efforts to cooperate with IOAC and Zoomcar in connection with obtaining the financing transactions.\n\n \n\n120\n\n \n\n \n\n**Stockholder\nSupport Agreement**\n\n** **\n\nOn\nOctober 13, 2022, Zoomcar delivered to IOAC the Stockholder Support Agreements with certain stockholders of Zoomcar, pursuant to which,\namong other things, such stockholders have agreed, respectively, to support the approval and adoption of the Business Combination. The\nStockholder Support Agreements will terminate upon the earliest to occur of (a) the Closing, (b) the date of the termination of the Merger\nAgreement, and (c) the Expiration Time. Such Zoomcar stockholders also agreed, until the expiration time, to certain transfer restrictions.\n\n \n\n**Lock-Up\nAgreement**\n\n** **\n\nIn\nconnection with entering into the Merger Agreement, on October 13, 2022, IOAC and certain Zoomcar stockholders entered into the Lock-Up\nAgreement. Pursuant to the Lock-Up Agreement, each Zoomcar stockholder holding 1% or more of the total number of issued and outstanding\nZoomcar shares on a fully diluted, as converted to common stock basis, will be subject to the restrictions described below from the Closing\nuntil the termination of applicable lock-up periods described below. Such Zoomcar stockholders agreed not to, without the prior written\nconsent of the Zoomcar board and subject to certain exceptions, during the applicable lock-up period: (i) lend, sell, offer to sell,\ncontract or agree to sell, hypothecate, pledge, grant any option, right or warrant to purchase or otherwise transfer, dispose of or agree\nto transfer or dispose of, directly or indirectly, or establish or increase a put equivalent position or liquidate or decrease a call\nequivalent position within the meaning of the Securities Exchange Act of 1934, as amended Exchange Act, and the rules and regulations\nof the SEC promulgated thereunder, any BC Lock-Up Shares; (ii) enter into any swap or other arrangement that transfers to another, in\nwhole or in part, any of the economic consequences of ownership of any of the BC Lock-Up Shares, whether any such transaction is to be\nsettled by delivery of such securities, in cash or otherwise; or (iii) publicly announce any intention to effect any transaction specified\nin the foregoing clauses. Pursuant to the Lock-Up Agreement, IOAC and certain Zoomcar stockholders agreed to the foregoing transfer restrictions\nduring the period beginning on the date of Closing and ending on the date that is the earlier of (i) six months after the Closing and\n(ii) subsequent to the Merger, (x) if the last sale price of Common Stock equals or exceeds $12.00 per share for any 20 trading days\nwithin any 30 trading day period commencing at least 150 days after the Closing; or (y) the date on which Zoomcar completes a liquidation,\nmerger, capital stock exchange, reorganization or other similar transactions that result in all of Zoomcar’s stockholders having\nthe right to exchange their shares for cash, securities or other property.\n\n \n\nOn\nDecember 18, 2023, OIAC and Ananda Trust entered into a First Amendment to Lock-Up Agreement, pursuant to which the lock-up period for\nthe shares held by Ananda Trust were amended to terminate upon the earlier of (i) twelve months after the Closing Date or (ii) subsequent\nto the Business Combination, the date on which the Company completes a liquidation, merger, capital stock exchange, reorganization or\nother similar transactions that results in all of the Company’s stockholders having the right to exchange their shares of cash,\nsecurities or other property.\n\n \n\n**Zoomcar,\nInc**.\n\n \n\n**Amendment\nto Zoomcar’s Investors’ Rights Agreement**\n\n** **\n\nPrior\nto the Closing, Zoomcar solicited and received consents from requisite outstanding Zoomcar shares to a proposed amendment to an investor\nrights agreement (the “IRA”) between Zoomcar and holders of Zoomcar preferred shares (the “IRA Amendment”), which\nwas adopted on December 28, 2023. Pursuant to the IRA Amendment, subject to certain exceptions, the securities issuable in the Business\nCombination to each investor party thereto would be restricted from disposing of or hedging any of Company securities beneficially owned\nby them, including shares of Company Common Stock issuable upon exercise or conversion of any convertible securities issuable to such\ninvestors in connection with the Merger, including, without limitation, any shares of Common Stock (“Company Shares”) issuable\nupon the exercise of options or warrants held by them immediately after the Effective Time, or any other securities convertible into\nor exercisable or exchangeable for Company Shares held by them immediately after the Effective Time during the period from the date of\nthe Closing and ending (i) as to one-third of such shares, six (6) months after the Closing, (ii) as to one-third of such shares, nine\n(9) months after the Closing, and (iii) as to the remainder of such shares, twelve (12) months after the Closing, provided that all of\nsuch lock-up restrictions will terminate upon completion of a liquidation, merger, capital stock exchange, reorganization or other similar\ntransactions that result in all of Company’s stockholders having the right to exchange their shares for cash, securities or other\nproperty. The IRA Amendment provides the foregoing lock-up restrictions supersede the transfer restrictions provided for in the IRA prior\nto the adoption of the IRA Amendment, assuming the consummation of the Business Combination. Prior to Closing, the board of directors\nof Zoomcar approved an exclusion from the lock-up terms under the IRA applicable to five (5%) of the Company Shares that would have otherwise\nbeen subject to lock-up pursuant to the trading restrictions described above resulting from the adoption of the IRA Amendment.\n\n \n\n121\n\n \n\n \n\n**Post-Closing\nRelated Party Transactions**\n\n** **\n\n**Zoomcar\nHoldings, Inc.**\n\n** **\n\n**Director\nRelationship with the Placement Agent**\n\n \n\nJohn\nClarke, a member of the Company’s Board of Directors, became an employee of ThinkEquity LLC, the Placement Agent for the Bridge\nFinancing 2026 in February 2026, and serves as a Managing Director of ThinkEquity. Mr. Clarke continues to serve on the Company’s\nBoard of Directors. Mr. Clarke was not an employee of ThinkEquity at the time the Company engaged ThinkEquity to act as Placement Agent\nfor this Offering.\n\n \n\nAs\na director of the Company, Mr. Clarke owes fiduciary duties to the Company and its stockholders. As an employee of ThinkEquity, Mr. Clarke\nhas economic and other interests aligned with ThinkEquity, including ThinkEquity’s right to receive a placement fee, placement\nagent warrants, expense reimbursement and tail compensation in connection with the Bridge Financing 2026 and certain subsequent financings.\nThe Company and ThinkEquity are exploring appropriate measures to address this conflict of interest, which the Company expects will include\nthe recusal of Mr. Clarke from any future Board deliberations and votes regarding ThinkEquity, including in connection with any future\nplacement agent or underwriting engagements with ThinkEquity, the contemplated uplisting of the Company, and any tail or successor compensation\narrangements.\n\n \n\nPost\nthe Closing Date, Mahindra & Mahindra Financial Services Limited, Mahindra First Choice Wheels Ltd and Yard Management Services Limited\nceased to be related parties since their holding percentage was reduced to less than 5% of the total holdings in the Company.\n\n \n\nAccordingly,\npost the Closing Date, the Director of the Company, Mohan Ananda, is a related party for the Company. The Company has payable to Mohan\nAnanda amounting to $ 75,000 towards sitting fees and other payables as on March 31, 2026.\n\n \n\n*Indemnification\nAgreements*\n\n* *\n\nIn\nconnection with the Closing, the Company entered into indemnification agreements (“**Indemnification Agreements**”) with\neach of the Company’s newly elected directors and newly appointed executive officers which provide that the Company will indemnify\nsuch directors and executive officers under the circumstances and to the extent provided for therein, from and against all losses, claims,\ndamages, liabilities, joint or several, expenses (including legal fees and expenses), judgments, fines, penalties, interest, settlements\nor other amounts arising from any and all threatened, pending or completed claim, demand, action, suit or proceeding, whether civil,\ncriminal, administrative or investigative, and whether formal or informal, and including appeals, in which he or she may be involved,\nor is threatened to be involved, as a party or otherwise, to the fullest extent permitted under Delaware law and our Bylaws.\n\n \n\nThe\nCharter contains provisions limiting the liability of directors, and the Bylaws provide that Zoomcar will indemnify each of its directors\nand officers to the fullest extent permitted under Delaware law. In addition, the Bylaws provide that, to the fullest extent permitted\nby Delaware law and subject to very limited exceptions, Zoomcar will advance all expenses incurred by its directors and officers in connection\nwith a legal proceeding involving his or her status as a director or officer of Zoomcar. See the section titled “*Description\nof Securities - Limitation on Liability and Indemnification of Directors and Officers”*for information on the indemnification\nprovisions of the Charter and Bylaws.\n\n \n\n**Participation\nof a former Director of Zoomcar in the November Offering**\n\n** **\n\nMark\nBailey, who was a director of the Company until December 6, 2024, was one of the investors in the November Offering, and invested $2.5\nmillion of the aggregate investment amount of $9.15 million in the November Offering.\n\n \n\n**Participation\nof the former Chief Executive Officer Zoomcar and our Chairman in the December Offering. and payments made to the Chairman.**\n\n \n\nHiroshi\nNishijima, the former Chief Executive Officer of the Company (while holding the office of Acting Chief Executive Officer) and Uri Levine,\nour Chairman, each invested in the December Offering. Of the aggregate investment amount of $5.485 million, Mr. Nishijima invested $50,000\nand Mr. Levine invested $300,000.\n\n** **\n\n**Payments\nto the Chairman as an erstwhile consultant**\n\n** **\n\nUri\nLevine was also engaged with Zoomcar since October 21, 2024, as a consultant. His position as a consultant was terminated effectively\nupon becoming a director and Chairman. Effective as of March 31, 2025, the Board appointed Uri Levine, as a member and Chairman of the\nBoard to serve as a Class III Director. During his term as a consultant to the Company Mr. Levine was processed a compensation of $174,996.\n\n \n\nFor\nthe upcoming fiscal year Mr. Levine shall be eligible for the following compensation based on the Board Appointment Letter executed on\nMarch 28, 2025: (i) a service fee of $29,166 per month, (ii) a $500,000 cash bonus on September 30, 2025 and (iii) award Mr. Levine,\nsubject to stockholder approval 1,000,000 shares of restricted stock all of which shall vest on the earlier of (A) the second anniversary\nof the date of grant and (B) Zoomcar India Private Limited, an Indian limited liability company and subsidiary of the Company, achieving\n$20 million or more in revenue in fiscal year 2026, in each case subject to the Stockholder Approval having been obtained on or before\nsuch date. Mr. Levine may not be awarded the Restricted Stock Award, unless and until Stockholder Approval has been obtained and if it\nis never obtained, he is not entitled to any other compensation in lieu thereof. Mr. Levine is also entitled to be reimbursed for all\nreasonable out-of-pocket expenses pursuant to the expense policy applicable to members of the Board.\n\n \n\n122\n\n \n\n \n\n**Policies\nfor Approval of Related Person Transactions**\n\n** **\n\nZoomcar\nhas adopted a written related person transaction policy that sets forth the following policies and procedures for the review and approval\nor ratification of related person transactions.\n\n \n\nA\n“Related Person Transaction” is a transaction, arrangement or relationship in which Zoomcar or any of its subsidiaries was,\nis or will be a participant, the amount of which involved exceeds $120,000, and in which any related person had, has or will have a direct\nor indirect material interest.\n\n \n\nA\n“Related Person” means:\n\n \n\n \n●\nany\nperson who is, or at any time during the applicable period was, one of the Zoomcar’s officers or one of Zoomcar’s directors;\n\n \n\n \n●\nany\nperson who is known by Zoomcar to be the beneficial owner of more than five percent (5%) of its voting stock;\n\n \n\n \n●\nany\nimmediate family member of any of the foregoing persons, which means any child, stepchild, parent, stepparent, spouse, sibling, mother-in-law,\nfather-in-law, daughter-in-law, brother-in-law or sister-in-law of a director, officer or a beneficial owner of more than five percent\n(5%) of its voting stock, and any person (other than a tenant or employee) sharing the household of such director, officer or beneficial\nowner of more than five percent (5%) of its voting stock; and\n\n \n\n \n●\nany\nfirm, corporation or other entity in which any of the foregoing persons is a partner or principal or in a similar position or in\nwhich such person has a ten percent (10%) or greater beneficial ownership interest.\n\n \n\nZoomcar\nhas policies and procedures designed to minimize potential conflicts of interest arising from any dealings it may have with its affiliates\nand to provide appropriate procedures for the disclosure of any real or potential conflicts of interest that may exist from time to time.\nSpecifically, pursuant to its charter, the audit committee will have the responsibility to review related party transactions.\n\n \n\nAll\nof the transactions described in this section were entered into prior to the adoption of this policy. Certain of the foregoing disclosures\nare summaries of certain provisions of our related party agreements and are qualified in their entirety by reference to all of the provisions\nof such agreements. Because these descriptions are only summaries of the applicable agreements, they do not necessarily contain all of\nthe information that you may find useful. Copies of certain of the agreements (or forms of the agreements) have been filed as exhibits\nto this Annual Report on 10-Kand are available electronically on the website of the SEC at www.sec.report.\n\n \n\n**Director\nIndependence**\n\n** **\n\nSection\n1.2 of the OTCQB Rules for U.S. Companies (the “OTCQB Rules”), require that a minimum of two of the board of directors of\na should be composed of “independent directors,”. As per the OTCQB Rules the following persons shall not be considered independent:\nA) a director who is, or at any time during the past three years was, employed by the Company; (B) a director who accepted or has\na Family Member who accepted any compensation from the Company in excess of $120,000 during any fiscal year within the three years preceding\nthe determination of independence, other than compensation for board or board committee service; compensation paid to a Family Member\nwho is an employee (other than an executive officer) of the Company; or benefits under a tax-qualified retirement plan, or non-discretionary\ncompensation; or (C) A director who is the Family Member of a Person who is, or at any time during the past three years was, employed\nby the Company as an executive officer. The Company’s Board has determined that each of Mohan Ananda, Evelyn D’An, Swatick\nMajumdar, and John Clarke are independent directors under the OTCQB Rules and that the Audit Committee composes of independent directors\nand meets the heightened independence standards of Rule 10A-3 of the Exchange Act.\n\n** **\n\n123"}