Financial Performance - Total revenue for Q2 2024 was $2,240,985, a decrease of 14.3% from $2,614,618 in Q2 2023[19] - Net loss attributable to common stockholders for Q2 2024 was $(2,531,579), significantly improved from $(28,781,134) in Q2 2023[19] - The company reported a comprehensive loss of $(2,568,414) for Q2 2024, compared to $(28,905,311) in Q2 2023[20] - The net loss for the three months ended June 30, 2024, was $2,531,579, a significant improvement compared to a net loss of $28,781,134 for the same period in 2023, representing a reduction of approximately 91.2%[22] - Cash used in operating activities for the three months ended June 30, 2024, was $1,776,412, down from $6,436,166 in the prior year, indicating a decrease of about 72.5%[22] - The company expects to continue incurring net losses and significant cash outflows from operating activities for at least the next 12 months[32] - The company recorded a loss before income taxes of $2,531,579 for the three months ended June 30, 2024, compared to a loss of $28,781,134 in 2023[179] - Net loss available for common shareholders decreased to $(2,531,579) for the three months ended June 30, 2024, compared to $(28,781,134) for the same period in 2023[182] - Basic and diluted loss per share improved to $(0.04) for the three months ended June 30, 2024, from $(59.61) in the prior year[182] Assets and Liabilities - Total current assets decreased to $4,255,734 as of June 30, 2024, down from $5,059,696 as of March 31, 2024[18] - Total liabilities decreased to $39,494,384 as of June 30, 2024, compared to $42,864,786 as of March 31, 2024[18] - Cash and cash equivalents increased to $1,583,483 as of June 30, 2024, up from $1,496,144 as of March 31, 2024[18] - The company's accumulated deficit reached $310,083,080 as of June 30, 2024, up from $307,551,501 as of March 31, 2024[31] - The company has negative working capital of $33,848,408, raising substantial doubt about its ability to continue as a going concern[31] - The total assets reported as of June 30, 2024, were $3,410,571, compared to $3,297,552 as of March 31, 2024, indicating a growth in total assets[215] - The total liabilities increased to $21,244,691 as of June 30, 2024, from $20,714,000 as of March 31, 2024[215] - The company reported a decrease in accounts receivable from $194,197 as of March 31, 2024, to $164,463 as of June 30, 2024[215] - The company had a total of $4,092,087 in debt as of June 30, 2024, down from $5,049,483 as of March 31, 2024[215] Revenue Recognition - The Company derives its revenue primarily from facilitation services, which include fees charged to hosts and trip protection charges to renters[45] - The Company recognizes facilitation revenue on a straight-line basis over the duration of the rental trip, using the output method based on rental hours or days[47] - Revenue from services in India for the three months ended June 30, 2024, was $2,223,638, down from $2,573,882 in 2023, reflecting a decline of 13.6%[173] - The company’s contract liabilities as of June 30, 2024, were $557,060, compared to $640,173 as of March 31, 2024[174] - The company has accumulated deferred revenue of $18,806 as of June 30, 2024, down from $96,710 as of March 31, 2024, indicating a decrease in loyalty program liabilities[174] Financing Activities - The company issued common stock against Atalaya note, resulting in an increase of $2,324,696 in equity[21] - The company reported a net cash generated from financing activities of $1,561,327 for the three months ended June 30, 2024, compared to $7,010,786 in the same period of the previous year[22] - The company entered into a letter agreement with Aegis Capital Corp. for a proposed private placement of up to $30 million in securities, although no funds have been raised under this agreement yet[32] - The company issued common stock upon conversion of Unsecured Convertible Notes amounting to $2,324,696 during the reporting period[23] - The company raised $8,109,954 during the year ended March 31, 2023, and $13,175,027 during the year ended March 31, 2024, against Senior Subordinated Convertible Promissory Notes (SSCPN) and related warrants[135] - The company issued and sold an aggregate of $3,600,000 in principal amount of notes and warrants, resulting in gross proceeds of $3,000,000 on June 20, 2024[126] Stock and Equity - The company’s common stock and warrants began trading on the Nasdaq Global Market under the symbols "ZCAR" and "ZCARW," respectively, on December 28, 2023, following a merger agreement[25] - The Company issued 20,000,000 shares of Common Stock as part of the earnout consideration for the acquisition of Zoomcar, Inc.[88] - The Company has 220,000,000 shares of Common Stock authorized for issuance prior to the Reverse Recapitalization, which increased to 260,000,000 shares post-transaction[162] - The total outstanding amount for the unsecured promissory note as of June 30, 2024, is $2,027,840, unchanged from March 31, 2024[134] - The total outstanding warrants to be converted into common stock was 32,999,472 prior to the Reverse Recapitalization on December 28, 2023[144] - The total outstanding warrants to be converted into preferred stock was 3,502,040 prior to the Reverse Recapitalization on December 28, 2023[145] - The Company issued 12,512,080 shares to settle a part of the Atalaya Note liability amounting to $2,324,696 during the three months ended June 30, 2024[150] Expenses and Costs - Cost of revenue for Q2 2024 was $1,512,289, down from $3,610,982 in Q2 2023[19] - Technology and development expenses were $901,781 in Q2 2024, a decrease from $1,326,879 in Q2 2023[19] - Finance costs for the three months ended June 30, 2024, totaled $551,003, significantly lower than $21,520,558 for the same period in 2023[176] - The company recorded an interest expense of $76,166 for the three months ended June 30, 2024, compared to $100,565 for the same period in 2023, indicating a decrease of approximately 24%[121] - The company incurred transaction costs of $10,947,805 related to the Reverse Recapitalization, including $4,804,482 recorded as a reduction to additional paid-in capital[85] Employee Benefits - Current employee benefit obligations for gratuity and compensated absences totaled $173,942 as of June 30, 2024, compared to $183,655 as of March 31, 2024[184] - The projected benefit obligation (PBO) for gratuity at the end of the period was $325,441, down from $373,442 a year earlier[185] - The net periodic benefit cost recognized in the income statement for gratuity was $23,156 for the three months ended June 30, 2024, compared to $28,830 in 2023[185] - The company made provident fund contributions of $93,412 for the three months ended June 30, 2024, down from $112,330 in the same period of 2023[194] Impairments and Defaults - The company has defaulted on equated monthly instalments (EMI) payments from November 2023 to June 2024, accumulating penal interest of $51,662 for the year ended June 30, 2024[111] - The company has defaulted on a $334,727 payment due in January 2024 for non-convertible debentures owed to Blacksoil Capital Private Limited[119] - The company has defaulted on EMI owed to Tata Motors Finance Limited amounting to $269,117, with an interest charge of 36% per annum applicable upon default[122] - The company has defaulted on a lumpsum payment of $873,924 owed to Mahindra & Mahindra Financial Services Limited, with an outstanding amount of $602,346 after adjusting for a certificate of deposit[123] Miscellaneous - The Company consolidates variable interest entities (VIEs) when it is the primary beneficiary, which includes Zoomcar Egypt Car Rental LLC and Zoomcar Vietnam Mobility LLC[39] - Zoomcar Vietnam Mobility LLC filed for bankruptcy on August 14, 2023, and its financial statements are prepared on a liquidation basis[41] - The Company estimates a forfeiture rate annually for stock-based compensation expense, which is recognized over the requisite service period[60] - The Company evaluates the presentation of revenue on a gross versus net basis based on its role as principal or agent in transactions[47] - The Company recorded $21,499,578 in assumed liabilities during the acquisition of IOAC, including $17,100,000 settled by issuing common stock[85]
Innovative International Acquisition (IOAC) - 2024 Q2 - Quarterly Report