SVMHW SRIVARU Holding Ltd

 

As filed with the Securities and Exchange Commission

on October 28, 2024.

 

Registration No. 333-282429

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Amendment No. 5 to

FORM F-1

REGISTRATION STATEMENT

UNDER

THE SECURITIES ACT OF 1933

 

 

SRIVARU Holding Limited

(Exact Name of Registrant as Specified in Its Charter)

 

Not Applicable

(Translation of Registrant’s name into English)

 

Cayman Islands		3711		Not Applicable
(State or Other Jurisdiction of Incorporation or Organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification Number)

 

3rd Floor, Genesis House, Unit 18

Genesis Close, George Town

P.O. Box 10655

Grand Cayman, KY1-1006

Cayman Islands

+1 (888) 227-8066

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

 

 

Maxim Group LLC

Chief Executive Officer

 

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

 

Rajiv Khanna, Esq. Norton Rose Fulbright LLP 1301 Avenue of the Americas New York, NY 10019 (212) 318-3168

M. Ali Panjwani, Esq. Pryor Cashman LLP 7 Times Square New York, New York 10036 (212) 421-4100

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

 

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box. ☒

 

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. ☐

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933. Emerging growth company ☒

 

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐

 

The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

 

The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

 

 

The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus is not an offer to sell these securities nor does it seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

 

PRELIMINARY PROSPECTUS FOR 75,000,000 UNITS

EACH UNIT CONSISTING OF

ONE ORDINARY SHARE OR

ONE PRE-FUNDED WARRANT TO PURCHASE ONE ORDINARY SHARE AND

ONE WARRANT TO PURCHASE TWO ORDINARY SHARES

OF SRIVARU HOLDING LIMITED

 

SUBJECT TO COMPLETION, DATED OCTOBER 28, 2024

 

SRIVARU Holding Limited

 

75,000,000 Units

 

75,000,000 Ordinary Shares or 75,000,000 Pre-Funded Warrants

 

75,000,000 Warrants

 

150,000,000 Ordinary Shares underlying Warrants

 

 

This is a firm commitment public offering of 75,000,000 units (“Units”), each Unit consisting of one ordinary share, par value $0.01 per share (“ordinary share”) or one pre-funded warrant (“pre-funded warrant”), and one warrant (“warrant”) to purchase one ordinary share, which can be exercisable for two ordinary shares pursuant to an alternative cashless exercise provision (collectively “the Securities”) at an assumed public offering price of $0.08 per Unit, which was the closing price of our ordinary shares on the Nasdaq Global Market (“Nasdaq”) on October 8, 2024. The public offering price per Unit shall be the determined between us and the underwriters and will be based on market conditions at the time of pricing, and may be at a discount to the then current market price of our ordinary shares. Therefore, the recent market price of our ordinary shares referenced throughout this preliminary prospectus may not be indicative of the final offering price per Unit. The Units have no stand-alone rights and will not be certified or issued as stand-alone securities. The ordinary shares or pre-funded warrants and warrants are immediately separable and will be issued separately in this offering. Each warrant will become exercisable for one ordinary share, and can be exercisable for two ordinary shares pursuant to an alternative cashless exercise provision at an assumed exercise price of $0.12 per share (150% of the assumed public offering price per Unit) upon shareholder approval (to the extent required by Nasdaq rules) and will expire five years from the date of shareholder approval.

 

We are offering to each purchaser, with respect to the purchase of units that would otherwise result in the purchaser’s beneficial ownership exceeding 4.99% of our outstanding ordinary shares immediately following the consummation of this offering, the opportunity to purchase units including one pre-funded warrant in lieu of one ordinary share in the unit. Subject to limited exceptions, a holder of pre-funded warrants will not have the right to exercise any portion of its pre-funded warrants if the holder, together with its affiliates, would beneficially own in excess of 4.99% (or, at the election of the holder, such limit may be increased to up to 9.99%) of the number of ordinary shares outstanding immediately after giving effect to such exercise. Each pre-funded warrant will be exercisable for one ordinary share. The purchase price of each unit including a pre-funded warrant will be equal to the price per unit including one ordinary share, minus $0.001, and the remaining exercise price of each pre-funded warrant will equal $0.001 per share. The pre-funded warrants will be immediately exercisable and may be exercised at any time until all of the pre-funded warrants are exercised in full. For each unit including a pre-funded warrant we sell (without regard to any limitation on exercise set forth therein), the number of units including an ordinary share we are offering will be decreased on a one-for-one basis.

 

We have granted the underwriters the option for a period of 45 days to purchase up to an additional 11,250,000 ordinary shares from us at the initial public offering price less the underwriting discounts and commissions.

 

Our ordinary shares are listed on the Nasdaq Global Market, or “Nasdaq,” under the symbol “SVMH”. On October 8, 2024, the last reported sale price of our ordinary shares was $0.08 per ordinary share.

 

We may amend or supplement this prospectus from time to time by filing amendments or supplements as required. You should read this entire prospectus and any amendments or supplements carefully before you make your investment decision.

 

We are an “emerging growth company” and a “foreign private issuer” as defined under the Securities and Exchange Commission, or SEC, rules and are subject to reduced public company reporting requirements for this prospectus and future filings. See “Prospectus Summary-Implications of Being an Emerging Growth Company and a Foreign Private Issuer.”

 

Investing in our securities involves a high degree of risk. See “Risk Factors” beginning on page 12 of this prospectus and other risk factors contained in the documents incorporated by reference herein for a discussion of information that should be considered in connection with an investment in our securities.

 

Neither the U.S. Securities and Exchange Commission nor any other regulatory body has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

		Per Unit				Total
Public offering price		$				$
Underwriting discounts and commissions(1)
Proceeds to us, before expenses		$				$

 

(1) We have also agreed to reimburse the underwriters for certain expenses in connection with this offering. See “Underwriting” for additional information regarding total underwriting compensation, including information on underwriting discounts and offering expenses.

 

We have granted Maxim Group LLC (the “Representative”) an option exercisable within 45 days of the date of this prospectus to purchase from us up to 11,250,000 additional ordinary shares at an assumed purchase price of $[  ] per share or up to 11,250,000 additional pre-funded warrants at a purchase price of [  ] per pre-funded warrant and/or up to an additional 22,500,000 additional warrants at a purchase price of [ ] per warrant, less, in each case, the underwriting discounts and commissions to cover over-allotments, if any. If the Representative exercises the option in full, the total underwriting discounts and commissions payable will be $ [  ], and the total proceeds to us, before expenses, will be $[  ].

 

	Sole Book-Running Manager
	Maxim Group LLC

 

The date of this prospectus is          , 2024

 

 

TABLE OF CONTENTS

 

	Page
About This Prospectus	1
Exchange Rates	1
Presentation of Financial Information	1
Market and Industry Data	2
Trademarks, Trade Names and Service Marks	2
Cautionary Note Regarding Forward Looking Statements	2
Prospectus Summary	4
The Offering	10
Risk Factors	12
Use of Proceeds	40
Dividend Policy	40
Capitalization and Indebtedness	41
Business	43
Management’s Discussion and Analysis of Financial Condition and Results of Operations	60
Board of Directors and Executive Management	72
Executive and Director Compensation	77
Description of Securities	79
Certain Relationships and Related Person Transactions	82
Beneficial Ownership of Securities	82
Material U.S. Federal Income Tax Considerations	84
Material Indian Income Tax Considerations	91
Material Cayman Islands Tax Considerations	92
Underwriting	93
Expenses Related to the Offering	97
Securities Eligible for Future Sales	98
Enforceability of Civil Liabilities Under U.S. Securities Laws	100
Experts	100
Legal Matters	100
Incorporation of Certain Information by Reference	100
Where You Can Find More Information	100
Index to Financial Statements	F-1

 

 

ABOUT THIS PROSPECTUS

 

This prospectus is part of a registration statement on Form F-1 filed with the Securities and Exchange Commission, or the “SEC,” by SRIVARU Holding Limited, a Cayman Islands exempted company, the “Company” or “SVH,” and constitutes a prospectus of SVH under Section 5 of the Securities Act with respect to the Securities.

 

The following summary highlights information contained or incorporated by reference elsewhere in this prospectus and does not contain all of the information that you should consider in making your investment decision. Before investing in our ordinary shares, you should carefully read this entire prospectus, including our consolidated financial statements and the related notes and other documents incorporated by reference herein, as well as the information under the caption “Risk Factors” herein and under similar headings in the other documents that are incorporated by reference into this prospectus including documents that are filed after the date hereof. Some of the statements in this prospectus constitute forward-looking statements that involve risks and uncertainties. See “Cautionary Note Regarding Forward-Looking Statements.” Our actual results could differ materially from those anticipated in such forward-looking statements as a result of certain factors, including those discussed in the “Risk Factors” and other sections included in or incorporated by reference herein. In this prospectus, unless otherwise stated or the context otherwise requires, references to “SRIVARU,” “SRIVARU Motors Private Limited”, “SVM”, “SVH” the “Company,” “we,” “us,” “our,” or similar references mean SRIVARU Holdings Limited and its subsidiaries on a consolidated basis. You should read this prospectus together with the additional information about us described in the section below entitled “Where You Can Find More Information.” You should rely only on information contained in this prospectus. We have not, and the placement agent has not, authorized anyone to provide you with information different from that contained in this prospectus. The information contained in this prospectus is accurate only as of the date on the front cover of the prospectus. You should not assume that the information contained in this prospectus is accurate as of any other date.

 

Unless otherwise indicated, references to a particular “fiscal year” are to SVH’s fiscal year ended March 31 of that year. SVH’s fiscal year ends on March 31 each year and its fiscal quarters are on June 30, September 30, and December 31.

 

References to a year other than a “Fiscal”, “FY” or “fiscal year” are to the calendar year ended December 31. References to “U.S. Dollars” and “$” in this prospectus are to United States dollars, the legal currency of the United States. References to “Indian Rupee,” “INR” and “Rs.” in this prospectus are to the Indian Rupee, the legal currency of the Republic of India. Any discrepancies in any table between totals and sums of the amounts listed are due to rounding. Certain amounts and percentages have been rounded; consequently, certain figures may add up to be more or less than the total amount and certain percentages may add up to be more or less than 100%. In particular and without limitation, amounts expressed in millions contained in this prospectus have been rounded to a single decimal place for the convenience of readers.

 

We have granted the underwriters an option, exercisable for 45 days after the date of this prospectus, to purchase up to an additional 11,250,000 ordinary shares at an assumed purchase price of $[  ] per share or up to 11,250,000 additional pre-funded warrants at a purchase price of [  ] per pre-funded warrant and/or warrants to purchase up to an additional 22,500,000 ordinary shares at a purchase price of $[ ] per warrant less, in each case, the underwriting discounts payable by us, solely to cover over-allotments, if any.

 

The information on taxation contained in this prospectus is a summary of certain tax considerations but is not intended to be a complete discussion of all tax considerations. The contents of this prospectus are not to be construed as investment, legal, or tax advice. Investors should consult their own counsel, accountant or investment advisor as to legal, tax, and related matters concerning their investment.

 

EXCHANGE RATE PRESENTATION

 

SVH reports its financial results in U.S. Dollars, but its functional currency is Indian Rupees. Solely for the convenience of the reader, this prospectus contains translations of certain Indian Rupee amounts into U.S. Dollars at specified rates. Except as otherwise stated in this prospectus, all translations from Indian Rupees to U.S. Dollars are based on the rates of Rs. 83.3739 per $1.00 being the closing exchange rate published by the Reserve Bank of India as of March 31, 2024. No representation is made that the Indian Rupee amounts referred to in this prospectus could have been or could be converted into U.S. Dollars at such rates or any other rates.

 

FINANCIAL STATEMENT PRESENTATION

 

This prospectus contains the audited consolidated financial statements of SVH as of and for the years ended March 31, 2024 and 2023.

 

Unless indicated otherwise, financial data presented in this prospectus has been taken from the audited financial statements of SVH included in this prospectus. Where information is identified as “unaudited,” it has not been subject to an audit.

 

SVH is a “foreign private issuer,” as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and has prepared its financial statements in accordance with U.S. GAAP denominated in U.S. Dollars. Accordingly, the audited condensed combined financial information and the comparative per share information that will be presented in this prospectus will be prepared in accordance with Article 11 of Regulation S-X and denominated in U.S. Dollars.

 

SVH refers in various places in this prospectus to non-U.S. GAAP financial measures, including EBITDA and EBITDA margin, which are more fully explained in “Selected Historical Financial Information—Other Financial Data”. The presentation of the non-U.S. GAAP information is not meant to be considered in isolation or as a substitute for SVH’s audited financial results prepared in accordance with U.S. GAAP.

 

 

INDUSTRY AND MARKET DATA

 

Unless otherwise indicated, information contained in this prospectus concerning SVH’s industry and the regions in which it operates, including SVH’s general expectations and market position, market opportunity, market share and other management estimates, is based on information obtained from various independent publicly available sources. SVH has not independently verified the accuracy or completeness of any third-party information. Similarly, internal surveys, industry forecasts and market research, which SVH believes to be reliable based upon its management’s knowledge of the industry, have not been independently verified. While SVH believes that the market data, industry forecasts and similar information included in this prospectus are generally reliable and reasonable, such information is inherently imprecise. Forecasts and other forward-looking information obtained from third parties are subject to the same qualifications and uncertainties as the other forward-looking statements in this prospectus. In addition, assumptions and estimates of SVH’s future performance and growth objectives and the future performance of its industry and the markets in which it operates are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those discussed under the headings “Risk Factors,” “Cautionary Note Regarding Forward-Looking Statements” and “SVH Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this prospectus.

 

TRADEMARKS, TRADE NAMES AND SERVICE MARKS

 

SVH and its respective subsidiaries (including SVM) own or have rights to trademarks and trade names that they use in connection with the operation of their business. In addition, their names, logos and website names and addresses are their trademarks. All other trademarks, trade names or service marks appearing in this prospectus are, to SVH’s knowledge, the property of their respective owners. Solely for convenience, in some cases, the trademarks, trade names and service marks referred to in this prospectus are listed without the applicable ™ or ^® symbols, but such references are not intended to indicate, in any way, that the applicable licensor will not assert, to the fullest extent under applicable law, its rights to these trademarks, trade names and service marks. SVH does not intend its use or display of other entities’ trade names, trademarks or service marks to imply a relationship with, or endorsement or sponsorship of SVH by, any other entities.

 

CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS

 

This prospectus and the information incorporated by reference herein include certain “forward-looking statements” within the meaning of Section 27A of the Securities Act, and Section 21E of the Exchange Act. These forward-looking statements can generally be identified by the use of forward-looking terminology, including the terms “believes,” “estimates,” “anticipates,” “expects,” “seeks,” “projects,” “intends,” “plans,” “may,” “will” or “should” or, in each case, their negative or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. They appear in a number of places throughout this prospectus and include statements regarding our intentions, beliefs or current expectations concerning, among other things, the Business Combination (as defined below), the benefits and synergies of the Business Combination, including anticipated cost savings, results of operations, financial condition, liquidity, prospects, growth, strategies, future market conditions or economic performance and developments in the capital and credit markets and expected future financial performance, the markets in which we operate, as well as any information concerning possible or assumed future results of our operations.

 

Many factors could cause actual results or performance to be materially different from those expressed or implied by the forward-looking statements in this prospectus, including without limitation:

 

●

the effect of the public listing of our securities on our business relationships, performance, financial condition and business generally;

 

 

	●	the ability to maintain the listing of our securities on the Nasdaq;
	●	our ability to implement business plans, forecasts, and other expectations, and identify opportunities;
	●	changes adversely affecting the renewable energy industry;
	●	the impact of pandemics or other adverse public health developments on our business;
	●	the outcome of any legal proceedings that may be instituted against us or our directors or officers related to or arising out of the Business Combination or otherwise;
	●	changes in applicable laws or regulations;
	●	our ability to build our brand and consumers’ recognition, acceptance and adoption of our brand;
	●	risks relating to our dependence on and use of certain intellectual property and technology;
	●	general economic conditions;
	●	our estimates of expenses, ongoing losses, future revenue, capital requirements and needs for or ability to obtain additional financing; and
	●	other factors discussed under the section titled “Risk Factors” in this prospectus, which section is incorporated herein by reference.

 

The forward-looking statements contained in this prospectus are based on our current expectations and beliefs concerning future developments and their potential effects. There can be no assurance that future developments will be those that we have anticipated. These forward-looking statements involve a number of risks, uncertainties (some of which are beyond our control) or other assumptions that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those factors described under the heading “Risk Factors.” Should one or more of these risks or uncertainties materialize, or should any of the assumptions prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements, we will not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

THE OFFERING

 

The summary below describes the principal terms of the offering. The “Description of Securities” section of this prospectus contains a more detailed description of our Ordinary Shares.

 

Issuer		SRIVARU Holdings Limited
Securities being offered		75,000,000 Units, each Unit consisting of one of our ordinary shares or one pre-funded warrant and one warrant to purchase one ordinary share, which can be exercisable for two ordinary shares pursuant to an alternative cashless exercise provision. Each warrant will have an exercise price of $0.12 per share (150% of the public offering price of one Unit), will be exercisable upon approval by our shareholders and expire five years from the date of shareholder approval.   We are offering to each purchaser, with respect to the purchase of units that would otherwise result in the purchaser’s beneficial ownership exceeding 4.99% of our outstanding ordinary shares immediately following the consummation of this offering, the opportunity to purchase units including one pre-funded warrant in lieu of one ordinary share in the unit. Subject to limited exceptions, a holder of pre-funded warrants will not have the right to exercise any portion of its pre-funded warrant if the holder, together with its affiliates, would beneficially own in excess of 4.99% (or, at the election of the holder, such limit may be increased to up to 9.99%) of the number of ordinary shares outstanding immediately after giving effect to such exercise. Each pre-funded warrant will be exercisable for one ordinary share. The purchase price of each unit including a pre-funded warrant will be equal to the price per unit including one ordinary share, minus $0.001, and the remaining exercise price of each pre-funded warrant will equal $0.001 per share. The pre-funded warrants will be immediately exercisable and may be exercised at any time until all of the pre-funded warrants are exercised in full.   The Units will not be certificated or issued in stand-alone form. The ordinary shares or pre-funded warrants and the warrants comprising the Units are immediately separable upon issuance and will be issued separately in this offering.
Number of ordinary shares or pre-funded warrants being offered		75,000,000 ordinary shares or pre-funded warrants (or 86,250,000 ordinary shares or pre-funded warrants if the underwriters exercise their over-allotment option for ordinary shares in full).
Number of warrants being offered		Warrants to purchase 150,000,000 ordinary shares (or warrants to purchase 161,250,000 ordinary shares if the underwriters exercise their over-allotment option for warrants in full).
Assumed public offering price		$0.08 per Unit (which was the closing price of the Company’s ordinary shares on the Nasdaq Global Market on October 8, 2024) .
Number of ordinary shares outstanding immediately prior to this offering		441,901,509 ordinary shares
Number of ordinary shares to be outstanding immediately after this offering(1)		516,901,509 ordinary shares (or 528,151,509 ordinary shares if the underwriters exercise their over-allotment option for ordinary shares in full)
Over-allotment option		We have granted the underwriters an option, exercisable for 45 days after the date of this prospectus, to purchase up to an additional 11,250,000 ordinary shares at an assumed purchase price of $[  ] per share or 11,250,000 pre-paid warrants at an assumed purchase price per warrant of $[ ] per pre-funded warrant and/or warrants to purchase up to an additional 22,500,000 ordinary shares at a purchase price of $0.01 per warrant less, in each case, the underwriting discounts payable by us, solely to cover over-allotments, if any.
Use of proceeds		We intend to use the net proceeds from this offering for general business purposes and for the specific purposes set forth in “Use of Proceeds” of this prospectus.
Description of Warrants		Each warrant will have an exercise price per share of 150% of the public offering price per Unit, will be exercisable upon shareholder approval, and expire on the fifth anniversary of the shareholder approval. Each warrant will be exercisable for one ordinary share, which can be exercisable for two ordinary shares pursuant to an alternative cashless exercise provision, subject to adjustment in the event of stock dividends, stock splits, stock combinations, reclassifications, reorganizations or similar events affecting our ordinary shares as described herein. The warrants will be automatically exercised via the alternative cashless exercise on their termination date.   Each holder of warrants will be prohibited from exercising its warrant if, as a result of such exercise, the holder, together with its affiliates, would own more than 4.99% of the total number of shares of our ordinary shares then issued and outstanding. However, any holder may increase such percentage to any other percentage not in excess of 9.99%. The terms of the warrants will be governed by a Warrant Agent Agreement, dated as of the closing date of this offering, between us and VStock Transfer, LLC, as the warrant agent (the “Warrant Agent”).   This offering also relates to the offering of the shares of ordinary shares issuable upon the exercise of the warrants. For more information regarding the warrants, you should carefully read the section titled “Description of Securities - Warrants” in this prospectus.

 

 

Underwriter compensation:		The underwriters will receive an underwriting discount equal to 7.0% of the gross proceeds from the sale of securities in the offering. We will also reimburse the underwriters for certain out-of-pocket actual expenses related to the offering. See “Underwriting.”
Market for our ordinary shares		Our ordinary shares are listed on the Nasdaq Global Market under the symbol “SVMH”.
Transfer and Warrant Agent		The transfer agent and registrar for our ordinary shares and the Warrant Agent for the warrants is VStock Transfer LLC.
Lock-up restrictions		Subject to certain exceptions, we and all of our executive officers and directors, as of the effective date of the registration statement have agreed not to offer, issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise dispose of any of our common shares or other securities convertible into or exercisable or exchangeable for shares of our common shares for a period of 90 days after this offering is completed without the prior written consent of the underwriters. See “Securities Eligible for Future Sales-Lock-Up.”
Dividend policy		We have never declared or paid any cash dividends. Our board of directors (“Board”) will consider whether or not to institute a dividend policy. We presently intend to retain our earnings for use in business operations and, accordingly, it is not anticipated that our Board will declare dividends in the foreseeable future. We have not identified a paying agent. See “Dividend Policy.”
Risk factors		The securities offered by this prospectus are speculative and involve a high degree of risk. Prospective investors should carefully consider the section titled “Risk Factors” in this prospectus for a discussion of factors you should carefully consider before deciding to invest in the securities offered hereby.

 

(1)	The number of shares of our ordinary shares to be outstanding following this offering is based on 441,901,509 outstanding ordinary shares as of October 8, 2024, and excludes:
	●	10,798,300 ordinary shares issuable upon the exercise of the warrants at a weighted average exercise price of $11.50 per share (the “Outstanding Warrants”);
	●	3,800,000 ordinary shares available for issuance under our 2023 Equity Incentive Plan (the “2023 Plan”); and
	●	150,000,000 ordinary shares issuable upon the exercise of the warrants to be issued in this offering.
Unless otherwise indicated, this prospectus also assumes no exercise by the underwriters of their option to purchase up to an additional 11,250,000 ordinary shares or pre-funded warrants and/or warrants to purchase up to an additional 22,500,000 ordinary shares from us to cover over-allotments, if any.

 

 

RISK FACTORS

 

You should carefully consider the risks described below before making an investment decision, as well as the risks and uncertainties described in the section entitled “Risk Factors” contained in our Annual Report on Form 20-F for the year ended March 31, 2023, and in our subsequent reports filed with the Securities and Exchange Commission (“SEC”), which filings are incorporated in this prospectus by reference in their entirety, as well as in any prospectus supplement hereto. Additional risks not presently known to us or that we currently deem immaterial may also impair our business operations. Our business, financial condition or results of operations could be materially and adversely affected by any of these risks. The trading price and value of our Shares could decline due to any of these risks, and you may lose all or part of your investment. This prospectus also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of certain factors, including the risks faced by us described below and elsewhere in this prospectus. As stated elsewhere in this prospectus, unless otherwise stated or the context otherwise requires, all references in this subsection to the “Company,” “we,” “us” or “our” refer to SRIVARU Holdings Limited, an exempted company incorporated with limited liability under the laws of the Cayman Islands, and its subsidiaries.

 

Risks Related to Our Business and Industry

 

SVH’s limited operating history makes evaluating its business and future prospects difficult and may increase the risk of your investment.

 

SVH has a limited operating history, and operates in a rapidly evolving market. As a result, there is limited information that investors can use in evaluating SVH’s business, strategy, operating plan, results, and prospects. Furthermore, SVH does not have experience assembling or selling a commercial product at scale. SVH’s business is capital-intensive and SVH expects to continue to incur substantial operating losses for the foreseeable future.

 

SVH has encountered and expects to continue to encounter risks and uncertainties frequently experienced by companies in rapidly changing markets, including risks relating to its ability to, among other things:

 

	●	successfully scale commercial production and sales on the schedule and with the specifications SVH had planned;
	●	hire, integrate and retain professional and technical talent, including key members of management;
	●	continue to make significant investments in research, development, assembly, manufacturing, marketing, and sales;
	●	successfully obtain, register, maintain, protect and enforce its intellectual property and defend against claims of intellectual property infringement, misappropriation or other violations;
	●	build a well-recognized and respected brand;
	●	establish and refine its commercial manufacturing capabilities and distribution infrastructure;
	●	establish and maintain satisfactory arrangements with third-party suppliers;
	●	establish and expand a customer base;
	●	navigate an evolving and complex regulatory environment;
	●	anticipate and adapt to changing market conditions, including consumer demand for certain vehicle types, models or trim levels, technological developments, and changes in competitive landscape; and
	●	successfully design, build, manufacture, and market new models of electric vehicles to follow the Prana–Grand launch.

 

If SVH does not address these risks successfully, or if the assumptions it uses to plan and operate its business are incorrect or market conditions change, its results of operations could differ materially from its expectations and SVH’s business, financial condition and results of operations could be materially adversely affected.

 

 

SVH has incurred net losses every year since its inception and SVH expects to incur increasing expenses and losses in the foreseeable future.

 

SVH has incurred consolidated net losses every year since its inception, including a net loss attributable to common shareholders of approximately $3.659 million, $0.674 million and $0.382 million for the nine-month period ended March 31, 2024 and the years ended March 31, 2023 and 2022, respectively. As of March 31, 2024 and March 31, 2023, SVH’s consolidated accumulated deficit was approximately $4.445 million and $0.971 million, respectively. SVH expects to continue to incur substantial losses and to increase expenses in the foreseeable future.

 

If SVH’s product development or commercialization is delayed, SVH’s costs and expenses may be significantly higher than it currently expects. Because SVH will incur the costs and expenses from these efforts before it receives any incremental revenues with respect thereto, SVH expects to incur losses in future periods. SVH’s ability to generate product revenues will depend on its ability to scale commercial production of the Prana Grand, and start production of its products in volume, which it does not expect will occur until the first half of 2024. If SVH is delayed or unable to achieve production in scale or if production is less efficient than expected, SVH’s financial results may be materially adversely affected.

 

SVH may be unable to adequately control the costs associated with its operations.

 

SVH will require capital to develop and grow its business. SVH has incurred and expects to continue to incur expenses as its builds its brand and markets its vehicles; expenses relating to developing and assembling its vehicles, tooling and expanding its assembly facilities; research and development expenses; raw material procurement costs; and general and administrative expenses as it scales its operations and incurs the costs of being a public company. SVH expects to incur costs servicing and maintaining customers’ vehicles, including establishing its service operations and facilities. SVH does not have a record of forecasting and budgeting for any of these expenses, or monitoring actual versus forecast numbers, and these expenses could be higher than SVH currently anticipates. In addition, any delays in the production of Prana–Grand and the production of its other products, obtaining necessary equipment or supplies, expansion of SVH’s assembly facilities, or the procurement of permits and licenses relating to SVH’s assembly, products, sales and distribution could significantly increase SVH’s expenses. In such events, SVH could be required to seek additional financing earlier than it expects, and such financing may not be available on commercially reasonable terms, or at all. SVH’s ability to become profitable in the future will depend on its ability not only to control costs, but also to sell in quantities and at prices sufficient to achieve its expected margins. If SVH is unable to cost-efficiently design, manufacture, market, sell, distribute and service its vehicles, its margins, profitability and prospects would be materially adversely affected.

 

SVH has sold only a limited number of vehicles and has received limited reservations for additional Prana-Grand units, all of which may be cancelled.

 

As of March 31, 2023, SVH had sold more than 160 vehicles. Since the launch of the Prana–Grand, SVH has received reservations for approximately 12,000 units, however, SVH has not taken deposits to secure reservations and its customers may cancel their reservations at any time and for any reason, until they place orders for their vehicle. Any delays in the current production line of the Prana-Grand could result in customer cancellations. No assurance can be given that reservations will not be cancelled and will ultimately result in the final sale and delivery of vehicles. Accordingly, the number of current reservations should not be considered a reliable indicator of demand for SVH’s vehicles, or for future vehicle sales. The cancellation of the reservations could materially negatively impact SVH’s results of operation and financial conditions.

 

 

SVH’s forecasted operating and financial results rely in large part upon assumptions and analyses it has developed and SVH’s actual results of operations may be materially different from its projections.

 

The projections prepared by SVH in November 2022 and revised in February and March 2023 that previously appeared in the proxy statement/prospectus regarding the Business Combination (the “Projections”) reflect SVH’s targets for future performance required to earn the Earn Out Shares under the Business Combination Agreement and incorporate certain financial and operational assumptions based on information available at the time the forecasts were made. None of the Projections were prepared with a view toward public disclosure other than to certain parties that were involved in the Business Combination. The Projections were prepared based on numerous variables and assumptions which are inherently uncertain and may be beyond the control of SVH.

 

Whether actual operating and financial results and business developments will be consistent with the expectations and assumptions reflected in the Projections depends on a number of factors, many of which are outside of SVH’s control. If SVH fails to meet its own financial or operating forecasts or those of securities analysts, the value of SVH’s shares could be significantly adversely affected.

 

The TWV market is highly competitive, and SVH may not be successful in competing in this industry.

 

The global TWV market is highly competitive, and SVH expects it will become even more so in the future as additional vendors enter the market within the next several years. E2W manufacturers with which SVH competes include existing manufacturers in India, as well as an increasing number of international entrants. SVH also competes with established premium TWV vendors, many of which have entered or have announced plans to enter the E2W market. Many of SVH’s current and potential competitors have significantly greater financial, technical, manufacturing, marketing, and other resources than SVH does, and may be able to devote greater resources to the design, development, manufacturing, distribution, promotion, sale, servicing, and support of their products. In addition, many of these companies have longer operating histories, greater name recognition and branding, larger and more established sales forces, broader customer and industry relationships and other resources than SVH does. SVH’s competitors may be in a stronger position to respond quickly to new technologies and may be able to design, develop, market, and sell their products more effectively. SVH expects competition in its industry to significantly intensify in the future in light of increased demand for E2W vehicles, continuing globalization, favorable governmental policies and consolidation in the worldwide automotive industry. SVH’s ability to successfully compete in its industry will be fundamental to its future success. There can be no assurance that SVH will be able to compete successfully in the global TWV markets.

 

The TWV industry has significant barriers to entry that SVH must overcome in order to manufacture and sell E2W at scale.

 

The TWV industry is characterized by significant barriers to entry, including large capital requirements, costs of designing, manufacturing, and distributing vehicles, long lead times to bring vehicles to market from the concept and design stage, the need for specialized design and development expertise, safety and regulatory requirements, establishing a brand name and image, and the need to establish sales and service locations. Since SVH is focused on the design of E2W, it faces various challenges to entry that a traditional vehicle manufacturer would not encounter, including additional costs of developing and producing an electric powertrain that has comparable performance to an internal combustion engine, or ICE, lack of experience with servicing electric vehicles, regulations associated with the transport and storage of batteries, the need for charging infrastructure, and other challenges that may arise for a nascent product. While SVH has assembled and delivered more than 160 units of the Prana-Grand, it has not begun mass assembly or deployed a nation-wide sales and service network. If SVH is not able to overcome these barriers, its business, prospects, results of operations and financial condition will be negatively impacted, and its ability to grow its business will be harmed.

 

SVH will initially depend on revenue generated from a single model and, in the foreseeable future, will be significantly dependent on a limited number of models.

 

SVH will initially depend on revenue generated from a single vehicle model, the Prana-Grand, and in the foreseeable future, will be significantly dependent on a single or limited number of models. Although SVH has other vehicle models on its product roadmap, it currently does not expect to introduce another vehicle model for sale until 2024, at the earliest. SVH expects to rely on sales from the Prana-Grand, among other sources of financing, for the capital that will be required to develop and commercialize those subsequent models. If production of the Prana-Grand is delayed or reduced, or if the Prana-Grand is not well-received by the market for any reason, SVH’s revenue and cash flow would be adversely affected, and it may need to seek additional financing earlier than it expects. Such financing may not be available to it on commercially reasonable terms, or at all.

 

 

SVH’s sales will depend in part on its ability to establish and maintain confidence in its long-term business prospects among consumers, analysts, and others within its industry.

 

Consumers may be less likely to purchase SVH’s products if they do not believe that its business will succeed or that its operations, including service and customer support operations, will endure. Similarly, suppliers and other third parties will be less likely to invest time and resources in developing business relationships with SVH if they are not convinced that its business will succeed. Accordingly, to build, maintain and grow its business, SVH will be required to establish and maintain confidence among customers, suppliers, financing sources, and other parties with respect to its liquidity and long-term business prospects. Maintaining such confidence may be difficult as a result of many factors, including SVH’s limited operating history, others’ unfamiliarity with its products, uncertainty regarding the future of electric vehicles, any delays in scaling production, delivery and service operations to meet demand, competition, and SVH’s production and sales performance compared with market expectations. Many of these factors are largely outside of SVH’s control, and any negative perceptions about SVH’s long-term business prospects, even if exaggerated or unfounded, would likely harm its business and make it more difficult to raise additional capital in the future. In addition, as discussed above, a significant number of new electric vehicle companies have recently entered the market. If these new entrants or other manufacturers of electric vehicles go out of business, produce vehicles that do not perform as expected or otherwise fail to meet expectations, such failures may have the effect of increasing scrutiny of others in the industry, including SVH, and further challenging customers’, suppliers’, and analysts’ confidence in SVH’s long-term prospects.

 

SVH’s ability to generate meaningful product revenue will depend on consumers’ demand for electric vehicles.

 

SVH is focused on E2W and, accordingly, its ability to generate meaningful product revenue will depend on demand for E2W vehicles. If the market for E2W vehicles does not develop as SVH expects or develops more slowly than it expects, or if there is a decrease in consumer demand for E2W vehicles, SVH’s business, prospects, financial condition and results of operations will be negatively affected. The market for E2W vehicles is relatively new, rapidly evolving, characterized by rapidly changing technologies, competition, evolving government policies and regulation (including government incentives and subsidies) and industry standards, frequent new vehicle announcements, and changing consumer demands and behaviors. Any changes in the industry could negatively affect consumer demand for E2W vehicles in general and for SVH’s vehicles in particular.

 

Volatility in demand may lead to lower vehicle unit sales, which may result in downward price pressure and adversely affect SVH’s business, prospects, financial condition and results of operations. Further, sales of vehicles tend to be cyclical in many markets, which may expose SVH to increased volatility, especially as it expands its operations and retail strategies.

 

Developments in E2Ws or alternative fuel technologies or improvements in the internal combustion engine may adversely affect the demand for SVH’s vehicles.

 

SVH may be unable to keep up with changes in E2W technology or alternatives to electricity as a fuel source and, as a result, its competitiveness may suffer. Significant developments in alternative technologies, such as alternative battery technologies, hydrogen fuel cell technology, advanced gasoline, biofuels, natural gas, or improvements in the fuel economy of the internal combustion engine, may adversely affect SVH’s business and prospects in ways it does not currently anticipate. Existing and other battery technologies, fuels or sources of energy may emerge as customers’ preferred alternative to the technologies utilized in SVH’s E2W vehicles. Any failure by SVH to develop new or enhanced technologies or processes, or to react to changes in existing technologies, could materially delay its development and introduction of new and enhanced E2W vehicles, which could result in the loss of competitiveness of its vehicles, decreased revenue and a loss of market share to competitors. In addition, SVH expects to compete in part on the basis of its vehicles’ range, efficiency, charging speeds, and performance. Improvements in the technologies offered by competitors could reduce demand for SVH’s vehicles. As technologies change, SVH plans to upgrade or adapt its vehicles and introduce new models that reflect such technological developments, but its vehicles may become obsolete, and its research and development efforts may not be sufficient to adapt to changes in alternative fuel and E2W technologies. Additionally, as new companies and larger, existing vehicle manufacturers enter the E2W market, SVH may lose any technological advantage it may have and suffer a decline in its competitive position. Any failure by SVH to successfully anticipate or react to changes in technologies or the development of new technologies could materially harm its competitive position and growth prospects.

 

 

Extended periods of low gasoline or other fossil fuel prices could adversely affect demand for SVH’s vehicles, which would adversely affect its business, prospects, results of operations and financial condition.

 

A portion of the current and expected demand for electric vehicles results from government policies, regulations and economic incentives promoting fuel efficiency and alternative forms of energy, concerns about climate change resulting in part from the burning of fossil fuels and concerns about volatility in the cost of gasoline and other petroleum-based fuel, and the sourcing of oil from unstable or hostile countries. If the cost of gasoline and other petroleum-based fuel decreases and remains deflated for extended time periods, the outlook for the long-term supply of oil improves, the government eliminates or modifies its policies, regulations or economic incentives related to fuel efficiency and alternative forms of energy, or there is a change in the perception that the burning of fossil fuels negatively impacts the environment, the demand for electric vehicles, including SVH’s vehicles, could be reduced, and SVH’s business and revenue may be negatively impacted.

 

SVH may not be able to obtain or agree on acceptable terms and conditions for all or a significant portion of the grants, loans and other incentives for which it may apply. As a result, SVH’s business and prospects may be adversely affected.

 

SVH anticipates that in the future there may be new opportunities for it to apply for grants, loans, and other incentives from governments in jurisdictions in which it will operate, designed to stimulate the economy and support the production of alternative fuel and electric vehicles and related technologies. SVH’s ability to obtain funds or incentives from government sources is subject to the availability of funds under applicable government programs and approval of SVH’s applications to participate in such programs. The application process for these funds and other incentives will likely be competitive. SVH cannot assure you that it will be successful in obtaining any of these grants, loans and other incentives. If SVH is not successful in obtaining any of these additional incentives and it is unable to find alternative sources of funding to meet its planned capital needs, SVH’s business and prospects could be materially adversely affected.

 

SVH faces risks associated with international operations, including unfavorable regulatory, political, tax and labor conditions, which could adversely impact its business.

 

SVH anticipates having operations and subsidiaries in more countries and markets that will be subject to the legal, political, regulatory and social requirements and economic conditions in those jurisdictions. SVH also intends to expand its sales, maintenance and repair services and its assembly activities outside India. However, SVH has no experience assembling, selling or servicing its vehicles other than in India, and such expansion would require it to make significant capital and operating expenditures, including establishing facilities, hiring local employees, and setting up distribution and supply chain systems, in advance of generating any revenues. Other risks associated with international business activities include but are not limited to conforming SVH’s vehicles to various regulatory and safety requirements in jurisdictions outside India, difficulties in establishing international assembly operations, difficulties in attracting customers in new markets, foreign taxes, permit and labor requirements and regulations, trade restrictions and regulations, changes in diplomatic and trade relationships, and fluctuations in foreign currency exchange rates and interest rates. If SVH fails to successfully address these risks, its business, prospects, results of operations and financial condition could be materially harmed.

 

Uninsured losses could result in payment of substantial damages, which would decrease SVH’s cash reserves and could harm its cash flow and financial condition.

 

In the ordinary course of business, SVH may be subject to losses resulting from product liability, accidents, acts of God, and other claims against it, for which it may have no insurance coverage. While SVH currently carries liability insurance policies that it deems appropriate for its business, it may not maintain as much insurance coverage as other original equipment manufacturers do, and in some cases, it may not maintain any at all. Additionally, the policies it has may include significant deductibles, and SVH cannot be certain that its insurance coverage, including the directors’ and officers’ insurance policies that SVH will purchase, will be sufficient to cover all or any future claims against it. A loss that is uninsured or exceeds policy limits may require SVH to pay substantial amounts, which could adversely affect its financial condition and results of operations. Further, insurance coverage may not continue to be available to SVH or, if available, may be at a significantly higher cost, especially if insurance providers perceive any increase in SVH’s risk profile in the future.

 

 

The ongoing Russian military action in Ukraine could adversely affect SVH’s business, financial condition and operating results.

 

Global markets are experiencing volatility and disruption following the escalation of geopolitical tensions and the start of the military incursion by Russia in Ukraine. On February 24, 2022, Russian military forces launched a military action in Ukraine, and since then sustained conflict and disruption in the region has occurred and is likely to continue. Although the length, impact and outcome of the ongoing military conflict in Ukraine is highly unpredictable, this conflict has led to and could lead to significant market and other disruptions, including significant volatility in commodity prices and supply of energy resources, instability in financial markets, supply chain interruptions, political and social instability, changes in consumer or purchaser preferences as well as increase in cyberattacks and espionage.

 

While SVH does not currently have operations in Ukraine, Russia or Belarus, it is nevertheless actively monitoring the situation in Ukraine and assessing its impact on our business, including our business partners and customers. To date SVH has not experienced any material interruptions in our infrastructure, supplies, technology systems or networks needed to support our operations. SVH has no way to predict the progress or outcome of the conflict in Ukraine or its impacts in Ukraine, Russia or Belarus as the conflict, and any resulting government reactions, are rapidly developing and beyond our control. The extent and duration of the military action, sanctions and resulting market and/or supply disruptions could be significant and could potentially have substantial impact on the global economy and our business for an unknown period of time. Any of the above factors could negatively affect SVH’s business, financial condition and operating results. Any such disruptions may also magnify the impact of other risks described in this prospectus.

 

In addition, there may be an increased risk of cyberattacks by state actors due to the current conflict between Russia and Ukraine. Any increase in such attacks on us or our systems could adversely affect our network systems or other operations. Although we maintain cybersecurity policies and procedures to manage risk to our information systems and, continuously adapt our systems and processes to mitigate such threats, we may not be able to address these cybersecurity threats proactively or implement adequate preventative measures and there can be no assurance that we will promptly detect and address any such disruption or security breach, if at all. See “Risk Factors—Any unauthorized control, manipulation, interruption, or compromise of, or access to, SVH’s products or information technology systems could result in loss of confidence in SVH and its products, fines or other sanctions by regulators, harm SVH’s business and materially adversely affect its financial performance, results of operations or prospects.”

 

Climate changes and the occurrence of natural disasters may adversely affect our business, financial condition and results of operations.

 

Natural calamities such as earthquakes, excessive rains, monsoons, floods, droughts, tsunamis, and adverse and unusual weather patterns have occurred globally in the past few years. The extent and severity of these natural disasters determine their impact on the global economy, which may adversely affect SVH’s business operations and financial position. In particular, excessive rains and floods often result in electricity becoming unavailable across large areas and for extended periods of time, which could lead to unavailability of electricity at charging stations. Additionally, excessive rains and floods, can also cause significant health hazards as submerged vehicles can lead to debilitating electrical shocks and short circuits.

 

 

Risks Related to Manufacturing and Supply Chain

 

SVH has experienced, and may in the future experience, delays in the design, manufacture, launch and financing of its vehicles, and supply chain issues arising from its reliance on third-party suppliers for many key components, which could harm its business and prospects.

 

SVH is in the early-stage production of the PRANA 2.0 versions of Prana-Grand vehicles and Prana-Elite vehicles. Production of the Alive scooter is not expected to begin until 2025 and may occur later or not at all. Any delay in the financing, design, manufacture and launch of SVH’s product lines could materially damage SVH’s business, prospects, financial condition and results of operations. Prior to mass production of its electric vehicles, SVH will also need the vehicles to be fully approved for sale in its intended markets. If SVH fails to scale up the production of Prana-Grand, and PRANA-Elite, its first family of products, its growth prospects could be adversely affected.

 

Furthermore, SVH relies on third-party suppliers for many of the key components and materials used in its vehicles. To the extent SVH’s suppliers experience any delays in providing SVH with necessary components, SVH could experience delays in bringing its vehicles to market. Likewise, SVH may encounter delays with the design, construction and regulatory or other approvals necessary to expand its India assembly facilities, or other future assembly facilities. Any significant delay or other complication in the production ramp of the Prana-Grand or the development, manufacture, launch and production ramp of SVH’s future products and services, could materially damage SVH’s brand, reputation, business, prospects, financial condition and results of operations. The continued development of and the ability to start manufacturing SVH’s vehicles are and will be subject to risks, such as the ability to finalize product specifications; secure necessary funding; obtain required regulatory approvals and certifications; and secure necessary components, services, or licenses on acceptable terms and in a timely manner.

 

If our electric vehicle owners modify our electric vehicles, regardless of whether third-party aftermarket products are used, the electric vehicle may not operate properly, which may create negative publicity and could harm our business.

 

Vehicle enthusiasts may seek to alter SVH’s electric vehicles to modify their performance which could compromise vehicle safety and security systems. Also, customers may customize their electric vehicles with aftermarket parts that can compromise rider safety. SVH does not test, nor does it endorse, such changes or products. In addition, customers may attempt to modify SVH’s electric vehicles’ charging systems or use improper external cabling or unsafe charging outlets that can compromise the vehicle systems or expose our customers to injury from high-voltage electricity. Such unauthorized modifications could reduce the safety and security of SVH’s electric vehicles and any injuries resulting from such modifications could result in adverse publicity, which would negatively affect SVH’s brand and reputation and thus harm its business, prospects, financial condition and operating results.

 

If SVH fails to manage its growth effectively, it may not be able to develop, manufacture, distribute, market and sell its vehicles successfully.

 

Any failure to manage SVH’s growth effectively could materially and adversely affect its business, prospects, results of operations and financial condition. SVH intends to expand its operations significantly, and intends to hire a significant number of additional personnel, including design and manufacturing personnel and service technicians. Because its vehicles are based on a different technology platform than ICE vehicles, individuals with sufficient training in electric vehicles may not be readily available and as a result, SVH may need to expend significant resources training the employees it will hire. Competition for individuals with experience designing, manufacturing, and servicing electric vehicles is intense, and SVH may not be able to attract, integrate, train, motivate or retain additional qualified personnel in the future. The failure to attract, integrate, train, motivate and retain these additional employees could harm SVH’s business and prospects. In addition, SVH has no experience in high volume manufacturing of its vehicles. SVH cannot assure you that it will be able to develop efficient, automated, low-cost manufacturing capabilities and processes, and reliable sources of component supply that will enable it to meet the quality, price, engineering, design, and production standards, as well as the production volumes it anticipates, and SVH may not be able to achieve economies of scale required to successfully and profitably market its vehicles. Any failure to develop such manufacturing processes and capabilities within SVH’s projected costs and timelines could stunt its future growth and impair its ability to produce, market, service, and sell its vehicles successfully.

 

 

Financial service providers may be unable to offer attractive leasing and financing options for SVH’s vehicles, which would adversely affect consumer demand.

 

While purchase financing for SVH’s vehicles is available in India, increasing the financing facilities to support SVH’s sales could take additional time or not occur. SVH is working on establishing a nation-wide network of providers to offer vehicle loan programs, however, SVH currently has agreements in place with a small number of financing sources. SVH can provide no assurance that third-party financing sources would be able or willing to provide purchase financing on terms acceptable to SVH’s customers, or at all. Furthermore, because SVH has sold a limited number of vehicles and no secondary market for its vehicles exists, the future resale value of SVH’s vehicles is difficult to predict, and the possibility that resale values could be lower than SVH expects, or that no resale market emerges, increases the difficulty of obtaining third-party financing on terms that appeal to potential customers. SVH believes that its ability to access additional markets will depend on the availability of attractive leasing and financing options, and if SVH is unable to make available to its customers attractive options to finance the purchase or lease of its vehicles, such failure could substantially reduce the addressable market and decrease demand for SVH’s vehicles.

 

SVH’s business and prospects depend significantly on the “Prana” brand.

 

SVH’s business and prospects will depend on its ability to develop, maintain and strengthen the “Prana” brand associated with premium products and technological excellence. Promoting and positioning its brand will likely depend significantly on SVH’s ability to provide a consistently premium customer experience, an area in which it has limited experience. To promote its brand across multiple geographies, SVH may be required to change its customer development and branding practices and develop local content, which could result in substantially higher expenses, including the need to use traditional media such as television, radio and print advertising. In particular, any negative publicity, whether or not true, can quickly proliferate on social media and harm consumer perception and confidence in SVH’s brand and reputation. SVH’s ability to successfully position its brand could also be adversely affected by perceptions about the quality of its competitors’ vehicles or its competitors’ success. For example, certain of SVH’s competitors have been subject to significant scrutiny for incidents involving their battery fires, which could result in similar scrutiny of SVH.

 

In addition, from time to time, SVH’s vehicles may be evaluated and reviewed by third parties. Any negative reviews or reviews which compares SVH unfavorably to competitors could adversely affect consumer perception about its vehicles and reduce demand for its vehicles, which could have a material adverse effect on SVH’s business, results of operations, prospects and financial condition.

 

SVH’s products may not meet customer expectations due to design, performance, or durability factors, and its ability to develop, market and sell or lease its products could be harmed as a result.

 

SVH’s products may not perform in line with customers’ expectations. For example, the vehicles may not have the durability or longevity, and may not be as easy and convenient to maintain and repair as other vehicles on the market. Although SVH will attempt to remedy any issues it observes in its products as effectively and rapidly as possible, such efforts may not be timely, may hamper production or may not be to the satisfaction of its customers. Further, if certain features of SVH’s products take longer than expected to become available, are legally restricted or become subject to additional regulation, SVH’s ability to develop, market and sell its products and services could be harmed.

 

SVH’s vehicles may contain product or design defects, which could have a material adverse impact on SVH’s business, financial condition, operating results and prospects.

 

SVH’s vehicles include certain features of its modular system, mode function, advanced sequential combined braking system, and energy management software. SVH plans to add features in the future to its new models, as well as by upgrading the software of its current models. SVH’s products may contain defects in design and manufacture that may cause them not to perform as expected or that may require repair. Its current features or future enhancements may not perform in line with expectations. While SVH performs extensive internal testing of its vehicles’ software and hardware systems, and has successfully sold vehicles with those systems, given SVH’s limited operating history, it has a limited frame of reference by which to evaluate the long-term performance of its systems and vehicles. SVH may not be able to detect and fix any defects in the vehicles prior to their sale. Any product or design defects or any other failure of SVH’s vehicles to perform as expected could result in adverse publicity, lost revenue, delivery delays, product recalls, product liability claims, harm to SVH’s brand and reputation, and present significant warranty claims and other expenses. All of the foregoing could negatively affect SVH’s business, prospects, results of operations and financial condition.

 

 

The battery efficiency and the range of the vehicles will decline over time, which may affect consumers’ purchasing choices and can negatively impact SVH’s business and financial conditions.

 

Even if its vehicles function as designed, all battery-powered vehicles lose efficiency, and hence range, over time. Other factors, such as usage, time and charging patterns, may also impact the battery’s ability to hold a charge, or could require SVH to limit vehicles’ battery charging capacity, including via over-the-air or other software updates, which could further decrease SVH’s vehicles’ range. Current battery technology may limit SVH’s ability to improve the performance of its battery packs, or increase its vehicles’ range, in the future. Any such battery deterioration or capacity limitations and related decreases in range may negatively impact SVH’s brand and reputation and lead to customer complaints or warranty claims, and its business, prospects, results of operations and financial condition could be materially harmed.

 

Adequate charging solutions for SVH’s vehicles may affect demand for its products.

 

Demand for SVH’s vehicles may depend in part on the availability of charging infrastructure. While the prevalence of charging stations has been increasing, charging station locations are significantly less widespread than gas stations. Although SVH designed a standard 16Amp charger into the Prana product line, which allows ubiquitous charging, the charging infrastructure available to its customers may be insufficient to meet their needs or expectations. Some potential customers may choose not to purchase SVH’s E2W because of the lack of a more widespread charging infrastructure.

 

SVH has only limited experience servicing its vehicles and their integrated software. If SVH or its partners are unable to adequately service its vehicles, SVH’s business, prospects, financial condition, and results of operations may be materially adversely affected.

 

Because SVH does not plan to begin large-scale commercial production of the Prana-Grand until 2023, SVH has only limited experience servicing or repairing its vehicles. Servicing electric vehicles is different than servicing vehicles with internal combustion engines and requires specialized skills, including high voltage training and servicing techniques. In addition, SVH plans to partner with certain third parties to perform some of the service on SVH’s vehicles, and there can be no assurance that SVH will be able to enter into acceptable arrangements with any such third-party providers. Further, although such servicing partners may have experience in servicing other electric vehicles, they will initially have no experience in servicing SVH’s vehicles. There can be no assurance that SVH’s service arrangements will adequately address the service requirements of its customers to their satisfaction, or that SVH and its servicing partners will have sufficient resources, experience, or inventory to meet these service requirements in a timely manner as the volume of vehicles SVH delivers increases. This risk is enhanced by SVH’s limited operating history and its limited data regarding its vehicles’ real-world reliability and service requirements. In addition, if SVH is unable to roll out and establish a widespread service network that provides satisfactory customer service, its customer loyalty, brand and reputation could be adversely affected, which in turn could materially adversely affect its sales, results of operations, prospects and financial condition.

 

SVH’s customer support team may not grow quickly enough as the company expands, which could limit its growth, result in increased costs, and negatively affect SVH’s results of operations.

 

SVH’s customers will depend on SVH’s customer support team to resolve technical and operational issues relating to the software integrated into its vehicles, a large portion of which SVH has developed in-house. As SVH grows, its customer support team and service network may be required to address a growing number of issues, and SVH may be unable to accommodate short-term increases in customer demand for technical support. SVH also may be unable to modify the future scope and delivery of its technical support to compete with the technical support provided by its competitors. If SVH is unable to successfully address the service requirements of its customers, or if the market perceives that it does not maintain high-quality support, its brand and reputation could be adversely affected, and it may be subject to claims from its customers, which could result in loss of revenue or damages, and its business, results of operations, prospects and financial condition could be materially adversely affected.

 

 

Insufficient reserves to cover future warranty or part replacement needs or other vehicle repair requirements, including any potential software upgrades, could materially adversely affect SVH’s business, prospects, financial condition and results of operations.

 

Since the commencement of commercial production in 2021, SVH has been providing and will continue to provide its manufacturer’s warranty on all vehicles it sells. SVH has been maintaining and will need to continue maintaining reserves to cover part replacement and other vehicle repair needs, including any potential software upgrades. Warranty reserves will include the SVH management team’s best estimate of the projected costs to repair or to replace items under warranty. Such estimates are inherently uncertain, particularly, in light of SVH’s limited operating history and the limited field data available to it, and changes to such estimates based on real-world observations may cause material changes to SVH’s warranty reserves in the future. SVH may become subject to significant and unexpected expenses as well as claims from SVH’s customers, including loss of revenue or damages. There can be no assurances that the warranty reserves will be sufficient to cover all claims. In addition, if future laws or regulations impose additional warranty obligations on SVH that go beyond SVH’s manufacturer’s warranty, SVH may be exposed to higher warranty, parts replacement and repair expenses than it expects, and its reserves may be insufficient to cover such expenses. If SVH’s reserves are inadequate to cover future warranty claims and maintenance requirements, its business, prospects, financial condition, and results of operations could be materially adversely affected.

 

If SVH’s assembly facilities become inoperable, it will be unable to produce its vehicles within its current and anticipated time and cost structure and its business will be harmed.

 

SVH’s assembly plans contemplate that its facilities may need to be expanded or new production lines may need to be set up. SVH may not be able to expand its facilities or production lines in a timely and cost-effective manner, or within its budgeted expenditures, which could adversely impact SVH’s sales and profitability. Additionally, if incremental external financing would be required for expansion, such financing may not be obtained on favorable terms, or at all. These risks could be exacerbated because SVH may invest in production and assembly facilities to support its production processes, which differ substantially from ICE vehicle production processes for which expertise is more readily available. SVH will also need to hire and train a significant number of additional employees and integrate a yet-to-be-fully-developed supply chain to scaleup commercial production at its facilities, and SVH may fail to scale up commercial production on schedule. If any of SVH’s assembly facilities do not conform to its requirements, repair or remediation may be required, and SVH could be required to take production offline, delay implementation of its planned growth, construct alternate facilities, outsource manufacturing, or bear substantial additional costs including potentially costly litigation costs. SVH’s insurance policies or other recoveries may not be sufficient to cover all or any of such costs. Any of the foregoing consequences could have a material adverse effect on SVH’s business, prospects, results of operations and financial condition.

 

SVH must develop complex software and technology systems, including in coordination with vendors and suppliers, to produce its products, and there can be no assurance such systems will be successfully developed.

 

SVH’s vehicles use and will continue to use a substantial amount of third-party and in-house software and complex technological hardware to operate, some of which is subject to further development and testing. The development and implementation of such advanced technologies is inherently complex, and SVH will need to coordinate with its vendors and suppliers in order to integrate such technology into its products and ensure these technologies interoperate with other complex systems as designed and as expected. SVH may fail to detect defects and errors in the software and technologies, and its control over the performance of third-party services and systems may be limited. Any defects or errors in such software and technologies, which may adversely affect the safety, performance or cost of its products, could result in delayed production and delivery of SVH’s vehicles, damage to SVH’s brand or reputation, increased service and warranty costs and legal action by customers or third parties, including product liability claims, among other things, which could negatively impact the financial results of SVH.

 

 

SVH’s facilities or operations could be adversely affected by events outside of its control, such as natural disasters, wars, health epidemics or pandemics, or security incidents.

 

SVH may be impacted by natural disasters, wars, health epidemics or pandemics, or other events outside of its control. If major disasters such as earthquakes, wildfires, monsoons, floods, or other events occur, or the information system or communications network used by SVH malfunctions, its headquarters and assembly facilities may be seriously damaged, or SVH may have to stop or delay production and shipment of its products. In addition, SVH may in the future be adversely affected as a result of health epidemics or pandemics. Furthermore, SVH could be impacted by physical security incidents at its facilities, which could result in significant damage to such facilities that could require SVH to delay or discontinue production. SVH may incur significant expenses or delays relating to such events outside of its control, which could have a material adverse impact on its business, results of operations and financial condition.

 

If SVH updates or discontinues the use of its assembly equipment more quickly than expected, it may have to shorten the useful lives of any equipment to be retired as a result of any such update, and the resulting acceleration in SVH’s depreciation or amortization could negatively affect its financial results.

 

SVH expects to invest significantly in tools, machinery, and other assembly equipment, and SVH will depreciate the cost of such equipment and amortize its investment in intangible assets over their expected useful lives. However, assembly technology and intangible assets evolve rapidly, and SVH may decide to update its assembly processes more quickly than expected. Moreover, as SVH initiates and accelerates the commercial production of its vehicles, SVH’s experience may cause it to discontinue the use of some equipment or discontinue the use of certain intangible assets. The useful life of any assets that would be retired sooner than expected would be shortened, causing the depreciation and amortization on such assets to be accelerated, and SVH’s results of operations could be negatively impacted.

 

SVH’s vehicles utilize lithium-ion battery cells, which have been observed to catch fire or vent smoke and flame and could negatively affect SVH’s business.

 

The battery packs within SVH’s vehicles utilize lithium-ion cells. On rare occasions, lithium-ion cells can rapidly release the energy they contain by venting smoke and flames in a manner that can ignite nearby materials. While SVH’s lithium ferro-phosphate (LFP) based packs do not emit flames, and SVH has introduced a new battery design which passively contains a single cell’s release of energy, failure of its vehicles’ battery packs may occur. Any such events or failures of SVH’s vehicles, battery packs or warning systems could subject SVH to lawsuits, product recalls, or redesign efforts. Also, negative public perceptions regarding the suitability of lithium-ion cells for mobility applications or any future incident involving lithium-ion cells, such as a vehicle or other fire, even if such incident does not involve SVH’s vehicles, could seriously harm SVH’s business and reputation. Once SVH scales up manufacturing its vehicles SVH will need to store a significant number of lithium-ion cells at its facilities. Any mishandling of battery cells, safety issues, or fire related to the cells could disrupt its operations and lead to adverse publicity and potentially a safety recall. In addition, any failure to comply with the relevant regulations could result in fines, loss of permits and licenses, or other regulatory consequences. Moreover, any failure of a competitor’s electric vehicle or energy storage product may cause indirect adverse publicity for SVH and its products. All of the foregoing could negatively affect SVH’s brand and harm SVH’s business, prospects, results of operations and financial condition.

 

Risks Related to Cybersecurity and Data Privacy

 

Any unauthorized control, manipulation, interruption, or compromise of, or access to, SVH’s products or information technology systems could result in loss of confidence in SVH and its products, fines or other sanctions by regulators, harm SVH’s business and materially adversely affect its financial performance, reputation, results of operations or prospects.

 

SVH’s operations depends upon continued development, maintenance and improvement of its information technology and communication systems, such as systems for product data management, procurement, inventory management, production planning and execution, sales, service and logistics. If these systems or their functionality do not operate as SVH expects them to or conform to any new regulatory requirements, SVH may be required to expend significant resources to make corrections or find alternative sources for performing these functions. The technological complexity of SVH’s products and systems, and any updates thereto, may increase the risk of a potential compromise or breach of the measures that SVH or its third-party service providers employ.

 

 

If SVH is unable to protect its systems (and the information stored in its systems) from unauthorized access, use, disclosure, disruption, modification, destruction or other breach, such problems or security breaches could have negative consequences for SVH’s business and prospects. This type of breach can lead to losses, fines, penalties, damages, loss of reputation, or liabilities under SVH’s contracts or applicable laws and regulations. There would be additional costs to respond to breaches and other unauthorized disclosures including investigations, and to remedy such incidents. In addition, SVH may be mandated by laws, regulations or contractual obligations to notify individuals, regulatory authorities and other third parties in the event of a security breach. Such mandatory disclosures are costly, could lead to negative publicity, penalties or fines, litigation and SVH’s customers losing confidence in the effectiveness of SVH’s security measures. SVH may not have adequate insurance coverage to cover losses associated with such breach or incidents, if any. In addition, SVH cannot assure that its existing insurance coverage will continue to be available on acceptable terms or that its insurers will not deny coverage as to any future claim.

 

Any of the foregoing could materially adversely affect SVH’s business, prospects, results of operations and financial condition.

 

The failure of our Information Technology (“IT”) systems, and the remediation of any such failure, could result in loss of confidence in SVH and its products, harm SVH’s business and materially adversely affect its financial performance, reputation, results of operations or prospects.

 

Our business operations utilize a variety of IT systems. We are dependent on these systems for all commercial transactions, and supply chain and inventory management. Although we have established appropriate contingency plans to mitigate the risks associated with a failure of our IT systems, if one of our key IT systems were to suffer a failure, this could have a material adverse effect on our financial performance, reputation, results of operations or prospects. Further, we rely on third parties for certain IT services. If an IT service provider were to fail or the relationship with us were to end, we might be unable to find a suitable replacement in a timely manner, and our financial performance, reputation, results of operations or prospects could be materially adversely affected. We continually modify and enhance our IT systems and technologies to increase productivity and efficiency. As new systems and technologies are implemented, we could experience unanticipated difficulties resulting in unexpected costs and adverse impacts to our manufacturing and other business processes. When implemented, the systems and technologies may not provide the benefits anticipated and could add costs and complications to ongoing operations, which may have a material adverse effect on our business, results of operations or financial condition.

 

SVH is subject to evolving laws, regulations, standards, policies, and contractual obligations related to data privacy and security, and any actual or perceived failure to comply with such obligations could harm SVH’s reputation and brand, subject SVH to significant fines and liability, or otherwise adversely affect its reputation and business.

 

In the course of its operations, SVH collects, uses, stores, discloses, transfers, and otherwise processes personal information from its customers, employees, and third parties with whom SVH conducts business, including names, accounts, user IDs and passwords, and payment or transaction related information. Additionally, SVH uses its vehicles’ electronic systems to log information about each vehicle’s use, such as charge time, battery usage, mileage, location and the drivers’ behavior, in order to aid it in vehicle diagnostics, repair and maintenance, as well as to help SVH customize and improve the driving and riding experience. Accordingly, SVH is subject to or affected by a number of Indian and international laws and regulations, as well as contractual obligations and industry standards, that impose certain obligations and restrictions with respect to data privacy and security. These laws, regulations and standards may be interpreted and applied differently over time and from jurisdiction to jurisdiction, and it is possible that they will be interpreted and applied in ways that may have a material adverse impact on SVH’s business, financial condition and results of operations.

 

Compliance with applicable privacy and data security laws, regulations and standards is a rigorous and time-intensive process, and SVH may be required to put in place additional mechanisms to comply with such, which could cause SVH to incur substantial costs or require SVH to change its business and data practices in a manner adverse to its business.

 

The global data protection landscape is rapidly evolving, and implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future. SVH may not be able to monitor and react to all developments in a timely manner.

 

Risks Related to SVH’s Employees and Human Resources

 

The loss of key personnel or an inability to attract, retain and motivate qualified personnel, particularly in full-scale commercial manufacturing operations, as well as presence of labor and union activities, may impair SVH’s ability to expand its business.

 

SVH’s success depends upon the continued service and performance of its senior management team and key technical personnel. SVH’s employees, including SVH’s senior management team, are at-will employees, and therefore may terminate employment with SVH at any time with no advance notice. Although SVH retained its management and key personnel in place following the Business Combination, it is possible that SVH could lose some key personnel. The replacement of any members of SVH’s senior management team or other key personnel likely would involve significant time and costs and may significantly delay or prevent the achievement of SVH’s business objectives.

 

 

SVH’s future success also depends, in part, on its ability to continue to attract, integrate and retain highly skilled personnel, particularly to engage in full-scale commercial manufacturing operations. This needs to be accomplished quickly in order for SVH to scale-up commercial production and sales. There are various risks and challenges associated with hiring, training, and managing a large workforce, and these risks and challenges may be exacerbated by the short period in which SVH intends to scale up its workforce, as well as increasing competition for skilled personnel, especially in India. Although the area surrounding SVH’s facilities is home to a trained workforce with experience in engineering and manufacturing, this workforce does not have significant experience with electric vehicle manufacturing, and many jobs will require training. Moreover, as SVH seeks to expand across India, such skilled workforce may not be easily available owing to the limited supply of skilled personnel, and such individuals may be subject to non-competition and other agreements that restrict their ability to work for SVH. There can be no guarantee that SVH will be able to attract such individuals. If SVH is unsuccessful in hiring and training a workforce in a timely and cost-effective manner, its business, financial condition and results of operations could be adversely affected.

 

Additionally, it is common throughout the vehicle manufacturing industry generally, including in India, for many employees at vehicle manufacturing companies to belong to a union, which can result in higher employee costs and increased risk of work stoppages. Moreover, regulations in some jurisdictions mandate employee participation in industrial collective bargaining agreements and work councils with certain consultation rights with respect to the relevant companies’ operations. Although none of SVH’s employees are currently represented by a labor union, in the event SVH’s employees seek to join or form a labor union, SVH could be subject to risks as it engages in and attempts to finalize negotiations with any such union, including potential work slowdowns or stoppages, delays, and increased costs. Furthermore, SVH may be directly or indirectly dependent upon companies with unionized work forces, such as parts suppliers and trucking and freight companies, and work stoppages or strikes organized by such unions could have a material adverse impact on SVH’s business, financial condition, or results of operations.

 

SVH is highly dependent on certain key employees.

 

SVH is highly dependent on the services of certain key employees. If its key employees were to discontinue their service to SVH due to death, disability, or any other reason, SVH would be significantly disadvantaged.

 

Misconduct by SVH’s employees and independent contractors during and before their employment with SVH could expose SVH to potentially significant legal liabilities, reputational harm and/or other damages to its business.

 

Many of SVH’s employees play critical roles in ensuring the safety and reliability of its vehicles and/or its compliance with relevant laws and regulations. Certain SVH employees have access to sensitive information and/or proprietary technologies and know-how. While SVH has adopted codes of conduct for all its employees and implemented detailed policies and procedures relating to intellectual property, proprietary information, and trade secrets, SVH cannot assure you that its employees will always abide by these codes, policies, and procedures nor that the precautions SVH takes to detect and prevent employee misconduct will always be effective. If any of SVH’s employees engage in any misconduct, illegal or suspicious activities, including but not limited to misappropriation or leakage of sensitive customer information or proprietary information, SVH and such employees could be subject to legal claims and liabilities and SVH’s reputation and business could be adversely affected as a result. Such negative impacts can include, without limitation, the imposition of civil, criminal and administrative penalties, damages, monetary fines, disgorgement, integrity oversight and reporting obligations to resolve allegations of non-compliance, imprisonment, other sanctions, contractual damages, reputational harm, diminished profits and future earnings and curtailment of SVH’s operations, any of which could adversely affect its business, prospects, financial condition and results of operations.

 

Risks Related to Litigation and Regulation

 

SVH is subject to laws and regulations that could impose substantial costs, legal prohibitions, or unfavorable changes upon its operations or products, and any failure to comply with these laws and regulations, including as they evolve, could substantially harm its business and results of operations.

 

SVH is and will be subject to environmental, manufacturing, and health and safety laws and regulations at numerous jurisdictional levels, including laws relating to the use, handling, storage, recycling, disposal and human exposure to hazardous materials and with respect to constructing, expanding and maintaining its facilities. Any violations of these laws may result in substantial fines and penalties, remediation costs, third party damages, or a suspension or cessation of SVH’s operations. The costs of compliance, including remediating contamination, if any, is found on SVH’s properties, or any related changes to SVH’s operations, may be significant. SVH may also face unexpected delays in obtaining permits and approvals required by such laws in connection with its manufacturing facilities, which would hinder its ability to commence or continue its commercial manufacturing operations. Such costs and delays may adversely impact SVH’s business prospects and results of operations.

 

 

In addition, motor vehicles are subject to regulation under international, federal, state and local laws. SVH has incurred, and expects to continue to incur, significant costs in complying with these regulations. Any failures to comply could result in significant expenses, delays, fines, or other sanctions. These laws, regulations and standards are further subject to change from time to time, and SVH may be subject to amended or additional regulations that would increase the effort and expense of compliance.

 

SVH also expects to become subject to laws and regulations applicable to the supply, manufacture, import, sale, and service of E2W, including in those countries and markets it intends to enter in the future. Compliance with such regulations will require additional time, effort and expense to ensure regulatory compliance in those countries. There can be no assurance that SVH will be able to achieve foreign regulatory compliance in a timely manner and at its expected cost, or at all, and the costs of achieving international regulatory compliance or the failure to achieve international regulatory compliance could harm SVH’s business, prospects, results of operations and financial condition.

 

SVH may face regulatory limitations on its ability to sell vehicles, which could materially and adversely affect its ability to sell its vehicles.

 

SVH’s business plan includes the direct sale of vehicles to retail consumers as well as through its dealers network via a franchise model. SVH may be required to obtain licenses or permits, and take other actions to ensure its distribution model complies with the applicable legal requirements. Because such requirements vary across jurisdictions and evolve over time, SVH’s distribution model must be carefully established, its sales and service processes must be continually monitored, and a competent team needs to be recruited to monitor the compliance efficiently and proactively, which may add to the cost of SVH’s business.

 

Additionally, in India, dealers works on a “single brand franchise” model are often required under the dealership agreements to sell only vehicles of a particular OEM in the primary market. SVH may find it difficult to sign franchise agreements with such dealers to expand its dealership network. Such limitation could adversely impact SVHs expansion plans across India.

 

SVH may choose to or be compelled to undertake product recalls or take other actions, which could adversely affect its business, prospects, results of operations, reputation and financial condition.

 

Any product recalls may result in adverse publicity, damage SVH’s reputation and adversely affect its business, prospects, results of operations and financial condition. In the future, SVH may, voluntarily or involuntarily, initiate a recall if any of its vehicles or components (including its battery cells) prove to be defective or noncompliant with applicable safety standards in each of its markets. If a large number of vehicles are the subject of a recall or if needed replacement parts are not in adequate supply, SVH may be unable to service and repair recalled vehicles for a significant period of time. These types of disruptions could jeopardize SVH’s ability to fulfill existing contractual commitments or satisfy demand for its vehicles and could also result in the loss of credibility and market share. SVH may not have adequate funds to withstand the financial impact of such recalls, which could involve significant expense and diversion of management’s attention and other resources, adversely affecting SVH’s brand image in its target market and its business, prospects, results of operations and financial condition.

 

SVH may in the future be subject to legal proceedings, regulatory disputes and governmental inquiries that could cause it to incur significant expenses, divert its management’s attention, and materially harm its business, results of operations, cash flows and financial condition.

 

From time to time, SVH may be subject to claims, lawsuits, government investigations and other proceedings that could adversely affect its business, results of operations, cash flows and financial condition. While to date SVH has not been the subject of complaints or litigation, including claims related to employment matters, there can be no assurances that SVH will not be the subject of complaints or litigation as SVH expands its operations across multiple geographies.

 

 

Litigation and regulatory proceedings may be protracted and expensive, and the results are difficult to predict. Additionally, SVH’s litigation costs could be significant, even if it achieves favorable outcomes. Adverse outcomes with respect to litigation or any of these legal proceedings may result in significant settlement costs or judgments, penalties and fines, or require SVH to modify, make temporarily unavailable or stop assembling or selling its vehicles in some or all markets, all of which could negatively affect its sales and revenue growth and adversely affect its business, prospects, results of operations, cash flows and financial condition.

 

The results of litigation, investigations, claims and regulatory proceedings cannot be predicted with certainty, and determining reserves for pending litigation and other legal and regulatory matters requires significant judgment. There can be no assurance that SVH’s expectations will prove correct, and even if these matters are resolved in SVH’s favor or without significant cash settlements, these matters, and the time and resources necessary to litigate or resolve them, could harm its business, results of operations, cash flows and financial condition. In addition, the threat or announcement of litigation or investigations by governmental authorities or other parties, irrespective of the merits of the underlying claims, may itself have an adverse impact on the trading price of SVH’s shares.

 

SVH may become subject to product liability claims, which could harm its financial condition and liquidity if it is not able to successfully defend or insure against such claims.

 

SVH may become subject to product liability claims, which could harm its business, prospects, results of operations and financial condition. The automotive industry experiences product liability claims, and SVH faces the risk of claims in the event its vehicles do not perform or are claimed not to perform as expected or malfunction, resulting in property damage, personal injury or death. SVH also expects that, as is true for other automakers, SVH’s vehicles will be involved in crashes resulting in death or personal injury, and even if not caused by the failure of its vehicles, SVH may face product liability claims and adverse publicity in connection with such incidents. In addition, SVH may face claims arising from or related to failures, claimed failures or misuse of new technologies that SVH expects to offer.

 

A successful product liability claim against SVH could require it to pay a substantial monetary award. SVH’s risks in this area are particularly pronounced given that its vehicles have been commercially available for a limited time period, and hence field experience of its vehicles is limited. Moreover, a product liability claim against SVH or its competitors could generate substantial negative publicity about SVH’s vehicles and business and inhibit or prevent commercialization of its future vehicles, which would have material adverse effect on its brand, business, prospects and results of operations. SVH’s insurance coverage might not be sufficient to cover all potential product liability claims, and insurance coverage may not continue to be available to SVH or, if available, may be at a significantly higher cost. Any lawsuit seeking significant monetary damages or other product liability claims may have a material adverse effect on SVH’s reputation, business and financial condition.

 

SVH may be exposed to delays, limitations and risks related to the permits required to operate its assembly facilities.

 

Operation of a vehicle assembly facility requires land use and environmental permits and other operating permits from government entities. While SVH believes it has the permits necessary to carry out and perform its current operations at its assembly facility in Tamil Nadu, India, based on its current target production capacity, SVH plans to expand its assembly facilities and add assembly facilities in other markets over time and will be required to apply for and secure various permits and certificates of occupancy necessary for the operation of such expanded and additional facilities. Delays, denials or restrictions on any of the applications for or assignment of the permits to operate SVH’s expanded or additional assembly or manufacturing facilities could adversely affect its ability to execute its business plans and objectives . See “— Risks Related to Manufacturing and Supply Chain — SVH has experienced and may in the future experience significant delays in the design, manufacture, launch and financing of the various products in pipeline which could harm its business and prospects.”

 

 

SVH is subject to various environmental, health and safety laws and regulations that could impose substantial costs on it and cause delays in expanding its production facilities.

 

SVH’s operations are subject to environmental laws and regulations of each market and jurisdiction they operate in, including laws relating to the use, handling, storage, disposal of and exposure to hazardous materials. Environmental, health and safety laws and regulations are complex, and SVH has limited experience complying with them. Moreover, SVH may be affected by future amendments to such laws or new environmental, health and safety laws and regulations which may require it to change its operations, potentially resulting in a material adverse effect on its business, prospects, results of operations and financial condition. These laws can give rise to liability for administrative oversight costs, cleanup costs, property damage, bodily injury, fines and penalties. Capital and operating expenses needed to comply with environmental laws and regulations can be significant, and violations could result in substantial fines and penalties, third-party damages, suspension of production or a cessation of its operations.

 

Contamination at properties SVH operates or may own or formerly owned or operated, or properties to which hazardous substances were sent by SVH may result in liability for SVH under environmental laws and regulations, including, but not limited to, the Air (Prevention and Control of Pollution) Act, 1981, the Environment (Protection) Act, 1986, and the Water (Prevention and Control of Pollution) Act, 1974, which are applicable in India. These laws can impose liability for the full amount of remediation-related costs, for the investigation and cleanup of contaminated soil and ground water, for building contamination and impacts to human health and for damages to natural resources, without regard to fault. The costs of complying with environmental laws and regulations and any claims concerning noncompliance, or liability with respect to contamination in the future, could have a material adverse effect on SVH’s financial condition or results of operations. Such laws require compliance with various workplace safety requirements, including requirements related to environmental safety. These laws and regulations can give rise to liability for oversight costs, compliance costs, bodily injury (including workers’ compensation), fines, and penalties. Additionally, non-compliance could result in delay or suspension of production or cessation of operations. The costs required to comply with workplace safety laws can be significant, and non-compliance could adversely affect SVH’s production or other operations, including with respect to the planned production of products, which could have a material adverse effect on SVH’s business, prospects and results of operations.

 

Risks Related to Intellectual Property

 

SVH may not be able to obtain, register maintain, enforce or protect its intellectual property and prevent third parties from unauthorized use of its intellectual property and proprietary technology, and, as a result its competitive position could be harmed and it could be required to incur significant expenses to enforce its rights, whether or not it is successful.

 

SVH establishes and protects its intellectual property and proprietary technology through a combination of seeking intellectual property registrations in India, licensing agreements, third-party nondisclosure and confidentiality agreements and other contractual provisions, as well as through patent, trademark, copyright and trade secret and other intellectual property laws in India and other jurisdictions. We have applied for the registration of many of our trade names, trademarks and patents in India. Some of these applications have been granted and some of these registrations are currently pending approval from the corresponding departments. There can be no assurance that we will obtain such registrations or that the registrations we obtain will prevent the imitation of our products or infringement of our intellectual property rights by others. Our failure to successfully protect our trademarks could diminish the value and effectiveness of our past and future marketing efforts and could cause customer confusion. This could in turn adversely affect our revenues, profitability and the market price of our ordinary shares.

 

SVH’s efforts to obtain, register and protect intellectual property rights may not be adequate to prevent SVH’s competitors or other third parties from challenging SVH’s intellectual property. Failure to adequately obtain, maintain, enforce and protect SVH’s intellectual property could result in its competitors offering identical or similar products, potentially resulting in the loss of SVH’s competitive advantage and a decrease in its revenue which would adversely affect its business, prospects, financial condition and results of operations.

 

SVH may not be able to effectively protect its intellectual property, and there could be potential misappropriation of SVH’s intellectual properties and adverse effects on its financial condition and results of operations.

 

Intellectual property laws vary significantly throughout the world. The laws of some foreign countries, including countries in which SVH’s products are sold, or may be sold in the future, may not provide adequate mechanisms for obtaining and enforcing intellectual property rights. Therefore, SVH’s intellectual property may not be as easily obtained or enforced in such jurisdictions. Further, policing the unauthorized use of SVH’s intellectual property in foreign jurisdictions may be difficult.

 

 

SVH may not effectively prosecute actions against third-party infringement, which could result in misappropriation of the company’s intellectual property and could adversely affect the company’s financial condition and results of operations.

 

To prevent unauthorized use of SVH’s intellectual property, it may be necessary to prosecute actions for infringement, misappropriation or other violation of SVH’s intellectual property against third parties. Any such action could result in significant costs and diversion of SVH’s resources and management’s attention. Furthermore, many of SVH’s current and potential competitors have the ability to dedicate substantially greater resources to enforce their intellectual property rights than SVH does.

 

It is SVH’s policy to enter into confidentiality and invention assignment agreements with its employees and contractors that have developed material intellectual property for SVH, but these agreements may not be self-executing and may not otherwise adequately protect SVH’s intellectual property, particularly with respect to conflicts of ownership relating to work product generated by the employees and contractors. SVH, the operating entity in India, has entered into such confidentiality and invention assignment agreements with its employees, which are reflected in each employment contract, and will continue to enter into such agreements for all future employees, particularly those involved in the design and engineering process. Furthermore, SVH cannot be certain that these agreements will not be breached and that third parties will not gain access to its trade secrets, know-how and other proprietary technology. Third parties may also independently develop the same or substantially similar proprietary technology. Monitoring unauthorized use of SVH’s intellectual property is difficult and costly, as are the steps SVH has taken or will take to prevent misappropriation.

 

Accordingly, despite its efforts, SVH may not be able to prevent third parties from infringing, misappropriating or otherwise violating its intellectual property. Any of the foregoing could adversely affect SVH’s business, prospects, financial condition and results of operations.

 

SVH may be sued by third parties for alleged infringement, misappropriation or other violation of their intellectual property, which could be time-consuming and costly and result in significant legal liability.

 

There is considerable patent and other intellectual property development activity in SVH’s industry. Companies, organizations and individuals, including SVH’s competitors, may hold or obtain patents, trademarks or other intellectual property that would prevent, limit or interfere with SVH’s ability to make, use, develop, sell, lease, market or otherwise exploit its vehicles, components or other technology, which could make it more difficult for SVH to operate its business. SVH’s success depends in part on not infringing, misappropriating or otherwise violating the intellectual property of third parties. From time to time, SVH may receive communications from third parties, including its competitors, alleging that it is infringing, misappropriating or otherwise violating their intellectual property or otherwise asserting their rights and urging it to take licenses, and SVH may be found to be infringing, misappropriating or otherwise violating such rights, particularly in jurisdictions it would like to serve in the future. Further, depending on the advancement of patent and other intellectual property development in those jurisdictions, SVH may have potential conflicts in patents or other intellectual property with existing players in those markets and may not be able to successfully enter those jurisdictions due to existing competitors offering similar products or even similar branding. SVH may not be able to adequately mitigate the risk of potential suits or other legal demands by its competitors or other third parties. Accordingly, SVH may consider entering into licensing agreements with respect to such rights, however, such licenses may not be obtained on acceptable terms or at all, and there could be litigations associated with such licenses. SVH may be unaware of the intellectual property and other proprietary rights of third parties that may cover some or all of its products or technologies. Any claims or litigation could cause SVH to incur significant expenses and, if successfully asserted against it, could have adverse effects on SVH’s business, prospects, financial condition and results of operations.

 

Furthermore, SVH may be subject to claims that it or its employees have inadvertently or otherwise used or disclosed trade secrets or other proprietary information of these employees’ former employers. Litigation may be necessary to defend against these claims. If SVH fails in defending such claims, in addition to paying monetary damages, SVH may lose valuable intellectual property or personnel. Any of the foregoing could materially adversely affect SVH’s business, prospects, results of operations and financial condition.

 

 

SVH may need to defend its indemnitees against intellectual property litigations, which could adversely affect its financial conditions and results of operations.

 

If any of SVH’s indemnitees are alleged to have infringed, misappropriated or otherwise violated any third-party intellectual property, SVH would in general be required to defend or settle the litigation on their behalf. In addition, if SVH is unable to obtain licenses or modify its products or technologies to make them non-infringing, SVH may be required to pay substantial settlement amounts or royalties on future product sales to resolve claims or litigation. Even if SVH were to prevail in the actual or potential claims or litigation against it, any claim or litigation regarding its intellectual property could be costly and time-consuming. Such disputes, with or without merit, could also cause potential customers to refrain from purchasing SVH’s products or otherwise cause SVH reputational harm and negative publicity.

 

Some of SVH’s products contain open-source software, which may pose particular risks to its proprietary software, products and services in a manner that could harm its business.

 

SVH uses open-source software in its products and anticipates using open-source software in the future. Some open-source software licenses require those who distribute open-source software as part of their own software product to publicly disclose all or part of the source code to such software product or to make available any derivative works of the open-source code on unfavorable terms or at no cost, and SVH may be subject to such terms. The terms of many open-source licenses to which SVH is subject have not been interpreted by U.S. or foreign courts, and there is a risk that open-source software licenses could be construed in a manner that imposes unanticipated conditions or restrictions on SVH’s ability to provide or distribute its products or services. Although SVH monitors and controls its use of open-source software and tries to ensure that none is used in a manner that would require it to disclose its proprietary source code or that would otherwise breach the terms of an open-source agreement, we cannot ensure our processes for controlling use of open-source software will be effective.

 

Additionally, SVH could face claims from third parties claiming ownership of, or demanding release of, the open-source software or derivative works that it developed using such software, which could include its proprietary source code, or otherwise seeking to enforce the terms of the applicable open-source license. These claims could result in litigation and could require SVH to make its software source code freely available, purchase a costly license or cease offering the implicated products or services unless and until it can re-engineer them to avoid infringement, which may be a costly and time-consuming process, and SVH may not be able to complete the re-engineering process successfully.

 

Many of the risks associated with the use of open-source software, such as the lack of warranties or assurances of title or performance, cannot be eliminated, and could, if not properly addressed, negatively affect SVH’s business. Any of these risks could be difficult to eliminate or manage and, if not addressed, could have a material adverse effect on SVH’s business, financial condition and results of operations.

 

Risks Related to Financing and Strategic Transactions

 

SVH will require additional capital to support its growth, and this capital might not be available on commercially reasonable terms, or at all.

 

SVH anticipates that it will need to raise additional funds through equity or debt financings. SVH’s business is capital-intensive, and SVH expects that the costs and expenses associated with its planned operations will increase in the near term. SVH does not expect to achieve positive cash flow from operations before 2025, if at all. Further, redemptions by MOBV stockholders upon the closing of the Business Combination resulted in less capital being available to SVH than initially anticipated, and SVH may be required to raise additional capital earlier than it expects. SVH’s plan to scale-up the commercial production of its vehicles and grow its business is dependent upon the timely availability of funds and further investment in design, engineering, component procurement, testing, and the build-out of manufacturing capabilities. In addition, the fact that SVH has a limited operating history means that it has limited historical data on the demand for its vehicles. As a result, SVH’s future capital requirements are uncertain, and actual capital requirements may be greater than what it currently anticipates.

 

If SVH raises additional funds through further issuances of equity or convertible debt securities, its shareholders could suffer dilution, and any new equity securities SVH issues could have rights, preferences and privileges senior to those of holders of SVH Shares. Any debt financing in the future could involve additional restrictive covenants relating to SVH’s capital raising activities and other financial and operational matters, which may make it more difficult for SVH to obtain additional capital and to pursue business opportunities, including potential acquisitions.

 

 

SVH may not be able to obtain additional financing on terms favorable to it, if at all. SVH’s ability to obtain such financing could be adversely affected by a number of factors, including general conditions in the global economy and in the global financial markets, changes in regulatory framework or taxation policies, or investor acceptance of its business model. These factors may make the timing, amount, terms and conditions of such financing unattractive or unavailable to SVH. If SVH is unable to obtain adequate financing or financing on terms satisfactory to it, when required, SVH will have to significantly reduce its spending, delay or cancel its planned activities or substantially change its corporate structure, and it might not have sufficient resources to conduct or support its business as projected, which would have a material adverse effect on its results of operations, prospects and financial condition.

 

SVH may not be able to identify adequate strategic relationship opportunities or form strategic relationships, in the future.

 

SVH expects that strategic business relationships will be an important factor in the growth and success of its business. However, there are no assurances that SVH will be able to identify or secure suitable business relationship opportunities in the future or that its competitors will not capitalize on such opportunities before it does. SVH may not be able to offer similar benefits to other companies with which it would like to establish and maintain strategic relationships, which could impair its ability to establish such relationships. For example, SVH has contracted with a limited number of suppliers to provide battery technology for its products and for wider distribution. If one of those contracts is terminated or a supplier otherwise fails to deliver, SVH’s ability to provide a satisfactory customer experience will be harmed, and SVH will be required to identify alternate suppliers. SVH’s current and future alliances could subject it to a number of risks, including risks associated with sharing proprietary information, non-performance by the third party and increased expenses in establishing new strategic alliances, any of which may materially and adversely affect its business. SVH may have limited ability to monitor or control the actions of these third parties and, to the extent any of these strategic third parties suffer negative publicity or harm to their reputation, SVH may also suffer negative publicity or harm to its reputation by virtue of its association with any such third party.

 

Moreover, identifying and executing on such opportunities could demand substantial management time and resources, and negotiating and financing relationships involves significant costs and uncertainties. If SVH is unable to successfully source and execute on strategic relationship opportunities in the future, its overall growth could be impaired, and its business, prospects and results of operations could be materially adversely affected.

 

SVH may acquire other businesses, which could require significant management attention, disrupt its business, dilute shareholder value, and adversely affect its results of operations.

 

As part of its business strategy, SVH may make investments in complementary companies, solutions or technologies. SVH may not be able to find suitable acquisition candidates, and it may not be able to complete such acquisitions on favorable terms, if at all. In addition to possible shareholder approval, SVH may need approvals and licenses from relevant government authorities for the acquisitions and to comply with any applicable laws and regulations, which could result in increased delay and costs, and may disrupt its business strategy if it fails to do so. If SVH does complete acquisitions, it may not ultimately strengthen its competitive position or achieve its goals. In addition, if SVH is unsuccessful at integrating such acquisitions or developing the acquired technologies, the revenue and results of operations of the combined company could be adversely affected. Further, the integration of acquired businesses or assets typically requires significant time and resources, which could result in a diversion of resources from SVH’s existing business, which could have an adverse effect on its operations, and SVH may not be able to manage the process successfully. SVH may not successfully evaluate or utilize the acquired technology or personnel or accurately forecast the financial impact of an acquisition transaction, including accounting charges. SVH may have to pay cash, incur debt or issue equity securities to pay for any such acquisition, each of which could adversely affect its financial condition or the value of its ordinary shares. The sale of equity or issuance of debt to finance any such acquisitions could result in dilution to SVH’s shareholders. The incurrence of indebtedness would result in increased fixed obligations and exposure to potential unknown liabilities of the acquired business and could also include covenants or other restrictions that would impede SVH’s ability to manage its operations.

 

 

SVH’s financial results may vary significantly from period to period due to fluctuations in its operating costs, product demand and other factors.

 

SVH expects its period-to-period financial results to vary based on its operating costs and product demand, which it anticipates will fluctuate as it continues to design, develop and manufacture new vehicles, increase production capacity and establish or expand design, research and development, production, sales and service facilities. SVH’s revenues from period to period may fluctuate as it identifies and investigates areas of demand, adjusts volumes and adds new product derivatives based on market demand and margin opportunities, develops and introduces new vehicles or introduces existing vehicles to new markets for the first time, finetunes its inventory holding, both for raw materials as well as finished products. In addition, automotive manufacturers typically experience significant seasonality, with comparatively low sales in the first quarter and comparatively high sales in the fourth quarter, or higher demands during festive and summer seasons and lower demands during winter seasons in India, and SVH expects to continue experiencing similar seasonality when it begins scaling up commercial production of the Prana-Grand and future vehicles. SVH’s period-to-period results of operations may also fluctuate because of other factors including labor availability and costs for hourly and management personnel; profitability of its vehicles, especially in new markets; changes in interest rates; impairment of long-lived assets; macroeconomic conditions, both nationally and locally; negative publicity relating to its vehicles; changes in consumer preferences and competitive conditions; or investment in expansion to new markets. As a result of these factors, SVH believes that period-to-period comparisons of its financial results, especially in the short term, may have limited utility as an indicator of future performance. Significant variation in SVH’s performance could significantly and adversely affect the trading price of SVH Shares.

 

Risks Related to Tax

 

Unanticipated tax laws or any change in the application of existing tax laws to SVH or SVH’s customers may adversely impact its profitability and business.

 

SVH or SVM may in the future operate and become subject to income and other taxes in jurisdictions throughout the world. Existing tax laws, statutes, rules, regulations, or ordinances could be interpreted, changed, modified, or applied adversely to SVH or SVM (possibly with retroactive effect), which could require SVH or SVM to change its transfer pricing policies and pay additional tax amounts, fines or penalties, surcharges, and interest charges for past amounts due, the amounts and timing of which are difficult to discern. Existing tax laws, statutes, rules, regulations, or ordinances could also be interpreted, changed, modified, or applied adversely to SVM’s customers (possibly with retroactive effect) and, if SVM’s customers are required to pay additional surcharges, it could adversely affect demand for SVM’s vehicles. Furthermore, changes to tax laws on income, sales, use, import/export, indirect, or other tax laws, statutes, rules, regulations, or ordinances on multinational corporations continue to be considered by countries where SVM currently operates or plans to operate. These contemplated tax initiatives, if finalized and adopted by countries, and the other tax issues described above may materially and adversely impact SVM’s operating activities, transfer pricing policies, effective tax rate, deferred tax assets, operating income, and cash flows.

 

The IRS may not agree that SVH should be treated as a non-U.S. corporation for U.S. federal income tax purposes.

 

Although SVH is incorporated and tax resident in the Cayman Islands, the IRS may assert that it should be treated as a U.S. corporation for U.S. federal income tax purposes pursuant to Section 7874 of the Code. For U.S. federal income tax purposes, a corporation is generally considered a U.S. “domestic” corporation if it is created or organized in or under the laws of the U.S., any state thereof, or the District of Columbia. Because SVH is not so created or organized (but is instead incorporated only in the Cayman Islands), it would generally be classified as a foreign corporation (that is, a corporation other than a U.S. “domestic” corporation) under these rules. Section 7874 of the Code provides an exception under which a corporation created or organized only under foreign law may, in certain circumstances, be treated as a U.S. corporation for U.S. federal income tax purposes.

 

 

As more fully described in the section titled “Material Tax Considerations — Material U.S. Federal Income Tax Considerations — U.S. Federal Income Tax Treatment of SVH — Tax Residence of SVH for U.S. Federal Income Tax Purposes,” based on the terms of the Merger, the rules for determining share ownership under Code Section 7874 and the Treasury regulations promulgated under Code Section 7874 (the “Section 7874 Regulations”), and certain factual assumptions, SVH does not expect to be treated as a U.S. corporation for U.S. federal income tax purposes under Code Section 7874 as a result of the Merger. However, the application of Section 7874 of the Code is complex, is subject to detailed regulations (the application of which is uncertain in various respects and would be impacted by changes in such U.S. tax laws and regulations with possible retroactive effect), and is subject to certain factual uncertainties. Accordingly, there can be no assurance that the IRS will not challenge the status of SVH as a foreign corporation under Code Section 7874 or that such challenge would not be sustained by a court.

 

If the IRS were to successfully challenge under Code Section 7874 SVH’s status as a foreign corporation for U.S. federal income tax purposes, SVH and certain SVH shareholders could be subject to significant adverse tax consequences, including a higher effective corporate income tax rate on SVH and future withholding taxes on certain SVH shareholders, depending on the application of any income tax treaty that might apply to reduce such withholding taxes. In particular, holders of SVH Shares and/or SVH Warrants would be treated as holders of stock and warrants of a U.S. corporation.

 

See “Material Tax Considerations — Material U.S. Federal Income Tax Considerations — U.S. Federal Income Tax Treatment of SVH — Tax Residence of SVH for U.S. Federal Income Tax Purposes” for a more detailed discussion of the application of Code Section 7874 to SVH. Investors in SVH should consult their own advisors regarding the application of Code Section 7874 to SVH.

 

If SVH were a passive foreign investment company for United States federal income tax purposes for any taxable year, U.S. Holders that hold SVH Shares and/or SVH Warrants at any time during such taxable year could be subject to adverse United States federal income tax consequences.

 

If SVH is or becomes a “passive foreign investment company,” or a PFIC, within the meaning of Section 1297 of the Code for any taxable year during which a U.S. Holder holds SVH Shares or SVH Warrants, certain adverse U.S. federal income tax consequences may apply to such U.S. Holder. SVH does not believe that it was a PFIC for its prior taxable year and does not expect SVH to be a PFIC for U.S. federal income tax purposes for the current taxable year. However, neither SVH nor its legal counsel has made a determination with respect to SVH’s PFIC status, and the PFIC status of a company depends on the composition of the company’s income and assets and the fair market value of its assets (including goodwill) from time to time, as well as on the application of complex statutory and regulatory rules that are subject to potentially varying or changing interpretations. Accordingly, there can be no assurance that SVH will not be treated as a PFIC for any taxable year.

 

If SVH were treated as a PFIC for any taxable year, a U.S. Holder that holds SVH Shares and/or SVH Warrants at any time during such taxable year may be subject to adverse U.S. federal income tax consequences, such as taxation at the highest marginal ordinary income tax rates on capital gains and on certain actual or deemed distributions, interest charges on certain taxes treated as deferred, denial of basis step-up at death, and additional reporting requirements. See “Material Tax Considerations — Material U.S. Federal Income Tax Considerations—U.S. Holders—Passive Foreign Investment Company Rules.”

 

 

A change in SVH’s tax residency could have a negative effect on its future profitability, and may trigger taxes on dividends or exit charges.

 

The Organization for Economic Co-operation and Development proposed a number of measures relating to the tax treatment of multinationals, some of which are implemented by amending double tax treaties through the multilateral convention to implement tax treaty related measures to prevent base erosion and profit shifting, or the “MLI.” The MLI has now entered into force for a number of countries, including India.

 

SVH intends to conduct its affairs such that it will not be treated under the applicable tax authorities of jurisdictions outside of the Cayman Islands as a resident in those jurisdictions for tax purposes. However, even if SVH is managed and controlled from Cayman Islands, if SVH were to be treated under the applicable tax authorities of jurisdictions outside of the Cayman Islands as a resident in one or more jurisdictions or to have a permanent establishment in such jurisdictions, SVH could be subject to taxation in jurisdictions outside of Cayman Islands and required to comply with detailed and complex transfer pricing rules of those jurisdictions, which require that all transactions with non-resident related parties (such as transactions between SVH and one or more of its branches or offices in another jurisdiction) be priced using arm’s length pricing principles within the meaning of such rules. Potential violation of such transfer pricing rules increases the risk of SVH being subject to tax audits in those jurisdictions. Further, there being no tax treaty between India and the Cayman Islands, SVH may be subject to the provisions of the ITA, and considered to be tax resident in, or have a permanent establishment in, India, and could become liable for Indian income tax on its worldwide income.

 

In addition, in such circumstance any dividend declared by SVH to its shareholders may (subject to treaty relief) be subject to Indian income tax in the hands of the shareholders and consequent withholding of taxes by SVH. If SVH were found to be solely resident in India based on a mutual agreement between tax authorities, SVH would be similarly liable for Indian taxes and withholding taxes. Alternatively, if SVH were to be treated as having a permanent establishment in India but not be a tax resident in India, its income attributable to such permanent establishment would be taxed in India. Thereafter there would not be further tax in India on repatriation of such income to SVH.

 

It is possible that in the future, whether as a result of a “change in law” or the practice of any relevant tax authority or as a result of any change in the conduct of SVH’s business, SVH could become, or be regarded as having become, resident in a jurisdiction other than the Cayman Islands.

 

SVH may encounter difficulties in obtaining lower rates of Indian withholding income tax for dividends distributed from India.

 

Under the ITA, any dividend distribution by an Indian company to a shareholder who is not a tax resident in India is subject to withholding of tax at 20% (plus applicable surcharge and other taxes), which rate can be reduced for such non-resident shareholders who are eligible for a reduced rate under the applicable DTAA. Given that India does not have a DTAA with the Cayman Islands, and that SVH is a tax resident of the Cayman Islands, it would be subject to tax at 20% (plus applicable surcharge and other taxes) on receipt of dividends from SVH as prescribed under the ITA.

 

SVH shareholders may be subject to Indian taxes on income arising through the sale of their SVH Shares.

 

Under the ITA, income arising directly or indirectly through the sale of a capital asset, including shares of a company incorporated outside of India, will be subject to tax in India, if such shares derive, directly or indirectly, their value substantially from assets located in India, whether or not the seller of such shares has a residence, place of business, business connection, or any other presence in India. Such shares shall be deemed to derive their value substantially from assets located in India if, on the specified date, the value of such assets (i) represents at least 50% of the value of all assets owned by the company or entity, and (ii) exceeds the amount of 100 million rupees.

 

If the Indian tax authorities determine that SVH Shares derive their value substantially from assets located in India, shareholders in SVH may be subject to Indian income taxes on the income arising, directly or indirectly, through the sale by holders of SVH Shares. However, an exception is available under the ITA for shareholders who, either individually or along with their related parties, neither hold more than 5% of voting power of share capital in the company nor holds any right of management or control in the company, at any time in 12 months preceding the date of transfer. Similarly, the impact of the above indirect transfer provisions would need to be separately evaluated under the tax treaty scenario of the country of which the shareholder is a tax resident.

 

 

Additionally, under the provisions of GAAR in the ITA, the Indian tax authorities may declare an arrangement as an impermissible avoidance arrangement if such arrangement (i) is not entered at arm’s length, (ii) results in misuse or abuse of provisions of ITA, (iii) lacks commercial substance or (iv) the purpose of arrangement is obtaining a tax benefit. The tax consequences of the GAAR provisions, if applied to an arrangement or a transaction, could result in, but are not limited to, the denial of tax benefits under the ITA. Please refer to “Material Tax Considerations – Material Indian Income Tax Considerations” for more information.

 

Investors may be subject to tax at the time of conversion of warrants into shares.

 

As per the provisions of the ITA, where any person receives subject to certain exception any sum of money, immoveable property or any property other than immovable property for a consideration which is lower than the “fair market value” of such property by more than INR 50,000 (Indian Rupees Fifty Thousand), then the shortfall in consideration is taxable in the hands of the recipient as “Income from Other Sources” (“Other Income”) at the ordinary tax rate applicable to the relevant shareholder. The rules for determining the fair market value of shares and securities have been prescribed under the Indian Income-tax Rules, 1962. Accordingly, in case it is held that Other Income is earned by the relevant investors, such Other Income would generally be chargeable to tax at the rate of 30% (plus applicable surcharge and tax) in case of Indian resident investors and at the rate of 40% (plus applicable surcharge and tax) for foreign companies. Further, the cost of the acquisition of the shares acquired would be deemed to be the fair market value of the shares as determined above.

 

The above tax liability may be triggered at the time of conversion of warrants into SVH Shares by the relevant investors. Please refer to “Material Tax Considerations – Material Indian Income Tax Considerations” for more information.

 

Risks Related to India

 

Changes in India’s economic, political or social conditions or government policies could have a material and adverse effect on our business and results of operations.

 

Substantially all of our revenues are expected to be derived in India through SVM, in the near future and most of our activities, including all of our assembly, is currently conducted in India. Accordingly, our results of operations, financial condition and prospects are influenced by economic, political and legal developments in India. Any political instability in India, such as corruption, scandals and protests against certain economic reforms could slow the pace of liberalization and deregulation, and any change in the central government in the general election in 2024, could have a material adverse effect on the overall economic growth and political stability of India. Such developments, which may include currency exchange rates and other matters affecting investment in India, could adversely affect our business and operating results, leading to a reduction in demand for our services and solutions and adverse impact on our competitive position.

 

SVH may be adversely affected by the complexity, uncertainties and changes in Indian regulations concerning taxes.

 

The application of various Indian tax laws (such as the Taxation Laws (Amendment) Act, 2019), rules and regulations to our business, currently or in the future, is subject to interpretation by the applicable taxation authorities and future amendments. There is a risk that orders by courts and tribunals may affect SVH’s profitability in the future.

 

The laws, rules or regulations providing for reduced tax regimes (such as the Finance Act, 2022), incentives for manufacturing companies or those concerning foreign investment and stamp duty laws are subject to unfavorable changes or interpretations. Such amendments have the risk of SVH being deemed to be in contravention of such laws and may subject SVH to additional approval requirements. Additionally, with the introduction of General Anti-Avoidance Rules (“GAAR”) in April 2017, there is a risk that SVH may become subject to these rules in the future and may be denied certain tax benefits, among other consequences. Considering that such rules were recently introduced and taking into account the lack of precedents, the application of these rules is uncertain. If such rules were to apply to SVH in the future, they may have an adverse tax impact on SVH.

 

 

The rules and regulations regarding the new goods and services tax (“GST”) regime also continue to evolve. Any amendments may impact the rates and include new goods and services within the regime. While not all of such changes would be applicable to SVH, some of the changes (especially those relating to GST rate) and the related uncertainties with respect to the implementation of such rules and regulations may have an adverse effect on SVH’s business, results of operations, cash flows and financial condition.

 

SVH may be adversely affected by the complexity, uncertainties and changes in Indian regulations concerning labor and employment.

 

The government of India has recently passed new laws relating to social security, occupational safety, industrial relations and wages. These include the Code on Social Security, 2020, the Occupational Safety, Health and Working Conditions Code, 2020, the Industrial Relations Code, 2020 and the Code on Wages, 2019 and they are as recent as April 2021. While the rules for implementation under these codes have not been finalized, as an immediate consequence, the coming into force of these codes could increase the financial burden on SVH which may adversely impact our profitability.

 

The Supreme Court of India has, in a decision, clarified the components of basic wages which need to be considered by companies while making provident fund payments. Given its small scale as of now, SVH has not made relevant provisions providing for such components now. Any such decisions in future or any further changes in interpretation of laws may have an impact on our results of operations. SVH may incur increased costs and other burdens relating to compliance with such new requirements. This will require significant management time and other resources. Any failure to comply may adversely affect our business, results of operations and prospects.

 

SVH may be adversely affected by the complexity, uncertainties and changes in Indian regulations concerning import and export of goods.

 

As part of its initiative to promote domestic manufacturing enterprises, the Indian government has been offering reduced import duty on certain goods, including the semi-and-completely knocked down electric vehicles and raw material components (such as lithium-ion battery). SVH cannot assure you that the Ministry of Finance, Government of India, will continue to support reduced tax rates or that it will not increase tax rates in the future. Any unfavorable changes to the rules and regulations concerning imports and exports are likely to increase pricing and lower demand for SVH’s products. This could, in turn, adversely impact the business operations, cash flow and financial performance of SVH.

 

The unavailability, reduction or elimination of government and economic incentives or government policies which are favorable for electric vehicles and domestically produced vehicles could have a material adverse effect on our business, financial condition, operating results and prospects.

 

SVH’s growth in India depends significantly on the availability and amounts of economic incentives and government policies that support the growth of new energy vehicles generally and electric vehicles specifically. SVH cannot assure you that any changes to such policies would be favorable to its business. Further, (i) any reduction, elimination or discriminatory application of government subsidies and economic incentives because of policy changes, (ii) the reduced need for such subsidies and incentives due to the perceived success of electric vehicles, (iii) fiscal tightening, or other factors may lead to diminished competitiveness of the alternative fuel vehicle industry generally or in relation to our electric vehicles. This could materially and adversely impact SVH’s operations, business, prospects, results of operations and financial condition. Further, the various incentives offered by the Indian government could also attract large Indian and global players, particularly those with expertise in the EV market, to set up large manufacturing capabilities in India. This may impact (i) SVH’s home advantage in pricing, (ii) its access to local talent and competitive labor force, (iii) its familiarity with legal and regulatory setup, (iv) language advantage, and (v) distribution, among other considerations. Such results could adversely impact our prospects and financial condition significantly.

 

 

Indian EV market is still in a nascent stage and faces infrastructure and other challenges.

 

SVH operates in the automotive industry, which is unregulated, with the Indian government permitting 100% foreign direct investment FDI through the automatic route. Further, the electric vehicle segment has been provided with several incentives and reduced taxation policies. Regardless of the country’s ambitious targets, India’s EV space is at a nascent stage and the government’s policies are still evolving. In addition, there is significant ground to cover. The key challenges that SVH faces in India include (i) lack of or inadequate infrastructure for charging stations, (ii) lack of affordability by a vast population and increased cost of ownership due to the need to replace battery, and (iii) general lack of awareness of engineering technology, servicing protocols, spare part availability and replacement by industry resources which may hinder mass adoption and purchase of EVs. These factors pose a threat to SVH’s business operations and financial performance.

 

Risks Related to Being a Public Company

 

SVH’s management team has limited experience managing a public company.

 

Most members of SVH’s management team have limited experience managing a publicly traded company, interacting with public company investors and complying with the increasingly complex laws pertaining to public companies. SVH’s management team may not successfully or efficiently manage SVH’s transition to a public company subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors. These new obligations and constituents will require significant attention from SVH’s senior management and could divert their attention away from the day-to-day management of SVH’s business, which could adversely affect its business, results of operations, cash flows and financial condition. In addition, SVH expects to hire additional personnel to support its operations as a public company, which will increase its operating costs in future periods.

 

SVH is incurring higher costs as a result of being a public company.

 

SVH is incurring additional legal, accounting, insurance and other expenses, including costs associated with public company reporting requirements following completion of the Business Combination. SVH will incur higher costs associated with complying with the requirements of the Sarbanes-Oxley Act, the Dodd-Frank Act, and related rules implemented by the SEC and the Nasdaq, as well as similar legislation in applicable jurisdictions. The expenses incurred by public companies generally for reporting and corporate governance purposes have been increasing. SVH expects these laws and regulations to continue to increase its legal and financial compliance costs and to render some activities more time-consuming and costly, although SVH is currently unable to estimate these costs with any degree of certainty. SVH may need to hire more employees or engage outside consultants to comply with these requirements, which will increase its costs and expenses. These laws and regulations could make it more difficult or costly for SVH to obtain certain types of insurance, including director and officer liability insurance, and SVH may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. These laws and regulations could also make it more difficult for SVH to attract and retain qualified persons to serve on the SVH Board, board committees or as executive officers. Furthermore, if SVH’s securities are listed on the Nasdaq and SVH is unable to satisfy its obligations as a public company, it could be subject to delisting of SVH’s securities, fines, sanctions and other regulatory action and potentially civil litigation.

 

We may be delisted from Nasdaq if we do not satisfy continued listing requirements.

 

On July 24, 2024 and July 30, 2024, we received Staff Delisting Determination letters (the “Determinations”) from Nasdaq setting forth a determination to delist our Ordinary Shares from Nasdaq as a result of our failure to regain compliance with each of their rules with respect to (i) minimum Bid Price of $1.00, (ii) minimum Market Value of Publicly Held Shares of $15,000,000, and (iii) a minimum Market Value of Listed Securities of $50,000,000. On July 30, 2024, we submitted a request for a hearing before a Hearings Panel (the “Panel”) to appeal the Determinations. The hearing request was accepted by Nasdaq and the hearing is scheduled for September 5, 2024. The hearing request will stay the delisting of our Ordinary Shares and warrants until a determination is made by the Panel. The Ordinary Shares will continue to trade on Nasdaq pending the outcome of the hearing before the Panel. We will address the ongoing non-compliance matters before the Panel and will request additional time to cure the deficiency. There can be no assurance that, following the hearing, the Panel will grant our request for additional time to regain compliance. If the Panel does not grant our request for additional time to comply, our Ordinary Shares will be subject to delisting from Nasdaq.

 

 

If our Ordinary Shares are no longer listed on Nasdaq, we may be eligible for trading on an over-the-counter market in the United States. In the event that we are not able to obtain a listing on another United States stock exchange or quotation service for our Ordinary Shares, it may be extremely difficult or impossible for shareholders to sell their Ordinary Shares in the United States. Moreover, if we are delisted from Nasdaq, but obtain a listing on an over-the-counter market, such market will likely have less liquidity than Nasdaq. In such case, shareholders may not be able to sell their Ordinary Shares on any such over-the-counter market in the quantities, at the times, or at the prices that could potentially be available on a more liquid trading market such as Nasdaq. As a result of these factors, if our Ordinary Shares are delisted from Nasdaq, the price of our Ordinary Shares is likely to decline and could also impair our ability to raise additional capital.

 

As a “foreign private issuer” under the rules and regulations of the SEC, SVH is permitted to, and may, file less or different information with the SEC than a company incorporated in the United States or otherwise not filing as a “foreign private issuer,” and will follow certain home country corporate governance practices in lieu of certain Nasdaq requirements applicable to U.S. issuers.

 

SVH is considered a “foreign private issuer” under the Exchange Act and is therefore exempt from certain rules under the Exchange Act, including the proxy rules, which impose certain disclosure and procedural requirements for proxy solicitations for U.S. and other issuers. Moreover, SVH is not required to file periodic reports and financial statements with the SEC as frequently or within the same time frames as U.S. companies with securities registered under the Exchange Act. SVH currently prepares its financial statements in accordance with U.S. GAAP. SVH is not required to comply with Regulation FD, which imposes restrictions on the selective disclosure of material information to shareholders. In addition, SVH’s officers, directors and principal shareholders are exempt from the reporting and short-swing profit recovery provisions of Section 16 of the Exchange Act and the rules under the Exchange Act with respect to their purchases and sales of SVH’s securities.

 

In addition, as a “foreign private issuer” whose shares are intended to be listed on the Nasdaq, SVH is permitted to follow certain home country corporate governance practices in lieu of certain Nasdaq requirements. However, SVH cannot make any assurances that it will continue to follow such corporate governance requirements in the future, and may therefore in the future, rely on available Nasdaq exemptions that would allow SVH to follow its home country practice. If SVH loses its status as a foreign private issuer in the future, it will no longer be exempt from the rules described above and, among other things, will be required to file periodic reports and annual and quarterly financial statements as if it were a company incorporated in the United States. If this were to happen, SVH would likely incur substantial costs in fulfilling these additional regulatory requirements and members of SVH’s management would likely have to divert time and resources from other responsibilities to ensure these additional regulatory requirements are fulfilled.

 

If SVH fails to maintain an effective system of internal control over financial reporting, SVH may not be able to accurately report its financial results or prevent fraud. As a result, shareholders could lose confidence in SVH’s financial and other public reporting, which is likely to negatively affect SVH’s business and the market price of SVH Shares.

 

Effective internal control over financial reporting is necessary for SVH to provide reliable financial reports and prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in SVH’s implementation could cause SVH to fail to meet its reporting obligations. In addition, any testing conducted by SVH, or any testing conducted by SVH’s independent registered public accounting firm, may reveal deficiencies in SVH’s internal control over financial reporting that are deemed to be material weaknesses or that may require prospective or retroactive changes to SVH’s financial statements or identify other areas for further attention or improvement. Inferior internal controls could also cause investors to lose confidence in SVH’s reported financial information, which is likely to negatively affect SVH’s business and the market price of SVH Shares.

 

 

The ordinary shares being offered in this prospectus represent a substantial percentage of our outstanding ordinary shares, and the sales of such shares, or the perception that these sales could occur, could cause the market price of our ordinary shares to decline significantly.

  

The 75,000,000 ordinary shares underlying the Units being offered pursuant to this prospectus exceeds the number of ordinary shares constituting our public float and represents approximately 17% of our ordinary shares outstanding as of October 15, 2024, and 11.2% of our outstanding ordinary shares assuming the issuance of all 150,000,000 ordinary shares issuable upon full exercise of the warrants underlying the Units. The sale of such Units, or the perception that these sales could occur, could depress the market price of our ordinary shares and warrants. A reduction in the market price of our ordinary shares and warrants could materially and adversely affect our ability to raise capital, which in turn could adversely affect our ability to make necessary investments and, therefore, could affect our results of operations.

 

Risks Related to this Offering and Ownership of our Securities

 

Investors in this offering will experience immediate and substantial dilution in the book value of their investment.

 

The public offering price will be substantially higher than the net tangible book value per share of our outstanding ordinary shares. As a result, investors in this offering will incur immediate dilution of $0.067 per share based on the assumed public offering price of $0.08 per Unit. Investors in this offering will pay a price per Unit that substantially exceeds the book value of our assets after subtracting our liabilities. See “Dilution” for a more complete description of how the value of your investment will be diluted upon the completion of this offering.

 

Our management will have broad discretion over the use of the proceeds we receive in this offering and might not apply the proceeds in ways that increase the value of your investment.

 

Our management will have broad discretion over the use of our net proceeds from this offering, and you will be relying on the judgment of our management regarding the application of these proceeds. Our management might not apply our net proceeds in ways that ultimately increase the value of your investment. We expect to use the net proceeds from this offering for general corporate purposes and the specific purposes set forth under “Use of Proceeds”. Our management might not be able to yield a significant return, if any, on any investment of these net proceeds. You will not have the opportunity to influence our decisions on how to use our net proceeds from this offering.

 

We may seek to raise additional funds, finance acquisitions or develop strategic relationships by issuing securities that would dilute your ownership. Depending on the terms available to us, if these activities result in significant dilution, it may negatively impact the trading price of our ordinary shares.

 

Any additional financing that we secure may require the granting of rights, preferences or privileges senior to, or pari passu with, those of our ordinary shares. Any issuances by us of equity securities may be at or below the prevailing market price of our ordinary shares and in any event may have a dilutive impact on your ownership interest, which could cause the market price of our ordinary shares to decline. We may also raise additional funds through the incurrence of debt or the issuance or sale of other securities or instruments senior to our ordinary shares, which may be highly dilutive. The holders of any securities or instruments we may issue may have rights superior to the rights of our shareholders. If we experience dilution from the issuance of additional securities and we grant superior rights to new securities over holders of our ordinary shares, it may negatively impact the trading price of our ordinary shares and you may lose all or part of your investment.

 

The warrants are subject to shareholder approval and speculative in nature and there is not expected to be an active trading market for the warrants.

 

The warrants offered in this offering do not confer any rights of ordinary share ownership on their holders, such as voting rights or the right to receive dividends, but rather merely represent the right to acquire ordinary shares at a fixed price for a limited period of time. Specifically, commencing on the date of shareholder approval of the warrants, holders of the warrants may exercise their right to acquire the ordinary shares and pay an exercise price of $0.12 per share (150% of the public offering price of a Unit), prior to five years from the date of shareholder approval, after which date any unexercised warrants will expire and have no further value. Without an active trading market, the liquidity of the warrants will be limited.

 

Holders of the warrants will have no rights as shareholder until they acquire our ordinary shares.

 

Until holders of the warrants acquire ordinary shares upon exercise of the warrants, the holders will have no rights with respect to ordinary shares issuable upon exercise of the warrants. Upon exercise of the warrants, the holder will be entitled to exercise the rights of a shareholder as to the security exercised only as to matters for which the record date occurs after the exercise.

 

Provisions of the warrants could discourage an acquisition of us by a third party.

 

Certain provisions of the warrants could make it more difficult or expensive for a third party to acquire us. The warrants prohibit us from engaging in certain transactions constituting “fundamental transactions” unless, among other things, the surviving entity assumes our obligations under the warrants. These and other provisions of the warrants offered by this prospectus could prevent or deter a third party from acquiring us even where the acquisition could be beneficial to you.

 

A possible “short squeeze” due to a sudden increase in demand of our ordinary shares that largely exceeds supply may lead to price volatility in our ordinary shares.

 

Following this offering, investors may purchase our ordinary shares to hedge existing exposure in our ordinary shares or to speculate on the price of our ordinary shares. Speculation on the price of our ordinary shares may involve long and short exposures. To the extent aggregate short exposure exceeds the number of our ordinary shares available for purchase in the open market, investors with short exposure may have to pay a premium to repurchase our ordinary shares for delivery to lenders of our ordinary shares. Those repurchases may in turn, dramatically increase the price of our ordinary shares until investors with short exposure are able to purchase additional shares to cover their short position. This is often referred to as a “short squeeze.” A short squeeze could lead to volatile price movements in our ordinary shares that are not directly correlated to the performance or prospects of our company and once investors purchase the ordinary shares necessary to cover their short position the price of our ordinary shares may decline.

 

 

An active, liquid and orderly trading market for our ordinary shares may not develop, the price of our shares may be volatile, and you could lose all or part of your investment.

 

Even though our ordinary shares are currently listed on Nasdaq, we cannot predict the extent to which investor interest in our company will lead to the development of an active trading market in our securities or how liquid that market might become. If such a market does not develop or is not sustained, it may be difficult for you to sell your ordinary shares at the time you wish to sell them, at a price that is attractive to you, or at all. There could be extreme fluctuations in the price of our ordinary shares if there are a limited number of shares in our public float.

 

The trading price of our ordinary shares may be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are beyond our control. Our stock price could be subject to wide fluctuations in response to a variety of factors, which include:

 

	●	whether we achieve our anticipated corporate objectives;
	●	actual or anticipated fluctuations in our quarterly or annual operating results;
	●	changes in our financial or operational estimates;
	●	our ability to implement our operational plans;
	●	changes in the economic performance or market valuations of companies similar to ours; and
	●	general economic or political conditions in the India or elsewhere.

 

In addition, broad market and industry factors may seriously affect the market price of companies’ stock, including ours, regardless of actual operating performance. These fluctuations may be even more pronounced in the trading market for our shares shortly following this offering. In addition, in the past, following periods of volatility in the overall market and the market price of a particular company’s securities, securities class action litigation has often been instituted against these companies. This litigation, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources.

 

If our ordinary shares become subject to the penny stock rules, it would become more difficult to trade our shares.

 

The SEC has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks. Penny stocks are generally equity securities with a price of less than $5.00, other than securities registered on certain national securities exchanges or authorized for quotation on certain automated quotation systems, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system. If we do not retain a listing on Nasdaq and if the price of our ordinary shares is less than $5.00, our ordinary shares will be deemed a penny stock. The penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from those rules, to deliver a standardized risk disclosure document containing specified information. In addition, the penny stock rules require that before effecting any transaction in a penny stock not otherwise exempt from those rules, a broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive (i) the purchaser’s written acknowledgment of the receipt of a risk disclosure statement; (ii) a written agreement to transactions involving penny stocks; and (iii) a signed and dated copy of a written suitability statement. These disclosure requirements may have the effect of reducing the trading activity in the secondary market for our ordinary shares, and therefore shareholders may have difficulty selling their shares.

 

If SVH Shares or the SVH Warrants become ineligible for deposit and clearing within the facilities of DTC, then transactions in the SVH Shares or the SVH Warrants may be disrupted.

 

The facilities of the Depository Trust Company, or “DTC,” are a widely used mechanism that allow for rapid electronic transfers of securities between the participants in the DTC system, which include many large banks and brokerage firms. The SVH Shares and the SVH Warrants are currently eligible for deposit and clearing within the DTC system.

 

DTC generally has discretion to cease to act as a depository and clearing agency for the SVH Shares or the SVH Warrants.

 

If DTC determines at any time that the SVH Shares or the SVH Warrants are not eligible for continued deposit and clearance within its facilities, then SVH believes the SVH Shares and the SVH Warrants would not be eligible for continued listing on a U.S. securities exchange and trading in the shares would be disrupted. While SVH would pursue alternative arrangements to preserve its listing and maintain trading, any such disruption could have a material adverse effect on the market price of its SVH Shares or the SVH Warrants.

 

If we were to dissolve, the holders of our securities may lose all or substantial amounts of their investments.

 

If we were to dissolve as a corporation, as part of ceasing to do business or otherwise, we will be required to pay all amounts owed to any creditors before distributing any assets to our shareholders. There is a risk that in the event of such a dissolution, there will be insufficient funds to repay amounts owed to holders of any of our indebtedness and insufficient assets to distribute to our shareholders, in which case investors could lose their entire investment.

 

If securities or industry analysts do not publish or cease publishing research or reports about us, our business or our market, or if they change their recommendations regarding our securities adversely, our share price and trading volume could decline.

 

The trading market for our ordinary shares is influenced by the research and reports that industry or securities analysts may publish about us, our business, our market or our competitors. If any of the analysts who may cover us change their recommendation regarding our ordinary shares adversely, or provide more favorable relative recommendations about our competitors, our share price would likely decline. If any analyst who may cover us were to cease coverage of our company or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause our share price or trading volume to decline.

 

In making your investment decision, you should understand that we and the underwriters have not authorized any other party to provide you with information concerning us or this offering.

 

You should carefully evaluate all of the information in this prospectus before investing in our company. We may receive media coverage regarding our company, including coverage that is not directly attributable to statements made by our officers, that incorrectly reports on statements made by our officers or employees, or that is misleading as a result of omitting information provided by us, our officers or employees. We and the underwriters have not authorized any other party to provide you with information concerning us or this offering, and you should not rely on unauthorized information in making an investment decision.

 

 

USE OF PROCEEDS

 

We estimate that the net proceeds from this offering will be approximately $[  ] million, after deducting the estimated underwriting discounts and estimated offering expenses payable by us, based on an assumed public offering price of $0.08 per Unit (the last reported sale price of our ordinary shares on October 8, 2024). If the over-allotment option is exercised in full, we estimate that our net proceeds will be approximately $, after deducting the underwriting discount and estimated offering expenses payable by us. We intend to use the net proceeds from this offering for general business purposes and for the specific purposes set forth below:

 

● Manufacturing Expansion: The Company plans to scale up its manufacturing capabilities. We have developed a capital-efficient business model that includes highly scalable, low-cost manufacturing and assembly processes to support high product margins., we have completed the assembly line and automated test line. We will further expand the manufacturing with battery pack assembly line, motor manufacturing line, chassis part assembly line with tooling. We plan to allocate $[  ] million for manufacturing expansion.

 

● Market Expansion: The company intends to capture a significant share of the Indian electric vehicle (EV) markets and then expand Globally. The Indian market alone is projected to grow faster in the EV mobility, and Srivaru aims to leverage this growth by enhancing its distribution networks and sales operations. Part of the funds will be allocated to accelerated commercialization efforts, including marketing and customer acquisition strategies to boost sales and brand recognition in both domestic and international markets. We plan to allocate $[  ] million for market expansion.

 

● R&D Product Development: Investment in R&D will continue to be a priority. Srivaru is focused on developing state-of-the-art technologies for their electric motorcycles, including advanced safety features and improved performance specifications. Srivaru also has plan to develop additional product lines. We plan to allocate $[  ] million for R&D.

 

● Operational Efficiency: The proceeds will also be used to streamline operations, ensuring that the company maintains its competitive edge through operational efficiencies and cost management strategies. We plan to allocate $[  ] million for operational efficiency.

 

● Inventory/Raw Material provisioning: The Company sources material, battery, parts from various OEM part suppliers for making the finished product of Prana - Grand and Prana – Elite. We plan to allocate $[  ] million for inventory and raw material purchasing.

 

A $0.05 increase (decrease) in the assumed public offering price of $0.08 per Unit, would increase (decrease) the net proceeds to us from this offering by approximately $[ ], assuming the number of shares offered by us, as set forth on the cover page of this prospectus, remains the same and after deducting the estimated underwriting discounts and commissions.

 

The actual allocation of proceeds realized from this offering will depend upon our operating revenue, cash position, our working capital requirements. Therefore, as of the date of this prospectus, we cannot specify with certainty all of the particular uses for the net proceeds to be received upon the completion of this offering. Accordingly, we will have discretion in the application of the net proceeds, and investors will be relying on our judgment regarding the application of the proceeds of this offering. Pending our use of the net proceeds from this offering, we intend to invest the net proceeds in a variety of capital preservation investments, including short-term, investment-grade, interest-bearing instruments and U.S. government securities.

 

DIVIDEND POLICY

 

We have never declared or paid any cash dividends. Our Board will consider whether or not to institute a dividend policy. Any future declaration and payment of cash dividends or other distributions of capital will be at the discretion of our board of directors and will depend on our financial condition, earnings, cash needs, capital requirements (including requirements of our subsidiaries), contractual, legal, tax and regulatory restrictions, and any other factors that our board of directors deem relevant in making such a determination. We currently intend to retain all available funds and future earnings, if any, to fund the development and growth of the business, and therefore, do not anticipate declaring or paying any cash dividends on our Ordinary Shares in the foreseeable future. We have not identified a paying agent.

 

 

CAPITALIZATION AND INDEBTEDNESS

 

The following table sets forth our capitalization as of March 31, 2024, as follows:

 

	●	on an actual basis; and
	●	on an as adjusted basis to reflect the issuance and sale by us of 75,000,000 of Units in this offering at the assumed public offering price of $0.08 per Unit, after deducting underwriting discounts and commissions and estimated offering expenses payable by us and the receipt by us of the proceeds of such sale.

 

The information below is illustrative only. Our capitalization following the closing of this offering will change based on the actual public offering price and other terms of this offering determined at pricing. The information in this table should be read in conjunction with the financial statements and notes thereto and other financial information included in this prospectus and any prospectus supplement and the information under “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” SVH’s historical results do not necessarily indicate our expected results for any future periods.

 

		As of March 31, 2024
		Actual				As Adjusted4
		(US$in thousands)
Cash and cash equivalents		$	175				6,785
Equity			(108	)			6,502
Debt			78				78
Loans and borrowings (current)			78				78
Loans and borrowings (non-current)			-				0
Total debt			78				78
Shareholders’ Equity
Ordinary Shares ($0.01 par value, 100,000,000 shares authorized, 37,326,731 shares outstanding as of March 31, 2024; 1,000,000,000 shares authorized, 127,151,529 shares outstanding on an as adjusted basis)			415				13,14
Total capitalization(1)			(30	)			6,580

 

(1)	Total capitalization is equal to the sum of total equity and total debt.

 

The number of shares of our ordinary shares outstanding set forth in the table above excludes, as of March 31, 2024:

 

-

Earnout Shares – 389,749,980 shares

 

DESCRIPTION OF SVH’S MATERIAL INDEBTEDNESS

 

The following is a summary of certain material provisions of the agreements and instruments governing and evidencing SVH’s material indebtedness. Unless the context otherwise requires, all references in this section to “we,” “us,” or “our” refer to SVH.

 

On June 10, 2020, SVM entered into the HSBC Facility. The current balance as of March 31, 2024 under the HSBC Facility is approximately USD $20 thousand (debit).

 

SVH does not have any material indebtedness of its own.

 

 

DILUTION

 

If you invest in our Units in this offering, your investment will be immediately and substantially diluted to the extent of the difference between the public offering price per share of our ordinary shares that is part of the Unit and the net tangible book value per share of our ordinary shares after giving effect to the offering.

 

Our net tangible book value (deficit) as of March 31, 2024 was $(108) thousand, or approximately $(0.0029) per share. Net tangible book value per share represents our total tangible assets less total liabilities, divided by the number of shares of ordinary shares outstanding.

 

As adjusted net tangible book value dilution per share of ordinary shares to new investors represents the difference between the amount per ordinary share that is part of the Unit paid by purchasers in the offering and the net tangible book value per ordinary share immediately after completion of the offering. After giving effect to the offering and our sale of the Units in the offering at an assumed public offering price of $0.08 per Unit, and after deduction of underwriting discounts and commissions from gross proceeds raised in the offering and estimated offering expenses payable by us, our as adjusted net tangible book value as of March 31, 2024 would have been $6,502 thousand, or $0.013 per ordinary share. This represents an immediate increase in net tangible book value of $0.011 per ordinary share to existing shareholders and an immediate dilution in net tangible book value of $0.067 per ordinary share to investors of the offering, as illustrated in the following table, based on shares outstanding as of March 31, 2024.

 

The information below is illustrative only. The dilution caused by this offering will change based on the actual public offering price and other terms of this offering determined at pricing.

 

Assumed offering price per ordinary share (attributing no value to warrants)						$	0.080
Actual Net tangible book value per ordinary share before this offering(1)		$	0.002
Increase (decrease) in net tangible book value per share attributable to new investors(2)		$	0.016
Net tangible book value per share after this offering(3)						$	0.013
Immediate dilution in net tangible book value per share to new investors						$	0.067

 

(1)	Determined by dividing (i) net tangible book value (total assets less intangible assets) less total liabilities by (ii) the total number of ordinary shares issued and outstanding prior to the offering.
(2)	Represents the difference between (i) as adjusted net tangible book value per share after this offering and (ii) net tangible book value per share as of March 31, 2024.
(3)	Determined by dividing (i) as adjusted net tangible book value, which is our pro forma net tangible book value plus the cash proceeds of this offering, after deducting the estimated offering expenses payable by us, by (ii) the total number of ordinary shares to be outstanding following this offering.

 

Each $0.05 increase (decrease) in the assumed public offering price of $0.08 per ordinary shares/Unit would increase (decrease) the pro forma net tangible book value per share after this offering by $0.016 ($0.003) per share and the dilution to new investors purchasing ordinary shares/Units in this offering by $(0.0016) $0.005 per share, assuming the number of Units offered by us, as set forth on the cover page of this prospectus, remains the same, and after deducting placement agent fees and estimated offering expenses payable by us.

 

If the underwriters exercise their option in full to purchase an additional 11,250,000 ordinary shares in this offering, the net tangible book value per share after the offering would be $0.0140 per share, the increase in the net tangible book value per share to existing shareholders would be $0.017 per share and the dilution to new investors purchasing Units in this offering would be $0.0066 per share.

 

The number of ordinary shares outstanding set forth in the table above excludes, as of March 31, 2024:

 

	●	10,798,300 shares of our ordinary shares issuable upon the exercise of outstanding warrants;
	●	3,800,000 shares of ordinary shares available for issuance under our 2023 Plan ; and
	●	150,000,000 ordinary shares issuable upon the exercise of the warrants to be issued as part of Units in this offering.

 

 

BUSINESS

 

Overview

 

SVH’s mission is to revolutionize two-wheeled vehicles (“TWV”) by developing premium products powered by renewable energy, which are best-in-class for safety, performance, and comfort, thereby providing the best riding experience to our customers.

 

SVM was founded in 2018 and is currently focusing on India, the largest market for TWV where the population growing; it is younger than the global median; urbanizing rapidly; and, personal incomes and consumption are growing. India’s infrastructure has lagged its growth leading to traffic congestion, bad road conditions, and environmental pollution, which have compelled the government to develop policies favorable to TWV, especially E2W. Consequently, demand for Electric Two-Wheeled (“E2W”) vehicles has grown, leading SVH to develop the next generation of E2W vehicles, named “Prana™”, which means “life energy”. Prana™ is designed to offer consumers a “Fast, Fun and Safe” vehicle that is safe and comfortable to ride, and contributes to improved health and a cleaner environment.

 

By combining SVH’s E2W vehicle skills with its proprietary know-how and intellectual property, SVH (i) designs, engineers, and builds premium E2W vehicles, (ii) offers a unique customer experience, and (iii) has a robust product development roadmap of e-mobility products and technologies. SVH has enlisted the support of purchase financing providers to allow customers to lease their vehicles and benefit from SVH’s compelling TCO.

 

SVH’s first product line, the Prana™, is a premium E2W vehicle that is redefining the category. This achievement is enabled by its patent-pending technology, which also results in increased safety, stability, and comfort. Prana-Grand™ is the first variant of the Prana line of products. SVH started delivering the Prana-Grand to customers in February 2021.

 

The Prana’s many innovations, include its superior balance, ease in riding, single-gear and clutch-free automatic direct drive in-wheel motor, dual channel braking systems that once activated, apply automatically in an optimal braking sequence, battery management, drive mode selection, which customizes the power delivered by the motor, its built-in charging system that allows the use of standard 16Amp outlets, proprietary integrated IT platform and process, “OmniPresence” which is a single point of contact desk to cater to customers, and planned integrated helmet. These are among the many breakthroughs that place the Prana as the elite combination of rider experience, performance, safety, stability, and lowered TCO in the world’s largest market for TWV.

 

Strategy

 

The key elements of our strategy include:

 

Premium brand. SVH has designed and manufactures its vehicles as premium e-mobility solutions. SVH seeks the premium end of the market, and will expand into more affordable products only after achieving the scale necessary to ensure it can maintain its operating margins.

 

 

Target market. SVH caters to young, upper income, urban dwellers. The market is sufficiently large and growing quickly enough that SVH sees significant room for growth without aggressively battling for market share. SVH prices its vehicles so that when considered with the savings afforded to E2W, including fuel, taxes, insurance, etc. and combined with financing options, customers will achieve superior TCO and monthly payments with SVH’s vehicles, and experience a premium product at less than the monthly cost of an inferior ICE TWV.

 

Distribution and service. SVH enters the market with an omnichannel approach, i.e., direct sales, dealership network ad online sales. SVH has received over 700 applications from dealers who would like to sell and service its vehicles. SVH will select those dealers it feels best align with its premium brand and that can provide the sales and service experience SVH demands of its representatives. SVH’s OmniPresence information platform supports online and direct sales throughout the customer’s engagement.

 

Market entry. SVH believes that other markets will demand premium E2W and exhibit characteristics similar to the Indian market. Those markets with favorable characteristics and policies, including mandates to eliminate ICE vehicles, will be near term opportunities to expand SVH’s regional distribution. Over time and with growing capacity, SVH intends to be a global leader in e-mobility solutions.

 

Product development. SVH has a development roadmap to expand, first, its premium Prana line, followed by introducing more affordable vehicles to capture more segments of the market and engage with customers earlier in the consumption path with an entry-level product that can then be upsold to premium.

 

Products

 

Prana™ is a premium E2W vehicle that redefines the category. This achievement is enabled by our patent-pending technology, which also offers increased safety, stability, and comfort. Prana-Grand™ is the first variant of the Prana line of products and has been in pilot commercial production since February 2021. By combining SVH’s E2W skills with its proprietary know-how and intellectual property, SVH (i) designs, engineers, and builds premium E2W vehicles, (ii) offers a unique customer experience, and (iii) has a robust product development roadmap of e-mobility products and technologies. SVH has enlisted the support of purchase financing providers to allow customers to lease their vehicles and benefit from SVH’s compelling TCO.

 

The Prana’s many innovations include its superior balance, ease in riding, single-gear and a clutch-free automatic direct drive in-wheel motor, dual channel braking systems that once activated, apply automatically in an optimal braking sequence, battery management, drive mode selection, which customizes the power delivered by the motor, an integrated charging system that allows the use of standard 16Amp outlets, proprietary integrated IT platform and process, “OmniPresence” which is a single point of contact desk to cater to customers, and its planned integrated helmet. These are among the many breakthroughs that place the Prana as the premium combination of rider experience, performance, safety, stability, and TCO in the world’s largest market for TWV.

 

SVH is preparing to launch additional vehicles in the coming years. SVH has commenced engineering and design work for the Prana-Elite that is expected to leverage the same platform as the Prana-Grand, while upgrading its range. SVH expects to begin production of the Prana-Elite in FY2024. Following the Prana-Grand and the Prana-Elite, SVH plans to introduce more affordable vehicles in higher volumes, such as the planned Prana-Class and scooters under the Alive™ and Alive-Lite™ brands.

 

 

SVM utilizes India’s software, information technology, and engineering skillset. The Company plans to further strengthen its software, information technology, and engineering capabilities to develop differentiated products in a cost-effective manner, with a focus on providing “Fast, Fun, and Safe” riding experience to our customer.

 

We are committed to promoting an environmentally friendly mobility solution. SVM’s manufacturing facility in India will be configured to use electricity from renewable energy sources such as wind and solar. SVM promotes green cover by incentivizing its customers to plant trees through credits or discounts.

 

Software

 

Software is a major component of our products. SVH benefits from India’s software, information technology, and engineering skillset. SVH developed OmniPresence, its enterprise-wide information system to:

 

	●	support marketing and sales;
	●	manage purchasing and production;
	●	manage service and maintenance;

 

	●	manage vehicle functions, including propulsion, energy, braking and safety, and monitor driver behavior; and
	●	provides feedback to SVH that is useful for improving the vehicles and adjusting features to local conditions.

 

SVH’s software is monitored, maintained, and updated over the air as necessary. SVH will leverage its software and the data it collects to develop differentiated products in a cost-effective manner, with a focus on providing a “Fast, Fun, and Safe” riding experience to its customers.

 

Our Market Opportunity

 

SVH’s initial focus is on the Indian market, from which SVH intends to expand to the rest of Asia and the world. Industry analysts believe India is currently the world’s largest and fastest growing market for TWV, in which E2W are expected to capture a growing share. The Indian market is driven by a growing population, an emerging consumer class with rising incomes, production capacity, robust supply chains, and a supportive government.

 

SVM believes the E2W market will experience accelerating growth, driven by:

 

	●	Technology: Improving battery technology and charging infrastructure enables better performance and longer range at lower costs. E2W will benefit from the global shift to EV as global investment and economies of scale drive costs lower, produce more skilled workers, develop better performing batteries, and deploy more charging infrastructure. The investment by the global automotive industry and supply chain will benefit SVH’s products.
	●	Demand: Consumers are shifting their preferences to E2W as the benefits of electric powertrains and the environmental impact become more apparent. SVM’s affordable premium products invite interest from prospective customers.
	●	Regulatory Support: Governments are globally promulgating policies to support, and invest in, sustainable energy technologies and electric vehicles, especially in urban environments. Measures include stricter emission regulations, including restrictions on CO2 emissions and ICE vehicles in urban environments, phase-outs of ICE vehicles, and monetary incentives for electric vehicle purchasers.
	●	Superior Rider Experience: SVH’s design innovations have produced compelling products with reduced noise, longer range, superior riding experience, enhanced safety, and other features at lower cost, creating a superior alternative to ICE vehicles.

 

 

While the E2W market is nascent, analysts expect the global electric vehicle penetration to expand from 6% of units in 2021 to 25% by 2030, implying E2W market growth from $2.5 billion in sales to approximately $20 billion to $28 billion over the same period. Demand from younger customers, ubiquitous rapid charging infrastructure, continued improvement in battery technology, and favorable government regulation, coupled with high and volatile gasoline prices could drive higher E2W vehicle penetration and market growth.

 

SVH is attempting to revolutionize the marketing of E2W with its Experience Centers, OmniPresence customer support and future virtual reality access to SVH’s vehicles, products, and services SVH’s Experience Centers allow customers to visit any SVH or dealer location and instantly recognize the layout, features and offerings. SVH has modeled its retail locations on premium retail experiences in other industries incorporating advanced retail practices and user experience.

 

Most SVM customers begin their journey online, mostly utilizing a mobile device. SVM’s OmniPresence, our digital infrastructure, enables a singular experience for prospective customers and supports their relationship with SVM, from initial inquiry to post-sales support. The OmniPresence team provides expertise in every aspect of E2W ownership and works with each customer to deliver a custom journey that matches their personal preferences.

 

Many SVM customers want to ride the Prana before making a purchase. In the course of preparing a dealer network to cover major population centers, SVM received over 700 applications from prospective dealers. These dealers will also provide the service network to support SVM’s customers.

 

Customer experience

 

Digital customer interaction allows SVM to conserve capital and market directly to consumers and to service vehicles remotely. Ubiquitous connectivity enables data mining to design products that are better suited to customers’ needs, improve safety features and comfort, direct resources to areas most meaningful to customers, generate valuable behavior data to lower insurance costs, track asset usage and reliability etc. The virtual customer experience enables greater customization and fosters brand loyalty.

 

Demographics

 

The United Nations projects that by 2025, the world’s population will grow to 8.2 billion people, of whom 1.4 billion will reside in India, at which time India will overtake China as the world’s most populous nation. While China’s population is expected to peak in 2025 and decline thereafter, India’s population is expected to continue growing, so that by 2050 the UN projects India’s population to be 300,000,000 bigger than China’s.

 

In 2025, the U.N. projects India’s population will have a median age of 29, placing it among the youngest countries (the global median age is projected to be 31 in 2025).

 

India’s population is also rapidly urbanizing, in line with global trends and rising incomes. In 2018 the UN’s Department of Economic and Social Affairs predicted that by 2050, 68% of the world’s population will live in urban areas with Asia exhibiting some of the fastest rates of urbanization. Rising urbanization presents a larger market for our products as range becomes less of an issue with people living in greater proximity and density.

 

Globally, EV owners compared to ICE owners:

 

	●	Are on average five years younger;
	●	Are more likely to live in urban areas;
	●	Have a 32% longer commute time;
	●	Earn 30% more;
	●	Are six times more likely to have bought their last car online.

 

 

Purchasing power

 

India is quickly becoming richer as is per capita GDP has grown from $442.03 in 2000 to $2,256.59 per year in 2021 (in current US dollars), a compounded annual growth rate (“CAGR”) of approximately 8.5%.

 

India’s consumer income is expected to double by 2040, facilitated by a vibrant labor market and stable economic performance. Purchasing power will be concentrated in Millennials’ hands.

 

By 2030, nearly 80% of households will be middle-income, up from about 50% today. The middle class will drive 75% of consumer spending in 2030. As 140 million households move into the middle class and another 20 million move into the high-income bracket, they will spend 2-2.5x more on essential categories, including transport, and 3-4x more on services. Upper-middle-income and high-income entrants will drive a 15-20% increase in the ownership of durables, including vehicles. Half of incremental consumer spending by 2030 will be to upgrade to premium offerings. Premiumization and category addition will drive a significant share of incremental spending.

 

Millennials’ and Generation Z’s preferences will shape the market. These youngest Indians already exhibit the greatest willingness to increase spending over the next 10 years, but they are also highly discerning about what they consider “best in class” offerings in every consumption category. Businesses will have more prosperous and more willing buyers.

 

As many as 50-70% of the most digitally connected consumers already use digital platforms for product discovery and pre-purchase research. By 2030, more than 40% of all purchases will be digitally influenced, up from 20-22% today. In the future, preferences will be driven by a consumer’s degree of connectedness to content. At all income levels, more “connected” consumers will spend more, own durables, upgrade to premium products and be very aware of brands.

 

Indians have traditionally used public transport services over owned vehicles. Digital platforms for renting and sharing will speak to this mindset, as well as to consumers’ awareness and use of technology. Subscription models will serve the value-conscious Indian keen to access new brands and products.

 

Market Size

 

Global:

 

	●	The global E2W vehicles market was valued at US$51.22 billion in 2020 with Asia-Pacific region leading in market share.
	●	Battery prices and TCO are declining rapidly, with McKinsey estimating a greater than 90% decline in battery prices over the past ten years.
	●	The TWV market has not been consolidated yet, allowing new entrants and disruptive product and service offerings.

 

India:

 

	●	Total vehicle sales (FY 2022): approximately 23 million per year
	●	Share of TWV (FY 2022): approximately 80%
	●	India’s TWV market is expected to reach 27.2 million units by 2026 exhibiting a CAGR of 10.2% during 2022-2026.

 

 

	●	Revenue in India’s motorcycles market is projected by industry analysts to reach US$18.86 billion in 2022 and a compounded annual growth rate of 13.15% (CAGR 2022-2026), resulting in a projected market volume of US$ 30.91 billion by 2026.
	●	The market for all EVs in India is projected to reach approximately $7.1 billion in 2025 with the total automotive component industry projected to reach $251-$283 billion in 2026;
	●	With growing concerns around vehicle emissions, consumers are increasingly attracted to E2Ws due to their lower environmental impact, and that almost 97.5% of all EVs sold in India were E2Ws in 2021, as per the International Institute for Sustainable Development (IISD).

 

TWV Market in India

 

Currently, the new growth lever for the TWV industry is electric scooters and motorcycles. While many startups are working in the low powered scooter segment, SVH chose to address the market with premium products, given the extensive experience and expertise of SVH’s leadership team with global electric pioneering companies. Furthermore, there are many macro-economic enablers such as the Indian government’s commitment to EV transformation, increasing consumer awareness of pollution related health impacts, efforts on curbing climate change, are helping fuel the growth.

 

Increased government mandates for electrification, combined with consumers’ growing desire for clean energy vehicles, and hassle-free riding experience are driving electrification of the TWV industry at a rapid pace and on a global scale. The Indian government has set a goal to electrify 100% of the TWV market. This presents an enormous opportunity for SVH. The government has also lowered the Goods and Services Tax (GST) to 5% for EVs, as compared to 28% on ICE vehicles, and added other incentives for consumers, including elimination of vehicle registration tax and income tax rebate for EV purchase. Additionally, several state governments are providing incentives to make E2W more affordable. More investment in the electricity infrastructure, especially in the renewable energy sector, could potentially accelerate the process.

 

COVID-19 has accelerated a trend towards individual mobility solutions and this has led to a rising demand of personal vehicles. Considering India’s demography, this could further increase the total addressable market-size for SVH in India. There has been a behavioral change among the people towards mobility due to the rising environmental concern and this can be directly seen with the sudden boom of electric two wheelers market after the lockdown and restrictions were removed. This has helped E2W gain a strong market share around the world.

 

SVH’s initial product, the Prana-Grand, is positioned as a premium E2W. According to Statista/Mobility Markets Insights/Motorcycle Market India, the Indian motorcycle market is expected to reach revenues of US$25.6 billion in 2023, growing to US$36.1 billion by 2027. SVM considers the rapid growth of the E2W market to be a significant opportunity to establish a global brand synonymous with electric, sustainable premium vehicle, while offering a value proposition to customers that is superior to ICE vehicles.

 

The demand for all EVs is impeded by insufficient charging infrastructure. Our product line addresses range anxiety by providing twice the range/charge than the average daily travel distance of motorcycle users and integrating a waterproof charger inside the vehicle which uses the standard household 16Amp outlet, allowing users to charge their vehicles almost anywhere and enabling a business model for electric utilities and power distributors to develop charging networks.

 

Policy

 

To confront the challenges of growing populations with growing mobility needs while mitigating climate change, many governments have implemented and accelerated programs to incentivize EV utilization.

 

The role of electricity in the final consumption mix is projected to grow from ~20% today to 40% by 2050. The corresponding doubling of electricity consumption combined with uptake of hydrogen is projected to offset fossil-fuel consumption (which excludes primary demand of coal and gas for power generation), which could be ~40% lower in 2050 compared to 2020.

 

 

The largest markets are moving rapidly to eliminate new ICE vehicle sales. Converting the automotive industry to fully EV will create economies of scale for all electric vehicle types throughout the supply chain.

 

EVs have lower TCO than ICE vehicles in some countries currently and is expected to be cheaper in all countries by 2025.

 

Electrification eco-system

 

McKinsey projects a substantial increase in EV market share in India by 2026. We expect that ubiquitous charging availability will foster new business models, including Mobility-as-a-Service (“MaaS”) and more shared riding initiatives. Further, electrification is not just about replacing a fuel tank with a battery. Electric mobility disrupts the ICE platform and much associated with it – removing the entire ICE drivetrain and replace it with an EV drivetrain containing 1/5^th to 1/10^th the number of moving or breakable parts. This is a fundamental, disruptive transformation that we expect to lead to an improved and more affordable riding experience.

 

SVH’s Competitive Advantage

 

	●	Management Team: SVH’s board and senior leadership team has deep domain knowledge and expertise across vehicle, semiconductor and power storage industries, including the entire value chain from product development to service delivery. The team is led by Mohanraj Ramasamy, who served in various roles in Tesla during its development and early manufacture of the Model S and Model 3. SVH is well poised to leverage its team’s combined expertise in these areas and address emerging market needs, and develop next generation products and services. The team is supported by executives with significant industry experience from such companies as Royal Enfield, TVS, and Bajaj, among others.
	●	Favorable Market Trends: As consumers seek brands that align with their values, SVH is positioned to address the wants and needs of a new generation of customer demands. The Prana-Grand is the first premium E2W and has positioned SVH to establish its brand and reputation. By building the Srivaru brand and achieving scale and efficiency in our manufacturing footprint, the Company believes it will have the opportunity, over time, to create more affordable and attainable technology to allow broader adoption of its E2W and capitalize on adjacent market opportunities.

 

	●	Product: Prana-Grand has been in commercial use for over a year. In that time period, we have sold over 160 units and SVM’s motor, battery technology, design, and ease of use have been validated in real world applications. Our technology, combined with design and superior customer experience, delivering exceptional performance, range and safety is expected to drive our growth and market share. Prana 2.0 family of products were launched in August 2024, Prana 2.0 family of products include Prana-Grand and Prana-Elite. The Prana 2.0 family of products has updated battery pack from the cells made of LFP chemistry supplied by BYD. Prana 2.0 has enhanced water-proof hub motor with resolver technology eliminating the active components inside the motor to increase the reliability and endurance in the harsher conditions. Prana 2.0 has enhanced communication with iOT connectivity via smart cluster providing vehicle level parameters analysis enabling enhance service and vehicle experience.
	●	Platform-based Approach: Prana’s platform-based approach is designed to support the production of other vehicle variants as well as product lines to be built on the same underbody, enabling shorter time to market and efficiency in capital deployment.
	●	Charging: Prana comes equipped with a standard 16Amp charger that can charge the vehicle from any household outlet. Our vehicles do not require any specialized charging network and the integrated charger can fully charge the battery in under 5 hours, the time the vehicle is idle at home or at work. Prana’s range is triple the average daily commute of our customers, alleviating range anxiety. Furthermore, Prana’s charging system encourages power suppliers to develop charging networks as a business model.
	●	Maintenance: Prana is powered by a sealed, waterproof motor that is embedded in the back wheel, without a clutch, gears, chains, or shafts, resulting in reduced maintenance requirements.

 

 

	●	Sales and Service: SVH intends to implement a hybrid sales strategy to maintain control over the customer experience and ensure that interactions are aligned with the SVH brand through the SVH experience centers; the Company expects to exert control over the customer experience by vertically integrating OmniPresence, its customer service platform with sales, after sales service and dealer management. SVH plans to build and scale its own service operations in addition to cultivating partnerships with dealers and other service partners that meet our expectations for customer service, under our unified OmniPresence platform.
	●	Strategic Relationships: SVH has established strong relationships with suppliers of critical components to deliver the Prana-Grand, which can be extended as product lines and variants are added.
	●	Intellectual Property: SVH has developed significant intellectual property and proprietary technology with many breakthrough innovations to enhance rider experience, performance, safety, stability, and lowered TCO in the world’s largest market for TWV.

 

Growth Strategy

 

We aim to create a world-class e-mobility company, developing premium products powered by renewable energy.

 

We entered the market with our flagship product, the Prana-Grand, which is intended to capture the potential of electrification through a fusion of art and science. Initially, we will focus on the Indian motorcycle market, which is expected to grow to US$ 30.91 billion by 2026.

 

We have targeted expansion of our product offerings into other geographies such as Malaysia and Singapore by FY 2026, followed by Europe and the Middle East. Initially, we expect SVH’s total addressable market share (“TAM”), will be 1.80 million units, and with the introduction of Prana-Elite, its TAM may double in size. Expected subsequent products such as the Alive brand may further expand SVH’s TAM by adding another 6.2 million vehicles.

 

Vehicle Roadmap. We have established a roadmap for future vehicle lines that includes a variety of vehicle types that are expected to perform well in various customer segments, such as new variants of Prana product line, Prana-Elite and Prana-Class, and the scooter product line, with Alive and Alive-Lite. In line with this strategy, on August 22, 2024, we have successfully launched product platform, PRANA 2.0, and product variants, PRANA 2.0 Grand and PRANA 2.0 Elite, respectively, in Chennai, India. The launch event was attended by members of the media, key vendors, and representatives from the Company’s dealer network. The PRANA 2.0 features advanced technology, including an extended driving range and a superior battery system, which were highlighted during the launch. The Company believes that the favorable reception of the PRANA 2.0, positions it well for commercial success. By utilizing the Prana to establish our brand, we plan to leverage economies of scale and efficiency of operations to unlock sales in more mass market segments, commencing in the Indian market and then seeking to establish a strong customer base in the premium and premium vehicle markets across the globe. Commencing FY2026, we plan to manufacture and sell an expanded portfolio of products including the Alive-Lite and Prana-Class, which would enable us to address a majority of the Indian E2W vehicle market. Management believes this expanded portfolio of vehicles will position the Company to address an estimated TAM of approximately 42 million vehicles per year by 2027 in India alone

 

International Expansion. We expect to distribute our products throughout India and in other countries and markets in the coming years. Our expansion into other markets could include local manufacturing, assembly, and sales and service networks. We anticipate that localized supply chain, production, distribution and retail can yield cost savings and environmental benefits with reduced transportation of product to the customer, shorter time to market, and enhanced relationship with our customers.

 

We are highly motivated to usher in a future where mobility is sustainable and friendly to the planet.

 

 

SVH’s Vehicles

 

Prana™

 

Our first product, the Prana-Grand , is already being produced and sold commercially. We have further enhanced our Prana product family with Prana 2.0 products, Prana 2.0 family has two products Prana-Grand and Prana-Elite. As our flagship product, Prana-Grand and Prana-Elite, is intended to set the standard for excellence across all future products and experiences. Below are some of the key aspects of our products:

 

	●	Product Design: The Prana-GrandTM and The Prana-Elite fuses art and science to capture the potential benefits of electrification. As our flagship product, the Prana-Elite sets the bar for excellence across all of our products and experiences. Our customer experience represents a breakthrough, achieved through a ground-up rethinking of the way a TWV is designed. Our reimagining of the motorcycle has resulted in a more balanced drive, safer brake performance, improved ride comfort, with a sporty and efficient exterior, delivering the “Fast, Fun and Safe” value proposition to customers. SVH believes its technology leads the industry in energy efficiency, with expected efficiency of approximately 54 watts per mile. Prana can be fully charged using a standard household outlet in about 6 hours and Prana 2.0 products can be fitted with fast chargers to shorten the charging time, however with the driving range of 156 miles/charge the need for intermittent charging during the day time is almost eliminated as the average user’s daily commute distance is well under 100km/day.
	●	Performance and Range: The Prana 2.0 family of products (Prana-Grand’s and Prana-Elite’s) combination of balanced chassis with direct drive motor, supported by SVH’s custom battery management system (“BMS”), delivers smooth acceleration without gear or clutch operations. Prana’s mode function delivers customized direct torque and speed based on the customer’s preferences, including acceleration rates in the range of 0-37 MPH in under 4 seconds. the Prana-Grand model has achieved a range of approximately 94 miles on a single charge, which is twice the average typical drive distance for which TWVs are used. The Prana-Elite is certified for range of approximately 156 miles per charge, which is more than three times the average typical drive distance of a TWV.
	●	Ease of Riding: The Prana has no clutch or gears to change, making it a hassle-free drive, even in heavy, congested traffic in city roads. The driving experience is more like an automated system, in stark contrast with manual transmission TWVs.
	●	Smart cluster with iOT connectivity: Prana 2.0 family of Products has smart cluster with iOT connectivity. Prana 2.0 vehicles have CAN communication enabled devices allowing handshake and deeper data exchange between the charger, controller and battery pack. SVM deployed certain level of artificial intelligence into the cluster to enhance the users experience and comfort, for example Prana’s range estimate algorithm dynamically adjusts its range calculation based on the energy consumption for past few miles driving condition, battery’s remaining energy, and regeneration factors. This gives closer prediction of remaining drivable distance with available energy. These smart clusters equipped with Bluetooth connectivity for mobile pairing. The turn-by-turn navigation is possible to be displayed from phone to the smart cluster. iOT connectivity with CAN communication also allows to remotely monitor the battery packs health and balancing.
	●	Safety: The Prana is equipped with dual channel, independent braking system that applies automatically in an optimal braking sequence. Prana’s exquisitely balanced chassis combined with inbuilt motor provides safe stopping and reduces the potential for skidding, even in emergency breaking situations. Prana is also equipped with dual LED head lights, enhancing road visibility. In the future, we intend to launch an integrated helmet, which will further enhance the safety and comfort of the rider.
	●	TCO/Affordability: The Prana offers an overall lower TCO, with significantly lower operating costs than comparable ICE TWVs. Our vehicles can be financed through banks and non-banking financial institutions in India. Additionally, the savings in fuel and maintenance effectively offset the monthly financing cost, thereby lowering the TCO and making the vehicle more affordable.

 

The customer’s transformation journey from ICE to E2W vehicle is facilitated through the SVM Experience Center and OmniPresence platform, which allows consistent customer experience, regardless of the size of the Experience Center or the external environment. In future, we expect the Experience Center to host a virtual reality-like customer walk through, helping to capitalize on the virtual reality trend and providing a customized experience to the customer. We intend to roll out SVM’s Experience Center and OmniPresence platform in all regions.

 

Our Technology is a Key Differentiator

 

We are a technology and mobility company seeking to set new standards for sustainable transportation with Prana, Alive, and other planned future product lines. The Company has developed cutting-edge products that it believes sets new benchmarks for E2Ws.

 

Our in-house engineering team, working with component manufacturing partners, is focused on delivering innovation in all facets of vehicle development, including vehicle design and engineering, hardware and software development, and passenger comfort. The development of the Prana was predicated on simplifying the powertrain and embedding the sealed motor in the back wheel, which helped us to redefine the E2W vehicle.

 

We have contracted with leading battery manufacturers utilizing advanced lithium-ion cell battery packs to achieve the optimal combination of safety and performance. We are using the data accumulated from these activities to refine our technology throughout our product development process.

 

We believe the premium E2W experience is composed of three essential elements: (i) product superiority, in performance, ride comfortability and attention to detail; (ii) exceptional customer experience and interactions throughout the sales cycle and ownership journey, and (iii) ease of service to customers using a combination of SVM’s and independent service providers, guided by OmniPresence centers.

 

 

Although we are initially focusing on the premium market, the Company intends to expand its product portfolio, to provide a lower TCO to customers and expand its TAM.

 

We are committed to making ESG an integral focus of our operations, through mass production of sustainable transportation. We offer rebates to customers who plant saplings while purchasing a vehicle from us. We currently offer a rebate for customers who plant 10 saplings and share photos in the hope of inspiring others to do the same. The Company’s first product is called Prana, which in Hindi means “life energy”. We believe this reflects our goal of building and selling the leading clean energy vehicles and attempting to improve the environment and people’s health.

 

Our business prospects include technological achievements, platform to connect with customers, combined with an excellent sales and service network. Our technology stack includes significant advancements to the core technologies of TWV that are radically different in the Prana product lines compared to other TWV. Areas where our in-house engineering has driven advancement include:

 

	●	Battery Pack: Our research and development team has worked with leading suppliers to design and produce a compact and dense battery pack that is safe, efficient, performs well in varied terrain and climates, and can be recharged using standard household outlets. The battery pack’s components are designed to be scalable and reusable in the next product variants, providing range variations as we develop future mobility platforms. The Company is also working on passive balancing technology-based battery packs to provide higher range, which will be used in the Prana-Elite. The cells incorporated in our battery packs conform to our high standards, including requirements for range, energy density, recharge/discharge rates and other characteristics. The integrated, custom-designed chassis battery module is designed for mass production, easy installation and service. SVH believes that the technology developed for the Prana battery packs can be transferred to other E2Ws, to the industrialization of mass-market vehicles, and to technologically adjacent markets.
	●	Platform. Our platform was designed and developed to optimize these key elements: (i) battery management, (ii) electric motor, (iii) power electronics, (v) control software and (vi) integrated charger (vii) smart clusters. The platform structure enables the chassis to provide greater safety, smoother ride, and a superior user experience. The foundational platform is designed to support other vehicle variants, which should allow for capital-efficient growth and reduce time to profitability.

 

	●	Integrated Electric Drive Unit. The Prana-Grand’s electric drive motor is embedded in its rear wheel. This motor placement eliminates the need for a gear box, transmission, drive shaft or chain, thereby vastly simplifying the vehicle, reducing maintenance, and reducing weight. There are very few moving parts in the Prana-Grand and Prana-Elite. Placing the motor in the rear wheel also allows Prana to achieve optimal weight balance, assists with braking, and reduces loss of traction, or “fish-tailing”. The drive unit motors are designed to reach a top speed of over 144 kilometers/hour (90 miles/hour), which is superior to most competitors. The motor uses the alloy wheel to dissipate the heat and extend the service life of the parts, boosting efficiency. We developed the Prana-Grand’s drive mode function in a manner that enables higher levels of energy efficiency and performance, and also includes a reverse mode function, which is useful to park, turn and extract the Prana-Grand from difficult parking spots.
	●	Charging. The Prana-Grand’s integrated IP67 charger is designed to alleviate range anxiety and is airtight and waterproof, so harsh environment conditions such as dust and moisture do not cause internal short circuits. The standard 16Amp plug-point connector is suitable for at-home charging and allows the Prana’s battery to fully charge in under 5 hours. In addition to making charging ubiquitous, we have been working with electricity distribution companies to accelerate their plans for commercial charging networks. Prana’s battery pack is capable of fast charging, which will be enabled in future versions so Prana can be charged at other fast charging networks.

 

 

	●	Experience Centers: Our Experience Centers, which are currently operating in India as SVM Experience Centers, are focused on providing a unique but consistent and rich experience to customers by creating a theater-like environment. This has the effect of shielding customers from external interferences while inside the Experience Centers. Further, the customer experience is enhanced by the SVH’s OmniPresence team, which is provides one-stop customer service. In the future, we plan for the same team to provide a virtual walk-through to customers. The OmniPresence teams are supported by a vertically integrated dealer management platform that provides as-built information about Prana to customers, while also supporting the sales lead generation system. We plan to roll out similar centers when we start operations in other geographies.
	●	Software update and Helmet: We plan to continue to improve the drive system software, which is programmable and updateable during vehicle service. In addition, we are working on proprietary patent-pending helmet technology, which will be integrated into the Prana vehicle to maximize comfort and driver wellbeing. The helmet is the first in our line of accessories that we intend to develop to serve the Prana user community.

 

Manufacturing

 

SVM is currently assembling Prana-Grand vehicles in its facility located, in Sulur, Coimbatore, Tamil Nadu, India. The current facility can produce 2,000 vehicles per month and is equipped with digital tools for production accuracy and consistency, which can be scaled to produce 4,000 vehicles per month due to its modular assembly process. We believe that the facility may potentially support the production of more than 50,000 units annually by end of year 2024. To cater to expected future production demands, the Company also intends to add capacity to ramp production up to 100,000 vehicles per month. The assembling enhanced with automated testing line is to ensure production consistency.

 

We have also received several invitations from various state governments to establish assembly facilities across India. We will carefully consider these invitations and how to expand our assembly base as necessary to ramp-up production in a cost-efficient and timely manner.

 

We employ suppliers to provide sub-assembly components according to our specifications, which are then assembled at our facility, resulting in efficient deployment of capital and maintaining the lean workforce and processes necessary in the early stages of the Company’s growth. Further, we plan to use more modern and automated technology to set up the assembly base necessary to achieve our projected revenues.

 

We have completed setting up a dedicated manufacturing subsidiary, SVM Factory Private Limited (“SVMF”), in India to cater to future growth, while benefitting from reduced corporate tax rates of 17.48% (including taxes earmarked for specific purposes and surcharges).

 

Go-To-Market Strategy

 

In 2021, we launched our online vehicle configurator system along with limited social media outreach to validate our market assumptions. Soon after introducing the reservation system, we received reservations for more than 12,000 units, at which point the online reservation system was suspended. The reservation numbers far exceeded our original forecast and manufacturing capacity, and we wanted to focus on bringing the product to the market and providing superior customer experience.

 

We will open exclusive OmniPresence Experience Centers across the various geographies in which we intend to operate, which may be Company-owned or through franchisees. The Company has received over 950 franchise requests in India and in overseas markets.

 

We believe that customer interest in our products is strong and that customer enthusiasm can be revived quickly once our manufacturing and distribution systems can handle the demand. We intend to utilize digital platforms and social media networks to educate customers about our technology, product features, brand identity and safety aspects. The goal is to cultivate a sense of brand loyalty with our customers.

 

 

Restarting customer engagement is expected to drive customers to our website and social media outlets to learn more about our story and the Prana product lines. On the website, customers can experience the online vehicle configurator. In the future, the Company will add an immersive and customizable opportunity to interact with our vehicles in a virtual setting. From there, we expect to provide customers with the option to either place a reservation online or visit one of our Experience Centers. We believe that our hybrid approach of providing consistent experience to direct-to-customer and through franchise network, allows us to maintain customer interaction, engage with them on their new mobility journey, creating opportunities to tailor each customer’s purchase and ownership preferences. Customers will have the option to visit an Experience Center in person, make their inquiries entirely online or a combination of the two experiences. This should allow us to build longer brand association and generate recurring product revenue.

 

Some states allow on-line purchases and direct delivery of vehicles to home. Our unified Experience Centers should allow the Company to gain additional margin through direct on-line sales.

 

We believe that establishing hybrid go-to-market strategy will enable the Company to grow the brand, scale the business and address market demand.

 

We also expect to employ company service technicians, while also empowering independent service providers to maintain our products. This should allow the Company to conserve capital while catering to customer needs.

 

We expect our future vehicles to be equipped with fast-charging capabilities, which are expected to be compatible with national standard fast-charging networks in India. This would enable our customers to use any of the national charging networks. EV charging locations that additionally offer amenities like shopping, food and restrooms, are expected to provide a delightful experience to SVH’s customers. This approach also allows the Company to avoid establishing and operating its own charging network while providing customers with access to established networks.

 

Government Regulations and Credits

 

Environmental Regulations

 

SVM operates in an industry that is subject to extensive environmental regulation, which has become more stringent over time. The laws and regulations to which SVM is or may become subject govern, among other things, water use; emissions; use of recycled materials; energy sources; the storage, handling, treatment, transportation, and disposal of hazardous materials; the protection of the environment, natural resources and endangered species; and the remediation of environmental contamination. Compliance with such laws and regulations is and will continue to be an important aspect of SVM’s ability to continue its operations, and may substantially vary in each location that SVM chooses to operate in.

 

Environmental standards applicable to SVM are established by Indian laws and regulations, standards adopted by regulatory agencies and the permits and licenses SVM is required to obtain. Each of these sources is subject to periodic modifications and variations and what SVM anticipates will be increasingly stringent. Violations of these laws, regulations or permits and licenses may result in substantial civil and criminal fines, penalties and possibly orders to cease the violating operations or to conduct or pay for corrective works. In some instances, violations may also result in the suspension or revocation of permits and licenses.

 

Many countries have announced requirements for the sale of zero-emission vehicles beginning with proscribed timeframes, some as early as 2035. In particular, the government of India unveiled the National Electric Mobility Mission Plan 2020 (NEMMP 2020) in 2013 with the ultimate objective of promoting the manufacturing of electric and hybrid vehicle technology to completely achieve electrification by 2030. The plan aims to encourage reliable, affordable and efficient EVs that meet performance and cost expectations through government-industry collaboration for promotion and development of indigenous manufacturing capabilities, required infrastructure, consumer awareness and technology; thereby helping India to emerge as a global manufacturing leader in EV markets. SVM, as an EV manufacturer, is already in a position to comply with such requirements across its entire product portfolio.

 

 

Emissions Credits

 

While we expect these environmental regulations to benefit SVM’s growth, it is possible for certain regulations to result in margin pressures. For example, regulations that effectively impose electric vehicle production quotas on auto manufacturers may lead to an oversupply of electric vehicles, which in turn could promote price decreases. Changes to these incentives and regulations could affect our revenues and gross margins.

 

Other Credits and Benefits

 

EVs are not only cost-effective, but they also have tax advantages in India. SVM may benefit from additional opportunities under government regulations and legislation, such as the following:

 

	●	EV loan tax exemption of up to INR 150,000 (USD: 1,923) is available under section 80EEB of the ITA;
	●	FAME-II subsidy for eligible product lines; Faster Adoption and Manufacturing of (Hybrid &) Electric Vehicles (“FAME”), was launched in 2015 as “FAME I” under the aegis of NEMMP 2020, is an incentive or subsidy scheme promoted by the government of India for boosting electric and hybrid vehicles across the nation; FAME II scheme was launched on April 1, 2019, and the eligibility period has been extended to March 31, 2024;
	●	Reduced GST tax of 5% as compared to 28% on ICE vehicles.

 

SVM might also be eligible for state GST refund program for in state vehicle sales.

 

Vehicle Safety, Emission and Testing

 

SVM is required to obtain the Central Motor Vehicles Rules based Type Approval Certification for its product lines in India, and similar or equivalent certification is applicable for each of our target markets. These regulations are updated from time to time. Type Approval Testing includes detailed safety, emission, and other standard tests. SVM obtained the Type Approval Certification from Central Motor Vehicle testing agency for Prana 2.0 family of Products: Prana – Grand and Prana - Elite

 

Automobile Manufacturer and Dealer Regulation

 

Indian laws regulate the manufacture, distribution, sale and service of vehicles, and generally require motor vehicle manufacturers and dealers to be licensed in order to sell vehicles directly. SVM’s direct network distribution will need to obtain sales and distribution network licenses in each state. There is no restriction in India preventing manufacturers from selling their vehicles directly. However, each overseas target market may have its own distribution licensing requirements.

 

Battery Safety and Testing Regulation

 

SVM’s battery packs are designed to conform to mandatory regulations that govern transport of “dangerous goods,” defined to include lithium-ion batteries, which may present a risk in transportation. The governing regulations in India are framed broadly on the UN’s Manual Tests and Criteria guidelines, which contains criteria, test methods, and procedures to be used for the classification of dangerous goods according to the provisions of the “United Nations Recommendations on the Transport of Dangerous Goods, Model Regulations”.

 

The use, storage and disposal of battery packs is regulated under Indian central government law. The Regulatory Safety Standards Associated with Vehicle Battery Safety was set up by the Ministry of Road Transport and Highways (“MoRTH”) under the Central Motor Vehicles Rule in 2015, with an amendment later added in 2017. SVM complies with the existing safety standards. These standards are expected to be amended from time to time to improve the safety of E2Ws.

 

Recently, MoRTH has modified rules to update battery safety standards for E2Ws. The amendments provide for additional fire safety requirements related to battery cells, BMS, onboard chargers, battery pack designs, and thermal propagation due to internal cell short circuits.

 

 

For the global market, SVM’s battery packs are intended to comply with the applicable requirements of the UN’s Manual of Tests and Criteria. SVM uses lithium-ion cells in the high voltage battery packs in its vehicles. These tests include:

 

	●	Altitude simulation — simulating air transport under low pressure conditions;
	●	Thermal cycling — assessing cell and battery seal integrity and internal electrical connections;
	●	Vibration — simulating vibration during transport;
	●	Shock —  robustness of cells and batteries against cumulative shocks;
	●	External short circuit — simulating an external short circuit;
	●	Impact/Crush – simulating mechanical abuse from an impact or crush that may result in an internal short circuit;
	●	Overcharge — evaluating the ability of a rechargeable battery to withstand overcharging; and
	●	Forced discharge – evaluating the ability of a primary or a rechargeable cell to withstand a forced discharge condition.

 

Competition

 

SVH faces competition from both traditional ICE automotive OEMs and other alternative fuel vehicles from both new manufacturers and established automotive OEMs, many of which have entered or have announced plans to enter the alternative fuel and electric vehicle market. The Company expects this competition to increase, particularly as the transportation sector continues to shift towards low-emission, zero-emission or carbon neutral solutions.

 

We believe the primary factors on which we will compete include, but are not limited to:

 

	●	product quality, reliability and safety;
	●	range, efficiency and charging speeds;
	●	product performance;
	●	technological innovation, including integrated helmets and safety measures;
	●	access to charging options;
	●	design, styling and elegant;
	●	service options and customer experience;
	●	management team experience at bringing electric vehicles and other disruptive technologies to market;
	●	manufacturing efficiency;
	●	brand recognition and prestige; and
	●	product price.

 

 

SVH believes that it is favorably positioned to compete on the basis of these factors. However, many of SVH’s current and potential competitors have substantially greater financial, technical, manufacturing, marketing and other resources than SVH. SVH’s competitors may be able to deploy greater resources to the design, development, manufacturing, distribution, promotion, sales, marketing and support of their products. Additionally, many of SVH’s competitors also have greater name recognition, longer operating histories, larger sales forces, broader customer and industry relationships and other tangible and intangible resources that exceed SVH’s. Furthermore, many of SVH’s competitors operate with a traditional sales and dealer distribution model for vehicles that may be viewed more favorably by potential customers. These competitors also compete with SVH in recruiting and retaining qualified research and development, sales, marketing and management personnel, as well as in acquiring technologies complementary to, or necessary for, SVH’s products. Additional mergers and acquisitions in the electric vehicle and luxury automotive markets may result in SVH’s competitors becoming even more concentrated.

 

Facilities

 

SVH does not currently own or lease any real property of its own. SVM currently leases one facility in Sulur, Coimbatore, Tamil Nadu, which consist of our headquarters administration office and sales & marketing office and experience center respectively. SVH currently does not own the land on which the properties are situated; these properties are subject to various lease arrangements with third-party entities.

 

The office measures approximately 26,745 square feet and is leased pursuant to a lease agreement dated December 1, 2023 for a five-year term. The lease may be terminated by either SVM or the lessor with three months written notice. Rent is Rs. 75,000 per month. The administrative office is used for our finance, experience center, engineering, product, commercial and administrative functions.

 

SVM Factory currently leases two facilities in Sulur, Coimbatore, Tamil Nadu, which consist of our production factory and store

 

The factory measures approximately 106,983 square feet and is leased pursuant to a lease agreement dated December 1, 2023 for a five-year term. The lease may be terminated by either SVM or the lessor with three months written notice. Rent is Rs. 300,000 per month. The factory is used for manufacturing operations, storage of raw materials and finished goods.

 

The guest house measures approximately 1,600 square feet and is leased pursuant to a lease agreement dated January 22, 2024, for a 11 months term. The lease may be terminated by either SVM Factory or the lessor with three months written notice. Rent is Rs. 64,000 per month. The guest house is used to temporarily house employees, customers and other guests visiting the factory and experience center.

 

Legal Proceedings

 

From time to time, we may be subject to various legal proceedings that arise from the normal course of business activities. In addition, from time to time, third parties may assert claims of intellectual property infringement, misappropriation or other violation against us in the form of letters and other forms of communication. If an unfavorable ruling were to occur, there exists the possibility of a material adverse impact on our results of operations, prospects, cash flows, financial position and brand. We are not presently party to any legal proceedings the resolution of which we believe would have a material adverse effect on our business, prospects, financial condition, liquidity, results of operation, cash flows or capital levels. 

 

Intellectual Property

 

Intellectual property is important to our business. Our commercial success depends in part on our ability to obtain, register, maintain and protect the intellectual property and other proprietary technology that we develop, to operate without infringing, misappropriating or otherwise violating the intellectual property and proprietary rights of others, and to prevent others from infringing, misappropriating or otherwise violating our intellectual property and proprietary rights. We rely on a combination of patents (filed and pending approval), trademarks (filed, registered and through common-law rights), trade secrets, know-how, continuing technological innovation, confidential information and other measures to develop and maintain our proprietary position including through employee, contractor, consultant and third-party nondisclosure and invention assignment agreements and other contractual arrangements. To date, we have obtained patent and trademark registrations and filed applications to register patents and trademarks in India.

 

 

Regardless of the coverage we seek under our existing patent applications, there is always a risk that alterations from our products or processes may provide sufficient basis for a competitor to avoid infringement claims. In addition, the coverage claimed in a patent application can be significantly reduced before a patent is issued and courts can reinterpret patent scope after issuance. Many jurisdictions permit third parties to challenge issued patents in administrative proceedings, which may result in further narrowing or even cancellation of patent claims. We cannot provide any assurance that any patents will be issued from our pending or any future applications or that any current or future issued patents will adequately protect our intellectual property. For this and other risks related to our proprietary technology, inventions and improvements, please see the section entitled “Risk Factors — Risks Related to Intellectual Property.”

 

We expect to develop additional intellectual property and proprietary technology as our engineering and validation activities proceed. Technologies that we have and intend to invest in and develop include engineering software, battery systems and controls, cybersecurity, telematics and electrical architecture hardware and software. As we develop our technology, we will continue to build our intellectual property portfolio, including by pursuing patent and other intellectual property protection when we believe it is possible, cost-effective, beneficial and consistent with our overall intellectual property protection strategy. See the section entitled “— SVH’s Vehicles” above for more information.

 

The terms of individually issued patents extend for varying periods of time depending on the date of filing of the patent application or the date of patent issuance and the legal term of patents in the countries in which they are obtained. Generally, in India, utility patents are granted a term of 20 years from the earliest effective filing date of a non-provisional patent application, assuming the patent has not been terminally disclaimed over a commonly owned patent or a patent naming a common inventor, or over a patent not commonly owned but that was disqualified as prior art as the result of activities undertaken within the scope of a joint research agreement. The life of a patent, and the protection it affords, is therefore limited and once our issued patents have expired, we may face competition, including from other competing technologies. The duration of foreign patents varies in accordance with provisions of applicable local law, but typically is also 20 years from the earliest effective filing date. The actual protection afforded by a patent may vary from country to country and can depend upon many factors, including the type of patent, the scope of its coverage, the availability of patent term adjustments or extensions, the availability of legal remedies in a particular country and the validity and enforceability of the patent. As a result, our owned patent portfolio may not provide us with sufficient rights to exclude others from commercializing products similar or identical to ours.

 

Furthermore, we rely upon trade secrets and know-how, confidential information, unpatented technologies, continuing technological innovation and other proprietary information to develop, protect and maintain our competitive position and aspects of our business that are not amenable to, or that we do not presently consider appropriate for, patent protection and prevent competitors from reverse engineering or copying our technologies. However, the foregoing rights, technologies and information are difficult to protect. We seek to protect them by, in part, using confidentiality agreements with our employees and consultants and any potential commercial partners and collaborators and invention assignment agreements with our employees. We also have implemented or intend to implement confidentiality agreements or invention assignment agreements with our selected consultants and any potential commercial partners. These agreements are designed to protect our proprietary information and, in the case of the invention assignment agreements, to grant us ownership of technologies that are developed through a relationship with a third party. These agreements may be breached, and we may not have adequate remedies for any breach. There can be no assurance that these agreements will be self-executing or otherwise provide meaningful protection for our trade secrets or other intellectual property or proprietary information. In addition, our trade secrets may otherwise become known or be independently discovered by competitors. To the extent that our commercial partners, collaborators, employees and consultants use intellectual property owned by others in their work for us, disputes may arise as to the rights in related or resulting know-how and inventions.

 

Our commercial success will also depend in part on not infringing, misappropriating or otherwise violating the intellectual or proprietary rights of third parties. The issuance of third-party patents could require us to alter our development or commercial strategies, change our products or processes, obtain licenses to additional third-party patents or other intellectual property or cease certain activities. Our breach of any license agreements or failure to obtain a license for proprietary rights that we may require to develop or commercialize our future products or technologies may have an adverse impact on us. Given that patent applications in India and our future patents that may be filed in the United States and certain other jurisdictions, are maintained in secrecy for 18 months or potentially longer, and since publication of discoveries in the scientific or patent literature often lags behind actual discoveries, we cannot be certain of the patent protection being sought by third parties and/or the priority of inventions covered by such patent applications. Moreover, we may have to participate in interference, revocation, derivation, re-examination, post-grant review, inter parties review or opposition proceedings brought by third parties or declared by the U.S. Patent and Trademark Office or an equivalent foreign body. See “Risk Factors —  Risks Related to Intellectual Property” for additional information regarding these and other risks related to our intellectual property portfolio and their potential effect on us.

 

 

Employees

 

SVH is committed to cultivating a diverse company to enhance our culture and position the Company for success. As of March 31, 2024, SVM had approximately 45 full time employees in India, mostly in engineering, assembly, production, sales, and service. They are advised and mentored by the board and senior leadership team who have deep domain knowledge and expertise across vehicle, semiconductor, and power storage industries.

 

Further, India has a vast resource pool of technical workers with engineering backgrounds, and SVH expects to locate, hire, and train the talent necessary for scaling our operation. SVH will also seek to recruit local talent in the various locations in which it seeks to operate, who have an understanding of the local legal and regulatory environments, and have networks and relationships in the local TWV/E2W markets.

 

Seasonality

 

SVH, along with other automotive manufacturers, typically experiences seasonality, with comparatively low sales in the first quarter and comparatively high sales in the fourth quarter, or higher demands during festive and summer seasons and lower demands during winter seasons in India, and SVH expects to continue experiencing similar seasonality when it begins scaling up commercial production of the Prana-Grand and future vehicles. SVH’s period-to-period results of operations may also fluctuate because of other factors including labor availability and costs for hourly and management personnel; profitability of its vehicles, especially in new markets; changes in interest rates; impairment of long-lived assets; macroeconomic conditions, both nationally and locally; negative publicity relating to its vehicles; changes in consumer preferences and competitive conditions; or investment in expansion to new markets.

 

Environmental, Social and Compliance

 

The Environment

 

SVH seeks to address the threat posed by climate change and the need for enhanced sustainability. SVH believes it is important to find ways to make transportation more sustainable.

 

We seek to attract premium vehicle customers to switch from polluting ICE vehicles to energy efficient, sustainable electric transportation. We believe that the efficiency of our direct drive technology will enable the Prana and Alive product lines to travel further per kWh than other vehicles — this in turn is expected to result in lower emissions by power plants due to the less frequent need to recharge our products.

 

Further, investment in renewable energy hit record levels in India in financial year 2021-22, with a total of $14.5 billion being invested in renewable energy, up by 125% compared with financial year 2020-21 and 72% higher than in FY2020. Rising electricity demand, falling prices for renewable energy, India’s push to manufacture solar photovoltaic modules, government support schemes aimed at boosting Indian manufacturers’ competitiveness and attracting investment (Production Linked Incentive schemes), and the waiver of transmission charges for renewable energy are the key drivers of India’s renewable energy growth. Additionally, the government is also facilitating investment in other clean technologies, such as energy storage, green hydrogen, energy efficiency and electric mobility. SVH’s mission of building the best riding electric TWV is poised to utilize India’s growing clean energy sources. After establishing our brand based on attention to detail and refinement, we intend to expand our product lineup to broaden our impact on the traditional TWV market.

 

In addition to the steps SVH is taking to address the TWV market in general by offering captivating E2W vehicles to customers, we intend to pursue sustainability throughout our business by focusing on recycling and waste management, logistics, supplier localization, sustainable materials selection and other areas of our business. Our production and distribution of EVs will consume energy, as with any other similar company. We believe that our products will require less energy throughout their useful life than competing products.

 

 

Compliance

 

SVH is implementing a robust compliance program centered around a clear statement of principles and an expectation for both legal compliance and high ethical standards. We intend to achieve these goals through ongoing training and discussions with our employees, clear policies and guidelines, internal controls over financial transactions, technological solutions to automate screenings for legal compliance and a reporting hotline which enables employees and service providers to share allegations of any legal or ethical matters on an anonymous basis.

 

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

References in this section to the “Company,” “our,” “us” or “we” refer to SVH. The following discussion and analysis should be read together with the historical audited annual combined financial statements and the related notes that are included elsewhere in this prospectus. The discussion and analysis should also be read together with the financial information for the year ended March 31, 2023. See “Audited Condensed Combined Financial Information.” The following discussion may contain forward-looking statements. Our actual results could differ materially from those discussed in these forward-looking statements. Factors that could cause or contribute to these differences include those factors discussed below and elsewhere in this information statement, particularly in “Cautionary Note Concerning Forward Looking Statements” and “Risk Factors.”

 

Recent Developments

 

Business Combination

 

On March 13, 2023, SVH entered into the Business Combination Agreement with Merger Sub, and MOBV. Pursuant to the Merger Agreement, the parties thereto entered into a business combination transaction by which Merger Sub merged with and into MOBV, with MOBV surviving such merger as a wholly owned subsidiary of SVH. The Business Combination closed on December 8, 2023, and MOBV is now a wholly-owned subsidiary of SVH. The SVH Shares are listed on Nasdaq under the symbol “SVMH” and SVH Warrants are listed on Nasdaq under the symbol “SVMHW”.

 

The merger was accounted for as an asset purchase, in accordance with U.S. GAAP. Under this method of accounting, MOBV will was treated as the “acquired” company for financial reporting purposes. Accordingly, the Business Combination was treated as the equivalent of SVH issuing stock for the net assets of MOBV. The net assets of MOBV was stated at fair value, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination were those of SVH.

 

The most significant change in SVH’s future reported financial position and results was an estimated increase in cash (as compared to SVH’s combined balance sheet on March 31, 2022) to approximately US$5 million. See “Audited Combined Financial Information.”

 

As a consequence of the merger, SVH became the successor to an SEC-registered company, which will require SVH to hire additional personnel and implement procedures and processes to address public company regulatory requirements and customary practices. SVH expects to incur additional annual expenses as a public company for, among other things, directors’ and officers’ liability insurance, director fees and additional internal and external accounting and legal and administrative resources, including increased audit and legal fees.

 

Closing of the Business Combination

 

On December 8, 2023 (the “Closing Date” and such closing, the “Closing”), we consummated the previously announced business combination pursuant to the Business Combination Agreement, dated as of March 13, 2023 (the “Business Combination Agreement”), by and among us, Pegasus Merger Sub Inc., a Delaware corporation and direct, wholly owned subsidiary of the Company (“Merger Sub”) and MOBV. As of the Closing Date, pursuant to the terms of the Business Combination Agreement, Merger Sub merged with and into MOBV (the “Merger”), with MOBV surviving the Merger as a wholly owned subsidiary of the Company (the “Business Combination”).

 

In connection with the execution of the Business Combination Agreement, the Company entered into, among other arrangements, (1) exchange agreements (the “Exchange Agreements”) with certain shareholders of SVM, pursuant to which, among other things such shareholders of SVM have a right to transfer one or more of the shares owned by them in SVM to us in exchange for the delivery of Shares or cash payment, subject to the terms and conditions set forth in the Exchange Agreements, and (2) a registration rights agreement (the “Registration Rights Agreement”) with certain of its shareholders and the Sponsor.

 

On December 11, 2023, our ordinary shares commenced trading on the Nasdaq under the symbol “SVMH”.

 

 

Ionic Purchase Agreement

 

We entered into the Purchase Agreement with Ionic Ventures, LLC (“Ionic”) on July 1, 2024, which provides that, upon the terms and subject to the conditions and limitations set forth therein, we have the right to direct Ionic to purchase up to an aggregate of US$25,000,000 of ordinary shares of the Company, par value $0.01 per share (the “Ordinary Shares”) over the 36-month term of the Purchase Agreement (the “Purchase Shares”). We issued an initial exemption purchase notice to Ionic for US$1 million on July 1, 2024. The Purchase Agreement prohibits the Company from issuing Shares to Ionic in excess of 4.99% of the then outstanding ordinary shares of the Company at any given time.

 

After the satisfaction of the commencement conditions, we will have the right to present Ionic with a regular purchase notice (“Regular Purchase Notice”) directing Ionic to purchase any amount no less than US$250,000 and no greater than US$1,000,000 of our Ordinary Shares per trading day, at a per share price equal to 97% (or 80% if the Ordinary Shares are not then trading on the Nasdaq Global Market) of the lowest volume weighted average price (“VWAP”) over a specified measurement period, as described further in the Purchase Agreement. If an Event of Default (as defined in the Purchase Agreement) occurs between the date on which a Regular Purchase Notice is delivered to Ionic and such specified measurement period, such price per share will be adjusted to 85% (or 90% in the event the Ordinary Shares are not then trading on the Nasdaq Global Market) for so long as such Event of Default remains uncured.

 

The Purchase Agreement may be terminated by us if certain conditions to commence have not been satisfied by July 31, 2024. The Purchase Agreement may also be terminated by us at any time after commencement, at our discretion; provided, however, that if we have sold less than US$6,000,000 worth of Purchase Shares to Ionic (other than as a result of our inability to sell Purchase Shares to Ionic as a result of the Beneficial Ownership Limitation or our failure to have sufficient Ordinary Shares authorized), we will pay to Ionic a termination fee of US$300,000, which is payable, at our option, in cash or in Ordinary Shares at a price equal to the closing price of our Ordinary Shares on the Nasdaq Global Market on the trading day immediately preceding the date of receipt of the termination notice. Further, the Purchase Agreement will automatically terminate on the date that we sell, and Ionic purchases, the full US$25,000,000 of Purchase Shares under the agreement or, if all such Purchase Shares have not been purchased, on the expiration of the 36-month term of the Purchase Agreement.

 

The Company has currently reserved 50,000,000 Ordinary Shares that will be issuable pursuant to the Purchase Agreement. In the event such reserve is not increased or the total number of the Company’s authorized shares are not increased, the number of Purchase Shares that may be issued will be constrained thereby.

 

Ionic Registration Rights Agreement

 

Concurrently with entering into the Purchase Agreement, we also entered into a registration rights agreement, dated as of July 1, 2024, by and between us and Ionic Ventures (the “the Ionic Registration Rights Agreement”), pursuant to which we agreed to file one or more registration statements, as necessary, to register under the Securities Act of 1933, as amended, the resale of all Ordinary Shares that may, from time to time, be issued or become issuable to Ionic under the Purchase Agreement and the Ionic Registration Rights Agreement. We are filing this registration statement in part to fulfill our obligations under the Ionic Registration Rights Agreement.

 

Placement Agency Agreement

 

In connection with the transactions contemplated under the Purchase Agreement, the Company entered into a placement agency agreement (the “Placement Agency Agreement”) with Maxim Group LLC (“Maxim”). Pursuant to the terms of the Placement Agency Agreement, the Company must pay Maxim (i) a cash fee equal to 5.0% of the aggregate gross proceeds raised from the sale of Purchase Shares in connection with any exemption purchase notice; and (ii) a cash fee equal to 3.0% of the aggregate gross proceeds raised from the sale of Purchase Shares in connection with any Regular Purchase Notice. The Company must also reimburse Maxim, directly upon the initial closing under the Purchase Agreement for all travel and other documented out-of-pocket expenses incurred by Maxim, including the reasonable fees, costs and disbursements of its legal counsel, in an amount not to exceed an aggregate of $5,000. The Company owes Maxim a total of $50,000 from the gross proceeds of $1,000,000 due to the Company from the exemption purchase notice dated July 1, 2024. If the Company issues additional Ordinary Shares to Ionic pursuant to the Purchase Agreement, the Company would be obligated to pay Maxim cash fees of up to $720,000, assuming the remaining $24,000,000 of Purchase Shares are issued pursuant to Regular Purchase Notices.

 

The Company also agreed to indemnify Maxim and its affiliates, directors, officers, employees and controlling persons against all losses, claims, damages, expenses and liabilities, as the same are incurred (including the reasonable fees and expenses of counsel), relating to or arising out of its activities pursuant to the Placement Agency Agreement.

 

The foregoing descriptions of each of the Purchase Agreement, the Ionic Registration Rights Agreement, and the Placement Agency Agreement do not purport to be complete and are qualified in their entirety to the full text of such documents, which are filed as exhibits to this registration statement.

 

Nasdaq Delisting Determination and Appeal

 

On July 24, 2024 and July 30, 2024, we received Staff Delisting Determination letters (the “Determinations”) from Nasdaq setting forth a determination to delist our Ordinary Shares from Nasdaq as a result of our failure to regain compliance with each of their rules with respect to (i) minimum Bid Price of $1.00, (ii) minimum Market Value of Publicly Held Shares of $15,000,000, and (iii) a minimum Market Value of Listed Securities of $50,000,000. On July 30, 2024, we submitted a request for a hearing before a Hearings Panel (the “Panel”) to appeal the Determinations. The hearing request was accepted by Nasdaq and the hearing is scheduled for September 5, 2024. The hearing request will stay the delisting of our Ordinary Shares and warrants until a determination is made by the Panel. The Ordinary Shares will continue to trade on Nasdaq pending the outcome of the hearing before the Panel. We will address the ongoing non-compliance matters before the Panel and will request additional time to cure the deficiency. There can be no assurance that, following the hearing, the Panel will grant our request for additional time to regain compliance. If the Panel does not grant our request for additional time to comply, our Ordinary Shares will be subject to delisting from Nasdaq. If our Ordinary Shares were to be delisted by Nasdaq, the market liquidity of our Ordinary Shares could be adversely affected and the market price of our Ordinary Shares could decline, even though such Ordinary Shares may continue to be traded “over-the-counter”. See “Risk Factors” for more information.

 

 

Amendment of Memorandum of Association and Release of Earnout Shares

 

The Company amended its Memorandum of Association to increase its authorized share capital to US$10,000,000, comprising of 1,000,000,000 ordinary shares of US$0.01 par value with effect on August 2, 2024. The amendment was approved by special resolution of the shareholders at the extraordinary general meeting on June 27, 2024, and subsequently implemented by the board of directors.

 

Pursuant to the Extraordinary General Meeting of Shareholders (the “Meeting”) of the Company convened at June 27, 2024, the Company’s shareholders approved the release of Earnout Shares to the Earnout Group, without the occurrence of Milestone Events (as defined in the Merger Agreement dated March 13, 2023) and a pro rata increase in the number of Earnout Shares in proportion to certain issuances of shares made by the Company in advance of the closing of the Business Combination. The Merger Agreement was subsequently amended on September 12, 2024, to provide for the vesting of the Earnout Shares in three tranches as follows: 129,916,660 immediately; 129,916,660 on June 27, 2025; and 129,916,660 on June 27, 2026.

 

Key Factors Affecting the Company’s Operating Results

 

SVH and its subsidiary have been developing their E2W vehicles for the past five years. SVH began early-stage commercial sales in 2021 and its products have been in commercial use for the past two years. SVH believes that its future success and financial performance depends on several factors that present significant opportunities for our business, but also pose risks and challenges, including those discussed below and in the Section of this prospectus titled “Risk Factors.”

 

Innovation

 

SVH is committed to the E2W market and plans to invest in technology, manufacturing, distribution, and service that will delight our customers and deliver pioneering E2W by means of design, software and customer experience. The E2W vehicle market is highly competitive and includes both established manufacturers and new entrants. SVH expects to become a leading electric motorcycle brand as the first Indian E2W company publicly traded in the U.S.

 

Distribution, Sales and Service

 

Our growth will depend on our ability to achieve vehicle revenue targets, which depends on our ability to successfully execute our sales and marketing strategy, while retaining our premium brand perception. We have received over 700 distributor applications in India, but have not signed any agreements as of the date hereof. Prana has been in early commercial production and sales for the past two years, and our customers’ feedback has been positive and customer interest has been robust. To maintain our premium brand position, it is imperative that we do not disappoint customers, and so we accepted only limited orders, to ensure satisfactory delivery times and quality control. We expect to increase our sales and delivery schedules as we increase production capacity and achieve high volume production.

 

We plan to raise brand awareness primarily through online and social media channels, in addition to our Customer Experience physical touchpoints. In keeping with our premium brand, we intend to provide superior customer experience through our direct and franchised technicians, who will assist in delivery and after-sales care at our customer’s location.

 

SVM operates a hybrid sales and services model through SVM Experience Centre and franchise-operated Experience Centre. SVH expects to continue to expand throughout India, and regionally in Asia.

 

Establishing Contract Manufacturing Capacity and Supply Chain Management

 

Achieving our business plan will require us to expand our supply chain and contract manufacturing capacity. The scope of our future contract manufacturing capacity requirements and resulting capital expenditures will depend on many factors, including the growth of our sales and marketing initiatives, our ability to develop and launch new electric vehicles, our ability to utilize planned capacity in its existing contract manufacturers’ facilities, our ability to retain contract manufacturing relationships, access to capital, and the timing of our entry into new markets.

 

Global supply chain and logistics challenges affect SVH and its industry. As a result of these challenges, SVH has experienced cost increases for logistics, raw materials and purchased components, as well as increased manufacturing costs. SVM’s location in India, however, mitigates some of the higher costs as labor, land, and other input prices remain lower in India. It is expected that certain components, logistics, and manufacturing costs will stabilize in 2023, but that certain inflation in raw materials and components, especially with respect to batteries, will persist in the near term. Furthermore, SVM buys certain of its components in U.S. dollars, while selling products and services domestically in Indian rupees. Any fluctuations in the exchange rates of the U.S. dollar to the Indian rupee may have adverse effects on SVM’s financial condition and results of operation.

 

The Company has also in the past experienced some supply chain disruption for certain components, including semiconductor chips. While these disruptions have not materially impacted production volumes to date, SVM expects production to accelerate, which could aggravate the effects of future supply disruptions on its business.

 

The global supply chain and logistics disruptions continue to impact SVH and the automotive industry. Our ability to manufacture vehicles is dependent on the continued supply of manufacturing inputs. Fluctuations in the cost of input materials or components and supply interruptions or shortages could materially impact our business. For example, following the launch of a military action in Ukraine by Russia in February 2022, commodity prices, including the price of oil, gas, nickel, copper, lithium, and aluminum, increased. Sanctions and other measures imposed in response to such actions by countries and bodies around the world, as well as the existing and potential further responses from Russia or other countries subject to such sanctions, tensions and military action, could result in persistent volatility in commodity prices and interruptions of supply of manufacturing inputs. In addition, some components of our vehicles are manufactured in China and we depend on our suppliers there to deliver these components in order to deliver our products to our customers.

 

 

Contracting with Industry-Leading Original Component Manufacturers and Innovative Battery Technology Research Companies

 

SVH has contracted with a limited number of battery manufacturers to allow us to secure additional battery supplies with improved technologies and scale rapidly with low capital intensity.

 

SVH believes that our experience manufacturing and selling the Prana product line will reduce the execution risk typically associated with new vehicle companies. Through such platform sharing, component sourcing, and manufacturing partnerships, SVH believes that it will be able to accelerate market access and reduce investment in development. SVH intends to meet timing, cost, and quality expectations while optimizing cost structures by leveraging its partnerships and in-house expertise. Maintaining maximum component independence allows SVH to dynamically select partners and components to its advantage and enables the Company to focus on design innovation, customer experience, and user interface that integrates software and hardware as well as products and services.

 

Market Trends and Competition

 

SVH offers innovative and proprietary E2W vehicles in India, one of the largest markets in the world for TWV. India’s market offers a young and growing population, rising incomes, rapid urbanization, and a supportive government whose policies promote electric vehicles, or EV, generally. Existing competitors supply mostly ICE powered vehicles at a higher TCO, and low-end electric scooters. SVH believes it offers the only premium electric motorcycle in India that is affordable to young urban professionals and compares favorably on TCO.

 

Regulatory Landscape

 

SVH operates in an industry that is subject to and benefits from a regulated environment. In addition to rules and regulations that apply to all vehicles, including safety, service, and emissions, most recent regulations have been targeting environmental concerns, which regulations have generally become more stringent over time. Regulations in target markets include economic incentives to purchase EV generally and E2W specifically, to deploy vehicle charging stations, to manufacture components locally in India, and to improve roads. While SVH expects environmental regulations to benefit our growth, certain regulations may result in higher costs and lower margins.

 

Sustainability

 

SVH’s is a leader in sustainable mobility, prioritizing responsible business practices to sustain people and planet and allow a future that is safe for posterity.

 

Our vehicles, products, and services promote several of the United Nations’ Sustainable Development Goals, notably:

 

	●	Affordable and Clean Energy;
	●	Sustainable Cities and Communities; and
	●	Responsible Consumption and Production.

 

Sustainable Design: SVH’s designs reduce material consumption, carbon emissions, and noise pollution.

 

Net Zero: SVH is committed to achieving net zero carbon emissions by decarbonizing both our own operations, as well as our zero-emissions vehicles.

 

Stakeholder Attitude: SVH aims to improve the working conditions of our employees and make our communities desirable places to live, work, and ride.

 

 

Internal Control Over Financial Reporting

 

Our financial reporting function and system of internal controls are less developed in certain respects than those of similar companies and may not provide our management with as much or as accurate or timely information. A deficiency in internal controls exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control over financial reporting that is less severe than a material weakness, yet important enough to merit attention by those responsible for oversight of the company’s financial reporting. The Public Company Accounting Oversight Board, or PCAOB, has defined a material weakness as a deficiency, or a combination of deficiencies in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the annual or interim statements will not be prevented or detected on a timely basis.

 

Although we are not yet subject to the certification or attestation requirements of Section 404 of the Sarbanes-Oxley Act, in connection with the audit of our consolidated financial statements as of and for the years ended March 31, 2024 and 2023, our management and our independent registered public accounting firm did not identify any deficiencies.

 

As a company with less than $1.235 billion in revenue for our last fiscal year, we qualify as an “emerging growth company” pursuant to the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act, in the assessment of the emerging growth company’s internal control over financial reporting.

 

Basis of Presentation

 

Refer to Note 1 of the Notes to Annual Combined Financial Statements for a discussion of the underlying basis used to prepare the combined financial statements.

 

Components of Results of Operations

 

Revenue

 

SVM generates revenue from the sale of E2W, related products and accessories, and value-added services. E2W are sold both directly to retail end users through SVM’s Customer Experience centers and online, as well as to a network of dealer partners. SVM expects revenue to increase in future periods as it expects shipments of current models to grow as well as from the introduction of new models that will expand its target market.

 

Cost of Revenue/Goods Sold

 

Cost of goods sold primarily consists of direct materials, components, in-bound freight, customs and duties, supplies, labor-related costs, including salaries, benefits and share-based compensation. and allocated overhead costs, including facilities costs, depreciation of manufacturing-related equipment and facilities and other direct costs. SVM expects its cost of goods sold to increase in absolute dollars as it expects to produce more vehicles for its growing sales. SVM expects cost of goods sold per unit to decrease as its growth allows for improved terms in purchasing and as economies of scale take hold in its production process.

 

Selling, General and Administrative Expense

 

Selling, general, and administrative, or SG&A, expenses consist of personnel-related expenses for SVM’s corporate, executive, finance, engineering, product development and other administrative functions, expenses for outside professional services, including legal, audit and advisory services as well as expenses for depreciation and amortization of assets and facilities not directly involved in production, and marketing and advertising costs. Personnel-related expenses consist of salaries, benefits, and share-based compensation. SG&A expenses also include other engineering expenses, which consist of expenditures for research and development activities relating to product development and improvements.

 

SVM expects absolute SG&A expenses to increase for the foreseeable future as it scales headcount, expands hiring of engineers and designers, continues to invest in new designs and development of technology in order to drive the growth of the business, and as a result of operating as a public company, including compliance with the rules and regulations of the SEC, legal, audit and internal controls, additional insurance expenses, investor relations activities and other administrative and professional services.

 

 

Depreciation and Amortization Expenses

 

Depreciation and amortization costs relate to the depreciation of manufacturing-related equipment and facilities and the amortization of definite-lived intangible assets. SVM expects depreciation and amortization costs to increase in absolute terms as it invests in property, plant, and equipment and in developing its intellectual property estate.

 

Amortization is calculated based on the cost of intangible assets less their estimated residual values using the straight-line method over their estimated useful lives, from the date that they are available for use and is recognized in profit or loss. The amortization is included in “General and administrative expenses.”

 

Interest Expense

 

Interest expense consists primarily of interest expense associated with credit facilities employed in the procurement, manufacturing and sales of SVH’s vehicles, products, and services.

 

Income Tax Provision

 

SVM’s income taxes as presented are calculated on a separate tax return basis. The income tax provision (benefit) consists of an estimate for national, federal, state, local, and foreign income taxes based on enacted rates, as adjusted for allowable credits, deductions, uncertain tax positions, changes in deferred tax assets and liabilities and changes in the tax law. SVM has generated operating losses in each of the years presented.

 

Results of Operations

 

SVH generates revenue from the sale of E2W, related products and accessories, and value-added services. E2W are sold both directly to retail end users through SVM’s Customer Experience centers and online, as well as to a network of dealer partners. SVH expects revenue to increase in future periods as it expects shipments of current models to grow as well as from the introduction of new models that will expand its target market.

 

Comparison of the for the year ended March 31, 2024, and 2023:

 

		March 31, 2024 ($)				March 31, 2023 ($)
Revenue			42,538				112,409

 

Revenue for the year ended March 31, 2024, declined by $70 thousand, or 62.27%, to $43 thousand from $113 thousand for the year ended March 31, 2023. The decline was primarily due to the delay in receipts of shipment of raw materials pursuant to the increase of COVID cases in different countries. Refer to Note 3 of the Notes to Annual Combined Financial Statements for further discussion.

 

 

Cost of Revenue

 

Comparison of the for the year ended March 31, 2024, and 2023:

 

		March 31, 2024($)				March 31, 2023($)
Cost of goods Sold			(35,316	)			(132,780	)
Inventory write-down			(262,686	)			(113,724	)
Total Cost of Revenue			(298,002	)			(246,504	)

 

Cost of revenue for the year ended March 31, 2024, increased by $51 thousand, or 20.69%, to $298 thousand from $247 thousand for the year ended March 31, 2023. The increase was primarily due to i) inventory write down amounting to $263 thousand which occurred during year ended March 31, 2024 pursuant to the compliance with the revised Automotive Industry Standards (AIS)-156 and AIS-038 regulations issued by the Govt of India w.r.t EV batteries and also expiration of Prana 1.0 license this was offset by decrease in the Cost of goods sold amounting to $97 thousand on account of delay in receipt of shipments of raw materials pursuant to increase in COVID cases in different countries.

 

General and Administrative Expenses

 

Comparison for the years ended March 31, 2024, and 2023:

 

		(Audited) March 31, 2024($)				(Audited) March 31, 2023($)
General and Administrative expenses			(10,924,808	)			(405,078	)

 

General and Administrative expenses for the year ended March 31, 2024, increased by $10,519 thousand, or 2597.03%, to $10,924 thousand from $405 thousand for the year ended March 31, 2023. The increase was primarily due to increases related to higher headcount, increases in professional service costs related primarily to audit, legal and other professional services, and increases in other costs related primarily to depreciation, technology and other administrative expenses.

 

Selling and Distribution expenses

 

Comparison of the for the years ended March 31, 2024, and 2023:

 

		March 31, 2024($)				March 31, 2023($)
Selling and Distribution expenses			(181,195	)			(2,814	)

 

Selling and Distribution expenses for the year ended March 31, 2024, increased by $178 thousand, or 6325.52%, to $181 thousand from $3 thousand for year ended March 31, 2023. The increase was primarily due to a written off of supplier advances due to uncertainty over receipt of shipments of raw materials/ its recoverability

 

Depreciation and Amortization costs

 

Comparison of the for the years ended March 31, 2024, and 2023:

 

		March 31, 2024($)				March 31, 2023($)
Depreciation and Amortization costs			(38,343	)			(24,545	)

 

Depreciation and Amortization costs for the year ended March 31, 2024, increased by $13 thousand, or 57.04%, to $38 thousand from $25 thousand for the year ended March 31, 2023. The increase was primarily due to recognition of operating lease assets and amortization thereof.

 

 

Income Tax Provision

 

Comparison of the for the years ended March 31, 2024, and 2023:

 

		March 31, 2024($)				March 31, 2023($)
Income tax expense/benefit			(26,162	)			(64,241	)

 

Income tax expense for the year ended March 31, 2024, decreased by $38 thousand, or 59.15%, to $26 thousand from $64 thousand for the year ended March 31, 2023. The change in income tax expense was due to recognition of tax liability for the year ended March 31, 2024.

 

Comparison of the for the years ended March 31, 2024, and 2023:

 

		March 31, 2024($)				March 31, 2023($)
Revenue			42,538				112,409
Cost of goods Sold			(35,316	)			(132,780	)
Inventory write-down			(262,686	)			(113,724	)
Total Cost of Revenue			(298,002	)			(246,504	)
Gross Profit			(255,464	)			(134,095	)
General and administrative expenses			(10,924,808	)			(405,078	)
Selling and Distribution expenses			(181,195	)			(2,814	)
Depreciation and Amortization			(38,343	)			(24,545	)
Other income, net			1,330				11,771
Finance Expenses			(57,652	)			(55,946	)
Income tax expense/benefit			(26,162	)			(64,241	)

 

		March 31, 2024($)				March 31, 2023($)				Change ($ in 000’s)				%
Revenue			42,538				112,409				(70	)			-62.27	%
Cost of goods Sold			(35,316	)			(132,780	)			(69	)			-73.05	%
Inventory write-down			(262,686	)			(113,724	)			149				131.02	%
Total Cost of Revenue			(298,002	)			(246,504	)			51				20.69	%
Gross Profit			(255,464	)			(134,095	)			(122	)			-90.23	%
General and administrative expenses			(10,924,808	)			(405,078	)			10,519				2597.03	%
Selling and Distribution expenses			(181,195	)			(2,814	)			178				6325.52	%
Depreciation and Amortization			(38,343	)			(24,545	)			13				57.04	%
Other income, net			1,330				11,771				(11	)			-84.95	%
Finance Expenses			(57,652	)			(55,946	)			2				3.57	%
Income tax expense/benefit			(26,162	)			(64,241	)			(38	)			-59.15	%

 

Off-Balance Sheet Arrangements

 

We have not entered into any financial guarantees or other commitments to guarantee the payment obligations of any unconsolidated third parties. In addition, we have not entered into any derivative contracts that are indexed to our shares and classified as shareholders’ equity or that are not reflected in our consolidated financial statements. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity or contractual arrangements that support the credit, liquidity or market risk for such transferred assets. Moreover, we do not have any variable interest in any unconsolidated entity.

 

Contractual Obligations

 

SVH does not have any material contractual obligations of its own. The previously availed HSBC Facility has been repaid in full and closed.

 

Liquidity and Capital Resources

 

As of March 31, 2024, our cash and cash equivalents amounted to US$0.17 million.

 

We have historically managed liquidity risk by effectively managing our working capital, capital expenditures and cash flows, and deploying resources to match production needs.

 

 

Investments and Borrowing Requirements

 

As an early-stage growth company, we do not currently have, nor do we expect to generate from operations, adequate liquidity to fund our operations for the next twelve months. To alleviate such conditions, we are currently discussing funding commitments with several parties. Accordingly, management believes that cash on hand and the financing facilities it has arranged will provide sufficient liquidity to meet our projected obligations, including those related to existing contractual obligations, for at least the next twelve months.

 

We plan to use our current cash on hand to support our core business operations and strategic plan to accelerate our go-to-market strategy, invest in new product development, and enhance our global distribution capabilities. We expect our capital expenditures and working capital requirements to increase substantially in the future as we grow our business, develop our customer support and marketing infrastructure and expand our research and development efforts. Specifically, we estimate we will invest approximately $50.9 million by fiscal year 2026 to expand the capacity necessary to achieve the projected volumes.

 

Our purchase orders for inventory used in manufacturing generally do not become firm commitments until 30-45 days prior to expected delivery. We record a liability for excess firm commitments. Refer to Note 11 of the Notes to Annual Combined Financial Statements for further discussion of excess firm commitments. Our material contractual operating cash commitments on March 31, 2024, relate to leases and notes payable to a related party. Our long-term lease obligations and future payments are discussed further in Note 8 of the Notes to Annual Combined Financial Statements. Our notes payable to related party, included interest and maturity terms, are discussed further in Note 10 of the Notes to Annual Combined Financial Statements.

 

Cash Flows

 

The following table summarizes our cash flow activities for the periods presented:

 

		Year Ended March 31,
		2024($)				2023($)
Net cash used in operating activities			(3,872,110	)			(384,070	)
Net cash (used in)/provided by investing activities			(102,523	)			(13,026	)
Net cash (used in)/provided by financing activities			4,123,010				296,583
Effects of exchange rate changes on cash and cash equivalents			5,286				46,286
Net increase/(decrease) in cash and cash equivalents			153,663				(54,227	)
Cash and cash equivalents at the beginning of the period			21,378				75,605
Cash and cash equivalents at the end of the period			175,041				21,378

 

The overall increase in cash during the nine-month period ended March 31, 2024, was primarily due to the increase in cash flows from financing activities incurred during the period ended April 1, 2023 through March 31, 2024.

 

Net Cash Used by Operating Activities

 

We had negative cash flow from operating activities during the years ended March 31, 2024 and 2023. The negative cash flow from operating activities reflects the growth in electric motorcycle shipments and ongoing product development investments given the start-up nature of the electric motorcycle business.

 

Net cash used in operating activities decreased by $3,488 thousand to $3,872 thousand for the year ended March 31, 2024 compared to $384 thousand for the year ended March 31, 2023. The decrease in cash used in operating activities was primarily driven by changes in working capital. Working capital was impacted by changes in inventory, primarily due to decreasing inventory levels on account of lockdown restrictions during the COVID 19/delay in receipt of shipment of raw materials.

 

 

Net Cash Used by Investing Activities

 

Net cash used in investing activities increased by $90 thousand to $103 thousand for the year ended March 31, 2024, compared to $13 thousand for the year ended March 31, 2023. The increase was primarily due investments in Property plant and Equipment during the year ended March 31, 2024.

 

We expect to fund future cash flows used in investing activities with cash flow generated by operations and other financings.

 

Net Cash Provided by Financing Activities

 

Net cash provided by financing activities increased by $3,826 thousand to $4,123 thousand for the year ended March 31, 2024 compared to $297 thousand for the year ended March 31, 2023. The increase in cash provided by financing activities was driven by an additional paid-in capital.

 

Critical Accounting Policies and Estimates

 

Our financial statements are based on the selection and application of significant accounting policies, which require management to make significant estimates and assumptions. Management believes that the following are some of the more critical judgment areas in the application of accounting policies that currently affect our financial condition and results of operations.

 

Product Warranty and Recalls—We provide a limited warranty on the new electric motorcycles for a period of one year, except for the battery which is covered for five years. Estimated warranty costs are recorded at the time of sale and are based primarily on our historical claim information and as actual experience becomes available it is used to update the accruals.

 

Additionally, we may from time to time initiate certain voluntary recall campaigns. The estimated costs associated with voluntary recalls are recorded when the liability is both probable and estimable. This generally occurs when management approves and commits to a recall. The accrued cost of a recall is based on an estimate of the cost to repair each affected vehicle and the number of vehicles expected to be repaired based on historical data concerning the percentage of affected customers that take advantage of recall offers. In the case of both warranty and recall costs, as actual experience becomes available it is used to update the accruals.

 

The factors affecting actual warranty and recall costs can be volatile. As a result, actual warranty claims experience and recall costs may differ from estimates, which could lead to material changes in our accrued warranty and recall costs. Our warranty and recall liabilities are discussed further in Note 10 of the Notes to Annual Combined Financial Statements. To date, we have not issued any recalls.

 

Income Taxes—Our income taxes as presented are calculated on a separate tax return basis. We account for income taxes in accordance with Accounting Standards Codification Topic 740, Income Taxes (Topic 740). Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and other loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. We review our deferred income tax asset valuation allowances on a quarterly basis or whenever events or changes in circumstances indicate that a review is required. In determining the requirement for a valuation allowance, the historical and projected financial results of the legal entity or combined group recording the net deferred income tax asset is considered, along with any positive or negative evidence including tax law changes. Since future financial results and tax law may differ from previous estimates, periodic adjustments to our valuation allowances may be necessary. We have generated operating losses in each of the years presented, however, any hypothetical net operating loss attributes generated, and related valuation allowances, are deemed to have been distributed to SVH through net parent investment and are not presented on the balance sheet.

 

 

We are subject to income taxes in the U.S. and numerous foreign jurisdictions. These tax laws and regulations are complex and significant judgment is required in determining our worldwide provision for income taxes and recording the related deferred tax assets and liabilities.

 

In the ordinary course of our business, there are transactions and calculations where the ultimate tax determination is uncertain. Accruals for unrecognized tax benefits are provided for in accordance with the requirements of Topic 740. An unrecognized tax benefit represents the difference between the recognition of benefits related to items for income tax reporting purposes and financial reporting purposes. Any unrecognized tax benefit is not included within the combined balance sheets as any benefit would reside with SVM. SVM is regularly audited by tax authorities as a normal course of business. Although the outcome of tax audits is always uncertain, SVM believes that it has appropriate support for the positions taken on its tax returns and that its annual tax provision includes amounts sufficient to pay any assessments. Nonetheless, the amounts ultimately paid, if any, upon resolution of the issues raised by the taxing authorities may differ materially from the amounts accrued for each year and would be the obligation of SVM. Refer to Note 5 of the Notes to Annual Combined Financial Statements for further discussion regarding our income taxes.

 

Business Combination.

 

SVH was the acquiror for both the legal and accounting purposes, as the shares of MOBV converted into the right to receive SVH Shares (the “Per Share Consideration”) and MOBV legally became SVH’s wholly owned subsidiary as a result of the merger with Merger Sub.

 

The Business Combination was accounted for as an asset acquisition. MOBV did not qualify as a Business per ASC 805-10-55-3A. Since the acquisition was based on a monetary exchange, and most of the assets of MOBV were marketable securities in the trust account, the fair value of the assets was the more evident value. The liabilities assumed were all of short-term nature which are deemed to be at fair value. As such the fair value of the consideration given, in this case the transaction costs incurred, one to one share exchange and the Earn Out consideration were allocated using the relative fair value approach based on the net asset value acquired from MOBV. Given the nature of the assets acquired and liabilities assumed from MOBV, an allocation of the transaction costs and Earn Out consideration cannot be made to the net assets acquired. Accordingly, an immediate charge to operations was recognized for the difference between the relative value allocated to the earnout and the fair value, as well as for the value of the transaction costs.

 

In relation to the Business Combination, the purchase price contained contingent consideration. The contingent consideration relates to an aggregate earn-out payment with maximum payout of $250 million based on the achievement of sales volume during the three-year performance periods FY2024, FY2025 and FY2026. Each annual period has its own targets and related potential earn-out payments. The fair value of the contingent consideration is estimated using a Monte Carlo simulation that utilizes key assumptions defined in the earnout agreement including sales volume performance periods, caps and floors. Changes to the fair value of the contingent consideration liability can result from changes to one or more inputs, including discount rates, the probabilities of achieving the sales volume targets, and the time required to achieve the sales volume targets. Significant judgment is employed in determining the appropriateness of these inputs, which reflect the Company’s assumptions on the best market information available under the circumstances. In any given period, changes to the inputs, or significant increases or decreases to the inputs in isolation, would have resulted in a significantly lower or higher fair value ascribed to the contingent consideration and have a material impact on our financial position and results of operations.

 

Goodwill and Intangible Assets—Goodwill represents the excess of acquisition cost over the fair value of the net assets purchased. Goodwill is tested for impairment, based on financial data related to the reporting unit to which it has been assigned, at least annually or whenever events or changes in circumstances indicate that the carrying value may not be recoverable. If the carrying amount of the reporting unit exceeds its fair value, goodwill is considered impaired and an impairment loss is recognized for the amount by which the carrying amount exceeds the fair value, limited to the total goodwill allocated to the reporting unit. When evaluating goodwill for impairment, SVM first performs a qualitative assessment to determine whether it is more likely than not that the reporting unit is impaired. If SVM determines that it is not more likely than not that the fair value of the reporting unit exceeds its carrying amount, SVM calculates the estimated fair value of the reporting unit using income and market approaches. Significant assumptions are incorporated into the income approach, such as estimated growth rates and a risk-adjusted discount rate. Fair value under the market approach utilizes the guideline public company methodology, which uses valuation indicators determined from other businesses that are similar to our reporting unit.

 

 

Intangible assets consist of trademarks, non-compete agreements and others and are stated at cost less accumulated amortization. The intangible assets have been determined to have finite lives and are amortized on a straight-line basis over their estimated useful lives.

 

Significant judgments are required in assessing impairment of intangible assets and include identifying whether events or changes in circumstances require an impairment assessment, estimating future cash flows, determining appropriate discount and growth rates and other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value whether an impairment exists and if so the amount of that impairment.

 

The intangible assets are tested for impairment whenever events or changes in circumstances indicate the carrying amount may not be recoverable. The events and circumstances SVM monitors and considers include significant decreases in the market price for similar assets, significant adverse changes to the extent and manner in which the asset is used, an adverse change in legal factors or business climate, an accumulation of costs that exceed the estimated cost to acquire or develop a similar asset, and continuing losses that exceed forecasted costs. When the carrying value of an intangible asset is not recoverable based on the existence of one or more of the above indicators, recoverability is determined by comparing the carrying amount of the asset to net future undiscounted cash flows that the asset is expected to generate. An impairment charge would then be recognized equal to the amount by which the carrying amount exceeds the fair value of the asset.

 

Emerging Growth Company Status

 

Section 102(b)(1) of the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”) exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can choose not to take advantage of the extended transition period and comply with the requirements that apply to non-emerging growth companies, and any such election to not take advantage of the extended transition period is irrevocable.

 

MOBV is an “emerging growth company” as defined in Section 2(a) of the Securities Act and has elected to take advantage of the benefits of the extended transition period for new or revised financial accounting standards. SVH expects to remain an emerging growth company at least through the end of the 2023 fiscal year and SVH expects to continue to take advantage of the benefits of the extended transition period, although it may decide to early adopt such new or revised accounting standards to the extent permitted by such standards. This may make it difficult or impossible to compare SVH’s financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions because of the potential differences in accounting standards used.

 

Revenue Recognition

 

The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of this standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services.

 

ASC 606 prescribes a 5-step process to achieve its core principle. The Company recognizes revenue from trading, rental, or product sales as follows:

 

	I.	Identify the contract with the customer.
	II.	Identify the contractual performance obligations.
	III.	Determine the amount of consideration/price for the transaction.
	IV.	Allocate the determined amount of consideration/price to the contractual obligations.
	V.	Recognize revenue when or as the performing party satisfies performance obligations.

 

The consideration/price for the transaction (performance obligation(s)) is determined as per the agreement or invoice (contract) for the services and products in the automobile segment.

 

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, discounts, sales incentives, goods & service tax. The Company recognizes revenue when the amount of revenue and its related cost can be reliably measured and it is probable that future economic benefits will flow to the entity and degree of managerial involvement associated with ownership or effective control have been met for each of the Company’s activities. Revenue includes revenue related to domestic sales of vehicles, spare parts, and accessories that meet the definition of a performance obligation under ASC 606.

 

Sales disaggregated by significant products and services for years ended is as follows:

 

		Year ended March 31, 2024				Year ended March 31, 2023
Vehicle Manufacturing
Vehicle Sales (1)			28,986				100,022
Others			13,552				12,387
Total			42,538				112,409

 

(1)	Revenue from Sales of Vehicle represents sale of Electric Bikes to Authorized dealers in and around India.

 

 

New Accounting Standards Not Yet Adopted

 

Other than the recent accounting pronouncements disclosed in SVH’s Annual Combined Financial Statements, there have been no new accounting pronouncements or changes in accounting pronouncements during the period ended March 31, 2024, that are significant or potentially significant to SVH.

 

Quantitative and Qualitative Disclosures About Market Risk

 

As of March 31, 2024, our cash and cash equivalents amounted to US$1.65 million. We historically managed liquidity risk by effectively managing our working capital, capital expenditures and cash flows, and deploying resources to match production needs.

 

Financial instruments that potentially subject us to concentration of credit risk principally consist of accounts receivable. We limit our credit risk with respect to accounts receivable by performing credit evaluations and requiring collateral to secure amounts owed by our customers, each when deemed necessary.

 

We have experienced cost increases for logistics, raw materials, and purchased components as well as increased manufacturing costs. Our location in India, however, mitigates some of the higher costs as labor, land and other input prices remain lower in India and the effects of inflation not been material to date. We expect the supply chain challenges and higher costs will continue in 2025 and may become more significant as production volumes increase. We expect that certain components, logistics and manufacturing costs will stabilize in 2026, but that certain raw materials cost inflation, especially in batteries, will persist in the near term. Furthermore, we buy certain of our components in U.S. dollars while we sell our products and services domestically in Indian rupee. Any fluctuations in the exchange rates of the U.S. dollar to the Indian rupee may have adverse effects on our financial condition and results of operation.

 

We are also exposed to possible disruption of supply or shortage of materials, in particular for lithium-ion battery cells and key semiconductor chip components necessary for electric vehicles and any inability to purchase raw materials and components could negatively impact our operations.

 

We plan to sell our electric motorcycles and related products initially in India and in the future, internationally. In most international markets, sales are made in the foreign country’s local currency. As a result, our operating results will be affected by fluctuations in the values of the Indian rupee relative to foreign currencies, however, the impact of such fluctuations on our operations to date are not material given the majority of our sales are currently in India. We plan to expand its business and operations internationally and expects its exposure to currency rate risk to increase in the future.

 

BOARD OF DIRECTORS AND EXECUTIVE MANAGEMENT

 

Directors and Executive Officers

 

The following table sets forth certain information relating to our executive officers and directors as of October 8, 2024.

 

Name		Age				Title
Mohanraj Ramasamy			47			Chief Executive Officer, Product Architect and Director
Weng Kiat (Adron) Leow			51			Chief Financial Officer
Ramakrishnan V			56			Vice President – Operations and Factory
Yuvaraj Sankar			28			Engineering Director, SVM
Ganesh Iyer			57			Director
Mohsen Moazami			64			Director
Jonathan Reichental			54			Director
Lata Gullapalli			58			Director

 

Unless otherwise indicated, the business address of each director and executive officer of SVH is 3rd Floor, Genesis House, Unit 18, Genesis Close, George Town, P.O. Box 10655, Grand Cayman, KY1-1006, Cayman Islands. A description of the business experience and present position of each director and executive officer is provided below:

 

Executive Officers

 

Mohanraj Ramasamy. Mohanraj Ramasamy has served as the Managing Director of SVM since its inception in March 2018 and Chief Executive Officer and director of SVH since its inception in June 2021. Prior to starting SVM he served at Tesla from 2012 to 2015 in various capacities across the organization, from the Vehicle Engineering, Carnet, Information Services, Disaster Recovery establishment, Warp Application, Service Module development, and eCommerce platform scale-up. Mr. Ramasamy enrolled in the executive MBA program at the University of San Francisco in 2015. After completing his MBA, Mr. Ramasamy started SVM. He also has an engineering degree in Computer Technology from Nachimuthu Polytechnic College. Mr. Ramasamy is qualified to serve as a director of SVH due to his experience as SVH’s Chief Executive Officer and Product Architect, as well as his extensive technical and operational expertise and experience in the automotive industry and the electric vehicle industry in particular.

 

 

Weng Kiat (Adron) Leow. Mr. Leow is our Chief Financial Officer effective and brings more than 25 years of complex finance and business experience to SVH. Since July 2017, Mr. Leow has served as the Managing Director at Aamoni Lifestyle Sdn Bhd (formerly known as ALLF Management Group Sdn Bhd) where he is responsible for the profitability of the company, its expansion in the Asia-Pacific region and the development of new products and partnerships. Mr. Leow also serves as a director of Mobiv Pte. Ltd. and Milan Vido Partners Pte. Ltd. each since December 2021. In addition, Mr. Leow serves as a member of the board of directors of Exodus Standard Sdn. Bhd. since January 2010 and as Chief Financial Officer of Revenue Harvest Sdn. Bhd. and Revenue Group Berhad since March 2022 and June 2022 respectively. Mr. Leow served as a director of IGC House Sdn. Bhd. from May 2021 through June 2022 until November 29, 2022.

 

Prior to joining Aamoni Lifestyle Sdn Bhd, Mr. Leow was the Chief Operating Officer at Galasys PLC from May 2014 to June 2017. As Chief Operating Officer, he managed the operations of Galasys PLC in China, Malaysia and the United Kingdom and was responsible for financial reporting, including compliance with U.K.-listing requirements, the development of research and development centers in Malaysia and global business development for the company.

 

Mr. Leow holds a professional accounting qualification from Association of Chartered Certified Accountants and “A Level” from SEGi College, Subang Jaya, Selangor, Malaysia Mr. Leow is a chartered certified accountant and Fellow member of the Association of Chartered Certified Accountants and a member of the Malaysia Institute of Accountants.

 

Key Employees

 

Ramakrishnan V, Ramakrishnan is currently serving as our Vice President – Operations, SVM Factory. With over 30 years of experience in the automotive industry, he brings a wealth of knowledge in production, methods engineering, industrial engineering, quality engineering, and head operations. He has worked with top companies such as TVS Groups, ELGI, and LGB Limited. His hands-on experience in implementing world-class manufacturing systems (WCM) such as TPM, TQM, TPS, and Lean Six Sigma has made him an invaluable asset in the industry. He has expertise in both two- and four-wheel vehicle parts manufacturing industries. In addition to his technical expertise, he holds a Bachelor’s degree in Mechanical Engineering and an MBA in Human Resources. This combination of education and experience has given him a unique perspective on the automotive industry, allowing him to lead teams and drive results effectively. Overall, he is a highly accomplished professional, dedicated to quality, continuous improvement, and operational excellence.

 

Yuvaraj Sankar. Yuvaraj Sankar and has been associated with SVM since its inception in March 2018, as Engineering Manager and assumed the role of Director, Engineering, SVM India, post the Business Combination. He is an electronics engineer, having graduated from Bachelor of Engineering, Electronics and Communications from Anna University in India, in 2017. He has undergone the full-stack developer programs prior to joining SVM. He is primarily responsible for engineering aspects including facilitation of homologation and vehicle testing.

 

Non-Executive Director

 

Ganesh Iyer. Mr. Iyer will serve as an independent director. Mr. Iyer currently serves as the chief executive officer of NIO U.S. Mr. Iyer has over 35 years of experience delivering proven results in various industries including autonomous technology, hi-tech, manufacturing, and telecom. Mr. Iyer worked as vice president of Information Technology at Tesla Inc. until 2016. Prior to Tesla, Mr. Iyer held senior information technology leadership roles at VMWare from 2010 to 2016. Prior to VMWare, Mr. Iyer served as director of information technology at Juniper Networks and WebEx and worked in consulting, primarily at Electronic Data Systems. Mr. Iyer received a bachelor’s degree in chemical engineering from the University of Calicut in India.

 

 

Mohsen Moazami. Mr. Moazami will serve as an independent director and the Chairman of Audit Committee. Mr. Moazami is the founder and Managing Partner of Seif Capital, a technology investment and advisory firm in Silicon Valley. Mr. Moazami is senior advisor to Blackstone, Siguler Guff ($20 Billion in Assets Under Management), and Opengate Capital ($3 Billion in Assets Under Management). Further, Mr Moazami is an operating partner at Kestrel Partners in London, which aims to generate superior long-term returns for its clients by investing and driving change in under-valued, under-researched business critical software companies listed on the London Stock Exchange. Until recently he served as the Chairman of Astrea Acquisition Corp (NASDAQ: ASAX). Mr. Moazami is a member of the Board of Directors at Marpai (NASDAQ: MRAI). He serves as a board member or an advisor to many VC backed startups in Silicon Valley, such as Luminous Computing (Bill Gates backed), Vcinity, Edgecloud Link (ECL), Ethernovia (AMD and Marvell backed) and several others. A graduate of Stanford University engineering school, Mr. Moazami’s previous roles include founder and CEO of Stanford Business Systems (SBS - acquired by Accenture), 12 years at Cisco, the last four of which were in the leadership of their Emerging Markets division, with $6 billion of revenue. He then co-founded CNTP, a global, multi-stage, technology investment firm, investing in security, cyber security, big data analytics, gig economy and SaaS applications. A sample of his early stage investments are, Matterport (IPO), DoorDash (IPO), Bina Technologies (acquired by Roche), Bracket Computing (acquired by vMware). Mr. Moazami also served on the Board of a telecommunications company, Global Capacity, where he helped oversee a turnaround of the business, a $150m acquisition and the ultimate exit of the company.

 

Mr. Moazami is a 2010 Ellis Island Medal of Honor awardee. Mr. Moazami holds a Masters of Mechanical Engineering from Stanford University and Bachelors of Science in Engineering Sciences and a Minor in Economics from University of California, San Diego.

 

Dr. Jonathan Reichental. Dr. Reichental will serve as an independent director. Dr. Reichental is a multiple-award-winning technology leader and professor with over 30-years of experience spanning private and public sectors, as well as academia. Dr. Reichental served as Chief Technology Officer at City of Palo Alto, California from 2011 to 2018 and O’Reilly Media from 2010-2011. Dr. Reichental worked in several technical managerial roles and is a recognized global thought leader on a number of emerging trends including urban innovation, smart cities, sustainability, blockchain technology, data governance, the fourth industrial revolution, and digital transformation. He is an adjunct professor in the School of Management at the University of San Francisco and instructs at several other universities. Dr. Reichental has a passion for sharing his knowledge to create and inspire doers. Dr. Reichental has written six books, regularly creates technology training which is shared through online platforms such as LinkedIn. Dr. Reichental holds several degrees including a Ph.D. in Information Systems from Nova Southeastern University.

 

Lata Gullapalli. Ms. Gullapalli will serve as an independent director. She is an investment banker by profession, specializing in mergers and acquisitions. Ms. Gullapalli has worked in the investment banking for over 30 years in various regions of the world, including South Asia. She has commenced and run start-ups. She advises companies on Merger and Acquisition, financial restructuring and capital raising. She currently practices in the U.K. Ms. Gullapalli has led teams involved in creating joint ventures and taken a company public via initial public offering. Ms. Gullapalli is an author with published works, one recently published collection of fictional short stores and is writing a novel. Ms. Gullapalli works with NGOs in the U.K and in India that are focused primarily on and are involved in child protection, education for young girls and orphans. Ms. Gullapalli has an education in corporate law, financial strategy, taxation and economics, chartered secretary and a chartered financial analyst (I) with a Diploma in Basic Finance, and an MBA from INSTEAD (the European Institute of Business Administration).

 

Family Relationships

 

There are no family relationships between any of our executive officers and directors.

 

Number and Terms of Office of Directors and Officers

 

SVH’s board currently consists of five (5) directors. Our Amended and Restated Articles of Association provide that the number of directors shall be fixed by the directors from time to time, but shall not be less than one director. Our directors hold office until such time as they are removed from office by a majority vote of the shareholders. Our Amended and Restated Articles of Association provide that our directors shall be divided into three classes designated as Class I, Class II and Class III, respectively. Directors shall be assigned to each class in accordance with a resolution or resolutions adopted by the board of directors.

 

At the first annual general meeting of SVH after the adoption of the Amended and Restated Articles of Association, the term of office of the Class I directors shall expire and Class I directors shall be elected for a full term of two years. At the second annual general meeting of SVH after the adoption of the Amended and Restated Articles of Association, the term of office of the Class II directors shall expire and Class II directors shall be elected for a full term of two years. At the third annual general meeting of SVH after the adoption of the Amended and Restated Articles of Association, the term of office of the Class III directors shall expire and Class III directors shall be elected for a full term of two years. At each succeeding annual general meeting, directors shall be elected for a full term of two years to succeed the directors of the class whose terms expire at such annual general meeting. Our directors shall hold office until the expiration of his or her term, until his or her successor shall have been duly elected and qualified or until his or her earlier death, resignation or removal (including by a majority vote of the shareholders).

 

Our officers are appointed by the board of directors and serve at the discretion of the board of directors, rather than for specific terms of office. Our Amended and Restated Articles of Association authorize the board of directors appoint persons to hold such offices as the directors think necessary for the administration of the Company.

 

 

Director Independence

 

Nasdaq listing standards require that a majority of our board of directors be independent. An “independent director” is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship which in the opinion of the company’s board of directors, would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Our board of directors has determined that Ganesh Iyer, Mohsen Moazami, Jonathan Reichental, and Lata Gullapalli are “independent directors” as defined in the Nasdaq listing standards and applicable SEC rules. In making these determinations, the board of directors considered the current and prior relationships that each non-employee director has with the Company and all other facts and circumstances the board of directors deemed relevant in determining their independence, including the beneficial ownership of our capital stock by each non-employee director, and any transactions involving them described in the section titled “Certain Relationships and Related Party Transactions.” Our audit committee is entirely composed of independent directors meeting Nasdaq’s additional requirements applicable to members of the audit committee. Our independent directors have regularly scheduled meetings at which only independent directors are present.

 

Committees of the Board of Directors

 

Our board of directors has two standing committees: an audit committee and a compensation committee. Subject to phase-in rules and a limited exception, the rules of Nasdaq and Rule 10A-3 of the Exchange Act require that the audit committee of a listed company be comprised solely of independent directors, and the rules of Nasdaq require that the compensation committee of a listed company be comprised solely of independent directors. Each committee operates under a charter that has been approved by our board and has the composition and responsibilities described below.

 

Audit Committee

 

We have established an audit committee of the board of directors. Mohsen Moazami, Lata Gullapalli, and Jonathan Reichental serve as members of our audit committee with Mohsen Moazami as chair. Under the Nasdaq listing standards and applicable SEC rules, we are required to have at least three members of the audit committee, all of whom must be independent, subject to certain phase-in provisions. Mohsen Moazami, Lata Gullapalli, and Jonathan Reichental meet the independent director standard under Nasdaq listing standards and under Rule 10-A-3(b)(1) of the Exchange Act.

 

Each member of the audit committee is financially literate and our board of directors has determined that Ganesh Iyer qualifies as an “audit committee financial expert” as defined in applicable SEC rules.

 

We have adopted an audit committee charter, which details the principal functions of the audit committee, including:

 

	●	the appointment, compensation, retention, replacement, and oversight of the work of the independent auditors and any other independent registered public accounting firm engaged by us;
	●	pre-approving all audit and permitted non-audit services to be provided by the independent auditors or any other registered public accounting firm engaged by us, and establishing pre-approval policies and procedures;
	●	reviewing and discussing with the independent auditors all relationships the auditors have with us in order to evaluate their continued independence;
	●	setting clear hiring policies for employees or former employees of the independent auditors;
	●	setting clear policies for audit partner rotation in compliance with applicable laws and regulations;

 

●

obtaining and reviewing a report, at least annually, from the independent auditors describing (i) the independent auditor’s internal quality-control procedures and (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues;

 

 

	●	reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and
	●	reviewing with management, the independent auditors, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities.

 

Compensation Committee

 

We have established a compensation committee of the board of directors. Ganesh Iyer and Lata Gullapalli serve as members of our compensation committee. Under the Nasdaq listing standards and applicable SEC rules, we are required to have at least two members of the compensation committee, all of whom must be independent, subject to certain phase-in provisions. Ganesh Iyer and Lata Gullapalli meet the independent director standard under Nasdaq listing standards applicable to members of the compensation committee.

 

We have adopted a compensation committee charter, which will detail the principal functions of the compensation committee, including:

 

	●	reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officers’ compensation, evaluating our Chief Executive Officers’ performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officers based on such evaluations;
	●	reviewing and approving on an annual basis the compensation of all of our other officers;
	●	reviewing on an annual basis our executive compensation policies and plans;
	●	implementing and administering our incentive compensation equity-based remuneration plans;
	●	assisting management in complying with our proxy statement and annual report disclosure requirements;
	●	approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees;
	●	if required, producing a report on executive compensation to be included in our annual proxy statement; and
	●	reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors.

 

The charter also provides that the compensation committee may, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other adviser and will be directly responsible for the appointment, compensation and oversight of the work of any such adviser. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other adviser, the compensation committee will consider the independence of each such adviser, including the factors required by Nasdaq and the SEC.

 

Director Nominations

 

We do not have a standing nominating committee. In accordance with Rule 5605(e)(2) of the Nasdaq Rules, a majority of the independent directors may recommend a director nominee for selection by the board of directors. The board of directors believes that the independent directors can satisfactorily carry out the responsibility of properly selecting or approving director nominees without the formation of a standing nominating committee. As there is no standing nominating committee, we do not have a nominating committee charter in place.

 

 

The board of directors will also consider director candidates recommended for nomination by our shareholders during such times as they are seeking proposed nominees to stand for election at the next annual general meeting of SVH. Members that wish to nominate a director for election to our board of directors should follow the procedures set forth in our Amended and Restated Articles of Association.

 

We have not formally established any specific, minimum qualifications that must be met or skills that are necessary for directors to possess. In general, in identifying and evaluating nominees for director, our board of directors considers educational background, diversity of professional experience, knowledge of our business, integrity, professional reputation, independence, wisdom, and the ability to represent the best interests of our shareholders.

 

Code of Ethics

 

We have adopted a Code of Ethics applicable to our directors, officers and employees. We have filed a copy of our Code of Ethics and our audit and compensation committee charters as exhibits to the registration statement for our initial public offering. You can review these documents by accessing our public filings at the SEC’s web site at www.sec.gov. In addition, a copy of the Code of Ethics will be provided without charge upon request from us. We intend to disclose any amendments to or waivers of certain provisions of our Code of Ethics in a Report on Form 6-K.

 

Compensation Committee Interlocks and Insider Participation

 

None of our executive officers currently serves, and in the past year has not served, as a member of the compensation committee of any entity that has one or more executive officers serving on our board of directors.

 

Indemnification of Directors and Officers

 

SVH has entered into indemnification agreements with each of its current directors, and plans on entering into indemnification agreements with each director that joins the board. Under these agreements, SVH may agree to indemnify its directors against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director of SVH.

 

Auditors

 

Manohar Chowdhry & Associates acted as SVH’s independent auditor for each of the three years in the period ended March 31, 2024, and is expected to continue to act as SVH’s independent auditor.

 

EXECUTIVE AND DIRECTOR COMPENSATION

 

Officer and Director Compensation Discussion and Analysis

 

Directors or members of our management team may be paid consulting or management fees from the Company. We have not established any limit on the amount of such fees that may be paid by the Company to our directors or members of management. Any compensation to be paid to our officers will be determined, or recommended to the board of directors for determination, either by a compensation committee constituted solely by independent directors or by a majority of the independent directors on our board of directors.

 

No compensation was paid, nor benefits in kind granted, for the Company’s last full financial year through March 31, 2024, since the period covered in this Registration Statement is the first applicable period for such disclosure since the closing of the Business Combination and the Company has not yet paid any compensation nor granted benefits in kind other than initial grants of equity to directors in conjunction with their appointments. As a foreign private issuer, the Company follows local Cayman Island disclosure requirements which do not require individual compensation disclosure for officers and directors.

 

To the extent we deem necessary, we may seek to recruit additional managers to supplement the incumbent management team. We cannot assure you that we will have the ability to recruit additional managers, or that additional managers will have the requisite skills, knowledge or experience necessary to enhance the incumbent management.

 

Employment Agreements and Indemnification Agreements

 

SVH has entered into employment agreements with its Chief Executive Officer and Chief Financial Officer that became effective as of December 8, 2023, the closing date of the Business Combination.

 

Mohanraj Ramasamy Employment Agreement

 

Mr. Ramasamy’s employment agreement has an initial term extending through March 31, 2026, which will be renewed automatically on an annual basis thereafter unless either party gives 90 days’ notice of termination prior to the end of the term. Pursuant to the employment agreement, Mr. Ramasamy serves as the Chief Executive Officer of SVH. The employment agreement entitles Mr. Ramasamy to receive an annual base salary equal to $271,000, an annual target bonus equal to 25% of his base annual salary (currently $67,750) subject to the terms and conditions of the annual bonus plan adopted by the board.

 

 

Under the employment agreement, if the Company terminates Mr. Ramasamy without “cause” or Mr. Ramasamy resigns for “good reason” (as each such term is defined in the employment agreement), subject to Mr. Ramasamy’s execution of a release of claims in favor of the Company, Mr. Ramasamy will be entitled to receive (i) 12 months’ base salary, (ii) his target annual bonus for the year of termination, and (iii) continued medical coverage paid by the Company for 18 months following such qualifying termination.

 

Weng Kiat (Adron) Leow Employment Agreement

 

Mr. Leow’s employment agreement has an initial term extending through March 31, 2026, which will be renewed automatically on an annual basis thereafter unless either party gives 90 days’ notice of termination prior to the end of the term. Pursuant to the employment agreement, Mr. Leow serves as the Chief Financial Officer of SVH. The employment agreement entitles Mr. Leow to receive an annual base salary equal to $216,000, a signing bonus of $24,000, and an annual target bonus equal to 25% of his base annual salary (currently $54,000) subject to the terms and conditions of the annual bonus plan adopted by the board.

 

Under the employment agreement, if the Company terminates Mr. Leow without “cause” or Mr. Leow resigns for “good reason” (as each such term is defined in the employment agreement), subject to Mr. Leow’s execution of a release of claims in favor of the Company, Mr. Leow will be entitled to receive (i) 12 months’ base salary, (ii) his target annual bonus for the year of termination, and (iii) continued medical coverage paid by the Company for 18 months following such qualifying termination.

 

Director Indemnity Agreements

 

SVH has entered into indemnification agreements with each of its current directors, and plans on entering into indemnification agreements with each director that joins the board. Under these agreements, SVH may agree to indemnify its directors against certain liabilities and expenses incurred by such persons in connection with claims made by reason of their being a director of SVH.

 

Equity Incentive Plans

 

The following summarizes the terms of the Srivaru Holding Limited 2023 Incentive Equity Plan (the “Company Incentive Equity Plan”), which we expect to adopt in the near term.

 

Company Incentive Equity Plan

 

SVH expects to approve and adopt the Company Incentive Equity Plan in the manner prescribed under applicable laws initially reserving 3,800,000 Ordinary Shares for grant thereunder (exclusive of the number of Ordinary Shares subject to outstanding company equity awards as of such date of approval). The Company Incentive Equity Plan will provide for customary annual increases to such share reserve for a period of up to 10 years. SVH will file a registration statement on Form S-8 (or any successor form or comparable form in another relevant jurisdiction) with the SEC relating to SVH Shares issuable pursuant to the Company Incentive Equity Plan. Because SVH is a foreign private issuer, the establishment of such equity incentive plan does not require the approval of SVH’s shareholders and will only be approved by its board of directors and compensation committee.

 

Principal Accountant Fees and Services

 

The following is a summary of fees paid or to be paid to Manohar Chowdhry & Associates for services rendered.

 

 

Audit Fees. Audit fees consist of fees billed for professional services rendered for the audit of our year-end financial statements, quarterly reviews and services that are normally provided by Manohar Chowdhry & Associates in connection with regulatory filings. The aggregate fees billed by Manohar Chowdhry & Associates for professional services rendered for the audit of our annual financial statements, and other required filings with the SEC for the period through March 31, 2023, totaled $13,900. The above amounts include interim procedures and audit fees, as well as attendance at audit committee meetings.

 

Audit-Related Fees. Audit-related services consist of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our financial statements and are not reported under “Audit Fees.” These services include attest services that are not required by statute or regulation and consultations concerning financial accounting and reporting standards. We did not pay Manohar Chowdhry & Associates for consultations concerning financial accounting and reporting standards for the years ended March 31, 2022 and March 31, 2023.

 

Tax Fees. We did not pay Manohar Chowdhry & Associates for tax planning and tax advice for the years ended March 31, 2022 and March 31, 2023.

 

All Other Fees. We did not pay Manohar Chowdhry & Associates for other services for the years ended March 31, 2022 and March 31, 2023.

 

Pre-Approval Policy

 

Our audit committee was formed upon the consummation of the Business Combination. As a result, the audit committee did not pre-approve all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our board of directors. Since the formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit)

 

DESCRIPTION OF SECURITIES

 

General

 

The following description of the material terms of the securities of SVH following the Business Combination includes a summary of specified provisions of the SVH A&R Articles. This description is qualified by reference to the SVH A&R Articles, a copy of which is attached to this prospectus as an exhibit and is incorporated in this prospectus by reference.

 

SVH is an exempted company incorporated under the laws of the Cayman Islands and its affairs are governed by the SVH A&R Articles, the Cayman Companies Act, and Cayman law. SVH was incorporated as a Cayman company on June 16, 2021.

 

Our register of shareholders is currently maintained by VStock Transfer LLC.

 

Share Capital

 

As of the date of this prospectus, SVH’s authorized share capital is US$10,000,000 divided into 1,000,000,000 shares of a par value of US$0.01 per share.

 

Ordinary Shares

 

General

 

All of our issued and outstanding ordinary shares are fully paid and non assessable.

 

 

Certificates representing our issued and outstanding ordinary shares are generally not issued and legal title to our issued shares is recorded in registered form in the register of members. Holders of our ordinary shares have no preemptive, subscription, redemption or conversion rights under either Cayman Islands law or the SVH A&R Articles.

 

Our board of directors may provide for other classes of shares, including classes of preferred shares, out of our authorized but unissued share capital, which could be utilized for a variety of corporate purposes, including future offerings to raise capital for corporate purposes or for use in employee benefit plans. Such additional classes of shares shall have such rights, restrictions, preferences, privileges and payment obligations as determined by our board of directors. If we issue any preferred shares, the rights, preferences and privileges of holders of our ordinary shares will be subject to, and may be adversely affected by, the rights of the holders of such preferred shares.

 

Voting Rights and Restrictions on Voting

 

Every SVH shareholder present in person and every person representing a SVH shareholder by proxy shall, at a general meeting of SVH, each have one vote and on a poll every SVH shareholder and every person representing a SVH shareholder by proxy shall have one vote for each SVH Share of which they or the person represented by proxy is the holder.

 

A quorum required for a meeting of SVH shareholders consists of SVH shareholders holding at least a majority of the votes eligible to be cast at any such general meeting of SVH. A special resolution will be required for matters such as merger or consolidation transactions, change of name or making changes to the SVH A&R Articles, or the voluntary winding up of SVH.

 

An ordinary resolution to be passed by the SVH shareholders requires the affirmative vote of a simple majority of the votes cast by persons present and voting in a general meeting at which a quorum is present, while a special resolution requires the affirmative vote of not less than two-thirds of the votes cast by persons present and voting at any such meeting, or, in each case, a unanimous resolution in writing.

 

Dividends and Other Distributions

 

The holders of SVH Shares are entitled to such dividends as may be declared by the board of directors subject to the Cayman Companies Act and the SVH A&R Articles. Dividends and other distributions on issued and outstanding SVH Shares may be paid out of the funds of SVH lawfully available for such purpose, subject to any preference of any outstanding preferred shares. Dividends and other distributions will be distributed among the holders of the ordinary shares on a pro rata basis.

 

Transferability

 

Any of the SVH shareholders may transfer all or any of his or her SVH Shares by an instrument of transfer in the usual or common form or any other form approved by the SVH Board, subject to the applicable restrictions of the SVH A&R Articles, such as the suspension of transfers for a period immediately preceding a general meeting, or the determination that a proposed transfer is not eligible.

 

Liquidation

 

On a return of capital on winding up or otherwise (other than on conversion, redemption or purchase of SVH Shares), assets available for distribution among the holders of SVH Shares shall be distributed among the holders of the SVH Shares on a pro rata basis.

 

Variation of rights

 

The rights attached to any class of shares (unless otherwise provided by the terms of issue of that class), such as voting, dividends and the like, may only be materially adversely varied or abrogated with the sanction of a resolution passed by not less than two-thirds of the votes attaching to the shares of the relevant class cast in a meeting of the holders of the shares of that class (the quorum for which shall be one or more persons at least holding or representing by proxy one-third in nominal or par value amount of the issued shares of the relevant class), or by the written consent of the holders of not less than two-thirds of the shares of that class. The rights conferred upon the holders of the shares of any class shall not (unless otherwise provided by the terms of issue of that class) be deemed to be varied by the creation, allotment or issue of further shares ranking pari passu therewith or shares issued with preferred or other rights.

 

Alteration to share capital

 

SVH may by ordinary resolution increase its share capital by such sum, to be divided into shares of such classes and amount, as the resolution shall prescribe. SVH may by ordinary resolution: consolidate and divide its share capital into shares of a larger amount than its existing SVH Shares, convert its SVH Shares into shares of any denomination, subdivide its existing SVH Shares into shares of a smaller amount, and cancel any SVH Shares that, at the date of the passing of the resolution, have not been taken or agreed to be taken by any person and diminish the amount of its share capital by the amount of the SVH Shares so cancelled.

 

SVH may by special resolution reduce its share capital and any capital redemption reserve in any manner authorized by law.

 

Warrants

 

Overview

 

The following summary of certain terms and provisions of the warrants offered hereby is not complete and is subject to, and qualified in its entirety by, the provisions of the warrant agent agreement between us the Warrant Agent, and the form of warrant, both of which will be filed as exhibits to the registration statement of which this prospectus is a part. Prospective investors should carefully review the terms and provisions set forth in the warrant agent agreement, including the annexes thereto, and form of warrant. Each warrant issued in this offering entitles the registered holder to purchase one ordinary share at a price equal to $0.12 per share (equal to 150% of the public offering price of the Units), which can be exercisable for two ordinary shares pursuant to an alternative cashless exercise provision, subject to adjustment as discussed below, immediately following the issuance of such warrant and terminating at 5:00 p.m., New York City time, five years after the date of shareholder approval.

 

 

Exercisability

 

The warrants will be exercisable at any time after our shareholders approve the issuance of the warrants and the ordinary shares underlying the warrants and until the date that is five years after the shareholder approval. The warrants may be exercised upon surrender of the warrant on or prior to the expiration date at the offices of the Warrant Agent, with the exercise form included with the warrant completed and executed as indicated. If we fail to maintain the effectiveness of the registration statement and current prospectus relating to the ordinary shares issuable upon exercise of the warrants, the holders of the warrants shall have the right to exercise the warrants via a cashless exercise feature provided for in the warrants, until such time as there is an effective registration statement and current prospectus. See “- Cashless Exercise” below.

 

Exercise Limitation

 

A holder (together with its affiliates) may not exercise any portion of the warrant to the extent that the holder would own more than 4.99% (or, at the election of the holder, 9.99%) of the outstanding ordinary shares immediately after exercise, except that upon at least 61 days’ prior notice from the holder to us, the holder may increase the amount of ownership of ordinary shares after exercising the holder’s warrants up to 9.99% of the number of ordinary shares outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the warrants.

 

Exercise Price

 

The exercise price per whole ordinary share purchasable upon the exercise of the warrants is $0.12 (or 150% of the public offering price per Unit) per ordinary share. The warrants will be exercisable upon shareholder approval and may be exercised at any time up to the date that is five years after the shareholder approval. The exercise price and number of ordinary shares issuable upon exercise of the warrants may be adjusted in certain circumstances, including in the event of a stock dividend or recapitalization, reorganization, merger or consolidation. However, the warrants will not be adjusted for issuances of ordinary shares at prices below their exercise price.

 

Share Dividends and Splits

 

If the Company: (i) pays a share dividend or otherwise makes a distribution or distributions on its ordinary shares or any other equity or equity equivalent securities payable in ordinary shares, (ii) subdivides outstanding ordinary shares into a larger number of shares, (iii) combines (including by way of reverse share split) outstanding ordinary shares into a smaller number of shares, or (iv) issues any other shares of the Company by reclassification of the ordinary shares, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator will be the number of ordinary shares outstanding immediately before such event and the denominator will be the number of ordinary shares outstanding immediately after such event, and the number of shares issuable upon exercise of the warrants will be proportionately adjusted such that the aggregate Exercise Price of the warrants shall remain unchanged.

 

Cashless Exercise

 

If, at any time after the issuance of the warrants, a holder of the warrants exercises the warrants and a registration statement registering the issuance of the ordinary shares underlying the warrants under the Securities Act is not then effective or available (or a prospectus is not available for the resale of shares of ordinary shares underlying the warrants), then in lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price, the holder shall instead receive upon such exercise (either in whole or in part) only the net number of ordinary shares determined according to a formula set forth in the warrants.

 

Alternative Cashless Exercise

 

Regardless of whether a registration statement registering the issuance of the ordinary shares underlying the warrants under the Securities Act is effective or available, a holder of the warrants may effect an alternative cashless exercise. In an alternative cashless exercise, the warrant holder will be entitled to receive the as-adjusted number of shares represented by the warrant multiplied by two. The warrants will be automatically exercised via the alternative cashless exercise on their termination date.

 

Fractional Shares

 

No fractional ordinary shares will be issued upon exercise of the warrants. If, upon exercise of the warrant, a holder would be entitled to receive a fractional interest in a share, we will, in our discretion and upon exercise, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the exercise price or round up to the next whole share.

 

Transferability

 

Subject to applicable laws, the warrants may be offered for sale, sold, transferred or assigned at the option of the holder without our consent.

 

Warrant Agent; Global Certificate

 

The warrants will be issued in registered form under a warrant agent agreement between the Warrant Agent and us. The warrants shall initially be represented only by one or more global warrants deposited with the Warrant Agent, as custodian on behalf of The Depository Trust Company (“DTC”) and registered in the name of Cede & Co., a nominee of DTC, or as otherwise directed by DTC.

 

Fundamental Transactions

 

In the event of a “fundamental transaction,” as described in the warrants and generally including any reorganization, recapitalization or reclassification of our ordinary shares, the sale, transfer or other disposition of all or substantially all of our properties or assets, our consolidation or merger with or into another person, the acquisition of more than 50% of our outstanding ordinary shares, or any person or group becoming the beneficial owner of 50% of the voting power represented by our outstanding ordinary shares, the holders of the warrants will be entitled to receive upon exercise of the warrants the kind and amount of securities, cash or other property that the holders would have received had they exercised the warrants immediately prior to such fundamental transaction.

 

Rights as a Shareholder

 

Except by virtue of such holder’s ownership of ordinary shares, the holder of a warrant does not have the rights or privileges of a holder of our ordinary shares, including any voting rights, until the holder exercises the warrant.

 

Transfer and Warrant Agent

 

The transfer agent and registrar for our ordinary shares and the Warrant Agent for the warrants is VStock Transfer, LLC.

 

Nasdaq Listing

 

Our ordinary shares are currently listed on Nasdaq under the symbol “SVMH.”

 

 

CERTAIN RELATIONSHIPS AND RELATED PERSON TRANSACTIONS

 

Other than compensation arrangements for our executive officers and directors which are described elsewhere in this prospectus, see “Executive Compensation—Employment Agreements,” below we describe transactions since March 31, 2024, to which we were or will be a participant and in which:

 

● the amounts involved exceeded or will exceed $120,000; and

 

● any of our directors, executive officers or holders of more than 5% of our outstanding voting securities, or any member of the immediate family of, or person sharing the household with, the foregoing persons, had or will have a direct or indirect material interest.

 

Registration Rights Agreement

 

In connection with the Transactions, SVH, certain shareholders of SVH, and the Sponsor have entered into the Registration Rights Agreement, which became effective upon the Closing.

 

Loans from Directors

 

SVM received loans from two directors, Mohanraj Ramasamy and Selvaraj Krishnan, from time to time to finance its working capital requirements. Such loans are unsecured and are repayable on demand. The current total balance of loans from Mohanraj Ramasamy and Selvaraj Krishna, as of August 29, 2024, is INR 10,900,000 and INR 13,560,000, respectively.

 

SVH further received loans from Mohanraj Ramasamy from time to time to finance its working capital requirements. These loans are unsecured and are repayable on demand. There are no current total balance of such loans as of August 29, 2024.

 

SVM Factory Private Limited (“SVMF”), the newly set up factory in India, has also received loans to finance its working capital requirements and setup costs. The current total balance of loans from Selvaraj Krishna as of August 29, 2024, is INR 9,658,739.

 

Related Party Transaction Policy

 

We have in place a formal written Related Party Transaction Policy for the review, approval, ratification and disclosure of related party transactions. This policy applies to any transaction, arrangement or relationship (or any series of similar or related transactions, arrangements or relationships) in which we were, are or will be a participant and the amount involved exceeds $120,000, and in which any related party had or will have a direct or indirect material interest. The audit committee of the Board must review, and may approve and ratify a related party transaction that is subject to the Related Party Transaction Policy, if the transaction is consistent with the Related Party Transaction Policy and is on terms, taken as a whole, that the audit committee believes are no less favorable to us than could be obtained in an arm’s-length transaction with an unrelated third-party, unless the audit committee otherwise determines that the transaction is not in our best interests. Our audit committee does not need to approve or ratify any related party transaction or modification of the transaction that the Board has approved or ratified by the affirmative vote of a majority of directors who do not have a direct or indirect material interest in such transaction. In addition, our compensation committee, rather than our audit committee, must approve related party transactions involving compensation of our directors and executive officers.

 

BENEFICIAL OWNERSHIP OF SECURITIES

 

The following table sets forth information regarding the actual beneficial ownership of SVH’s voting shares as of October 8, 2024, for:

 

	●	each person who is known to be the beneficial owner of more than 5% of SVH’s voting shares;
	●	each person who is now a named executive officer or director of SVH; and
	●	all executive officers and directors of SVH, as a group.

 

Beneficial ownership is determined according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable within 60 days. A person is also deemed to be a beneficial owner of any securities of which that person has a right to acquire beneficial ownership within 60 days, provided that any person who acquires any such right with the purpose or effect of changing or influencing the control of the issuer, or in connection with or as a participant in any transaction having such purpose or effect, immediately upon such acquisition shall be deemed to be the beneficial owner of the securities which may be acquired through the exercise of such right. Under these rules, more than one person may be deemed to be a beneficial owner of the same securities.

 

 

SVH’s authorized share capital consists of 1,000,000,000 Shares. See “Description of SVH’s Securities.”

 

Based on the foregoing assumptions, the following voting shares of SVH in issuance, including those shares issuable upon the exercise of warrants that are currently exercisable or exercisable within 60 days: 441,901,909 SVH Shares and 10,798,300 warrants that are now exercisable; in each case as of October 8, 2024.

 

Unless otherwise indicated, SVH and MOBV believe that all persons named in the table below have sole voting and investment power with respect to all shares of voting shares beneficially owned by them, subject to applicable community property laws.

 

Unless otherwise indicated, the business address of each of the individuals from SVH is 3rd Floor, Genesis House, Unit 18, Genesis Close, George Town, P.O. Box 10655, Grand Cayman, KY1-1006, Cayman Islands. Unless otherwise indicated, the business address of each of the individuals from MOBV is 850 Library Avenue, Suite 204, Newark, Delaware 19711.

 

Name and Address of Beneficial Owner		Total ordinary shares				% of Total Voting Power*
5% Beneficial Owners SVH
Mohanraj Ramasamy			61,744,092				13.90	%(2)
SVM Trust			306,728,730				69.06	%(2)
All 5% Beneficial owners SVH as a group			368,472,822				82.97	%(2)
Directors and Executive Officers of SVH
Mohanraj Ramasamy			61,744,092				13.90	%(2)
Weng Kiat (Adron) Leow(1)			5,000				*
Ganesh Iyer			—
Mohsen Moazami			—
Jonathan Reichental			—
Lata Gullapalli			—
All Directors and Executive Officers of SVH as a Group			61,749,092				13.90	%

 

* Less than 1%

 

(1)	Mr. Weng Kiat (Adron) Leow is director of our Sponsor, Mobiv Pte. Ltd., and its, holding company, Milan Vido Partners Pte. Ltd.
(2)	The denominator includes (i) 543,300 Private Shares, (ii) 543,300 SVH Shares issuable upon exercise of 543,300 Private Warrants, (ii) 250,000 SVH shares issuable upon exercise of 250,000 Private Warrants which are expected to be issued in connection with the conversion of working capital loans related to expenses in conjunction with the Business Combination.

 

 

MATERIAL U.S. FEDERAL INCOME TAX CONSIDERATIONS

 

The following discussion is a summary of the material U.S. federal income tax considerations of the acquisition, ownership and disposition of SVH Shares and SVH Warrants (collectively “SVH securities”). This discussion applies only to the SVH securities that are acquired pursuant to this Offering and that are held as “capital assets” within the meaning of Section 1221 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) (generally, property held for investment).

 

The following does not purport to be a complete analysis of all potential tax effects arising in connection with the closing of the acquisition, ownership and disposition of SVH securities. The effects of other U.S. federal tax laws, such as estate and gift tax laws, and any applicable state, local, or non-U.S. tax laws are not discussed. This discussion is based on the Code, Treasury regulations promulgated thereunder, judicial decisions, and published rulings and administrative pronouncements of the U.S. Internal Revenue Service (the “IRS”), in each case in effect as of the date hereof. These authorities may change or be subject to differing interpretations. Any such change or differing interpretation may be applied retroactively in a manner that could adversely affect the tax consequences discussed below. SVH has not sought and will not seek any rulings from the IRS regarding the matters discussed below. There can be no assurance the IRS will not take, or a court will not sustain, a contrary position regarding the tax consequences discussed below.

 

This discussion does not address all U.S. federal income tax consequences relevant to a holder’s particular circumstances, including the impact of the Medicare contribution tax on net investment income and the alternative minimum tax. In addition, it does not address consequences relevant to holders subject to special rules, including, without limitation:

 

·

banks, insurance companies, and certain other financial institutions;

·

regulated investment companies and real estate investment trusts;

·

brokers, dealers, or traders in securities;

·

traders in securities that elect to mark to market;

·

tax-exempt organizations or governmental organizations;

·

U.S. expatriates and former citizens or long-term residents of the United States;

·

persons holding SVH securities as part of a hedge, straddle, constructive sale, or other risk reduction strategy or as part of a conversion or constructive sale transaction or other integrated or similar transaction;

·

persons subject to special tax accounting rules as a result of any item of gross income with respect to SVH securities being taken into account in an applicable financial statement;

·

persons that actually or constructively own, directly or indirectly 10% or more (by vote or value) of SVH;

·

S corporations, partnerships, or other entities or arrangements treated as partnerships or other flow-through entities for U.S. federal income tax purposes (and investors therein);

·

U.S. Holders having a functional currency other than the U.S. dollar;

·

persons who hold or received SVH securities pursuant to the exercise of any employee stock option or otherwise as compensation; and

·

tax-qualified retirement plans.

 

If an entity or arrangement treated as a partnership for U.S. federal income tax purposes holds SVH securities, the tax treatment of an owner of such entity will depend on the status of the owner or participant in the arrangement, the activities of the entity or arrangement, and certain determinations made at the owner or participant level. Accordingly, entities or arrangements treated as partnerships for U.S. federal income tax purposes and the partners in such partnerships should consult their tax advisors regarding the U.S. federal income tax consequences to them.

 

For purposes of this discussion, because any Unit consisting of one SVH Share and one SVH Warrant is immediately separable, SVH is treating the SVH Share and the SVH Warrant held by a holder in the form of a single Unit as separate instruments and is assuming that the Unit itself will not be treated as an integrated instrument.

 

For purposes of this discussion, a “U.S. Holder” is any beneficial owner of shares of SVH security that is for U.S. federal income tax purposes:

 

·

an individual who is a citizen or resident of the United States;

·

a corporation (or other entity taxable as a corporation) created or organized in or under the laws of the United States or any state thereof or the District of Columbia;

·

an estate whose is subject to U.S. federal income taxation regardless of its source; or

·

a trust if (i) a court within the U.S. is able to exercise primary supervision over the trust’s administration and one or more U.S. persons have the authority to control all of the trust’s substantial decisions, or (ii) the trust has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person.

 

 

THE U.S. FEDERAL INCOME TAX CONSIDERATIONS APPLICABLE TO THE ACQUISITION, OWNERSHIP AND DISPOSITION OF SVH SECURITIES WITH RESPECT TO ANY PARTICULAR HOLDER WILL DEPEND ON THE HOLDER’S PARTICULAR TAX CIRCUMSTANCES. YOU ARE URGED TO CONSULT YOUR TAX ADVISOR REGARDING THE U.S. FEDERAL, STATE, LOCAL, AND NON-U.S. INCOME AND OTHER TAX CONSEQUENCES TO YOU, IN LIGHT OF YOUR PARTICULAR INVESTMENT OR TAX CIRCUMSTANCES.

 

U.S. Federal Income Tax Treatment of SVH

 

Tax Residence of SVH for U.S. Federal Income Tax Purposes

 

Although SVH is incorporated and tax resident in the Cayman Islands, the IRS may assert that it should be treated as a U.S. corporation for U.S. federal income tax purposes pursuant to Section 7874 of the Code. For U.S. federal income tax purposes, a corporation is generally considered a U.S. “domestic” corporation if it is created or organized in or under the laws of the U.S., any state thereof, or the District of Columbia. Because SVH is not so created or organized (but is instead incorporated only in the Cayman Islands), it would generally be classified as a foreign corporation (that is, a corporation other than a U.S. “domestic” corporation) under these rules. Section 7874 of the Code provides an exception under which a corporation created or organized only under foreign law may, in certain circumstances, be treated as a U.S. corporation for U.S. federal income tax purposes. The Section 7874 rules are complex and require analysis of all relevant facts, and there is limited guidance and significant uncertainties as to their application.

 

Under Code Section 7874, a corporation created or organized outside the United States (i.e., a foreign corporation) will nevertheless be treated as a U.S. corporation for U.S. federal income tax purposes when (i) the foreign corporation directly or indirectly acquires substantially all of the assets held directly or indirectly by a U.S. corporation (including the indirect acquisition of assets of the U.S. corporation by acquiring the outstanding shares of the U.S. corporation), (ii) the shareholders of the acquired U.S. corporation hold, by vote or value, at least 80% of the shares of the foreign acquiring corporation after the acquisition by reason of holding shares in the U.S. acquired corporation (the “Section 7874 Percentage”), and (iii) the foreign corporation’s “expanded affiliated group” does not have substantial business activities in the foreign corporation’s country of creation or organization relative to such expanded affiliated group’s worldwide activities (the “Substantial Business Activities Exception”). In order to satisfy the Substantial Business Activities Exception, at least 25% of the employees (by headcount and compensation), real and tangible assets, and gross income of the foreign acquiring corporation’s “expanded affiliated group” must be based, incurred, located, and derived, respectively, in the country in which the foreign acquiring corporation is created or organized. The Section 7874 Regulations further provide for a number of special rules that aggregate multiple acquisitions of U.S. corporations for purposes of Code Section 7874 that are made as part of a plan or made over a 36-month period, making it more likely that Code Section 7874 will apply to a foreign acquiring corporation.

 

SVH indirectly acquired substantially all of the assets of MOBV through the Merger. As a result, Section 7874 of the Code may apply to cause SVH to be treated as a U.S. corporation for U.S. federal income tax purposes depending on whether the Section 7874 Percentage of SVH after the Merger equals or exceeds 80%, subject to the applicability of the Substantial Business Activities Exception.

 

Based upon the terms of the Merger, the rules for determining share ownership under Code Section 7874 and the Section 7874 Regulations, and certain factual assumptions, SVH believes that the Section 7874 Percentage of MOBV stockholders in SVH is less than 80% after the Merger. Accordingly, SVH does not expect to be treated as a U.S. corporation for U.S. federal income tax purposes under Section 7874 of the Code. The calculation of the Section 7874 Percentage is complex, is subject to detailed regulations (the application of which is uncertain in various respects and could be impacted by changes in U.S. tax laws and regulations with possible retroactive effect), and is subject to certain factual uncertainties. Further, even if the Section 7874 Percentage was such that SVH were still respected as a foreign corporation under Code Section 7874, SVH may be limited in using its equity to engage in future acquisitions of U.S. corporations over a 36-month period following the Merger. If SVH were to be treated as acquiring substantially all of the assets of a U.S. corporation within a 36-month period after the Merger, the Section 7874 Regulations would exclude certain shares of SVH attributable to the Merger for purposes of determining the Section 7874 Percentage of that subsequent acquisition, making it more likely that Code Section 7874 would apply to such subsequent acquisition. Accordingly, there can be no assurance that the IRS will not now or in the future challenge the status of SVH as a foreign corporation under Code Section 7874 or that such challenge would not be sustained by a court.

 

If the IRS were to successfully challenge under Code Section 7874 SVH’s status as a foreign corporation for U.S. federal income tax purposes, SVH and certain SVH shareholders could be subject to significant adverse tax consequences, including a higher effective corporate income tax rate on SVH and future withholding taxes on certain SVH shareholders. In particular, holders of SVH Shares and/or SVH Warrants would be treated as holders of stock and warrants of a U.S. corporation.

 

The remainder of this discussion assumes that SVH will not be treated as a U.S. corporation for U.S. federal income tax purposes under Section 7874 of the Code.

 

 

U.S. Federal Income Tax Consequences of the Ownership and Disposition of SVH Securities to U.S. Holders

 

Distributions on SVH Shares

 

If SVH makes distributions of cash or property on the SVH Shares, such distributions will be treated first as a dividend to the extent of SVH’s current and accumulated earnings and profits (as determined for U.S. federal income tax purposes), and then as a tax-free return of capital to the extent of the U.S. Holder’s tax basis, with any excess treated as gain from the sale or exchange of the shares. The amount of any such distribution will include any amounts withheld by SVH (or another applicable withholding agent). SVH does not intend to calculate its earnings and profits under U.S. federal income tax principles. Therefore, a U.S. Holder should expect all cash distributions to be reported as dividends for U.S. federal income tax purposes. Any dividend will not be eligible for the dividends received deduction allowed to corporations in respect of dividends received from U.S. corporations.

 

Subject to the discussion below under “— Passive Foreign Investment Company Rules,” dividends received by certain non-corporate U.S. Holders (including individuals) may be “qualified dividend income,” which is taxed at the lower applicable capital gains rate, provided that:

 

● either (a) the shares are readily tradable on an established securities market in the United States or (b) SVH is eligible for the benefits of a qualifying income tax treaty with the U.S. that includes an exchange of information program;

 

● SVH is neither a PFIC (as discussed below under below under “— Passive Foreign Investment Company Rules”) nor treated as such with respect to the U.S. Holder for SVH’s taxable year in which the dividend is paid or the preceding taxable year;

 

● the U.S. Holder satisfies certain holding period requirements;

 

● the U.S. Holder is not under an obligation to make related payments with respect to positions in substantially similar or related property; and

 

● the taxpayer does not take the dividends into account as investment income under Code Section 163(d)(4)(B).

 

There currently is no comprehensive income tax treaty between the United States and the Cayman Islands and there can be no assurances that SVH will be eligible for benefits of an applicable comprehensive income tax treaty between the United States and any other jurisdiction in which SVH is resident for tax purposes. Under current IRS authority, the Nasdaq is considered an established securities market for purposes of the rules described above. However, there can be no assurance that SVH Shares will be considered “readily tradable” on an established securities market in accordance with applicable legal authorities. Furthermore, SVH will not constitute a qualified foreign corporation for purposes of these rules if it is a PFIC for the taxable year in which it pays a dividend or for the preceding taxable year. See “— Passive Foreign Investment Company Rules.” U.S. Holders should consult their tax advisors regarding the availability of the lower rate for dividends paid with respect to SVH Shares.

 

The amount of any dividend distribution paid in foreign currency will be the U.S. dollar amount calculated by reference to the applicable exchange rate in effect on the date of actual or constructive receipt, regardless of whether the payment is in fact converted into U.S. dollars at that time. A U.S. Holder may have foreign currency gain or loss if the dividend is converted into U.S. dollars after the date of receipt.

 

 

Subject to certain exceptions, dividends on SVH Shares will constitute foreign source income for foreign tax credit limitation purposes. If the dividends are qualified dividend income (as discussed above), the amount of the dividend taken into account for purposes of calculating the foreign tax credit limitation may be subject to certain adjustments under applicable law. The limitation on foreign taxes eligible for credit is calculated separately with respect to specific classes of income. For this purpose, dividends distributed by SVH with respect to the SVH Shares generally will constitute “passive category income” but could, in the case of certain U.S. Holders, constitute “general category income”. The rules governing foreign tax credits are complex and U.S. Holders are urged to consult their tax advisors regarding the creditability of foreign taxes in their particular circumstances. In lieu of claiming a foreign tax credit, a U.S. Holder may, in certain circumstances, deduct foreign taxes in computing the holder’s taxable income, subject to generally applicable limitations under U.S. law. Generally, an election to deduct foreign taxes instead of claiming foreign tax credits applies to all foreign taxes paid or accrued in the taxable year.

 

Sale, Exchange, Redemption or Other Taxable Disposition of SVH Securities

 

Subject to the discussion below under “— Passive Foreign Investment Company Rules,” a U.S. Holder generally will recognize gain or loss on any sale, exchange, redemption or other taxable disposition of SVH securities in an amount equal to the difference between (i) the amount realized on the disposition and (ii) such U.S. Holder’s adjusted tax basis in such securities. Any gain or loss recognized by a U.S. Holder on a taxable disposition of SVH securities generally will be capital gain or loss. A non-corporate U.S. Holder, including an individual, who has held the SVH securities for more than one year generally will be eligible for reduced tax rates for such long-term capital gains. The deductibility of capital losses is subject to limitations.

 

Any such gain or loss recognized generally will be treated as U.S. source income or loss. Accordingly, in the event any foreign tax (including withholding tax) is imposed upon such sale or other disposition, a U.S. Holder may not be able to utilize foreign tax credits unless such holder has foreign source income or gain in the same category from other sources. Moreover, there are special rules under certain income tax treaties between the U.S. and other jurisdictions, which may impact a U.S. Holder’s ability to claim a foreign tax credit. U.S. Holders are urged to consult their tax advisor regarding the ability to claim a foreign tax credit and the application of treaties to such U.S. Holder’s particular circumstances.

 

Exercise, Lapse, or Redemption of an SVH Warrant

 

Subject to the PFIC rules discussed below, a U.S. Holder generally will not recognize gain or loss upon the acquisition of an SVH Share on the exercise of an SVH Warrant for cash. A U.S. Holder’s tax basis in an SVH Share received upon exercise of the SVH Warrant generally should be an amount equal to the exercise price. The U.S. Holder’s holding period for an SVH Share received upon exercise of the SVH Warrant will begin on the date following the date of exercise (or possibly the date of exercise) of the SVH Warrant and will not include the period during which the U.S. Holder held the SVH Warrant. If an SVH Warrant is allowed to lapse unexercised, a U.S. Holder generally will recognize a capital loss equal to such holder’s tax basis in the SVH Warrant, if any. In general, such a loss will be a capital loss, and will be a short-term or long-term capital loss depending on the holder’s holding period for the warrant.

 

In certain limited circumstances, a U.S. Holder may be permitted to undertake a cashless exercise of SVH Warrants into SVH Shares. The U.S. federal income tax treatment of a cashless exercise of warrants into shares is unclear, and the tax consequences of a cashless exercise could differ from the consequences upon the exercise of a warrant described in the preceding paragraph. U.S. Holders should consult their own tax advisors regarding the U.S. federal income tax consequences of a cashless exercise of SVH Warrants.

 

 

Possible Constructive Distributions

 

Under Section 305 of the Code, an adjustment to the number of SVH Shares that will be issued on the exercise of the SVH Warrants, or an adjustment to the exercise price of the SVH Warrants, may be treated as a constructive distribution to holders if, and to the extent that, such adjustment has the effect of increasing the holder’s proportionate interest in the earnings and profits or assets of SVH, depending on the circumstances of such adjustment (for example, if such adjustment is to compensate for a distribution of cash or other property to our shareholders). Adjustments to the exercise price of SVH Warrants made pursuant to a bona fide reasonable adjustment formula that has the effect of preventing dilution of the interest of the holders of the warrants should generally not be considered to result in a constructive distribution. Any such constructive distribution would be taxable whether or not there is an actual distribution of cash or other property. See the more detailed discussion of the rules applicable to distributions under the heading “Distributions on SVH Shares” above.

 

Passive Foreign Investment Company Rules

 

Definition of a PFIC

 

A non-U.S. corporation will generally be classified as a PFIC for U.S. federal income tax purposes if either (i) at least 75% of its gross income in a taxable year is passive income (the “income test”) or (ii) at least 50% of its assets in a taxable year (generally determined based on fair market value and averaged quarterly over the year) produce or are held for the production of passive income (the “asset test”). For this purpose, a corporation is generally treated as owning its proportionate share of the assets and earning its proportionate share of the income of any other corporation in which it owns, directly or indirectly, at least 25% (by value) of the stock. Passive income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of passive assets. For purposes of these rules, interest income earned by a corporation is considered to be passive income and subject to a limited working capital exception under the proposed Treasury regulations, cash held by a corporation is considered to be a passive asset. In determining the value and composition of our assets for purposes of the PFIC asset test, (1) the cash we raise in this offering will generally be considered to be held for the production of passive income and (2) the value of our assets must be determined based on the market value of SVH Shares from time to time, which could cause the value of our non-passive assets to be less than 50% of the value of all of our assets (including the cash raised in this offering) on any particular quarterly testing date for purposes of the asset test.

 

 

PFIC status of SVH

 

Based on the past and projected composition of the assets and income of SVH, including goodwill (which is determined in part based on the expected market value of SVH Shares), we do not believe we were a PFIC for our most recent taxable year, and we do not expect to become a PFIC in the current taxable year or in the foreseeable future, although there can be no assurance in this regard. Because PFIC status is based on income, assets and activities for the entire taxable year, however, it is not possible to determine SVH’s PFIC status for any taxable year until after the close of the taxable year, and there can be no assurance with respect to the PFIC status of SVH for the current taxable year or any future taxable year. The composition of assets and income of SVH may be affected by how, and how quickly, we use our liquid assets, including the cash raised in this offering. In addition, because the determination of asset value for purposes of the asset test will generally be determined based on the market price of SVH Shares, the PFIC status of SVH will depend in large part on the market price of SVH Shares. Accordingly, there can be no assurance that SVH will not be considered a PFIC for any taxable year.

 

Application of PFIC rules to SVH securities

 

If (i) SVH is determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. Holder and (ii) in the case of SVH Shares, the U.S. Holder did not make a timely and effective QEF Election (as defined below) for SVH’s first taxable year as a PFIC in which the U.S. Holder held (or was deemed to hold) SVH Shares (such taxable year as it relates to each U.S. Holder, the “First PFIC Holding Year”) or a Mark-to-Market Election (as defined below), then such holder will generally be subject to special rules (the “Default PFIC Regime”) with respect to:

 

● any gain recognized by the U.S. Holder on the sale or other disposition of its SVH securities; and

 

● any “excess distribution” made to the U.S. Holder (generally, any distributions to such U.S. Holder during a taxable year of the U.S. Holder that are greater than 125% of the average annual distributions received by such U.S. Holder in respect of SVH securities during the three preceding taxable years of such U.S. Holder or, if shorter, such U.S. Holder’s holding period for such securities).

 

Under the Default PFIC Regime:

 

● the U.S. Holder’s gain or excess distribution will be allocated ratably over the U.S. Holder’s holding period for its securities;

 

● the amount of gain allocated to the U.S. Holder’s taxable year in which the U.S. Holder recognized the gain or received the excess distribution, or to the period in the U.S. Holder’s holding period before the first day of the first taxable year in which SVH is a PFIC, will be subject to tax as ordinary income;

 

● the amount of gain allocated to other taxable years (or portions thereof) of the U.S. Holder included in such U.S. Holder’s holding period will be subject to tax at the highest tax rate in effect for that year and applicable to the U.S. Holder; and

 

● an additional tax equal to the interest charge generally applicable to underpayments of tax will be imposed on the U.S. Holder in respect of the tax attributable to each such other taxable year of such U.S. Holder included in such U.S. Holder’s holding period.

 

QEF Election and Mark-to-Market Election

 

In general, if SVH is determined to be a PFIC, a U.S. Holder may avoid the Default PFIC Regime with respect to its SVH Shares (but not SVH Warrants) by making a timely and effective “qualified electing fund” election under Section 1295 of the Code (a “QEF Election”) for such holder’s First PFIC Holding Year. In order to comply with the requirements of a QEF Election with respect to SVH Shares, a U.S. Holder must receive certain information from SVH. Because SVH does not intend to provide such information, however, the QEF Election will not be available to U.S. Holders with respect to SVH Shares.

 

 

Alternatively, if a U.S. Holder, at the close of its taxable year, owns (or is deemed to own) shares in a PFIC that are treated as marketable shares, the U.S. Holder may make a mark-to-market election (a “Mark-to-Market Election”) with respect to such shares for such taxable year. A U.S. Holder that makes a valid Mark-to-Market Election for such holder’s First PFIC Holding Year will generally not be subject to the Default PFIC Regime with respect to its SVH Shares as long as such shares continue to be treated as marketable shares. Instead, the U.S. Holder will generally include as ordinary income for each year that SVH is treated as a PFIC, the excess, if any, of the fair market value of its SVH Shares at the end of its taxable year over the adjusted basis in its SVH Shares. The U.S. Holder also will be allowed to take an ordinary loss in respect of the excess, if any, of the adjusted basis of its SVH Shares over the fair market value of its SVH Shares at the end of its taxable year (but only to the extent of the net amount of previously included income as a result of the Mark-to-Market Election). The U.S. Holder’s basis in its SVH Shares will be adjusted to reflect any such income or loss amounts, and any additional gain recognized on a sale or other taxable disposition of the SVH Shares in a taxable year in which SVH is treated as a PFIC will be treated as ordinary income. Special tax rules may also apply if a U.S. Holder makes a Mark-to-Market Election for a taxable year after such holder’s First PFIC Holding Year. Currently, a Mark-to-Market Election may not be made with respect to SVH Warrants.

 

The Mark-to-Market Election is available only for stock that is regularly traded on a national securities exchange that is registered with the SEC, including Nasdaq. U.S. Holders should consult their tax advisors regarding the availability and tax considerations relevant to a Mark-to-Market Election with respect to SVH Shares in their particular circumstances.

 

If SVH is determined to be a PFIC and, at any time, has a non-U.S. subsidiary that is classified as a PFIC, U.S. Holders will generally be deemed to own a portion of the shares of such lower-tier PFIC, and could incur liability for the deferred tax and interest charge described above if SVH receives a distribution from, or disposes of all or part of SVH’s interest in, the lower-tier PFIC or the U.S. Holders otherwise were deemed to have disposed of an interest in the lower-tier PFIC. A Mark-to-Market Election will generally not be available with respect to such lower-tier PFIC. U.S. Holders should consult their tax advisors regarding the tax considerations relevant to the deemed ownership of lower-tier PFICs.

 

A U.S. Holder that owns (or is deemed to own) shares in a PFIC during any taxable year of the U.S. Holder, may be required to file an IRS Form 8621 with such U.S. Holder’s U.S. federal income tax return (whether or not a QEF Election or a Mark-to-Market Election is made) and provide such other information as may be required by the U.S. Treasury Department. The rules governing PFICs and QEF Elections and Mark-to-Market Elections are complex and their application is affected by various factors in addition to those described above. Accordingly, U.S. Holders of SVH securities should consult their tax advisors concerning the application of the PFIC rules to SVH securities in their particular circumstances.

 

THE PFIC RULES ARE COMPLEX AND THEIR APPLICATION IS AFFECTED BY VARIOUS FACTORS IN ADDITION TO THOSE DESCRIBED ABOVE. ALL U.S. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE APPLICATION OF THE PFIC RULES TO THEM, INCLUDING WITH RESPECT TO WHETHER A MARK-TO-MARKET ELECTION OR ANY OTHER ELECTION IS AVAILABLE AND THE CONSIDERATIONS RELEVANT TO THEM OF ANY SUCH ELECTION, THE APPLICATION OF THE PFIC RULES TO WARRANTS, AND THE IMPACT OF ANY PROPOSED OR FINAL PFIC TREASURY REGULATIONS.

 

Information Reporting and Backup Withholding

 

Certain U.S. Holders are required to report information to the IRS relating to an interest in “specified foreign financial assets” (as defined in the Code), including shares and warrants issued by a non-United States corporation, for any year in which the aggregate value of all specified foreign financial assets exceeds $50,000 (or a higher dollar amount prescribed by the IRS), subject to certain exceptions (including an exception for shares held in custodial accounts maintained with a U.S. financial institution). These rules also impose penalties if a U.S. Holder is required to submit such information to the IRS and fails to do so.

 

In addition, U.S. Holders may be subject to information reporting to the IRS and backup withholding with respect to dividends on and proceeds from the sale or other disposition of the SVH securities. Information reporting will generally apply to payments of dividends on, and to proceeds from the sale or other disposition of, SVH securities by a paying agent within the United States to a U.S. Holder, other than U.S. Holders that are exempt from information reporting and properly certify their exemption. A paying agent within the United States will be required to withhold at the applicable statutory rate, currently 24%, in respect of any payments of dividends on, and the proceeds from the disposition of, SVH securities within the United States to a U.S. Holder (other than U.S. Holders that are exempt from backup withholding and properly certify their exemption) if the holder fails to furnish its correct taxpayer identification number or otherwise fails to comply with applicable backup withholding requirements. U.S. Holders who are required to establish their exempt status generally must provide a properly completed IRS Form W-9.

 

Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against a U.S. Holder’s U.S. federal income tax liability. A U.S. Holder generally may obtain a refund of any amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the IRS in a timely manner and furnishing any required information. Each U.S. Holder is advised to consult with its tax advisor regarding the application of the United States information reporting rules to their particular circumstances.

 

 

MATERIAL INDIAN INCOME TAX CONSIDERATIONS

 

Distributions on SVH Shares

 

Unless the shareholders are tax residents of India, there will be no Indian tax implications on them when receiving distribution of income from SVH.

 

Sale, Exchange, Redemption or Other Disposition of SVH Securities

 

As long as SVH securities derive their value substantially from Indian assets, these securities would be considered situated in India. The security shall be deemed to derive its value substantially from the assets (whether tangible or intangible) located in India, if, on the specified date, the value of such assets:

 

(i) exceeds INR 100 million; and

(ii) represents at least 50 per cent of the value of all the assets owned by SVH.

 

Therefore, regardless of whether the holder of such securities is US resident or resident of any other country, gains realized on the said disposition would be taxable in India except in the following circumstances:

 

	●	The said gains are not taxable in India due to a favorable provision in the double tax avoidance agreement between India and the country of residence of the security holder and subject to the fact that the security holder satisfies the requirements of being eligible to the benefits of the said double taxation avoidance agreement.
	●	The person realizing the capital gains by himself/herself/itself or along with associated enterprises, is not the holder of at least 5% of the voting power or does not hold right of management or control of SVH directly or indirectly during the 12 months period directly prior to the disposition.
	●	The person realizing the capital gains by himself/herself/itself or along with associated enterprises, is not the holder of at least 5% of the voting power or does not hold right of management or control of SVM directly or indirectly.
	●	The gains are realized by a non-resident who has invested in SVH directly or indirectly, through Category-I or Category-II foreign portfolio investor under the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2014 prior to their repeal, made under the Securities and Exchange Board of India Act, 1992 or Category I foreign portfolio investor under the Securities and Exchange Board of India (Foreign Portfolio Investors) Regulations, 2019.

 

For this purpose, the valuation of the securities of SVH shall be required to be done on a specified date as prescribed in the ITA and as per the rule of valuation under the Income Tax Rules, 1962.

 

 

CERTAIN MATERIAL CAYMAN ISLANDS TAX CONSIDERATIONS

 

The following description is not intended to constitute a complete analysis of all tax consequences relating to the acquisition, ownership and disposition of the Shares and should not be construed as legal or professional tax advice. You should consult your own tax advisor concerning the tax consequences of your particular situation, as well as any tax consequences that may arise under the laws of any state, local, foreign or other taxing jurisdiction.

 

Prospective investors should consult their advisors on the possible tax consequences of investing in our securities under the laws of their country of citizenship, residence or domicile.

 

Cayman Islands Tax Considerations

 

The following is a discussion on certain Cayman Islands income tax consequences of an investment in our securities. The discussion is a general summary of present law, which is subject to prospective and retroactive change. It is not intended as tax advice, does not consider any investor’s particular circumstances, and does not consider tax consequences other than those arising under Cayman Islands law.

 

Under Existing Cayman Islands Laws

 

Any payments of dividends and capital in respect of our securities will not be subject to taxation in the Cayman Islands and no withholding will be required on the payment of a dividend or capital to any holder of the securities nor will gains derived from the disposal of the securities be subject to Cayman Islands income or corporate tax. The Cayman Islands currently has no income, corporate or capital gains tax and no estate duty, inheritance tax or gift tax.

 

No stamp duty is payable in respect of the issue of Shares or on an instrument of transfer in respect of such shares. However, an instrument of transfer in respect of shares is stampable if executed in or brought into the Cayman Islands.

 

We have been incorporated under the laws of the Cayman Islands as an exempted company limited by shares and, as such, have applied for and received an undertaking from the Government of the Cayman Islands in substantially the following form:

 

The Tax Concessions Act

 

(As Revised)

 

Undertaking as to Tax Concessions

 

In accordance with the Tax Concessions Act (As Revised), the following undertaking is hereby given to SRV:

 

(a)	That no Law which is hereafter enacted in the Islands imposing any tax to be levied on profits, income, gains or appreciations shall apply to us or our operations; and

 

(b)	In addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance tax shall be payable:

 

	(i)	on or in respect of our shares, debentures or other obligations; or
	(ii)	by way of the withholding in whole or part, of any relevant payment as defined in the Tax Concessions Act (As Revised).

 

These concessions shall be for a period of 20 years from the date hereof.

 

 

UNDERWRITING

 

We are offering our Units described in this prospectus through the underwriters named below. Maxim Group LLC, or Maxim, is acting as Representative of the underwriters. We have entered into an underwriting agreement with the underwriter dated October [  ], 2024. Subject to the terms and conditions of the underwriting agreement, the underwriter has agreed to purchase, and we have agreed to sell to the underwriter, the number of Units listed next to its name in the following table.

 

Underwriter		Number of Units
Maxim Group LLC			75,000,000
Total

 

The underwriting agreement provides that the underwriter must buy all of the Units being sold in this offering if they buy any of them. However, the underwriter is not required to take or pay for the shares and/or warrants covered by the underwriter’s option to purchase additional shares and/or warrants as described below.

 

●

receipt and acceptance of our ordinary shares or pre-funded warrants and warrants issued as part of the Units by the underwriters; and

 

●

the underwriters’ right to reject orders in whole or in part.

 

We have been advised by Maxim that the underwriters intend to make a market in our ordinary shares and warrants but that they are not obligated to do so and may discontinue making a market at any time without notice. In connection with this offering, the underwriters may distribute prospectuses electronically.

 

Option to Purchase Additional Ordinary shares and/or Warrants

 

We have granted the underwriters an option to buy up to an aggregate of 11,250,000 additional ordinary shares or pre-funded warrants and/or warrants to purchase up to an additional 22,500,000 ordinary shares. The underwriters have 45 days from the date of this prospectus to exercise this option.

 

Underwriting Discount

 

Units sold by the underwriters to the public will initially be offered at the initial offering price set forth on the cover of this prospectus. Any Units sold by the underwriters to securities dealers may be sold at a discount of up to $[ ] per Unit from the public offering price. The underwriters may offer the Units through one or more of their affiliates or selling agents. If all the Units are not sold at the public offering price, Maxim may change the offering price and the other selling terms. Upon execution of the underwriting agreement, the underwriters will be obligated to purchase the Units at the prices and upon the terms stated therein.

 

The following table shows the per share and total underwriting discount we will pay to the underwriters assuming both no exercise and full exercise of the underwriters’ option to purchase up to [ ] additional ordinary shares and/or warrants to purchase up to an additional ordinary shares.

 

		Per Unit including common stock				Total without Over-Allotment Option				Total with Over-Allotment Option
Public offering price		$	0.08			$	6,000,000			$
Underwriting discounts and commissions (7.0%)		$				$				$
Proceeds, before expenses, to us		$				$				$

 

 

We have agreed to pay Maxim’s out-of-pocket accountable expenses including Maxim’s legal fees, up to a maximum amount of $[  ] if this offering is completed.

 

We estimate that the total expenses of the offering payable by us, not including the underwriting discounts and commissions, will be approximately $75,000. This amount includes the underwriters’ expenses described above.

 

Lock-Up Agreements

 

We and each of our officers and directors have agreed, subject to certain exceptions, not to offer, issue, sell, contract to sell, encumber, grant any option for the sale of or otherwise dispose of any of our ordinary shares or other securities convertible into or exercisable or exchangeable for our ordinary shares for 90 days after this offering is completed without the prior written consent of the Representative.

 

The Representative may in its sole discretion and at any time without notice release some or all of the ordinary shares subject to lock-up agreements prior to the expiration of the lock-up period. When determining whether or not to release shares from the lock-up agreements, the Representative will consider, among other factors, the security holder’s reasons for requesting the release, the number of shares for which the release is being requested and market conditions at the time.

 

Indemnification

 

We have agreed to indemnify the underwriters against certain liabilities, including certain liabilities under the Securities Act. If we are unable to provide this indemnification, we have agreed to contribute to payments the underwriters may be required to make in respect of those liabilities.

 

Stock Exchange

 

Our ordinary shares is currently listed on Nasdaq under the symbol “SVMH.” Our publicly traded warrants are currently listed on Nasdaq under the symbol “SVMHW.”

 

Determination of Offering Price and Exercise Price

 

The actual public offering price of the securities we are offering, and the exercise price of the warrants included in the Units that we are offering, were negotiated between us and the underwriters based on the trading of our ordinary shares prior to the offering, among other things. Other factors considered in determining the public offering price of the securities we are offering, as well as the exercise price of the warrants included in the Units that we are offering, include our history and prospects, the market price of our ordinary shares on Nasdaq, the stage of development of our business, our business plans for the future and the extent to which they have been implemented, an assessment of our management, the general conditions of the securities markets at the time of the offering and such other factors as were deemed relevant.

 

Electronic Distribution

 

A prospectus in electronic format may be made available on a website maintained by the underwriters. In connection with the offering, the underwriters or selected dealers may distribute prospectuses electronically. No forms of electronic prospectus other than prospectuses that are printable as Adobe® PDF will be used in connection with this offering.

 

Other than the prospectus in electronic format, the information on the underwriters’ websites and any information contained in any other website maintained by the underwriters is not part of the prospectus or the registration statement of which this prospectus forms a part, has not been approved and/or endorsed by us or the underwriters in their capacity as an underwriter and should not be relied upon by investors.

 

 

Price Stabilization, Short Positions

 

In connection with this offering, the underwriters may engage in activities that stabilize, maintain or otherwise affect the price of our shares of ordinary shares and warrants during and after this offering, including:

 

	●	stabilizing transactions;
	●	short sales;
	●	purchases to cover positions created by short sales;
	●	imposition of penalty bids; and
	●	syndicate covering transactions.

 

Stabilizing transactions consist of bids or purchases made for the purpose of preventing or retarding a decline in the market price of our securities while this offering is in progress. Stabilization transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum. These transactions may also include making short sales of our shares of ordinary shares, which involve the sale by the underwriter of a greater number of shares of ordinary shares than they are required to purchase in this offering and purchasing shares of ordinary shares on the open market to cover short positions created by short sales. Short sales may be “covered short sales,” which are short positions in an amount not greater than the underwriter’s option to purchase additional shares referred to above, or may be “naked short sales,” which are short positions in excess of that amount.

 

The underwriter may close out any covered short position by either exercising their option, in whole or in part, or by purchasing shares in the open market. In making this determination, the underwriter will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option.

 

Naked short sales are short sales made in excess of the over-allotment option. The underwriter must close out any naked short position by purchasing shares in the open market. A naked short position is more likely to be created if the underwriter is concerned that there may be downward pressure on the price of our shares of ordinary shares in the open market that could adversely affect investors who purchased in this offering.

 

The underwriter also may impose a penalty bid. This occurs when a particular underwriter repays to the underwriter a portion of the underwriting discount received by it because Maxim has repurchased shares sold by or for the account of that underwriter in stabilizing or short covering transactions.

 

These stabilizing transactions, short sales, purchases to cover positions created by short sales, the imposition of penalty bids and syndicate covering transactions may have the effect of raising or maintaining the market price of our shares of ordinary shares and warrants or preventing or retarding a decline in the market price of our shares of ordinary shares and warrants. As a result of these activities, the price of our shares of ordinary shares and warrants may be higher than the price that otherwise might exist in the open market. The underwriter may carry out these transactions on Nasdaq, in the over-the-counter market or otherwise. Neither we nor the underwriters make any representation or prediction as to the effect that the transactions described above may have on the price of the shares and warrants. Neither we, nor the underwriters make any representation that the underwriters will engage in these stabilization transactions or that any transaction, once commenced, will not be discontinued without notice.

 

Other Relationships and Affiliations

 

The underwriters and their affiliates are full service financial institutions engaged in various activities, which may include securities trading, commercial and investment banking, financial advisory, investment management, investment research, principal investment, hedging, financing and brokerage activities. The underwriters and their affiliates may from time to time in the future engage with us and perform services for us or in the ordinary course of their business for which they will receive customary fees and expenses. In the ordinary course of their various business activities, the underwriters and their affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers, and such investment and securities activities may involve securities and/or instruments of us. The underwriters and their respective affiliates may also make investment recommendations and/or publish or express independent research views in respect of these securities or instruments and may at any time hold, or recommend to clients that they acquire, long and/or short positions in these securities and instruments.

 

 

Selling Restrictions

 

Canada. The securities may be sold in Canada only to purchasers purchasing, or deemed to be purchasing, as principal that are accredited investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario), and are permitted clients, as defined in National Instrument 31 103 Registration Requirements, Exemptions and Ongoing Registrant Obligations. Any resale of the securities must be made in accordance with an exemption from, or in a transaction not subject to, the prospectus requirements of applicable securities laws.

 

Securities legislation in certain provinces or territories of Canada may provide a purchaser with remedies for rescission or damages if this prospectus supplement (including any amendment thereto) contains a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult with a legal advisor.

 

Pursuant to section 3A.3 of National Instrument 33 105 Underwriting Conflicts (NI 33 105), the underwriters are not required to comply with the disclosure requirements of NI 33-105 regarding underwriters conflicts of interest in connection with this offering.

 

European Economic Area. In relation to each Member State of the European Economic Area which has implemented the Prospectus Directive (each, a “Relevant Member State”) an offer to the public of any securities may not be made in that Relevant Member State, except that an offer to the public in that Relevant Member State of any securities may be made at any time under the following exemptions under the Prospectus Directive, if they have been implemented in that Relevant Member State:

 

	●	to any legal entity which is a qualified investor as defined in the Prospectus Directive;
	●	to fewer than 100 or, if the Relevant Member State has implemented the relevant provision of the 2010 PD Amending Directive, 150, natural or legal persons (other than qualified investors as defined in the Prospectus Directive), as permitted under the Prospectus Directive, subject to obtaining the prior consent of the representatives for any such offer; or
	●	in any other circumstances falling within Article 3(2) of the Prospectus Directive, provided that no such offer of securities shall result in a requirement for the publication by us or any underwriters of a prospectus pursuant to Article 3 of the Prospectus Directive.

 

For the purposes of this provision, the expression an “offer to the public” in relation to any securities in any Relevant Member State means the communication in any form and by any means of sufficient information on the terms of the offer and any securities to be offered so as to enable an investor to decide to purchase any securities, as the same may be varied in that Member State by any measure implementing the Prospectus Directive in that Member State, the expression “Prospectus Directive” means Directive 2003/71/EC (and amendments thereto, including the 2010 PD Amending Directive, to the extent implemented in the Relevant Member State), and includes any relevant implementing measure in the Relevant Member State, and the expression “2010 PD Amending Directive” means Directive 2010/73/EU.

 

United Kingdom. Each underwriter has represented and agreed that:

 

	●	it has only communicated or caused to be communicated and will only communicate or cause to be communicated an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000 (the FSMA)) received by it in connection with the issue or sale of the securities in circumstances in which Section 21(1) of the FSMA does not apply to us; and
	●	it has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the securities in, from or otherwise involving the United Kingdom.

 

 

Switzerland. The securities may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (the SIX) or on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange or regulated trading facility in Switzerland. Neither this document nor any other offering or marketing material relating to the securities or the offering may be publicly distributed or otherwise made publicly available in Switzerland.

 

Neither this document nor any other offering or marketing material relating to the offering, or the securities have been or will be filed with or approved by any Swiss regulatory authority. In particular, this document will not be filed with, and the offer of securities will not be supervised by, the Swiss Financial Market Supervisory Authority FINMA, and the offer of securities has not been and will not be authorized under the Swiss Federal Act on Collective Investment Schemes (CISA). Accordingly, no public distribution, offering or advertising, as defined in CISA, its implementing ordinances and notices, and no distribution to any non-qualified investor, as defined in CISA, its implementing ordinances and notices, shall be undertaken in or from Switzerland, and the investor protection afforded to acquirers of interests in collective investment schemes under CISA does not extend to acquirers of securities.

 

Australia. No placement document, prospectus, product disclosure statement or other disclosure document has been lodged with the Australian Securities and Investments Commission, in relation to the offering.

 

This prospectus does not constitute a prospectus, product disclosure statement or other disclosure document under the Corporations Act 2001 (the Corporations Act) and does not purport to include the information required for a prospectus, product disclosure statement or other disclosure document under the Corporations Act.

 

Any offer in Australia of the securities may only be made to persons (the Exempt Investors) who are “sophisticated investors” (within the meaning of section 708(8) of the Corporations Act), “professional investors” (within the meaning of section 708(11) of the Corporations Act) or otherwise pursuant to one or more exemptions contained in section 708 of the Corporations Act so that it is lawful to offer the securities without disclosure to investors under Chapter 6D of the Corporations Act.

 

The securities applied for by Exempt Investors in Australia must not be offered for sale in Australia in the period of 12 months after the date of allotment under the offering, except in circumstances where disclosure to investors under Chapter 6D of the Corporations Act would not be required pursuant to an exemption under section 708 of the Corporations Act or otherwise or where the offer is pursuant to a disclosure document which complies with Chapter 6D of the Corporations Act. Any person acquiring securities must observe such Australian on-sale restrictions.

 

This prospectus contains general information only and does not take account of the investment objectives, financial situation or particular needs of any particular person. It does not contain any securities recommendations or financial product advice. Before making an investment decision, investors need to consider whether the information in this prospectus is appropriate to their needs, objectives and circumstances, and, if necessary, seek expert advice on those matters.

 

Notice to Prospective Investors in the Cayman Islands. No invitation, whether directly or indirectly, may be made to the public in the Cayman Islands to subscribe for our securities.

 

Taiwan. The securities have not been and will not be registered with the Financial Supervisory Commission of Taiwan pursuant to relevant securities laws and regulations and may not be sold, issued or offered within Taiwan through a public offering or in circumstances which constitutes an offer within the meaning of the Securities and Exchange Act of Taiwan that requires a registration or approval of the Financial Supervisory Commission of Taiwan. No person or entity in Taiwan has been authorized to offer, sell, give advice regarding or otherwise intermediate the offering and sale of the securities in Taiwan.

 

Notice to Prospective Investors in Hong Kong. The contents of this prospectus have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the offer. If you are in any doubt about any of the contents of this prospectus, you should obtain independent professional advice. Please note that (i) our securities may not be offered or sold in Hong Kong, by means of this prospectus or any document other than to “professional investors” within the meaning of Part I of Schedule 1 of the Securities and Futures Ordinance (Cap.571, Laws of Hong Kong) (SFO) and any rules made thereunder, or in other circumstances which do not result in the document being a “prospectus” within the meaning of the Companies Ordinance (Cap.32, Laws of Hong Kong) (CO) or which do not constitute an offer or invitation to the public for the purpose of the CO or the SFO, and (ii) no advertisement, invitation or document relating to our securities may be issued or may be in the possession of any person for the purpose of issue (in each case whether in Hong Kong or elsewhere) which is directed at, or the contents of which are likely to be accessed or read by, the public in Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to the securities which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” within the meaning of the SFO and any rules made thereunder.

 

Notice to Prospective Investors in the People’s Republic of China. This prospectus may not be circulated or distributed in the PRC and the shares may not be offered or sold, and will not offer or sell to any person for re-offering or resale directly or indirectly to any resident of the PRC except pursuant to applicable laws, rules and regulations of the PRC. For the purpose of this paragraph only, the PRC does not include Taiwan and the special administrative regions of Hong Kong and Macau.

 

Expenses Related To The Offering

 

The following table sets forth the various expenses, all of which will be borne by the registrant, in connection with the sale and distribution of the securities being registered, other than the underwriting discounts and commissions. All amounts shown are estimates except for the SEC registration fee and the FINRA filing fee

 

Expenses		Amount
SEC registration fee		$	2,952
FINRA filing fee				*
Printing and engraving expenses				*
Legal fees and expenses				*
Accounting fees and expenses				*
Miscellaneous				*
Total		$		*

 

*	These fees are calculated based on the securities offered and the number of issuances and accordingly cannot be defined at this time.

 

 

SECURITIES ELIGIBLE FOR FUTURE SALES

 

As of October 8, 2024, we had 441,901,909 ordinary shares issued and outstanding, 10,798,300 Public Warrants issued and outstanding, 250,000 Advisory Warrants held by ACP, and 543,000 Private Warrants held by the Sponsor, with each Warrant exercisable at $11.50 per one Ordinary Share. All of our ordinary shares that were issued in connection with the Business Combination are freely tradable, except that our ordinary shares received in the Business Combination by persons who become affiliates of our company for purposes of Rule 144 under the Securities Act may be resold by them only in transactions permitted by Rule 144, or as otherwise permitted under the Securities Act. Sales of substantial amounts of our ordinary shares in the public market could adversely affect prevailing market price of the Shares.

 

We cannot make any prediction as to the effect, if any, that sales of the Units, or the availability of such securities for sale, will have on the market price of our securities.

 

Lock-up Agreement

 

Pursuant to the Investor Rights Agreement and the amended and restated memorandum and articles of association of SVH, subject to certain exceptions, the holders of: (i) shares of ordinary shares of MOBV issued as consideration pursuant to the business combination, (ii) any assumed SVH equity awards or warrants; or (iii) shares of ordinary shares of MOBV underlying such assumed SVH equity awards or warrants, in each case, were restricted from selling or transferring any of the securities described in clauses (i), (ii) or (iii) between the Closing and the date that was 180 days after the Closing. Pursuant to the Investor Rights Agreement, certain SVH shareholders have agreed to the same restrictions, and the Sponsor has agreed to similar restrictions for a period of 18 months with respect to MOBV Shares and Private Warrants held by it. However, following the expiration of such lock-up periods, the Sponsor and the other lock-up parties will not be restricted from selling SVH securities held by them, other than by applicable securities laws. As a result, sales of a substantial number of SVH Shares in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could reduce the market price of SVH Shares.

 

Registration Rights Agreement

 

Pursuant to the Registration Rights Agreement, the Company must file a registration statement upon receipt of a demand registration request registering ordinary shares held by certain shareholders of SVH and use commercially reasonable efforts to have declared effective and maintain the effectiveness of such registration.

 

Rule 144

 

Pursuant to Rule 144 under the Securities Act, a person who has beneficially owned restricted Shares for at least six months would be entitled to sell their securities; provided that (i) such person is not deemed to have been one of our affiliates at the time of, or at any time during the three months preceding, a sale and (ii) we are subject to the Exchange Act periodic reporting requirements for at least three months before the sale and has filed all required reports under Section 13 or 15(d) of the Exchange Act during the 12 months (or such shorter period as it was required to file reports) preceding the sale.

 

Persons who have beneficially owned restricted Shares for at least six months but who are our affiliates at the time of, or at any time during the three months preceding, a sale, would be subject to additional restrictions, by which such person would be entitled to sell within any three-month period only a number of securities that does not exceed the greater of:

 

●	one percent (1%) of the total number of Shares then issued and outstanding; or
●	the average weekly reported trading volume of the Shares during the four calendar weeks preceding the filing of a notice on Form 144 with respect to the sale.

 

Sales by our affiliates under Rule 144 are also limited by manner of sale provisions and notice requirements and to the availability of current public information about us.

 

 

Restrictions on the Use of Rule 144 by Shell Companies or Former Shell Companies

 

Rule 144 is not available for the resale of securities initially issued by shell companies (other than business combination related shell companies) or issuers that have been at any time previously a shell company. However, Rule 144 also includes an important exception to this prohibition if the following conditions are met:

 

●	the issuer of the securities that was formerly a shell company has ceased to be a shell company;
●	the issuer of the securities is subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act;
●	the issuer of the securities has filed all Exchange Act reports and material required to be filed, as applicable, during the preceding 12 months (or such shorter period that the issuer was required to file such reports and materials); and
●	at least one year has elapsed from the time that the issuer filed Form 20-F type information with the SEC, reflecting its status as an entity that is not a shell company.

 

Regulation S

 

Regulation S under the Securities Act provides an exemption from registration requirements in the United States for offers and sales of securities that occur outside the United States. Rule 903 of Regulation S provides the conditions to the exemption for a sale by an issuer, a distributor, their respective affiliates or anyone acting on their behalf, while Rule 904 of Regulation S provides the conditions to the exemption for a resale by persons other than those covered by Rule 903. In each case, any sale must be completed in an offshore transaction, as that term is defined in Regulation S, and no directed selling efforts, as that term is defined in Regulation S, may be made in the United States.

 

We are a foreign issuer as defined in Regulation S. As a foreign issuer, securities that we sell outside the United States pursuant to Regulation S are not considered to be restricted securities under the Securities Act, and, subject to the offering restrictions imposed by Rule 903, are freely tradable without registration or restrictions under the Securities Act, unless the securities are held by our affiliates. Generally, subject to certain limitations, holders of our restricted shares who are not affiliates of our company or who are affiliates of our company by virtue of their status as an officer or director may, under Regulation S, resell their restricted shares in an “offshore transaction” if none of the seller, its affiliate nor any person acting on their behalf engages in directed selling efforts in the United States and, in the case of a sale of our restricted shares by an officer or director who is an affiliate of ours solely by virtue of holding such position, no selling commission, fee or other remuneration is paid in connection with the offer or sale other than the usual and customary broker’s commission that would be received by a person executing such transaction as agent. Additional restrictions are applicable to a holder of our restricted shares who will be an affiliate of our company other than by virtue of his or her status as an officer or director of our company.

 

Rule 701

 

In general, under Rule 701 of the Securities Act as currently in effect, each of our employees, consultants or advisors who purchases equity shares from us in connection with a compensatory stock plan or other written agreement that was executed prior to the completion of the Business Combination is eligible to resell those equity shares in reliance on Rule 144, but without compliance with some of the restrictions, including the holding period, contained in Rule 144. However, the Rule 701 shares would remain subject to applicable lock-up arrangements and would only become eligible for sale when the lock-up period expires.

 

 

ENFORCEABILITY OF CIVIL LIABILITIES UNDER U.S. SECURITIES LAWS

 

SVH is incorporated under the laws of the Cayman Islands as an exempted company limited by shares. The Cayman Islands has a less developed body of securities laws as compared to the United States and provides protections for investors to a significantly lesser extent. Additionally, Cayman Islands companies may not have standing to sue before the federal courts of the United States.

 

SVH been advised by Conyers Dill & Pearman LLP, SVH’s Cayman Islands legal counsel, that there is uncertainty as to whether the courts of the Cayman Islands would (1) recognize or enforce judgments of United States courts against SVH or its directors and executive officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States or (2) entertain original actions brought in the Cayman Islands against SVH or its directors and executive officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States, so far as the liabilities imposed by those provisions are penal in nature.

 

Conyers Dill & Pearman LLP has further advised SVH that the courts of the Cayman Islands will not enforce criminal fines and tax judgments and judgments that are contrary to Cayman Islands public policy. However, although there is no statutory enforcement in the Cayman Islands of judgements obtained in the United States, the courts of the Cayman Islands will recognize and enforce a foreign money judgment of a foreign court of competent jurisdiction without retrial on the merits based on the principle that a judgment of a competent foreign court imposes upon the judgment debtor an obligation to pay the sum for which judgment has been given provided certain conditions are met. For a foreign judgment to be enforced in the Cayman Islands, such judgment must be final and conclusive and for a liquidated sum, and must not be in respect of taxes or a fine or penalty, inconsistent with a Cayman Islands judgment in respect of the same matter, impeachable on the grounds of fraud or obtained in a manner, and or be of a kind the enforcement of which is, contrary to natural justice or the public policy of the Cayman Islands (awards of punitive or multiple damages may well be held to be contrary to public policy). A Cayman Islands Court may stay enforcement proceedings if concurrent proceedings are being brought elsewhere.

 

EXPERTS

 

The consolidated financial statements of SVH as of March 31, 2024 and 2023, included in this prospectus, which is referred to and made a part of the prospectus and registration statement, have been audited by Manohar Chowdhry & Associates, independent registered public accounting firm, as set forth in their report appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in auditing and accounting.

 

LEGAL MATTERS

 

The validity of the securities offered by this prospectus and certain other legal matters will be passed upon by Conyers Dill & Pearman LLP, our counsel as to Cayman Islands law. Norton Rose Fulbright (US) LLP is acting as counsel to the Company regarding U.S. securities law matters. Pryor Cashman LLP, New York, New York is acting as counsel for the underwriters in connection with certain legal matters relating to this offering.

 

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

 

The SEC allows us to incorporate by reference into this prospectus certain information we file with it, which means that we can disclose important information by referring you to those documents. The information incorporated by reference is considered to be part of this prospectus. Because we are incorporating by reference future filings with the SEC, this prospectus is continually updated and those future filings may modify or supersede some of the information included or incorporated in this prospectus. We incorporate by reference the documents listed below and all documents subsequently filed with the SEC (excluding any portions of any Form 6-K that are not deemed “filed” pursuant to the General Instructions of Form 6-K) pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, after the date of this prospectus and prior to the date this offering is terminated or we issue all of the securities under this prospectus:

 

-

our Annual Report on Form 20-F for the year ended March 31, 2024, as amended and restated on July 23, 2024; and

 

-

our Current Reports on Form 6-K filed with the SEC on May 20, 2024, June 14, 2024, July 2, 2024, July 9, 2024, July 29, 2024, August 1, 2024, August 12, 2024, September 9, 2024, and September 19, 2024.

 

To obtain copies of these filings, see “Where You Can Find More Information” in this prospectus. Information in this prospectus supersedes related information in the documents listed above and information in subsequently filed documents supersedes related information in both this prospectus and the incorporated documents.

 

WHERE YOU CAN FIND MORE INFORMATION

 

Information and statements contained in this prospectus or any annex to this prospectus are qualified in all respects by reference to the copy of the relevant contract or other annex filed as an exhibit to this prospectus.

 

We are subject to the periodic reporting and other information requirements of the Exchange Act as applicable to a “foreign private issuer,” and we will file annual reports and other information from time to time with the SEC in accordance with such requirements. Our SEC filings will be available to the public on the internet at a website maintained by the SEC located at www.sec.gov.

 

We also maintain an Internet website at www.svmh.ai. Through our website, we will make available, free of charge, the following documents as soon as reasonably practicable after they are electronically filed with, or furnished to, the SEC: our Annual Reports on Form 20-F; our reports on Form 6-K; amendments to these documents; and other information as may be required by the SEC. The information contained on, or that may be accessed through, our website is not part of, and is not incorporated into, this prospectus.

 

The information contained on or that can be accessed through our website is not part of, and is not incorporated into, this prospectus. All website addresses in this prospectus are intended to be inactive textual references only.

 

If you would like additional copies of this prospectus, you should contact via phone or in writing:

 

SVH

3rd Floor, Genesis House, Unit 18

Genesis Close, George Town

P.O. Box 10655

Grand Cayman, KY1-1006

Cayman Islands

Telephone: +1 (888) 227-8066

 

 

[  ] Units

 

Each Unit Consisting of One Ordinary Share or

One Pre-Funded Warrant and

One Warrant to Purchase Two Ordinary Shares

 

SRIVARU HOLDING LIMITED

 

 

PROSPECTUS

 

 

	Sole Book-Running Manager
	Maxim Group LLC

 

, 2024

 

 

INDEX TO FINANCIAL STATEMENTS

 

SRIVARU HOLDING LIMITED CONSOLIDATED FINANCIAL STATEMENTS	Page No.
Report of Independent Registered Public Accounting Firm (PCAOB ID: 5341)	F-2
Consolidated Balance Sheet as of March 31, 2024 and 2023	F-3
Consolidated Statements of Operations and Comprehensive Income for the years ended March 31, 2024, and 2023	F-4
Consolidated Statement of Stockholders’ Equity for the years ended March 31, 2024 and 2023	F-5
Consolidated statements of Cash Flows for the years ended March 31, 2024 and 2023 and	F-6
Notes to Consolidated Financial Statements	F-7

 

 

Report of Independent Registered Public Accounting Firm

 

To the shareholders and the board of directors of Srivaru Holding Limited

 

Opinion on the Consolidated Financial Statements

 

We have audited the accompanying Consolidated balance sheets of Srivaru Holding Limited and its subsidiary (the “Company”) as of March 31, 2024 and March 31, 2023, the related Consolidated statements of operations and comprehensive Income, stockholders’ equity and Consolidated cash flows, for each of the two years in the period ended March 31, 2024, and the related notes (collectively referred to as the “ Consolidated financial statements”). In our opinion, the Consolidated financial statements present fairly, in all material respects, the Consolidated financial position of the Company as at March 31, 2024 and 2023, and the Consolidated results of its operations and its cash flows for each of the two years in the period ended March 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

 

Basis for Opinion

 

These Consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s Consolidated financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

 

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

 

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audit provides a reasonable basis for our opinion.

 

Critical Audit Matters

 

Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters

 

Manohar Chowdhry & Associates

Chartered Accountants

 

We are serving as the Company’s auditors Since 2022.

 

Chennai, India

July 17, 2024

 

 

Srivaru Holding Limited

CONSOLIDATED BALANCE SHEET

(all amounts are in $, except share data)

 

		March 31, 2024 ($)				March 31, 2023 ($)
ASSETS
Current assets:
Cash and cash equivalents			175,041				21,378
Marketable securities			13,944				14,415
Accounts receivable, net			-				-
Inventory			119,743				331,548
Deposits and advances			918,724				288,842
Total current assets			1,227,452				656,183
Property, plant and equipment, net			135,823				55,196
Non-Marketable securities			-				-
Deferred tax assets			-				-
Operating lease asset			222,884				-
Total long-term assets			358,707				55,196
Total assets			1,586,159				711,379
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable			952,340				3,976
Accrued liabilities and others			165,055				55,571
Borrowings			77,962				1,158,390
Total current liabilities			1,195,357				1,217,937
Long-term loans			-				-
Other liabilities			498,426				-
Total non-current liabilities			498,426				-
Total liabilities			1,693,783				1,217,937
Commitments and Contingencies – See Note 11			-				-
Stockholders’ equity:
Ordinary shares, $ 0.01 par value: 100,000,000 shares authorized as of March 31, 2024 (March 31, 2023; 20,000,000 shares); 37,326,731 (March 31, 2023; 19,147,698) shares issued or outstanding as of March 31, 2024.			415,281				191,477
Class A ordinary shares, $0.000001 par value; 10,00,00,000 shares authorized			4				-
Ordinary share, value			415,281				191,477
Share Premium			6,194,937				149,614
Profit on Consolidation			87,756				87,756
Non Controlling Interest			(69,338	)			(14,979	)
Other Comprehensive income			54,295				51,057
Other Equity			5,456,500				-
Accumulated deficit			(12,247,059	)			(971,483	)
Total stockholders’ equity			(107,624	)			(506,558	)
Total liabilities and stockholders’ equity			1,586,159				711,379

 

The accompanying notes should be read in connection with these consolidated financial statements.

 

 

Srivaru Holding Limited

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(all amounts are in $, except share data)

 

		Year ended March 31, 2024				Year ended March 31, 2023
		($)				($)
Revenue			42,538				112,409
Cost of goods Sold			(35,316	)			(132,780	)
Inventory write-down			(262,686	)			(113,724	)
Total Cost of Revenue			(298,002	)			(246,504	)
Gross Profit			(255,464	)			(134,095	)
General and administrative expenses			(10,924,808	)			(405,078	)
Selling and Distribution expenses			(181,195	)			(2,814	)
Depreciation and Amortisation			(38,343	)			(24,545	)
Operating loss			(11,399,810	)			(566,532	)
Other income, net			1,330				11,771
Finance Expenses			(57,652	)			(55,946	)
Loss before income taxes			(11,456,132	)			(610,707	)
Income tax expense/benefit			(26,162	)			(64,241	)
Net loss attributable to ordinary sharesholders			(11,482,294	)			(674,948	)
Loss attributable to Ordinary shares holders of Parent Company			(11,427,935	)			(654,273	)
Loss attributable to non-controlling interests			(54,539	)			(20,675	)
Loss per share attributable to ordinary sharesholders:
Basic & diluted			(4.23	)			(0.04
Weighted-average number of shares used in computing loss per share amounts:			20,763,518				19,145,415
Net loss attributable to ordinary sharesholders			(11,482,294	)			(674,948	)
Foreign currency translation adjustments			5,286				46,286
Remeasurements of the net defined benefit liability / asset, net			(2,048	)			-
Comprehensive income			(11,479,056	)			(628,662	)
Loss attributable to Ordinary shares holders of Parent Company			(11,424,697	)			(607,987	)
Loss attributable to non-controlling interests			(54,539	)			(20,675	)

 

The accompanying notes should be read in connection with these Consolidated financial statements.

 

 

Srivaru Holding Limited

STATEMENT OF STOCKHOLDERS’ EQUITY

(all amounts are in $, except share data)

 

		Number of Common Shares				Ordinary shares				Share Premium				Accumulated Deficit				Capital Reserve				Non- Controlling Interest				Other Comprehensive Income				Other Equity				Total Stockholders’ Equity
Balances as of April 01 , 2022			19,140,849				191,408				124,682				(317,210	)			87,756				5,696				4,771				-				97,103
Ordinary shares issued during the year			6,849				69				24,932				-				-								-				-				25,001
Net loss			-				-				-				(654,273	)			-				(20,675	)			-				-				(674,948	)
Adjustments Pertaining to Business Combination			-				-				-				-				-				-				-				-				-
Profit on Consolidation			-				-				-				-				-				-				-				-				-
Exchange gain on translation of Foreign Subsidiaries			-				-				-				-				-				-				46,286				-				46,286
Balances as of March 31, 2023			19,147,698				191,477				149,614				(971,483	)			87,756				(14,979	)			51,057				-				(506,558	)

 

		Number of Ordinary shares				Common Stock				Share Premium				Accumulated Deficit				Capital Reserve				Non- Controlling Interest				Other Comprehensive Income				Other Equity				Total Stockholders’ Equity
Balances as of April 01 , 2023			19,147,698				191,477				149,614				(971,483	)			87,756				(14,979	)			51,057				-				(506,558	)
Balances			19,147,698				191,477				149,614				(971,483	)			87,756				(14,979	)			51,057				-				(506,558	)
Share Subdivision during the year			(4,201,413	)			-				-				-				-				-				-				-				-
Ordinary shares issued during the year			2,23,80,446				223,804				6,045,323				-				-								-				-				6,269,127
Class A ordinary shares, $0.000001 par value			-				4				-				-				-				-				-				-				4
Net loss			-				-				-				(11,427,935	)			-				(54,359	)			-								(11,482,294	)
Adjustments Pertaining to Business Combination			-				-				-				152,359				-				-				-				-				152,359
Earnout Shares			-				-				-				-				-				-				-				5,456,500				5,456,500
Exchange gain on translation of Foreign Subsidiaries			-				-				-				-				-				-				5,286				-				5,286
Remeasurements of the net defined benefit liability / asset, net			-				-				-				-				-				-				(2,048	)			-				(2,048	)
Balances as of March 31, 2024			37,326,731				415,285				6,194,937				(12,247,059	)			87,756				(69,338	)			54,295				5,456,500				(107,624	)
Balances			37,326,731				415,285				6,194,937				(12,247,059	)			87,756				(69,338	)			54,295				5,456,500				(107,624	)

 

The accompanying notes should be read in connection with these consolidated financial statements.

 

 

Srivaru Holding Limited

CONSOLIDATED STATEMENTS OF CASH FLOWS

(all amounts are in $, except share data)

 

		Year Ended March 31, 2024				Year Ended March 31, 2023
		($)				($)
Cash flows from operating activities:
Net loss			(11,456,132	)			(610,707	)
Adjustment to reconcile net loss to net cash:
Depreciation and amortization			38,343				24,545
Advances written-off			175,257				-
Earnout Expenses			6,656,500				-
Interest on lease liability			6,867				-
Changes in operating assets and liabilities:
Accounts receivables, net			-				-
Inventory			211,805				103,555
Deposits and advances			(805,139	)			129,748
Claims and advances			-				-
Accounts payable			948,364				(3,800	)
Accrued and other liabilities			378,187				(27,411	)
Net cash used in operating activities			(3,845,948	)			(384,070	)
Income Tax paid/Received			(26,162	)			-
Net cash used in Operating Activities			(3,872,110	)			(384,070	)
Cash flow from investing activities:
Net sale/(purchase) of property, plant, and equipment			(102,994	)			(13,491	)
Investment in/sale of marketable securities/Subsidiaries			471				465
Net cash provided by/ (used in) investing activities			(102,523	)			(13,026	)
Cash flows from financing activities:
Issuance of equity stock through offering (net of expenses)			5,221,490				25,001
Repayment of Lease Liabilities			(18,052	)			-
Proceeds from/Repayment of borrowings			(1,080,428	)			271,582
Net cash provided by financing activities			4,123,010				296,583
Effects of exchange rate changes on cash and cash equivalents			5,286				46,286
Net increase/(decrease) in cash and cash equivalents			153,663				(54,227	)
Cash and cash equivalents at the beginning of the period			21,378				75,605
Cash and cash equivalents at the end of the period			175,041				21,378
Supplementary information:
Non-cash items:
Operating leases entered during the year			238,860				-

 

The accompanying notes should be read in connection with these Consolidated Financial Statements

 

 

Srivaru Holding Limited

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For Fiscal Year Ended March 31, 2024

 

Unless the context requires otherwise, all references in this report to “SVH,” “we,” “our” and “us” refer to Srivaru Holding Limited.

 

NOTE 1 – NATURE OF OPERATIONS AND MANAGEMENT’S PLANS

 

SVH is an investment Company incorporated outside India. The registered office of the Company is at the offices of Amicorp Cayman Fiduciary Limited, 3rd Floor, Genesis House, Unit 18, Genesis Close, George Town, P.O. Box 10655, Grand Cayman KY1 – 1006, Cayman Islands or at such other place as the Directors may from time to time decide. The Company has invested in one subsidiary which is clean tech electric two-wheeler manufacturer and the goal is to produce the best riding automobiles for the personal commute. SVH believe that there are lots of untapped engineering talent in the country, they are starving for a greener opportunity. While SVH invent, manufacture, and sell the electric vehicles it will create lots of opportunities at all levels for the people who are truly passionate. SVM want these engineers to follow their hearts to create something useful for the larger community.

 

NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES

 

a) Principles of consolidation

 

The accompanying consolidated financial statements have been prepared in conformity with GAAP and reflect our accounts and operations and those of our subsidiaries in which we have a controlling financial interest. In accordance with the provisions of ASC 810, Consolidation (“ASC 810”). The consolidated financial statements include the accounts of the Company and all its subsidiaries. Intercompany accounts and transactions have been eliminated. In the opinion of the Company’s management, the consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. Transactions between the Company and its subsidiaries are eliminated in the consolidated financial statements.

 

b) Basis of Preparation

 

The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP).

 

Business Combination/ Transaction:

 

On December 8, 2023 (the “Closing Date” and such closing, the “Closing”), we consummated the previously announced business combination pursuant to the Business Combination Agreement, dated as of March 13, 2023 (the “Business Combination Agreement”), by and among us, Pegasus Merger Sub Inc., a Delaware corporation and direct, wholly owned subsidiary of the Company (“Merger Sub”) and MOBV. As of the Closing Date, pursuant to the terms of the Business Combination Agreement, Merger Sub merged with and into MOBV (the “Merger”), with MOBV surviving the Merger as a wholly owned subsidiary of the Company (the “Business Combination”).

 

SVH has given effect a 0.7806 share sub-division of all the shares of SVH, par value US $0.01 (“SVH Shares”) (both issued and unissued) in accordance with section 13(1)(d) of the Companies Act (as amended) of the Cayman Islands and the applicable provisions of the Governing Documents (as defined in the Merger Agreement) of SVH (the “Stock Split”), such that the number of outstanding SVH Shares immediately prior to the Effective Time (excluding the Escrowed Earnout Shares (as defined in the Merger Agreement) issued in conjunction with the Stock Split) is 14,946,286.

 

Exchange Consideration:

 

Each MOBV Share (except for the Excluded Shares, as defined below) was automatically converted as of the Effective Time into the right to receive the Per Share Consideration and each of the MOBV Warrants has automatically become a SVH Warrant and all rights with respect to MOBV Shares underlying the MOBV Warrants have automatically converted into rights with respect to SVH Shares and thereupon assumed by the SVH. The Excluded Shares refer to any MOBV Public Shares (a) held in the treasury of MOBV, (b) otherwise held by MOBV or (c) for which a public shareholder of MOBV has demanded that MOBV redeem.

 

Each issued and outstanding share of capital stock of Merger Sub issued and outstanding immediately prior to the Effective Time was converted into and become one validly issued, fully paid and non-assessable share of ordinary shares, par value $0.01 per share, of the Surviving Company, which constitutes the only outstanding share of capital stock of the Surviving Company.

 

Each Excluded Share was surrendered and cancelled and has cease to exist and no consideration was be delivered exchange therefor.

 

F-7

 

Accounting for the Transaction:

 

SVH is both the legal and accounting acquirer as the shares of MOBV will convert into the right to receive SVH Shares (the “Per Share Consideration”) and MOBV has legally become SVH’s wholly owned subsidiary as a result of the merger with Merger Sub.

 

The Transaction will be accounted for as an asset acquisition. MOBV does not qualify as a Business per ASC 805-10-55-3A. Since the acquisition is based on a monetary exchange, and most of the assets of MOBV are marketable securities in the Trust Account, the fair value of the assets is the more evident value. The liabilities assumed are all of short-term nature which are deemed to be at fair value. As such the fair value of the consideration given, in this case the transaction costs incurred, one to one share exchange and the Earn Out consideration should be allocated using the relative fair value approach based on the net asset value acquired from MOBV. Given the nature of the assets acquired and liabilities assumed from MOBV, an allocation of the transaction costs and Earnout consideration cannot be made to the net assets acquired. Accordingly, an immediate charge to operations would be recognized for the difference between the relative value allocated to the earnout and the fair value, as well as for the value of the transaction costs.

 

Exchange agreement

 

The Exchange Agreement does provide the Company with the obligation to purchase the SVM shares for cash. “Cash Exchange Payment” means with respect to a particular Call Exchange for which the Company has elected to make a Cash Exchange or a particular Put Exchange for which the Shareholder has elected to receive a Cash Exchange Payment: The terms both a call and a put option with same strike price and exercise dates applied and have a fixed redemption price. As such the Exchange Agreement should be classified as a liability under ASC 480 and the NCI removed from equity with the subsidiary reported at 100% by the parent.

 

Earnout shares

 

Pursuant to the Merger Agreement, certain shareholders of SVH (the “Pre-Closing Company Shareholders”) and certain shareholders of SVM India (the “Other SVM India Stockholders” and together with the Pre-Closing Company Shareholders, the “Earnout Group”) are entitled to receive their Pro Rata Portion (as defined in the Merger Agreement) of up to 25,000,000 SVH Shares (the “Earnout Shares”).

 

Earn Out Share payments are within the scope of ASC 480. The Company agreed to issue 25,000,000 Earn Out Shares over a three-year period based on Vehicle Sales Revenue earned at each year, or in the aggregate for the three years. However, the number of shares to be delivered can vary based on the discretion of the Company Board to waive the applicable Vehicle Sales Revenue trigger and release all or any portion of the Earnout shares available, accordingly a liability will be record for the fair value of the Earn Out shares.

 

At the Extraordinary General Meeting of Shareholders (the “Meeting”) of the Company convened at June 27, 2024, shareholders approved the amendment to the agreement to permit the Issuance of Earnout Shares (as defined below) without the occurrence of Milestone Events (as defined in the Merger Agreement) (the “Amendment of the Earnout Agreement”). Pursuant to the amendment, the Escrow Shares (as defined in that certain Agreement and Plan of Merger (the “Merger Agreement”), dated as of March 13, 2023, by and among the Company, Mobiv Acquisition Corp, and Pegasus Merger Sub Inc.) shall be released to the Earnout Group (as defined in the Merger Agreement) immediately, but subject to vesting in three equal tranches each year over a three-year period (each year a “Vesting Period”) with 1st vesting amount effective from approval of this EGM, regardless of the lack of occurrence of Milestone Events. The Earnout Group shall receive the Escrow Shares multiplied by the weighted average exchange ratio of 15.59 per Escrow Share to reflect the Company’s additional share issuances at the Closing of the Business Combination (as defined in the Merger Agreement) and, if the Reverse Share Split and Share Consolidation are implemented, subsequently divided by the consequent number in the final RS Ratio (for example, 15 for an RS Ratio of 1:15) as determined by the Board of Directors to reflect the effect of the Reverse Share Split and Share Consolidation on the number of ordinary shares on issue. Therefore, the Earnout Group shall receive a total of as low as 25,983,334 if the Reverse Share Split and Share Consolidation are implemented (at an RS Ratio of 1:15) and 389,750,000 Earnout Shares if the Reverse Share Split and Share Consolidation are not implemented (the “Earnout Shares”) (the “Issuance of Earnout Shares”).

 

c) Going Concern

 

The Company assesses and determines its ability to continue as a going concern in accordance with the provisions of ASC Subtopic 205-40, “Presentation of Financial Statements—Going Concern”, which requires the Company to evaluate whether there are conditions or events that raise substantial doubt about its ability to continue as a going concern.

 

The Company is currently in a process of obtaining the Prana 2.0 License and setting up of expanding the manufacturing facility in India and, thus, has not yet achieved profitability. The Company expects to continue to incur significant operating and net losses and negative cash flows from operations in the near future.

 

F-8

 

For the years ended March 31, 2024, and March 31, 2023, the Company incurred net losses of $11.5 million and $0.7 million, respectively. As of March 31, 2024, the Company’s cash and cash equivalents totaled $0.2 million. As of July 1, 2024, the Company had enter into an additional financing such as Committed Equity Financing Facility (the “CEFF”) with investors to purchase up to $25,000,000 of the Company’s ordinary shares par value $0.01 per share over a three-year period (the “CEFF Financing”). Pursuant to this arrangement, the Company On July 2, 2024, has received USD 1 million. The equity and the credit facility serve to minimize ongoing liquidity requirements and ensure the Company’s ability to sustain its operations. Furthermore, the Company intends to raise additional funds through private placement subject to market conditions. Please refer to Note 16, “Subsequent Event,” for further information.

 

The Company estimates that its current cash and cash equivalents balance with working capital and equity investment is sufficient to support operations beyond the twelve months following the date these consolidated financial statements and footnotes were issued. These estimates are based on assumptions that may prove to be wrong, and the Company could use its available capital resources sooner than it currently expects.

 

d) Use of estimates

 

The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

 

Management believes that the estimates and assumptions used in the preparation of the financial statements are prudent and reasonable. Significant estimates and assumptions are generally used for, but not limited to allowance for uncollectible accounts receivable; sales returns; normal loss during production; inventory write-downs; future obligations under employee benefit plans; the useful lives of property, plant, equipment; intangible assets; valuations; impairment of goodwill and investments; recoverability of advances; the valuation of options granted, and warrants issued; and income tax and deferred tax valuation allowances, if any. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Critical accounting estimates could change from period to period and could have a material impact on SVH’s results, operations, financial position, and cash flows. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the consolidated financial statements.

 

e) Revenue recognition

 

The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of this standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services.

 

ASC 606 prescribes a 5-step process to achieve its core principle. The Company recognizes revenue from trading, rental, or product sales as follows:

 

	I.	Identify the contract with the customer.
	II.	Identify the contractual performance obligations.
	III.	Determine the amount of consideration/price for the transaction.
	IV.	Allocate the determined amount of consideration/price to the contractual obligations.
	V.	Recognize revenue when or as the performing party satisfies performance obligations.

 

The consideration/price for the transaction (performance obligation(s)) is determined as per the agreement or invoice (contract) for the services and products in the automobile segment. Refer to Note 14 - “Revenue Recognition.”

 

f) Cost of Revenue

 

Our cost of revenue includes costs associated with labor expense, components, manufacturing overhead, and outbound freight for our products division.

 

(g) Earnings/(Loss) per Share

 

Basic net loss per share attributable to ordinary sharesholders is computed by dividing the net loss by the number of weighted-average outstanding common shares. Diluted net loss per share attributable to ordinary sharesholders is determined by giving effect to all potential common equivalents during the reporting period, unless including them yields an antidilutive result.

 

The weighted average number of shares outstanding for the years ended March 31, 2024 and 2023, used for the computation of basic earnings per share (“EPS”) is 20,763,518 and 19,145,415 respectively.

 

F-9

 

h) Income taxes

 

The Company accounts for income taxes under the asset and liability method, in accordance with ASC 740, Income Taxes, which requires an entity to recognize deferred tax liabilities and assets. Deferred tax assets and liabilities are recognized for the future tax consequence attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the enacted tax rate expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. A valuation allowance is established and recorded when management determines that some or all of the deferred tax assets are not likely to be realized and therefore, it is necessary to reduce deferred tax assets to the amount expected to be realized.

 

In evaluating a tax position for recognition, management evaluates whether it is more-likely-than-not that a position will be sustained upon examination, including resolution of related appeals or litigation processes, based on technical merits of the position. If the tax position meets the more-likely-than-not recognition threshold, the tax position is measured and recognized in the Company’s financial statements as the largest amount of tax benefit that, in management’s judgment, is greater than 50% likely of being realized upon settlement. As of March 31, 2024, there was no significant liability for income tax associated with unrecognized tax benefits.

 

i) Accounts receivable

 

We make estimates of the collectability of our accounts receivable by analyzing historical payment patterns, customer concentrations, customer creditworthiness, and current economic trends. If the financial condition of a customer deteriorates, additional allowances may be required. We had $Nil accounts receivable, net of provision for doubtful debt of $Nil as of March 31, 2024 (March 31, 2023; $Nil).

 

j) Cash and cash equivalents

 

For financial statement purposes, the Company considers all highly liquid debt instruments with maturity of three months or less, to be cash equivalents. The Company maintains its cash in bank accounts in India. The cash and cash equivalents in the Company on March 31, 2024 was approximately $ 175 thousand (March 31, 2023; $ 21 thousand).

 

k) Short-term and long-term investments

 

Our policy for short-term and long-term investments is to establish a high-quality portfolio that preserves principal, meets liquidity needs, avoids inappropriate concentrations, and delivers an appropriate yield in relationship to our investment guidelines and market conditions. Short-term and long-term investments consist of corporate, various government agency and municipal debt securities, as well as certificates of deposit that have maturity dates that are greater than 90 days. Certificates of deposit are carried at cost which approximates fair value. Available-for-sale securities: Investments in debt securities that are classified as available for sale shall be measured subsequently at fair value in the statement of financial position.

 

Investments are initially measured at cost, which is the fair value of the consideration given for them, including transaction costs. Where the Company’s ownership interest is in excess of 20% and the Company has a significant influence, the Company has accounted for the investment based on the equity method in accordance with ASC Topic 323, “Investments – Equity method and Joint Ventures.” Under the equity method, the Company’s share of the post-acquisition profits or losses of the equity investee is recognized in the consolidated statements of operations and its share of post-acquisition movements in accumulated other comprehensive income / (loss) is recognized in other comprehensive income / (loss). Where the Company does not have significant influence, the Company has accounted for the investment in accordance with ASC Topic 321, “Investments-Equity Securities.”

 

As of March 31, 2024, investment in marketable securities is valued at fair value and investment in non-marketable securities with ownership less than 20% is valued at cost as per ASC Topic 321, “Investments-Equity Securities.”

 

l) Property, plant, and equipment (PP&E)

 

Property and equipment are recorded at cost net of accumulated depreciation and depreciated over their estimated useful lives using the Written down value method.

 

Upon retirement or disposition, cost and related accumulated depreciation of the property and equipment are de-recognized, and any gain or loss is reflected in the results of operation. Cost of additions and substantial improvements to property and equipment are capitalized. The cost of maintenance and repairs of the property and equipment are charged to operating expenses as incurred.

 

F-10

 

m) Fair value of financial instruments

 

ASC 820, “Fair Value Measurement” defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. It also establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:

 

Level 1: Observable inputs such as quoted prices in active markets;

Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and

Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.

 

The carrying amounts of the Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, approximate their fair values due to the nature of the items. Please refer to Note 15, “Fair value of financial instruments,” for further information.

 

n) Concentration of credit risk and significant customers

 

Financial instruments, which potentially expose the Company to concentrations of credit risk, are primarily comprised of cash and cash equivalents, investments, accounts receivable and unbilled accounts receivable, if any. The Company places its cash, investments in highly rated financial institutions. The Company adheres to a formal investment policy with the primary objective of preservation of principal, which contains credit rating minimums and diversification requirements. Management believes its credit policies reflect normal industry terms and business risk. The Company does not anticipate non-performance by the counterparties and, accordingly, does not require collateral. During Fiscal 2024, sales were spread across customers in India and the credit concentration risk is low.

 

o) Commitments and contingencies

 

Liabilities for loss contingencies arising from claims, assessments, litigations, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated. We record associated legal fees as incurred. Information regarding our commitments and contingencies is incorporated by reference in Note 11, “Commitments and contingencies” of these financial statements.

 

p) Impairment of long – lived assets

 

The Company reviews its long-lived assets, with finite lives, for impairment whenever events or changes in business circumstances indicate that the carrying amount of assets may not be fully recoverable. Such circumstances include, though are not limited to, significant or sustained declines in revenues or earnings, future anticipated cash flows, business plans and material adverse changes in the economic climate, such as changes in operating environment, competitive information, and impact of changes in government policies. For assets that the Company intends to hold for use, if the total of the expected future undiscounted cash flows produced by the assets or subsidiary company is less than the carrying amount of the assets, a loss is recognized for the difference between the fair value and carrying value of the assets. For assets, the Company intends to dispose of by sale, a loss is recognized for the amount by which the estimated fair value less cost to sell is less than the carrying value of the assets. Fair value is determined based on quoted market prices, if available, or other valuation techniques including discounted future net cash flows. Unlike goodwill, long-lived assets are assessed for impairment only where there are any specific indicators for impairment.

 

q) Inventory

 

Inventory is valued at the lower of cost or net realizable value, which is defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.

 

Inventory consists of raw materials, finished goods related to manufacture of Electric vehicles. Inventory is primarily accounted for using the weighted average cost method. Primary costs include raw materials, packaging, direct labor, overhead, shipping and the depreciation of manufacturing equipment. Manufacturing overhead and related expenses include salaries, wages, employee benefits, utilities, maintenance, and property taxes.

 

Electric Vehicles are measured at net realizable value, with changes recognized in profit or loss only when the Vehicle:

 

	-	has a reliable, readily determinable, and realizable market value;
	-	has relatively insignificant and predictable costs of disposal; and
	-	is available for immediate delivery.

 

Abnormal amounts of idle facility expense, freight, handling costs, scrap, discontinued products and wasted material (spoilage) are expensed in the period they are incurred.

 

F-11

 

r) Foreign currency translation

 

the Company operates in India, Cayman Islands and a substantial portion of the Company’s financials are denominated in the Indian Rupee (“INR”). As a result, changes in the relative values of the U.S. Dollar (“USD”), or the INR affect financial statements.

 

The accompanying financial statements are reported in USD. The INR is the functional currencies for subsidiary of the Company. The translation of the functional currencies into U.S. dollars is performed for assets and liabilities using the exchange rates in effect at the balance sheet date and for revenues and expenses using average exchange rates prevailing during the reporting periods. Adjustments resulting from the translation of functional currency financial statements to reporting currency are accumulated and reported as other comprehensive income/(loss), a separate component of shareholders’ equity.

  SCHEDULE OF FOREIGN CURRENCY TRANSLATION

		Year End Average Rate				Year End Rate
Period		(P&L rate)				(Balance sheet rate)
Year ended March 31, 2024		INR	82.7954 Per USD			INR	83.3739 Per USD
Year ended March 31, 2023		INR	79.0120 Per USD			INR	82.2169 Per USD

 

s) Leases

 

Lessee Accounting

 

The Company adopted ASU 2016-02 during the Fiscal year 2024. The standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. In connection with the adoption, the Company will elect to utilize the modified retrospective presentation whereby the Company will continue to present prior period financial statements and disclosures under ASC Topic 840. In addition, the Company will elect the transition package of three practical expedients permitted within the standard, which eliminates the requirements to reassess prior conclusions about lease identification, lease classification and initial direct costs. Further, the Company will adopt a short-term lease exception policy, permitting us to not apply the recognition requirements of this standard to short-term leases (i.e., leases with terms of 12 months or less), and an accounting policy to account for lease and non-lease components as a single component for certain classes of assets.

 

Under ASU 2016-02 (Topic 842), lessees are required to recognize the following for all leases (with the exception of short-term leases) on the commencement date: (i) lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.

 

At the commencement date, the Company recognizes the lease liability at the present value of the lease payments not yet paid, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate for the same term as the underlying lease. The right-of-use asset is recognized initially at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received. All right-of-use assets are reviewed for impairment. There was no impairment for right-of-use lease assets as of March 31, 2024 (March 31, 2023: $ Nil).

 

The Company categorizes leases at their inception as either operating or finance leases. On certain lease agreements, the Company may receive rent holidays and other incentives. The Company recognizes lease costs on a straight-line basis without regard to deferred payment terms, such as rent holidays, that defer the commencement date of required payments. Please refer to Note 8, “Leases,” for further information.

 

t) Recently issued and adopted accounting pronouncements

 

Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. Accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows, or disclosures.

 

NOTE 3 – INVENTORY

  SCHEDULE OF INVENTORY

		As of March 31, 2024 ($)				As of March 31, 2023 ($)
Raw Materials*			89,878				251,273
Work in Progress			-				-
Finished Goods			29,865				80,275
Total			119,743				331,548

 

*

During Fiscal 2024, the Company written-off $263 thousand (Fiscal Year 2023: $114 thousand) of inventory on account of compliance with the revised Automotive Industry Standards (AIS)-156 and AIS-038 regulations issued by the Govt of India w.r.t EV batteries and also expiration of Prana 1.0 license. These charges were recorded in Cost of Revenue in the consolidated statements of operations.

 

F-12

 

NOTE 4 – DEPOSITS AND ADVANCES

  SCHEDULE OF DEPOSITS AND ADVANCES

		As of March 31, 2024 ($)				As of March 31, 2023 ($)
Prepaid expense and other current assets			535,021				52,258
Advance to Suppliers			383,703				236,584
Advance to employees			-				-
Total			918,724				288,842

 

Prepaid and other current assets include approximately $ 306 thousand (March 31, 2023: $ 2 thousand) prepaid insurance for Fiscal Year 2024. The Advances to suppliers primarily relate to advances to suppliers of component suppliers in the Vehicle manufacturing segment and also towards supply of capital equipment.

 

NOTE 5 – PROPERTY, PLANT, AND EQUIPMENT

 SCHEDULE OF PROPERTY, PLANT, AND EQUIPMENT

		As of March 31, 2024 ($)				As of March 31, 2023 ($)
Computer & Software & Accessories			56,964				38,037
Electrical Fittings			6,389				5,883
Furniture & Fittings			36,606				27,047
Office Equipment			10,804				6,890
Plant & Machinery			102,879				52,963
Vehicle			5,599				5,678
Lease Hold Improvements			19,458				-
Translation difference			793				-
Total Gross Value			239,492				136,498
Less: Accumulated depreciation			(103,669	)			(81,302	)
Total Property, plant and equipment, net			135,823				55,196

 

The depreciation expense in Fiscal 2024 and 2023, amounted to approximately $38 thousand and $25 thousand, respectively. The net decrease in total Property, Plant & Equipment is primarily due to depreciation and foreign exchange translations.

 

NOTE 6 – INVESTMENTS IN MARKETABLE SECURITIES

SCHEDULE OF MARKETABLE SECURITIES

		As of March 31, 2024 ($)				As of March 31, 2023 ($)
Other Bank balances			13,944				14,415
Total			13,944				14,415

 

(i)	Other bank balances represent the fixed deposits maintained by the Company with the Banks in India which has maturity of more than 3 months as at the year end.

 

NOTE 7 – CLAIMS AND ADVANCES

SCHEDULE OF CLAIMS AND ADVANCES

		As of March 31, 2024 ($)				As of March 31, 2023 ($)
Refundable taxes (1)			-				86
Total			-				86

 

(1)

The balance represents Tax deducted by the Vendors/ Suppliers which will be refunded to the Company upon filing of income tax return for the respective year.

 

F-13

 

 

NOTE 8 – LEASES

 

The Company has short-term leases primarily consisting of spaces with the remaining lease term being less than or equal to 12 months. The total short- term lease expense and cash paid for Fiscal 2024 is approximately $ 43 thousand (March 31, 2023; $ 29 thousand). The Company also has two operating leases as of March 31, 2024.

 

In December 2023, the Company entered into a lease agreement with a lease term of 5 years starting from December 1, 2023. The annual lease expense is approximately $18 thousand with escalation of 3 % every year. The lease contract does not contain any material residual value guarantees or material restrictive covenants. The lease does not provide a readily determinable implicit rate. Therefore, the Company discounts lease payments based on an estimate of its incremental borrowing rate.

 

Operating lease assets and lease liabilities for our operating leases were recorded in the consolidated balance sheet as follows:

 SCHEDULE OF OPERATING LEASE ASSETS AND LEASE LIABILITIES

		Year Ended March 31, 2024 ($)				Year Ended March 31, 2023 ($)
Assets
Operating lease asset			222,884				-
Total lease assets			222,884				-
Liabilities
Current liabilities:
Accrued liabilities and others (current portion – operating lease liability)			36,361				-
Non-current liabilities:
Operating lease liability (non-current portion – operating lease liability)			191,314				-
Total lease liability			227,675				-

 

Supplemental cash flow and non-cash information related to leases is as follows:

 SCHEDULE OF CASH FLOW AND NON CASH INFORMATION RELATED TO LEASES

		(in thousands) Year Ended March 31, 2024 ($)				(in thousands) Year Ended March 31, 2023 ($)
Cash paid for amounts included in the measurement of lease liabilities
–Financing cash flows from operating leases			18,052				-
Right-of-use assets obtained in exchange for operating lease obligations			-				-

 

 

As of March 31, 2024, the following table summarizes the maturity of our lease liabilities:

 SCHEDULE OF MATURITY OF LEASE LIABILITIES

Mar-25			36,361
2025			36,361
Mar-26			42,529
2026			42,529
Mar-27			49,401
2027			49,401
Mar-28			57,048
2028			57,048
Mar-29			42,336
2029			42,336
Total Lease liabilities			227,675

 

NOTE 9 – ACCRUED LIABILITIES AND OTHERS

SCHEDULE OF ACCRUED LIABILITIES AND OTHERS

		As of March 31, 2024 ($)				As of March 31, 2023 ($)
Compensation and other contributions			82,368				15,193
Other current liability			42,832				37,485
Advance from customers			3,494				2,893
Operating lease liability			36,361
Total			165,055				55,571

 

SCHEDULE OF OTHER LIABILITY 

		As of March 31, 2024 ($)				As of March 31, 2023 ($)
Statutory reserve*			7,112				-
Other current liability			300,000				-
Operating lease liability – non-current			191,314				-
Total			498,426				-

 

Compensation and other contribution related liabilities consist of accrued salaries to employees. Other current liability also includes $ 14 thousand of dealer deposits received from various dealers as of March 31, 2024 (March 31, 2023: $ 28 thousand).

 

*	The statutory reserve is a gratuity reserve for employees in our subsidiaries in India.

 

F-14

 

NOTE 10 – LOANS AND OTHER LIABILITIES

 

Short-term loans:

 

As of March 31, 2024, the Company has the following loans:

 

	a)	Working capital loan and overdraft loan facility of USD 1.22 million with Hongkong and Shanghai Banking Corporation Limited (as renewed from time to time, the “HSBC Facility”). The current balance as of march 31, 2024, under the HSBC Facility is approximately USD 20 thousand (Debit). These loans are repayable on demand. The HSBC Facility carries interest rates set using the MCLR/3M T-Bill standards or any other external benchmark determined by the bank annually. Interest is calculated daily on the outstanding balances. The HSBC Facility is secured by SVM’s current assets.
	b)	Loan from the related Party is taken from the Managing Director of the Company. These loans are unsecured and are repayable on demand.

 

NOTE 11 – COMMITMENTS AND CONTINGENCIES

 

Legal Proceedings

 

The Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. There are no such matters that are deemed material to the financial statements as of March 31, 2024 (March 31, 2023: Nil).

 

Earnout shares

Pursuant to the Merger Agreement, certain shareholders of SVH (the “Pre-Closing Company Shareholders”) and certain shareholders of SVM India (the “Other SVM India Stockholders” and together with the Pre-Closing Company Shareholders, the “Earnout Group”) are entitled to receive their Pro Rata Portion (as defined in the Merger Agreement) of up to 25,000,000 SVH Shares (the “Earnout Shares”).

 

Earn Out Share payments are within the scope of ASC 480. The Company agreed to issue 25,000,000 Earn Out Shares over a three-year period based on Vehicle Sales Revenue earned at each year, or in the aggregate for the three years. However, the number of shares to be delivered can vary based on the discretion of the Company Board to waive the applicable Vehicle Sales Revenue trigger and release all or any portion of the Earnout shares available, accordingly a liability will be record for the fair value of the Earn Out shares.

 

At the Extraordinary General Meeting of Shareholders (the “Meeting”) of the Company convened at June 27, 2024, shareholders approved the amendment to the agreement to permit the Issuance of Earnout Shares (as defined below) without the occurrence of Milestone Events (as defined in the Merger Agreement) (the “Amendment of the Earnout Agreement”). Pursuant to the amendment, the Escrow Shares (as defined in that certain Agreement and Plan of Merger (the “Merger Agreement”), dated as of March 13, 2023, by and among the Company, Mobiv Acquisition Corp, and Pegasus Merger Sub Inc.) shall be released to the Earnout Group (as defined in the Merger Agreement) immediately, but subject to vesting in three equal tranches each year over a three-year period (each year a “Vesting Period”) with 1st vesting amount effective from approval of this EGM, regardless of the lack of occurrence of Milestone Events. The Earnout Group shall receive the Escrow Shares multiplied by the weighted average exchange ratio of 15.59 per Escrow Share to reflect the Company’s additional share issuances at the Closing of the Business Combination (as defined in the Merger Agreement) and, if the Reverse Share Split and Share Consolidation are implemented, subsequently divided by the consequent number in the final RS Ratio (for example, 15 for an RS Ratio of 1:15) as determined by the Board of Directors to reflect the effect of the Reverse Share Split and Share Consolidation on the number of ordinary shares on issue. Therefore, the Earnout Group shall receive a total of as low as 25,983,334 if the Reverse Share Split and Share Consolidation are implemented (at an RS Ratio of 1:15) and 389,750,000 Earnout Shares if the Reverse Share Split and Share Consolidation are not implemented (the “Earnout Shares”) (the “Issuance of Earnout Shares”).

 

Exchange Agreements.

 

At the Closing, certain shareholders of SRIVARU Motors Private Limited , a private limited company organized under the laws of India and a majority-owned subsidiary of SVH (“SVM India”) will enter into exchange agreements (the “Exchange Agreements”) with SVH, pursuant to which, among other things, such shareholders of SVM India will have a right to transfer one or more of the shares owned by them in SVM India to SVH in exchange for the delivery of SVH Shares or cash payment, subject to the terms and conditions set forth in the Exchange Agreements.

 

F-15

 

NOTE 12 – FAIR VALUE OF FINANCIAL INSTRUMENTS

 

As of March 31, 2024, the Company’s marketable securities consist of liquid funds, which have been classified as Level 1 of the fair value hierarchy because they have been valued using quoted prices in active markets. The Company’s cash and cash equivalents have also been classified as Level 1 on the same principle. Financial instruments are classified as current if they are expected to be liquidated within the next twelve months. The Company’s remaining investments have been classified as Level 3 instruments as there is little or no market data. Level 3 investments are valued using cost-method.

 

The following table presents information about the Company’s assets that are measured at fair value on a recurring basis as of March 31, 2024, and March 31, 2023, and indicates the fair value hierarchy of the valuation techniques the Company used to determine such fair value:

SCHEDULE OF FAIR VALUE MEASUREMENT

		Level 1 ($)				Level 2 ($)				Level 3 ($)				Total ($)
March 31, 2024
Cash and cash equivalents:			175,041				-				-				175,041
Total cash and cash equivalents			175,041				-				-				175,041
Investments:
Marketable securities			13,944				-				-				13,944
Total Investment			13,944				-				-				13,944

 

		Level 1 ($)				Level 2 ($)				Level 3 ($)				Total ($)
March 31, 2023
Cash and cash equivalents:			21,378				-				-				21,378
Total cash and cash equivalents			21,378				-				-				21,378
Investments:
Marketable securities			14,415				-				-				14,415
Total Investment			14,415				-				-				14,415

 

NOTE 13 – INCOME TAXES

 

The Company calculates its provision for Income tax based on the current tax law Prevailing in India. Due to the Company’s history of losses, there is no income tax liability accrued in the books during the current year and the previous year.

 

The significant components of deferred income tax expense/(benefit) from operations for each of the years ended March 31 are approximated as following:

SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES

Deferred income taxes		2024 ($)				2023 ($)
Net operating loss carry-forwards			-				64,241
Net deferred tax asset			-				64,241
Valuation allowance			-				(64,241	)
Deferred income tax expense (benefit)			-				-

 

A valuation allowance is recognized against deferred tax assets when, based on the consideration of all available positive and negative evidence using a more likely than not criteria, it is determined that all or a portion of these tax benefits may not be realized. This assessment requires consideration of all sources of taxable income available to realize the deferred tax asset including taxable income in prior carry-back years, future reversals of existing temporary differences, tax planning strategies and future taxable income exclusive of reversing temporary differences and carryforwards. The Company incurred losses on a cumulative basis for the two-year period ended March 31, 2024, which is considered to be significant negative evidence. The positive evidence considered in support was insufficient to overcome this negative evidence. As a result, the Company established a full valuation allowance for its net deferred tax asset in the amount of $ Nil as of March 31, 2024 (March 31, 2023: $64 thousand).

 

F-16

 

RESULTS OF OPERATIONS

 

NOTE 14 – REVENUE

 

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, discounts, sales incentives, goods & service tax. The Company recognizes revenue when the amount of revenue and its related cost can be reliably measured and it is probable that future economic benefits will flow to the entity and degree of managerial involvement associated with ownership or effective control have been met for each of the Company’s activities. Revenue is recognized for domestic sales of vehicles, spare parts, and accessories when the Company transfers control over such products to the customer on dispatch from the factory.

 

net sales disaggregated by significant products and services for years ended is as follows:

SCHEDULE OF NET SALES DISAGGREGATED BY SIGNIFICANT PRODUCTS AND SERVICES

		Year ended March 31, 2024				Year ended March 31, 2023
Vehicle Manufacturing
Vehicle Sales (1)			28,986				100,022
Others			13,552				12,387
Total			42,538				112,409

 

(1)

Revenue from Sales of Vehicle represents sale of Electric Bikes to Authorized dealers in and around India.

 

NOTE 15 – SEGMENT INFORMATION

 

FASB ASC 280, “Segment Reporting” establishes standards for reporting information about reportable segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group (“CODM”), in deciding how to allocate resources and in assessing performance. The CODM evaluates revenues and gross profits based on product lines and routes to market. Based on our integration and Management strategies, we operate in one reportable segment which is vehicle manufacturing. There are no other significant reportable segments.

 

NOTE 16 – SUBSEQUENT EVENTS

 

As of July 1, 2024, the Company had entered into an additional financing such as Committed Equity Financing Facility (the “CEFF”) with investors to purchase up to $25,000,000 of the Company’s ordinary shares par value $0.01 per share over a three-year period (the “CEFF Financing”). Pursuant to this arrangement, the Company On July 2, 2024, has received USD 1 million. The equity facility serves to minimize ongoing liquidity requirements and ensure the Company’s ability to sustain its operations. Furthermore, the Company intends to raise additional funds through private placement subject to market conditions

 

 

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

 

None.

 

Controls and Procedures

 

There were no changes in and disagreements with accountants on accounting and financial disclosures.

 

(a) Evaluation of disclosure controls and procedures

 

Our Management maintains disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”) that are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to Management, including our Chief Executive Officer and Principal Financial Officer (our principal executive officer and principal financial officer, respectively), as appropriate, to allow for timely decisions regarding required disclosure.

 

Our Management, including the Chief Executive Officer and Principal Financial Officer, carried out an evaluation of the effectiveness of our disclosure controls and procedures as of the end of the period covered by this report. Based on this evaluation, our Chief Executive Officer and Principal Financial Officer concluded that our disclosure controls and procedures were effective to ensure that the information required to be disclosed in the reports filed or submitted by us under the Exchange Act was recorded, processed, summarized and reported within the requisite time periods and that such information was accumulated and communicated to our Management, including our Chief Executive Officer and Principal Financial Officer, as appropriate to allow for timely decisions regarding required disclosure.

 

(b) Changes in internal control over financial reporting

 

Our Management, including our Chief Executive Officer and Principal Financial Officer, evaluated our “internal control over financial reporting” as defined in Exchange Act Rule 13a-15(f) to determine whether any changes in our internal control over financial reporting occurred during Fiscal 2023, that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. Based on that evaluation, there were no changes in our internal control over financial reporting during Fiscal 2023, that have materially affected or are reasonably likely to materially affect our internal control over financial reporting

 

Other Information

 

None.

 

 

PART II

 

INFORMATION NOT REQUIRED IN PROSPECTUS

 

Item 6. Indemnification of Directors and Officers

 

The laws of the Cayman Islands do not limit the extent to which a company’s memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Islands courts to be contrary to public policy, such as to provide indemnification against willful default, willful neglect, civil fraud or the consequences of committing a crime. The Articles of Association provide that we shall indemnify and hold harmless, to the fullest extent permitted under the laws of the Cayman Islands as they presently exist or may hereafter be amended, any director or officer who was or is made or is threatened to be made a party or is otherwise involved in any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”) by reason of the fact that he or she, or a person for whom he or she is the legal representative, is or was a director or officer or, while serving as a director or officer, is or was serving at our request as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust, enterprise or non-profit entity, including service with respect to employee benefit plans, against all liability and loss suffered and expenses (including attorneys’ fees, judgments, fines ERISA excise taxes or penalties and amounts paid in settlement) reasonably incurred by such person in connection with any such Proceeding. Notwithstanding the preceding sentence, except as otherwise provided in Article 45.4 of the Articles of Association, we shall be required to indemnify a person in connection with a Proceeding initiated by such person only if the Proceeding was authorized in the specific case by the Board.

 

We have also entered into indemnification agreements with our directors under law, pursuant to which we have agreed to indemnify each such person and hold him harmless against expenses, judgments, fines and amounts payable under settlement agreements in connection with any threatened, pending or completed action, suit or proceeding to which he has been made a party or in which he became involved by reason of the fact that he is or was our director or officer. Except with respect to expenses to be reimbursed by us in the event that the indemnified person has been successful on the merits or otherwise in defense of the action, suit or proceeding, our obligations under the indemnification agreements will be subject to certain customary restrictions and exceptions.

 

In addition, we maintain, and are obligated to establish and maintain for at least six years, standard and tail policies of insurance under which coverage is provided to our directors and officers against loss rising from claims made by reason of breach of duty or other wrongful act, and to us with respect to payments which may be made by us to such directors and officers pursuant to the above indemnification provision or otherwise as a matter of law.

 

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controlling us pursuant to the foregoing provisions, we have been informed that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is theretofore unenforceable.

 

Item 7. Recent Sales of Unregistered Securities

 

Set forth below is information regarding all securities sold or granted by us within the past three years that were not registered under the Securities Act and the consideration, if any, received by us for such securities:

 

In conjunction with the Business Combination we entered into the Securities Purchase Agreement dated November 7, 2023 (the “SPA”) with certain Investors (as defined therein), pursuant to which we became obligated to issue 4,780,001 ordinary shares to the Investors at the Closing. Subsequent to the Closing, the VWAP (as defined in the SPA) of our ordinary shares for five (5) trading days in any consecutive ten (10) day period was equal to or less than $0.50, which entitled the Investors to an additional 5,000,000 ordinary shares pursuant to the terms of the SPA and which were subsequently issued to the Investors. In consideration for the shares due under the SPA, the Investors facilitated the Closing by way of entering into the Non-Redemption Agreement with MOBV on November 7, 2023 (the “NRA”).

 

 

Pursuant to a side letter agreement entered into between the Company, MOBV and the Sponsor, the Company agreed to reimburse the Sponsor for the Sponsor-owned shares in MOBV used as non-redemption consideration under the NRA, ultimately requiring the issuance of 3,044,875 ordinary shares to the Sponsor at Closing.

 

Pursuant to an engagement agreement dated November 19, 2022, and subsequent amendment thereto entered into by and between the Company, Sagiv Shiv and Vincent Calicchia (the “Advisors”), the Company received financial advisory services throughout the course of the Business Combination in exchange for the issuance of 2,600,000 ordinary shares to the Advisors.

 

Pursuant to the amended satisfaction and discharge of indebtedness agreement dated November 8, 2023, between the Company, MOBV and EF Hutton, a division of Benchmark Investments, LLC (“EF Hutton”), the Company issued 600,000 ordinary shares to EF Hutton in exchange for the discharge of indebtedness in the amount of $1,000,000 that would have otherwise been due at Closing.

 

On July 1, 2024, the Company entered into the Purchase Agreement with Ionic, which provides that, upon the terms and subject to the conditions and limitations set forth therein, we have the right to direct Ionic to purchase up to an aggregate of US$25,000,000 of our ordinary shares over the 36-month term of the Purchase Agreement.

 

The Company presented an initial Exemption Purchase Notice under the Purchase Agreement for $1,000,000 to Ionic Ventures on July 1, 2024, pertaining to 6,242,198 ordinary shares, based on the closing price of $0.178 for the ordinary shares on June 28, 2024. As of August 29, 2024, the 6,242,198 shares were issued to Ionic Ventures, and another 43,575,802 ordinary shares have been reserved to be issued, pursuant to the Purchase Agreement. The Company currently has an effective Registration Statement on Form F-1 (File No.: 333-279843) that has registered the initial 50,000,000 ordinary shares issuable pursuant to the Purchase Agreement.

 

 

Item 8. Exhibits and Financial Statement Schedules

 

EXHIBIT INDEX

 

Exhibit Number		Description
1.1		Form of Underwriting Agreement between SRIVARU Holding Limited and Maxim Group LLC.
2.1		Agreement and Plan of Merger, dated as of March 13, 2023, by and among Mobiv Acquisition Corp, Pegasus Merger Sub. Inc. and SRIVARU Holding Limited (incorporated by reference to Exhibit 2.1 to the Registration Statement on Form F-4/A filed on August 22, 2023 (File No. 333-272717)).
2.2		First Amendment dated August 4, 2023, to the Agreement and Plan of Merger, dated as of March 13, 2023, by and among Mobiv Acquisition Corp, Pegasus Merger Sub. Inc. and SRIVARU Holding Limited (incorporated by reference to Exhibit 2.2 to the Registration Statement on Form F-4/A filed on August 22, 2023 (File No. 333-272717)).
2.3*		Second Amendment dated September , 2024, to the Agreement and Plan of Merger, dated as of March 13, 2023, by and among Mobiv Acquisition Corp and SRIVARU Holding Limited.
3.1		Memorandum of Association of SRIVARU Holding Limited (incorporated by reference to Exhibit 3.1 to the Registration Statement on Form F-4/A filed on August 22, 2023 (File No. 333-272717)).
3.2		Articles of Association of SRIVARU Holding Limited (incorporated by reference to Exhibit 3.2 to the Registration Statement on Form F-4/A filed on August 22, 2023 (File No. 333-272717)).
3.3		Second Amended and Restated Memorandum and Articles of Association of SRIVARU Holding Limited effective August 2, 2024 (incorporated by reference to Exhibit 99.2 to the Current Report on Form 6-K filed on September 9, 2024).
4.1		Warrant Agreement, dated as of August 3, 2022, between Continental Stock Transfer & Trust Company and Mobiv Acquisition Corp (incorporated by reference to Exhibit 4.4 to the Current Report on Form 8-K filed with the SEC on August 9, 2022).
4.2		Warrant Assignment and Assumption Agreement dated December 8, 2023, by and between SRIVARU Holding Limited, Mobiv Acquisition Corp, and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.2 to the Registration Statement on Form F-1 filed on February 6, 2024 (File No. 333-276879).
4.3		Form of Warrant Agent Agreement between SRIVARU Holding Limited and VStock Transfer LLC.
4.4		Specimen Share Certificate of SRIVARU Holding Limited (incorporated by reference to Exhibit 4.6 to the Registration Statement on Form F-4/A filed on August 22, 2023 (File No. 333-272717)).
4.5		Specimen Warrant Certificate of SRIVARU Holding Limited (incorporated by reference to Exhibit 4.7 to the Registration Statement on Form F-4/A filed on August 22, 2023 (File No. 333-272717)).
4.6		Form of Pre-Funded Warrant of SRIVARU Holding Limited.
4.7		Form of Warrant of SRIVARU Holding Limited.
5.1		Opinion of Conyers Dill & Pearman LLP.
10.1		Sponsor Support Agreement, dated as of March 13, 2023, by and between Mobiv Pte. Ltd. and SRIVARU Holding Limited (incorporated by reference to Exhibit 10.1 to the Registration Statement on Form F-4/A filed on August 22, 2023 (File No. 333-272717)).
10.2		Transaction Support Agreement, dated as of March 13, 2023, by and among Mobiv Acquisition Corp and certain shareholders of SRIVARU Holding Limited (incorporated by reference to Exhibit 10.2 to the Registration Statement on Form F-4/A filed on August 22, 2023 (File No. 333-272717)).
10.3		Registration Rights Agreement, dated as of March 13, 2023, by and among SRIVARU Holding Limited, Mobiv Pte. Ltd. and certain shareholders of SRIVARU Holding Limited (incorporated by reference to Exhibit 10.3 to the Registration Statement on Form F-4/A filed on August 22, 2023 (File No. 333-272717)).
10.4		Lockup Agreement, dated as of March 13, 2023, by and among SRIVARU Holding Limited, Mobiv Pte. Ltd. and certain shareholders of SRIVARU Holding Limited (incorporated by reference to Exhibit 10.4 to the Registration Statement on Form F-4/A filed on August 22, 2023 (File No. 333-272717)).
10.5		Exchange Agreement, dated December 8, 2023, by and among SRIVARU Holding Limited, SRIVARU Motors Private Limited, and certain shareholders of SRIVARU Motors Private Limited (incorporated by reference to Exhibit 10.5 to the Registration Statement on Form F-1 filed on February 6, 2024 (File No. 333-276879).

 

 

10.6*		Securities Escrow Agreement, dated April 9, 2024, by and between SRIVARU Holding Limited, Stock Transfer, LLC and Mohanraj Ramasamy, as representative of the Earnout Group.
10.7		Indemnity Agreement, effective as of October 5, 2022, by and between SRIVARU Holding Limited and Mohanraj Ramasamy (incorporated by reference to Exhibit 10.7 to the Registration Statement on Form F-4/A filed on August 22, 2023 (File No. 333-272717)).
10.8		Form of Employment Agreement between SRIVARU Holding Limited and executive officers of SRIVARU Holding Limited (incorporated by reference to Exhibit 10.9 to the Registration Statement on Form F-4/A filed on August 22, 2023 (File No. 333-272717)).
10.9		Form of SRIVARU Holding Limited Incentive Plan (incorporated by reference to Exhibit 10.10 to the Registration Statement on Form F-4/A filed on August 22, 2023 (File No. 333-272717)).
10.10		Securities Purchase Agreement dated November 7, 2023 (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the SEC on November 8, 2023).
10.11		Purchase Agreement dated July 1, 2024, by and between SRIVARU Holding Limited and Ionic Ventures, LLC (incorporated by reference to Exhibit 10.1 to the Form 6-K filed on July 8, 2024),
10.12		Registration Rights Agreement dated July 1, 2024, by and between SRIVARU Holding Limited and Ionic Ventures, LLC (incorporated by reference to Exhibit 10.2 to the Form 6-K filed on July 8, 2024).
10.13		Placement Agency Agreement dated June 30, 2024, by and between SRIVARU Holding Limited and Maxim Group LLC (incorporated by reference to Exhibit 10.3 to the Form 6-K filed on July 8, 2024).
10.14*		First Amendment to Securities Escrow Agreement, dated August 27, 2024, by and between SRIVARU Holding Limited, Stock Transfer, LLC and Mohanraj Ramasamy, as representative of the Earnout Group.
21.1*		List of Subsidiaries.
23.1		Consent of Manohar Chowdhry & Associates relating to the financial statements of SRIVARU Holding Limited.
23.3		Consent of Conyers Dill & Pearman LLP (included in Exhibit 5.1).
107*		Filing Fee Table.

 

* Previously filed.

 

Item 9. Undertakings.

 

(a)	The undersigned registrant hereby undertakes:
(1)	To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

 

i.	To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
ii.	To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) (§ 230.424(b) of this chapter) if, in the aggregate, the changes in volume and price represent no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Filing Fee Tables” or “Calculation of Registration Fee” table, as applicable, in the effective registration statement.
iii.	To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement.

 

 

(2)	That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
(3)	To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.
(4)	To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A of Form 20-F at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Securities Act need not be furnished, provided that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements.
(5)	That, for the purpose of determining liability under the Securities Act to any purchasers, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use.
(6)	That, for the purpose of determining liability of the registrant under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i)	any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424;

 

(ii)	any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii)	the portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and
(iv)	any other communication that is an offer in the offering made by the undersigned registrant to the purchaser.

 

(b)

(1)

The undersigned registrant hereby undertakes as follows: that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of this form.

 

(2)

The registrant undertakes that every prospectus (i) that is filed pursuant to paragraph (1) immediately preceding or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

 

SIGNATURES

 

Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the State of California, on October 28, 2024.

 

SRIVARU Holding Limited
By:	/s/ Mohanraj Ramasamy
Name:	Mohanraj Ramasamy
Title:	Chief Executive Officer and Director

 

Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed by the following persons in the capacities and on the dates indicated.

 

Signature		Capacity		Date
/s/ Mohanraj Ramasamy		Chief Executive Officer and Director		October 28, 2024
Mohanraj Ramasamy		(principal executive officer)
*		Chief Financial Officer		October 28, 2024
Weng Kiat Leow		(principal financial officer and principal accounting officer)
*		Director		October 28, 2024
Ganesh Iyer
*		Director		October 28, 2024
Mohsen Moazami
*		Director		October 28, 2024
Jonathan Reichental
*		Director		October 28, 2024
Lata Gullapalli

 

* Signed by Mohanraj Ramasamy pursuant to the power of attorney signed by each individual and previously filed with this Registration Statement on September 24, 2024.

 

 

AUTHORIZED REPRESENTATIVE

 

Pursuant to the requirement of the Securities Act of 1933, as amended, SRIVARU Holding Limited has duly caused this registration statement to be signed by the following duly authorized representative in the United States on October 28, 2024.

 

By:	/s/ Mohanraj Ramasamy
Name:	Mohanraj Ramasamy
Title:	Chief Executive Officer

 

 

 

Exhibit 1.1

 

SRIVARU HOLDING LIMITED

 

UNDERWRITING AGREEMENT

 

[  ], 2024

 

Maxim Group LLC

300 Park Avenue, 16^th Floor

New York, New York 10022

 

As Representative of the Underwriters

named on Schedule A hereto

 

Ladies and Gentlemen:

 

SRIVARU Holding Limited, a Cayman Islands exempted company (the “Company”), proposes, subject to the terms and conditions stated herein, to issue and sell an aggregate of (i) [ ] common units (each a “Common Unit” and collectively, the “Common Units”), with each Common Unit consisting of (A) one ordinary share (each a “Share” and collectively, the “Shares”) of the Company, par value $0.01 per share (the “Ordinary Shares”), and (B) one warrant to purchase one Share (each a “Warrant” and collectively, the “Warrants”), and (ii) [ ] pre-funded units (each a “Pre-Funded Unit” and collectively, the “Pre-Funded Units”), with each Pre-Funded Unit consisting of (A) one pre-funded warrant (each a “Pre-Funded Warrant” and collectively, the “Pre-Funded Warrants”), with each Pre-Funded Warrant exercisable to purchase one Share (the “Pre-Funded Warrant Shares”) at an exercise price of $0.001 per share, and (B) one Warrant to the several underwriters (such underwriters, for whom Maxim Group LLC (“Maxim” or the “Representative”) is acting as representative, the “Underwriters” and each an “Underwriter”). The Common Units and Pre-Funded Units are referred to herein as the “Firm Securities.” The Common Units, the Pre-Funded Units and the securities included therein (i.e., the Shares, the Pre-Funded Warrants, the Pre-Funded Warrant Shares, the Warrants and the Warrant Shares) are referred to herein as the “Securities.” The Company has also agreed to grant to the Representative on behalf of the Underwriters an option (the “Option”) to purchase up to an additional [ ] Shares and/or Pre-Funded Warrants (respectively, the “Option Shares” and the “Option Pre-Funded Warrants”) and/or [ ] Warrants (the “Option Warrants”, and together with the Option Shares and Option Pre-Funded Warrants, the “Option Securities”) on the terms set forth in Section 1(b) hereof. The Firm Securities and the Option Securities are hereinafter collectively called the “Offered Securities” and the offering of such Offered Securities is hereinafter called the “Offering”. The Shares issuable upon the exercise of the Warrants are hereinafter called the “Warrant Shares.” The Offered Securities and all Shares underlying the securities therein (including the Shares and Warrant Shares) are herein collectively called the “Securities.”

 

The Company and each of the Underwriters confirm their respective agreements (this “Agreement”) as follows:

 

1. Agreement to Sell and Purchase.

 

(a) Purchase of Firm Securities. On the basis of the representations, warranties and agreements of the Company contained herein and subject to all the terms and conditions of this Agreement, the Company agrees to sell to the Underwriters, severally and not jointly, and the Underwriters, severally and not jointly, agree to purchase from the Company, the number of Firm Securities set forth opposite the name of such Underwriter set forth on Schedule A hereto, at a purchase price (the “Purchase Price”) (prior to discount and commissions) of $[  ] per Common Unit (or $[  ] per Common Unit net of discount and commissions) and $[  ] per Pre-Funded Unit (or $[  ] per Pre-Funded Unit net of discount and commissions).

 

 

(b) Purchase of Option Securities. Subject to all the terms and conditions of this Agreement, the Company grants to the Representative on behalf of the Underwriters the Option to purchase, severally and not jointly, all or less than all of the Option Shares and/or Option Pre-Funded Warrants and/or Option Warrants, which may be purchased in any combination. The purchase price (net of discount and commissions) to be paid for each Option Share will be the same Purchase Price (net of discount and commissions) allocated to each Common Unit, minus $0.01. The purchase price (net of discount and commissions) to be paid for each Option Pre-Funded Warrant will be the same Purchase Price (net of discount and commissions) allocated to each Pre-Funded Unit, minus $0.01. The purchase price to be paid for each Warrant shall be $0.01. The Option may be exercised in whole or in part at any time and from time to time on or before the 30^th day after the date of this Agreement, upon written notice (the “Option Notice”) by the Representative to the Company no later than 12:00 noon, New York City time, at least one and no more than five business days before the date specified for closing in the Option Notice (the “Option Closing Date”) setting forth the aggregate number of Option Shares and/or Option Pre-Funded Warrants and/or Option Warrants to be purchased and the time and date for such purchase. Upon exercise of the Option, the Company will become obligated to convey to the Underwriters, and, subject to the terms and conditions set forth herein, the Underwriters will become obligated to purchase, the number of Option Shares and/or Option Warrants specified in the Option Notice. If any Option Shares or Option Pre-Funded Warrants or Option Warrants are to be purchased, each Underwriter agrees, severally and not jointly, to purchase the number of Option Shares or Option Pre-Funded Warrants or Option Warrants, as applicable (as adjusted by the Representative in such manner as it deems advisable to avoid fractional securities) that bears the same proportion to the number of Firm Securities to be purchased by it as set forth on Schedule A opposite such Underwriter’s name relative to the total number of Firm Securities to be purchased pursuant to this Agreement by all Underwriters.

 

2. Delivery and Payment.

 

(a) Closing. Delivery of the Shares, Pre-Funded Warrants and Warrants contained in the Firm Securities shall be made to the Representative through the facilities of the Depository Trust Company (“DTC”) for the respective accounts of the Underwriters against payment of the Purchase Price by wire transfer of immediately available funds to the order of the Company. Such payment shall be made at 10:00 a.m., New York City time, on the second business day (the third business day, should the Offering be priced after 4:00 p.m., New York City Time) after the date of this Agreement or at such time on such other date, not later than ten business days after such date, as may be agreed upon by the Company and the Representative (such date is hereinafter referred to as the “Closing Date”). Notwithstanding the foregoing, in the case of a Pre-Funded Warrant or Warrant for which an Exercise Notice (as defined therein) is delivered on or prior to 12:00 p.m. (New York City time) on the Closing Date, which such Exercise Notice may be delivered at any time after the time of execution of this Agreement, the Company agrees to deliver the Pre-Funded Warrant Shares or Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Closing Date.

 

 

(b) Option Closing. To the extent the Option is exercised, delivery of the Option Securities against payment by the Underwriters (in the manner and at the location specified above) shall take place at the time and date (which may be the Closing Date, but not earlier than the Closing Date) specified in the Option Notice.

 

(c) Electronic Transfer. Electronic transfer of the Offered Securities shall be made at the time of purchase in such names and in such denominations as the Representative shall specify.

 

(d) Tax Stamps. The cost of original issue tax stamps, if any, in connection with the issuance and delivery of the Offered Securities by the Company to the Underwriters shall be borne by the Company. The Company shall pay and hold each Underwriter and any subsequent holder of the Offered Securities harmless from any and all liabilities with respect to or resulting from any failure or delay in paying United States federal and state and foreign stamp and other transfer taxes, if any, which may be payable or determined to be payable in connection with the original issuance, sale and delivery to such Underwriter of the Offered Securities.

 

3. Representations and Warranties of the Company. The Company represents and warrants to, and covenants with, each of the Underwriters as follows:

 

(a) Compliance with Registration Requirements. A registration statement on Form F-1 (Registration No. 333-[ ]) relating to the Securities, including a preliminary prospectus and such amendments to such registration statement as may have been required prior to the date of this Agreement, has been prepared by the Company under the provisions of the Securities Act of 1933, as amended (the “Act”), and the rules and regulations (collectively referred to as the “Rules and Regulations”) of the Securities and Exchange Commission (the “Commission”) thereunder, and has been filed with the Commission. Copies of such registration statement and of each amendment thereto, if any, including the related preliminary prospectuses, heretofore filed by the Company with the Commission have been delivered to the Underwriters. The term “Registration Statement” means such registration statement on Form F-1 as amended at the time it becomes or became effective, including financial statements, all exhibits and any information deemed to be included or incorporated by reference therein, including any information deemed to be included pursuant to Rule 430A or Rule 430B of the Rules and Regulations, as applicable. If the Company files a registration statement to register a portion of the Offered Securities or Warrant Shares and relies on Rule 462(b) of the Rules and Regulations for such registration statement to become effective upon filing with the Commission (the “Rule 462 Registration Statement”), then any reference to the “Registration Statement” shall be deemed to include the Rule 462 Registration Statement, as amended from time to time. The term “preliminary prospectus” as used herein means a preliminary prospectus as contemplated by Rule 430 or Rule 430A of the Rules and Regulations included at any time as part of, or deemed to be part of or included in, the Registration Statement. The term “Prospectus” means the final prospectus in connection with this Offering as first filed with the Commission pursuant to Rule 424(b) of the Rules and Regulations or, if no such filing is required, the form of final prospectus included in the Registration Statement at the effective date, except that if any revised prospectus or prospectus supplement shall be provided to the Representative by the Company for use in connection with the Offered Securities which differs from the Prospectus (whether or not such revised prospectus or prospectus supplement is required to be filed by the Company pursuant to Rule 424(b)), the term “Prospectus” shall also refer to such revised prospectus or prospectus supplement, as the case may be, from and after the time it is first provided to the Representative for such use. Any reference herein to the terms “amend”, “amendment” or “supplement” with respect to the Registration Statement, any preliminary prospectus or the Prospectus shall be deemed to refer to and include: (i) the filing of any document under the Securities Exchange Act of 1934, as amended, and together with the rules and regulations promulgated thereunder (collectively, the “Exchange Act”) after the effective date of the Registration Statement, the date of such preliminary prospectus or the date of the Prospectus, as the case may be, which is incorporated therein by reference, and (ii) any such document so filed.

 

 

(b) Effectiveness of Registration. The Registration Statement, any Rule 462 Registration Statement and any post-effective amendment thereto have been declared effective by the Commission under the Act or have become effective pursuant to Rule 462 of the Rules and Regulations. The Company has responded to all requests, if any, of the Commission for additional or supplemental information. No stop order suspending the effectiveness of the Registration Statement or any Rule 462 Registration Statement is in effect and no proceedings for such purpose have been instituted or are pending or, to the knowledge of the Company, are threatened by the Commission.

 

(c) Accuracy of Registration Statement. Each of the Registration Statement, any Rule 462 Registration Statement and any post-effective amendment thereto, at the time it became effective, when any document filed under the Exchange Act was or is filed and at all subsequent times, complied and will comply in all material respects with the Act and the Rules and Regulations, and did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading. The Prospectus, as amended or supplemented, as of its date and at all subsequent times when a prospectus is delivered or required (or, but for the provisions of Rule 172, would be required) by applicable law to be delivered in connection with sales of Securities, complied and will comply in all material respects with the Act, the Exchange Act and the Rules and Regulations, and did not or will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein not misleading, in the light of the circumstances under which they were made. Each preliminary prospectus (including the preliminary prospectus or prospectuses filed as part of the Registration Statement or any amendment thereto) complied when so filed in all material respects with Act, the Exchange Act and the Rules and Regulations, and each preliminary prospectus and the Prospectus delivered to the Representative for use in connection with this Offering is identical to the electronically transmitted copies thereof filed with the Commission on EDGAR, except to the extent permitted by Regulation S-T. The foregoing representations and warranties in this Section 3(c) do not apply to any statements or omissions made in reliance on and in conformity with information relating to the Underwriters furnished in writing to the Company by the Underwriters through the Representative specifically for inclusion in the Registration Statement or Prospectus or any amendment or supplement thereto.

 

 

(d) Company Not Ineligible Issuer. (i) At the time of filing the Registration Statement relating to the Securities and (ii) as of the date of the execution and delivery of this Agreement (with such date being used as the determination date for purposes of this clause (ii)), the Company was not and is not an “ineligible issuer” (as defined in Rule 405 of the Rules and Regulations).

 

(e) Disclosure at the Time of Sale. As of the Applicable Time, neither (i) the Issuer General Use Free Writing Prospectus(es) (as defined below) issued at or prior to the Applicable Time, the most recent preliminary prospectus related to this Offering, and the information included on Schedule II hereto, all considered together (collectively, the “General Disclosure Package”), nor (ii) any individual Issuer Limited Use Free Writing Prospectus, when considered together with the General Disclosure Package, included any untrue statement of a material fact or omitted to state any material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading.

 

As used in this subsection and elsewhere in this Agreement:

 

“Applicable Time” means 5:00 p.m. (New York City Time) on [  ], 2024 or such other time as agreed by the Company and the Representative.

 

“Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433 of the Rules and Regulations, relating to the Offered Securities that (i) is required to be filed with the Commission by the Company, (ii) is “a written communication that is a road show” within the meaning of Rule 433(d)(8)(i), whether or not required to be filed with the Commission or (iii) is exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a description of the Securities or of the Offering that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g).

 

“Issuer General Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is intended for general distribution to prospective investors, as evidenced by its being specified in Schedule I hereto.

 

“Issuer Limited Use Free Writing Prospectus” means any Issuer Free Writing Prospectus that is not an Issuer General Use Free Writing Prospectus.

 

(f) Issuer Free Writing Prospectuses. Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times through the Prospectus Delivery Period (as defined below), does not include any information that conflicts with the information contained in the Registration Statement. If at any time following the issuance of an Issuer Free Writing Prospectus there occurred an event or development as a result of which such Issuer Free Writing Prospectus conflicted with the information contained in the Registration Statement relating to the Securities or included an untrue statement of material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances prevailing at that subsequent time, not misleading, the Company has promptly notified the Representative and has promptly amended or supplemented, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement or omission.

 

 

(g) Distribution of Offering Material by the Company. The Company has not distributed and will not distribute, prior to the later of the Closing Date, any Option Closing Date and the completion of the Underwriters’ distribution of the Offered Securities, any offering material in connection with the offering or sale of the Offered Securities, the Registration Statement, the preliminary prospectus, the Permitted Free Writing Prospectuses reviewed and consented to by the Representative and included in Schedule I hereto, and the Prospectus. None of the Marketing Materials, as of their respective issue dates and at all subsequent times through the Prospectus Delivery Period (as defined below), include any information that conflicts with the information contained in the Registration Statement. If at any time following the issuance of any Marketing Material there occurred an event or development as a result of which such Marketing Material conflicted with the information contained in the Registration Statement relating to the Securities or included an untrue statement of material fact or omitted to state a material fact necessary in order to make the statements therein, in light of the circumstances prevailing at that subsequent time, not misleading, the Company has promptly notified the Representative and has promptly amended or supplemented, at its own expense, such Marketing Material to eliminate or correct such conflict, untrue statement or omission.

 

(h) Subsidiaries. All of the direct and indirect material subsidiaries of the Company (each, a “Subsidiary”) are set forth in the Registration Statement, the General Disclosure Package and the Prospectus. The Company owns, directly or indirectly, all of the capital stock or other equity interests of each Subsidiary free and clear of any lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other similar restriction (each, a “Lien”), and all of the issued and outstanding shares of capital stock of each Subsidiary are validly issued and are fully paid, non-assessable and free of preemptive and similar rights to subscribe for or purchase securities.

 

(i) Organization and Qualification. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, would not have or reasonably be expected to result in: (i) a material adverse effect on the legality, validity or enforceability of this Agreement, the Warrant Agreement (as hereinafter defined), the Warrants, or any other agreement, document, certificate or instrument required to be delivered pursuant to this Agreement (collectively, the “Transaction Documents”), (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole, or (iii) a material adverse effect on the Company’s ability to perform in any material respect on a timely basis its obligations under any Transaction Document (any of (i), (ii) or (iii), a “Material Adverse Effect”) and no action, claim, suit or proceeding (including, without limitation, a partial proceeding, such as a deposition), whether commenced or threatened (each, a “Proceeding”) has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

 

 

(j) Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors or the Company’s stockholders in connection herewith or therewith other than in connection with the Required Approvals (as hereinafter defined in Section 3(l)). This Agreement and each other Transaction Document to which it is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, assuming due authorization, execution and delivery by the Representative, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

(k) No Conflicts. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company’s or any Subsidiary’s certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as would not have or reasonably be expected to result in a Material Adverse Effect.

 

(l) Filings, Consents and Approvals. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than: (i) the filing with the Commission of the Registration Statement and the Prospectus, (ii) application(s) to the Nasdaq Capital Market for the listing of the Securities for trading thereon in the time and manner required thereby, (iii) such filings, if any, as are required to be made under applicable state securities laws, (iv) such notices, filings or authorizations as are required to be obtained or made under applicable rules of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and The Nasdaq Stock Market, and (v) such notices, filings or authorizations as have been obtained, given or made as of the date hereof (collectively, the “Required Approvals”).

 

 

(m) [Reserved.]

 

(n) Issuance of the Securities. The Securities (other than the Warrant Shares) are duly authorized and, when issued and paid for in accordance with the Final Prospectus, will be duly and validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Warrant Shares, when issued in accordance with the terms of the Warrants, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Company has reserved from its duly authorized capital stock the maximum number of Ordinary Shares issuable pursuant to the Final Prospectus.

 

(o) Capitalization. The capitalization of the Company as of the date hereof is as set forth in the Registration Statement, the General Disclosure Package and the Prospectus. The Company has not issued any capital stock since its most recently filed periodic report under the Exchange Act, other than pursuant to the Company’s equity incentive plans and pursuant to the conversion and/or exercise of any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Shares, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Shares (“Ordinary Share Equivalents”) and is outstanding as of the date of the most recently filed periodic report under the Exchange Act. No individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind (each, a “Person”) has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents. Except as a result of the purchase and sale of the Securities or as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any Shares or the capital stock of any Subsidiary, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional Shares or Ordinary Share Equivalents or capital stock of any Subsidiary. The issuance and sale of the Securities will not obligate the Company or any Subsidiary to issue Shares or other securities to any Person (other than the Underwriters) and will not result in a right of any holder of Company securities to adjust the exercise, conversion, exchange or reset price under any of such securities. There are no securities of the Company or any Subsidiary that have any anti-dilution or similar adjustment rights (other than adjustments for stock splits, recapitalizations, and the like) to the exercise or conversion price, have any exchange rights, or reset rights. Except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, there are no outstanding securities or instruments of the Company or any Subsidiary that contain any redemption or similar provisions, and there are no contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to redeem a security of the Company or such Subsidiary. The Company does not have any stock appreciation rights or “phantom stock” plans or agreements or any similar plan or agreement. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance in all material respects with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. No further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities. There are no stockholders agreements, voting agreements or other similar agreements with respect to the Company’s capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company’s stockholders.

 

 

(p) SEC Reports; Financial Statements. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with the Registration Statement, the General Disclosure Package and the Prospectus, being collectively referred to herein as the “SEC Reports”) on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading. The Company has never been an issuer subject to Rule 144(i) under the Securities Act. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved (“GAAP”), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. The agreements and documents described in the SEC Reports conform to the descriptions thereof contained therein and there are no agreements or other documents required by the Securities Act and the rules and regulations thereunder to be described in the SEC Reports or to be filed with the Commission as exhibits to the Registration Statement, that have not been so described or filed. Each agreement or other instrument (however characterized or described) to which the Company is a party or by which it is or may be bound or affected and (i) that is referred to in the SEC Reports, or (ii) is material to the Company’s business, has been duly authorized and validly executed by the Company, is in full force and effect in all material respects and is enforceable against the Company and, to the Company’s knowledge, the other parties thereto, in accordance with its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally, (y) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws, and (z) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefore may be brought. Except as disclosed in the SEC Reports, none of such agreements or instruments has been assigned by the Company, and neither the Company nor, to the best of the Company’s knowledge, any other party is in default thereunder and, to the best of the Company’s knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both, would constitute a default thereunder. To the best of the Company’s knowledge, performance by the Company of the material provisions of such agreements or instruments will not result in a violation of any existing applicable law, rule, regulation, judgment, order or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its assets or businesses, including, without limitation, those relating to environmental laws and regulations.

 

 

(q) Material Changes; Undisclosed Events, Liabilities or Developments. Since the date of the latest audited financial statements included within the SEC Reports, except as reflected or specifically disclosed in a subsequent SEC Report filed prior to the date hereof, (i) there has been no event, occurrence or development that has had or that would reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any material liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company’s financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock and (v) the Company has not issued any equity securities to any officer, director or Affiliate (as defined below), except pursuant to existing Company equity incentive plans or as set forth in the Registration Statement, the General Disclosure Package and the Prospectus. The Company does not have pending before the Commission any request for confidential treatment of information. Except for the issuance of the Offered Securities contemplated by this Agreement, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least one trading day prior to the date that this representation is made.

 

(r) Litigation. There is no action, suit, inquiry, notice of violation or proceeding pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an “Action”) which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) would, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.

 

 

(s) Labor Relations. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which would reasonably be expected to result in a Material Adverse Effect. None of the Company’s or its Subsidiaries’ employees is a member of a union that relates to such employee’s relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

 

(t) Compliance. Except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including, without limitation, all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as would not have or reasonably be expected to result in a Material Adverse Effect.

 

(u) Environmental Laws. The Company and its Subsidiaries (i) are in compliance in all material respects with all federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, “Hazardous Materials”) into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder (“Environmental Laws”); (ii) have received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii), the failure to so comply would be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.

 

 

(v) Regulatory Permits. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the Registration Statement, General Disclosure Package and the Prospectus, except where the failure to possess such permits would not reasonably be expected to result in a Material Adverse Effect (“Material Permits”), and neither the Company nor any Subsidiary has received any written notice of proceedings relating to the revocation or modification of any Material Permit.

 

(w) Title to Assets. The Company and its Subsidiaries have good and marketable title to all real property owned by them, if any, and good and marketable title in all personal property owned by them, in each case, that is material to the business of the Company and the Subsidiaries, and in such case free and clear of all Liens, except for Liens that (i) are described in the Registration Statement, the General Disclosure Package and the Prospectus, (ii) would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, (iii) do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries, or (iv) are for the payment of federal, state or other taxes, for which appropriate reserves have been made therefor in accordance with GAAP and, the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance in all material respects.

 

(x) Intellectual Property. To the knowledge of the Company, the Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Reports and which the failure to so have could have a Material Adverse Effect (collectively, the “Intellectual Property Rights”). None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or be abandoned, within two (2) years from the date of this Agreement, except where such action would not reasonably be expected to have a Material Adverse Effect. Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except as would not have or reasonably be expected to not have a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. The Company has no knowledge that it lacks or will be unable to obtain any rights or licenses to use all Intellectual Property Rights that are necessary to conduct its business.

 

(y) Insurance. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage at least equal to the aggregate Purchase Price. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

 

 

(z) Transactions With Affiliates and Employees. Except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, none of the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for (i) payment of salary or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including stock option agreements under any stock option plan of the Company.

 

(aa) Sarbanes-Oxley; Internal Accounting Controls. The Company and the Subsidiaries are in compliance with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective and applicable to the Company as of the date hereof, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date or the Option Closing Date, as applicable. Except as set forth in the SEC Reports, the Company and the Subsidiaries maintain a system of internal accounting controls sufficient to provide reasonable assurance that: (i) transactions are executed in accordance with management’s general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management’s general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms. The Company’s certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the “Evaluation Date”). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.

 

 

(bb) Certain Fees; FINRA Affiliation. Except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, no brokerage or finder’s fees or commissions are or will be payable by the Company or any Subsidiary to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. To the Company’s knowledge, there are no other arrangements, agreements or understandings of the Company or, to the Company’s knowledge, any of its stockholders that may affect the Underwriters’ compensation, as determined by FINRA. The Company has not made any direct or indirect payments (in cash, securities or otherwise) to (i) any person, as a finder’s fee, investing fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons who provided capital to the Company, (ii) any FINRA member, or (iii) any person or entity that has any direct or indirect affiliation or association with any FINRA member within the 12-month period prior to the date on which the Registration Statement was filed with the Commission (the “Filing Date”) or thereafter. To the Company’s knowledge, no (i) officer or director of the Company or its subsidiaries, (ii) owner of 5% or more of the Company’s unregistered securities or that of its subsidiaries or (iii) owner of any amount of the Company’s unregistered securities acquired within the 180-day period prior to the Filing Date, has any direct or indirect affiliation or association with any FINRA member. The Company will advise the Underwriters and their respective counsel if it becomes aware that any officer, director or stockholder of the Company or its subsidiaries is or becomes an affiliate or associated person of a FINRA member participating in the Offering.

 

(cc) Investment Company. The Company is not, and is not an affiliate of, and immediately after receipt of payment for the Offered Securities, will not be or be an affiliate of, an “investment company” within the meaning of the Investment Company Act of 1940, as amended.

 

(dd) Registration Rights. Except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, no Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act of any securities of the Company or any Subsidiary.

 

(ee) Listing and Maintenance Requirements. The Shares are registered pursuant to Section 12(b) or 12(g) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Shares under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration. Except as disclosed in the SEC Reports, the Company has not, in the 12 months preceding the date hereof, received notice from the Nasdaq Capital Market to the effect that the Company is not in compliance with the listing or maintenance requirements of such the Nasdaq Capital Market. Except as disclosed in the Registration Statement, the General Disclosure Package and the Prospectus, the Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements of the Nasdaq Capital Market. The Shares are currently eligible for electronic transfer through the Depository Trust Company or another established clearing corporation and the Company is current in payment of the fees to the Depository Trust Company (or such other established clearing corporation) in connection with such electronic transfer. The issuance and sale of the Securities hereunder does not contravene the rules and regulations of The Nasdaq Stock Market.

 

 

(ff) [Reserved.]

 

(gg) No Integrated Offering. Neither the Company or any Person acting on its behalf, nor, to the Company’s knowledge, any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with the Company (as such terms are used in and construed under Rule 405 under the Securities Act) (each, an “Affiliate”) or any Person acting on their behalf, has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Offered Securities to be integrated with prior offerings by the Company for purposes of any applicable shareholder approval provisions of The Nasdaq Stock Market.

 

(hh) Solvency. Based on the consolidated financial condition of the Company as of the Closing Date and as of the Option Closing Date, after giving effect to the receipt by the Company of the proceeds from the sale of the Offered Securities hereunder, the current cash flow of the Company, together with the proceeds the Company would receive, were it to liquidate all of its assets, after taking into account all anticipated uses of the cash, may be insufficient to pay all amounts on or in respect of its liabilities when such amounts are required to be paid. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). Except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, the Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within one year from the Closing Date or the Option Closing Date, as applicable. The Registration Statement, the General Disclosure Package and the Prospectus sets forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments. For the purposes of this Agreement, “Indebtedness” means (x) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company’s consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP. Except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus, neither the Company nor any Subsidiary is in default with respect to any Indebtedness.

 

(ii) Tax Status. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, each of the Company and its Subsidiaries (i) has made or filed all United States federal, state and local income and all foreign income and tax returns, reports and declarations required by any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim.

 

 

(jj) Foreign Corrupt Practices. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of Foreign Corrupt Practices Act of 1977, as amended.

 

(kk) Accountants. The Company’s accounting firm is Manohar Chowdhry & Associates (the “Accountants”). To the knowledge and belief of the Company, such accounting firm (i) is a registered public accounting firm as required by the Exchange Act and (ii) shall express its opinion with respect to the financial statements to be included in the Company’s Annual Report for the fiscal year ending December 31, 2024.

 

(ll) Regulation M Compliance. The Company has not, and to its knowledge no one acting on its behalf has, (i) taken, directly or indirectly, any action designed to cause or to result in the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of any of the Offered Securities, (ii) sold, bid for, purchased, or, paid any compensation for soliciting purchases of, any of the Offered Securities, or (iii) paid or agreed to pay to any Person any compensation for soliciting another to purchase any other securities of the Company, other than, in the case of clauses (ii) and (iii), compensation paid to the Underwriters in connection with the Offering.

 

(mm) [Reserved.]

 

(nn) Office of Foreign Assets Control. Neither the Company nor any Subsidiary nor, to the Company’s knowledge, any director, officer, agent, employee or Affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”).

 

(oo) U.S. Real Property Holding Corporation. The Company is not and has never been a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon the Representative’s request.

 

(pp) Bank Holding Company Act. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the “BHCA”), and to regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

 

 

(qq) Money Laundering. The operations of the Company and its Subsidiaries are and have been conducted at all times in compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the “Money Laundering Laws”), and no Action or Proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.

 

(rr) Share Option Plans. Each share option granted by the Company under the Company’s share option plans was granted (i) in accordance with the terms of the Company’s share option plans and (ii) with an exercise price at least equal to the fair market value of the Shares on the date such share option would be considered granted under GAAP and applicable law. No share option granted under the Company’s share option plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company policy or practice to knowingly grant, share options prior to, or otherwise knowingly coordinate the grant of share options with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.

 

(ss) Officer’s Certificates. Any certificate signed by any officer of the Company or any of its Subsidiaries delivered to the Representative or its counsel shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.

 

4. Agreements of the Company. The Company agrees with the Underwriters as follows:

 

(a) Amendments and Supplements to Registration Statement. The Company shall not, either prior to any effective date or thereafter during such period as the Prospectus is required by law to be delivered (whether physically or through compliance with Rule 172 of the Rules and Regulations or any similar rule) (the “Prospectus Delivery Period”) in connection with sales of the Offered Securities by an Underwriter or dealer, amend or supplement the Registration Statement, the General Disclosure Package or the Prospectus, unless a copy of such amendment or supplement thereof shall first have been submitted to the Representative within a reasonable period of time prior to the filing or, if no filing is required, the use thereof and the Representative shall not have objected thereto in good faith.

 

 

(b) Amendments and Supplements to the Registration Statement, the General Disclosure Package, and the Prospectus and Other Securities Act Matters. During the Prospectus Delivery Period, the Company will comply with all requirements imposed upon it by the Securities Act, as now and hereafter amended, and by the Rules and Regulations, as from time to time in force, and by the Exchange Act so far as necessary to permit the continuance of sales of or dealings in the Securities as contemplated by the provisions hereof, the General Disclosure Package, the Registration Statement and the Prospectus. If, during the Prospectus Delivery Period, any event or development shall occur or condition exist as a result of which the General Disclosure Package or the Prospectus, as then amended or supplemented, would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances then prevailing or under which they were made, as the case may be, not misleading, or if it shall be necessary to amend or supplement the General Disclosure Package or the Prospectus in order to make the statements therein, in the light of the circumstances then prevailing or under which they were made, as the case may be, not misleading, or if in the opinion of the Representative it is otherwise necessary to amend or supplement the Registration Statement, the General Disclosure Package or the Prospectus, or to file a new registration statement containing the Prospectus, in order to comply with the Act, the Rules and Regulations, the Exchange Act or the Exchange Act Rules, including in connection with the delivery of the Prospectus, the Company agrees to (i) promptly notify the Representative of any such event or condition and (ii) promptly prepare (subject to Section ‎4(a) and ‎4(f) hereof), file with the Commission (and use its best efforts to have any amendment to the Registration Statement or any new registration statement to be declared effective) and furnish at its own expense to the Representative (and, if applicable, to dealers), amendments or supplements to the Registration Statement, the General Disclosure Package or the Prospectus, or any new registration statement, necessary in order to make the statements in the General Disclosure Package or the Prospectus as so amended or supplemented, in the light of the circumstances then prevailing or under which they were made, as the case may be, not misleading, or so that the Registration Statement or the Prospectus, as amended or supplemented, will comply with the Act, the Rules and Regulations, the Exchange Act or the Exchange Act Rules or any other applicable law.

 

(c) Notifications to the Underwriters. The Company shall use its best efforts to cause the Registration Statement to become effective, and shall notify the Representative promptly, and shall confirm such advice in writing, (i) when any post-effective amendment to the Registration Statement has become effective and when any post-effective amendment thereto becomes effective, (ii) of any request by the Commission for amendments or supplements to the Registration Statement or the Prospectus or for additional information, (iii) of the commencement by the Commission or by any state securities commission of any proceedings for the suspension of the qualification of any of the Offered Securities for offering or sale in any jurisdiction or of the initiation, or the threatening, of any proceeding for that purpose, including, without limitation, the issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose or the threat thereof, (iv) of the happening of any event during the Prospectus Delivery Period that in the judgment of the Company makes any statement made in the Registration Statement or the Prospectus misleading (including by omission) or untrue or that requires the making of any changes in the Registration Statement or the Prospectus in order to make the statements therein, in light of the circumstances in which they are made, not misleading (including by omission), and (v) of receipt by the Company or any representative of the Company of any other communication from the Commission relating to the Company, the Registration Statement, any preliminary prospectus or the Prospectus. If at any time the Commission shall issue any order suspending the effectiveness of the Registration Statement, the Company shall use best efforts to obtain the withdrawal of such order at the earliest possible moment. The Company shall comply with the provisions of and make all requisite filings with the Commission pursuant to Rules 424(b), 430A, 430B and 462(b) of the Rules and Regulations and to notify the Representative promptly of all such filings.

 

 

(d) Executed Registration Statement. The Company shall furnish to the Representative, without charge, one signed copy of the Registration Statement, and of any post-effective amendment thereto, including financial statements and schedules, and all exhibits thereto, and shall furnish to the Representative, without charge, a copy of the Registration Statement and any post-effective amendment thereto, including financial statements and schedules but without exhibits.

 

(e) Undertakings. The Company shall comply with all the provisions of any undertakings contained and required to be contained in the Registration Statement.

 

(f) Prospectus. The Company shall prepare the Prospectus in a form approved by the Representative and shall file such Prospectus with the Commission pursuant to Rule 424(b) of the Rules and Regulations with a filing date not later than the second business day following the execution and delivery of this Agreement. Promptly after the effective date of the Registration Statement, and thereafter from time to time during the period when the Prospectus is required (or, but for the provisions of Rule 172 under the Act, would be required) to be delivered, the Company shall deliver to the Representative, without charge, as many electronic copies of the Prospectus and any amendment or supplement thereto as the Representative may reasonably request. The Company consents to the use of the Prospectus and any amendment or supplement thereto by the Representative and by all dealers to whom the Offered Securities may be sold, both in connection with the offering or sale of the Offered Securities and for any period of time thereafter during the Prospectus Delivery Period. If, during the Prospectus Delivery Period any event shall occur that in the judgment of the Company or counsel to the Underwriters should be set forth in the Prospectus in order to make any statement therein, in the light of the circumstances under which it was made, not misleading (including by omission), or if it is necessary to supplement or amend the Prospectus to comply with law, the Company shall forthwith prepare and duly file with the Commission an appropriate supplement or amendment thereto, and shall deliver to the Representative, without charge, such number of electronic copies thereof as the Representative may reasonably request.

 

(g) Permitted Free Writing Prospectuses. The Company represents and agrees that it has not made and, unless it obtains the prior consent of the Representative, will not make, any offer relating to the Offered Securities that would constitute a “free writing prospectus” as defined in Rule 405 of the Rules and Regulations, required to be filed with the Commission or retained by the Company under Rule 433 of the Rules and Regulations; provided that the prior written consent of the Representative hereto shall be deemed to have been given in respect of the Issuer Free Writing Prospectuses included in Schedule I hereto. Any such free writing prospectus consented to by the Representative is herein referred to as a “Permitted Free Writing Prospectus.” The Company agrees that (i) it has treated and will treat, as the case may be, each Permitted Free Writing Prospectus as an Issuer Free Writing Prospectus, and (ii) has complied and will comply, as the case may be, with the requirements of Rules 164 and 433 of the Act applicable to any Permitted Free Writing Prospectus, including in respect of timely filing with the Commission, legending and record keeping. If at any time following the issuance of an Issuer Free Writing Prospectus there occurs an event or development as a result of which such Issuer Free Writing Prospectus would conflict with the information contained in the Registration Statement relating to the Offered Securities or would include an untrue statement of material fact or would omit to state a material fact necessary in order to make the statements therein, in light of the circumstances prevailing at that subsequent time, not misleading, the Company will promptly notify the Representative and will promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate or correct such conflict, untrue statement, or omission. The Company represents that it has satisfied and agrees that it will satisfy the conditions in Rule 433 to avoid a requirement to file with the Commission any electronic road show.

 

 

(h) Compliance with Blue Sky Laws. Prior to any public offering of the Securities by the Underwriters, the Company shall cooperate with the Representative and counsel to the Underwriters in connection with the registration or qualification (or the obtaining of exemptions from the application thereof) of the Offered Securities for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Representative may request limitation, provided, however, that in no event shall the Company be obligated to qualify a public offering outside the United States or to do business as a foreign corporation in any jurisdiction where it is not now so qualified, to qualify or register as a dealer in securities, to take any action which would subject it to general service of process in any jurisdiction where it is not now so subject or subject itself to ongoing taxation in respect of doing business in any jurisdiction in which it is not so subject.

 

(i) Delivery of Financial Statements. During the period of five years commencing on the effective date of the Registration Statement applicable to the Underwriters, the Company shall furnish to the Representative and each other Underwriter who may so request copies of such financial statements and other periodic and special reports as the Company may from time to time distribute generally to the holders of any class of its capital stock, and will furnish to the Representative and each other Underwriter who may so request a copy of each annual or other report it shall be required to file with the Commission; provided, however, that the availability of electronically transmitted copies filed with the Commission pursuant to EDGAR shall satisfy the Company’s obligation to furnish copies hereunder.

 

(j) Availability of Earnings Statements. The Company shall make generally available to holders of its securities as soon as may be practicable but in no event later than the last day of the fifteenth (15^th) full calendar month following the calendar quarter in which the most recent effective date occurs in accordance with Rule 158 of the Rules and Regulations, an earnings statement (which need not be audited but shall be in reasonable detail) for a period of twelve (12) months ended commencing after the effective date, and satisfying the provisions of Section 11(a) of the Act (including Rule 158 of the Rules and Regulations).

 

(k) Consideration; Payment of Expenses.

 

(i) As compensation for services rendered, and provided that any of the Offered Securities are sold to the Underwriters in the Offering, at the closing of the Offering, the Company shall pay to the Underwriters or their respective designees their pro rata portion (based on the Offered Securities purchased in the Offering) an underwriting discount equal to seven percent (7%) of the aggregate gross proceeds raised in the Offering.

 

(ii) Maxim shall be entitled to a transaction fee equal to five percent (5%) with respect to any financing of equity, equity-linked, convertible or other capital-raising activity (“Tail Financing”) to the extent such financing or capital is provided to the Company by any of the investors contacted or introduced by Maxim to the Company during the term of this Agreement if such Tail Financing is consummated at a time within the nine (9) month period following the Closing Date or any Option Closing Date.

 

(iii) The Representative reserves the right to reduce any item of compensation or adjust the terms thereof as specified herein in the event that a determination shall be made by FINRA to the effect that the Underwriters’ aggregate compensation is in excess of FINRA rules or that the terms thereof require adjustment.

 

 

(iv) Whether or not the transactions contemplated by this Agreement, the Registration Statement and the Prospectus are consummated or this Agreement is terminated, the Company hereby agrees to pay all expenses incident to the performance of its obligations hereunder, including the following:

 

(1) all expenses in connection with the preparation, printing, formatting for EDGAR and filing of the Registration Statement, any Preliminary Prospectus and the Prospectus and any and all exhibits, amendments and supplements thereto and the mailing and delivering of copies thereof to the Underwriters and dealers;

 

(2) all filing fees in connection with filings with FINRA’s Public Offering System;

 

(3) all fees, disbursements and expenses of the Company’s counsel, accountants and other agents and representatives in connection with the registration of the Securities under the Act and the Offering;

 

(4) all expenses in connection with the qualifications of the Securities for offering and sale under state or foreign securities or blue sky laws (including, without limitation, all filing and registration fees);

 

(5) all fees and expenses in connection with listing the Securities on a national securities exchange;

 

(6) all expenses, including travel and lodging expenses, of the Company’s officers, directors and employees and any other expense of the Company incurred in connection with attending or hosting meetings with prospective purchasers of the Securities and any fees and expenses associated with the i-Deal system and NetRoadshow;

 

(7) any stock transfer taxes or other taxes incurred in connection with this Agreement or the offering, including any stock transfer taxes payable upon the transfer of securities to the Underwriters;

 

(8) the costs associated with preparing, printing and delivering certificates representing the Securities;

 

(9) the cost and charges of any transfer agent or registrar for the Securities; and

 

(10) subject to the following proviso and Section 4(l), the actual and reasonable out-of-pocket expenses incurred by the Underwriters in connection with the performance of their obligations under this Agreement (including the reasonable legal fees and expenses of the Underwriters’ legal counsel incurred in connection with the Offering contemplated hereby and including any fees or expenses incurred in accordance with Section 4(k)(iv)(6) above) and as allowed under FINRA Rule 5110, up to an aggregate of $75,000 (the “Underwriters’ Reimbursement”); provided, however, that except to the extent otherwise provided in Section 4(k) or Section 4(l) hereof, the Underwriters will pay all of their own costs and expenses, including the fees and disbursements of counsel for the Underwriters.

 

 

(l) Reimbursement of Expenses upon Termination of Agreement. If this Agreement shall be terminated by the Company pursuant to any of the provisions hereof or if for any reason the Company shall be unable to perform its obligations or to fulfill any conditions hereunder, or if the Underwriters shall terminate this Agreement pursuant to any of the provisions hereof, the amount of the Underwriters’ Reimbursement shall not exceed $40,000. Any amount payable to the Underwriters pursuant to this Section 4(l) shall be remitted to the Representative by the Company within ten days following the termination of this Agreement.

 

(m) No Stabilization or Manipulation. The Company shall not at any time, directly or indirectly, take any action intended to cause or result in, or which might reasonably be expected to cause or result in, or which will constitute, stabilization or manipulation, under the Act or otherwise, of the price of the Offered Securities to facilitate the sale or resale of any of the Offered Securities.

 

(n) Use of Proceeds. The Company shall apply the net proceeds from the offering and sale of the Offered Securities to be sold by the Company in the manner set forth in the General Disclosure Package and the Prospectus under “Use of Proceeds” and shall file such reports with the Commission with respect to the sale of the Offered Securities and the application of the proceeds therefrom as may be required in accordance with Rule 463 under the Act.

 

(o) Lock-Up Agreements of Company, Management and Affiliates. The Company shall not, for a period of ninety (90) days after the Closing Date (the “Lock-Up Period”), without the prior written consent of Maxim (which consent may be withheld in its sole discretion), (1) offer, pledge, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, or file with the Commission a registration statement under the Act to register, any Shares, warrants, or any securities convertible into or exercisable or exchangeable for Shares or (2) enter into any swap or other derivatives transaction that transfers to another, in whole or in part, directly or indirectly, any of the economic benefits or risks of ownership of Shares, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Shares or other securities, in cash or otherwise, or publicly disclose the intention to enter into any transaction described in clause (1) or (2) above. The foregoing sentence shall not apply to (A) the Securities to be sold hereunder, (B) any Shares issued pursuant to a trading plan established prior to the date hereof pursuant to Rule 10b5-1 of the Exchange Act, (C) the issuance of Shares upon the exercise or conversion of options, warrants or other convertible securities outstanding, and as in effect, on the date of this Agreement, (D) any Shares, dividend equivalent rights or other equity based awards issued, or options to purchase Shares granted, pursuant to any employee benefit plans of the Company referred to in the Registration Statement, the General Disclosure Package or the Prospectus or subsequently approved by the stockholders of the Company as required by applicable rules of the Nasdaq Capital Market (including the filing of a registration statement on Form S-8 relating to such employee benefit plans of the Company), (E) securities upon the exercise or exchange of or conversion of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into Ordinary Shares issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities (other than in connection with stock splits or combinations) or to extend the term of such securities, and (F) securities issued pursuant to acquisitions or strategic transactions (including, without limitation, joint venture, co-marketing, co-development or other collaboration agreements) approved by a majority of the disinterested directors of the Company, provided that such securities are issued as “restricted securities” (as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection therewith during the Lock-Up Period, and provided that any such issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities. The Company has caused each of its officers and directors to enter into agreements with the Representative in the form set forth in Exhibit A.

 

 

(p) Lock-Up Releases. If Maxim, in its sole discretion, agrees to release or waive the restrictions set forth in a lock-up letter described in Section 4(o) hereof for an officer or director of the Company and provides the Company with notice of the impending release or waiver at least three business days before the effective date of the release or waiver, the Company agrees to announce the impending release or waiver by a press release substantially in the form of Exhibit B hereto through a major news service at least two business days before the effective date of such release or waiver, or any other method that satisfies the obligations described in FINRA Rule 5131(d)(2) at least two business days before the effective date of the release or waiver.

 

(q) NASDAQ listing. The Company will use its reasonable best efforts to effect and maintain the listing of the Shares on the NASDAQ Capital Market for at least three (3) years after the Closing Date.

 

(r) The Company shall use its reasonable best efforts to maintain the effectiveness of the Registration Statement and a current Prospectus relating thereto for as long as the Warrants remain outstanding. During any period when the Company fails to have maintained an effective Registration Statement or a current Prospectus relating thereto and a holder of a Warrant desires to exercise such warrant and, in the opinion of counsel to the holder, Rule 144 is not available as an exemption from registration for the resale of the Warrant Shares, the Company shall promptly file a registration statement registering the resale of the Warrant Shares and use its reasonable best efforts to have it declared effective by the Commission within thirty (30) days.

 

(s) Variable Rate Transactions. From the date hereof through and including the ninety (90) calendar day anniversary of the Closing Date, neither the Company nor any Subsidiary shall enter into, announce the entering into, or proposed entering into, a Variable Rate Transaction. For purposes hereof, a “Variable Rate Transaction” shall mean, collectively, an “Equity Line of Credit” or similar agreement, or a Variable Priced Equity Linked Instrument. For purposes hereof, “Equity Line of Credit” means any transaction involving a written agreement between the Company and an investor or underwriter whereby the Company has the right to “put” its securities to the investor or underwriter over an agreed period of time and at future determined price or price formula (other than customary “preemptive” or “participation” rights or “weighted average” or “full-ratchet” anti-dilution provisions or in connection with fixed-price rights offerings and similar transactions that are not Variable Priced Equity Linked Instruments), and “Variable Priced Equity Linked Instruments” means: (A) any debt or equity securities which are convertible into, exercisable or exchangeable for, or carry the right to receive additional Shares either (1) at any conversion, exercise or exchange rate or other price that is based upon and/or varies with the trading prices of or quotations for Shares at any time after the initial issuance of such debt or equity security, or (2) with a conversion, exercise or exchange price that is subject to being reset on more than one occasion at some future date at any time after the initial issuance of such debt or equity security due to a change in the market price of the Shares since date of initial issuance (other than customary “preemptive” or “participation” rights or “weighted average” or “full-ratchet” anti-dilution provisions or in connection with fixed-price rights offerings and similar transactions), and (B) any amortizing convertible security which amortizes prior to its maturity date, where the Company is required or has the option to (or any investor in such transaction has the option to require the Company to) make such amortization payments in Shares which are valued at a price that is based upon and/or varies with the trading prices of or quotations for Shares at any time after the initial issuance of such debt or equity security (whether or not such payments in stock are subject to certain equity conditions). For the avoidance of doubt, the foregoing shall not prevent the Company from conducting “at-the-market” offerings or similar equity distribution programs after the expiration of the Lock-Up Period.

 

 

5. Conditions of the Obligations of the Underwriters. The obligation of the Underwriters to purchase the Firm Securities on the Closing Date or the Option Securities on the Option Closing Date, as the case may be, as provided herein is subject to the accuracy of the representations and warranties of the Company, the performance by the Company of its covenants and other obligations hereunder and to the following additional conditions:

 

(a) Post Effective Amendments and Prospectus Filings. Notification that the Registration Statement has become effective shall be received by the Representative not later than 4:30 p.m., New York City time, on the date of this Agreement or at such later date and time as shall be consented to in writing by the Representative and all filings made pursuant to Rules 424, 430A, or 430B of the Rules and Regulations, as applicable, shall have been made or will be made prior to the Closing Date in accordance with all such applicable rules.

 

(b) No Stop Orders, Requests for Information and No Amendments. (i) No stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall be pending or are, to the knowledge of the Company, threatened by the Commission, (ii) no order suspending the qualification or registration of the Offered Securities under the securities or Blue Sky laws of any jurisdiction shall be in effect and no proceeding for such purpose shall be pending before or threatened or contemplated by the authorities of any such jurisdiction, (iii) any request for additional information on the part of the staff of the Commission or any such authorities shall have been complied with to the satisfaction of the staff of the Commission or such authorities and (iv) after the date hereof no amendment or supplement to the Registration Statement or the Prospectus shall have been filed unless a copy thereof was first submitted to the Representative and the Representative did not object thereto in good faith, and the Representative shall have received certificates, dated the Closing Date and the Option Closing Date and signed by the Chief Executive Officer or the Chairman of the Board of Directors and the Chief Financial Officer of the Company in their capacities as such, and not individually, (who may, as to proceedings threatened, certify to their knowledge), to the effect of clauses (i), (ii) and (iii).

 

(c) No Material Adverse Changes. Since the respective dates as of which information is given in the Registration Statement and the Prospectus, except as set forth in the Registration Statement, the General Disclosure Package and the Prospectus (i) there shall not have been a Material Adverse Change, (ii) the Company shall not have incurred any material liabilities or obligations, direct or contingent, (iii) the Company shall not have entered into any material transactions not in the ordinary course of business other than pursuant to this Agreement and the transactions referred to herein, (iv) the Company shall not have issued any securities (other than the Securities or the Shares issued in the ordinary course of business pursuant to existing employee benefit plans of the Company referred to in the Registration Statement, General Disclosure Package and the Prospectus) or declared or paid any dividend or made any distribution in respect of its capital stock of any class or debt (long-term or short-term), and (v) no material amount of the assets of the Company shall have been pledged, mortgaged or otherwise encumbered.

 

 

(d) No Actions, Suits or Proceedings. Since the respective dates as of which information is given in the Registration Statement, the General Disclosure Package and the Prospectus, there shall have been no actions, suits or proceedings instituted, or to the Company’s knowledge, threatened against or affecting, the Company or its subsidiaries or any of their respective officers in their capacity as such, before or by any federal, state or local court, commission, regulatory body, administrative agency or other governmental body, domestic or foreign.

 

(e) All Representations True and Correct and All Conditions Fulfilled. Each of the representations and warranties of the Company contained herein shall be true and correct as of the date of the Agreement and at the Closing Date as if made at the Closing Date and any Option Closing Date, as the case may be, and all covenants and agreements contained herein to be performed by the Company and all conditions contained herein to be fulfilled or complied with by the Company at or prior to the Closing Date and any Option Closing Date, shall have been duly performed, fulfilled or complied with.

 

(f) Opinions of Counsel to the Company. The Underwriters shall have received the opinions and letters, each dated the Closing Date and any Option Closing Date, as the case may be, each reasonably satisfactory in form and substance to the Representative and counsel for the Underwriters, from Norton Rose Fulbright (US) LLP, as corporate/securities counsel.

 

(g) Opinion of Counsel to the Underwriters. The Representative shall have received an opinion, dated the Closing Date and any Option Closing Date, as the case may be, from Pryor Cashman LLP, securities counsel to the Underwriters, with respect to the Registration Statement, the Prospectus and this Agreement, which opinions shall be satisfactory in all respects to the Representative.

 

(h) Accountants’ Comfort Letter. On the date of the Prospectus, the Representative shall have received from the Accountants a letter dated the date of its delivery, addressed to the Underwriters, in form and substance reasonably satisfactory to the Representative and counsel to the Underwriters, containing statements and information of the type ordinarily included in accountant’s “comfort letters” to underwriters, delivered according to Statement of Auditing Standards No. 72 (or any successor bulletin), with respect to the audited and unaudited financial statements and certain financial information contained in the Registration Statement and the Prospectus. At the Closing Date and any Option Closing Date, as the case may be, the Representative shall have received from the Accountants a letter dated such date, in form and substance reasonably satisfactory to the Representative and counsel to the Underwriters, to the effect that they reaffirm the statements made in the letter furnished by them pursuant to the preceding sentence and have conducted additional procedures with respect to certain financial figures included in the Prospectus, except that the specified date referred to therein for the carrying out of procedures shall be no more than three business days prior to the Closing Date or any Option Closing Date, as the case may be.

 

 

(i) Officers’ Certificates. At the Closing Date and any Option Closing Date, there shall be furnished to the Representative an accurate certificate, dated the date of its delivery, signed by each of the Chief Executive Officer and the Chief Financial Officer of the Company, in their capacities as such, and not individually, in form and substance satisfactory to the Representative and counsel to the Underwriters, to the effect that:

 

(i) each signer of such certificate has carefully examined the Registration Statement and the Prospectus;

 

(ii) there has not been a Material Adverse Change; and

 

(iii) with respect to the matters set forth in Sections 5(b)(i) and 5(e).

 

(j) Effective Warrant Agreement. The Company and Continental Stock Transfer & Trust Company, as warrant agent for the Warrants, shall have executed and delivered a warrant agreement (the “Warrant Agreement”) and the Warrant Agreement shall be in full force and effect.

 

(k) Transfer Agent’s Certificate. The Company’s transfer agent shall have furnished or caused to be furnished to the Representative a certificate satisfactory to the Representative of one of its authorized officers with respect to the issuance of the Shares and Warrants and such other customary matters related thereto as the Representative may reasonably request.

 

(l) Eligible for DTC Clearance. At or prior to the Closing Date and each Option Closing Date, the Shares and Warrants shall be eligible for clearance and settlement through the facilities of the DTC.

 

(m) Lock-Up Agreements. At the date of this Agreement, the Representative shall have received the executed “lock-up” agreements referred to in Section 4(o) hereof from the Company’s officers and directors.

 

(n) Compliance with Blue Sky Laws. The Securities shall be qualified for sale in such states and jurisdictions in the United States as the Representative may reasonably request, and each such qualification shall be in effect and not subject to any stop order or other proceeding on the Closing Date and the Option Closing Date.

 

(o) Stock Exchange Listing. The Shares shall have been duly authorized for listing on the NASDAQ Capital Market, subject to official notice of issuance.

 

 

(p) Exchange Act Registration. One or more registration statements in respect of the Shares have been filed on Form 8-A pursuant to Section 12(b) of the Exchange Act, each of which registration statement complies in all material respects with the Exchange Act.

 

(q) Good Standing. At the Closing Date and any Option Closing Date, the Company shall have furnished to the Representative satisfactory evidence of the good standing of the Company and its subsidiaries in their respective jurisdictions of organization (to the extent the concept of “good standing” or such equivalent concept exists under the laws of the applicable jurisdictions) and their good standing as foreign entities in such other jurisdictions as the Representative may reasonably request, in each case in writing or any standard form of telecommunication from the appropriate governmental authorities of such jurisdictions. If the applicable jurisdiction does not have a concept of “good standing,” the Company will furnish evidence in writing or any standard form of telecommunication from the appropriate governmental authorities that the relevant company was duly incorporated and remains duly registered in the jurisdiction of its incorporation.

 

(r) Company Certificates. The Company shall have furnished to the Representative such certificates, in addition to those specifically mentioned herein, as the Representative may have reasonably requested as to the accuracy and completeness at the Closing Date and any Option Closing Date of any statement in the Registration Statement, the General Disclosure Package or the Prospectus, as to the accuracy at the Closing Date and any Option Closing Date of the representations and warranties of the Company herein, as to the performance by the Company of its obligations hereunder, or as to the fulfillment of the conditions concurrent and precedent to the obligations hereunder of the Underwriters.

 

(s) No Objection. FINRA has confirmed that it has not raised any objection with respect to the fairness and reasonableness of the underwriting terms and arrangements relating to the offering of the Offered Securities.

 

If any of the conditions hereinabove provided for in this Section 5 shall not have been fulfilled when and as required by this Agreement to be fulfilled, the obligations of the Underwriters hereunder may be terminated by the Representative by notifying the Company of such termination in writing at or prior to the Closing Date or any Option Closing Date, as the case may be.

 

6. Indemnification.

 

(a) Indemnification of the Underwriters. The Company shall indemnify and hold harmless each Underwriter, its affiliates, the directors, officers, employees and agents of such Underwriter and each person, if any, who controls such Underwriter within the meaning of Section 15 of the Act or Section 20 of the Exchange Act from and against any and all losses, claims, liabilities, expenses and damages (including any and all investigative, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding between any of the indemnified parties and any indemnifying parties or between any indemnified party and any third party, or otherwise, or any claim asserted), to which they, or any of them, may become subject under the Act, the Exchange Act or other federal or state statutory law or regulation, at common law or otherwise, insofar as such losses, claims, liabilities, expenses or damages arise out of or are based on (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), including the information deemed to be a part of the Registration Statement at the time of effectiveness and at any subsequent time pursuant to Rules 430A and 430B of the Rules and Regulations, as applicable, or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading or (ii) any untrue statement or alleged untrue statement of a material fact contained in any preliminary prospectus, any preliminary prospectus supplement, any Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement to any of the foregoing) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or (iii) any untrue statement or alleged untrue statement of a material fact contained in any materials or information provided to investors by, or with the approval of, the Company in connection with the marketing of the offering of the Securities, including any roadshow or investor presentations made to investors by the Company (whether in person or electronically) (collectively, Marketing Materials”) or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading or (iv) in whole or in part any inaccuracy in any material respect in the representations and warranties of the Company contained herein. This indemnity agreement will be in addition to any liability that the Company might otherwise have.

 

 

(b) Indemnification of the Company. Each Underwriter, severally and not jointly, agrees to indemnify and hold harmless the Company, its affiliates, the directors, officers, employees and agents of the Company and each other person or entity, if any, who controls the Company within the meaning of Section 15 of the Act or Section 20 of the Exchange Act, against any losses, liabilities, claims, damages and expenses whatsoever, as incurred (including but not limited to reasonable attorneys’ fees and any and all reasonable expenses whatsoever, incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, and any and all amounts paid in settlement of any claim or litigation), joint or several, to which they or any of them may become subject under the Act, the Exchange Act or otherwise, insofar as such losses, liabilities, claims, damages or expenses (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in the Registration Statement at the time of effectiveness and at any subsequent time pursuant to Rules 430A and 430B of the Rules and Regulations, any Preliminary Prospectus, the Prospectus, or any amendment or supplement to any of them, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that any such loss, liability, claim, damage or expense (or action in respect thereof) arises out of or is based upon any such untrue statement or alleged untrue statement or omission or alleged omission made therein in reliance upon written information provided by the Underwriter to the Company; provided, however, that in no case shall any Underwriter be liable or responsible for any amount in excess of the underwriting discount and commissions applicable to the Offered Securities purchased by such Underwriter hereunder.

 

(c) Indemnification Procedures. Any party that proposes to assert the right to be indemnified under this Section ‎6 shall, promptly after receipt of notice of commencement of any action against such party in respect of which a claim is to be made against an indemnifying party or parties under this Section ‎6, notify each such indemnifying party of the commencement of such action, enclosing a copy of all papers served, but the omission so to notify such indemnifying party shall not relieve the indemnifying party from any liability that it may have to any indemnified party under the foregoing provisions of this Section ‎6 unless, and only to the extent that, such omission results in the forfeiture of substantive rights or defenses by the indemnifying party. If any such action is brought against any indemnified party and it notifies the indemnifying party of its commencement, the indemnifying party will be entitled to participate in and, to the extent that it elects by delivering written notice to the indemnified party promptly after receiving notice of the commencement of the action from the indemnified party, jointly with any other indemnifying party similarly notified, to assume the defense of the action, with counsel satisfactory to the indemnified party, and after notice from the indemnifying party to the indemnified party of its election to assume the defense, the indemnifying party will not be liable to the indemnified party for any legal or other expenses except as provided below and except for the reasonable out-of-pocket costs of investigation subsequently incurred by the indemnified party in connection with the defense. The indemnified party will have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel will be at the expense of such indemnified party unless (i) the employment of counsel by the indemnified party has been authorized in writing by one of the indemnifying parties in connection with the defense of such action, (ii) the indemnified party has reasonably concluded (based on advice of counsel) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (iii) the indemnified party has reasonably concluded that a conflict or potential conflict exists (based on advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party shall not have the right to direct the defense of such action on behalf of the indemnified party), (iv) the indemnifying party does not diligently defend the action after assumption of the defense, or (v) the indemnifying party has not in fact employed counsel satisfactory to the indemnified party to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action, in each of which cases the reasonable fees, disbursements and other charges of counsel shall be at the expense of the indemnifying party or parties. It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than one separate firm admitted to practice in such jurisdiction at any one time for all such indemnified party or parties. All such fees, disbursements and other charges shall be reimbursed by the indemnifying party promptly as they are incurred. An indemnifying party shall not be liable for any settlement of any action or claim effected without its written consent (which consent will not be unreasonably withheld or delayed). No indemnifying party shall, without the prior written consent of each indemnified party, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding relating to the matters contemplated by this Section ‎6 (whether or not any indemnified party is a party thereto), unless (x) such settlement, compromise or consent (i) includes an unconditional release of each indemnified party from all liability arising or that may arise out of such claim, action or proceeding and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party, and (y) the indemnifying party confirms in writing its indemnification obligations hereunder with respect to such settlement, compromise or judgment. Notwithstanding the foregoing, if at any time an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 6(a) effected without its written consent if (A) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (B) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (iii) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.

 

 

(d) Contribution. In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in the foregoing paragraphs of this Section ‎6 is applicable in accordance with its terms but for any reason is held to be unavailable, the Company and the Underwriters shall contribute to the total losses, claims, liabilities, expenses and damages (including any investigative, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted, but after deducting any contribution received by the Company from persons other than the Underwriters, such as persons who control the Company within the meaning of the Act, officers of the Company who signed the Registration Statement and directors of the Company, who may also be liable for contribution), to which the Company and the Underwriter may be subject in such proportion as shall be appropriate to reflect the relative benefits received by the Company on the one hand and the Underwriters on the other from the offering of the Offered Securities pursuant to this Agreement. The relative benefits received by the Company and the Underwriters shall be deemed to be in the same proportion as (x) the total proceeds from the Offering (net of underwriting discount and commissions but before deducting expenses) received by the Company bears to (y) the underwriting discount and commissions received by the Underwriters, in each case as set forth in the table on the cover page of the Prospectus. If, but only if, the allocation provided by the foregoing sentence is not permitted by applicable law, the allocation of contribution shall be made in such proportion as is appropriate to reflect not only the relative benefits referred to in the foregoing sentence but also the relative fault of the Company, on the one hand, and the Underwriters, on the other, with respect to the statements or omissions which resulted in such loss, claim, liability, expense or damage, or action in respect thereof, as well as any other relevant equitable considerations with respect to such offering. Such relative fault shall be determined by reference to whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Underwriters, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Underwriters agree that it would not be just and equitable if contributions pursuant to this Section 6(d) were to be determined by pro rata allocation or by any other method of allocation (even if the Underwriters were treated as one entity for such purpose) which does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, liability, expense or damage, or action in respect thereof, referred to above in this Section 6(d) shall be deemed to include, for purpose of this Section 6(d), any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 6(d), no Underwriter shall be required to contribute any amount in excess of the underwriting discounts and commissions received by it. No person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 6(d), any person who controls a party to this Agreement within the meaning of the Act will have the same rights to contribution as that party, and each officer of the Company who signed the Registration Statement will have the same rights to contribution as the Company, and each director, officer, employee, counsel or agent of an Underwriter will have the same rights to contribution as such Underwriter, subject in each case to the provisions hereof. Any party entitled to contribution, promptly after receipt of notice of commencement of any action against such party in respect of which a claim for contribution may be made under this Section 6(d), will notify any such party or parties from whom contribution may be sought, but the omission so to notify will not relieve the party or parties from whom contribution may be sought from any other obligation it or they may have under this Section 6(d). The obligations of the Underwriters to contribute pursuant to this Section 6(d) are several in proportion to the respective number of Offered Securities to be purchased by each of the Underwriters hereunder and not joint. No party will be liable for contribution with respect to any action or claim settled without its written consent (which consent will not be unreasonably withheld).

 

 

(e) Survival. The indemnity and contribution agreements contained in this Section ‎6 and the representations and warranties of the Company contained in this Agreement shall remain operative and in full force and effect regardless of (i) any investigation made by or on behalf of any Underwriter or any controlling Person thereof, (ii) acceptance of any of the Securities and payment therefor or (iii) any termination of this Agreement.

 

7. Termination. The obligations of the Underwriters under this Agreement may be terminated at any time prior to the Closing Date (or, with respect to the Option Securities, on or prior to the Option Closing Date), by notice to the Company from the Representative, without liability on the part of the Underwriters to the Company, if, prior to delivery and payment for the Firm Securities (or the Option Securities, as the case may be), in the sole judgment of the Representative, any of the following shall occur:

 

(a) trading or quotation in any of the equity securities of the Company shall have been suspended or limited by the Commission, The Nasdaq Stock Market or by an exchange or otherwise;

 

(b) trading in securities generally on the New York Stock Exchange, the NYSE MKT, the NASDAQ Capital Market, the NASDAQ Global Market, the NASDAQ Global Select Market shall have been suspended or limited or minimum or maximum prices shall have been generally established on such exchange, or additional material governmental restrictions, not in force on the date of this Agreement, shall have been imposed upon trading in securities generally by such exchange or by order of the Commission or any court or other governmental authority;

 

(c) a general banking moratorium shall have been declared by any of U.S. federal, New York authorities;

 

(d) the United States shall have become engaged in new hostilities, there shall have been an escalation in hostilities involving the United States or there shall have been a declaration of a national emergency or war by the United States or there shall have occurred such a material adverse change in general economic, political or financial conditions, including, without limitation, as a result of terrorist activities after the date hereof (or the effect of international conditions on the financial markets in the United States shall be such), or any other calamity or crisis shall have occurred, the effect of any of which is such as to make it impracticable or inadvisable to market the Offered Securities on the terms and in the manner contemplated by the Prospectus;

 

 

(e) the Company shall have sustained a loss material or substantial to the Company by reason of flood, fire, accident, hurricane, earthquake, theft, sabotage, or other calamity or malicious act, whether or not such loss shall have been insured, the effect of any of which is such as to make it impracticable or inadvisable to market the Offered Securities on the terms and in the manner contemplated by the Prospectus; or

 

(f) there shall have been a Material Adverse Change.

 

8. Underwriter Default.

 

(a) If any Underwriter or Underwriters shall default in its or their obligation to purchase Firm Securities hereunder, and if the Securities with respect to which such default relates (the “Default Securities”) do not (after giving effect to arrangements, if any, made by the Representative pursuant to subsection (b) below) exceed in the aggregate 10% of the number of the Firm Securities, each non-defaulting Underwriter, acting severally and not jointly, agrees to purchase from the Company that number of Default Securities that bears the same proportion to the total number of Default Securities then being purchased as the number of Firm Securities set forth opposite the name of such Underwriter on Schedule A hereto bears to the aggregate number of Firm Securities set forth opposite the names of the non-defaulting Underwriters; subject, however, to such adjustments to eliminate fractional shares as the Representative in its discretion shall make.

 

(b) In the event that the aggregate number of Default Securities exceeds 10% of the number of Firm Securities, the Representatives may in their discretion arrange for themselves or for another party or parties (including any non-defaulting Underwriter or Underwriters who so agree) to purchase the Default Securities on the terms contained herein. In the event that within five (5) calendar days after such a default the Representative does not arrange for the purchase of the Default Securities as provided in this Section 8, this Agreement shall thereupon terminate, without liability on the part of the Company with respect thereto (except in each case as provided in Sections 4(k), 6 and 8) or the Underwriters, but nothing in this Agreement shall relieve a defaulting Underwriter or Underwriters of its or their liability, if any, to the other Underwriters and the Company for damages occasioned by its or their default hereunder.

 

(c) In the event that any Default Securities are to be purchased by the non-defaulting Underwriters, or are to be purchased by another party or parties as aforesaid, the Representatives or the Company shall have the right to postpone the Closing Date for a period, not exceeding five (5) Business Days, in order to effect whatever changes may thereby be necessary in the Registration Statement or the Prospectus or in any other documents and arrangements, and the Company agrees to file promptly any amendment or supplement to the Registration Statement or the Prospectus which, in the reasonable opinion of Underwriters’ Counsel, may be necessary or advisable. The term “Underwriter” as used in this Agreement shall include any party substituted under this Section 8 with like effect as if it had originally been a party to this Agreement with respect to such Firm Securities.

 

 

9. Miscellaneous.

 

(a) Notices. Notice given pursuant to any of the provisions of this Agreement shall be in writing and, unless otherwise specified, shall be mailed, hand delivered or telecopied (a) if to the Company, at the office of the Company, 2^nd Floor, Regatta Office Park, West Bay Road, P.O. Box 10655, Grand Cayman, KY1-1006, Cayman Islands, telephone number: (888) 227-8066, Attention: Chief Executive Officer, or (b) if to the Representative or any Underwriter, to Maxim Group LLC, 300 Park Avenue, 16^th Floor, New York, New York 10022, Attention: Legal Department, telecopy number: (212) 895-3555. Any such notice shall be effective only upon receipt. Any notice under Section ‎6 hereof may be made by telecopy or telephone, but if so made shall be subsequently confirmed in writing.

 

(b) No Third Party Beneficiaries. This Agreement has been and is made solely for the benefit of the Underwriters, the Company and, with respect to Section 6, the controlling persons, directors, officers, employees, counsel and agents referred to in Section ‎6 hereof, and their respective successors and assigns, and no other person shall acquire or have any right under or by virtue of this Agreement. The term “successors and assigns” as used in this Agreement shall not include a purchaser of Securities from any Underwriter in his, her or its capacity as such a purchaser, as such purchaser of Securities from such Underwriter.

 

(c) Survival of Representations and Warranties. All representations, warranties and agreements of the Company contained herein or in certificates or other instruments delivered pursuant hereto shall remain operative and in full force and effect regardless of any investigation made by or on behalf of the Underwriters or any of their controlling persons and shall survive delivery of and payment for the Securities hereunder.

 

(d) Disclaimer of Fiduciary Relationship. The Company acknowledges and agrees that (i) the purchase and sale of the Offered Securities pursuant to this Agreement, including the determination of the public offering price of the Offered Securities and any related discounts and commissions, is an arm’s-length commercial transaction between the Company, on the one hand, and the Underwriters, on the other hand, (ii) in connection with the Offering contemplated by this Agreement and the process leading to such transaction, the Underwriters are and have been acting pursuant to a contractual relationship created solely by this Agreement and are not agents or fiduciaries of the Company or its securityholders, creditors, employees or any other party, (iii) no Underwriter has assumed nor will it assume any advisory or fiduciary responsibility in favor of the Company with respect to the offering of the Securities contemplated by this Agreement or the process leading thereto (irrespective of whether such Underwriter or its affiliates has advised or is currently advising the Company on other matters) and each such Underwriter has no obligation to the Company with respect to the offering of the Securities contemplated by this Agreement except the obligations expressly set forth in this Agreement, (iv) the Underwriters and their affiliates may be engaged in a broad range of transactions that involve interests that differ from those of the Company, and (v) no Underwriter has provided any legal, accounting, regulatory or tax advice with respect to the Offering contemplated by this Agreement and the Company has consulted its own legal, accounting, regulatory and tax advisors to the extent it deemed appropriate.

 

(e) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.

 

 

(f) Submission to Jurisdiction. The Company irrevocably submits to the non-exclusive jurisdiction of any New York State or United States federal court sitting in The City of New York, Borough of Manhattan, over any suit, action or proceeding arising out of or relating to this Agreement, the Disclosure Package, the Prospectus, the Registration Statement, or the offering of the Securities. The Company irrevocably waives, to the fullest extent permitted by law, any objection which it may now or hereafter have to the laying of venue of any such suit, action or proceeding brought in such a court and any claim that any such suit, action or proceeding brought in such a court has been brought in an inconvenient forum. To the extent that the Company has or hereafter may acquire any immunity (on the grounds of sovereignty or otherwise) from the jurisdiction of any court or from any legal process with respect to itself or its property, the Company irrevocably waives, to the fullest extent permitted by law, such immunity in respect of any such suit, action or proceeding including without limitation, any immunity pursuant to the U.S. Foreign Sovereign Immunities Act of 1976, as amended. Each of the Underwriters and the Company further agrees to accept and acknowledge service of any and all process which may be served in any such suit, action or proceeding in the Supreme Court of the State of New York, New York County, or in the United States District Court for the Southern District of New York and agrees that service of process upon the Company mailed by certified mail or delivered by Federal Express via overnight delivery to the Company’s address shall be deemed in every respect effective service of process upon the Company in any such suit, action or proceeding, and service of process upon an Underwriter mailed by certified mail or delivered by Federal Express via overnight delivery to the Underwriters’ address shall be deemed in every respect effective service of process upon such Underwriter in any such suit, action or proceeding.

 

(g) Judgment Currency. If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder into any currency other than United States dollars, the parties hereto agree, to the fullest extent permitted by law, that the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Underwriters could purchase United States dollars with such other currency in The City of New York on the business day preceding that on which final judgment is given. The obligation of the Company with respect to any sum due from it to an Underwriter or any person controlling such Underwriter shall, notwithstanding any judgment in a currency other than United States dollars, not be discharged until the first business day following receipt by such Underwriter or controlling person of any sum in such other currency, and only to the extent that such Underwriter or controlling person may in accordance with normal banking procedures purchase United States dollars with such other currency. If the United States dollars so purchased are less than the sum originally due to such Underwriter or controlling person hereunder, the Company agrees as a separate obligation and notwithstanding any such judgment, to indemnify such Underwriter or controlling person against such loss. If the United States dollars so purchased are greater than the sum originally due to such Underwriter or controlling person hereunder, such Underwriter or controlling person agrees to pay to the Company an amount equal to the excess of the dollars so purchased over the sum originally due to such Underwriter or controlling person hereunder.

 

(h) Counterparts. This Agreement may be signed in two or more counterparts with the same effect as if the signatures thereto and hereto were upon the same instrument.

 

(i) Survival of Provisions Upon Invalidity of Any Single Provision. In case any provision in this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

(j) Waiver of Jury Trial. The Company and each Underwriter each hereby irrevocably waive any right they may have to a trial by jury in respect of any claim based upon or arising out of this Agreement or the transactions contemplated hereby.

 

(k) Titles and Subtitles. The titles of the sections and subsections of this Agreement are for convenience and reference only and are not to be considered in construing this Agreement.

 

(l) Entire Agreement. This Agreement embodies the entire agreement and understanding between the parties hereto and supersedes all prior agreements and understandings relating to the subject matter hereof. This Agreement may not be amended or otherwise modified or any provision hereof waived except by an instrument in writing signed by the parties hereto.

 

[Signature page follows]

 

 

If the foregoing correctly sets forth your understanding, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement among us.

 

	Very truly yours,
	SRIVARU HOLDING LIMITED
	By:
	Name:
	Title:

 

Accepted by the Representatives, acting for themselves and as

Representatives of the Underwriters named on Schedule A hereto,

as of the date first written above:

 

Maxim Group LLC

 

By:
Name:
Title:

 

 

SCHEDULE A

 

Name of Underwriter		Number of Common Units Being Purchased		Number of Pre-Funded Units Being Purchased
Maxim Group LLC
Total

 

 

Schedule I

 

ISSUER FREE WRITING PROSPECTUSES:

 

Schedule II

 

1.	The public offering price per Common Unit shall be $[  ]. The public offering price per Pre-Funded Unit shall be $[  ].

 

2.	The Company is selling [  ] Common Units and [  ] Pre-Funded Units.

 

3.	The Company has granted an option to the Representative, on behalf of the Underwriters, to purchase up to an additional [  ] Shares and/or Pre-Funded Warrants and/or [  ] Warrants.

 

 

EXHIBIT A

 

LOCK-UP AGREEMENT

 

[___], 2024

 

Maxim Group LLC
300 Park Avenue, 16^th Floor
New York, New York 10022

 

Re: SRIVARU Holding Limited

 

Ladies and Gentlemen:

 

As an inducement to Maxim Group LLC, as representative of the underwriters (the “Representative”), to execute an underwriting agreement (the “Underwriting Agreement”) with SRIVARU Holding Limited, a Cayman Islands exempt company (the “Company”), providing for a public offering (the “Offering”) of units of the Company (the “Units”), consisting of ordinary shares of the Company, par value $0.01 per share (the “Shares”), and ordinary share purchase warrants of the Company (the “Warrants,” and collectively with the Shares and the Units, the “Securities”), the undersigned hereby agrees that without, in each case, the prior written consent of the Representative, during the period specified in the second succeeding paragraph (the “Lock-Up Period”), the undersigned will not (1) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, make any short sale or otherwise transfer or dispose of, directly or indirectly, any Shares or any securities convertible into, exercisable or exchangeable for or that represent the right to receive Shares (including, without limitation, Shares which may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) and securities which may be issued upon exercise of a stock option or warrant) whether now owned or hereafter acquired (the “Undersigned’s Securities”) or (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Undersigned’s Securities, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Shares or such other securities, in cash or otherwise. The foregoing restriction is expressly agreed to preclude the undersigned from engaging in any hedging or other transaction which is designed to or which reasonably could be expected to lead to or result in a sale or disposition of the Undersigned’s Securities even if such Undersigned’s Securities would be disposed of by someone other than the undersigned. Such prohibited hedging or other transactions would include, without limitation, any short sale or any purchase, sale or grant of any right (including, without limitation, any put or call option) with respect to any of the Undersigned’s Securities or with respect to any security that includes, relates to, or derives any significant part of its value from such Undersigned’s Securities.

 

In addition, the undersigned agrees that, without the prior written consent of the Representative, it will not, during the Lock-Up Period, make any demand for or exercise any right with respect to, the registration of any Shares or any security convertible into or exercisable or exchangeable for Shares other than as contemplated in the registration statement relating to the Offering.

 

 

The Lock-Up Period shall mean the period commencing on the date of this Lock-Up Agreement and continue and include the date ninety (90) days after the date of the final prospectus used to sell the Securities in the Offering pursuant to the Underwriting Agreement.

 

Notwithstanding the foregoing, the undersigned may transfer the Undersigned’s Securities (i) to a Permitted Transferee, (ii) as a bona fide gift or gifts, (iii) to any trust for the direct or indirect benefit of the undersigned or the immediate family of the undersigned, (iv) by virtue of the laws of descent and distribution upon death of the undersigned, or (v) pursuant to a qualified domestic relations order. As used in this Lock-Up Agreement, the term “Permitted Transferee” shall mean, if the undersigned is a corporation, company, business trust, association, limited liability company, partnership, limited liability partnership or other entity (collectively, the “Entities” or, individually, the “Entity”), to any person or Entity which controls, is directly or indirectly controlled by, or is under common control with the undersigned and, if the undersigned is a partnership or limited liability company, to its partners, former partners or an affiliated partnership (or members, former members or an affiliated limited liability company) managed by the same manager or managing partner (or managing member, as the case may be) or management company, or managed by an entity controlling, controlled by, or under common control with, such manager or managing partner (or managing member) or management company in accordance with partnership (or membership) interests; provided, in the case of clauses (i) through (v), that the transferee agrees in writing with the Representative to be bound by the terms of this Lock-Up Agreement, and provided, further, that in the case of clauses (i) through (iii), that no filing by any party in any public report or filing with the SEC shall be required or shall be made voluntarily in connection with such transfer. For purposes of this Lock-Up Agreement, “immediate family” shall mean any relationship by blood, marriage or adoption, not more remote than first cousin. Furthermore, the undersigned may voluntarily forfeit Shares to pay any withholding tax owed by the undersigned on account of the vesting of such Shares, which may be reported on a Form 4 as such.

 

In addition, the foregoing restrictions shall not apply to (i) the exercise of stock options granted pursuant to the Company’s equity incentive plans; provided, that such restrictions shall apply to any of the Undersigned’s Securities issued upon such exercise, or (ii) the establishment of any contract, instruction or plan (a “Plan”) that satisfies all of the requirements of Rule 10b5-1(c)(1)(i)(B) under the Exchange Act; provided, that no sales of the Undersigned’s Securities shall be made pursuant to such a Plan prior to the expiration of the Lock-Up Period, and such a Plan may only be established if no public announcement of the establishment or existence thereof and no filing with the SEC or other regulatory authority in respect thereof or transactions thereunder or contemplated thereby, by the undersigned, the Company or any other person, shall be required, and no such announcement or filing is made voluntarily, by the undersigned, the Company or any other person, prior to the expiration of the Lock-Up Period.

 

In furtherance of the foregoing, the Company and its transfer agent and registrar are hereby authorized to decline to make any transfer of Shares if such transfer would constitute a violation or breach of this Lock-Up Agreement.

 

The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Lock-Up Agreement and that, upon request, the undersigned will execute any additional documents necessary in connection with the enforcement hereof. All authority herein conferred or agreed to be conferred and any obligations of the undersigned shall be binding upon the successors, assigns, heirs or personal representatives of the undersigned.

 

The undersigned understands that the undersigned shall be released from all obligations under this Lock-Up Agreement if (i) the Company or the Representative informs the other that it does not intend to proceed with the Offering, (ii) the Underwriting Agreement does not become effective or if the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Shares to be sold thereunder, or (iii) the Offering is not completed by [   ], 2024.

 

The undersigned understands that the Representative is entering into the Underwriting Agreement and proceeding with the Offering in reliance upon this Lock-Up Agreement.

 

This Lock-Up Agreement shall be governed by, and construed in accordance with, the laws of the State of New York.

 

Whether or not the Offering actually occurs depends on a number of factors, including market conditions. Any Offering will only be made pursuant to the Underwriting Agreement, the terms of which are subject to negotiation among the parties thereto.

 

[Signature page follows]

 

 

	Very truly yours,
	(Name - Please Print)
	(Signature)

 

 

EXHIBIT B

 

Form of Press Release

 

[       ]

[Date]

 

SRIVARU Holding Limited, a Cayman Islands exempted company (the “Company”), announced today that Maxim Group LLC, the lead book-running manager in the Company’s recent public sale of Company securities, is [waiving][releasing] a lock-up restriction with respect to [___] of the Company’s Shares held by [certain officers or directors][an officer or director] of the Company. The [waiver][release] will take effect on [___], and the Shares may be sold on or after such date.

 

This press release is not an offer for sale of the securities in the United States or in any other jurisdiction where such offer is prohibited, and such securities may not be offered or sold in the United States absent registration or an exemption from registration under the United States Securities Act of 1933, as amended.

 

 

Exhibit 4.3

 

SRIVARU HOLDING LIMITED

 

and

 

[                   ], as

 

Warrant Agent

 

Warrant Agency Agreement

 

Dated as of [  ], 2024

 

WARRANT AGENCY AGREEMENT

 

WARRANT AGENCY AGREEMENT, dated as of [  ], 2024 (“Agreement”), between SRIVARU Holding Limited, a Cayman Islands exempted company (the “Company”), and [  ], a corporation organized under the laws of [  ] (the “Warrant Agent”).

 

W I T N E S S E T H

 

WHEREAS, pursuant to the terms of that certain underwriting agreement (the “Underwriting Agreement”), dated [__], 2024, by and between the Company and Maxim Group LLC, as representative of the underwriters referenced therein, the Company is engaged in a public offering (the “Offering”) of [__] units (the “Units”), with each Unit consisting of (i) one ordinary share of the Company, par value $0.01 per share (the “Common Shares”), and (ii) one warrant (the “Warrant”), exercisable for one Common Share (the “Warrant Shares”);

 

WHEREAS, upon the terms and subject to the conditions hereinafter set forth and pursuant to an effective registration statement on Form F-1, as amended (File No. 333-282429) (the “Registration Statement”), and the terms and conditions of the Warrant Certificate (as defined below), the Company wishes to issue the Warrants in book entry form entitling the respective holders of such Warrants (the “Holders,” which term shall include a Holder’s transferees, successors and assigns and “Holder” shall include, if the Warrants are held in “street name,” a Participant (as defined below) or a designee appointed by such Participant) to purchase Common Shares in accordance with the respective terms of such Warrants and Warrant Certificates;

 

WHEREAS, the Common Shares and each of the Warrants to be issued in connection with the Offering shall be immediately separable from each other and will be issued separately, but will be purchased together as Units in the Offering; and

 

WHEREAS, the Company wishes the Warrant Agent to act on behalf of the Company, and the Warrant Agent is willing so to act, in connection with the issuance, registration, transfer, exchange, exercise and replacement of the Warrants and, in the Warrant Agent’s capacity as the Company’s transfer agent, the delivery of the Warrant Shares.

 

NOW, THEREFORE, in consideration of the premises and the mutual agreements herein set forth, the parties hereto hereby agree as follows:

 

Section 1. Certain Definitions. For purposes of this Agreement, all capitalized terms not herein defined shall have the meanings hereby indicated:

 

(a) “Affiliate” has the meaning ascribed to it in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”).

 

(b) “Business Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or any day on which the Nasdaq Capital Market is authorized or required by law or other governmental action to close.

 

(c) “Close of Business” on any given date means 5:00 p.m., New York City time, on such date; provided, however, that if such date is not a Business Day it means 5:00 p.m., New York City time, on the next succeeding Business Day.

 

 

(d) “Person” means an individual, corporation, association, partnership, limited liability company, joint venture, trust, unincorporated organization, government or political subdivision thereof or governmental agency or other entity.

 

(e) “Warrant Certificate” means certificates in substantially the forms attached hereto as Exhibit 1, representing such number of Warrant Shares as is indicated therein, as applicable, provided that any reference to the delivery of a Warrant Certificate in this Agreement shall include delivery of a Global Warrant (as defined below).

 

All other capitalized terms used but not otherwise defined herein shall have the meaning ascribed to such terms in the Warrant Certificate, as applicable.

 

Section 2. Appointment of Warrant Agent. The Company hereby appoints the Warrant Agent to act as agent for the Company in accordance with the terms and conditions hereof, and the Warrant Agent hereby accepts such appointment.

 

Section 3. Global Warrants.

 

(a) The Warrants shall be registered securities and shall be evidenced by a global warrant (the “Global Warrants”), in the applicable form of Warrant Certificate, which shall be deposited with the Warrant Agent and registered in the name of Cede & Co., a nominee of The Depository Trust Company (the “Depositary”), or as otherwise directed by the Depositary. Ownership of beneficial interests in each of the Warrants shall be shown on, and the transfer of such ownership shall be effected through, records maintained by (i) the Depositary or its nominee for each Global Warrant or (ii) institutions that have accounts with the Depositary (such institution, with respect to a Warrant in its account, a “Participant”).

 

(b) If the Depositary subsequently ceases to make its book-entry settlement system available for any of the Warrants, the Company may instruct the Warrant Agent regarding other arrangements for book-entry settlement. In the event that any of the Warrants are not eligible for, or it is no longer necessary to have any of the Warrants available in, book-entry form, the Warrant Agent shall provide written instructions to the Depositary to deliver to the Warrant Agent for cancellation each such Global Warrant, and the Company shall instruct the Warrant Agent to deliver to each Holder a Warrant Certificate.

 

Section 4. Form of Warrant Certificates. The Warrant Certificate, together with the form of election to purchase Common Stock (“Notice of Exercise”) and the form of assignment to be printed on the reverse thereof, shall be in the forms attached hereto as Exhibit 1.

 

Section 5. Countersignature and Registration. The Global Warrant shall be executed on behalf of the Company by its Chief Executive Officer or Chief Financial Officer, by facsimile signature, and if applicable have affixed thereto the Company’s seal or a facsimile thereof, which shall be attested by the Secretary or an Assistant Secretary of the Company, by facsimile signature. The Global Warrant shall be countersigned by the Warrant Agent by facsimile signature and shall not be valid for any purpose unless so countersigned. In case any officer of the Company who shall have signed any Global Warrant shall cease to be such officer of the Company before countersignature by the Warrant Agent and issuance and delivery by the Company, such Global Warrant, nevertheless, may be countersigned by the Warrant Agent, issued and delivered with the same force and effect as though the person who signed such Global Warrant had not ceased to be such officer of the Company; and any Global Warrant may be signed on behalf of the Company by any person who, at the actual date of the execution of such Global Warrant, shall be a proper officer of the Company to sign such Global Warrant, although at the date of the execution of this Warrant Agreement any such person was not such an officer.

 

 

The Warrant Agent will keep or cause to be kept, at one of its offices, or at the office of one of its agents, books for registration and transfer of the Global Warrants issued hereunder. Such books shall show the names and addresses of the respective Holders of the Global Warrant, the number of warrants evidenced on the face of each of such Global Warrant and the date of each of such Global Warrant. The Warrant Agent will create a special account for the issuance of Global Warrants.

 

Section 6. Transfer, Split Up, Combination and Exchange of Warrant Certificates; Mutilated, Destroyed, Lost or Stolen Warrant Certificates. With respect to the Global Warrant, subject to the provisions of the Warrant Certificate and the last sentence of this first paragraph of Section 6 and subject to applicable law, rules or regulations, or any “stop transfer” instructions that the Company may give to the Warrant Agent, at any time after the closing date of the Offering, and at or prior to the Close of Business on the Termination Date (as such term is defined in the Warrant Certificate), any Global Warrant or Global Warrants may be transferred, split up, combined or exchanged for another Global Warrant or Global Warrants, entitling the Holder to purchase a like number of shares of Common Stock as the Global Warrant or Global Warrants surrendered then entitled such Holder to purchase. Any Holder desiring to transfer, split up, combine or exchange any Global Warrant shall make such request in writing delivered to the Warrant Agent, and shall surrender the Global Warrant to be transferred, split up, combined or exchanged at the principal office of the Warrant Agent. Any requested transfer of Warrantsin book-entry form shall be accompanied by reasonable evidence of authority of the party making such request that may be required by the Warrant Agent. Thereupon the Warrant Agent shall, subject to the last sentence of this first paragraph of Section 6, countersign and deliver to the Person entitled thereto a Global Warrant or Global Warrants, as the case may be, as so requested. The Company may require payment from the Holder of a sum sufficient to cover any tax or governmental charge that may be imposed in connection with any transfer, split up, combination or exchange of Global Warrants. The Company shall compensate the Warrant Agent per the fee schedule mutually agreed upon by the parties hereto and provided separately on the date hereof.

 

Section 7. Exercise of Warrants; Exercise Price; Termination Date.

 

(a) The Warrants shall be exercisable commencing on the Initial Exercise Date. The Warrants shall cease to be exercisable and shall terminate and become void as set forth in the Warrant Certificate. Subject to the foregoing and to Section 7(b) below, the Holder of a Warrant may exercise the Warrant in whole or in part upon surrender of the Warrant Certificate, if required, with the executed Notice of Exercise and payment of the Exercise Price, which may be made, at the option of the Holder, by wire transfer or by certified or official bank check in United States dollars, to the Warrant Agent at the principal office of the Warrant Agent or to the office of one of its agents as may be designated by the Warrant Agent from time to time. In the case of the Holder of a Global Warrant, the Holder shall deliver the executed Notice of Exercise and the payment of the Exercise Price as described herein. Notwithstanding any other provision in this Agreement, a holder whose interest in a Global Warrant is a beneficial interest in a Global Warrant held in book-entry form through the Depositary (or another established clearing corporation performing similar functions), shall effect exercises by delivering to the Depositary (or such other clearing corporation, as applicable) the appropriate instruction form for exercise and complying with the procedures to effect exercise that are required by the Depositary (or such other clearing corporation, as applicable). The Company acknowledges that the bank account maintained by the Warrant Agent in connection with the services provided under this Agreement will be in the Warrant Agent’s name and that the Warrant Agent may receive investment earnings in connection with the investment at Warrant Agent risk and for its benefit of funds held in those accounts from time to time. Neither the Company nor the Holders will receive interest on any deposits or Exercise Price. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. The Company hereby acknowledges and agrees that, with respect to a holder whose interest in a Global Warrant is a beneficial interest in a Global Warrant held in book-entry form through the Depositary (or another established clearing corporation performing similar functions), upon delivery of irrevocable instructions to such holder’s Participant to exercise such Warrants, that solely for purposes of Regulation SHO that such holder shall be deemed to have exercised such Warrants.

 

(b) [Reserved].

 

 

(c) Upon the exercise of the Warrant Certificate pursuant to the terms of Section 2 of the applicable Warrant Certificate, the Warrant Agent shall cause the applicable Warrant Shares underlying such Warrant Certificate or Global Warrant to be delivered to or upon the order of the Holder of such Warrant Certificate or Global Warrant, registered in such name or names as may be designated by such Holder, no later than the Warrant Share Delivery Date (as such term is defined in such Warrant Certificate). If the Company is then a participant in the DWAC system of the Depositary and there is an effective registration statement permitting the issuance of such Warrant Shares to or resale of the Warrant Shares by Holder, then the certificates for such Warrant Shares shall be transmitted by the Warrant Agent to the Holder by crediting the account of the Holder’s broker with the Depositary through its DWAC system. For the avoidance of doubt, if the Company becomes obligated to pay any amounts to any Holders pursuant to Section 2.4.1 or 2.4.4 of the Warrant Certificate for the Warrant, such obligation shall be solely that of the Company and not that of the Warrant Agent. Notwithstanding anything else to the contrary in this Agreement, if any Holder fails to duly deliver payment to the Warrant Agent of an amount equal to the aggregate Exercise Price of the Warrant Shares to be purchased upon exercise of such Holder’s Warrant as set forth in Section 7(a) hereof by the Warrant Share Delivery Date, the Warrant Agent will not obligated to deliver such Warrant Shares (via DWAC or otherwise) until following receipt of such payment, and the applicable Warrant Share Delivery Date shall be deemed extended by one day for each day (or part thereof) until such payment is delivered to the Warrant Agent.

 

(d) The Warrant Agent shall deposit all funds received by it in payment of the Exercise Price for all Warrants in the account of the Company maintained with the Warrant Agent for such purpose (or to such other account as directed by the Company in writing) and shall advise the Company via email at the end of each day on which Notices of Exercise are received or funds for the exercise of any Warrant are received of the amount so deposited to its account.

 

Section 8. Cancellation and Destruction of Warrant Certificates. All Warrant Certificates surrendered for the purpose of exercise, transfer, split up, combination or exchange shall be delivered to the Warrant Agent for cancellation or in canceled form, and no Warrant Certificate shall be issued in lieu thereof except as expressly permitted by any of the provisions of this Agreement. The Company shall deliver to the Warrant Agent for cancellation and retirement, and the Warrant Agent shall so cancel and retire, any other Warrant Certificate purchased or acquired by the Company otherwise than upon the exercise thereof. The Warrant Agent shall deliver all canceled Warrant Certificates to the Company, at the request of the Company, or shall, at the written request of the Company, destroy such canceled Warrant Certificates, and in such case shall deliver a certificate of destruction thereof to the Company, subject to any applicable law, rule or regulation requiring the Warrant Agent to retain such canceled certificates.

 

Section 9. Certain Representations; Reservation and Availability of Shares of Common Stock or Cash.

 

(a) This Agreement has been duly authorized, executed and delivered by the Company and, assuming due authorization, execution and delivery hereof by the Warrant Agent, constitutes a valid and legally binding obligation of the Company enforceable against the Company in accordance with its terms, and each of the Warrants has been duly authorized, executed and issued by the Company and, assuming due authentication thereof by the Warrant Agent pursuant hereto and payment therefor by the Holders as provided in the Registration Statement and in accordance with the terms of each of the Warrants, constitute valid and legally binding obligations of the Company enforceable against the Company in accordance with their terms and entitled to the benefits hereof; in each case except as enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium and other similar laws relating to or affecting creditors’ rights generally or by general equitable principles (regardless of whether such enforceability is considered in a proceeding in equity or at law).

 

(b) As of the date hereof, the authorized capital stock of the Company consists of [  ] Common Shares, of which [  ] Common Shares are issued and outstanding and [  ] Common Shares are reserved for issuance upon exercise of the Warrants. Except as disclosed in the Registration Statement, there are no other outstanding obligations, warrants, options or other rights to subscribe for or purchase from the Company any class of capital stock of the Company.

 

(c) The Company covenants and agrees that it will cause to be reserved and kept available out of its authorized and unissued shares of Common Stock or its authorized and issued shares of Common Stock held in its treasury, free from preemptive rights, the number of shares of Common Stock that will be sufficient to permit the exercise in full of all outstanding Warrants.

 

 

(d) [Reserved].

 

(e) The Company further covenants and agrees that it will pay when due and payable any and all federal and state transfer taxes and charges which may be payable in respect of the original issuance or delivery of the Warrant Certificates or certificates evidencing Common Stock upon exercise of the Warrants. The Company shall not, however, be required to pay any tax or governmental charge which may be payable in respect of any transfer involved in the transfer or delivery of Warrant Certificates or the issuance or delivery of certificates for Common Stock in a name other than that of the Holder of the Warrant Certificate evidencing Warrants surrendered for exercise or to issue or deliver any certificate for shares of Common Stock upon the exercise of any Warrants until any such tax or governmental charge shall have been paid (any such tax or governmental charge being payable by the Holder of such Warrant Certificate at the time of surrender) or until it has been established to the Company’s reasonable satisfaction that no such tax or governmental charge is due.

 

Section 10. Common Stock Record Date. Each Person in whose name any certificate for shares of Common Stock is issued (or to whose broker’s account is credited shares of Common Stock through the DWAC system) upon the exercise of Warrants shall for all purposes be deemed to have become the holder of record for the Common Stock represented thereby on, and such certificate shall be dated, the date on which submission of the Notice of Exercise was made, provided that the Warrant Certificate evidencing such Warrant is duly surrendered (but only if required herein) and payment of the Exercise Price (and any applicable transfer taxes) is received on or prior to the Warrant Share Delivery Date; provided, however, that if the date of submission of the Notice of Exercise is a date upon which the Common Stock transfer books of the Company are closed, such Person shall be deemed to have become the record holder of such shares on, and such certificate shall be dated, the next succeeding day on which the Common Stock transfer books of the Company are open.

 

Section 11. Adjustment of Exercise Price, Number of Shares of Common Stock or Number of the Company Warrants. The Exercise Price, the number of shares covered by each Warrant and the number of Warrants outstanding are subject to adjustment from time to time as provided in Section 3 of each Warrant Certificate. In the event that at any time, as a result of an adjustment made pursuant to Section 3 of any Warrant Certificate, the Holder of any Warrant thereafter exercised shall become entitled to receive any shares of capital stock of the Company other than shares of Common Stock, thereafter the number of such other shares so receivable upon exercise of any Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to such number of adjusted shares pursuant to Section 3 of the Warrant Certificate and the provisions of Sections 7, 11 and 12 of this Agreement with respect to the shares of Common Stock shall apply on like terms to any such other shares. All Warrants originally issued by the Company subsequent to any adjustment made to the Exercise Price pursuant to such Warrant Certificate shall evidence the right to purchase, at the adjusted Exercise Price, the number of shares of Common Stock purchasable from time to time hereunder upon exercise of the Warrants, all subject to further adjustment as provided herein.

 

Section 12. Certification of Adjusted Exercise Price or Number of Shares of Common Stock. Whenever the Exercise Price or the number of shares of Common Stock issuable upon the exercise of each Warrant is adjusted as provided in Section 11 or 13, the Company shall (a) promptly prepare a certificate setting forth the Exercise Price of each Warrant as so adjusted, and a brief statement of the facts accounting for such adjustment, (b) promptly file with the Warrant Agent and with each transfer agent for the Common Stock a copy of such certificate and (c) instruct the Warrant Agent to send a brief summary thereof to each Holder of a Warrant Certificate.

 

 

Section 13. Fractional Shares of Common Stock.

 

(a) The Company shall not issue fractions of Warrants or distribute Warrant Certificates which evidence fractional Warrants. Whenever any fractional Warrant would otherwise be required to be issued or distributed, the actual issuance or distribution shall reflect a rounding of such fraction to the nearest whole Warrant (rounded down).

 

(b) The Company shall not issue fractions of shares of Common Stock upon exercise of Warrants or distribute stock certificates which evidence fractional shares of Common Stock. Whenever any fraction of a share of Common Stock would otherwise be required to be issued or distributed, the actual issuance or distribution in respect thereof shall reflect a rounding of such fraction to the nearest whole share (rounded down).

 

Section 15. Conditions of the Warrant Agent’s Obligations. The Warrant Agent accepts its obligations herein set forth upon the terms and conditions hereof, including the following to all of which the Company agrees and to all of which the rights hereunder of the Holders from time to time of the Warrant Certificates shall be subject:

 

(a)

Compensation and Indemnification. The Company agrees promptly to pay the Warrant Agent the compensation detailed on Exhibit 4 hereto for all services rendered by the Warrant Agent and to reimburse the Warrant Agent for reasonable out-of-pocket expenses (including reasonable counsel fees) incurred without gross negligence or willful misconduct finally adjudicated to have been directly caused by the Warrant Agent in connection with the services rendered hereunder by the Warrant Agent. The Company also agrees to indemnify and defend the Warrant Agent for, and to hold it harmless against, any loss, liability or expense incurred without gross negligence, or willful misconduct on the part of the Warrant Agent, finally adjudicated to have been directly caused by Warrant Agent hereunder, including the reasonable costs, attorney fees of counsel for the Warrant Agent selected by the Warrant Agent and expenses of defending against any claim of such liability. The Warrant Agent shall be under no obligation to institute or defend any action, suit, or legal proceeding in connection herewith or to take any other action likely to involve the Warrant Agent in expense, unless first indemnified to the Warrant Agent’s satisfaction. The indemnities provided by this paragraph shall survive the resignation or discharge of the Warrant Agent or the termination of this Agreement. Anything in this Agreement to the contrary notwithstanding, in no event shall the Warrant Agent be liable under or in connection with the Agreement for indirect, special, incidental, punitive or consequential losses or damages of any kind whatsoever, including but not limited to lost profits, whether or not foreseeable, even if the Warrant Agent has been advised of the possibility thereof and regardless of the form of action in which such damages are sought, and the Warrant Agent’s aggregate liability to the Company, or any of the Company’s representatives or agents, under this Section 14(a) or under any other term or provision of this Agreement, whether in contract, tort, or otherwise, is expressly limited to, and shall not exceed in any circumstances, one (1) year’s fees received by the Warrant Agent as fees and charges under this Agreement, but not including reimbursable expenses previously reimbursed to the Warrant Agent by the Company hereunder.

 

 

(b)

Agent for the Company. In acting under this Warrant Agreement and in connection with the Warrant Certificates, the Warrant Agent is acting solely as agent of the Company and does not assume any obligations or relationship of agency or trust for or with any of the Holders of Warrant Certificates or beneficial owners of Warrants.

 

(c)

Counsel. The Warrant Agent may consult with counsel satisfactory to it, which may include counsel for the Company, and the written advice of such counsel shall be full and complete authorization and protection in respect of any action taken, suffered or omitted by it hereunder in good faith and in accordance with the advice of such counsel.

 

(d)

Documents. The Warrant Agent shall be protected and shall incur no liability for or in respect of any action taken or omitted by it in reliance upon any Warrant Certificate, notice, direction, consent, certificate, affidavit, statement or other paper or document reasonably believed by it to be genuine and to have been presented or signed by the proper parties.

 

(e)

Certain Transactions. The Warrant Agent, and its officers, directors and employees, may become the owner of, or acquire any interest in, Warrants, with the same rights that it or they would have if it were not the Warrant Agent hereunder, and, to the extent permitted by applicable law, it or they may engage or be interested in any financial or other transaction with the Company and may act on, or as depositary, trustee or agent for, any committee or body of Holders of Warrant Securities or other obligations of the Company as freely as if it were not the Warrant Agent hereunder. Nothing in this Warrant Agreement shall be deemed to prevent the Warrant Agent from acting as trustee under any indenture to which the Company is a party.

 

(f)

No Liability for Interest. Unless otherwise agreed with the Company, the Warrant Agent shall have no liability for interest on any monies at any time received by it pursuant to any of the provisions of this Agreement or of the Warrant Certificates.

 

(g)

No Liability for Invalidity. The Warrant Agent shall have no liability with respect to any invalidity of this Agreement or the Warrant Certificates (except as to the Warrant Agent’s countersignature thereon).

 

(h)

No Responsibility for Representations. The Warrant Agent shall not be responsible for any of the recitals or representations herein or in the Warrant Certificate (except as to the Warrant Agent’s countersignature thereon), all of which are made solely by the Company.

 

(i)

No Implied Obligations. The Warrant Agent shall be obligated to perform only such duties as are herein and in the Warrant Certificates specifically set forth and no implied duties or obligations shall be read into this Agreement or any of the Warrant Certificates against the Warrant Agent. The Warrant Agent shall not be under any obligation to take any action hereunder which may tend to involve it in any expense or liability, the payment of which within a reasonable time is not, in its reasonable opinion, assured to it. The Warrant Agent shall not be accountable or under any duty or responsibility for the use by the Company of any of the Warrant Certificates authenticated by the Warrant Agent and delivered by it to the Company pursuant to this Agreement or for the application by the Company of the proceeds of any Warrant Certificate. The Warrant Agent shall have no duty or responsibility in case of any default by the Company in the performance of its covenants or agreements contained herein or in any of the Warrant Certificates or in the case of the receipt of any written demand from a Holder of a Warrant Certificate with respect to such default, including, without limiting the generality of the foregoing, any duty or responsibility to initiate or attempt to initiate any proceedings at law.

 

 

Section 14. Purchase or Consolidation or Change of Name of Warrant Agent. Any corporation or other legal entity into which the Warrant Agent or any successor Warrant Agent may be merged or with which it may be consolidated, or any corporation or other entity resulting from any merger or consolidation to which the Warrant Agent or any successor Warrant Agent shall be party, or any corporation or other entity succeeding to the corporate trust business of the Warrant Agent or any successor Warrant Agent, shall be the successor to the Warrant Agent under this Agreement without the execution or filing of any paper or any further act on the part of any of the parties hereto, provided that such corporation or other entity would be eligible for appointment as a successor Warrant Agent under the provisions of Section 18. In case at the time such successor Warrant Agent shall succeed to the agency created by this Agreement any of the Warrant Certificates shall have been countersigned but not delivered, any such successor Warrant Agent may adopt the countersignature of the predecessor Warrant Agent and deliver such Warrant Certificates so countersigned; and in case at that time any of the Warrant Certificates shall not have been countersigned, any successor Warrant Agent may countersign such Warrant Certificates either in the name of the predecessor Warrant Agent or in the name of the successor Warrant Agent; and in all such cases such Warrant Certificates shall have the full force provided in the Warrant Certificates and in this Agreement.

 

In case at any time the name of the Warrant Agent shall be changed and at such time any of the Warrant Certificates shall have been countersigned but not delivered, the Warrant Agent may adopt the countersignature under its prior name and deliver such Warrant Certificates so countersigned; and in case at that time any of the Warrant Certificates shall not have been countersigned, the Warrant Agent may countersign such Warrant Certificates either in its prior name or in its changed name; and in all such cases such Warrant Certificates shall have the full force provided in the Warrant Certificates and in this Agreement.

 

Section 15. Duties of Warrant Agent. The Warrant Agent undertakes the duties and obligations imposed by this Agreement upon the following terms and conditions, by all of which the Company, by its acceptance hereof, shall be bound:

 

(a) The Warrant Agent may consult with legal counsel reasonably acceptable to the Company (who may be legal counsel for the Company), and the opinion of such counsel shall be full and complete authorization and protection to the Warrant Agent as to any action taken or omitted by it in good faith and in accordance with such opinion.

 

(b) Whenever in the performance of its duties under this Agreement the Warrant Agent shall deem it necessary or desirable that any fact or matter be proved or established by the Company prior to taking or suffering any action hereunder, such fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a certificate signed by the Chief Executive Officer or Chief Financial Officer of the Company; and such certificate shall be full authentication to the Warrant Agent for any action taken or suffered in good faith by it under the provisions of this Agreement in reliance upon such certificate.

 

(c) Subject to the limitation set forth in Section 15, the Warrant Agent shall be liable hereunder only for its own gross negligence or willful misconduct, or for a breach by it of this Agreement.

 

(d) The Warrant Agent shall not be liable for or by reason of any of the statements of fact or recitals contained in this Agreement or in the Warrant Certificate (except its countersignature thereof) by the Company or be required to verify the same, but all such statements and recitals are and shall be deemed to have been made by the Company only.

 

(e) The Warrant Agent shall not be under any responsibility in respect of the validity of this Agreement or the execution and delivery hereof (except the due execution hereof by the Warrant Agent) or in respect of the validity or execution of any Warrant Certificate (except its countersignature thereof); nor shall it be responsible for any breach by the Company of any covenant or condition contained in this Agreement or in any Warrant Certificate; nor shall it be responsible for the adjustment of the Exercise Price or the making of any change in the number of shares of Common Stock required under the provisions of Section 11 or 14 or responsible for the manner, method or amount of any such change or the ascertaining of the existence of facts that would require any such adjustment or change (except with respect to the exercise of Warrants evidenced by the Warrant Certificates after actual notice of any adjustment of the Exercise Price); nor shall it by any act hereunder be deemed to make any representation or warranty as to the authorization or reservation of any shares of Common Stock to be issued pursuant to this Agreement or any Warrant Certificate or as to whether any shares of Common Stock will, when issued, be duly authorized, validly issued, fully paid and nonassessable.

 

 

(f) Each party hereto agrees that it will perform, execute, acknowledge and deliver or cause to be performed, executed, acknowledged and delivered all such further and other acts, instruments and assurances as may reasonably be required by the other party hereto for the carrying out or performing by any party of the provisions of this Agreement.

 

(g) The Warrant Agent is hereby authorized to accept instructions with respect to the performance of its duties hereunder from the Chief Executive Officer or Chief Financial Officer of the Company, and to apply to such officers for advice or instructions in connection with its duties, and it shall not be liable and shall be indemnified and held harmless for any action taken or suffered to be taken by it in good faith in accordance with instructions of any such officer, provided Warrant Agent carries out such instructions without gross negligence or willful misconduct.

 

(h) Subject to all applicable laws and regulations, the Warrant Agent and any shareholder, director, officer or employee of the Warrant Agent may buy, sell or deal in any of the Warrants or other securities of the Company or become pecuniarily interested in any transaction in which the Company may be interested, or contract with or lend money to the Company or otherwise act as fully and freely as though it were not Warrant Agent under this Agreement. Nothing herein shall preclude the Warrant Agent from acting in any other capacity for the Company or for any other legal entity.

 

(i) The Warrant Agent may execute and exercise any of the rights or powers hereby vested in it or perform any duty hereunder either itself or by or through its attorney or agents, and the Warrant Agent shall not be answerable or accountable for any act, default, neglect or misconduct of any such attorney or agents or for any loss to the Company resulting from any such act, default, neglect or misconduct, provided reasonable care was exercised in the selection and continued employment thereof and so long as the Warrant Agent has not acted with gross negligence or willful misconduct and a material breach of the Agreement has not occurred.

 

Section 16. Change of Warrant Agent. The Warrant Agent may resign and be discharged from its duties under this Agreement upon 10 days’ prior notice in writing sent to the Company. The Company may remove the Warrant Agent or any successor Warrant Agent upon 10 days’ prior notice in writing, sent to the Warrant Agent or successor Warrant Agent, as the case may be, and to each transfer agent of the Common Stock, and upon such removal, such notice shall be provided to the Holders of the Warrant Certificates. If the Warrant Agent shall resign or be removed or shall otherwise become incapable of acting, the Company shall appoint a successor to the Warrant Agent. If the Company shall fail to make such appointment within a period of 10 days after such removal or after it has been notified in writing of such resignation or incapacity by the resigning or incapacitated Warrant Agent or by the Holder of a Warrant Certificate (who shall, with such notice, submit such Holder’s Warrant Certificate for inspection by the Company), then the Holder of any Warrant Certificate may apply to any court of competent jurisdiction for the appointment of a new Warrant Agent, provided that, for purposes of this Agreement, the Company shall be deemed to be the Warrant Agent until a new warrant agent is appointed. Any successor Warrant Agent, whether appointed by the Company or by such a court, shall be a corporation or other entity organized and doing business under the laws of the United States or of a state thereof, in good standing, which is authorized under such laws to exercise corporate trust powers and is subject to supervision or examination by federal or state authority and which has at the time of its appointment as Warrant Agent a combined capital and surplus of at least $50,000,000. After appointment, the successor Warrant Agent shall be vested with the same powers, rights, duties and responsibilities as if it had been originally named as Warrant Agent without further act or deed; but the predecessor Warrant Agent shall deliver and transfer to the successor Warrant Agent any property at the time held by it hereunder, and execute and deliver any further assurance, conveyance, act or deed necessary for the purpose. Not later than the effective date of any such appointment, the Company shall file notice thereof in writing with the predecessor Warrant Agent and each transfer agent of the Common Stock, and mail a notice thereof in writing to the Holders of the Warrant Certificates. However, failure to give any notice provided for in this Section 18, or any defect therein, shall not affect the legality or validity of the resignation or removal of the Warrant Agent or the appointment of the successor Warrant Agent, as the case may be.

 

Section 17. Issuance of New Warrant Certificates. Notwithstanding any of the provisions of this Agreement or of each of the Warrants to the contrary, the Company may, at its option, issue new Warrant Certificates evidencing Warrants in such form as may be approved by its Board of Directors to reflect any adjustment or change in the Exercise Price per share and the number or kind or class of shares of stock or other securities or property purchasable under the several Warrant Certificates made in accordance with the provisions of this Agreement.

 

 

Section 18. Notices. Notices or demands authorized by this Agreement to be given or made (i) by the Warrant Agent or by the Holder of any Warrant Certificate to or on the Company, (ii) subject to the provisions of Section 16, by the Company or by the Holder of any Warrant Certificate to or on the Warrant Agent or (iii) by the Company or the Warrant Agent to the Holder of any Warrant Certificate shall be deemed given (a) on the date delivered, if delivered personally, (b) on the first Business Day following the deposit thereof with Federal Express or another recognized overnight courier, if sent by Federal Express or another recognized overnight courier, (c) on the fourth Business Day following the mailing thereof with postage prepaid, if mailed by registered or certified mail (return receipt requested), and (d) the date of transmission, if such notice or communication is delivered via facsimile or email attachment at or prior to 5:30 p.m. (New York City time) on a Business Day and (e) the next Business Day after the date of transmission, if such notice or communication is delivered via facsimile or email attachment on a day that is not a Business Day or later than 5:30 p.m. (New York City time) on any Business Day, in each case to the parties at the following addresses (or at such other address for a party as shall be specified by like notice):

 

(a)

If to the Company, to:   SRIVARU Holding Limited 2nd Floor, Regatta Office Park, West Bay Road P.O. Box 10655 Grand Cayman, KY1-1006, Cayman Islands Attention: Mohanraj Ramasamy Email: mohanramasamy@svmh.ai

 

(b)

If to the Warrant Agent, to:   VStock Transfer, LLC 18 Lafayette Place Woodmere, NY11598 Attention: David Mansbach Email: davidm@vstocktransfer.com; action@vstocktransfer.com

 

For any notice delivered by email to be deemed given or made, such notice must be followed by notice sent by overnight courier service to be delivered on the next business day following such email, unless the recipient of such email has acknowledged via return email receipt of such email.

 

(c) If to the Holder of any Warrant Certificate: to the address of such Holder as shown on the registry books of the Company. Any notice required to be delivered by the Company to the Holder of any Warrant may be given by the Warrant Agent on behalf of the Company. Notwithstanding any other provision of this Agreement, where this Agreement provides for notice of any event to a Holder of any Warrant, such notice shall be sufficiently given if given to the Depositary (or its designee) pursuant to the procedures of the Depositary or its designee.

 

Section 21. Supplements and Amendments.

 

(a) The Company and the Warrant Agent may from time to time supplement or amend this Agreement without the approval of any Holders of Global Warrants in order to add to the covenants and agreements of the Company for the benefit of the Holders of the Global Warrants or to surrender any rights or power reserved to or conferred upon the Company in this Agreement, provided that such addition or surrender shall not adversely affect the interests of the Holders of the Global Warrants or Warrant Certificates in any material respect.

 

(b) In addition to the foregoing, with the consent of Holders of Warrants entitled, upon exercise thereof, to receive not less than a majority of the shares of Common Stock issuable thereunder, the Company and the Warrant Agent may modify this Agreement for the purpose of adding any provisions to or changing in any manner or eliminating any of the provisions of this Warrant Agreement or modifying in any manner the rights of the Holders of the Global Warrants; provided, however, that no modification of the terms (including but not limited to the adjustments described in Section 11) upon which the Warrants are exercisable or the rights of holders of Warrants to receive liquidated damages or other payments in cash from the Company or reducing the percentage required for consent to modification of this Agreement may be made without the consent of the Holder of each outstanding Warrant Certificate affected thereby; provided further, however, that no amendment hereunder shall affect any terms of any Warrant Certificate issued in a Warrant Exchange. As a condition precedent to the Warrant Agent’s execution of any amendment, the Company shall deliver to the Warrant Agent a certificate from a duly authorized officer of the Company that states that the proposed amendment complies with the terms of this Section 21.

 

Section 22. Successors. All covenants and provisions of this Agreement by or for the benefit of the Company or the Warrant Agent shall bind and inure to the benefit of their respective successors and assigns hereunder.

 

Section 23. Benefits of this Agreement. Nothing in this Agreement shall be construed to give any Person other than the Company, the Holders of Warrant Certificates and the Warrant Agent any legal or equitable right, remedy or claim under this Agreement. This Agreement shall be for the sole and exclusive benefit of the Company, the Warrant Agent and the Holders of the Warrant Certificates.

 

Section 24. Governing Law. This Agreement and each Warrant Certificate and Global Warrant issued hereunder shall be governed by, and construed in accordance with, the laws of the State of New York, without giving effect to the conflicts of law principles thereof.

 

Section 25. Counterparts. This Agreement may be executed in any number of counterparts, including electronic counterparts, and each of such counterparts shall for all purposes be deemed to be an original, and all such counterparts shall together constitute but one and the same instrument.

 

Section 26. Captions. The captions of the sections of this Agreement have been inserted for convenience only and shall not control or affect the meaning or construction of any of the provisions hereof.

 

Section 27. Information. The Company agrees to promptly provide to the Holders of the Warrants any material information it provides to the holders of the Common Stock, except to the extent any such information is publicly available on the EDGAR system (or any successor thereof) of the U.S. Securities and Exchange Commission.

 

[Signature page follows]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

 

	SRIVARU HOLDING LIMITED
	By:
	Name:
	Title:

 

	[WARRANT AGENT]
	By:
	Name:
	Title:

 

 

Exhibit 1

 

Form of Warrant Certificate

 

 

Exhibit 2

 

Form of Warrant Certificate Request Notice

 

WARRANT CERTIFICATE REQUEST NOTICE

 

To: [  ], as Warrant Agent for SRIVARU Holding Limited (the “Company”)

 

The undersigned Holder of Warrants to Purchase Common Stock (“Warrants”) in the form of Global Warrants issued by the Company hereby elects to receive a Warrant Certificate evidencing the Warrants held by the Holder as specified below:

 

1.	Name of Holder of Warrants in form of Global Warrants: _____________________________

 

2.	Name of Holder in Warrant Certificate (if different from name of Holder of Warrants in form of Global Warrants): ________________________________

 

3.	Number of Warrants in name of Holder in form of Global Warrants: ___________________

 

4.	Number of Warrants for which Warrant Certificate shall be issued: __________________

 

5.	Number of Warrants in name of Holder in form of Global Warrants after issuance of Warrant Certificate, if any: ___________

 

6.	Warrant Certificate shall be delivered to the following address:

 

______________________________

 

______________________________

 

______________________________

 

______________________________

 

The undersigned hereby acknowledges and agrees that, in connection with this Warrant Exchange and the issuance of the Warrant Certificate, the Holder is deemed to have surrendered the number of Warrants in form of Global Warrants in the name of the Holder equal to the number of Warrants evidenced by the Warrant Certificate.

 

[SIGNATURE OF HOLDER]

 

Name of Investing Entity: ____________________________________________________

 

Signature of Authorized Signatory of Investing Entity: ______________________________

 

Name of Authorized Signatory: ________________________________________________

 

Title of Authorized Signatory: _________________________________________________

 

Date: _______________________________________________________________

 

Name of Investing Individual: ____________________________________________________

 

Signature of Investing Individual: ______________________________

 

Date: _______________________________________________________________

 

 

Exhibit 3

 

Form of Global Warrant Request Notice

 

GLOBAL WARRANT REQUEST NOTICE

 

To: [  ], as Warrant Agent for SRIVARU Holding Limited (the “Company”)

 

The undersigned Holder of Common Stock Purchase Warrants (“Warrants”) in the form of Warrants Certificates issued by the Company hereby elects to receive a Global Warrant evidencing the Warrants held by the Holder as specified below:

 

1.	Name of Holder of Warrants in form of Warrant Certificates: _____________________________

 

2.	Name of Holder in Global Warrant (if different from name of Holder of Warrants in form of Warrant Certificates): ________________________________

 

3.	Number of Warrants in name of Holder in form of Warrant Certificates: ___________________

 

4.	Number of Warrants for which Global Warrant shall be issued: __________________

 

5.	Number of Warrants in name of Holder in form of Warrant Certificates after issuance of Global Warrant, if any: ___________

 

6.	Global Warrant shall be delivered to the following address:

 

______________________________

 

______________________________

 

______________________________

 

______________________________

 

The undersigned hereby acknowledges and agrees that, in connection with this Global Warrant Exchange and the issuance of the Global Warrant, the Holder is deemed to have surrendered the number of Warrants in form of Warrant Certificates in the name of the Holder equal to the number of Warrants evidenced by the Global Warrant.

 

[SIGNATURE OF HOLDER]

 

Name of Investing Entity: ____________________________________________________

 

Signature of Authorized Signatory of Investing Entity: ______________________________

 

Name of Authorized Signatory: ________________________________________________

 

Title of Authorized Signatory: _________________________________________________

 

Date: _______________________________________________________________

 

Name of Investing Individual: ____________________________________________________

 

Signature of Investing Individual: ______________________________

 

Date: _______________________________________________________________

 

 

Exhibit 4

 

Warrant Agent Fee Schedule

 

 

 

Exhibit 4.6

 

PRE-FUNDED COMMON SHARE PURCHASE WARRANT

 

SRIVARu HOLDING Limited

 

Warrant Shares: _______

Initial Exercise Date: _______, 2024

 

THIS PRE-FUNDED COMMON SHARE PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and until this Warrant is exercised in full (the “Termination Date”) but not thereafter, to subscribe for and purchase from SRIVARU Holding Limited, a Cayman Islands exempted company (the “Company”), up to ______ (as subject to adjustment hereunder, the “Warrant Shares”) Common Shares. The purchase price of one Common Share under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

 

Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Underwriting Agreement (the “Underwriting Agreement”), dated October __, 2024, among the Company and the underwriter signatory thereto.

 

Section 2. Exercise.

 

a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation as soon as reasonably practicable of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

 

 

b) Exercise Price. The aggregate exercise price of this Warrant, except for a nominal exercise price of US$0.001 per Warrant Share, was pre-funded to the Company on or prior to the Initial Exercise Date and, consequently, no additional consideration (other than the nominal exercise price of US$0.001 per Warrant Share) shall be required to be paid by the Holder to any Person to effect any exercise of this Warrant. The Holder shall not be entitled to the return or refund of all, or any portion, of such pre-paid aggregate exercise price under any circumstance or for any reason whatsoever, including in the event this Warrant shall not have been exercised prior to the Termination Date. The remaining unpaid exercise price Common Share under this Warrant shall be US$0.001, subject to adjustment hereunder (the “Exercise Price”).

 

c) Cashless Exercise. This Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

	(A) =	as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Shares on the principal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;
	(B) =	the Exercise Price of this Warrant, as adjusted hereunder; and
	(X) =	the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

 

 

If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the holding period of the Warrant Shares being issued may be tacked on to the holding period of this Warrant. The Company agrees not to take any position contrary to this Section 2(c).

 

“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Shares are then listed or quoted on a Trading Market, the bid price of the Common Shares for the time in question (or the nearest preceding date) on the Trading Market on which the Common Shares are then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Shares are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per Common Share so reported, or (d) in all other cases, the fair market value of a Common Share as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Shares are then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Shares for such date (or the nearest preceding date) on the Trading Market on which the Common Shares are then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Shares are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per Common Share so reported, or (d) in all other cases, the fair market value of a Common Share as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

Notwithstanding anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2(c).

 

 

d) Mechanics of Exercise.

 

i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144 (assuming cashless exercise of the Warrants), and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each US$1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Shares on the date of the applicable Notice of Exercise), US$10 per Trading Day (increasing to US$20 per Trading Day on the third Trading Day after the Warrant Share Delivery Date) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Shares as in effect on the date of delivery of the Notice of Exercise.

 

 

ii. Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

 

iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.

 

iv. Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, Common Shares to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the Common Shares so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of Common Shares that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Shares having a total purchase price of US$11,000 to cover a Buy-In with respect to an attempted exercise of Common Shares with an aggregate sale price giving rise to such purchase obligation of US$10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder US$1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver Common Shares upon exercise of the Warrant as required pursuant to the terms hereof.

 

 

v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

 

vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.

 

vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

 

 

e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of Common Shares beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of Common Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of Common Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Share Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding Common Shares, a Holder may rely on the number of outstanding Common Shares as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of Common Shares outstanding. Upon the written or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of Common Shares then outstanding. In any case, the number of outstanding Common Shares shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding Common Shares was reported. The “Beneficial Ownership Limitation” shall be 4.99% of the number of Common Shares outstanding immediately after giving effect to the issuance of Common Shares issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of Common Shares outstanding immediately after giving effect to the issuance of Common Shares upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61^st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

 

 

Section 3. Certain Adjustments.

 

a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on its Common Shares or any other equity or equity equivalent securities payable in Common Shares (which, for avoidance of doubt, shall not include any Common Shares issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding Common Shares into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding Common Shares into a smaller number of shares, or (iv) issues by reclassification of the Common Shares any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of Common Shares (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of Common Shares outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

b) [Reserved].

 

c) Subsequent Rights Offerings. If the Company, at any time while the Warrant is outstanding, shall issue rights, options or warrants to all holders of Common Shares (and not to the Holder) entitling them to subscribe for or purchase Common Shares at a price per share less than the VWAP on the record date mentioned below, then the Exercise Price shall be multiplied by a fraction, of which the denominator shall be the number of Common Shares outstanding on the date of issuance of such rights, options or warrants plus the number of additional Common Shares offered for subscription or purchase, and of which the numerator shall be the number of Common Shares outstanding on the date of issuance of such rights, options or warrants plus the number of shares which the aggregate offering price of the total number of shares so offered (assuming receipt by the Company in full of all consideration payable upon exercise of such rights, options or warrants) would purchase at such VWAP. Such adjustment shall be made whenever such rights, options or warrants are issued, and shall become effective immediately after the record date for the determination of stockholders entitled to receive such rights, options or warrants.

 

 

d) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of Common Shares, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of Common Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of Common Shares are to be determined for the participation in such Distribution (provided, however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any Common Shares as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

e) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company (or any Subsidiary), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Shares are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Shares or 50% or more of the voting power of the common equity of the Company, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Shares or any compulsory share exchange pursuant to which the Common Shares are effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires 50% or more of the outstanding Common Shares or 50% or more of the voting power of the common equity of the Company (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of Common Shares of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of Common Shares for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one Common Share in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Shares are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the Common Shares acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the Common Shares pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall be added to the term “Company” under this Warrant (so that from and after the occurrence or consummation of such Fundamental Transaction, each and every provision of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to each of the Company and the Successor Entity or Successor Entities, jointly and severally), and the Successor Entity or Successor Entities, jointly and severally with the Company, may exercise every right and power of the Company prior thereto and the Successor Entity or Successor Entities shall assume all of the obligations of the Company prior thereto under this Warrant and the other Transaction Documents with the same effect as if the Company and such Successor Entity or Successor Entities, jointly and severally, had been named as the Company herein. For the avoidance of doubt, the Holder shall be entitled to the benefits of the provisions of this Section 3(e) regardless of (i) whether the Company has sufficient authorized Common Shares for the issuance of Warrant Shares and/or (ii) whether a Fundamental Transaction occurs prior to the Initial Exercise Date.

 

 

f) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of Common Shares deemed to be issued and outstanding as of a given date shall be the sum of the number of Common Shares (excluding treasury shares, if any) issued and outstanding.

 

g) Notice to Holder.

 

i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

 

ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Shares, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Shares, (C) the Company shall authorize the granting to all holders of Common Shares rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Shares, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of all or substantially all of its assets, or any compulsory share exchange whereby the Common Shares are converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by email to the Holder at its last email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of Common Shares of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of Common Shares of record shall be entitled to exchange their Common Shares for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Report on Form 6-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

 

 

h) Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market on which the Common Shares are then listed and with the prior written consent of the Holder, the Company may at any time during the term of this Warrant reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.

 

Section 4. Transfer of Warrant.

 

a) Transferability. Subject to compliance with any applicable securities laws, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

 

b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the original Issue Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

 

c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

 

 

Section 5. Miscellaneous.

 

a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required to net cash settle an exercise of this Warrant.

 

b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

 

c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

 

d) Authorized Shares.

 

The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Shares a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Shares may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

 

 

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

 

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

 

e) Jurisdiction. This Warrant shall be governed by and construed in accordance with the laws of the State of New York. The Company irrevocably (a) submits to the jurisdiction the federal courts of the United States of America or the courts of the State of New York, in each case located in the City of New York and County of New York, for the purpose of any suit, action, or other proceeding arising out of this Warrant, or any of the agreements or transactions contemplated by this or the Underwriting Agreement (each, a “Proceeding”), (b) agrees that all claims in respect of any Proceeding may be heard and determined in any such court, (c) waives, to the fullest extent permitted by law, any immunity from jurisdiction of any such court or from any legal process therein, (d) agrees not to commence any Proceeding other than in such courts, and (e) waives, to the fullest extent permitted by law, any claim that such Proceeding is brought in an inconvenient forum. THE COMPANY (ON BEHALF OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON BEHALF OF ITS RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN CONNECTION WITH THIS WARRANT AND THE TRANSACTIONS CONTEMPLATED BY THIS WARRANT AND THE UNDERWRITING AGREEMENT.

 

 

f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

 

g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

h) Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice of Exercise, shall be in writing and delivered personally, by facsimile or e-mail, or sent by a nationally recognized overnight courier service, addressed to the Company, at 730 Boulevard du Cure-Boivin, Boisbriand, Quebec J7G 2A7, Canada, Attention: Chief Financial Officer, facsimile number: [       ], email address: [     ], or such other facsimile number, email address or address as the Company may specify for such purposes by notice to the Holders. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile or e-mail, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number, e-mail address or address of such Holder appearing on the books of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or via e-mail at the e-mail address set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the date of transmission, if such notice or communication is delivered via facsimile at the facsimile number or via e-mail at the e-mail address set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given.

 

i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Shares or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

 

 

j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

 

k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

 

l) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

 

m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

 

n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

 

********************

 

(Signature Page Follows)

 

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

	SRIVARU HOLDING LIMITED
	By:
	Name:
	Title:

 

 

NOTICE OF EXERCISE

 

To:	SRIVARU Holding Limited

 

(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

 

(2) Payment shall take the form of (check applicable box):

 

[ ] in lawful money of the United States; or

 

[ ] if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).

 

(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

 

_______________________________

 

 

The Warrant Shares shall be delivered to the following DWAC Account Number:

 

_______________________________

 

_______________________________

 

_______________________________

 

[SIGNATURE OF HOLDER]

 

Name of Investing Entity: ________________________________________________________________________

Signature of Authorized Signatory of Investing Entity: _________________________________________________

Name of Authorized Signatory: ___________________________________________________________________

Title of Authorized Signatory: ____________________________________________________________________

Date: ________________________________________________________________________________________

 

 

EXHIBIT B

 

ASSIGNMENT FORM

 

(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)

 

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

Name:
		(Please Print)
Address:
		(Please Print)
Phone Number:
Email Address:
Dated: _______________ __, ______
Holder’s Signature:_________________________
Holder’s Address:__________________________

 

 

 

Exhibit 4.7

 

ORDINARY SHARE PURCHASE WARRANT

 

SRIVARU HOLDING LIMITED

 

Warrant Shares: _______

Initial Exercise Date: _______, 202_

 

THIS ORDINARY SHARE PURCHASE WARRANT (the “Warrant”) certifies that, for value received, _____________ or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date of Stockholder Approval (the “Initial Exercise Date”) and on or prior to 5:00 p.m. (New York City time) on _____¹ (the “Termination Date”) but not thereafter, to subscribe for and purchase from SRIVARU Holding Limited, a Cayman Islands exempted company (the “Company”), up to ______ Common Shares (as subject to adjustment hereunder, the “Warrant Shares”) of the Company. The purchase price of one Common Share under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b). This Warrant shall initially be issued and maintained in the form of a security held in book-entry form and the Depository Trust Company or its nominee (“DTC”) shall initially be the sole registered holder of this Warrant, subject to a Holder’s right to elect to receive a Warrant in certificated form pursuant to the terms of the Warrant Agency Agreement, in which case this sentence shall not apply.

 

Section 1. Definitions. In addition to the terms defined elsewhere in this Warrant, the following terms have the meanings indicated in this Section 1:

 

“Affiliate” means any Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with a Person, as such terms are used in and construed under Rule 405 under the Securities Act.

 

“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Shares are then listed or quoted on a Trading Market, the bid price of the Common Shares for the time in question (or the nearest preceding date) on the Trading Market on which the Common Shares are then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Shares are not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Common Shares are then reported in the Pink Open Market operated by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per common share so reported, or (d) in all other cases, the fair market value of a common share as determined by an independent appraiser selected in good faith by the Holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; provided, however, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to “stay at home”, “shelter-in-place”, “non-essential employee” or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day.

 

¹ Insert the date that is the five year anniversary of the Initial Exercise Date; provided, however, that, if such date is not a Trading Day, insert the immediately following Trading Day.

 

 

“Commission” means the United States Securities and Exchange Commission.

 

“Common Shares” means the ordinary shares of the Company, par value $0.01 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

 

“Common Share Equivalents” means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Shares, including, without limitation, any debt, preferred share, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Shares.

 

“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

“Floor Price” means 20% of the most recent Nasdaq Official Closing Price of the Common Stock at the time the Underwriting Agreement is entered into.

 

“Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

“Registration Statement” means the Company’s registration statement on Form F-1 (File No. 333-282429).

 

“Securities Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Stockholder Approval” means such approval as may be required by the applicable rules and regulations of The Nasdaq Stock Market LLC (or any successor entity) from the stockholders of the Company, or board of directors in lieu thereof, with respect to issuance of all of the Warrants and the Warrant Shares upon the exercise hereof, including without limitation, (i) to consent to any adjustment to the exercise price or number of shares of Common Stock underlying the Warrants in the event of a Share Combination Event pursuant to Section ‎3(g), and (ii) to consent to the voluntary adjustment, from time to time, of the Exercise Price of any and all currently outstanding Warrants pursuant to Section ‎3(i).

 

“Subsidiary” means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.

 

“Trading Day” means a day on which the Common Shares are traded on a Trading Market.

 

“Trading Market” means any of the following markets or exchanges on which the Common Shares are listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the New York Stock Exchange, the OTCQB, OTCQX, or OTC Pink Open Market (or any successors to any of the foregoing).

 

“Transfer Agent” means VStock Transfer LLC, the current transfer agent of the Company, with a mailing address of 18 Lafayette Place, Woodmere, NY 11598, and any successor transfer agent of the Company.

 

“Underwriting Agreement” means the underwriting agreement, dated as of _____, 2024, between the Company and Maxim Group LLC, as representative of the underwriters named therein, as amended, modified or supplemented from time to time in accordance with its terms.

 

 

“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Shares are then listed or quoted on a Trading Market, the daily volume weighted average price of the Common Shares for such date (or the nearest preceding date) on the Trading Market on which the Common Shares are then listed or quoted as reported by Bloomberg L.P. (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if the Common Shares are then quoted on the OTCQB or OTCQX and there is not another Trading Market, the volume weighted average price of the Common Shares for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Common Shares are not then listed or quoted for trading on OTCQB or OTCQX or another Trading Market and if prices for the Common Shares are then reported on the Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Shares so reported, or (d) in all other cases, the fair market value of a Common Share as determined by an independent appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.

 

“Warrant Agency Agreement” means that certain warrant agency agreement, dated on or about the Initial Exercise Date, between the Company and the Warrant Agent.

 

“Warrant Agent” means the Transfer Agent and any successor warrant agent of the Company.

 

“Warrants” means this Warrant and other Common Share purchase warrants issued by the Company pursuant to the Registration Statement.

 

Section 2. Exercise.

 

a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.

 

 

Notwithstanding the foregoing in this Section 2(a), a holder whose interest in this Warrant is a beneficial interest in certificate(s) representing this Warrant held in book-entry form through DTC (or another established clearing corporation performing similar functions), shall effect exercises made pursuant to this Section 2(a) by delivering to DTC (or such other clearing corporation, as applicable) the appropriate instruction form for exercise, complying with the procedures to effect exercise that are required by DTC (or such other clearing corporation, as applicable), subject to a Holder’s right to elect to receive a Warrant in certificated form pursuant to the terms of the Warrant Agency Agreement, in which case this sentence shall not apply.

 

b) Exercise Price. The exercise price per Common Share under this Warrant shall be US$_____², subject to adjustment hereunder (the “Exercise Price”).

 

c) Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein is not available for the issuance of the Warrant Shares to the Holder, then this Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:

 

(A) =

as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(68) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Common Shares on the principal Trading Market as reported by Bloomberg L.P. as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day;

 

(B) =

the Exercise Price of this Warrant, as adjusted hereunder; and

 

(X) =

the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.

 

If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take any position contrary to this Section 2(c).

 

²150% of the Offering Price.

 

 

Whether or not an effective registration statement is available, the Holder may also effect an “alternative cashless exercise”. In such event, the aggregate number of Warrant Shares issuable in such alternative cashless exercise pursuant to any given Notice of Exercise electing to effect an alternative cashless exercise shall equal the product of (i) the aggregate number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise, multiplied by (ii) 2.0. Notwithstanding anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2(c) (including an alternative cashless exercise pursuant to this paragraph).

 

d) Mechanics of Exercise.

 

i.

Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, provided that the Holder has then delivered the aggregate Exercise Price to the Company, if applicable, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise provided that the Holder has then delivered the aggregate Exercise Price to the Company, if applicable (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Common Shares on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Common Shares as in effect on the date of delivery of the Notice of Exercise.

 

 

ii.

Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

 

	iii.	Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise upon written notice to the Company.
	iv.	Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, Common Shares to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the Common Shares so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of Common Shares that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Common Shares having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Common Shares with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver Common Shares upon exercise of the Warrant as required pursuant to the terms hereof.
	v.	No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.

 

 

	vi.	Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
	vii.	Closing of Books. The Company will not close its shareholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.

 

e) Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of Common Shares beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of Common Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of Common Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Common Share Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination and shall have no liability for exercises of this Warrant that are not in compliance with the Beneficial Ownership Limitation (other than to the extent that information on the number of outstanding Common Shares of the Company is provided by the Company and relied upon by the Holder). In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding Common Shares, a Holder may rely on the number of outstanding Common Shares as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of Common Shares outstanding. Upon the written or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of Common Shares then outstanding. In any case, the number of outstanding Common Shares shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding Common Shares was reported. The “Beneficial Ownership Limitation” shall be 4.99% (or, upon election by a Holder prior to the issuance of any Warrants, 9.99%) of the number of Common Shares outstanding immediately after giving effect to the issuance of Common Shares issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of Common Shares outstanding immediately after giving effect to the issuance of Common Shares upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

 

 

(f) Redemption. This Warrant and all of the outstanding Warrants may be redeemed at the option of the Company at any time during the Exercise Period pursuant to the terms of Section 13 of the Warrant Agency Agreement.

 

Section 3. Certain Adjustments.

 

a) Share Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a share dividend or otherwise makes a distribution or distributions on its Common Shares or any other equity or equity equivalent securities payable in Common Shares (which, for avoidance of doubt, shall not include any Common Shares issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding Common Shares into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding Common Shares into a smaller number of shares, or (iv) issues by reclassification of the Common Shares any shares of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of Common Shares (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of Common Shares outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of shareholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

b) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Common Share Equivalents or rights to purchase shares, warrants, securities or other property pro rata to the record holders of any class of Common Shares (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of Common Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Shares are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such Common Shares as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

 

c) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of Common Shares, by way of return of capital or otherwise (excluding cash and including, without limitation, any distribution of shares or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) other than dividends or distributions subject to Section 3(a) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of Common Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of Common Shares are to be determined for the participation in such Distribution (provided, however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any Common Shares as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

d) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company (and all of its Subsidiaries, taken as a whole), directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Shares are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Common Shares, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Common Shares or any compulsory share exchange pursuant to which the Common Shares are effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger, or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding Common Shares (not including any Common Shares held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of Common Shares of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of Common Shares for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one Common Share in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Shares are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of common shares of such Successor Entity (or its parent entity) equivalent to the Common Shares acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares (but taking into account the relative value of the Common Shares pursuant to such Fundamental Transaction and the value of such shares, such number of shares and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant with the same effect as if such Successor Entity had been named as the Company herein.

 

 

e) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of Common Shares deemed to be issued and outstanding as of a given date shall be the sum of the number of Common Shares (excluding treasury shares, if any) issued and outstanding.

 

f) Notice to Holder.

 

i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.

 

ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Shares, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Shares, (C) the Company shall authorize the granting to all holders of the Common Shares rights or warrants to subscribe for or purchase any shares of any class or of any rights, (D) the approval of any shareholders of the Company shall be required in connection with any reclassification of the Common Shares, any consolidation or merger to which the Company (and all of its Subsidiaries, taken as a whole) is a party, any sale or transfer of all or substantially all of the assets of the Company, or any compulsory share exchange whereby the Common Shares are converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Shares of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Shares of record shall be entitled to exchange their Common Shares for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall promptly furnish such notice with the Commission pursuant to a Current Report on Form 8-K or Form 6-K, as applicable. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.

 

 

g) Share Combination Event Adjustment. In addition to the adjustments set forth in Section 3(a) above, if at any time and from time to time on or after the Stockholder Approval Date, there occurs any share split, share dividend, share combination recapitalization or other similar transaction involving the Common Stock (each, a “Share Combination Event”, and such date thereof, the “Share Combination Event Date”) and the average VWAP during the period commencing two (2) consecutive Trading Days immediately preceding and the two (2) consecutive Trading Days commencing on the Share Combination Event Date (the “Event Market Price”) (provided if the Share Combination Event is effective after close of trading on the primary Trading Market, then commencing on the next Trading Day which period shall be the “Share Combination Adjustment Period”) is less than the Exercise Price then in effect (after giving effect to the adjustment in Section 3(a) above), then at the close of trading on the primary Trading Market on the last day of the Share Combination Adjustment Period, the Exercise Price then in effect on such fifth (5th) Trading Day shall be reduced (but in no event increased) to the Event Market Price and the number of Warrant Shares issuable hereunder shall be increased such that the aggregate Exercise Price of this Warrant on the Issuance Date for the Warrant Shares then outstanding shall remain unchanged. Notwithstanding the foregoing, if one or more Share Combination Events occur prior to the Stockholder Approval being obtained and a reduction of the Exercise Price did not occur, once the Stockholder Approval is obtained, the Exercise Price will automatically be reduced to equal the lowest Event Market Price with respect to any Share Combination Event that occurred prior to the Stockholder Approval being obtained and the number of Warrant Shares shall be proportionately adjusted pursuant to the foregoing. Notwithstanding the foregoing, in no event shall the Event Market Price be less than the Floor Price (subject to adjustment for reverse and forward stock splits, recapitalizations and similar transactions following the date of the Securities Purchase Agreement). For the avoidance of doubt, (a) if the adjustment in the immediately preceding sentence would otherwise result in an increase in the Exercise Price hereunder, no adjustment shall be made, and if this Warrant is exercised, on any given Exercise Date during the Share Combination Adjustment Period, solely with respect to such portion of this Warrant exercised on such applicable Exercise Date, such applicable Share Combination Adjustment Period shall be deemed to have ended on, and included, the Trading Day immediately prior to such Exercise Date and the Event Market Price on such applicable Exercise Date will be the average VWAP of the Common Stock immediately during such the Share Combination Adjustment Period prior to such Exercise Date and ending on, and including the Trading Day immediately prior to such Exercise Date and (b) all adjustments pursuant to this Section 3(g) shall also be subject to Section 3(a) above, including any Event Market Price.

 

h) Stockholder Approval. The Company shall (a) hold a special meeting of stockholders (which may also be at the annual meeting of stockholders) at the earliest practicable date after the date hereof, or (b) obtain by written consent the Stockholder Approval, but in no event later than sixty (60) days (which time period, for the avoidance of doubt, does not include the time required to file and mail an information statement on Schedule 14C with respect to such written consent as required under the Exchange Act), after the Closing Date for the purpose of obtaining Stockholder Approval, if required to effect the purpose thereof, with the recommendation of the Board of Directors of the Company that such proposal be approved, and the Company shall, if applicable, solicit proxies from its stockholders in connection therewith in the same manner as all other management proposals in such proxy statement and all management-appointed proxyholders shall vote their proxies in favor of such proposal. If the Company does not obtain Stockholder Approval at the first such meeting or by written consent, the Company shall call a subsequent annual or special meeting every one hundred and eighty (180) days thereafter to seek Stockholder Approval until the earlier of the date Stockholder Approval is obtained or the Warrants are no longer outstanding.

 

i) Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time during the term of this Warrant, subject to the prior written consent of the Holder, reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.

 

 

Section 4. Transfer of Warrant.

 

a) Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.

 

b) New Warrants. If this Warrant is not held in global form through DTC (or any successor depositary), this Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.

 

c) Warrant Register. The Warrant Agent shall register this Warrant, upon records to be maintained by the Warrant Agent for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company and the Warrant Agent may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

 

Section 5. Miscellaneous.

 

a) No Rights as Shareholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a shareholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) herein, in no event shall the Company be required to net cash settle an exercise of this Warrant.

 

b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any share certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or share certificate, if mutilated, the Company will make and deliver a new Warrant or share certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or share certificate.

 

 

c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

 

d) Authorized Shares.

 

The Company covenants that, during the period the Warrant is outstanding, it will, if applicable, reserve from its authorized and unissued Common Shares a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Common Shares may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).

 

Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

 

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

 

 

e) Governing Law. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Warrant (whether brought against a party hereto or their respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Warrant and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an action, suit or proceeding to enforce any provisions of this Warrant, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for their reasonable attorneys’ fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.

 

g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

h) Notices. Any and all notices or other communications or deliveries to be provided by the Holders hereunder including, without limitation, any Notice of Exercise, shall be in writing and delivered personally, by facsimile or e-mail, or sent by a nationally recognized overnight courier service, addressed to the Company, at 2^nd Floor, Regatta Office Park, West Bay Road, P.O. Box 10655, Grand Cayman, KY1-1006, Cayman Islands, Attention: Chief Executive Officer, email address: [ ], or such other facsimile number, email address or address as the Company may specify for such purposes by notice to the Holders. Any and all notices or other communications or deliveries to be provided by the Company hereunder shall be in writing and delivered personally, by facsimile or e-mail, or sent by a nationally recognized overnight courier service addressed to each Holder at the facsimile number, e-mail address or address of such Holder appearing on the books of the Company. Any notice or other communication or deliveries hereunder shall be deemed given and effective on the earliest of (i) the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or via e-mail at the e-mail address set forth in this Section prior to 5:30 p.m. (New York City time) on any date, (ii) the next Trading Day after the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or via e-mail at the e-mail address set forth in this Section on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (iii) the second Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service, or (iv) upon actual receipt by the party to whom such notice is required to be given. To the extent that any notice provided hereunder constitutes, or contains, material, non-public information regarding the Company or any Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 8-K or Form 6-K, as applicable.

 

 

i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Common Shares or as a shareholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

 

j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

 

k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

 

l) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company, on the one hand, and the Holder or the beneficial owner of this Warrant, on the other hand.

 

m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

 

n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

 

o) Warrant Agency Agreement. If this Warrant is held in global form through DTC (or any successor depositary), this Warrant is issued subject to the Warrant Agency Agreement. To the extent any provision of this Warrant conflicts with the express provisions of the Warrant Agency Agreement, the provisions of this Warrant shall govern and be controlling.

 

********************

(Signature Page Follows)

 

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.

 

	SRIVARU HOLDING LIMITED
	By:
	Name:
	Title:

 

 

NOTICE OF EXERCISE

 

To: SRIVARU HOLDING LIMITED

 

(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.

 

(2) Payment shall take the form of (check applicable box):

 

[  ] in lawful money of the United States; or

 

[  ] if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).

 

(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:

_______________________________

 

The Warrant Shares shall be delivered to the following DWAC Account Number:

_______________________________

_______________________________

_______________________________

 

[SIGNATURE OF HOLDER]

 

Name of Investing Entity:___________________________________________________________________

 

Signature of Authorized Signatory of Investing Entity: ___________________________________________________________________

Name of Authorized Signatory:

___________________________________________________________________

Title of Authorized Signatory:

___________________________________________________________________

 

Date: ______________________________________________________________

 

 

ASSIGNMENT FORM

 

(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)

 

FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to

 

Name:	______________________________________
	(Please Print)
Address:	______________________________________
Phone Number: Email Address:	(Please Print) ______________________________________
Dated: _______________ __, ______
Holder’s Signature:	______________________________________
Holder’s Address:

 

 

Exhibit 5.1

 

CONYERS DILL & PEARMAN LLP SIX, 2nd Floor, Cricket Square PO Box 2681, Grand Cayman KY1-1111 Cayman Islands T +1 345 945 3901 conyers.com

 

28 October 2024

 

SRIVARU Holding Limited

c/o Amicorp Cayman Fiduciary Limited

3^rd Floor, Genesis House

Unit 18, Genesis Close

George Town, P.O. Box 10655

Grand Cayman KY1 – 1006

Cayman Islands

 

Dear Sirs

 

Re: SRIVARU Holding Limited (the “Company”)

 

We have acted as special legal counsel in the Cayman Islands to the Company in connection with the Company’s Registration Statement on Form F-1 initially filed with the Securities and Exchange Commission in the United States (“SEC”) on 30 September 2024 (as amended) (the “Registration Statement”) relating to the Company’s registration of (A) an aggregate of up to 75,000,000 units (“Units”) at the applicable offering price, each Unit consisting of (i) one ordinary share of the Company, par value $0.01 each per share (the “Ordinary Shares”) or one pre-funded warrant (a “Pre-Funded Warrant”), with each Pre-Funded Warrant entitling the holder to purchase one Ordinary Share at an exercise price of $0.001 per share, and (ii) one warrant (a “Warrant”), with each Warrant entitling the holder to purchase one Ordinary Share at an exercise price of $0.12 per share, which can be exercisable for two ordinary shares pursuant to an alternative cashless exercise provision, subject in each case to the underwriters’ over-allotment option; and (B) up to 150,000,000 Ordinary Shares (the “Warrant Shares”) to be issued upon the exercise of the Warrants, subject in each case to the underwriters’ over-allotment option, (the Units, Ordinary Shares, Pre-Funded Warrants, Warrants and Warrant Shares are collectively, the “Registered Securities”), in each case, pursuant to an underwriting agreement (the “Underwriting Agreement”) to be executed by the Company and Maxim Group LLC (as representative of the underwriters), all as more particularly defined and described in the Registration Statement.

 

1. DOCUMENTS REVIEWED

 

For the purposes of giving this opinion, we have examined copies of:

 

(i)

the Registration Statement;

 

(ii)

the certificate of incorporation of the Company dated 16 June 2021 and the amended and restated memorandum and articles of association of the Company adopted on 27 June 2024 and effective on 2 August 2024;

 

(iii)

the unanimous written resolutions of the directors of the Company dated 28 October 2024 (the “Resolutions”);

 

 

(iv)

a Certificate of Good Standing (the “Certificate of Good Standing”) dated 30 September 2024 issued by the Registrar of Companies in the Cayman Islands in relation to the Company;

 

(v)

the form of Underwriting Agreement;

 

(vi)

the form of warrant agency agreement to be executed by the Company and VStock Transfer, LLC in connection with the Warrants (the “Warrant Agreement”);

 

(vii)

the form of Pre-Funded Warrant;

 

(viii)

the form of Warrant; and

 

(ix)

such other documents and made such enquiries as to questions of law as we have deemed necessary in order to render the opinion set forth below.

 

2. ASSUMPTIONS

 

We have assumed:

 

(i)

the genuineness and authenticity of all signatures and the conformity to the originals of all copies (whether or not certified) examined by us and the authenticity and completeness of the originals from which such copies were taken;

 

(ii)

the accuracy and completeness of all factual representations made in the Registration Statement, Underwriting Agreement, Warrant Agreement, form of Pre-Funded Warrant, form of Warrant and other documents reviewed by us;

 

(iii)

that the resolutions contained in the Resolutions were passed by unanimous written resolutions of the directors of the Company, remain in full force and effect and have not been and will not be rescinded or amended;

 

(iv)

the legality, validity and binding effect under the laws of the State of New York (the “Foreign Laws”) of the Underwriting Agreement, the Warrant Agreement, the form of Pre-Funded Warrant and the form of Warrant, which are expressed to be governed by the Foreign Laws, in accordance with their respective terms;

 

(v)

the validity and binding effect under the Underwriting Agreement, the Warrant Agreement, the form of Pre-Funded Warrant and the form of Warrant of the submission by the Company to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan (the “Foreign Courts”);

 

(vi)

no invitation has been or will be made by or on behalf of the Company to the public in the Cayman Islands to subscribe for any shares of the Company;

 

(vii)

that there is no provision of the law of any jurisdiction, other than the Cayman Islands, which would have any implication in relation to the opinions expressed herein;

 

 

(viii)

that at the time of issuance, any Ordinary Shares and Warrant Shares shall be issued by the Company against payment in full, which shall be equal to at least the par value thereof, and shall be duly registered in the Company’s register of members;

 

(ix)

that the Company will have sufficient authorised share capital to effect the issue of any Ordinary Shares and/or Warrant Shares at the time of issuance;

 

(x)

the capacity, power and authority of all parties other than the Company to enter into and perform their obligations under any and all documents entered into by such parties in connection with the issuance of the Registered Securities, and the due execution and delivery thereof by each party thereto;

 

(xi)

the effectiveness under the laws of the United States of America of the Registration Statement and that the Registration Statement will be duly filed with and declared effective by the SEC;

 

(xii)

that the Registration Statement declared effective by the SEC will be in substantially the same form as the copy examined by us for the purposes of this opinion;

 

(xiii)

there are no records of the Company, agreements, documents or arrangements other than the documents expressly referred to herein as having been examined by us which materially affect, amend or vary the transactions envisaged in the documents or restrict the powers and authority of the directors of the Company in any way or which would affect any opinion given herein;

 

(xiv)

that each of the documents reviewed by us are, or will be, legal, valid, binding and enforceable against all relevant parties in accordance with their terms under all relevant laws (other than, with respect to the Company, the laws of the Cayman Islands);

 

(xv)

that there is no contractual or other prohibition or restriction (other than as arising under Cayman Islands law) binding on the Company prohibiting or restricting it from entering into and performing its obligations under the documents reviewed by us;

 

(xvi)

the offering of the Units and the transactions contemplated thereunder complies with the requirements of the applicable rules of the Nasdaq Global Market; and

 

(xvii)

where a document has been examined by us in draft form, it will be or has been executed and/or filed in the form of that draft, and where a number of drafts of a document have been examined by us all changes thereto have been marked or otherwise drawn to our attention.

 

3. QUALIFICATIONS

 

(i)

The term “enforceable” as used in this opinion means that an obligation is of a type which the courts of the Cayman Islands enforce. It does not mean that those obligations will be enforced in all circumstances. In particular, the obligations of the Company in connection with any Registered Security and any indenture or other agreement or document relating thereto:

 

(a)

will be subject to the laws from time to time in effect relating to bankruptcy, insolvency, liquidation, possessory liens, rights of set off, reorganisation, amalgamation, merger, consolidation, moratorium, bribery, corruption, money laundering, terrorist financing, proliferation financing or any other laws or legal procedures, whether of a similar nature or otherwise, generally affecting the rights of creditors as well as applicable international sanctions;

 

 

(b)

will be subject to statutory limitation of the time within which proceedings may be brought;

 

(c)

will be subject to general principles of equity and, as such, specific performance and injunctive relief, being equitable remedies, may not be available;

 

(d)

may not be given effect to by a Cayman Islands court if and to the extent they constitute the payment of an amount which is in the nature of a penalty; and

 

(e)

may not be given effect by a Cayman Islands court to the extent that they are to be performed in a jurisdiction outside the Cayman Islands and such performance would be illegal under the laws of that jurisdiction. Notwithstanding any contractual submission to the exclusive or non-exclusive jurisdiction of specific courts, a Cayman Islands court has inherent discretion to stay or allow proceedings in the Cayman Islands against the Company if there are other proceedings simultaneously underway against the Company in another jurisdiction.

 

(ii)

We have made no investigation of and express no opinion in relation to the laws of any jurisdiction other than the Cayman Islands.

 

(iii)

This opinion is to be governed by and construed in accordance with the laws of the Cayman Islands and is limited to and is given on the basis of the current law and practice in the Cayman Islands.

 

(iv)

This opinion is issued solely for the purposes of the filing of the Registration Statement and the offering of the Registered Securities by the Company and is not to be relied upon in respect of any other matter.

 

4. OPINIONS

 

On the basis of and subject to the foregoing, we are of the opinion that:

 

(i)

The Company is duly incorporated and existing under the laws of the Cayman Islands and, based on the Certificate of Good Standing, is in good standing. Pursuant to the Companies Act of the Cayman Islands (the “Act”), a company is deemed to be in good standing if all fees and penalties under the Act have been paid and the Registrar of Companies has no knowledge that the Company is in default under the Act.

 

(ii)

The issue of each of the Registered Securities has been duly authorised and, when issued and paid for in accordance with the Resolutions, the Underwriting Agreement, the Warrant Agreement, the form of Pre-Funded Warrant, the form of Warrant and the Registration Statement, as applicable, and entered on the register of members of the Company (insofar as it relates to the Ordinary Shares and the Warrant Shares), the Registered Securities will be validly issued, fully paid and non-assessable (which term when used herein means that no further sums are required to be paid by the holders thereof in connection with the issue of such Registered Securities).

 

We hereby consent to the filing of this opinion as an exhibit to the Registration Statement and to the references to our firm under the captions “Enforceability of Civil Liabilities Under U.S. Securities Law” and “Legal Matters” in the prospectus forming a part of the Registration Statement. In giving this consent, we do not hereby admit that we are experts within the meaning of Section 11 of the Securities Act or that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the Rules and Regulations of the Commission promulgated thereunder.

 

Yours faithfully

 

/s/ Conyers Dill & Pearman LLP

Conyers Dill & Pearman LLP

 

 

 

Exhibit 23.1

 

Consent of Independent Registered Public Accounting Firm

 

We consent to the reference to our firm under the caption “Experts” and to the use of our report dated July 17, 2024, in the Registration Statement on Form F-1 of Srivaru Holding Limited for the registration of Srivaru Holding Limited units comprising ordinary shares and warrants to purchase ordinary shares pursuant to a firm committent underwitten offering with Maxim Group LLC as the underwriter.

 

/s/ Manohar Chowdhry & Associates
Chennai, India
October 28, 2024

 

 

v3.24.3

Cover	12 Months Ended
	Mar. 31, 2024
Cover [Abstract]
Document Type	F-1/A
Amendment Flag	true
Amendment Description	Amendment No. 5
Entity Registrant Name	SRIVARU Holding Limited
Entity Central Index Key	0001973368
Entity Primary SIC Number	3711
Entity Incorporation, State or Country Code	E9
Entity Address, Address Line One	3rd Floor, Genesis House, Unit 18
Entity Address, Address Line Two	Genesis Close, George Town
Entity Address, Address Line Three	P.O. Box 10655
Entity Address, City or Town	Grand Cayman
Entity Address, Country	KY
Entity Address, Postal Zip Code	KY1-1006
City Area Code	+1 (888)
Local Phone Number	227-8066
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false

v3.24.3

Consolidated Balance Sheet - USD ($)	Mar. 31, 2024	Mar. 31, 2023
Current assets:
Cash and cash equivalents	$ 175,041	$ 21,378
Marketable securities	13,944	14,415
Accounts receivable, net
Inventory	119,743	331,548
Deposits and advances	918,724	288,842
Total current assets	1,227,452	656,183
Property, plant and equipment, net	135,823	55,196
Non-Marketable securities
Deferred tax assets
Operating lease asset	222,884
Total long-term assets	358,707	55,196
Total assets	1,586,159	711,379
Current liabilities:
Accounts payable	952,340	3,976
Accrued liabilities and others	165,055	55,571
Borrowings	77,962	1,158,390
Total current liabilities	1,195,357	1,217,937
Long-term loans
Other liabilities	498,426
Total non-current liabilities	498,426
Total liabilities	1,693,783	1,217,937
Commitments and Contingencies – See Note 11
Stockholders’ equity:
Share Premium	6,194,937	149,614
Profit on Consolidation	87,756	87,756
Non Controlling Interest	(69,338)	(14,979)
Other Comprehensive income	54,295	51,057
Other Equity	5,456,500
Accumulated deficit	(12,247,059)	(971,483)
Total stockholders’ equity	(107,624)	(506,558)
Total liabilities and stockholders’ equity	1,586,159	711,379
Common Stock [Member]
Stockholders’ equity:
Ordinary share, value	415,281	191,477
Common Class A [Member]
Stockholders’ equity:
Ordinary share, value	$ 4

v3.24.3

Consolidated Balance Sheet (Parenthetical) - $ / shares	Mar. 31, 2024	Mar. 31, 2023
Common stock, par value	$ 0.01
Common Stock [Member]
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	20,000,000
Common stock, shares issued	37,326,731	19,147,698
Common stock, shares outstanding	37,326,731	19,147,698
Common Class A [Member]
Common stock, par value	$ 0.000001	$ 0.000001
Common stock, shares authorized	100,000,000	100,000,000

v3.24.3

Consolidated Statements of Operations and Comprehensive Income - USD ($)	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Income Statement [Abstract]
Revenue	$ 42,538	$ 112,409
Cost of goods Sold	(35,316)	(132,780)
Inventory write-down	(262,686)	(113,724)
Total Cost of Revenue	(298,002)	(246,504)
Gross Profit	(255,464)	(134,095)
General and administrative expenses	(10,924,808)	(405,078)
Selling and Distribution expenses	(181,195)	(2,814)
Depreciation and Amortisation	(38,343)	(24,545)
Operating loss	(11,399,810)	(566,532)
Other income, net	1,330	11,771
Finance Expenses	(57,652)	(55,946)
Loss before income taxes	(11,456,132)	(610,707)
Income tax expense/benefit	(26,162)	(64,241)
Net loss attributable to ordinary sharesholders	(11,482,294)	(674,948)
Loss attributable to Ordinary shares holders of Parent Company	(11,427,935)	(654,273)
Loss attributable to non-controlling interests	$ (54,539)	$ (20,675)
Loss per share attributable to common stockholders, Basic	$ (4.23)	$ (0.04)
Loss per share attributable to common stockholders, Diluted	$ (4.23)	$ (0.04)
Weighted-average number of shares used in computing loss per share amounts, Basic	20,763,518	19,145,415
Weighted-average number of shares used in computing loss per share amounts, Diluted	20,763,518	19,145,415
Net loss attributable to ordinary sharesholders	$ (11,482,294)	$ (674,948)
Foreign currency translation adjustments	5,286	46,286
Remeasurements of the net defined benefit liability / asset, net	(2,048)
Comprehensive income	(11,479,056)	(628,662)
Loss attributable to Ordinary shares holders of Parent Company	(11,424,697)	(607,987)
Loss attributable to non-controlling interests	$ (54,539)	$ (20,675)

v3.24.3

Statement of Stockholders' Equity - USD ($)	Common Stock [Member]	Share Premium [Member]	Retained Earnings [Member]	Capital Reserve [Member]	Noncontrolling Interest [Member]	AOCI Attributable to Parent [Member]	Other Equity [Member]	Total
Balances at Mar. 31, 2022	$ 191,408	$ 124,682	$ (317,210)	$ 87,756	$ 5,696	$ 4,771		$ 97,103
Balances, shares at Mar. 31, 2022	19,140,849
Ordinary shares issued during the year	$ 69	24,932						25,001
Common stock issued during the year, shares	6,849
Net loss			(654,273)		(20,675)			(674,948)
Adjustments Pertaining to Business Combination
Profit on Consolidation
Exchange gain on translation of Foreign Subsidiaries						46,286		46,286
Remeasurements of the net defined benefit liability / asset, net
Balances at Mar. 31, 2023	$ 191,477	149,614	(971,483)	87,756	(14,979)	51,057		(506,558)
Balances, shares at Mar. 31, 2023	19,147,698
Ordinary shares issued during the year	$ 223,804	6,045,323						6,269,127
Common stock issued during the year, shares	22,380,446
Net loss			(11,427,935)		(54,359)			(11,482,294)
Adjustments Pertaining to Business Combination			152,359					152,359
Exchange gain on translation of Foreign Subsidiaries						5,286		5,286
Share Subdivision during the year
Share Subdivision during the year, shares	(4,201,413)
Class A ordinary shares, $0.000001 par value	$ 4							4
Earnout Shares							5,456,500	5,456,500
Remeasurements of the net defined benefit liability / asset, net						(2,048)		(2,048)
Balances at Mar. 31, 2024	$ 415,285	$ 6,194,937	$ (12,247,059)	$ 87,756	$ (69,338)	$ 54,295	$ 5,456,500	$ (107,624)
Balances, shares at Mar. 31, 2024	37,326,731

v3.24.3

Statement of Stockholders' Equity (Parenthetical) - $ / shares	Mar. 31, 2024	Mar. 31, 2023
Common stock, par value	$ 0.01
Common Class A [Member]
Common stock, par value	$ 0.000001	$ 0.000001

v3.24.3

Consolidated Statements of Cash Flows - USD ($)	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Cash flows from operating activities:
Net loss	$ (11,456,132)	$ (610,707)
Adjustment to reconcile net loss to net cash:
Depreciation and amortization	38,343	24,545
Advances written-off	175,257
Earnout Expenses	6,656,500
Interest on lease liability	6,867
Changes in operating assets and liabilities:
Accounts receivables, net
Inventory	211,805	103,555
Deposits and advances	(805,139)	129,748
Claims and advances
Accounts payable	948,364	(3,800)
Accrued and other liabilities	378,187	(27,411)
Net cash used in operating activities	(3,845,948)	(384,070)
Income Tax paid/Received	(26,162)
Net cash used in Operating Activities	(3,872,110)	(384,070)
Cash flow from investing activities:
Net sale/(purchase) of property, plant, and equipment	(102,994)	(13,491)
Investment in/sale of marketable securities/Subsidiaries	471	465
Net cash provided by/ (used in) investing activities	(102,523)	(13,026)
Cash flows from financing activities:
Issuance of equity stock through offering (net of expenses)	5,221,490	25,001
Repayment of Lease Liabilities	(18,052)
Proceeds from/Repayment of borrowings	(1,080,428)	271,582
Net cash provided by financing activities	4,123,010	296,583
Effects of exchange rate changes on cash and cash equivalents	5,286	46,286
Net increase/(decrease) in cash and cash equivalents	153,663	(54,227)
Cash and cash equivalents at the beginning of the period	21,378	75,605
Cash and cash equivalents at the end of the period	175,041	21,378
Non-cash items:
Operating leases entered during the year	$ 238,860

v3.24.3

NATURE OF OPERATIONS AND MANAGEMENT’S PLANS	12 Months Ended
	Mar. 31, 2024
Organization, Consolidation and Presentation of Financial Statements [Abstract]
NATURE OF OPERATIONS AND MANAGEMENT’S PLANS	NOTE 1 – NATURE OF OPERATIONS AND MANAGEMENT’S PLANS   SVH is an investment Company incorporated outside India. The registered office of the Company is at the offices of Amicorp Cayman Fiduciary Limited, 3rd Floor, Genesis House, Unit 18, Genesis Close, George Town, P.O. Box 10655, Grand Cayman KY1 – 1006, Cayman Islands or at such other place as the Directors may from time to time decide. The Company has invested in one subsidiary which is clean tech electric two-wheeler manufacturer and the goal is to produce the best riding automobiles for the personal commute. SVH believe that there are lots of untapped engineering talent in the country, they are starving for a greener opportunity. While SVH invent, manufacture, and sell the electric vehicles it will create lots of opportunities at all levels for the people who are truly passionate. SVM want these engineers to follow their hearts to create something useful for the larger community.

v3.24.3

SIGNIFICANT ACCOUNTING POLICIES	12 Months Ended
	Mar. 31, 2024
Accounting Policies [Abstract]
SIGNIFICANT ACCOUNTING POLICIES	NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES   a) Principles of consolidation   The accompanying consolidated financial statements have been prepared in conformity with GAAP and reflect our accounts and operations and those of our subsidiaries in which we have a controlling financial interest. In accordance with the provisions of ASC 810, Consolidation (“ASC 810”). The consolidated financial statements include the accounts of the Company and all its subsidiaries. Intercompany accounts and transactions have been eliminated. In the opinion of the Company’s management, the consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. Transactions between the Company and its subsidiaries are eliminated in the consolidated financial statements.   b) Basis of Preparation   The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP).   Business Combination/ Transaction:   On December 8, 2023 (the “Closing Date” and such closing, the “Closing”), we consummated the previously announced business combination pursuant to the Business Combination Agreement, dated as of March 13, 2023 (the “Business Combination Agreement”), by and among us, Pegasus Merger Sub Inc., a Delaware corporation and direct, wholly owned subsidiary of the Company (“Merger Sub”) and MOBV. As of the Closing Date, pursuant to the terms of the Business Combination Agreement, Merger Sub merged with and into MOBV (the “Merger”), with MOBV surviving the Merger as a wholly owned subsidiary of the Company (the “Business Combination”).   SVH has given effect a 0.7806 share sub-division of all the shares of SVH, par value US $0.01 (“SVH Shares”) (both issued and unissued) in accordance with section 13(1)(d) of the Companies Act (as amended) of the Cayman Islands and the applicable provisions of the Governing Documents (as defined in the Merger Agreement) of SVH (the “Stock Split”), such that the number of outstanding SVH Shares immediately prior to the Effective Time (excluding the Escrowed Earnout Shares (as defined in the Merger Agreement) issued in conjunction with the Stock Split) is 14,946,286.   Exchange Consideration:   Each MOBV Share (except for the Excluded Shares, as defined below) was automatically converted as of the Effective Time into the right to receive the Per Share Consideration and each of the MOBV Warrants has automatically become a SVH Warrant and all rights with respect to MOBV Shares underlying the MOBV Warrants have automatically converted into rights with respect to SVH Shares and thereupon assumed by the SVH. The Excluded Shares refer to any MOBV Public Shares (a) held in the treasury of MOBV, (b) otherwise held by MOBV or (c) for which a public shareholder of MOBV has demanded that MOBV redeem.   Each issued and outstanding share of capital stock of Merger Sub issued and outstanding immediately prior to the Effective Time was converted into and become one validly issued, fully paid and non-assessable share of ordinary shares, par value $0.01 per share, of the Surviving Company, which constitutes the only outstanding share of capital stock of the Surviving Company.   Each Excluded Share was surrendered and cancelled and has cease to exist and no consideration was be delivered exchange therefor.     Accounting for the Transaction:   SVH is both the legal and accounting acquirer as the shares of MOBV will convert into the right to receive SVH Shares (the “Per Share Consideration”) and MOBV has legally become SVH’s wholly owned subsidiary as a result of the merger with Merger Sub.   The Transaction will be accounted for as an asset acquisition. MOBV does not qualify as a Business per ASC 805-10-55-3A. Since the acquisition is based on a monetary exchange, and most of the assets of MOBV are marketable securities in the Trust Account, the fair value of the assets is the more evident value. The liabilities assumed are all of short-term nature which are deemed to be at fair value. As such the fair value of the consideration given, in this case the transaction costs incurred, one to one share exchange and the Earn Out consideration should be allocated using the relative fair value approach based on the net asset value acquired from MOBV. Given the nature of the assets acquired and liabilities assumed from MOBV, an allocation of the transaction costs and Earnout consideration cannot be made to the net assets acquired. Accordingly, an immediate charge to operations would be recognized for the difference between the relative value allocated to the earnout and the fair value, as well as for the value of the transaction costs.   Exchange agreement   The Exchange Agreement does provide the Company with the obligation to purchase the SVM shares for cash. “Cash Exchange Payment” means with respect to a particular Call Exchange for which the Company has elected to make a Cash Exchange or a particular Put Exchange for which the Shareholder has elected to receive a Cash Exchange Payment: The terms both a call and a put option with same strike price and exercise dates applied and have a fixed redemption price. As such the Exchange Agreement should be classified as a liability under ASC 480 and the NCI removed from equity with the subsidiary reported at 100% by the parent.   Earnout shares   Pursuant to the Merger Agreement, certain shareholders of SVH (the “Pre-Closing Company Shareholders”) and certain shareholders of SVM India (the “Other SVM India Stockholders” and together with the Pre-Closing Company Shareholders, the “Earnout Group”) are entitled to receive their Pro Rata Portion (as defined in the Merger Agreement) of up to 25,000,000 SVH Shares (the “Earnout Shares”).   Earn Out Share payments are within the scope of ASC 480. The Company agreed to issue 25,000,000 Earn Out Shares over a three-year period based on Vehicle Sales Revenue earned at each year, or in the aggregate for the three years. However, the number of shares to be delivered can vary based on the discretion of the Company Board to waive the applicable Vehicle Sales Revenue trigger and release all or any portion of the Earnout shares available, accordingly a liability will be record for the fair value of the Earn Out shares.   At the Extraordinary General Meeting of Shareholders (the “Meeting”) of the Company convened at June 27, 2024, shareholders approved the amendment to the agreement to permit the Issuance of Earnout Shares (as defined below) without the occurrence of Milestone Events (as defined in the Merger Agreement) (the “Amendment of the Earnout Agreement”). Pursuant to the amendment, the Escrow Shares (as defined in that certain Agreement and Plan of Merger (the “Merger Agreement”), dated as of March 13, 2023, by and among the Company, Mobiv Acquisition Corp, and Pegasus Merger Sub Inc.) shall be released to the Earnout Group (as defined in the Merger Agreement) immediately, but subject to vesting in three equal tranches each year over a three-year period (each year a “Vesting Period”) with 1st vesting amount effective from approval of this EGM, regardless of the lack of occurrence of Milestone Events. The Earnout Group shall receive the Escrow Shares multiplied by the weighted average exchange ratio of 15.59 per Escrow Share to reflect the Company’s additional share issuances at the Closing of the Business Combination (as defined in the Merger Agreement) and, if the Reverse Share Split and Share Consolidation are implemented, subsequently divided by the consequent number in the final RS Ratio (for example, 15 for an RS Ratio of 1:15) as determined by the Board of Directors to reflect the effect of the Reverse Share Split and Share Consolidation on the number of ordinary shares on issue. Therefore, the Earnout Group shall receive a total of as low as 25,983,334 if the Reverse Share Split and Share Consolidation are implemented (at an RS Ratio of 1:15) and 389,750,000 Earnout Shares if the Reverse Share Split and Share Consolidation are not implemented (the “Earnout Shares”) (the “Issuance of Earnout Shares”).   c) Going Concern   The Company assesses and determines its ability to continue as a going concern in accordance with the provisions of ASC Subtopic 205-40, “Presentation of Financial Statements—Going Concern”, which requires the Company to evaluate whether there are conditions or events that raise substantial doubt about its ability to continue as a going concern.   The Company is currently in a process of obtaining the Prana 2.0 License and setting up of expanding the manufacturing facility in India and, thus, has not yet achieved profitability. The Company expects to continue to incur significant operating and net losses and negative cash flows from operations in the near future.     For the years ended March 31, 2024, and March 31, 2023, the Company incurred net losses of $11.5 million and $0.7 million, respectively. As of March 31, 2024, the Company’s cash and cash equivalents totaled $0.2 million. As of July 1, 2024, the Company had enter into an additional financing such as Committed Equity Financing Facility (the “CEFF”) with investors to purchase up to $25,000,000 of the Company’s ordinary shares par value $0.01 per share over a three-year period (the “CEFF Financing”). Pursuant to this arrangement, the Company On July 2, 2024, has received USD 1 million. The equity and the credit facility serve to minimize ongoing liquidity requirements and ensure the Company’s ability to sustain its operations. Furthermore, the Company intends to raise additional funds through private placement subject to market conditions. Please refer to Note 16, “Subsequent Event,” for further information.   The Company estimates that its current cash and cash equivalents balance with working capital and equity investment is sufficient to support operations beyond the twelve months following the date these consolidated financial statements and footnotes were issued. These estimates are based on assumptions that may prove to be wrong, and the Company could use its available capital resources sooner than it currently expects.   d) Use of estimates   The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.   Management believes that the estimates and assumptions used in the preparation of the financial statements are prudent and reasonable. Significant estimates and assumptions are generally used for, but not limited to allowance for uncollectible accounts receivable; sales returns; normal loss during production; inventory write-downs; future obligations under employee benefit plans; the useful lives of property, plant, equipment; intangible assets; valuations; impairment of goodwill and investments; recoverability of advances; the valuation of options granted, and warrants issued; and income tax and deferred tax valuation allowances, if any. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Critical accounting estimates could change from period to period and could have a material impact on SVH’s results, operations, financial position, and cash flows. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the consolidated financial statements.   e) Revenue recognition   The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of this standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services.   ASC 606 prescribes a 5-step process to achieve its core principle. The Company recognizes revenue from trading, rental, or product sales as follows:     I. Identify the contract with the customer.   II. Identify the contractual performance obligations.   III. Determine the amount of consideration/price for the transaction.   IV. Allocate the determined amount of consideration/price to the contractual obligations.   V. Recognize revenue when or as the performing party satisfies performance obligations.   The consideration/price for the transaction (performance obligation(s)) is determined as per the agreement or invoice (contract) for the services and products in the automobile segment. Refer to Note 14 - “Revenue Recognition.”   f) Cost of Revenue   Our cost of revenue includes costs associated with labor expense, components, manufacturing overhead, and outbound freight for our products division.   (g) Earnings/(Loss) per Share   Basic net loss per share attributable to ordinary sharesholders is computed by dividing the net loss by the number of weighted-average outstanding common shares. Diluted net loss per share attributable to ordinary sharesholders is determined by giving effect to all potential common equivalents during the reporting period, unless including them yields an antidilutive result.   The weighted average number of shares outstanding for the years ended March 31, 2024 and 2023, used for the computation of basic earnings per share (“EPS”) is 20,763,518 and 19,145,415 respectively.     h) Income taxes   The Company accounts for income taxes under the asset and liability method, in accordance with ASC 740, Income Taxes, which requires an entity to recognize deferred tax liabilities and assets. Deferred tax assets and liabilities are recognized for the future tax consequence attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the enacted tax rate expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. A valuation allowance is established and recorded when management determines that some or all of the deferred tax assets are not likely to be realized and therefore, it is necessary to reduce deferred tax assets to the amount expected to be realized.   In evaluating a tax position for recognition, management evaluates whether it is more-likely-than-not that a position will be sustained upon examination, including resolution of related appeals or litigation processes, based on technical merits of the position. If the tax position meets the more-likely-than-not recognition threshold, the tax position is measured and recognized in the Company’s financial statements as the largest amount of tax benefit that, in management’s judgment, is greater than 50% likely of being realized upon settlement. As of March 31, 2024, there was no significant liability for income tax associated with unrecognized tax benefits.   i) Accounts receivable   We make estimates of the collectability of our accounts receivable by analyzing historical payment patterns, customer concentrations, customer creditworthiness, and current economic trends. If the financial condition of a customer deteriorates, additional allowances may be required. We had $Nil accounts receivable, net of provision for doubtful debt of $Nil as of March 31, 2024 (March 31, 2023; $Nil).   j) Cash and cash equivalents   For financial statement purposes, the Company considers all highly liquid debt instruments with maturity of three months or less, to be cash equivalents. The Company maintains its cash in bank accounts in India. The cash and cash equivalents in the Company on March 31, 2024 was approximately $ 175 thousand (March 31, 2023; $ 21 thousand).   k) Short-term and long-term investments   Our policy for short-term and long-term investments is to establish a high-quality portfolio that preserves principal, meets liquidity needs, avoids inappropriate concentrations, and delivers an appropriate yield in relationship to our investment guidelines and market conditions. Short-term and long-term investments consist of corporate, various government agency and municipal debt securities, as well as certificates of deposit that have maturity dates that are greater than 90 days. Certificates of deposit are carried at cost which approximates fair value. Available-for-sale securities: Investments in debt securities that are classified as available for sale shall be measured subsequently at fair value in the statement of financial position.   Investments are initially measured at cost, which is the fair value of the consideration given for them, including transaction costs. Where the Company’s ownership interest is in excess of 20% and the Company has a significant influence, the Company has accounted for the investment based on the equity method in accordance with ASC Topic 323, “Investments – Equity method and Joint Ventures.” Under the equity method, the Company’s share of the post-acquisition profits or losses of the equity investee is recognized in the consolidated statements of operations and its share of post-acquisition movements in accumulated other comprehensive income / (loss) is recognized in other comprehensive income / (loss). Where the Company does not have significant influence, the Company has accounted for the investment in accordance with ASC Topic 321, “Investments-Equity Securities.”   As of March 31, 2024, investment in marketable securities is valued at fair value and investment in non-marketable securities with ownership less than 20% is valued at cost as per ASC Topic 321, “Investments-Equity Securities.”   l) Property, plant, and equipment (PP&E)   Property and equipment are recorded at cost net of accumulated depreciation and depreciated over their estimated useful lives using the Written down value method.   Upon retirement or disposition, cost and related accumulated depreciation of the property and equipment are de-recognized, and any gain or loss is reflected in the results of operation. Cost of additions and substantial improvements to property and equipment are capitalized. The cost of maintenance and repairs of the property and equipment are charged to operating expenses as incurred.     m) Fair value of financial instruments   ASC 820, “Fair Value Measurement” defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. It also establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:   Level 1: Observable inputs such as quoted prices in active markets; Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.   The carrying amounts of the Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, approximate their fair values due to the nature of the items. Please refer to Note 15, “Fair value of financial instruments,” for further information.   n) Concentration of credit risk and significant customers   Financial instruments, which potentially expose the Company to concentrations of credit risk, are primarily comprised of cash and cash equivalents, investments, accounts receivable and unbilled accounts receivable, if any. The Company places its cash, investments in highly rated financial institutions. The Company adheres to a formal investment policy with the primary objective of preservation of principal, which contains credit rating minimums and diversification requirements. Management believes its credit policies reflect normal industry terms and business risk. The Company does not anticipate non-performance by the counterparties and, accordingly, does not require collateral. During Fiscal 2024, sales were spread across customers in India and the credit concentration risk is low.   o) Commitments and contingencies   Liabilities for loss contingencies arising from claims, assessments, litigations, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated. We record associated legal fees as incurred. Information regarding our commitments and contingencies is incorporated by reference in Note 11, “Commitments and contingencies” of these financial statements.   p) Impairment of long – lived assets   The Company reviews its long-lived assets, with finite lives, for impairment whenever events or changes in business circumstances indicate that the carrying amount of assets may not be fully recoverable. Such circumstances include, though are not limited to, significant or sustained declines in revenues or earnings, future anticipated cash flows, business plans and material adverse changes in the economic climate, such as changes in operating environment, competitive information, and impact of changes in government policies. For assets that the Company intends to hold for use, if the total of the expected future undiscounted cash flows produced by the assets or subsidiary company is less than the carrying amount of the assets, a loss is recognized for the difference between the fair value and carrying value of the assets. For assets, the Company intends to dispose of by sale, a loss is recognized for the amount by which the estimated fair value less cost to sell is less than the carrying value of the assets. Fair value is determined based on quoted market prices, if available, or other valuation techniques including discounted future net cash flows. Unlike goodwill, long-lived assets are assessed for impairment only where there are any specific indicators for impairment.   q) Inventory   Inventory is valued at the lower of cost or net realizable value, which is defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.   Inventory consists of raw materials, finished goods related to manufacture of Electric vehicles. Inventory is primarily accounted for using the weighted average cost method. Primary costs include raw materials, packaging, direct labor, overhead, shipping and the depreciation of manufacturing equipment. Manufacturing overhead and related expenses include salaries, wages, employee benefits, utilities, maintenance, and property taxes.   Electric Vehicles are measured at net realizable value, with changes recognized in profit or loss only when the Vehicle:     - has a reliable, readily determinable, and realizable market value;   - has relatively insignificant and predictable costs of disposal; and   - is available for immediate delivery.   Abnormal amounts of idle facility expense, freight, handling costs, scrap, discontinued products and wasted material (spoilage) are expensed in the period they are incurred.     r) Foreign currency translation   the Company operates in India, Cayman Islands and a substantial portion of the Company’s financials are denominated in the Indian Rupee (“INR”). As a result, changes in the relative values of the U.S. Dollar (“USD”), or the INR affect financial statements.   The accompanying financial statements are reported in USD. The INR is the functional currencies for subsidiary of the Company. The translation of the functional currencies into U.S. dollars is performed for assets and liabilities using the exchange rates in effect at the balance sheet date and for revenues and expenses using average exchange rates prevailing during the reporting periods. Adjustments resulting from the translation of functional currency financial statements to reporting currency are accumulated and reported as other comprehensive income/(loss), a separate component of shareholders’ equity.   SCHEDULE OF FOREIGN CURRENCY TRANSLATION     Year End Average Rate     Year End Rate   Period   (P&L rate)     (Balance sheet rate)   Year ended March 31, 2024   INR 82.7954 Per USD     INR 83.3739 Per USD                     Year ended March 31, 2023   INR 79.0120 Per USD     INR 82.2169 Per USD     s) Leases   Lessee Accounting   The Company adopted ASU 2016-02 during the Fiscal year 2024. The standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. In connection with the adoption, the Company will elect to utilize the modified retrospective presentation whereby the Company will continue to present prior period financial statements and disclosures under ASC Topic 840. In addition, the Company will elect the transition package of three practical expedients permitted within the standard, which eliminates the requirements to reassess prior conclusions about lease identification, lease classification and initial direct costs. Further, the Company will adopt a short-term lease exception policy, permitting us to not apply the recognition requirements of this standard to short-term leases (i.e., leases with terms of 12 months or less), and an accounting policy to account for lease and non-lease components as a single component for certain classes of assets.   Under ASU 2016-02 (Topic 842), lessees are required to recognize the following for all leases (with the exception of short-term leases) on the commencement date: (i) lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.   At the commencement date, the Company recognizes the lease liability at the present value of the lease payments not yet paid, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate for the same term as the underlying lease. The right-of-use asset is recognized initially at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received. All right-of-use assets are reviewed for impairment. There was no impairment for right-of-use lease assets as of March 31, 2024 (March 31, 2023: $ Nil).   The Company categorizes leases at their inception as either operating or finance leases. On certain lease agreements, the Company may receive rent holidays and other incentives. The Company recognizes lease costs on a straight-line basis without regard to deferred payment terms, such as rent holidays, that defer the commencement date of required payments. Please refer to Note 8, “Leases,” for further information.   t) Recently issued and adopted accounting pronouncements   Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. Accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows, or disclosures.

v3.24.3

INVENTORY	12 Months Ended
	Mar. 31, 2024
Inventory Disclosure [Abstract]
INVENTORY	NOTE 3 – INVENTORY   SCHEDULE OF INVENTORY     As of March 31, 2024 ($)     As of March 31, 2023 ($)   Raw Materials*     89,878       251,273   Work in Progress     -       -   Finished Goods     29,865       80,275   Total     119,743       331,548     * During Fiscal 2024, the Company written-off $263 thousand (Fiscal Year 2023: $114 thousand) of inventory on account of compliance with the revised Automotive Industry Standards (AIS)-156 and AIS-038 regulations issued by the Govt of India w.r.t EV batteries and also expiration of Prana 1.0 license. These charges were recorded in Cost of Revenue in the consolidated statements of operations.

v3.24.3

DEPOSITS AND ADVANCES	12 Months Ended
	Mar. 31, 2024
Deposits And Advances
DEPOSITS AND ADVANCES	NOTE 4 – DEPOSITS AND ADVANCES   SCHEDULE OF DEPOSITS AND ADVANCES     As of March 31, 2024 ($)     As of March 31, 2023 ($)   Prepaid expense and other current assets     535,021       52,258   Advance to Suppliers     383,703       236,584   Advance to employees     -       -                     Total     918,724       288,842     Prepaid and other current assets include approximately $ 306 thousand (March 31, 2023: $ 2 thousand) prepaid insurance for Fiscal Year 2024. The Advances to suppliers primarily relate to advances to suppliers of component suppliers in the Vehicle manufacturing segment and also towards supply of capital equipment.

v3.24.3

PROPERTY, PLANT, AND EQUIPMENT	12 Months Ended
	Mar. 31, 2024
Property, Plant and Equipment [Abstract]
PROPERTY, PLANT, AND EQUIPMENT	NOTE 5 – PROPERTY, PLANT, AND EQUIPMENT  SCHEDULE OF PROPERTY, PLANT, AND EQUIPMENT     As of March 31, 2024 ($)     As of March 31, 2023 ($)   Computer & Software & Accessories     56,964       38,037   Electrical Fittings     6,389       5,883   Furniture & Fittings     36,606       27,047   Office Equipment     10,804       6,890   Plant & Machinery     102,879       52,963   Vehicle     5,599       5,678   Lease Hold Improvements     19,458       -   Translation difference     793       -   Total Gross Value     239,492       136,498   Less: Accumulated depreciation     (103,669 )     (81,302 ) Total Property, plant and equipment, net     135,823       55,196     The depreciation expense in Fiscal 2024 and 2023, amounted to approximately $38 thousand and $25 thousand, respectively. The net decrease in total Property, Plant & Equipment is primarily due to depreciation and foreign exchange translations.

v3.24.3

INVESTMENTS IN MARKETABLE SECURITIES	12 Months Ended
	Mar. 31, 2024
Investments, Debt and Equity Securities [Abstract]
INVESTMENTS IN MARKETABLE SECURITIES	NOTE 6 – INVESTMENTS IN MARKETABLE SECURITIES SCHEDULE OF MARKETABLE SECURITIES     As of March 31, 2024 ($)     As of March 31, 2023 ($)   Other Bank balances     13,944       14,415   Total     13,944       14,415     (i) Other bank balances represent the fixed deposits maintained by the Company with the Banks in India which has maturity of more than 3 months as at the year end.

v3.24.3

CLAIMS AND ADVANCES	12 Months Ended
	Mar. 31, 2024
Claims And Advances
CLAIMS AND ADVANCES	NOTE 7 – CLAIMS AND ADVANCES SCHEDULE OF CLAIMS AND ADVANCES     As of March 31, 2024 ($)     As of March 31, 2023 ($)   Refundable taxes (1)     -       86                     Total     -       86       (1) The balance represents Tax deducted by the Vendors/ Suppliers which will be refunded to the Company upon filing of income tax return for the respective year.

v3.24.3

LEASES	12 Months Ended
	Mar. 31, 2024
Leases
LEASES	NOTE 8 – LEASES   The Company has short-term leases primarily consisting of spaces with the remaining lease term being less than or equal to 12 months. The total short- term lease expense and cash paid for Fiscal 2024 is approximately $ 43 thousand (March 31, 2023; $ 29 thousand). The Company also has two operating leases as of March 31, 2024.   In December 2023, the Company entered into a lease agreement with a lease term of 5 years starting from December 1, 2023. The annual lease expense is approximately $18 thousand with escalation of 3 % every year. The lease contract does not contain any material residual value guarantees or material restrictive covenants. The lease does not provide a readily determinable implicit rate. Therefore, the Company discounts lease payments based on an estimate of its incremental borrowing rate.   Operating lease assets and lease liabilities for our operating leases were recorded in the consolidated balance sheet as follows:  SCHEDULE OF OPERATING LEASE ASSETS AND LEASE LIABILITIES     Year Ended March 31, 2024 ($)     Year Ended March 31, 2023 ($)   Assets                 Operating lease asset     222,884       -   Total lease assets     222,884       -                     Liabilities                 Current liabilities:                 Accrued liabilities and others (current portion – operating lease liability)     36,361       -   Non-current liabilities:                 Operating lease liability (non-current portion – operating lease liability)     191,314       -   Total lease liability     227,675       -     Supplemental cash flow and non-cash information related to leases is as follows:  SCHEDULE OF CASH FLOW AND NON CASH INFORMATION RELATED TO LEASES     (in thousands) Year Ended March 31, 2024 ($)     (in thousands) Year Ended March 31, 2023 ($)   Cash paid for amounts included in the measurement of lease liabilities                 –Financing cash flows from operating leases     18,052       -   Right-of-use assets obtained in exchange for operating lease obligations     -       -       As of March 31, 2024, the following table summarizes the maturity of our lease liabilities:  SCHEDULE OF MATURITY OF LEASE LIABILITIES           Mar-25     36,361   2025     36,361   Mar-26     42,529   2026     42,529   Mar-27     49,401   2027     49,401   Mar-28     57,048   2028     57,048   Mar-29     42,336   2029     42,336   Total Lease liabilities     227,675

v3.24.3

ACCRUED LIABILITIES AND OTHERS	12 Months Ended
	Mar. 31, 2024
Payables and Accruals [Abstract]
ACCRUED LIABILITIES AND OTHERS	NOTE 9 – ACCRUED LIABILITIES AND OTHERS SCHEDULE OF ACCRUED LIABILITIES AND OTHERS     As of March 31, 2024 ($)     As of March 31, 2023 ($)   Compensation and other contributions     82,368       15,193   Other current liability     42,832       37,485   Advance from customers     3,494       2,893   Operating lease liability     36,361           Total     165,055       55,571     SCHEDULE OF OTHER LIABILITY      As of March 31, 2024 ($)     As of March 31, 2023 ($)   Statutory reserve*     7,112       -   Other current liability     300,000       -   Operating lease liability – non-current     191,314       -                          Total     498,426       -     Compensation and other contribution related liabilities consist of accrued salaries to employees. Other current liability also includes $ 14 thousand of dealer deposits received from various dealers as of March 31, 2024 (March 31, 2023: $ 28 thousand).   * The statutory reserve is a gratuity reserve for employees in our subsidiaries in India.

v3.24.3

LOANS AND OTHER LIABILITIES	12 Months Ended
	Mar. 31, 2024
Debt Disclosure [Abstract]
LOANS AND OTHER LIABILITIES	NOTE 10 – LOANS AND OTHER LIABILITIES   Short-term loans:   As of March 31, 2024, the Company has the following loans:     a) Working capital loan and overdraft loan facility of USD 1.22 million with Hongkong and Shanghai Banking Corporation Limited (as renewed from time to time, the “HSBC Facility”). The current balance as of march 31, 2024, under the HSBC Facility is approximately USD 20 thousand (Debit). These loans are repayable on demand. The HSBC Facility carries interest rates set using the MCLR/3M T-Bill standards or any other external benchmark determined by the bank annually. Interest is calculated daily on the outstanding balances. The HSBC Facility is secured by SVM’s current assets.         b) Loan from the related Party is taken from the Managing Director of the Company. These loans are unsecured and are repayable on demand.

v3.24.3

COMMITMENTS AND CONTINGENCIES	12 Months Ended
	Mar. 31, 2024
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	NOTE 11 – COMMITMENTS AND CONTINGENCIES   Legal Proceedings   The Company may be involved in legal proceedings, claims and assessments arising in the ordinary course of business. Such matters are subject to many uncertainties, and outcomes are not predictable with assurance. There are no such matters that are deemed material to the financial statements as of March 31, 2024 (March 31, 2023: Nil).   Earnout shares Pursuant to the Merger Agreement, certain shareholders of SVH (the “Pre-Closing Company Shareholders”) and certain shareholders of SVM India (the “Other SVM India Stockholders” and together with the Pre-Closing Company Shareholders, the “Earnout Group”) are entitled to receive their Pro Rata Portion (as defined in the Merger Agreement) of up to 25,000,000 SVH Shares (the “Earnout Shares”).   Earn Out Share payments are within the scope of ASC 480. The Company agreed to issue 25,000,000 Earn Out Shares over a three-year period based on Vehicle Sales Revenue earned at each year, or in the aggregate for the three years. However, the number of shares to be delivered can vary based on the discretion of the Company Board to waive the applicable Vehicle Sales Revenue trigger and release all or any portion of the Earnout shares available, accordingly a liability will be record for the fair value of the Earn Out shares.   At the Extraordinary General Meeting of Shareholders (the “Meeting”) of the Company convened at June 27, 2024, shareholders approved the amendment to the agreement to permit the Issuance of Earnout Shares (as defined below) without the occurrence of Milestone Events (as defined in the Merger Agreement) (the “Amendment of the Earnout Agreement”). Pursuant to the amendment, the Escrow Shares (as defined in that certain Agreement and Plan of Merger (the “Merger Agreement”), dated as of March 13, 2023, by and among the Company, Mobiv Acquisition Corp, and Pegasus Merger Sub Inc.) shall be released to the Earnout Group (as defined in the Merger Agreement) immediately, but subject to vesting in three equal tranches each year over a three-year period (each year a “Vesting Period”) with 1st vesting amount effective from approval of this EGM, regardless of the lack of occurrence of Milestone Events. The Earnout Group shall receive the Escrow Shares multiplied by the weighted average exchange ratio of 15.59 per Escrow Share to reflect the Company’s additional share issuances at the Closing of the Business Combination (as defined in the Merger Agreement) and, if the Reverse Share Split and Share Consolidation are implemented, subsequently divided by the consequent number in the final RS Ratio (for example, 15 for an RS Ratio of 1:15) as determined by the Board of Directors to reflect the effect of the Reverse Share Split and Share Consolidation on the number of ordinary shares on issue. Therefore, the Earnout Group shall receive a total of as low as 25,983,334 if the Reverse Share Split and Share Consolidation are implemented (at an RS Ratio of 1:15) and 389,750,000 Earnout Shares if the Reverse Share Split and Share Consolidation are not implemented (the “Earnout Shares”) (the “Issuance of Earnout Shares”).   Exchange Agreements.   At the Closing, certain shareholders of SRIVARU Motors Private Limited , a private limited company organized under the laws of India and a majority-owned subsidiary of SVH (“SVM India”) will enter into exchange agreements (the “Exchange Agreements”) with SVH, pursuant to which, among other things, such shareholders of SVM India will have a right to transfer one or more of the shares owned by them in SVM India to SVH in exchange for the delivery of SVH Shares or cash payment, subject to the terms and conditions set forth in the Exchange Agreements.

v3.24.3

FAIR VALUE OF FINANCIAL INSTRUMENTS	12 Months Ended
	Mar. 31, 2024
Fair Value Disclosures [Abstract]
FAIR VALUE OF FINANCIAL INSTRUMENTS	NOTE 12 – FAIR VALUE OF FINANCIAL INSTRUMENTS   As of March 31, 2024, the Company’s marketable securities consist of liquid funds, which have been classified as Level 1 of the fair value hierarchy because they have been valued using quoted prices in active markets. The Company’s cash and cash equivalents have also been classified as Level 1 on the same principle. Financial instruments are classified as current if they are expected to be liquidated within the next twelve months. The Company’s remaining investments have been classified as Level 3 instruments as there is little or no market data. Level 3 investments are valued using cost-method.   The following table presents information about the Company’s assets that are measured at fair value on a recurring basis as of March 31, 2024, and March 31, 2023, and indicates the fair value hierarchy of the valuation techniques the Company used to determine such fair value: SCHEDULE OF FAIR VALUE MEASUREMENT     Level 1 ($)     Level 2 ($)     Level 3 ($)     Total ($)   March 31, 2024                                                                   Cash and cash equivalents:     175,041       -       -       175,041   Total cash and cash equivalents     175,041       -       -       175,041                                     Investments:                                 Marketable securities     13,944       -       -       13,944   Total Investment     13,944       -       -       13,944         Level 1 ($)     Level 2 ($)     Level 3 ($)     Total ($)   March 31, 2023                                                                   Cash and cash equivalents:     21,378       -       -       21,378   Total cash and cash equivalents     21,378       -       -       21,378                                     Investments:                                 Marketable securities     14,415       -       -       14,415   Total Investment     14,415       -       -       14,415

v3.24.3

INCOME TAXES	12 Months Ended
	Mar. 31, 2024
Income Tax Disclosure [Abstract]
INCOME TAXES	NOTE 13 – INCOME TAXES   The Company calculates its provision for Income tax based on the current tax law Prevailing in India. Due to the Company’s history of losses, there is no income tax liability accrued in the books during the current year and the previous year.   The significant components of deferred income tax expense/(benefit) from operations for each of the years ended March 31 are approximated as following: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES Deferred income taxes   2024 ($)     2023 ($)                 Net operating loss carry-forwards     -       64,241                     Net deferred tax asset     -       64,241                     Valuation allowance     -       (64,241 ) Deferred income tax expense (benefit)     -       -     A valuation allowance is recognized against deferred tax assets when, based on the consideration of all available positive and negative evidence using a more likely than not criteria, it is determined that all or a portion of these tax benefits may not be realized. This assessment requires consideration of all sources of taxable income available to realize the deferred tax asset including taxable income in prior carry-back years, future reversals of existing temporary differences, tax planning strategies and future taxable income exclusive of reversing temporary differences and carryforwards. The Company incurred losses on a cumulative basis for the two-year period ended March 31, 2024, which is considered to be significant negative evidence. The positive evidence considered in support was insufficient to overcome this negative evidence. As a result, the Company established a full valuation allowance for its net deferred tax asset in the amount of $ Nil as of March 31, 2024 (March 31, 2023: $64 thousand).     RESULTS OF OPERATIONS

v3.24.3

REVENUE	12 Months Ended
	Mar. 31, 2024
Revenue from Contract with Customer [Abstract]
REVENUE	NOTE 14 – REVENUE   Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, discounts, sales incentives, goods & service tax. The Company recognizes revenue when the amount of revenue and its related cost can be reliably measured and it is probable that future economic benefits will flow to the entity and degree of managerial involvement associated with ownership or effective control have been met for each of the Company’s activities. Revenue is recognized for domestic sales of vehicles, spare parts, and accessories when the Company transfers control over such products to the customer on dispatch from the factory.   net sales disaggregated by significant products and services for years ended is as follows: SCHEDULE OF NET SALES DISAGGREGATED BY SIGNIFICANT PRODUCTS AND SERVICES     Year ended March 31, 2024     Year ended March 31, 2023   Vehicle Manufacturing                 Vehicle Sales (1)     28,986       100,022   Others     13,552       12,387                     Total     42,538       112,409     (1)   Revenue from Sales of Vehicle represents sale of Electric Bikes to Authorized dealers in and around India.

v3.24.3

SEGMENT INFORMATION	12 Months Ended
	Mar. 31, 2024
Segment Reporting [Abstract]
SEGMENT INFORMATION	NOTE 15 – SEGMENT INFORMATION   FASB ASC 280, “Segment Reporting” establishes standards for reporting information about reportable segments. Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker, or decision-making group (“CODM”), in deciding how to allocate resources and in assessing performance. The CODM evaluates revenues and gross profits based on product lines and routes to market. Based on our integration and Management strategies, we operate in one reportable segment which is vehicle manufacturing. There are no other significant reportable segments.

v3.24.3

SUBSEQUENT EVENTS	12 Months Ended
	Mar. 31, 2024
Subsequent Events [Abstract]
SUBSEQUENT EVENTS	NOTE 16 – SUBSEQUENT EVENTS   As of July 1, 2024, the Company had entered into an additional financing such as Committed Equity Financing Facility (the “CEFF”) with investors to purchase up to $25,000,000 of the Company’s ordinary shares par value $0.01 per share over a three-year period (the “CEFF Financing”). Pursuant to this arrangement, the Company On July 2, 2024, has received USD 1 million. The equity facility serves to minimize ongoing liquidity requirements and ensure the Company’s ability to sustain its operations. Furthermore, the Company intends to raise additional funds through private placement subject to market conditions

v3.24.3

SIGNIFICANT ACCOUNTING POLICIES (Policies)	12 Months Ended
	Mar. 31, 2024
Accounting Policies [Abstract]
Principles of consolidation	a) Principles of consolidation   The accompanying consolidated financial statements have been prepared in conformity with GAAP and reflect our accounts and operations and those of our subsidiaries in which we have a controlling financial interest. In accordance with the provisions of ASC 810, Consolidation (“ASC 810”). The consolidated financial statements include the accounts of the Company and all its subsidiaries. Intercompany accounts and transactions have been eliminated. In the opinion of the Company’s management, the consolidated financial statements reflect all adjustments, which are normal and recurring in nature, necessary for fair financial statement presentation. Transactions between the Company and its subsidiaries are eliminated in the consolidated financial statements.
Basis of Preparation	b) Basis of Preparation   The accompanying financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP).   Business Combination/ Transaction:   On December 8, 2023 (the “Closing Date” and such closing, the “Closing”), we consummated the previously announced business combination pursuant to the Business Combination Agreement, dated as of March 13, 2023 (the “Business Combination Agreement”), by and among us, Pegasus Merger Sub Inc., a Delaware corporation and direct, wholly owned subsidiary of the Company (“Merger Sub”) and MOBV. As of the Closing Date, pursuant to the terms of the Business Combination Agreement, Merger Sub merged with and into MOBV (the “Merger”), with MOBV surviving the Merger as a wholly owned subsidiary of the Company (the “Business Combination”).   SVH has given effect a 0.7806 share sub-division of all the shares of SVH, par value US $0.01 (“SVH Shares”) (both issued and unissued) in accordance with section 13(1)(d) of the Companies Act (as amended) of the Cayman Islands and the applicable provisions of the Governing Documents (as defined in the Merger Agreement) of SVH (the “Stock Split”), such that the number of outstanding SVH Shares immediately prior to the Effective Time (excluding the Escrowed Earnout Shares (as defined in the Merger Agreement) issued in conjunction with the Stock Split) is 14,946,286.   Exchange Consideration:   Each MOBV Share (except for the Excluded Shares, as defined below) was automatically converted as of the Effective Time into the right to receive the Per Share Consideration and each of the MOBV Warrants has automatically become a SVH Warrant and all rights with respect to MOBV Shares underlying the MOBV Warrants have automatically converted into rights with respect to SVH Shares and thereupon assumed by the SVH. The Excluded Shares refer to any MOBV Public Shares (a) held in the treasury of MOBV, (b) otherwise held by MOBV or (c) for which a public shareholder of MOBV has demanded that MOBV redeem.   Each issued and outstanding share of capital stock of Merger Sub issued and outstanding immediately prior to the Effective Time was converted into and become one validly issued, fully paid and non-assessable share of ordinary shares, par value $0.01 per share, of the Surviving Company, which constitutes the only outstanding share of capital stock of the Surviving Company.   Each Excluded Share was surrendered and cancelled and has cease to exist and no consideration was be delivered exchange therefor.     Accounting for the Transaction:   SVH is both the legal and accounting acquirer as the shares of MOBV will convert into the right to receive SVH Shares (the “Per Share Consideration”) and MOBV has legally become SVH’s wholly owned subsidiary as a result of the merger with Merger Sub.   The Transaction will be accounted for as an asset acquisition. MOBV does not qualify as a Business per ASC 805-10-55-3A. Since the acquisition is based on a monetary exchange, and most of the assets of MOBV are marketable securities in the Trust Account, the fair value of the assets is the more evident value. The liabilities assumed are all of short-term nature which are deemed to be at fair value. As such the fair value of the consideration given, in this case the transaction costs incurred, one to one share exchange and the Earn Out consideration should be allocated using the relative fair value approach based on the net asset value acquired from MOBV. Given the nature of the assets acquired and liabilities assumed from MOBV, an allocation of the transaction costs and Earnout consideration cannot be made to the net assets acquired. Accordingly, an immediate charge to operations would be recognized for the difference between the relative value allocated to the earnout and the fair value, as well as for the value of the transaction costs.   Exchange agreement   The Exchange Agreement does provide the Company with the obligation to purchase the SVM shares for cash. “Cash Exchange Payment” means with respect to a particular Call Exchange for which the Company has elected to make a Cash Exchange or a particular Put Exchange for which the Shareholder has elected to receive a Cash Exchange Payment: The terms both a call and a put option with same strike price and exercise dates applied and have a fixed redemption price. As such the Exchange Agreement should be classified as a liability under ASC 480 and the NCI removed from equity with the subsidiary reported at 100% by the parent.   Earnout shares   Pursuant to the Merger Agreement, certain shareholders of SVH (the “Pre-Closing Company Shareholders”) and certain shareholders of SVM India (the “Other SVM India Stockholders” and together with the Pre-Closing Company Shareholders, the “Earnout Group”) are entitled to receive their Pro Rata Portion (as defined in the Merger Agreement) of up to 25,000,000 SVH Shares (the “Earnout Shares”).   Earn Out Share payments are within the scope of ASC 480. The Company agreed to issue 25,000,000 Earn Out Shares over a three-year period based on Vehicle Sales Revenue earned at each year, or in the aggregate for the three years. However, the number of shares to be delivered can vary based on the discretion of the Company Board to waive the applicable Vehicle Sales Revenue trigger and release all or any portion of the Earnout shares available, accordingly a liability will be record for the fair value of the Earn Out shares.   At the Extraordinary General Meeting of Shareholders (the “Meeting”) of the Company convened at June 27, 2024, shareholders approved the amendment to the agreement to permit the Issuance of Earnout Shares (as defined below) without the occurrence of Milestone Events (as defined in the Merger Agreement) (the “Amendment of the Earnout Agreement”). Pursuant to the amendment, the Escrow Shares (as defined in that certain Agreement and Plan of Merger (the “Merger Agreement”), dated as of March 13, 2023, by and among the Company, Mobiv Acquisition Corp, and Pegasus Merger Sub Inc.) shall be released to the Earnout Group (as defined in the Merger Agreement) immediately, but subject to vesting in three equal tranches each year over a three-year period (each year a “Vesting Period”) with 1st vesting amount effective from approval of this EGM, regardless of the lack of occurrence of Milestone Events. The Earnout Group shall receive the Escrow Shares multiplied by the weighted average exchange ratio of 15.59 per Escrow Share to reflect the Company’s additional share issuances at the Closing of the Business Combination (as defined in the Merger Agreement) and, if the Reverse Share Split and Share Consolidation are implemented, subsequently divided by the consequent number in the final RS Ratio (for example, 15 for an RS Ratio of 1:15) as determined by the Board of Directors to reflect the effect of the Reverse Share Split and Share Consolidation on the number of ordinary shares on issue. Therefore, the Earnout Group shall receive a total of as low as 25,983,334 if the Reverse Share Split and Share Consolidation are implemented (at an RS Ratio of 1:15) and 389,750,000 Earnout Shares if the Reverse Share Split and Share Consolidation are not implemented (the “Earnout Shares”) (the “Issuance of Earnout Shares”).
Going Concern	c) Going Concern   The Company assesses and determines its ability to continue as a going concern in accordance with the provisions of ASC Subtopic 205-40, “Presentation of Financial Statements—Going Concern”, which requires the Company to evaluate whether there are conditions or events that raise substantial doubt about its ability to continue as a going concern.   The Company is currently in a process of obtaining the Prana 2.0 License and setting up of expanding the manufacturing facility in India and, thus, has not yet achieved profitability. The Company expects to continue to incur significant operating and net losses and negative cash flows from operations in the near future.     For the years ended March 31, 2024, and March 31, 2023, the Company incurred net losses of $11.5 million and $0.7 million, respectively. As of March 31, 2024, the Company’s cash and cash equivalents totaled $0.2 million. As of July 1, 2024, the Company had enter into an additional financing such as Committed Equity Financing Facility (the “CEFF”) with investors to purchase up to $25,000,000 of the Company’s ordinary shares par value $0.01 per share over a three-year period (the “CEFF Financing”). Pursuant to this arrangement, the Company On July 2, 2024, has received USD 1 million. The equity and the credit facility serve to minimize ongoing liquidity requirements and ensure the Company’s ability to sustain its operations. Furthermore, the Company intends to raise additional funds through private placement subject to market conditions. Please refer to Note 16, “Subsequent Event,” for further information.   The Company estimates that its current cash and cash equivalents balance with working capital and equity investment is sufficient to support operations beyond the twelve months following the date these consolidated financial statements and footnotes were issued. These estimates are based on assumptions that may prove to be wrong, and the Company could use its available capital resources sooner than it currently expects.
Use of estimates	d) Use of estimates   The preparation of financial statements in conformity with accounting principles generally accepted in the U.S. (U.S. GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.   Management believes that the estimates and assumptions used in the preparation of the financial statements are prudent and reasonable. Significant estimates and assumptions are generally used for, but not limited to allowance for uncollectible accounts receivable; sales returns; normal loss during production; inventory write-downs; future obligations under employee benefit plans; the useful lives of property, plant, equipment; intangible assets; valuations; impairment of goodwill and investments; recoverability of advances; the valuation of options granted, and warrants issued; and income tax and deferred tax valuation allowances, if any. Actual results could differ from those estimates. Appropriate changes in estimates are made as management becomes aware of changes in circumstances surrounding the estimates. Critical accounting estimates could change from period to period and could have a material impact on SVH’s results, operations, financial position, and cash flows. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the consolidated financial statements.
Revenue recognition	e) Revenue recognition   The Company recognizes revenue under ASC 606, Revenue from Contracts with Customers (“ASC 606”). The core principle of this standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services.   ASC 606 prescribes a 5-step process to achieve its core principle. The Company recognizes revenue from trading, rental, or product sales as follows:     I. Identify the contract with the customer.   II. Identify the contractual performance obligations.   III. Determine the amount of consideration/price for the transaction.   IV. Allocate the determined amount of consideration/price to the contractual obligations.   V. Recognize revenue when or as the performing party satisfies performance obligations.   The consideration/price for the transaction (performance obligation(s)) is determined as per the agreement or invoice (contract) for the services and products in the automobile segment. Refer to Note 14 - “Revenue Recognition.”
Cost of Revenue	f) Cost of Revenue   Our cost of revenue includes costs associated with labor expense, components, manufacturing overhead, and outbound freight for our products division.
Earnings/(Loss) per Share	(g) Earnings/(Loss) per Share   Basic net loss per share attributable to ordinary sharesholders is computed by dividing the net loss by the number of weighted-average outstanding common shares. Diluted net loss per share attributable to ordinary sharesholders is determined by giving effect to all potential common equivalents during the reporting period, unless including them yields an antidilutive result.   The weighted average number of shares outstanding for the years ended March 31, 2024 and 2023, used for the computation of basic earnings per share (“EPS”) is 20,763,518 and 19,145,415 respectively.
Income taxes	h) Income taxes   The Company accounts for income taxes under the asset and liability method, in accordance with ASC 740, Income Taxes, which requires an entity to recognize deferred tax liabilities and assets. Deferred tax assets and liabilities are recognized for the future tax consequence attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their tax bases and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using the enacted tax rate expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that included the enactment date. A valuation allowance is established and recorded when management determines that some or all of the deferred tax assets are not likely to be realized and therefore, it is necessary to reduce deferred tax assets to the amount expected to be realized.   In evaluating a tax position for recognition, management evaluates whether it is more-likely-than-not that a position will be sustained upon examination, including resolution of related appeals or litigation processes, based on technical merits of the position. If the tax position meets the more-likely-than-not recognition threshold, the tax position is measured and recognized in the Company’s financial statements as the largest amount of tax benefit that, in management’s judgment, is greater than 50% likely of being realized upon settlement. As of March 31, 2024, there was no significant liability for income tax associated with unrecognized tax benefits.
Accounts receivable	i) Accounts receivable   We make estimates of the collectability of our accounts receivable by analyzing historical payment patterns, customer concentrations, customer creditworthiness, and current economic trends. If the financial condition of a customer deteriorates, additional allowances may be required. We had $Nil accounts receivable, net of provision for doubtful debt of $Nil as of March 31, 2024 (March 31, 2023; $Nil).
Cash and cash equivalents	j) Cash and cash equivalents   For financial statement purposes, the Company considers all highly liquid debt instruments with maturity of three months or less, to be cash equivalents. The Company maintains its cash in bank accounts in India. The cash and cash equivalents in the Company on March 31, 2024 was approximately $ 175 thousand (March 31, 2023; $ 21 thousand).
Short-term and long-term investments	k) Short-term and long-term investments   Our policy for short-term and long-term investments is to establish a high-quality portfolio that preserves principal, meets liquidity needs, avoids inappropriate concentrations, and delivers an appropriate yield in relationship to our investment guidelines and market conditions. Short-term and long-term investments consist of corporate, various government agency and municipal debt securities, as well as certificates of deposit that have maturity dates that are greater than 90 days. Certificates of deposit are carried at cost which approximates fair value. Available-for-sale securities: Investments in debt securities that are classified as available for sale shall be measured subsequently at fair value in the statement of financial position.   Investments are initially measured at cost, which is the fair value of the consideration given for them, including transaction costs. Where the Company’s ownership interest is in excess of 20% and the Company has a significant influence, the Company has accounted for the investment based on the equity method in accordance with ASC Topic 323, “Investments – Equity method and Joint Ventures.” Under the equity method, the Company’s share of the post-acquisition profits or losses of the equity investee is recognized in the consolidated statements of operations and its share of post-acquisition movements in accumulated other comprehensive income / (loss) is recognized in other comprehensive income / (loss). Where the Company does not have significant influence, the Company has accounted for the investment in accordance with ASC Topic 321, “Investments-Equity Securities.”   As of March 31, 2024, investment in marketable securities is valued at fair value and investment in non-marketable securities with ownership less than 20% is valued at cost as per ASC Topic 321, “Investments-Equity Securities.”
Property, plant, and equipment (PP&E)	l) Property, plant, and equipment (PP&E)   Property and equipment are recorded at cost net of accumulated depreciation and depreciated over their estimated useful lives using the Written down value method.   Upon retirement or disposition, cost and related accumulated depreciation of the property and equipment are de-recognized, and any gain or loss is reflected in the results of operation. Cost of additions and substantial improvements to property and equipment are capitalized. The cost of maintenance and repairs of the property and equipment are charged to operating expenses as incurred.
Fair value of financial instruments	m) Fair value of financial instruments   ASC 820, “Fair Value Measurement” defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. It also establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:   Level 1: Observable inputs such as quoted prices in active markets; Level 2: Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and Level 3: Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.   The carrying amounts of the Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, approximate their fair values due to the nature of the items. Please refer to Note 15, “Fair value of financial instruments,” for further information.
Concentration of credit risk and significant customers	n) Concentration of credit risk and significant customers   Financial instruments, which potentially expose the Company to concentrations of credit risk, are primarily comprised of cash and cash equivalents, investments, accounts receivable and unbilled accounts receivable, if any. The Company places its cash, investments in highly rated financial institutions. The Company adheres to a formal investment policy with the primary objective of preservation of principal, which contains credit rating minimums and diversification requirements. Management believes its credit policies reflect normal industry terms and business risk. The Company does not anticipate non-performance by the counterparties and, accordingly, does not require collateral. During Fiscal 2024, sales were spread across customers in India and the credit concentration risk is low.
Commitments and contingencies	o) Commitments and contingencies   Liabilities for loss contingencies arising from claims, assessments, litigations, fines and penalties and other sources are recorded when it is probable that a liability has been incurred and the amount of the assessment and/or remediation can be reasonably estimated. We record associated legal fees as incurred. Information regarding our commitments and contingencies is incorporated by reference in Note 11, “Commitments and contingencies” of these financial statements.
Impairment of long – lived assets	p) Impairment of long – lived assets   The Company reviews its long-lived assets, with finite lives, for impairment whenever events or changes in business circumstances indicate that the carrying amount of assets may not be fully recoverable. Such circumstances include, though are not limited to, significant or sustained declines in revenues or earnings, future anticipated cash flows, business plans and material adverse changes in the economic climate, such as changes in operating environment, competitive information, and impact of changes in government policies. For assets that the Company intends to hold for use, if the total of the expected future undiscounted cash flows produced by the assets or subsidiary company is less than the carrying amount of the assets, a loss is recognized for the difference between the fair value and carrying value of the assets. For assets, the Company intends to dispose of by sale, a loss is recognized for the amount by which the estimated fair value less cost to sell is less than the carrying value of the assets. Fair value is determined based on quoted market prices, if available, or other valuation techniques including discounted future net cash flows. Unlike goodwill, long-lived assets are assessed for impairment only where there are any specific indicators for impairment.
Inventory	q) Inventory   Inventory is valued at the lower of cost or net realizable value, which is defined as estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation.   Inventory consists of raw materials, finished goods related to manufacture of Electric vehicles. Inventory is primarily accounted for using the weighted average cost method. Primary costs include raw materials, packaging, direct labor, overhead, shipping and the depreciation of manufacturing equipment. Manufacturing overhead and related expenses include salaries, wages, employee benefits, utilities, maintenance, and property taxes.   Electric Vehicles are measured at net realizable value, with changes recognized in profit or loss only when the Vehicle:     - has a reliable, readily determinable, and realizable market value;   - has relatively insignificant and predictable costs of disposal; and   - is available for immediate delivery.   Abnormal amounts of idle facility expense, freight, handling costs, scrap, discontinued products and wasted material (spoilage) are expensed in the period they are incurred.
Foreign currency translation	r) Foreign currency translation   the Company operates in India, Cayman Islands and a substantial portion of the Company’s financials are denominated in the Indian Rupee (“INR”). As a result, changes in the relative values of the U.S. Dollar (“USD”), or the INR affect financial statements.   The accompanying financial statements are reported in USD. The INR is the functional currencies for subsidiary of the Company. The translation of the functional currencies into U.S. dollars is performed for assets and liabilities using the exchange rates in effect at the balance sheet date and for revenues and expenses using average exchange rates prevailing during the reporting periods. Adjustments resulting from the translation of functional currency financial statements to reporting currency are accumulated and reported as other comprehensive income/(loss), a separate component of shareholders’ equity.   SCHEDULE OF FOREIGN CURRENCY TRANSLATION     Year End Average Rate     Year End Rate   Period   (P&L rate)     (Balance sheet rate)   Year ended March 31, 2024   INR 82.7954 Per USD     INR 83.3739 Per USD                     Year ended March 31, 2023   INR 79.0120 Per USD     INR 82.2169 Per USD
Leases	s) Leases   Lessee Accounting   The Company adopted ASU 2016-02 during the Fiscal year 2024. The standard establishes a right-of-use model (“ROU”) that requires a lessee to recognize a ROU asset and lease liability on the balance sheet for all leases with a term longer than 12 months. Leases will be classified as finance or operating, with classification affecting the pattern and classification of expense recognition in the income statement. In connection with the adoption, the Company will elect to utilize the modified retrospective presentation whereby the Company will continue to present prior period financial statements and disclosures under ASC Topic 840. In addition, the Company will elect the transition package of three practical expedients permitted within the standard, which eliminates the requirements to reassess prior conclusions about lease identification, lease classification and initial direct costs. Further, the Company will adopt a short-term lease exception policy, permitting us to not apply the recognition requirements of this standard to short-term leases (i.e., leases with terms of 12 months or less), and an accounting policy to account for lease and non-lease components as a single component for certain classes of assets.   Under ASU 2016-02 (Topic 842), lessees are required to recognize the following for all leases (with the exception of short-term leases) on the commencement date: (i) lease liability, which is a lessee’s obligation to make lease payments arising from a lease, measured on a discounted basis; and (ii) right-of-use asset, which is an asset that represents the lessee’s right to use, or control the use of, a specified asset for the lease term.   At the commencement date, the Company recognizes the lease liability at the present value of the lease payments not yet paid, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company’s incremental borrowing rate for the same term as the underlying lease. The right-of-use asset is recognized initially at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received. All right-of-use assets are reviewed for impairment. There was no impairment for right-of-use lease assets as of March 31, 2024 (March 31, 2023: $ Nil).   The Company categorizes leases at their inception as either operating or finance leases. On certain lease agreements, the Company may receive rent holidays and other incentives. The Company recognizes lease costs on a straight-line basis without regard to deferred payment terms, such as rent holidays, that defer the commencement date of required payments. Please refer to Note 8, “Leases,” for further information.
Recently issued and adopted accounting pronouncements	t) Recently issued and adopted accounting pronouncements   Changes to U.S. GAAP are established by the Financial Accounting Standards Board (“FASB”) in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. Accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not discuss recent pronouncements that are not anticipated to have an impact on or are unrelated to its consolidated financial condition, results of operations, cash flows, or disclosures.

v3.24.3

SIGNIFICANT ACCOUNTING POLICIES (Tables)	12 Months Ended
	Mar. 31, 2024
Accounting Policies [Abstract]
SCHEDULE OF FOREIGN CURRENCY TRANSLATION	SCHEDULE OF FOREIGN CURRENCY TRANSLATION     Year End Average Rate     Year End Rate   Period   (P&L rate)     (Balance sheet rate)   Year ended March 31, 2024   INR 82.7954 Per USD     INR 83.3739 Per USD                     Year ended March 31, 2023   INR 79.0120 Per USD     INR 82.2169 Per USD

v3.24.3

INVENTORY (Tables)	12 Months Ended
	Mar. 31, 2024
Inventory Disclosure [Abstract]
SCHEDULE OF INVENTORY	SCHEDULE OF INVENTORY     As of March 31, 2024 ($)     As of March 31, 2023 ($)   Raw Materials*     89,878       251,273   Work in Progress     -       -   Finished Goods     29,865       80,275   Total     119,743       331,548     * During Fiscal 2024, the Company written-off $263 thousand (Fiscal Year 2023: $114 thousand) of inventory on account of compliance with the revised Automotive Industry Standards (AIS)-156 and AIS-038 regulations issued by the Govt of India w.r.t EV batteries and also expiration of Prana 1.0 license. These charges were recorded in Cost of Revenue in the consolidated statements of operations.

v3.24.3

DEPOSITS AND ADVANCES (Tables)	12 Months Ended
	Mar. 31, 2024
Deposits And Advances
SCHEDULE OF DEPOSITS AND ADVANCES	SCHEDULE OF DEPOSITS AND ADVANCES     As of March 31, 2024 ($)     As of March 31, 2023 ($)   Prepaid expense and other current assets     535,021       52,258   Advance to Suppliers     383,703       236,584   Advance to employees     -       -                     Total     918,724       288,842

v3.24.3

PROPERTY, PLANT, AND EQUIPMENT (Tables)	12 Months Ended
	Mar. 31, 2024
Property, Plant and Equipment [Abstract]
SCHEDULE OF PROPERTY, PLANT, AND EQUIPMENT	SCHEDULE OF PROPERTY, PLANT, AND EQUIPMENT     As of March 31, 2024 ($)     As of March 31, 2023 ($)   Computer & Software & Accessories     56,964       38,037   Electrical Fittings     6,389       5,883   Furniture & Fittings     36,606       27,047   Office Equipment     10,804       6,890   Plant & Machinery     102,879       52,963   Vehicle     5,599       5,678   Lease Hold Improvements     19,458       -   Translation difference     793       -   Total Gross Value     239,492       136,498   Less: Accumulated depreciation     (103,669 )     (81,302 ) Total Property, plant and equipment, net     135,823       55,196

v3.24.3

INVESTMENTS IN MARKETABLE SECURITIES (Tables)	12 Months Ended
	Mar. 31, 2024
Investments, Debt and Equity Securities [Abstract]
SCHEDULE OF MARKETABLE SECURITIES	SCHEDULE OF MARKETABLE SECURITIES     As of March 31, 2024 ($)     As of March 31, 2023 ($)   Other Bank balances     13,944       14,415   Total     13,944       14,415     (i) Other bank balances represent the fixed deposits maintained by the Company with the Banks in India which has maturity of more than 3 months as at the year end.

v3.24.3

CLAIMS AND ADVANCES (Tables)	12 Months Ended
	Mar. 31, 2024
Claims And Advances
SCHEDULE OF CLAIMS AND ADVANCES	SCHEDULE OF CLAIMS AND ADVANCES     As of March 31, 2024 ($)     As of March 31, 2023 ($)   Refundable taxes (1)     -       86                     Total     -       86       (1) The balance represents Tax deducted by the Vendors/ Suppliers which will be refunded to the Company upon filing of income tax return for the respective year.

v3.24.3

LEASES (Tables)	12 Months Ended
	Mar. 31, 2024
Leases
SCHEDULE OF OPERATING LEASE ASSETS AND LEASE LIABILITIES	Operating lease assets and lease liabilities for our operating leases were recorded in the consolidated balance sheet as follows:  SCHEDULE OF OPERATING LEASE ASSETS AND LEASE LIABILITIES     Year Ended March 31, 2024 ($)     Year Ended March 31, 2023 ($)   Assets                 Operating lease asset     222,884       -   Total lease assets     222,884       -                     Liabilities                 Current liabilities:                 Accrued liabilities and others (current portion – operating lease liability)     36,361       -   Non-current liabilities:                 Operating lease liability (non-current portion – operating lease liability)     191,314       -   Total lease liability     227,675       -
SCHEDULE OF CASH FLOW AND NON CASH INFORMATION RELATED TO LEASES	Supplemental cash flow and non-cash information related to leases is as follows:  SCHEDULE OF CASH FLOW AND NON CASH INFORMATION RELATED TO LEASES     (in thousands) Year Ended March 31, 2024 ($)     (in thousands) Year Ended March 31, 2023 ($)   Cash paid for amounts included in the measurement of lease liabilities                 –Financing cash flows from operating leases     18,052       -   Right-of-use assets obtained in exchange for operating lease obligations     -       -
SCHEDULE OF MATURITY OF LEASE LIABILITIES	As of March 31, 2024, the following table summarizes the maturity of our lease liabilities:  SCHEDULE OF MATURITY OF LEASE LIABILITIES           Mar-25     36,361   2025     36,361   Mar-26     42,529   2026     42,529   Mar-27     49,401   2027     49,401   Mar-28     57,048   2028     57,048   Mar-29     42,336   2029     42,336   Total Lease liabilities     227,675

v3.24.3

ACCRUED LIABILITIES AND OTHERS (Tables)	12 Months Ended
	Mar. 31, 2024
Payables and Accruals [Abstract]
SCHEDULE OF ACCRUED LIABILITIES AND OTHERS	SCHEDULE OF ACCRUED LIABILITIES AND OTHERS     As of March 31, 2024 ($)     As of March 31, 2023 ($)   Compensation and other contributions     82,368       15,193   Other current liability     42,832       37,485   Advance from customers     3,494       2,893   Operating lease liability     36,361           Total     165,055       55,571
SCHEDULE OF OTHER LIABILITY	SCHEDULE OF OTHER LIABILITY      As of March 31, 2024 ($)     As of March 31, 2023 ($)   Statutory reserve*     7,112       -   Other current liability     300,000       -   Operating lease liability – non-current     191,314       -                          Total     498,426       -     Compensation and other contribution related liabilities consist of accrued salaries to employees. Other current liability also includes $ 14 thousand of dealer deposits received from various dealers as of March 31, 2024 (March 31, 2023: $ 28 thousand).   * The statutory reserve is a gratuity reserve for employees in our subsidiaries in India.

v3.24.3

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)	12 Months Ended
	Mar. 31, 2024
Fair Value Disclosures [Abstract]
SCHEDULE OF FAIR VALUE MEASUREMENT	SCHEDULE OF FAIR VALUE MEASUREMENT     Level 1 ($)     Level 2 ($)     Level 3 ($)     Total ($)   March 31, 2024                                                                   Cash and cash equivalents:     175,041       -       -       175,041   Total cash and cash equivalents     175,041       -       -       175,041                                     Investments:                                 Marketable securities     13,944       -       -       13,944   Total Investment     13,944       -       -       13,944         Level 1 ($)     Level 2 ($)     Level 3 ($)     Total ($)   March 31, 2023                                                                   Cash and cash equivalents:     21,378       -       -       21,378   Total cash and cash equivalents     21,378       -       -       21,378                                     Investments:                                 Marketable securities     14,415       -       -       14,415   Total Investment     14,415       -       -       14,415

v3.24.3

INCOME TAXES (Tables)	12 Months Ended
	Mar. 31, 2024
Income Tax Disclosure [Abstract]
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES	The significant components of deferred income tax expense/(benefit) from operations for each of the years ended March 31 are approximated as following: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES Deferred income taxes   2024 ($)     2023 ($)                 Net operating loss carry-forwards     -       64,241                     Net deferred tax asset     -       64,241                     Valuation allowance     -       (64,241 ) Deferred income tax expense (benefit)     -       -

v3.24.3

REVENUE (Tables)	12 Months Ended
	Mar. 31, 2024
Revenue from Contract with Customer [Abstract]
SCHEDULE OF NET SALES DISAGGREGATED BY SIGNIFICANT PRODUCTS AND SERVICES	SCHEDULE OF NET SALES DISAGGREGATED BY SIGNIFICANT PRODUCTS AND SERVICES     Year ended March 31, 2024     Year ended March 31, 2023   Vehicle Manufacturing                 Vehicle Sales (1)     28,986       100,022   Others     13,552       12,387                     Total     42,538       112,409     (1)   Revenue from Sales of Vehicle represents sale of Electric Bikes to Authorized dealers in and around India.

v3.24.3

SCHEDULE OF FOREIGN CURRENCY TRANSLATION (Details) - $ / shares	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Accounting Policies [Abstract]
Year End Average Rate, P and L rate	$ 82.7954	$ 79.0120
Year End Rate, Balance sheet rate	$ 83.3739	$ 82.2169

v3.24.3

SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) - USD ($)				12 Months Ended
	Jul. 02, 2024	Jul. 01, 2024	Mar. 13, 2023	Mar. 31, 2024	Mar. 31, 2023
Property, Plant and Equipment [Line Items]
Common stock, par value				$ 0.01
Vesting period			3 years
Net losses				$ 11,482,294	$ 674,948
Cash				175,041	21,378
Shares issued				$ 6,269,127	$ 25,001
Weighted average shares outstanding, basic				20,763,518	19,145,415
Accounts receivable
Provision for doubtful debt
Impairment for right-of-use lease assets				$ 0
Subsequent Event [Member]
Property, Plant and Equipment [Line Items]
Investment company, committed capital		$ 25,000,000
Ordinary shares, par value		$ 0.01
Equity financing term		3 years
Shares issued	$ 1,000,000
Merger Agreement [Member]
Property, Plant and Equipment [Line Items]
Sub- division of shares				$ 0.7806
Common stock, par value				$ 0.01
Stock split				14,946,286
Reverse stock split shares				389,750,000
Merger Agreement [Member] | Board of Directors Chairman [Member]
Property, Plant and Equipment [Line Items]
Reverse stock split shares				25,983,334
Merger Agreement [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Earnout shares				25,000,000
Exchange Agreement [Member]
Property, Plant and Equipment [Line Items]
Subsidiary classified percentage				100.00%

v3.24.3

SCHEDULE OF INVENTORY (Details) - USD ($)		Mar. 31, 2024	Mar. 31, 2023
Inventory Disclosure [Abstract]
Raw Materials	[1]	$ 89,878	$ 251,273
Work in Progress
Finished Goods		29,865	80,275
Total		$ 119,743	$ 331,548
[1] During Fiscal 2024, the Company written-off $263 thousand (Fiscal Year 2023: $114 thousand) of inventory on account of compliance with the revised Automotive Industry Standards (AIS)-156 and AIS-038 regulations issued by the Govt of India w.r.t EV batteries and also expiration of Prana 1.0 license. These charges were recorded in Cost of Revenue in the consolidated statements of operations.

v3.24.3

SCHEDULE OF INVENTORY (Details) (Parenthetical) - USD ($)	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Inventory Disclosure [Abstract]
Inventory write down	$ 262,686	$ 113,724

v3.24.3

SCHEDULE OF DEPOSITS AND ADVANCES (Details) - USD ($)	Mar. 31, 2024	Mar. 31, 2023
Deposits And Advances
Prepaid expense and other current assets	$ 535,021	$ 52,258
Advance to Suppliers	383,703	236,584
Advance to employees
Total	$ 918,724	$ 288,842

v3.24.3

DEPOSITS AND ADVANCES (Details Narrative) - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023
Deposits And Advances
Good and service tax credit	$ 306	$ 2

v3.24.3

SCHEDULE OF PROPERTY, PLANT, AND EQUIPMENT (Details) - USD ($)	Mar. 31, 2024	Mar. 31, 2023
Property, Plant and Equipment [Line Items]
Total Gross Value	$ 239,492	$ 136,498
Less: Accumulated depreciation	(103,669)	(81,302)
Total Property, plant and equipment, net	135,823	55,196
Computer Equipment [Member]
Property, Plant and Equipment [Line Items]
Total Gross Value	56,964	38,037
Electrical Fittings [Member]
Property, Plant and Equipment [Line Items]
Total Gross Value	6,389	5,883
Furniture and Fixtures [Member]
Property, Plant and Equipment [Line Items]
Total Gross Value	36,606	27,047
Office Equipment [Member]
Property, Plant and Equipment [Line Items]
Total Gross Value	10,804	6,890
Plant And Machinery [Member]
Property, Plant and Equipment [Line Items]
Total Gross Value	102,879	52,963
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Total Gross Value	5,599	5,678
Leasehold Improvements [Member]
Property, Plant and Equipment [Line Items]
Total Gross Value	19,458
Translation Difference [Member]
Property, Plant and Equipment [Line Items]
Total Gross Value	$ 793

v3.24.3

PROPERTY, PLANT, AND EQUIPMENT (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Property, Plant and Equipment [Abstract]
Depreciation expense	$ 38	$ 25

v3.24.3

SCHEDULE OF MARKETABLE SECURITIES (Details) - USD ($)	Mar. 31, 2024	Mar. 31, 2023
Investments, Debt and Equity Securities [Abstract]
Other Bank balances	$ 13,944	$ 14,415
Total	$ 13,944	$ 14,415

v3.24.3

SCHEDULE OF CLAIMS AND ADVANCES (Details) - USD ($)		Mar. 31, 2024	Mar. 31, 2023
Claims And Advances
Refundable taxes	[1]		$ 86
Total			$ 86
[1] The balance represents Tax deducted by the Vendors/ Suppliers which will be refunded to the Company upon filing of income tax return for the respective year.

v3.24.3

SCHEDULE OF OPERATING LEASE ASSETS AND LEASE LIABILITIES (Details) - USD ($)	Mar. 31, 2024	Mar. 31, 2023
Leases
Operating lease asset	$ 222,884
Total lease assets	222,884
Accrued liabilities and others (current portion – operating lease liability)	36,361
Operating lease liability (non-current portion – operating lease liability)	191,314
Total lease liability	$ 227,675

v3.24.3

SCHEDULE OF CASH FLOW AND NON CASH INFORMATION RELATED TO LEASES (Details) - USD ($)	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023
Leases
–Financing cash flows from operating leases	$ 18,052
Right-of-use assets obtained in exchange for operating lease obligations

v3.24.3

SCHEDULE OF MATURITY OF LEASE LIABILITIES (Details) - USD ($)	Mar. 31, 2024	Mar. 31, 2023
Leases
2025	$ 36,361
2026	42,529
2027	49,401
2028	57,048
2029	42,336
Total Lease liabilities	$ 227,675

v3.24.3

LEASES (Details Narrative) - USD ($) $ in Thousands	12 Months Ended
	Mar. 31, 2024	Mar. 31, 2023	Dec. 31, 2023
Leases
Lessee operating lease term	12 months		5 years
Short- term lease expense and cash paid	$ 43	$ 29
Lease expense	$ 18
Percentage of lease escalation	3.00%

v3.24.3

SCHEDULE OF ACCRUED LIABILITIES AND OTHERS (Details) - USD ($)	Mar. 31, 2024	Mar. 31, 2023
Payables and Accruals [Abstract]
Compensation and other contributions	$ 82,368	$ 15,193
Other current liability	42,832	37,485
Advance from customers	3,494	2,893
Operating lease liability	36,361
Total	$ 165,055	$ 55,571

v3.24.3

SCHEDULE OF OTHER LIABILITY (Details) - USD ($)		Mar. 31, 2024	Mar. 31, 2023
Payables and Accruals [Abstract]
Statutory reserve	[1]	$ 7,112
Other current liability		300,000
Operating lease liability – non-current		191,314
Total		$ 498,426
[1] The statutory reserve is a gratuity reserve for employees in our subsidiaries in India.

v3.24.3

ACCRUED LIABILITIES AND OTHERS (Details Narrative) - USD ($) $ in Thousands	Mar. 31, 2024	Mar. 31, 2023
Payables and Accruals [Abstract]
Dealer deposits	$ 14	$ 28

v3.24.3

LOANS AND OTHER LIABILITIES (Details Narrative) - HSBC Facility [Member] $ in Thousands	Mar. 31, 2024 USD ($)
Line of Credit Facility [Line Items]
Working capital loan and overdraft loan facility	$ 1,220
Current balance	$ 20

v3.24.3

COMMITMENTS AND CONTINGENCIES (Details Narrative) - shares		12 Months Ended
	Mar. 13, 2023	Mar. 31, 2024
Loss Contingencies [Line Items]
Vesting period	3 years
Merger Agreement [Member]
Loss Contingencies [Line Items]
Reverse stock split shares		389,750,000
Merger Agreement [Member] | Board of Directors Chairman [Member]
Loss Contingencies [Line Items]
Reverse stock split shares		25,983,334
Merger Agreement [Member] | Maximum [Member]
Loss Contingencies [Line Items]
Earnout shares		25,000,000
Exchange Agreements [Member]
Loss Contingencies [Line Items]
Earnout shares		25,000,000
Vesting period	3 years

v3.24.3

SCHEDULE OF FAIR VALUE MEASUREMENT (Details) - USD ($)	Mar. 31, 2024	Mar. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	$ 175,041	$ 21,378
Marketable securities	13,944	14,415
Fair Value, Recurring [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	175,041	21,378
Total cash and cash equivalents	175,041	21,378
Marketable securities	13,944	14,415
Total Investment	13,944	14,415
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 1 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents	175,041	21,378
Total cash and cash equivalents	175,041	21,378
Marketable securities	13,944	14,415
Total Investment	13,944	14,415
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents
Total cash and cash equivalents
Marketable securities
Total Investment
Fair Value, Recurring [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents
Total cash and cash equivalents
Marketable securities
Total Investment

v3.24.3

SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($)	Mar. 31, 2024	Mar. 31, 2023
Income Tax Disclosure [Abstract]
Net operating loss carry-forwards		$ 64,241
Net deferred tax asset		64,241
Valuation allowance		(64,241)
Deferred income tax expense (benefit)

v3.24.3

INCOME TAXES (Details Narrative) - USD ($)	Mar. 31, 2024	Mar. 31, 2023
Income Tax Disclosure [Abstract]
Valuation allowance		$ 64,241

v3.24.3

SCHEDULE OF NET SALES DISAGGREGATED BY SIGNIFICANT PRODUCTS AND SERVICES (Details) - USD ($)		12 Months Ended
		Mar. 31, 2024	Mar. 31, 2023
Disaggregation of Revenue [Line Items]
Total		$ 42,538	$ 112,409
Vehicle Sales [Member]
Disaggregation of Revenue [Line Items]
Total	[1]	28,986	100,022
Others [Member]
Disaggregation of Revenue [Line Items]
Total		$ 13,552	$ 12,387
[1] Revenue from Sales of Vehicle represents sale of Electric Bikes to Authorized dealers in and around India.

v3.24.3

SUBSEQUENT EVENTS (Details Narrative) - USD ($)			12 Months Ended
	Jul. 02, 2024	Jul. 01, 2024	Mar. 31, 2024	Mar. 31, 2023
Subsequent Event [Line Items]
New issues			$ 6,269,127	$ 25,001
Subsequent Event [Member]
Subsequent Event [Line Items]
Additional financing with investors		$ 25,000,000
Ordinary shares		$ 0.01
Equity financing term		3 years
New issues	$ 1,000,000

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