EF Hutton Acquisition I(EFHT) - 2024 Q4 - Annual Report

Financial Performance - Revenue for the years ended December 31, 2024 and 2023 was $25.1 million and$19.5 million, respectively, representing a year-over-year increase of approximately 28.7%[307] - The company reported a net loss of $10.8 million for 2024 compared to a net loss of$1.2 million for 2023, indicating a significant increase in losses[307] - Adjusted EBITDA decreased by $5.4 million for the year ended December 31, 2024, compared to the previous year, primarily due to increased public company costs and expenses related to financial statement restatements[334] - The Company reported a net loss of$(10,771,451) for the year ended December 31, 2024, compared to a net loss of $(1,178,906) for the year ended December 31, 2023[333] - Net revenue for the year ended December 31, 2024, was$25,165,733, representing a 29.1% increase from $19,492,606 in 2023[352] - Gross profit increased to$5,887,947 in 2024, a 30.2% increase from $4,522,923 in 2023, with gross margin percentage rising to 23.4$10,436,687 in 2024, a 72.3% increase from $6,058,757 in 2023, driven by higher advertising and general administrative expenses[359] - Interest expense surged to$5,270,404 in 2024, a 706.6% increase from $653,429 in 2023, primarily due to accrued interest on convertible notes[363] Business Operations - The company completed a business combination on December 12, 2023, resulting in the issuance of 26,500,000 shares of common stock and 25,000 shares of preferred stock as part of the merger consideration[314] - The company operates a logistics center in the UK to source and transport over-25-year-old work vehicles for restoration[310] - The Company has 105 employees, including 67 craftsmen and technicians, as of December 31, 2024[310] - The company experienced significant supply chain disruptions due to the COVID-19 pandemic, impacting operations and leading to the production of six fewer vehicles in 2020 compared to budget[324] - Vehicle builds accounted for 98.4$33,808 contributing $338,080 to revenue growth[354] Financing Activities - The December 2023 Convertible Note was issued for a principal amount of$15,819,209, with an interest rate of Prime + 5% per annum, and a maturity date of December 12, 2026[313] - The Company executed a senior secured convertible note in August 2024 for a principal amount of $1,154,681, net of a debt discount of$363,718, and issued 300,000 shares of Common Stock[373] - In January 2025, the Company entered into a securities purchase agreement for a loan of $1,724,100 and issued 500,000 shares of Common Stock[374] - The Company entered into a Business Loan and Security Agreement on February 20, 2025, receiving a term loan of$1,575,000, with total interest accruing to $661,500[416] - A new business loan agreement was established on April 4, 2025, with a principal amount of$1,824,300, accruing interest of $638,505[418] - The net proceeds from the new loan were used to pay off the previous Agile Loan amounting to$1,749,300[419] Customer and Revenue Management - Customer deposits amounted to $8,130,324 as of December 31, 2024, indicating reliance on customer funding for working capital[368] - Deferred revenue for completed vehicles not yet titled was$3,672,501 as of December 31, 2024[368] - The Company generates revenue through product sales, service revenue, and warranty revenue, with product revenue recognized upon customer payment and delivery[337] Strategic Initiatives - The Company plans to open new marketing channels in 2025, including outreach events and collaborations with market influencers[329] - The Company introduced the Jaguar E-type in 2022 and added the Ford Mustang and Toyota FJ to its lineup in 2024, targeting higher price points and gross margins[328] - The Company has expanded its manufacturing facility in Kissimmee, Florida, leasing 100,000 sq. ft. for 125 months to enhance production efficiencies[327] Compliance and Governance - The Company is currently working to regain compliance with Nasdaq Listing Rules after receiving notices regarding market value and filing delinquency[420][425] - ECD appointed Benjamin Piggott as Chief Financial Officer on September 16, 2024, following the resignation of Raymond Cole[455] - ECD appointed Barton CPA PLLC as the independent registered public accounting firm for the year ending December 31, 2024[464] - Keven Kastner was appointed as Chief Revenue Officer on November 11, 2024, to drive sales and manage revenue streams[457] Future Outlook - The Company has determined that its liquidity condition raises substantial doubt about its ability to continue as a going concern for the next twelve months[377] - The Company plans to use its current cash position and collections from accounts receivable to fund ongoing operations[378]