ECD Automotive Design(ECDA) - 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% rise from $4,522,923 in 2023, with gross margin percentage improving 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 operates a logistics center in the UK to source and transport over-25-year-old work vehicles for restoration, enhancing its operational capabilities[310] - The company employs 105 individuals, including 67 craftsmen and technicians, contributing to its custom vehicle building process[310] - The Company increased production by approximately 20$15,819,209 and an annual interest rate of Prime + 5%, with a maturity date of December 12, 2026[313] - As of December 31, 2024, accrued interest on the December 2023 Convertible Note was $569,419, reflecting the company's financial obligations[319] - The company has experienced certain events of default under the December 2023 Convertible Note, resulting in additional default interest of$165,233 for the three months ended June 30, 2024[318] - 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, highlighting potential future revenue recognition[368] - The company has substantial doubt about its ability to continue as a going concern for the next twelve months due to liquidity concerns[377] - The company experienced cash flow challenges, with a net decrease in cash and cash equivalents of 6,657,361 for the year ended December 31, 2024[378] Strategic Initiatives - The Company plans to open new marketing channels in 2025, including outreach events and collaborations with market influencers[329] - The Company closed transactions related to the A&R Asset Purchase Agreement on April 24, 2024, and earned an additional 300,000 by June 24, 2024[321] - The Company entered into an Asset Purchase Agreement to acquire assets related to vehicle builds for up to $1.25 million, including a trademark, with a base price of$950,000[320] - The Company entered into a marketing services agreement with OTBC, agreeing to issue 100,000 shares of common stock valued at $100,000 for services rendered[436] - ECD announced a Strategic Partnership Agreement with One Drivers Club to launch its first retail showroom in West Palm Beach, Florida, with a base rent of$225,000 per annum, subject to 4% annual increases[459] 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] - The Company has a compliance period until August 4, 2025, to regain a minimum bid price of $1 per share[426] - ECD's 2024 Annual Meeting had 36,199,662 shares entitled to vote, with 21,334,357 shares (58.94%) represented[464] - The stockholders approved an amendment to increase the number of shares reserved under the 2023 Equity Incentive Plan from 400,000 to 2,500,000 shares[464] - ECD appointed Barton CPA PLLC as the independent registered public accounting firm for the year ending December 31, 2024[464] Management Changes - ECD appointed Benjamin Piggott as Chief Financial Officer on September 16, 2024, following the resignation of Raymond Cole[455] - Keven Kastner was appointed as Chief Revenue Officer on November 11, 2024, to drive sales and manage revenue streams[457]