10-Q - ECD Automotive Design, Inc. (0001922858) (Filer)

Wed, May 21, 10:09 AM (37 days ago)

### ECD Automotive Design, Inc. (ECDA) Q1 2025 Financial Summary **Company Overview:** ECD Automotive Design, Inc. (ECDA) specializes in customizing and restoring classic vehicles, primarily focusing on British and American classics. The company operates from a 100,000-square-foot facility in Kissimmee, FL, and has a logistics center in the UK for sourcing parts. **Financial Performance (Q1 2025 vs. Q1 2024):** - **Revenue:** $6.4 million (Q1 2025) vs. $7.0 million (Q1 2024) - **Net Loss:** $2.8 million (Q1 2025) vs. $2.9 million (Q1 2024) - **Gross Profit:** $1.8 million (Q1 2025) vs. $1.5 million (Q1 2024) - **Operating Expenses:** Increased by $1.2 million due to higher general and administrative costs, including equity compensation and inventory write-offs. - **Interest Expense:** Increased by $720,679 due to higher debt and amortization costs. - **Other Income (Expense):** Decreased by $127,695 due to changes in fair value of warrants and conversion options. **Cash Flow:** - **Operating Activities:** Used $3.0 million (Q1 2025) vs. $2.6 million (Q1 2024) - **Investing Activities:** No cash used (Q1 2025) vs. $18,920 (Q1 2024) - **Financing Activities:** Provided $2.2 million (Q1 2025) vs. no cash provided (Q1 2024) **Liquidity and Capital Resources:** - **Cash and Cash Equivalents:** $677,473 (Q1 2025) vs. $5,560,320 (Q1 2024) - **Working Capital Deficit:** $5.5 million (Q1 2025) - **Customer Deposits:** $7.7 million (Q1 2025) - **Deferred Revenue:** $2.8 million (Q1 2025) **Debt and Financing:** - **Convertible Notes:** Issued multiple convertible notes with varying terms and conditions, including the December 2023, August 2024, and January 2025 notes. - **New Loan Agreement:** Secured a new loan of $1.8 million to pay off existing debt. - **Floor Plan Financing:** Used for purchasing used and trade-in vehicles. **Uncertainties and Future Operations:** - **Going Concern:** Substantial doubt about the company's ability to continue as a going concern due to liquidity issues. - **Future Financing:** Needs to raise additional capital through loans or equity to sustain operations. - **Market Conditions:** Vulnerable to global economic conditions and increased competition. **Operational Trends:** - **Supply Chain Management:** Focus on reducing costs and improving efficiencies. - **Manufacturing Facility Expansion:** Increased production capacity and added new product lines. - **Growth Plans:** Introduced new models and expanded retail presence. **Key Metrics:** - **Adjusted EBITDA:** Decreased by $442,900 due to higher costs associated with being a public company. **Conclusion:** ECDA faces significant financial challenges, including liquidity issues and the need for additional financing. The company is focusing on operational efficiencies and expanding its product offerings to improve margins and sustain growth. However, the current financial health indicates a need for strategic financial management to ensure long-term viability.