ECDA Amends 10-K, Discloses Control Weaknesses Amid Revenue Growth

TL;DR

**ECDA's 10-K/A reveals serious internal control issues and a going concern warning, overshadowing decent revenue growth and making it a high-risk bet despite luxury market appeal.**

AI Summary

ECD Automotive Design, Inc. (ECDA) filed an Amendment No. 2 to its 2024 Form 10-K, primarily to address SEC comments and correct prior deficiencies. The amendment includes Section 302 and 906 certifications, a corrected independent auditor's report addressing the company's going concern status, and management's conclusion that disclosure controls and procedures were not effective as of December 31, 2024. The company reported total revenue of $25.1 million for the year ended December 31, 2024, a significant increase from $19.5 million in 2023, representing a 28.7% year-over-year growth. Despite revenue growth, ECDA experienced a net loss of $10.8 million in 2024, substantially wider than the $1.2 million net loss in 2023. The company achieved a 23.4% gross margin in 2024, a 100 basis point improvement from the previous year, outperforming the mass market automobile industry average of 15.7%. ECDA specializes in custom-built classic vehicles, with an average base contract price of $258,394 per vehicle and additional upgrades averaging $73,394. The company aims for $70.0 million to $80.0 million in annual revenues and a 35.0% to 40.0% gross margin with a third production line.

Why It Matters

This amended filing is crucial for investors as it reveals significant internal control deficiencies and a going concern qualification from Barton CPA PLLC, indicating potential operational and financial instability. While ECDA demonstrated strong revenue growth of 28.7% to $25.1 million in 2024 and improved gross margins to 23.4%, the widening net loss to $10.8 million raises concerns about profitability and cash flow management. The competitive landscape in the luxury custom car market, with players like Ferrari and Porsche boasting significantly higher gross margins (50.1% and 26.4% respectively), highlights the challenges ECDA faces in achieving its target margins of 35-40%. Employees and customers might face uncertainty if the company's financial health deteriorates, impacting future operations and service delivery.

Risk Assessment

Risk Level: high — The risk level is high due to management's conclusion that disclosure controls and procedures were not effective as of December 31, 2024, and the corrected auditor's report addressing the company's going concern status. This indicates significant internal weaknesses and raises substantial doubt about ECDA's ability to continue as a going concern, directly impacting investor confidence and financial stability.

Analyst Insight

Investors should exercise extreme caution and consider this a high-risk investment. Given the ineffective disclosure controls and the going concern warning, potential investors should wait for evidence of improved internal controls and a clear path to sustained profitability before considering a position in ECDA.

Financial Highlights

revenue

$25.1M

net Income

-$10.8M

gross Margin

23.4%

revenue Growth

+28.7%

Key Numbers

• $25.1M — Total Revenue (for the year ended December 31, 2024, up from $19.5M in 2023)
• $10.8M — Net Loss (for the year ended December 31, 2024, widened from $1.2M in 2023)
• 23.4% — Gross Margin (for the year ended December 31, 2024, up 100 basis points from 2023)
• $9,003,636 — Aggregate Market Value of Common Equity (held by non-affiliates as of June 30, 2024)
• 57,074,093 — Shares of Common Stock Issued and Outstanding (as of August 18, 2025)
• $258,394 — Average Base Contract Price per Vehicle (for custom builds)
• $73,394 — Average Cost of Additional Upgrades (per vehicle, potentially up to $150,000)
• 37.7% — Revenue Compound Annual Growth Rate (over the past three years)
• 20% — Repeat Client Sales (percentage of total sales)
• 12-14 months — Typical Project Duration (from contract signing to vehicle delivery)

Key Players & Entities

• ECD Automotive Design, Inc. (company) — registrant
• Barton CPA PLLC (company) — independent registered public accounting firm
• SEC (regulator) — comment letter issuer
• Emily Humble (person) — founder of ECD and ECD UK
• Thomas Humble (person) — founder of ECD
• Defender SPV LLC (company) — holder of Common Shares Warrants and Preferred Shares Warrants
• Scott Wallace (person) — Securityholder Representative in Merger Agreement
• EF Hutton Acquisition Corporation I (company) — former name of ECD Automotive Design, Inc.
• Humble Imports, Inc d/b/a ECD Auto Design (company) — Florida corporation involved in Merger Agreement
• The Nasdaq Stock Market LLC (regulator) — exchange where ECDA securities are registered

FAQ

Risk Factors

• Going Concern Uncertainty [high — financial]: The independent auditor's report highlights substantial doubt about ECDA's ability to continue as a going concern. This is primarily due to recurring net losses and negative cash flows from operations, despite significant revenue growth. The company's ability to fund its operations and capital expenditures relies on its ability to secure additional financing.
• Production Capacity and Scalability [medium — operational]: ECDA's growth strategy is heavily reliant on expanding its production capacity, including the addition of a third production line. Failure to effectively scale operations, manage lead times (currently 12-14 months), or maintain quality control during expansion could hinder revenue targets of $70.0 million to $80.0 million.
• Dependence on Niche Market [medium — market]: The company operates in the niche 'Restomod' sector, focusing on custom-built classic vehicles. While this allows for high average contract prices ($258,394 base), it also makes the company susceptible to shifts in consumer preferences within this luxury segment and competition from other high-end customizers.
• Increased Net Loss Despite Revenue Growth [high — financial]: For the year ended December 31, 2024, ECDA reported a net loss of $10.8 million, a substantial increase from $1.2 million in 2023, even as revenue grew 28.7% to $25.1 million. This widening loss indicates potential issues with cost management or increased operating expenses relative to revenue.
• Disclosure Controls and Procedures [medium — regulatory]: Management concluded that disclosure controls and procedures were not effective as of December 31, 2024. This indicates potential weaknesses in internal controls over financial reporting, which could lead to future misstatements or regulatory scrutiny.

Industry Context

ECDA operates in the luxury custom vehicle segment, specifically the 'Restomod' market, which focuses on restoring and modernizing classic cars. This niche allows for high-margin, bespoke products with average contract values exceeding $250,000. The company competes by offering highly customized Land Rovers, Jaguar E-Types, Ford Mustangs, and Toyota FJ40s, differentiating itself through craftsmanship and brand heritage.

Regulatory Implications

The amendment filing and the auditor's emphasis on going concern and ineffective disclosure controls suggest heightened regulatory scrutiny. Investors should monitor ECDA's ability to remediate control deficiencies and improve financial stability to avoid further SEC actions or delisting.

What Investors Should Do

1. Monitor cash burn and financing activities.
2. Evaluate progress on production expansion.
3. Assess management's remediation of control deficiencies.
4. Analyze cost structure and margin sustainability.

Key Dates

• 2023-12-12: Business Combination Closing Date — Marks the completion of the merger, transforming the company from EF Hutton Acquisition Corporation I to ECD Automotive Design, Inc. and establishing its current corporate structure.
• 2024-12-31: Fiscal Year End — Reporting period for the 2024 financial results, showing significant revenue growth but a widening net loss, and the date as of which disclosure controls were deemed ineffective.
• 2025-08-18: Shares Outstanding Date — Indicates the total number of common shares issued and outstanding as of this date, relevant for per-share calculations and ownership analysis.

Glossary

Restomod

A sector of the automotive industry where classic cars are restored and then modified with modern technology, performance parts, and comfort features. (ECDA's core business model is centered around building 'Restomod' vehicles, making this term crucial for understanding their market and product offering.)

Going Concern

An accounting principle that assumes a company will continue to operate for the foreseeable future. If there is substantial doubt about this, auditors must disclose it. (The auditor's report explicitly mentions substantial doubt about ECDA's going concern status, highlighting significant financial risks.)

Disclosure Controls and Procedures

A system designed to ensure that a company's public disclosures are timely, accurate, and complete, including financial and non-financial information. (Management's conclusion that these controls were ineffective indicates potential internal control weaknesses that could impact financial reporting reliability.)

ASE Certifications

Certifications from the National Institute for Automotive Service Excellence (ASE), indicating a mechanic's proficiency and expertise in various automotive repair and diagnostic areas. (The company highlights the high level of ASE certifications among its craftsmen (66 total, 3 master level) as a testament to its technical expertise and quality of work.)

Year-Over-Year Comparison

Compared to the prior year, ECDA has demonstrated strong revenue growth, increasing by 28.7% to $25.1 million in 2024 from $19.5 million in 2023. While the gross margin improved by 100 basis points to 23.4%, the net loss significantly widened from $1.2 million to $10.8 million, indicating rising operating costs or other expenses. A critical new development is the auditor's emphasis on substantial doubt regarding the company's going concern status and management's admission of ineffective disclosure controls and procedures.

Key Financial Figures

• $0.0001 — " refers to our common stock, par value $0.0001. " Charter " refers to the Second Ame
• $11.50 — our common stock, par value $0.0001 at $11.50 per share of common stock. " Converti
• $15,819,209 — an aggregate principal funding equal to $15,819,209, in a private placement immediately pri
• $1,000 — r preferred stock, par value $0.0001 at $1,000 per share of preferred stock. " Secur
• $25.1 m — used vehicles. We had total revenue of $25.1 million, $19.5million for the years ended
• $19.5million — We had total revenue of $25.1 million, $19.5million for the years ended December 31, 2024 a
• $10.8 million — tively. Additionally, we had a net loss $10.8 million and $1.2 million for the years ended De
• $1.2 million — ly, we had a net loss $10.8 million and $1.2 million for the years ended December 31, 2024 a
• $70.0 million — o have total annual revenues of between $70.0 million and $80.0 million, and a gross margin b
• $80.0 m — l revenues of between $70.0 million and $80.0 million, and a gross margin between 35.0%
• $73,394 — onal upgrades, which cost an average of $73,394, and may be as high as $150,000 over th
• $150,000 — erage of $73,394, and may be as high as $150,000 over the $258,394 base contract price p
• $258,394 b — and may be as high as $150,000 over the $258,394 base contract price per vehicle. ECD's up
• $2.5 b — services and restoration, is valued at $2.5 billion, measured in total revenue, accor

Filing Documents

• ea0254290-10ka2_ecdauto.htm (10-K/A) — 1865KB
• ea025429001ex31-1_ecdauto.htm (EX-31.1) — 10KB
• ea025429001ex31-2_ecdauto.htm (EX-31.2) — 10KB
• ea025429001ex32-1_ecdauto.htm (EX-32.1) — 3KB
• ea025429001ex32-2_ecdauto.htm (EX-32.2) — 3KB
• image_001.jpg (GRAPHIC) — 12KB
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• image_009.jpg (GRAPHIC) — 13KB
• image_010.jpg (GRAPHIC) — 78KB
• image_011.jpg (GRAPHIC) — 11KB
• image_012.jpg (GRAPHIC) — 8KB
• 0001213900-25-082025.txt ( ) — 9318KB
• efht-20241231.xsd (EX-101.SCH) — 80KB
• efht-20241231_cal.xml (EX-101.CAL) — 73KB
• efht-20241231_def.xml (EX-101.DEF) — 423KB
• efht-20241231_lab.xml (EX-101.LAB) — 733KB
• efht-20241231_pre.xml (EX-101.PRE) — 433KB
• ea0254290-10ka2_ecdauto_htm.xml (XML) — 884KB

Business

Business 1 Item 1A.

Risk Factors

Risk Factors 25 Item 1B. Unresolved Staff Comments 47 Item 1C. Cyber Security 47 Item 2.

Properties

Properties 48 Item 3.

Legal Proceedings

Legal Proceedings 48 Item 4. Mine Safety Disclosures 48 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 49 Item 6. [Reserved] 52 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 53 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 83 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 83 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 83 Item 9A.

Controls and Procedures

Controls and Procedures 83 Item 9B. Other Information 85 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 85 PART III Item 10. Directors, Executive Officers and Corporate Governance 86 Item 11.

Executive Compensation

Executive Compensation 95 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 98 Item 13. Certain Relationships and Related Transactions, and Director Independence 100 Item 14. Principal Accounting Fees and Services 103 PART IV Item 15. Exhibit and Financial Statement Schedules 104 Item 16. Form 10-K Summary 109 i INTRODUCTORY NOTES Use of Terms Except as otherwise indicated by the context and for the purposes of this report only, references in this report to "we," "us," "our," and "the Company" are to ECD Automotive Design, Inc., a Delaware corporation, and its consolidated subsidiaries. In addition, in this annual report: " Business Combination " refers to the transactions contemplated by the Merger Agreement, which closed on December 12, 2023. " Closing Date " refers to December 12, 2023, the date on which the Business Combination is consummated. " Closing " refers to the closing of the transactions contemplated under the Merger Agreement. " Common Stock " refers to our common stock, par value $0.0001. " Charter " refers to the Second Amended and Restated Certificate of Incorporation, which took effect upon the Closing. " Common Shares Warrants " refers to our 1,091,525 Common Shares Warrants held by Defender SPV LLC entitling the holder to purchase shares of our common stock, par value $0.0001 at $11.50 per share of common stock. " Convertible Note " means the offering of senior secured convertible notes of ECD with an aggregate principal funding equal to $15,819,209, in a private placement immediately prior to consummation of the Business Combination pursuant to the definitive agreements, dated October 6, 2023, by and among EFHT and the Lender. " ECD " or the " Company " refers to ECD Automotive Design, Inc., a Delaware corporation, formerly known as EF Hutton Acquisition Corporation I prior to the closing of the Business Combination. " EF Hutton " refers to EF Hutton LLC. " EFHT " refers to EF Hutt

forward-looking statements by terms such as "may," "could," "will," "should," "would,"

forward-looking statements by terms such as "may," "could," "will," "should," "would," "expect," "plan," "intend," "anticipate," "believe," "estimate," "predict," "potential," "project" or "continue" or the negative of these terms or other comparable terminology. These statements are only predictions. You should not place undue reliance on forward-looking statements because they involve known and unknown risks, uncertainties and other factors, which are, in some cases, beyond our control and which could materially affect results. Factors that may cause actual results to differ materially from current expectations include, among other things, those listed under Item 1A " Risk Factors " and elsewhere in this report. If one or more of these risks or uncertainties occur, or if our underlying assumptions prove to be incorrect, actual events or results may vary significantly from those implied or projected by the forward-looking statements. No forward-looking statement is a guarantee of future performance. In addition, statements that "we believe" and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements. The forward-looking statements made in this report relate only to events or information as of the date on which the statements are made in this report. Except as expressly required by the federal securities laws, there is no undertaking to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed c

BUSINESS

ITEM 1. BUSINESS. History of ECD All our founders grew up in England, around 40 miles from the Solihull plant, a car manufacturing factory at Lode Heath, Solihull, United Kingdom, where Land Rover Defenders first started to be built. From an early age, our founders naturally developed their passion for such English vehicles. In 2012, two of our founders moved to the United States, where they opened their specialized automotive dealership. In addition to commercializing the Land Rover Defenders they were importing, the ECD founders, noticing that their passion was shared by a select class of consumers, started investing long working hours on the customization of those vehicles in accordance with those consumers' individual tastes. As a development of that initial entrepreneurial endeavor, ECD was founded on March 5, 2013, combining high quality classic vehicles with custom, modern performance. Initially, ECD outsourced some aspects of its production process, such as painting and upholstery. However, to achieve its ideal level of quality of its final products, ECD restructured its internal processes to create and customize each vehicle from the ground up, taking control of each step of the production, from sourcing the base vehicle to final quality control checks, bringing all the elements of production in-house. ECD Overview ECD is an award winning, custom-car builder in the Restomod sector with a focus on classic motor vehicles of various models of both two-door and four-door styles. Among those awards are the "Top 5 Restorations" award by The Robb Report in 2022. Our mission is to bring new life to iconic brands by building fully-customized, 1-of-1 designs of these luxury vehicles – setting the customer in the center of the experience. We have sought to become the world's best Land Rover customization and production facility since our start in 2013, aiming at producing the most customized Land Rovers. In addition, the company customizes the Jaguar E-Type,

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View this 10-K/A filing on SEC EDGAR