ECD Automotive Design Files Q2 2024 10-Q

TL;DR

ECD Auto's Q2 10-Q is in. Check financials.

AI Summary

ECD Automotive Design, Inc. filed its 10-Q for the quarterly period ended June 30, 2024. The company, formerly known as EF Hutton Acquisition Corp I, is incorporated in Delaware and headquartered in Kissimmee, Florida. The filing details its financial performance and business operations for the specified quarter.

Why It Matters

This filing provides investors with an update on ECD Automotive Design's financial health and operational status for the second quarter of 2024, crucial for understanding its current market position.

Risk Assessment

Risk Level: medium — As a publicly traded company filing a quarterly report, there are inherent risks associated with its financial performance and market conditions.

Key Players & Entities

• ECD Automotive Design, Inc. (company) — Registrant
• June 30, 2024 (date) — Quarterly period end date
• EF Hutton Acquisition Corp I (company) — Former company name
• Delaware (jurisdiction) — State of incorporation
• Kissimmee, FL (location) — Principal executive offices location
• 001-41497 (other) — Commission File Number

FAQ

Key Financial Figures

• $0 — ompany had trade accounts receivable of $0 as of June 30, 2023 and a recorded allo

Filing Documents

• ea0210816-10q_ecdauto.htm (10-Q) — 841KB
• ea021081601ex10-14_ecdauto.htm (EX-10.14) — 30KB
• ea021081601ex31-1_ecdauto.htm (EX-31.1) — 11KB
• ea021081601ex31-2_ecdauto.htm (EX-31.2) — 12KB
• ea021081601ex32-1_ecdauto.htm (EX-32.1) — 5KB
• ea021081601ex32-2_ecdauto.htm (EX-32.2) — 5KB
• 0001213900-24-070695.txt ( ) — 5688KB
• efht-20240630.xsd (EX-101.SCH) — 61KB
• efht-20240630_cal.xml (EX-101.CAL) — 51KB
• efht-20240630_def.xml (EX-101.DEF) — 286KB
• efht-20240630_lab.xml (EX-101.LAB) — 502KB
• efht-20240630_pre.xml (EX-101.PRE) — 287KB
• ea0210816-10q_ecdauto_htm.xml (XML) — 541KB

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited) 1 Condensed Consolidated Balance Sheets as of June 30, 2024 (unaudited) and December 31, 2023 1 Unaudited Condensed Consolidated Statements of Operations for the Three and Six Months Ended June 30, 2024 and 2023 2 Unaudited Condensed Consolidated Statements of Changes in Stockholders' Deficit for the Three and Six Months Ended June 30, 2024 and 2023 3 Unaudited Condensed Statements of Cash Flows for the Six Months Ended June 30, 2024 and 2023 4 Notes to Unaudited Condensed Consolidated Financial Statements 5

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

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 24

Quantitative and Qualitative Disclosures about Market Risk

Item 3. Quantitative and Qualitative Disclosures about Market Risk 41

Control and Procedures

Item 4. Control and Procedures 41

– OTHER INFORMATION

PART II – OTHER INFORMATION 42

Legal Proceedings

Item 1. Legal Proceedings 42

Risk Factors

Item 1A. Risk Factors 42

Unregistered Sales of Equity Securities and Use of Proceeds

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 42

Defaults Upon Senior Securities

Item 3. Defaults Upon Senior Securities 42

Mine Safety Disclosures

Item 4. Mine Safety Disclosures 42

Other Information

Item 5. Other Information 42

Exhibits

Item 6. Exhibits 43

– FINANCIAL INFORMATION

PART I – FINANCIAL INFORMATION

Financial Statements

Item 1. Financial Statements ECD AUTOMOTIVE DESIGN, INC CONDENSED CONSOLIDATED BALANCE SHEETS June 30, December 31, 2024 2023 (unaudited) (audited) ASSETS Current assets: Cash and cash equivalents $ 5,660,684 $ 8,134,211 Accounts receivable, net 105,132 - Inventories 10,119,487 11,799,304 Prepaid and other current assets 405,468 34,006 Total current assets 16,290,771 19,967,521 Property and equipment, net 607,603 968,677 Deferred tax asset - 515,444 Right-of-use assets 3,586,612 3,763,294 Brand name, net 1,200,006 0 Deposit 60,200 77,686 TOTAL ASSETS $ 21,745,192 $ 25,292,622 LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT Current liabilities: Accounts payable $ 1,104,896 $ 768,808 Accrued expenses 1,411,058 687,000 Deferred revenue 11,467,622 17,596,512 Deferred taxes liability 7,124 - Lease liability, current 334,231 314,903 Floor plan payable 1,321,000 - Income tax payable 1,115,559 1,115,559 Share issuance liability 1,325,000 250,000 Other payable 641,621 168,256 Total current liabilities 18,728,111 20,901,038 Lease liability, non-current 3,554,078 3,727,182 Convertible note, net of debt discount 11,551,467 10,683,452 Total liabilities 33,833,656 35,311,672 Commitments and contingencies (Note 16) - - Redeemable preferred stock, $ 0.0001 par value, 20,000,000 authorized shares; 25,000 shares issued and outstanding as of June 30, 2024 and December 31, 2023 3 3 Stockholders' deficit: Common stock, $ 0.0001 par value, 1,000,000,000 authorized shares; 32,099,662 shares and 31,874,662 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively 3,210 3,187 Additional paid-in capital 431,936 - Accumulated deficit ( 12,523,613 ) ( 10,022,240 ) Total Stockholders' Deficit ( 12,088,467 ) ( 10,019,053 ) TOTAL LIABILITIES, REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS' DEFICIT $ 21,745,192 $ 25

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS 1. NATURE OF OPERATIONS ECD Automotive Design, Inc (the "Company," "ECD," "we," "us," or "our), formerly known as EF Hutton Acquisition Corporation I ("EFHAC") (the Company) is engaged in the production and sale of Land Rover vehicles. Since the Company's commencement of operations in 2013, they have established a facility geared towards producing the most customized Land Rovers with the highest quality of parts and the highest quality labor force building each vehicle. The Company primarily earns revenue from the sale of the customized vehicle directly to the customer. Additionally, revenue is generated from providing repair or upgrade services to customers and from the sale of extended warranties. On December 12, 2023, ECD completed the business combination contemplated by the merger agreement dated as of March 3, 2023 (the "Merger Agreement") by and among EFHAC, Humble Imports Inc., d/b/a ECD Auto Design, a Florida corporation ("Humble" or "ECD"), ECD Auto Design UK, Ltd., an England and Wales corporation (the "ECD UK"), EFHAC Merger Sub, Inc., a Florida corporation ("Merger Sub") and wholly-owned subsidiary of EFHAC, and Scott Wallace, as the Securityholder Representative. At part of the closing Merger Sub merged with and into ECD with ECD as the surviving corporation and becoming a wholly-owned subsidiary of EFHAC. In connection with the Merger, EFHAC changed its name to "ECD Automotive Design Inc." or such other name designated by E.C.D. by notice to EFHAC. See Note 4 for further information. The business combination was accounted for as a reverse recapitalization in accordance with GAAP. Under this method of accounting, although EFHAC acquired the outstanding equity interest in ECD in the business combination, EFHAC is treated as the "acquired company" and ECD was treated as the accounting acquirer for financial statement purposes. Accordingly, the Business Combination was treated as the equivalent of ECD issuing stock for the net a

financial statements

financial statements. 5 ECD AUTOMOTIVE DESIGN, INC NOTES TO THE UNAUDITED CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying condensed consolidated financial in accordance with GAAP, expressed in U.S. dollars. In the opinion of management, all adjustments necessary for a fair presentation of such unaudited condensed consolidated financial statements have been included. All such adjustments consisted of all normal recurring items, including the elimination of all intercompany transactions and balances. References to GAAP issued by the FASB in these accompanying notes to the consolidated financial statements are to the FASB Accounting Standards Codification ("ASC"). The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with United States generally accepted accounting principles (U.S. GAAP) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Certain information and footnote disclosures normally included in financial statements prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP") have been condensed or omitted pursuant to such rules and regulations. These operating results are not necessarily indicative of the results that may be expected for the year ending December 31, 2024. These unaudited interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto for the year ended December 31, 2023 included in the 2023 Form 10-K, with the exception of presentation of restated interim results included in Note 2 and 17 of the Form 10-K. The December 31, 2023 condensed consolidated balance sheet included herein was derived from the December 31, 2023 audited consolidated balance sheet included in the 2023 Form 10-K. After th

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS Cash and Cash Equivalents The Company considers all highly liquid investments acquired with an original maturity of three months or less at the date of purchase to be cash equivalents. Cash equivalents are stated at cost, which approximates market value, because of the short maturity of these instruments. Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist of cash accounts in a financial institution, which, at times, may exceed the Federal Deposit Insurance Corporation Coverage limit of $ 250,000 . As of June 30, 2024 and December 31, 2023, the Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts. Revenue Recognition Revenue is recognized when the Company transfers promised goods or services to the customer, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under the agreement, the Company performs the following steps: (i) identification of the promised goods or services in the contract; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price, including the constraint on variable consideration; (iv) allocation of the transaction price to the performance obligations; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company only applies the five-step model to contracts when it is probable that it will collect the consideration it is entitled to in exchange for the goods or services it transfers to the customer. Product Revenue – Builds The Company generates revenue through the sale of rebuilt or upgraded Land Rover Defende

FINANCIAL STATEMENTS

FINANCIAL STATEMENTS Other Revenue Policies Sales, value add, and other taxes collected on behalf of third parties are excluded from revenue. Applying the practical expedient in paragraph ASC 606-10-32-18, the Company does not assess whether a contract has a significant financing component if the expectation at contract inception is that the period between payment by the customer and the transfer of the promised products to the customer will be one year or less, which is the case with substantially all customers. Applying the practical expedient in ASC 606-10-25-18B, the Company accounts for shipping and handling activities related to contracts with customers as costs to fulfill the promise to transfer the associated products. The Company records the related costs as part of the cost of goods good. Disaggregation of Revenue The following table summarizes the Company's net revenues disaggregated by product category: Three Months Ended June 30, Six Months Ended June 30, 2024 2023 2024 2023 Builds 7,989,055 3,824,181 16,206,702 6,475,431 Warranty and other 882,948 43,722 973,340 99,798 Total revenues, net $ 8,872,003 $ 3,867,903 $ 17,180,042 $ 6,575,229 Deferred revenue and remaining performance obligation: June 30, 2024 December 31, 2023 Beginning balance, January 1 $ 17,596,512 $ 14,166,030 Additional deposits received 10,077,812 8,212,166 Revenue Recognized during the year at a point-in-time ( 16,206,702 ) ( 4,781,684 ) Ending balance $ 11,467,622 $ 17,596,512 As of June 30, 2024 and December 31, 2023, in addition to the customer deposits noted above, the Company has $ 8,373,028 and $ 12,253,253 , respectively of contract consideration allocated to performance obligations not yet completed, which are not reflected on the accompanying unaudited condensed consolidated balance sheets. The customer deposits, performance obligations not yet completed, and deferred revenue are typically recognized in revenue a

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