2024 Q1 - Quarterly Report

UNITEDSTATES SECURITIESANDEXCHANGECOMMISSION Washington,D.C.20549FORM10-Q (Markone) oQUARTERLYREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934 ForthequarterlyperiodendedMarch31,2024or ☐TRANSITIONREPORTPURSUANTTOSECTION13OR15(d)OFTHESECURITIESEXCHANGEACTOF1934 Forthetransitionperiodfromto CommissionFileNumber:001-41497 ECDAUTOMOTIVEDESIGN,INC. (Exactnameofregistrantasspecifiedinitscharter) Delaware86-2559175 (Stateorotherjurisdictionofincorporationororganization) (IRSEmployerIdentificationNo.) 4390IndustrialLane,Kissimmee,FL34758 (AddressofprincipalexecutiveofficesandZipCode) (407)483-4825 (Registrant’stelephonenumber,includingareacode) NotApplicable (Formernameorformeraddress,ifchangedsincelastreport)SecuritiesregisteredpursuanttoSection12(b)oftheAct: TitleofeachclassTradingSymbol(s) Nameofeachexchangeonwhichregistered CommonStockECDATheNasdaqStockMarketLLC WarrantsECDAWTheNasdaqStockMarketLLC Indicatebycheckmarkwhethertheregistrant(1)hasfiledallreportsrequiredtobefiledbySection13or15(d)oftheSecuritiesExchangeActof1934duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtofilesuchreports),and(2)hasbeensubjecttosuchfilingrequirementsforthepast90days.Yes☒No☐ IndicatebycheckmarkwhethertheregistranthassubmittedelectronicallyeveryInteractiveDataFilerequiredtobesubmittedandpostedpursuanttoRule405ofRegulationS-T(§232.405ofthischapter)duringthepreceding12months(orforsuchshorterperiodthattheregistrantwasrequiredtosubmitsuchfiles).Yes☒No☐ Indicatebycheckmarkwhethertheregistrantisalargeacceleratedfiler,anacceleratedfiler,anon-acceleratedfiler,asmallerreportingcompany,oranemerginggrowthcompany.Seedefinitionsof“largeacceleratedfiler,”“acceleratedfiler,”“smallerreportingcompany,”and“emerginggrowthcompany”inRule12b-2oftheExchangeAct. Largeacceleratedfiler ☐ Acceleratedfiler ☐ Non-acceleratedfiler ☒ Smallerreportingcompany ☒ Emerginggrowthcompany ☒ Ifanemerginggrowthcompany,indicatebycheckmarkiftheregistranthaselectednottousetheextendedtransitionperiodforcomplyingwithanyneworrevisedfinancialaccountingstandardsprovidedpursuanttoSection13(a)oftheExchangeAct.☐ Indicatebycheckmarkwhethertheregistrantisashellcompany(asdefinedinRule12b-2oftheExchangeAct):Yes☐No☒ AsofJune26,2024,theregistranthad31,999,662sharesofcommonstockissuedandoutstanding Page Item1.FinancialStatements(Unaudited)1 PART1–FINANCIALINFORMATION UnauditedCondensedConsolidatedBalanceSheetsasofMarch31,2024andDecember31,20231 UnauditedCondensedConsolidatedStatementsofOperationsfortheThreeMonthsEndedMarch31,2024and2023 2 UnauditedCondensedConsolidatedStatementsofChangesinStockholders’DeficitfortheThreeMonths EndedMarch31,2024and2023 3 UnauditedCondensedStatementsofCashFlowsfortheThreeMonthsEndedMarch31,2024and2023 4 NotestoUnauditedCondensedConsolidatedFinancialStatements 5 Item2. Management’sDiscussionandAnalysisofFinancialConditionandResultsofOperations 21 Item3. QuantitativeandQualitativeDisclosuresaboutMarketRisk 37 Item4. ControlandProcedures 37 PARTII–OTHERINFORMATION38 Item1.LegalProceedings38 Item2.UnregisteredSalesofEquitySecuritiesandUseofProceeds38 Item1A.RiskFactors38 Item4.MineSafetyDisclosures38 Item3.DefaultsUponSeniorSecurities38 Item6.Exhibits39 Item5.OtherInformation38 SIGNATURES40 i PARTI–FINANCIALINFORMATION Item1.FinancialStatements ECDAUTOMOTIVEDESIGN,INC UNAUDITEDCONDENSEDCONSOLIDATEDBALANCESHEETS March31,2024 December31, 2023 ASSETSCurrentassets:Cashandcashequivalents $5,560,321 $8,134,211 Inventories 10,914,086 11,799,304 Prepaidandothercurrentassets 346,657 34,006 Totalcurrentassets 16,821,064 19,967,521 Propertyandequipment,net 981,801 968,677 Deferredtaxasset - 515,444 Right-to-useasset 3,675,559 3,763,294 Deposit 77,686 77,686 TOTALASSETS $21,556,110 $25,292,622 LIABILITIES,REDEEMABLEPREFERREDSTOCKANDSTOCKHOLDERS’DEFICITCurrentliabilities:Accountspayable $995,777 $768,808 Accruedexpenses 1,330,255 687,000 Deferredrevenue 13,983,645 17,596,512 Deferredtaxliability 16,836 - Leaseliability,current 324,791 314,903 Otherpayable 1,465,098 1,533,815 Totalcurrentliabilities 18,116,402 20,901,038 Leaseliability,non-current 3,641,602 3,727,182 Convertiblenote,netofdebtdiscount 11,117,460 10,683,452 Totalliabilities 32,875,464 35,311,672 Redeemablepreferredstock,$0.0001parvalue,20,000,000authorizedshares;25,000sharesissued andoutstandingasofMarch31,2024andDecember31,2023 3 3 Stockholders’deficit: Commonstock,$0.0001parvalue,1,000,000,000authorizedshares;31,899,662sharesand31,874,662sharesissuedandoutstandingasofMarch31,2024andDecember31,2023, respectively 3,190 3,187 Additionalpaid-incapital 249,997 - Accumulateddeficit (11,572,544) (10,022,240) TotalStockholders’Deficit (11,319,357) (10,019,053) TOTALLIABILITIES,REDEEMABLEPREFERREDSTOCKANDSTOCKHOLDERS’DEFICIT $21,556,110 $25,292,622 Theaccompanyingnotesareanintegralpartoftheseunauditedcondensedconsolidatedfinancialstatements 1 ECDAUTOMOTIVEDESIGN,INC UNAUDITEDCONDENSEDCONSOLIDATEDSTATEMENTSOFOPERATIONS ThreeMonthsEndedMarc