ECD Automotive Design, Inc. 8-K

What Happened

• ECD Automotive Design, Inc. (ECDA) announced that under a June 5, 2025 securities purchase agreement it issued additional senior secured convertible notes on March 12, 2026. The Holder exercised its right to buy additional Notes with an original principal of $2,663,770 for a purchase price of $2,424,667. The Notes will mature on December 12, 2026 unless the Holder extends the maturity in certain circumstances.
• The additional Notes carry a beneficial ownership limitation preventing conversion to the extent the Holder would own more than 9.99% of outstanding common stock. If converted at the stated floor price of $0.0034 per share (without applying the ownership cap), the additional Notes would convert into 783,461,765 shares. The Holder is the Company’s parent and also has made loans to the Company totaling $12,484,248 in outstanding principal.

Key Details

• Aggregate program size (per June 5, 2025 SPA): up to $21,972,275.38 in senior secured convertible notes.
• March 12, 2026 issuance: original principal $2,663,770; purchase price $2,424,667.
• Maturity date: December 12, 2026 (subject to Holder’s extension rights).
• Conversion floor price: $0.0034/share; conversion subject to 9.99% beneficial ownership limit.
• Transaction treated as a private placement exempt from registration under Section 4(a)(2) and Rule 506 (Holder is accredited and the securities are for investment).

Why It Matters

• This increases the Company’s debt and potential equity dilution: if fully converted (and absent the ownership cap) the added Notes imply hundreds of millions of shares at the floor price. The 9.99% cap, however, limits immediate conversion to avoid a single investor exceeding that ownership threshold.
• It is a related‑party financing—The Holder is the Company’s parent and an existing lender—so investors should note the company is relying on affiliated parties for funding.
• The Notes mature within the year (Dec 2026), so this is near‑term financing that may affect liquidity, capital structure and potential future dilution depending on conversion, redemption or further extensions.