ECD Automotive Design secures $500M facility for Bitcoin strategy

KISSIMMEE, Fla. - ECD Automotive Design, Inc. (NASDAQ:ECDA), a $12.17 million market cap company, announced Monday it has signed a $500 million equity facility with ECDA Bitcoin Treasury LLC to implement a Bitcoin treasury strategy and fund growth initiatives. According to InvestingPro data, the company faces significant cash burn challenges with negative EBITDA of $3.46 million in the last twelve months.

The luxury vehicle restoration company, known for customizing Land Rovers and other classic cars, will use the proceeds to acquire Bitcoin as a reserve asset and for general corporate purposes, according to a press release statement. With a debt-to-capital ratio of 65% and current ratio of 0.68, InvestingPro analysis indicates the company operates with substantial leverage and limited liquid assets.

The facility gives ECD the right, but not obligation, to issue and sell up to $500 million in newly issued common stock, with the company controlling the timing and amount of any drawdowns.

As part of its digital asset strategy, ECD is offering the first 21 customers who purchase a vehicle using Bitcoin a $21,000 credit toward vehicle upgrades over the next twelve months.

"This significant financing option strengthens our financial foundation and enables us to diversify our treasury strategy with Bitcoin," said Ben Piggott, CFO of ECD Automotive Design.

The company recently established a framework to accept cryptocurrency payments through a relationship with BitPay and aims to engage with the Bitcoin community, which it identifies as a priority customer demographic.

Before ECD can draw on the facility, the Securities and Exchange Commission must declare effective a registration statement covering the resale of the common stock. The stock issuance will be made in a private placement under exemptions from Securities Act registration requirements.

ECD Automotive Design specializes in restoring luxury vehicles including Land Rover Defenders, Range Rover Classics, Jaguar E-Types, Ford Mustangs, and Toyota FJs at its 100,000-square-foot facility in Kissimmee, Florida. Despite current challenges, analysts tracked by InvestingPro project the company will achieve profitability in 2025, with forecasted earnings per share of $0.16.

In other recent news, ECD Automotive Design has implemented several initiatives aimed at enhancing operational efficiency and improving its financial position. The company completed a comprehensive review of its cost structure and capital allocation, resulting in a cost savings analysis, a strategic review of inventory management practices, and negotiations with existing lenders. These negotiations have led to a waiver that resolves existing defaults and secures a 12-month grace period from debt service obligations. Additionally, ECD Auto Design has introduced a new 700+ horsepower BLUEPRINT V8 engine upgrade for its Defender lineup and, for the first time, for Range Rover Classic models. This engine upgrade reflects a response to client demand for more powerful drivetrains, maintaining the classic appearance of the vehicles while significantly boosting performance. The new engine is designed for clients seeking a blend of classic style and modern supercar power, with enhanced cooling systems and upgraded drivetrain components. ECD anticipates that this new engine option will be popular among performance enthusiasts and luxury vehicle collectors. The company continues to focus on sustainable value creation and evaluating opportunities to drive efficiency and improve its cash position.

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