Massive ECDA (NASDAQ: ECDA) note conversion capacity as IPO warrants lose value

Rhea-AI Filing Summary

ECD Automotive Design, Inc. disclosed that an institutional investor, which is also its parent, exercised its right under a prior securities purchase agreement to buy additional senior secured convertible notes with an original principal amount of $2,663,770 for a purchase price of $2,424,667. Unless converted or redeemed, these notes mature on December 12, 2026 and include a 9.99% beneficial ownership cap, limiting how much common stock the holder can own after conversion.

If converted at the stated floor price of $0.0034 per share, the additional notes would be convertible into up to 783,461,765 shares of common stock. The company also reported that, following a merger, its public and private placement warrants were adjusted so that holders are entitled to receive $0.0176 for each share underlying a warrant, while the current exercise price is $2300 per share, meaning the warrants no longer have practical exercise value.

Positive

• None.

Negative

• Potentially large equity overhang from convertible notes – The additional notes are convertible at a floor price of $0.0034 per share into up to 783,461,765 common shares, which could significantly affect existing shareholders if substantial conversions occur.
• Legacy warrants rendered uneconomic – After the merger, warrant holders are entitled to only $0.0176 per underlying share while the exercise price is $2300, meaning the warrants have no practical exercise value under the disclosed terms.

Insights

Capital structure and credit analyst

Company adds low‑priced convertible debt while legacy warrants lose value.

The new senior secured convertible notes add $2,663,770 in principal from the company’s parent, on top of an earlier program of up to $21,972,275.38. Conversion at a floor price of $0.0034 per share implies potential issuance of 783,461,765 shares, subject to a 9.99% ownership cap.

This structure links future equity issuance to the note holder’s conversion decisions and market conditions. Because the notes are senior secured and held by the parent, the parent’s creditor position strengthens relative to common shareholders.

The warrant adjustment after the merger is also notable. Holders now receive $0.0176 per underlying share while the exercise price is $2300 per share, so exercising would not be economical based on the disclosed terms. This effectively removes these warrants as a realistic source of future equity funding.

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the

Securities Exchange Act of 1934

March 12, 2026

Date of Report (Date of earliest event reported)

ECD AUTOMOTIVE DESIGN, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware		001-41497		86-2559175
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

4390 Industrial Lane Kissimmee, Florida		34758
(Address of Principal Executive Offices)		(Zip Code)

Registrant’s telephone number, including area code: (407) 483-4825

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act
☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act
☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		ECDA		The Nasdaq Stock Market LLC
Warrants		ECDAW		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR §230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR §240.12b-2).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01. Entry Into a Material Definitive Agreement.

As previously disclosed, on June 5, 2025, the Company entered into a securities purchase agreement (the “June 2025 SPA”) with an institutional investor (the “Holder”) for a series of senior secured convertible notes (“Notes”) in an aggregate principal amount of up to $21,972,275.38.

On March 12, 2026, the Holder exercised its right to purchase additional Notes in the original principal amount of $2,663,770 for a purchase price of $2,424,667.  Unless converted or redeemed, the additional Notes will mature on December 12, 2026, subject to the Holder’s right to extend such date in certain circumstance. The additional Notes include a beneficial ownership limitation, which provides that the Notes may not be exercised to the extent that the Holder would own more 9.99% of the outstanding Common Stock immediately after giving effect to such conversion. If the additional Notes were to be converted at the floor price of $0.0034 per share, without giving effect to the beneficial ownership limitation, the aggregate principal amount of the additional Notes would be convertible into 783,461,765 shares of Common Stock. The terms and conditions of the additional Notes are described more fully in the Company’s Current Report on Form 8-K filed on June 11, 2025, and such description is incorporated herein by reference.

As of the date of this report, the Holder is the parent of the Company and has made loans to the Company with an aggregate outstanding principal amount of $12,484,248.

The offer and sale of the additional Notes, and of the shares of Common Stock issuable upon conversion of the additional Notes, are exempt from the registration requirements of the Securities Act, pursuant to Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder because, among other things, the transaction did not involve a public offering, the investors are accredited investors, the investors are taking the securities for investment and not resale, and the Company took appropriate measures to restrict the transfer of the securities.

Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth under Item 1.01 is incorporated herein by reference.

Item 3.02. Unregistered Sales of Equity Securities.

The information set forth under Item 1.01 is incorporated herein by reference.

Item 3.03. Material Modification to Rights of Security Holders.

The information set forth under Item 1.01 is incorporated herein by reference.

Upon consummation of the merger described in the Company’s current report on Form 8-K filed on March 12, 2026, the Company’s outstanding warrants issued in its initial public offering in September 2022 and in a private placement consummated simultaneously with the initial public offering (the “Warrants”), were adjusted pursuant to their terms.  As of the effective time of the merger, pursuant to Section 4.5 of the warrant agreement governing the Warrants, the Warrant holders have the right to receive $0.0176 for each share that they would have received upon exercise of the Warrants prior to the merger. The current exercise price of the Warrants is $2300 per share, and accordingly the Warrants have no value.
 

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits.

The following exhibits are filed as part of, or incorporated by reference into, this Report.

No.		Description of Exhibit
4.1		Senior Secured Convertible Note (incorporated by reference to Exhibit 10.2 of the Company’s Current Report on Form 8-K filed on June 11, 2025).
104*		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Dated: March, 18 2026
	ECD AUTOMOTIVE DESIGN, INC.
	By:	/s/ Victoria Hay
	Name:	Victoria Hay
	Title:	Chief Executive Officer

FAQ

What new financing did ECD Automotive Design (ECDA) report in this 8-K?

ECD Automotive Design reported that its institutional investor parent purchased additional senior secured convertible notes with an original principal amount of $2,663,770 for a purchase price of $2,424,667. These notes are part of a larger program of up to $21,972,275.38 in aggregate principal.

When do ECD Automotive Design’s new convertible notes mature?

The additional senior secured convertible notes mature on December 12, 2026, unless converted or redeemed earlier. The holder also has certain rights to extend this maturity date under specified circumstances described in the note terms incorporated by reference.

How many ECD Automotive Design shares could the new notes convert into?

If fully converted at the stated floor price of $0.0034 per share, the new notes would be convertible into up to 783,461,765 shares of common stock. Actual conversions are limited by a 9.99% beneficial ownership cap for the holder.

What is the beneficial ownership limitation on ECDA’s new notes?

The additional notes include a beneficial ownership limitation that prevents the holder from converting if, after conversion, it would own more than 9.99% of ECD Automotive Design’s outstanding common stock. This cap constrains how many shares can be issued from conversions at any one time.

How did the recent merger affect ECD Automotive Design’s warrants?

After the merger, outstanding warrants from the company’s 2022 IPO and related private placement were adjusted so holders receive $0.0176 for each share they could previously receive. With a current exercise price of $2300 per share, the warrants no longer have practical exercise value.

Are the new ECD Automotive Design notes and conversion shares registered with the SEC?

The offer and sale of the additional notes and the common shares issuable upon conversion rely on exemptions from Securities Act registration under Section 4(a)(2) and Rule 506 of Regulation D. The securities were sold in a non‑public offering to accredited investors with transfer restrictions.

Filing Exhibits & Attachments

4 documents

Other Documents

• EX-101 XBRL TAXONOMY EXTENSION SCHEMA 3.9 KB
• EX-101 XBRL TAXONOMY EXTENSION DEFINITION LINKBASE 13.4 KB
• EX-101 XBRL TAXONOMY EXTENSION LABEL LINKBASE 17.5 KB
• EX-101 XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE 13.4 KB