Possible Scam?

[Elio Amazed]

Thanks Dan.
I knew most of that, and the rest, as you described it, was how I imagined that it all worked.

Again, I think it's the "simplified" and exaggerated pitch and the inaccurate information within that pitch that will tend to give any reasonable layman pause, and not that reasonable layman's "misunderstanding" of those simplifications, exaggerations and inaccuracies.

It's a good thing that we're discussing it here, for the sake of those yet to be called (if EM is extending private placement beyond Sept. 30th).

Sincerely, thanks for the additional insight.
I think we're in agreement. I hope you can recognize that.

 

[AriLea]

This whole thread has been very interesting. Investment is a big world that few of the 99%'ers like me know very little about.
So yea, we all first thought, oh that's got to be a scam. But we'r catching on, and very glad that wasn't.

It is supporting the hunch I had that the Crowdfunding success is invigorating the other investment channels. There is probably a lot more opportunity coming into reach because of that.

 

[ks6c]

Thanks Dan.
I knew most of that, and the rest, as you described it, was how I imagined that it all worked.

Again, I think it's the "simplified" and exaggerated pitch and the inaccurate information within that pitch that will tend to give any reasonable layman pause, and not that reasonable layman's "misunderstanding" of those simplifications, exaggerations and inaccuracies.

It's a good thing that we're discussing it here, for the sake of those yet to be called (if EM is extending private placement beyond Sept. 30th).

Sincerely, thanks for the additional insight.
I think we're in agreement. I hope you can recognize that.

Oh, we're all good - never any doubt about that! And I have to tell you, I've clicked on "Can't Find My Way Home" several dozen times because of your sig! BTW, here's a Winwood-Clapton version that rocks, too.

I think any reasonable layman should have pause when on the receiving end of a broker's cold call, especially since most won't have the experience or expertise to quickly and accurately filter and digest a 2 minute elevator pitch from a trained salesman. They can only walk away with misunderstandings because of the limits of their experiences (and I'm not saying that as a bad thing, it just "is"). The safety valve, put in place by the SEC, is that you CAN'T buy over the phone - that's what the whole Accredited Investor process is all about. Listening can be entertaining, though <grin>

Let's consider what might be "inaccuracies" in Mr. Nicholas' pitch. He says production in Q2, EM's docs filed with the SEC say "no later than" Q4. Sarbanes-Oxley now holds CEOs, CFOs and accounting firm principals personally accountable and subject to fines and jail time for material mis-statements. I'm pretty confident that when EM says NLT Q4 to the SEC, they really mean it and feel it's in the bag. Q2? Only time will tell.

NASDAQ in 4 weeks? Actually could happen - EM has filed, SEC has responded with questions (according to the person I spoke with at N1). IF (big IF) the SEC is satisfied after the first round of responses, listing could be imminent. Likely? I don't think so, but that's only based on my own personal experiences with gov't agencies in general. Impossible? Nope. Exaggerated on Mr. Nicholas' part? He could easily claim hopeful or optimistic.

It all depends on the filters one is using... That's why they're all required to put it all down in writing in the Prospectus!

 

[ks6c]

This whole thread has been very interesting. Investment is a big world that few of the 99%'ers like me know very little about.
So yea, we all first thought, oh that's got to be a scam. But we're catching on, and very glad that wasn't.

It is supporting the hunch I had that the Crowdfunding success is invigorating the other investment channels. There is probably a lot more opportunity coming into reach because of that.

I think we are under-estimating and under-appreciating just how true your statement is! The old adage "it takes money to make money" has always been true, and the unprecedented fundraising approach being pioneered by EM, StartEngine and Network1 is cutting this off at the knees.

My personal opinion, but years down the road when historians look back on the Elio project, I think this little gem will be looked at as a watershed moment. Truly.

 

[Ekh]

1k all in yields ASIL (a spot in line-)
1k also yields $500 incentive
also yields a "T"
and a bumper sticker (still?)

I am still waiting for the T. Hope it has a pic of the P5 on it.

 

[RUCRAYZE]

I am still waiting for the T. Hope it has a pic of the P5 on it.

Keep us posted

 

[Ty]

Oh, we're all good - never any doubt about that! And I have to tell you, I've clicked on "Can't Find My Way Home" several dozen times because of your sig! BTW, here's a Winwood-Clapton version that rocks, too.

I think any reasonable layman should have pause when on the receiving end of a broker's cold call, especially since most won't have the experience or expertise to quickly and accurately filter and digest a 2 minute elevator pitch from a trained salesman. They can only walk away with misunderstandings because of the limits of their experiences (and I'm not saying that as a bad thing, it just "is"). The safety valve, put in place by the SEC, is that you CAN'T buy over the phone - that's what the whole Accredited Investor process is all about. Listening can be entertaining, though <grin>

Let's consider what might be "inaccuracies" in Mr. Nicholas' pitch. He says production in Q2, EM's docs filed with the SEC say "no later than" Q4. Sarbanes-Oxley now holds CEOs, CFOs and accounting firm principals personally accountable and subject to fines and jail time for material mis-statements. I'm pretty confident that when EM says NLT Q4 to the SEC, they really mean it and feel it's in the bag. Q2? Only time will tell.

NASDAQ in 4 weeks? Actually could happen - EM has filed, SEC has responded with questions (according to the person I spoke with at N1). IF (big IF) the SEC is satisfied after the first round of responses, listing could be imminent. Likely? I don't think so, but that's only based on my own personal experiences with gov't agencies in general. Impossible? Nope. Exaggerated on Mr. Nicholas' part? He could easily claim hopeful or optimistic.

It all depends on the filters one is using... That's why they're all required to put it all down in writing in the Prosectus!

The whole "Someone at Chrysler said they are going to buy 300M credits a year" thing isn't right. Well, I suppose someone could have said "We at Chrysler will buy 300M credits IF they come available" or something like that.

 

[Ty]

It's interesting the number of people who want to label this a scam (it isn't) or to characterize what Mr. Nicholas may (or may not) have said as illegal (it wasn't). Nothing he says is really binding, in any case - I'll explain.

He can't sell the instruments over the phone, any more than we can buy them over the phone. He can't vet anyone as an Accredited Investor by asking 3 questions, either. This is a multi-step process and all he is trying to sell you on is taking the first step - asking for the Prospectus and the paperwork necessary to establish you as an Accredited Investor.

When you see a Prospectus (any, and I'd bet, ALL Prospectuses), one of the first things you read will be along the lines of "this is the controlling document, the ONLY controlling document, and no other written or verbal representations will be recognized." IOW, nothing Mr. Nicholas said is/was binding. You can't purchase until you have a Prospectus in hand, and you verify that you have read it. You can NOT purchase based on his representations.

Next step - you will be asked to provide investment account statements or the signature of a registered financial account manager/financial advisor/broker stating you meet the SEC's guidelines as an Accredited Investor. Legally, they can't take your word for it. AC's are considered "sophisticated" investors, capable of not only reading a Prospectus but understanding what it says and the risks involved in the investment. You will sign a statement that you have read the Prospectus, and that you understand it, too.

"50% discount" goes back to conversion terms. At the private placement stage, the company declares an estimate of valuation to communicate to investors what "share" (not Shares) of the company they would be buying. Going public (IPO, OTC, others), the company has to do the same thing, again - but time has passed, additional milestones have been achieved, their estimate of valuation goes up. The AC's interests can be converted to public Shares at this point, along with new purchasers. Here's the magic - if the Company's estimate of valuation has doubled, the AC's interests will have doubled, too, and their conversion to shares will essentially be at 1/2 the price of new investors just coming in. It's easier just to say "a 50% discount".

And this is why I feel a bit compelled to explain it all - Nobody will know or remember Network1, everybody will know Elio Motors, and it wouldn't be a good thing if talk of scam or scandal related to EM's fund-raising efforts has a negative effect on EM's reputation. It's bad enough we're dealing with the blowback of non-legitimate expressions of interest with StartEngine, giving ammunition to the naysayers that the process is tainted, we don't need to be adding fuel to the fire on the private placement side, too, especially if it's due to our own mis-understandings.

Thanks for the in-depth explanation there. I can see how what I thought was being said could be a misunderstanding or just taken wrong. Pam was surprised at the verbage the guy was using but Network1 or whatever the name is IS actually working with Elio and some of the work can be subcontracted out. So, it all makes sense to me better now. So again, thank you.

(Industrial Engineering questions, I'm your guy... financing, not so much.)

 

[AriLea]

The whole "Someone at Chrysler said they are going to buy 300M credits a year" thing isn't right. Well, I suppose someone could have said "We at Chrysler will buy 300M credits IF they come available" or something like that.

All that is totally under the blanket, and pretty much just academic until there is law that enables it.
Still, I had some representative numbers at one point based on the current program. I forget what it was exactly, but it related to the differences in all fleet average MPG. Applied to 240k cars at 84mpg and the national average at the time it came out something like $600m in cash value yearly ($2500/car).
If that turned out to be correct, definitely that would make a dent in the whole profitability picture.

 

[Elio Amazed]

Other than the possible misinterpretation of the "public offering", the broker's verbage was exactly as described.
Rather than saying that the information was outright inaccurate, I'll try for a better description...

How does extremely skewed work for us?

I was somewhat aware of the process involved in private placement.
I understand all that's been said here about this being business as usual.
Keeping in mind this pitch was probably being used on the layman and the well-informed alike...
I'm not completely right with a professional using a pitch that requires industry knowledge to discipher.
And a pitch that if simply and reasonably taken at face value is considered to be "misunderstood".

Even if it's only used to spark enough of an individual's interest to cause them to initiate the process.

I consider it to be a prime example of what's accepted as a new standard of morality.
It reminds me of what many people describe as what's wrong with business and government.
I have the highest regard for those who have contributed to this thread, and mean no offense...
But the explanations sound more like excuses to me than anything else.

I don't think EM had knowledge of, let alone condoned, this.

Nope. I'm not right with it at all in any industry or situation.
"It's an accepted practice" and "It is what it is" doesn't always cut it with me.

Again, it's good that there's no scam nor any issue significant enough to be considered scandalous.
And again, many thanks to those who've enabled us to make those determinations.