Elio Crowdfunding

[bowers baldwin]

 

[bowers baldwin]

 

[AriLea]

So $30,000,000 for crash testing to begin? I believe that's what Paul said.

On that university presentation a while back Paul said they needed 30mil to do the E1 thru E25, crash testing, plus the final engine testing. The E1 is the P5. He also said that the engine testing will be completed during the E2-25 build. And that will include the destructive engine testing. Paul has said that a prototype costs $700k, and that they would announce a new funding program soon.

Just after that they acquired some amount of cash from the 506c program. We don't know how much. Then now from the A+ crowd funding it looks like they can get what they want up to say 50mil. Paul has said recently that the crowd funding is financing the E2-25 build, and I assume the engine tests.
Some people are saying that the max allowed for both the 506c and the A+ is 50mil. But I wonder if the A+ program can actually total 50mil by itself. If so, possibly the 506c can be expanded also, but that's just wistfulness on my part.

In any case it seems they must get 25mil from the A+ which leads me to believe they got at least 5mil from the 506c. I don't see a reason why EM can't go for a full 50mil, I'm sure it can be put to good use with plenty of investor interest to supply that. Paul has said recently that there are now about 3 other funding avenues available in addition to the ATVM loan program. I don't know if that includes the languishing equipment sales program. I'll note, it is possible collateral for a loan.

 

[bowers baldwin]

2 steps back

 

[Ekh]

On that university presentation a while back Paul said they needed 30mil to do the E1 thru E25, crash testing, plus the final engine testing. The E1 is the P5. He also said that the engine testing will be completed during the E2-25 build. And that will include the destructive engine testing. Paul has said that a prototype costs $700k, and that they would announce a new funding program soon.

Just after that they acquired some amount of cash from the 506c program. We don't know how much. Then now from the A+ crowd funding it looks like they can get what they want up to say 50mil. Paul has said recently that the crowd funding is financing the E2-25 build, and I assume the engine tests.
Some people are saying that the max allowed for both the 506c and the A+ is 50mil. But I wonder if the A+ program can actually total 50mil by itself. If so, possibly the 506c can be expanded also, but that's just wistfulness on my part.

In any case it seems they must get 25mil from the A+ which leads me to believe they got at least 5mil from the 506c. I don't see a reason why EM can't go for a full 50mil, I'm sure it can be put to good use with plenty of investor interest to supply that. Paul has said recently that there are now about 3 other funding avenues available in addition to the ATVM loan program. I don't know if that includes the languishing equipment sales program. I'll note, it is possible collateral for a loan.

I think the $50 million restriction is just for Reg A+ funding -- 506c funding is a separate critter, and has, so far as I know, no upper campaign limit except the limits placed on individual investors. I could be wrong on that, but think I have it right.

 

[AriLea]

On that university presentation a while back Paul said they needed 30mil to do the E1 thru E25, crash testing, plus the final engine testing. The E1 is the P5. He also said that the engine testing will be completed during the E2-25 build. And that will include the destructive engine testing. Paul has said that a prototype costs $700k, and that they would announce a new funding program soon.

Just after that they acquired some amount of cash from the 506c program. We don't know how much. Then now from the A+ crowd funding it looks like they can get what they want up to say 50mil. Paul has said recently that the crowd funding is financing the E2-25 build, and I assume the engine tests.
Some people are saying that the max allowed for both the 506c and the A+ is 50mil. But I wonder if the A+ program can actually total 50mil by itself. If so, possibly the 506c can be expanded also, but that's just wistfulness on my part.

In any case it seems they must get 25mil from the A+ which leads me to believe they got at least 5mil from the 506c. I don't see a reason why EM can't go for a full 50mil, I'm sure it can be put to good use with plenty of investor interest to supply that. Paul has said recently that there are now about 3 other funding avenues available in addition to the ATVM loan program. I don't know if that includes the languishing equipment sales program. I'll note, it is possible collateral for a loan.

Also in that university presentation Paul said that current investors will require an exit strategy at some point so a ?public stock offering? (I need to re-watch the video) will be required at some point. Don't know if that is one of the three funding options noted above.

 

[AriLea]

I think the $50 million restriction is just for Reg A+ funding -- 506c funding is a separate critter, and has, so far as I know, no upper campaign limit except the limits placed on individual investors. I could be wrong on that, but think I have it right.

Maybe that's why I have the hunch that the A+ success will energize the 506c. It's just a feeling I had.

 

[Jeff Porter]

Let's do a "what-if" scenario, since I'm pretty sure I don't fully understand what happens if all goes as we hope it will.

Let's say the SEC gives the thumbs up to Elio Motors, and EM decides to offer all of us that signed up on Start Engine, to buy shares. What might be the steps of the process, and if things go well for EM, what financial gains will a share-holder get?

Potential steps, please add to / change this as needed:

1. EM might say, you can buy shares at $50 per share. I say sounds good, I buy 5 shares for a total of $250, give my money to EM.
2. So now I own 5 shares that I bought for $50 each.
3. Time goes by, eventually EM starts production.
4. More time goes by. EM is doing well, they decide to pay a dividend of $0.50 per share.
5. I decide to reinvest my dividends, give that money back to EM.

When is it possible to sell my shares, and how do I do it? When will a share go up or down in value? How do we track such a thing? Will there be a certain period of time that shares are for sale initially, i.e. after a certain date you can't buy any more shares?

 

[Ekh]

Also in that university presentation Paul said that current investors will require an exit strategy at some point so a ?public stock offering? (I need to re-watch the video) will be required at some point. Don't know if that is one of the three funding options noted above.

Probably not. EM is totally unequipped for any sort of IPO, even on the "pink sheets." They are way too speculative at this point. Once they're in production, there will have to be an exit strategy for current investors ... it might even be a share buy-back at an agreed upon price based on the then net worth of the company. (I'd be happy to go for that). Or, a future buy-back at a fixed future price. Say, EM agrees that at a date certain (say, 5 years from the date of investment) EM will undertake to buy your shares back for 200% of purchase price, or after 7 years for 250% of purchase price. Something like that might be an OK exit strategy. Still the same level of risk, but at least you'd be certain what you'll get back out of it if the company is successful.

 

[Ekh]

Let's do a "what-if" scenario, since I'm pretty sure I don't fully understand what happens if all goes as we hope it will.

Let's say the SEC gives the thumbs up to Elio Motors, and EM decides to offer all of us that signed up on Start Engine, to buy shares. What might be the steps of the process, and if things go well for EM, what financial gains will a share-holder get?

Potential steps, please add to / change this as needed:

1. EM might say, you can buy shares at $50 per share. I say sounds good, I buy 5 shares for a total of $250, give my money to EM.
2. So now I own 5 shares that I bought for $50 each.
3. Time goes by, eventually EM starts production.
4. More time goes by. EM is doing well, they decide to pay a dividend of $0.50 per share.
5. I decide to reinvest my dividends, give that money back to EM.

When is it possible to sell my shares, and how do I do it? When will a share go up or down in value? How do we track such a thing? Will there be a certain period of time that shares are for sale initially, i.e. after a certain date you can't buy any more shares?

When companies are not publicly offered, there is no regular market for shares. So some sort of pseudo-market has to be created by the company itself. See my answer to AriLea's post, immediately above.