Elio Crowdfunding

[John Painter]

At this point, with the Reg A+ statement, being timid about your good things -- and each reservation is a Good Thing -- is not what they ought to do, IMO. Flaunt your strengths when your weaknesses are on full view.

The only difference between EM's SEC filing and every other business that's wanted to raise capital by offering private placement or public stock is that most of us have happened read EM's disclosure. These documents, by definition, are supposed to be very conservative, bleak almost - no low hanging fruit. If anything it's a relief that EM is actually capable of fully articulating the risks of the venture. I think EM does a good job of articulating their strengths, the four must haves is a pretty big flaunt, the challenge on top of what they articulated (and which has pretty much been the challenge all along) is whether the public that is interested in the vehicle is able to read their SEC filing and balance the enthusiasm for the vehicle with the stark reality of starting a vehicle manufacturing company.

 

[Rickb]

Thankfully, EM and other companies are required to articulate the high risks thanks to government regulation implemented to protect eager crowdsource funding investors with little investment background and limited actual venture capital to risk. It's the only reason we have finally been able to document EM's financial situation. We already suspected it was bleak, now we know exactly how bleak. If you believe it's a good investment opportunity and can afford it please throw some money at EM to keep things moving slowly forward.

 

[bowers baldwin]

 

[JEBar]

given, the filing shows exactly what most folks following EM already knew, that being they need to raise significant money to move on to production .... is it a major hindrance to the Crowd Funding effort, not yet .... the pledges continue to grow but what is does do is give EM's detractors (AKA haters) another point on which they can express what they consider to be righteous indignation .... we won't know for sure until the money is in EM's account and the stock is in the hands of its supporters

 

[Ekh]

I think what's bothering some of us most is the scope of the debt predicament. We knew Elio had been limping along, but I don't think any of us really knew how deep the hole was -- and the ruinous rates of interest being charged. Having that made concrete really is a shocker. It's not the kiss of doom, but it's a major, major problem. The sword of Damocles is hanging over EM's head ... but if they can only get those cars built and the doors open, the situation will turn around. But frankly, I think it will take the ATVM loan or an angel investor or a huge fleet order to get a big enough influx of cash to refinance the debt. And refinancing the debt is vital. The punitive interest payments for that one missed payment in 2013 are hamstringing the company for sure.

These are doubts many of us sensed, but the declarations in the Reg A filing have made the size of the problems real. Yes, John, you are right that the declarations are designed to be conservative, to put the worst case forward ... but those debt numbers aren't maybes, they're real bucks that have to come from somewhere. They haven't come (yet) from the DOE loan guarantee, and they haven't come from surplus equipment sales (a fraction of the earlier valuation). The expressions of interest help, but aren't yet real, while those payment still have to be made. I'm not giving up, PE for sure isn't giving up, but the financial picture on the debit side is pretty grim, while the revenue side, given orders on hand, is terrific. So how in hell to bridge the gap?

My guess is that Paul is going to have to sell a major part of the company to Daddy Warbucks, like it or not. But I'd hate to see that happen.

 

[JEBar]

I'm not giving up, PE for sure isn't giving up, but the financial picture on the debit side is pretty grim, while the revenue side, given orders on hand, is terrific.

agree .... hopefully sometime today there will be an update in the number of reservations that, in all likely hood, will move into the 45,000+ range .... for a good while now reservations have been rising by 1,000 every 4 +/- weeks .... EM is most certainly walking a tight rope but the response to the Crowd Funding program would seem to have widened the rope

 

[Chris F]

The only difference between EM's SEC filing and every other business that's wanted to raise capital by offering private placement or public stock is that most of us have happened read EM's disclosure. These documents, by definition, are supposed to be very conservative, bleak almost - no low hanging fruit. If anything it's a relief that EM is actually capable of fully articulating the risks of the venture. I think EM does a good job of articulating their strengths, the four must haves is a pretty big flaunt, the challenge on top of what they articulated (and which has pretty much been the challenge all along) is whether the public that is interested in the vehicle is able to read their SEC filing and balance the enthusiasm for the vehicle with the stark reality of starting a vehicle manufacturing company.

These documents always paint a bleak picture; the purpose is to protect the issuer in case something negative occurs. Its often difficult to explain that to issuers, who are always optimistic about their future results.

 

[Elio Amazed]

agree .... hopefully sometime today there will be an update in the number of reservations that, in all likely hood, will move into the 45,000+ range .... for a good while now reservations have been rising by 1,000 every 4 +/- weeks .... EM is most certainly walking a tight rope but the response to the Crowd Funding program would seem to have widened the rope

As far as bailing water as fast as you can and robbing Peter to pay Paul, been there and done that.
When you have no other option than incurring that kind of interest on your debt, it gets scary and ugly.

I also know what it is to be forced to bite off more than you can chew.
Once everything else is in place, there has to be equipment and a plant.
If not for that deal, the only alternative may have been building and buying new.
That probably would have caused the number needed for production to be 183m x a factor of ?

I offer that there's another way to say...
"...but the response to the Crowd Funding program would seem to have widened the rope",

And that is...
"...but the response to the Crowd Funding program may save their butts."

If I understand what's being said here...
The moment we collectively purchase the stock, it's worth only a small fraction of what we're paying for it, correct?

Hmmm.

Don't care. I'm going to honor my commitment, put the shares in a safe place, and hold onto them.

I had a pretty clear inclination of the plant equipment's worth when I started following all of this.
I couldn't figure out how it could be that much more than anyone was going to be willing to pay for it.
I knew that the big three weren't going to want it.
GM would have never left it if they thought they'd ever need it again.
The Chinese? The Indians? Nope. They've got big enough bankrolls for new stuff.
Other start-ups? What other start-ups? Or better yet, what other start-ups with cash?
We were still in a depres... Oops, sorry, ...recession when that deal was struck.
Tesla? (chuckling).

Keep in mind that the sale of the equipment was a piece of the puzzle that EM was counting on.

Heavily.

Even before he tried to sell it...
PE said he paid way to much for it.
He's realizing how much too much.
In his favor, I'm sure he didn't go blindly into it.
He probably had "expert" advise along the way.

I appreciate the skill these people have in keeping a number of balls in the air.

All in all, this is where we are now.
The past is pretty meaningless except for the "live and learn" thing.
I've got a very limited income and I'm supporting these numbskulls to the end.

 

[Ty]

As far as bailing water as fast as you can and robbing Peter to pay Paul, been there and done that.
When you have no other option than incurring that kind of interest on your debt, it gets scary and ugly.

I also know what it is to be forced to bite off more than you can chew.
Once everything else is in place, there has to be equipment and a plant.
If not for that deal, the only alternative may have been building and buying new.
That probably would have caused the number needed for production to be 183m x a factor of ?

I offer that there's another way to say...
"...but the response to the Crowd Funding program would seem to have widened the rope",

And that is...
"...but the response to the Crowd Funding program may save their butts."

If I understand what's being said here...
The moment we collectively purchase the stock, it's worth only a small fraction of what we're paying for it, correct?

Hmmm.

Don't care. I'm going to honor my commitment, put the shares in a safe place, and hold onto them.

I had a pretty clear inclination of the plant equipment's worth when I started following all of this.
I couldn't figure out how it could be that much more than anyone was going to be willing to pay for it.
I knew that the big three weren't going to want it.
GM would have never left it if they thought they'd ever need it again.
The Chinese? The Indians? Nope. They've got big enough bankrolls for new stuff.
Other start-ups? What other start-ups? Or better yet, what other start-ups with cash?
We were still in a depres... Oops, sorry, ...recession when that deal was struck.
Tesla? (chuckling).

Keep in mind that the sale of the equipment was a piece of the puzzle that EM was counting on.

Heavily.

Even before he tried to sell it...
PE said he paid way to much for it.
He's realizing how much too much.
In his favor, I'm sure he didn't go blindly into it.
He probably had "expert" advise along the way.

I appreciate the skill these people have in keeping a number of balls in the air.

All in all, this is where we are now.
The past is pretty meaningless except for the "live and learn" thing.
I've got a very limited income and I'm supporting these numskulls to the end.

One tiny bit of info... Paul bought the equipment including the extra equipment because it was all or nothing. He needed most of it. He paid a fraction what it would have cost to buy it new. GM would surely want the equipment if they had need for it. That plant was one of their most (if not the most) updated plant with the newest equipment. Stipulation of the bankruptcy was they had to shutter some plants and were NOT permitted to remove anything from those plants. Shreveport Truck Assembly Facility was one of those plants.

Would Paul love to sell all the excess equipment ($113M of equipment was "excess" according to Elio's press release)? Of course. Was he a little optimistic about the market for those used equipment items? It appears so. However, the $400M worth of equipment in that plant was purchased for $3M in cash and a $23M promissory note. In their SEC filing, Elio says that the purchase of the equipment saved them $350M in equipment purchases.

I tend to ramble when I research. Sorry about that.

 

[Kuda]

One tiny bit of info... Paul bought the equipment including the extra equipment because it was all or nothing. He needed most of it. He paid a fraction what it would have cost to buy it new. GM would surely want the equipment if they had need for it. That plant was one of their most (if not the most) updated plant with the newest equipment. Stipulation of the bankruptcy was they had to shutter some plants and were NOT permitted to remove anything from those plants. Shreveport Truck Assembly Facility was one of those plants.

Would Paul love to sell all the excess equipment ($113M of equipment was "excess" according to Elio's press release)? Of course. Was he a little optimistic about the market for those used equipment items? It appears so. However, the $400M worth of equipment in that plant was purchased for $3M in cash and a $23M promissory note. In their SEC filing, Elio says that the purchase of the equipment saved them $350M in equipment purchases.

I tend to ramble when I research. Sorry about that.