Elio Crowdfunding

[cantwait]

Slow and steady is no longer a viable option for Elio. Unlike the legendary Hare, interest never sleeps.
“Interest never sleeps nor sickens nor dies; it never goes to the hospital; it works on Sundays and holidays; it never takes a vacation; it never visits nor travels; it takes no pleasure; it is never laid off work nor discharged from employment; it never works on reduced hours. . . . Once in debt, interest is your companion every minute of the day and night; you cannot shun it or slip away from it; you cannot dismiss it; it yields neither to entreaties, demands, or orders; and whenever you get in its way or cross its course or fail to meet its demands, it crushes you.” — J. Reuben Clark

According to the Offering Circular/SEC Reg A+ filing:
Elio Motors is over $70 million in debt, about half of which is due by the end of 2016. Interest alone is pushing $10 million per year.
They lost over $13 million in 2013, over $24 million in 2014, and almost $9 million in the first half of 2015.
They need over $264 million (less what they clear from the current Reg A+ stock offering) to make it to production.

They do not need slow and steady, they need big and bold and fast and steady. Their/our hopes rest on the E-series loosening the wallets of the big investors.

 

[Rickb]

Slow and steady is no longer a viable option for Elio. Unlike the legendary Hare, interest never sleeps.
“Interest never sleeps nor sickens nor dies; it never goes to the hospital; it works on Sundays and holidays; it never takes a vacation; it never visits nor travels; it takes no pleasure; it is never laid off work nor discharged from employment; it never works on reduced hours. . . . Once in debt, interest is your companion every minute of the day and night; you cannot shun it or slip away from it; you cannot dismiss it; it yields neither to entreaties, demands, or orders; and whenever you get in its way or cross its course or fail to meet its demands, it crushes you.” — J. Reuben Clark

According to the Offering Circular/SEC Reg A+ filing:
Elio Motors is over $70 million in debt, about half of which is due by the end of 2016. Interest alone is pushing $10 million per year.
They lost over $13 million in 2013, over $24 million in 2014, and almost $9 million in the first half of 2015.
They need over $264 million (less what they clear from the current Reg A+ stock offering) to make it to production.

They do not need slow and steady, they need big and bold and fast and steady. Their/our hopes rest on the E-series loosening the wallets of the big investors.

So with that said, the $70 million in funding that EM has raised to date is actually the debt. That $70 Million of debt + the all in % of the $18 million in reservations received is the funding that has brought EM to the somewhat incomplete P5 milestone? Now I understand why EM needs the additional $230 Million, preferably the low interest ATVM Loan, which would likely to be used to pay down the current high interest debt. The balance of the loan used to ramp up an official production schedule. After production begins the $290 Million worth of pre-order revenue would be available to fund EM's daily operations. IMO

New Motto for the New Year: Big & Bold and Fast & Steady.

 

[3wheelin]

So with that said, the $70 million in funding that EM has raised to date is actually the debt. That $70 Million of debt + the all in % of the $18 million in reservations received is the funding that has brought EM to the somewhat incomplete P5 milestone? Now I understand why EM needs the additional $230 Million, preferably the low interest ATVM Loan, which would likely to be used to pay down the current high interest debt. The balance of the loan used to ramp up an official production schedule. After production begins the $290 Million worth of pre-order revenue would be available to fund EM's daily operations. IMO

New Motto for the New Year: Big & Bold and Fast & Steady.

View attachment 7865

It looks like it does not leave much for profit as the $230 mil will be used to START operation and the $290 mil. just to PAY for current loan interests, bills, salaries, materials, etc. just to SUSTAIN EM's daily operation!
I've said it all along that EM's march to production is dictated by funding. Had the funding's been there from the start, our ELIO would have been a household name and in everyone's driveway by now. It's all over the news that Elon Musk's Tesla has been a disaster from the start, has been operating at a loss, inventory has been piling up and analysts has been predicting it's business will fold sooner than later. Maybe Musk needs to see ELIO and put his money in this dream, that is if PE is willing to concede control of his pet project! Without the infusion of the needed cash, denero, muhla, well, for now we keep on dreaming. Strictly my opinion only.

 

[RUCRAYZE]

Oh. That doesn't seem like great news for a company that will need another $300 million to begin production.

Welcome

The slow and steady wins the race reference is to a Fable not real life. Other concepts could potentially win the race to production and cut into EM's US and World Wide Sales/Marketing strategy. I have been following Elio's slow race since 2008 and frankly I feel after 8 years it's time to pick up the pace. Many of you have been following only 2-3 years and are understandably a little more patient. I have been patient and understanding too right up until the P5 Reveal.

Build/Test the E's as planned with the recently acquired small investor funding while immediately securing the additional $230 Million needed for production from PE's secret private venture capitalist. Yes, he will have to share some profit. Just Do It! The plant would be tooled, parts locked in, begin the hiring and training process of the 1500 employees, tool additional plant space required and employees needed to build 49,000 + engines, and be certain the Elio stores are ready and scheduled to open for business, all while the E's are being built and tested. EM would be production ready the minute the final Production E is certified, delivered to Paul Elio's home, and ready to mass produce. My opinion only after 8 years of observing what I feel is essentially still a 'test the waters' Marketing Campaign.
We will be lucky to see the E Builds and testing completed by Christmas 2016 under the current March 2017 production schedule while waiting on the not so guaranteed ATVM Loan.
View attachment 7862

wasn't there some sort of penalty if a goal wasn't reached about now??

 

[RUCRAYZE]

So with that said, the $70 million in funding that EM has raised to date is actually the debt. That $70 Million of debt + the all in % of the $18 million in reservations received is the funding that has brought EM to the somewhat incomplete P5 milestone? Now I understand why EM needs the additional $230 Million, preferably the low interest ATVM Loan, which would likely to be used to pay down the current high interest debt. The balance of the loan used to ramp up an official production schedule. After production begins the $290 Million worth of pre-order revenue would be available to fund EM's daily operations. IMO

New Motto for the New Year: Big & Bold and Fast & Steady.

View attachment 7865

and who would give a loan to a company with -70m in debt, 3 prototypes, and promises. You have to present that you don't need the money to secure the debt- (be able and have the resources to cover the loan) poor credit ratings get you higher interest rates, and possibly rejected-
Buy a car for example, and can't "prove" that you can pay off the loan- no car.
One good thing my pop learned me- if ya can't pay for it (up front), you can't buy it.

Of course her attorney didn't see it that way! as it turned out

 

[3wheelin]

and who would give a loan to a company with -70m in debt, 3 prototypes, and promises. You have to present that you don't need the money to secure the debt- (be able and have the resources to cover the loan) poor credit ratings get you higher interest rates, and possibly rejected-
Buy a car for example, and can't "prove" that you can pay off the loan- no car.
One good thing my pop learned me- if ya can't pay for it (up front), you can't buy it.

Of course her attorney didn't see it that way! as it turned out

Well at least the funding is in place from what EM claims to start or maybe it's already in the works regarding the E-series builds. The positive results from these tests when all was said and done "could" bring the needed start up money to production, fulfill all the reservations first to put them on the streets of America for everybody to see and by then, orders will come in thousands, foreign and domestic, fleet or individual, that is if it proves it's merits!

 

[cantwait]

Welcome

wasn't there some sort of penalty if a goal wasn't reached about now??

From page 22 of the Offering Circular:
In December 2013, we entered into an agreement with Shreveport Business Park, LLC to lease 997,375 rentable square feet of manufacturing and warehouse space for a 25-year term, which provides for a rent-free period until the earlier of four months after the start of production or August 1, 2015, after which the base rent will be $249,344 per month. We have two options to extend the term of the lease for 25 additional years each, as well as an option to expand into additional space. Since December 2013, we have been obligated to pay taxes, insurance expenses and common expenses with respect to this space. On July 31, 2015, we entered into an amendment to the lease which extended the base rent commencement date to February 1, 2016 and deferred payment of the base rent for the period February 1, 2016 through July 31, 2016 until August 1, 2016.

Among the terms of our purchase agreement with Racer Trust was our agreement to use and develop the property so as to create at least 1,500 new jobs. We agreed that if we had not created 1,500 new jobs by February 28, 2016, we would pay Racer Trust $5,000 for each full-time, permanent direct job that fell below the required number. We have requested an extension of this requirement from Racer Trust, as we do not anticipate that we will be in production until the end of 2016 at the earliest.

The note to Racer Trust is secured by a lien subordinated to the lien of CH Capital Lending on certain machinery and equipment and is non-interest bearing. The note, as amended, requires monthly principal payments of $173,500 from January 1, 2016 through July 1, 2017, with the remaining outstanding principal due on July 1, 2017. As of December 31, 2014, the outstanding principal balance was $21,038,818. See Note 4. Long-Term Debt of the Notes to Financial Statements for more information regarding this debt obligation.

From page F-13 of the Offering Circular (in Note 4):
On March 17, 2015, the Company entered into the first amendment to the subordinated promissory note with RACER. The first amendment delayed the monthly minimum payments from January 1, 2015 until January 1, 2016. The first amendment also extended the maturity date from September 1, 2016 to July 1, 2017. The principal balance outstanding shall continue to bear default interest of 18% per annum until the payments are resumed on January 1, 2016.

TLDR:
$249k per month rent starts accruing Feb 1. Lump sum ($1.5M) due Aug 1.
$5k charge per job charge for each job short of 1,500. (Maximum $7.5M) Due Feb 28. Extension requested because production not anticipated until the end of 2016 at the earliest.
$173.5k monthly payments (on $21M loan) due starting Jan 1. 18% interest from March 2015 until payments start. 0% interest after payments start.

 

[slinches]

Just to give a bit of perspective, this is what any pre-production startup that intends to produce something tangible looks like. It takes a lot of investment (i.e. debt) to get to the point where you can start making and selling your product. Once that happens, the goal is then to have enough profit to be able to pay back that debt in a reasonable time frame (exceedingly unlikely to be less than a few years, unless your product has ridiculous margins). And even if you do have the revenue to pay the debt down, it may be a better choice to reinvest any profit into the company to help it grow more quickly (thereby ensuring greater future revenues) instead of using it to become debt free, but at the cost of having insufficient funds to pursue further product development.

 

[AriLea]

Just to give a bit of perspective, this is what any pre-production startup that intends to produce something tangible looks like. It takes a lot of investment (i.e. debt) to get to the point where you can start making and selling your product. Once that happens, the goal is then to have enough profit to be able to pay back that debt in a reasonable time frame (exceedingly unlikely to be less than a few years, unless your product has ridiculous margins). And even if you do have the revenue to pay the debt down, it may be a better choice to reinvest any profit into the company to help it grow more quickly (thereby ensuring greater future revenues) instead of using it to become debt free, but at the cost of having insufficient funds to pursue further product development.

By the way, in the past, circa 1970-80's a reasonable payback in big automotive was 7 years. If borrowing totals up to 300mil, and Elio maintains $1k profit per car, and produce 240k units per year, payback is about 1.2 years.

 

[Coss]

By the way, in the past, circa 1970-80's a reasonable payback in big automotive was 7 years. If borrowing totals up to 300mil, and Elio maintains $1k profit per car, and produce 240k units per year, payback is about 1.2 years.

Wait, is that what the SEC filing says? You better check because everything that Elio is, was or will be doing is spelled out in there.