I looked at it but don't know what its for ....
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Financing Elio Motors Development And Production
- Thread starter elio_curious
- Start date
I looked at it but don't know what its for ....
This mostly confirms what we already know which is that Corporate Fuels Securities is a broker for a private placement stock offering, or technically a 506(c) stock offering, and that this sale is indeed now underway.
The interesting bit is that this document lists $30 million as the amount EM is seeking right now, up to $2.1 million of which is to be paid to Corporate Fuels Securities as their commissions for raising these funds, and up to another $4 million could be paid to the listed EM board members.
My guess is that this is indeed EM making sure to have all their ducks in a row in advance of the NY Auto Show. It does appear that this show will be just as important to EM's financing goals as it will be in terms of coverage by the auto industry media.
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Charlie G
Elio Addict
The offering was @ 30 million when they filed this time last year too, but that time it was offering Equity, whereas this one is offering Debt.
In fact, each of their 3 other filings were selling Equity rather than debt.
This is also the first year they're filing with a 506(c) exemption, which allows them to advertise but prevents them from selling to unaccredited investors.
Charlie G
Elio Addict
I also got a chuckle out of David Schembri being listed outright as a "Director" on their 3/17/2014 filing, making their 'announcement' of his appointment 11 months (2/19/2015) later rather silly indeed.
The 506(c) part of regulation D is relatively new so would not have been available for all the previous filings and being able to advertise would be very helpful for the brokers.
Also with a quick bit of research I believe I understand why the change from equity to debt. What Corporate Fuels Securities has likely advised EM to do is sell convertible bonds. These are bonds which are convertible to equity in the future so they are similar in a lot of ways however as bonds this gives the investors some means to recoup funds if EM were to fail which would not be the case if they were simply equity investors. This would appear to be a smart tactical move which would make it easier to find investors for this round of funding.
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10-4 .... not operating in that world, I had no clue .... info appreciated
Schembri's profile was a lot smaller than Stu Lichters & they
had already made much of Lichter's involvement so Schembri
wasn't a bad choice to impress potential "Newbies"......
Didn't we just hear that... the next 30 million was going to be the "hard part?" Coincidental that this is for 30 million?
This is $30 million is the very same Paul Elio said would likely be the hardest and in fact even harder than they expect the next round for production funding even though that round is much larger. This statement actually makes sense to me as EM does not have other immediate options for funding this round besides private investment and a lot of goals but not a lot of hard real world data with which they can convince investors to invest. EM in fact needs this $30 million, the sooner the better, to get through the vehicle testing stage which will leave EM with a fully tested and production ready vehicle along with real world data necessary to back up their safety, fuel consumption, and cost goals.
7% is not a bad sales commission for a private placement. Convertible debt is a good strategy for the investors, since it gives them the choice to get repaid or convert to common stock later. Note that they got the entire $150K from 1 investor.