Financing Elio Motors Development And Production

[Kuda]

Satx is right about one thing, however, if there was ever a good time for a "Daddy Big Bucks" to come to the rescue, the time would be now.

Yo Fiddy Cent you listenin?

 

[Jim H]

......Well for sure are a very diverse group, who given other venues would probably not communicate with each other . Thank G*D we have the ELIO in common!!

You are absolutely correct - we are one extremely diverse group with a common purpose - the Elio.

 

[mag44]

EM needs LOTS of money NOW, have needed it for a long time, and the indications are that don't have it.

It's not question of "financially amateur" EM people know not knowing how to manage money. It's that they don't HAVE the $200M+ any/enough money.

My guess is that they don't get all the money they need in the next few weeks, a couple months max, shipping by June 2016 is probably impossible, meaning the Elio would be dead.

True but most on this forum won't believe that until they drive by the GM Plant and see it dozed down.
I look for another delay (or shutdown) by Sept. 2015 if the Easter Bunny (as some believe in) don't drop 250 Million on the front steps of Elio.
I've got skin ($1000.00) in the game.

 

[goofyone]

EM needs LOTS of money NOW, have needed it for a long time, and the indications are that don't have it.
It's not question of "financially amateur" EM people know not knowing how to manage money. It's that they don't HAVE the $200M+ any/enough money.
My guess is that they don't get all the money they need in the next few weeks, a couple months max, shipping by June 2016 is probably impossible, meaning the Elio would be dead.

True but most on this forum won't believe that until they drive by the GM Plant and see it dozed down.
I look for another delay (or shutdown) by Sept. 2015 if the Easter Bunny (as some believe in) don't drop 250 Million on the front steps of Elio.
I've got skin ($1000.00) in the game.

I do have to point out a huge misconception I am seeing here. The fact of the matter is that Elio Motors is NOT attempting to ask the private sector the entire $200+ million they need to complete the entire project at this time. EM would be laughed at it they attempted to ask for all that money at this time and that would in fact be a sign to investors of an amateur operation, as evidenced by the amateurs making comment wanting to see this happen. The way this works is that companies such as EM seek, and are granted funding, in investment rounds each with stated goals, costs, and risks. These rounds of investment keep the 'cost' of these investments comparably low for the companies and break up the needed investment into smaller amounts which minimizes risk for investors and makes it easier to raise the capital as fewer investors are needed for each round.

With the current round of funding what EM is trying to do is simply secure the funding they need to complete the vehicle development project and as a result bring the vehicle to a production ready state. EM had thought they would be able to complete the vehicle development using the proceeds from the equipment sales however as that process is going to take longer than EM originally planned for they are instead seeking the money via a round of private funding. While Corporate Fuel Securities only began marketing the placement this month EM has referenced a 90 day due-diligence period ahead of the sale and this is in fact a Federal SEC requirement. This essentially means that during the last quarter of 2014 EM was essentially under a gag order and they were not legally able to tell us about any of this until this month. If you feel the need to make your eyes water with federal regulations you can research SEC Regulation D and also the SEC rules for broker-dealers.

Once pre-production vehicle testing is well under way and showing positive results, and if the ATVM loan has not come through, EM will at that time hold another funding round where they will seek the funding to actually produce the vehicle. In some ways the delay in equipment sales may actually be a blessing in disguise as this will likely result in EM sitting on a larger pile of cash if they need to have another funding round. This could make it easier for EM to get through that round of funding, should it be required, as this would both reduce the amount they need to raise and also make EM appear stronger to investors going into that funding round.

 

[John Painter]

Once pre-production vehicle testing is well under way and showing positive results, .

This is the part I wonder about, because I've read several blogs from EM of the number of vehicles they will need to be able to test, I'm assuming the testing is very critical to progress in funding rounds. How is that phase actually funded, there short of actual initial production, it seems to me there would be a massive amount of money being spent over that time period, what would be a realistic time frame to accomplish it all?

 

[goofyone]

This is the part I wonder about, because I've read several blogs from EM of the number of vehicles they will need to be able to test, I'm assuming the testing is very critical to progress in funding rounds. How is that phase actually funded, there short of actual initial production, it seems to me there would be a massive amount of money being spent over that time period, what would be a realistic time frame to accomplish it all?

Because so much testing can happen in parallel, using a number of vehicles simultaneously, the testing can actually be done in a relatively short time period of only about six months. Also a good portion of the road testing could even happen as the plant is being configured. In this relatively short time period the cost estimates we have heard from EM, some time ago now, were in the neighborhood of $40+ million to complete the pre-production development so it is indeed not inexpensive.

We have also been told in Tech Talks that Techosports will build the pre-production vehicles however they will be assembled from sub-assemblies just like they will be at the plant. This allows for building each pre-production vehicle relatively quickly and at the same time results in test vehicles that will be equivalent to those which the plant will produce. This is of course what EM needs to have for valid testing.

As the testing time period is really not a long time EM does actually have some time on their side when it comes to this part of the project. As long as EM gets building on those vehicles by about mid year they can actually have the testing well under way by this fall and winter when they would need to secure any required production funds.

If I were EM what I would do is push hard to get the pre-productions builds underway before mid year and then enter the 90-day gag period required for another private placement round of funding. This would ensure that if needed they could market the placement in the fourth quarter of the year while also giving EM plenty of positive news they could talk about during the gag time relating to the vehicle development program. This vehicle news would also help sell investors, if needed, in the fourth quarter. Also if the ATVM loan has not already been determined and comes through during this time EM would just stop the private placement process and go public with that funding news instead.

 

[Kuda]

Snipped: Also if the ATVM loan has not already been determined and comes through during this time EM would just stop the private placement process and go public with that funding news instead.

The 25 or so units needed for the 'Testing" phase is beginning to
make more sense. In order to complete the ATVM requirements
Elio Motors must demonstrate they can produce a production ready
& salable product. The units used to set up & time the line will go
towards meeting this......

 

[goofyone]

The 25 or so units need for the 'Testing" phase is beginning to make
more sense. In order to complete the ATVM requirements Elio
Motors must demonstrate they can produce a production ready
& salable product. The units used to set up & time the line will go
towards meeting this......

Computer simulations are perfectly acceptable according to the ATVM program guidelines and combining those with the current plant plans from Comau, the existence of the plant itself and reusable plant equipment, and the chassis mule prototypes already constructed and EM very likely has the bases covered. Having the actual pre-production vehicles would most definitely not hurt, even if not required, however likely even more helpful is the running engine. The DOE, and other 'green' oriented people in the administration, are likely to care a lot less about the production line details than they do care about actually meeting, or exceeding, the fuel efficiency target.

 

[BADBOY]

G1 could you explain in my terminology a bit more on the gag period as to why/what for?

 

[Rickb]

EM needs LOTS of money NOW, have needed it for a long time, and the indications are that don't have it.

It's not question of "financially amateur" EM people know not knowing how to manage money. It's that they don't HAVE the $200M+ any/enough money.

My guess is that they don't get all the money they need in the next few weeks, a couple months max, shipping by June 2016 is probably impossible, meaning the Elio would be dead.

I agree, but I'm granting EM an extension to the 4th of July to have the funding and prototype builds well underway for tooling, testing, and the ride and drive events to meet the deadline.