Funding Refused By Paul Elio

[ecdriver711]

Hi Helios. Welcome to the forum.

 

[Mike W]

Welcome indeed, Helios! It's nice to have someone so flagrantly positive! Lately the whole site seems a bit more upbeat, a good change of pace.

 

[HHH]

HHH, i read your post and it seems that you misquoted Nasdaq capital market requirements (or didn't understand?).

EM has no difficulties to meet Nasdaq capital market requirements.

Companies must meet all of the criteria under at least one of the three standards below.

Requirements
*Equity Standard
*Market Value of Listed Securities Standard*
*Net Income Standard

In my view, EM could use any of those standards except "Net Income Standard".



http://www.awesomescreenshot.com/image/365508/198af6c244e617e3b819f3d8d87aff47
https://listingcenter.nasdaq.com/assets/initialguide.pdf (page 9)

Since our understanding of EM's capital structure is lacking, I will relegate this matter to speculation. Suffice to say that PE has stated that he would only do an IPO if absolutely necessary. I would take this to mean that after exhausting 506(c) and A+ fundraising, and not receiving a timely ATVM loan guarantee, and not receiving sufficient, timely support from angel investors, and if EM could qualify under these alternate listing criteria, then PE would reluctantly pursue an IPO.

In the meantime, our actions related to https://www.opencongress.org/contact_congress_letters/69543-S-685-Autocycle-Safety-Act can have a useful impact on the success of EM.

 

[Helios]

Since our understanding of EM's capital structure is lacking, I will relegate this matter to speculation. and if EM could qualify under these alternate listing criteria, then PE would reluctantly pursue an IPO.

Those are not alternate listing criterias, those are primary. If you do some research about other Nasdaq listed companies (http://www.nasdaq.com/markets/ipos/), you would see that it's common that their "capital structure is lacking". That's why they do IPOs! But that was not your original argument, it was that "because EM doesn't have net income it cannot be listed." If that would be criteria, there wouldn't have been Tesla's IPO nor Solarcity's nor thousands of other unprofitable ventures. And now you change the subject.... With all due respect, i have feeling that you don't know what you're talking about.

EM needs capital and PE would be idiot (which he's NOT), if he wouldn't take where it's most inexpensively available!

I rest my case!

 

[Reid3400]

Those are not alternate listing criterias, those are primary. If you do some research about other Nasdaq listed companies (http://www.nasdaq.com/markets/ipos/), you would see that it's common that their "capital structure is lacking". That's why they do IPOs! But that was not your original argument, it was that "because EM doesn't have net income it cannot be listed." If that would be criteria, there wouldn't have been Tesla's IPO nor Solarcity's nor thousands of other unprofitable ventures. And now you change the subject.... With all due respect, i have feeling that you don't know what you're talking about.

EM needs capital and PE would be idiot (which he's NOT), if he wouldn't take where it's most inexpensively available!

I rest my case!

Tesla's fiscal 2014 net loss was $300M. Elio hasn't matched that in total since 2002.

 

[Ekh]

My version of the letter about S685.
I am writing as your constituent in Ohio. I support S.685 - Autocycle Safety Act, and am tracking it using OpenCongress.org, the free public resource website for government transparency and accountability.

We need this bill because it brings safety and sanity to the changing world of vehicular transportation. In particular, it establishes safety requirements for "autocycles" -- enclosed 3-wheel vehicles that drive, handle, and feel like cars, but which offer great advantages in fuel economy and cost.

Please take an active role in supporting S.685.

Sincerely,
Eric Hatch

 

[tonyspumoni]

I was told last year that complete funding had been offered but refused by Paul Elio because the investor wanted too much control over the company. The following post, in my mind, confirms it.

http://www.elioowners.com/threads/elio-in-greenbelt-md-may-18-2015.6074/

Page 1, post #8, item #4.

I do not believe the real problem is funding as we have been lead to believe, but rather the problem is control. Apparently funding is available if investors are allowed to share control in the company as is customary and reasonable. What is not available, is funding from investors who will let Paul Elio have complete control over the company.

How many times has funding been turned down by Paul Elio because he must have complete control? We would probably be having our vehicles on time if he did not insist on complete control.

It is completely reasonable and customary for investors of millions of dollars to expect a share of control in the company they are funding. What is unreasonable is for Paul Elio to expect them to give him funding without giving them part of the control. Perhaps he is afraid they would overrule him and not permit the elgin gauges. They would have that power and I am sure they would exercise it.

Paul Elio does not have much money to personally invest. He has said he was desperate a few years ago and applied at Starbucks and eventually worked as a roofer. Since that time, he has worked as a CEO of a startup company that has only borrowed money and produced no profits. I am sure his salary as CEO is not large. Again, Paul Elio does not have much money to personally invest. I suspect the investors attitude is something similar to ‘You want to completely control the millions of dollars we put at risk while you put only a few thousand dollars at risk?’ If the company went under, the investors would lose millions of dollars. What would Paul Elio lose?

I have always wondered why investors are not flocking to fund such a great idea. Now, I believe I know why. NDAs (nondisclosure agreements) are great for not letting the public know what is happening in funding discussions. I suspect Paul Elio insists on them. I am sure he does not want reservationist to know the reason they are not getting their vehicles is because he will not share power.

How does someone get the money for a company and maintain complete control? Government loans might be a way. The government loans the money but does not step in to tell the company how to run its day to day business. Crowd funding is another way. Crowd funding will consist of many small investors who probably are not investment savvy and for the most part will follow Paul Elio and let him make the decision.

Paul Elio is a smart engineer. He is a smart business manager. Now it looks like he is a smart finance officer. He may be able to pull this off. But then again, maybe not.

The Elio vehicle is a great idea. The Elio vehicle may rank with the Ford model T and the Volkswagen Bug. Europe’s approach to the economy problem is the Smart car. With great pride, I will point to the Elio vehicle as my country’s solution. However, I am not interested in making Paul Elio a mega millionaire nor one of industries’ movers and shakers. History remembers kindly the people who are creative, but less so the more wealthy or powerful they become.

However, right now, I simply want my vehicle. I do not like it being put into jeopardy because Paul Elio has a control issue.

Pistonboy,

I think you have made your case well and plainly and I cannot add much, even nearly five months after the fact. Paul is clearly a visionary and deserves considerable respect for having gotten this far. But respect didn't garner him production-enabling funding since your initial complaint in June and it isn't likely to do so in the future either. No one is going to give him majorty-level resources for minority level control. That's just not how it is done in a marketplace for capital, where offerings vie to provide the best risk-reward balance. ATVM is clearly NOT the answer though. The rules are pretty clear: you have to be financial viable before you qualify and Elio either does NOT meet that criteria or might meet the criteria. At this point Elio Motor's best shot at ATVM would be to spend less to get into partial production - maybe no delivery centers and all deliveries at at the factory - and then make the case that they need the extra money to expand production. But this is just my idea and could be just as windy as he current plans.

 

[Kuda]

snipped: But this is just my idea and could be just as windy as he current plans.

I think your hittin pretty close
to home, TS. The 'numbered'
folks have a shot at Picken
them up at the factory. The
stores & fulfillment centers
I believe we're always meant
to come after the early
reservationists created stronger demand by virtue of flyin down the HOV lanes of the good 'ol USA...

 

[pistonboy]

Paul Elio is planning on running two shifts at maximum capacity. I had always wondered about running one shift at maximum capacity.

Regardless.

Paul may be playing financial brinksmanship.

 

[tonyspumoni]

Well Paul's status as a risk taker certainly leaves little to doubt, does it? (Note to self: do not play poker for large stakes with Paul Elio).

I invested what I can afford to lose. I invested because if this does go I'll nail a nice multiple. I mostly I invested because eventually Paul will acrete around himself enough folks who stand to lose a lot more than I will if it does fail that he'll have to make some compromises if he genuinely wishes to succeed and make everyone happy. The real question we need to ask at this point is whether he's crazy or not. Ego has a funny way of infusing otherwise obvious rational decision-making with an element of, how shall we shall, um, unpredictability and self-destructiveness. If Paul gets to the go/no-go point where has only two choices, rename the damn thing a Fiat, sell gazzilions of 'em, and change the planet for the better, or take us all down with him, who's to say he won't do the later? There is no way of knowing for sure, is there?