Elio Motors (OTCQB: ELIO) is back raising money once again for its three wheel concept vehicle that has been delayed multiple times. But this time is different as Elio is planning an initial coin offering with a security token: ElioCoin.
Elio Motors hit the crowdfunding radar when it became the first issuer ever to utilize the Reg A+ exemption to raise growth funding and then quickly trade on OTC Markets. The offering, listed on StartEngine, closed having raised about $17 million backed by over 6300 investors who purchased equity in the firm at $12 / share. Today, Elio trades at around $4 / share having struggled to put together a vehicle that actually entered into production. At the time of the crowdfunding offer, Elio was predicting its high MPG vehicles would start trickling off the assembly line in late 2017. Jump forward to today and the Elio concept has yet to produce a vehicle.
In August 2017, Elio attempted to do another funding round, filing a registration statement Form S-1 with the SEC relating to a proposed public offering of its common stock. The plan was to raise more money and jump over to the NASDAQ Global Market – but that never occurred.
Elio finally found its best hope in the form of blockchain entrepreneur and Overstock founder Patrick Byrne who threw the company a lifeline when it purchase $2.5 million worth of Elio shares. Elio simultaneously announced its intent to issue a security token – perhaps one of the first on Overstock’s tZero platform.
According to a statement this past week, Byrne has committed to becoming the first participant in the pre-sale of the forthcoming security token offering (STO).
Elio Motors intends to raise up to $25 million in the STO, which is limited to certain institutional and accredited investors pursuant to Reg D (506c).
Paul Elio, CEO and founder of the firm, called the STO a “watershed moment” for his company.
“Our newest partnerships with Dr. Byrne and other major institutional investors have further crystallized our vision of bringing the Elio to production. We look forward to the launch of ElioCoin and offering secondary trading on tZERO’s security token platform.”
Byrne added that he is honored to be the first participant in the ElioCoin pre-sale. He expressed his confidence in the Elio vision of a three wheel, gas-sipping vehicle.
“More importantly, I believe the design of the ElioCoin is groundbreaking and may pave a way for a new era in raising funds to pay for public infrastructure (such as bridges and turnpikes), real estate, and even fund pharmaceutical research (regarding which I have already been enthusiastically contacted).”
Elio said that JonesTrading Institutional Services LLC is acting as the placement agent for the pre-sale which is ongoing through October 15th,
Units in the pre-sale offering are constituted of ElioCoin Tokens and Series E preferred equity convertible at $10 per share.
Following the pre-sale, Elio plans to launch a more broadly marketed main sale of the ElioCoin. Elio said they currently plan to issue securities under Reg D for the main sale.
So will this be the final funding round to push an actual Elio vehicle onto the highways of America? Hard to tell. Investor response has been mixed at best. For early investors that bought in at $12/share they are probably just happy Elio has not gone to zero.
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