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Elio Motors Gets Funding Lifeline from Overstock.com
Struggling three-wheel-car startup Elio Motors Inc. has sold $2.5 million of newly issued common stock shares to online retailer Overstock.com.
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Struggling three-wheel-car startup Elio Motors Inc. has sold $2.5 million of newly issued common stock shares to online retailer Overstock.com.
Elio plans to use the money help pay off debts and other expenses. The investment also will be used to help fund capital expenditures as the carmaker moves forward with plans to launch its $7,500 car, which has been delayed several times in recent years.
In addition, the Phoenix-based carmaker is issuing a new cryptocurrency called “ElioCoin.” Unlike Bitcoin and similar blockchain-type digital coin currencies, ElioCoin will be directly linked to the production and sale of the Elio three-wheeler.
The so-called “security token offering” is expected to be facilitated by JonesTrading, with the tokens initially available only to accredited institutional investors. These investors will be able to redeem the cryptocurrency for Elio vehicles, though details of the scheme are still being worked out. ElioCoin is expected to eventually trade on the blockchain-based securities platform that Overstock’s tZERO subsidiary is developing.
Formed in 2009, Elio Motors originally hoped to begin production in 2014. The company attracted reservations from 65,000 customers who put up as much as $1,000 for the tiny three-wheeler, which is powered by a 900-cc, 3-cylinder engine that promises to deliver 84 mpg.
But the project has struggled as Elio Motors continues to burn through cash. Regulatory filings in early 2017 indicated the company had $123 million in debt with just over $100,000 of cash on hand.
Last summer Elio was said to be considering an initial public stock offering on the NASDAQ stock exchange. The company’s market capitalization is estimated at about $97 million.
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