Atvm Loan Requirement Changes

[raptor213]

http://energy.gov/sites/prod/files/2016/06/f33/Guidance_for_Potential_ATVM_Applicants_June2016.pdf

Section II.2.H - Additional Guidance on Adequate Future Sales

I had never read the ACTUAL guidance that has been cited from June 2016. Here she be for your literary amusement.

After having read through that 10-page guidance supplement, I reckon there can't be too many more hoops to jump through between the Department of Energy's ATVM Loan Program Office and Elio Motors' management executives. Confidence restored for now!

 

[Ekh]

Resources:

https://en.m.wikipedia.org/wiki/Aptera_Motors
http://www.autoblog.com/2009/10/30/president-signs-bill-expanding-atvm-program-to-three-wheelers/
https://www.law.cornell.edu/cfr/text/10/part-611
http://energy.gov/lpo/downloads/updated-guidance-applicants-advanced-technology-vehicles

According to documents procured from the DOE website, I believe the next great hurdle to overcome in the fight towards ATVM loan approval is in convincing the reviewers that Elio Motors as a publicly-traded corporate entity is 'financially viable' on its own merits notwithstanding the approval of any funds from the ATVM loan program office. There is a non-exhaustive list of variables that the reviewers consider under 10 CFR 611.100(c) [https://www.law.cornell.edu/cfr/text/10/611.100], including but not limited to such factors as debt-to-equity ratios, liquidity, statements from current lenders and debt owners displaying a consistent history of on-time payments, etc.

Personally, I am concerned that the outstanding debts that Elio Motors lists in their SEC filings as having been under deferment, forbearance, or other approved modified payment arrangements for an extended duration of time, and having operated without any revenue earned aside from customer reservation deposits/commitments and the slow process of liquidating second-hand factory equipment acquired from RACER Trust, might come back to haunt their chances of loan approval.

On the flip-side, there is no mention of a 65,000 reservation/deposit/binding commitment figure anywhere in the public record of the Dept. of Energy's ATVM loan program office website. Therefore, it must have been the brain child of mutual agreement by both parties as Elio Motors picks their way through red tape and the hurry-up-and-wait game, while the DOE agents assist by directly requesting for whatever documentation might convince or sway the underwriting staff to put a stamp of approval on Elio's application.

If a bean counter in a federal office determined that 41% of existing and future reservation deposits are likely to transition to binding purchase commitments, representing a positive revenue stream of $7000 plus options and accessories per vehicle sold, and scaling that figure up to a grand total of 65,000 reservations equates to 26,650 estimated binding purchase commitments at $7000+ each, that revenue stream of $187M could represent the collateral or financial viability that brings assurance to underwriters to fund the loan.

You have certainly passed your "working with the Feds 101" course! I think the 26,000 or commitment letters is realistic; it's in line with a conversation I had last month with an Elio executive, who said when I questioned him about the drop-out factor (non-committing all-inners) "we're not expecting a very high percentage of commitment letters," just enough to satisfy DOE.
(He didn't use an actual number with me).

 

[Trusting]

 

[RonnieB]

This is about it my friends.....just need $200,000,000.00

 

[Coss]

http://energy.gov/sites/prod/files/2016/06/f33/Guidance_for_Potential_ATVM_Applicants_June2016.pdf

Section II.2.H - Additional Guidance on Adequate Future Sales

I had never read the ACTUAL guidance that has been cited from June 2016. Here she be for your literary amusement.

After having read through that 10-page guidance supplement, I reckon there can't be too many more hoops to jump through between the Department of Energy's ATVM Loan Program Office and Elio Motors' management executives. Confidence restored for now!

Raptor a little side note you can add in; Racer Trust is owned by Stuart (Stu) Lichter; who is also a friend of Paul Elio and on the Board of Directors of Elio Motors.
https://www.eliomotors.com/about-elio/#board-members
You might want to roll that into consideration.

 

[Ekh]

The "additional guidance" section on proof of financial viability looks at a lot of stuff. If you read that page, you'll see that a lot of what Paul's been saying lately -- especially at the Gateway presentation -- plays directly into those requirements. For instance, the chart depicting the various markets Elio can sell into -- clunker, "and car", and used car -- are all markets of interest to DOE.

But those signed commitment letters are the gold standard. If you haven't committed yet, you really should.

 

[Horn]

They need the ATVM loan. Pretty simple. They have been waiting on the loan for years. If there was a back up plan, it should have been executed by now. Unfortunately, it doesn't look like Elio has the capital to make it happen right now.

 

[Ekh]

They need the ATVM loan. Pretty simple. They have been waiting on the loan for years. If there was a back up plan, it should have been executed by now. Unfortunately, it doesn't look like Elio has the capital to make it happen right now.

I was told, in person, by one of Elio's first Angel investors, that taking the company public has completely changed their financial prospects -- for the better. They now have a measure of credibility and can actually get in to talk to potential investors. The SF Gateway conference last week is a perfect example -- the presentation reaches some people, but the tabletop one-on-ones are where the action s ... and that's what the event promotes, direct contact between CEOs and serious investors.

The same gentleman told me that they can get there without the ATVM loan, but from a shareholder perspective the ATVM is a much better deal because it has no equity with it and thus is not diluting the share value. No ATVM means issuing significant blocks of stock, with a consequent dilution of your shares (if you have any) and mine. The ATVM also protects the timeline.

So, getting the ATVM loan means launching the car sooner rather than later, rather than go / no-go. Whether you believe this story or not is up to you. I'm about 60/40 it's the truth.

 

[Sailor Dog]

It's the truth!

 

[Horn]

I was told, in person, by one of Elio's first Angel investors, that taking the company public has completely changed their financial prospects -- for the better. They now have a measure of credibility and can actually get in to talk to potential investors. The SF Gateway conference last week is a perfect example -- the presentation reaches some people, but the tabletop one-on-ones are where the action s ... and that's what the event promotes, direct contact between CEOs and serious investors.

The same gentleman told me that they can get there without the ATVM loan, but from a shareholder perspective the ATVM is a much better deal because it has no equity with it and thus is not diluting the share value. No ATVM means issuing significant blocks of stock, with a consequent dilution of your shares (if you have any) and mine. The ATVM also protects the timeline.

So, getting the ATVM loan means launching the car sooner rather than later, rather than go / no-go. Whether you believe this story or not is up to you. I'm about 60/40 it's the truth.

Who told you this? I'm not saying you are lying, but I hear this type of thing all the time online and on tv. "sources". No one has to actually prove what they are saying.

It's clearly a better deal to get a grant "free money" than about anything else. BUT let's say they issued more stock then got the grant. They could then buy back some of the stock.