Paul Elio K T B S Interview 2/7/2017

wizard of ahs said:

Ah....the things that make you go....HMMMMMMM

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I think I'm right there and that could be one of the reasons the SEC filing looks so bad. Elio owes reservationists ($7,000 X 64,000) $448M in vehicles.


EDIT: Actually, Elio owes reservationists the promised discounts off future vehicles. That amount will remain a negative in their books until the vehicles are produced.

Ty said:

When Elio takes a $1,000 deposit on a $7,000 car, it would show on their SEC filings as a $6,000 debt, right? They OWE the reservationist a car and thus it is shown on their SEC paperwork. Right?

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A clear definition of "accumulated debt" as listed in the SEC filing would be helpful - it isn't clear to me.

I'm rather sure what you suggest isn't how it works though. Elio doesn't have a $6,000 debt with a reservationist - they have agreed to provide a car in return for the future additional $6,000. The math isn't close either - that would put the "accumulated" debt over 400 million - it was "just" 123 million in the last 2016 SEC filing.

Ty said:

When Elio takes a $1,000 deposit on a $7,000 car, it would show on their SEC filings as a $6,000 debt, right? They OWE the reservationist a car and thus it is shown on their SEC paperwork. Right?

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EM does not owe anyone a car. The contract we signed with our deposit was explicit in that EM was under no obligation to sell us a car, and we were under no obligation to buy a car from them. The receipt I received shows that I bought a $1,000.00 T-Shirt.

Rob Croson said:

EM does not owe anyone a car. The contract we signed with our deposit was explicit in that EM was under no obligation to sell us a car, and we were under no obligation to buy a car from them. The receipt I received shows that I bought a $1,000.00 T-Shirt.

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Don't forget the Bumper sticker. See, the tee shirt wasn't that expensive after all.

Ty said:

When Elio takes a $1,000 deposit on a $7,000 car, it would show on their SEC filings as a $6,000 debt, right? They OWE the reservationist a car and thus it is shown on their SEC paperwork. Right?

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Uh... no.

Elio Amazed said:

Uh... no.

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You are correct. I was not right.. Not quite, anyway.

From the SEC filing:

The Company has received customer deposits ranging from $100 to $1,000 per order for purposes of securing their

vehicle production slot. As of September 30, 2016 and December 31, 2015, the Company received refundable deposits

of $1,201,400 and $1,092,750, respectively, which are refundable upon demand. Refundable deposits are included

in current liabilities in the accompanying balance sheets. As of September 30, 2016 and December 31, 2015, the

Company received nonrefundable deposits of $24,768,800 and $19,587,800, respectively. The nonrefundable deposits

are included in long term liabilities in the accompanying balance sheets since the Company has not fulfilled their

obligation to the customer as well as consumer production is not expected to begin until the fourth quarter of 2017. As

further discussed in Note 10 Commitments and Contingencies: Sales Discounts, the Company provides a sales discount

for nonrefundable deposit customers up to 50% of the nonrefundable deposit, up to $500 per deposit. As of September

30, 2016 and December 31, 2015, future committed sales discounts offered amounted to approximately $11,910,000

and $9,800,000, respectively.


So... for me, Elio has an obligation to provide $1,750 worth of discount if/when they produce vehicles. That's "obligation" as it pertains to finance and not obligation as in "My Aunt sent me a card so I'm obligated to send her one" even though I interviewed a woman who thought that was the case. Wow, that was quite a while ago... 2006.

Rob Croson said:

EM does not owe anyone a car. The contract we signed with our deposit was explicit in that EM was under no obligation to sell us a car, and we were under no obligation to buy a car from them. The receipt I received shows that I bought a $1,000.00 T-Shirt.

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Unless you LOCKED-IN, then IF they produce a product, we are obligated to buy it

wizard of ahs said:

Unless you LOCKED-IN, then IF they produce a product, we are obligated to buy it

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This is true, I have saved enough for the wife's, and working on saving for mine. I can always use the gas money deal for the second if I haven't saved enough for the cash pay off when they say it is ready.