Troubled three-wheel car startup Elio Motors netted a $2.5 million lifeline on Tuesday from online retailer Overstock.com—yes, that is still a thing, as is Elio, for now—and confirmed it is indeed going crypto, something we alluded to a week ago. Elio said its “security token offering,” likely to be called ElioCoin, is the “first digital token sale led by a major investment bank.” Things are looking up already.
Elio said the ElioCoin security token offering will be facilitated by JonesTrading Institutional Services LLC and is “expected to be conducted” in line with U.S. securities law, and the initial tokens will be sold “only to institutional accredited investors.”
Really dense stuff, yeah? Here’s how The Drive decoded Elio’s plans for using its new digital currency:
Investors will redeem ElioCoins for actual Elio vehicles, although the company isn’t ready to discuss exactly how that will work just yet. Overstock.com is currently negotiating to become the lead investor in the ElioCoin sale, and the tokens will be traded on Overstock subsidiary tZero. Overstock is also planning a conventional equity investment in Elio. However, Elio won’t discuss the amount of that investment, or the amount it hopes to raise through the coin offering at this time.
Here’s how Overstock summed up tZero in the press release announcing the deal:
“It is our fondest hope that, once issued and cleared for trading, ElioCoin may trade on the blockchain-based securities trading platform that is in development at tZERO,” said Overstock.com CEO and founder Patrick M. Byrne. tZERO is a subsidiary company of Overstock.com.
So the blockchain-based securities trading platform at tZero is still “in development.” Promising?
Elio said it intends to use the proceeds from Overstock.com to “fund capital expenditures and repay certain outstanding debt and accounts payable.” The startup has for years said it wants to build a three-wheeled vehicle priced at roughly $7,500.
Elio says it still wants to launch production at a factory in Shreveport, Louisiana by 2019, but as we covered it last summer, that situation hasn’t gone well.