Company Announces Security Token Offering Two Years After Reg A+ IPO
In April 2016, Elio was the first company to raise capital online and go public on OTCQX under the JOBS Act Regulation A+.
In the initial months following its IPO, ELIO traded at about $20 per share but has lately traded in the $3 per share range. Crowd investors during the Reg A+ round purchased shares for $12 per share. Elio had been low on cash and struggling in recent months with some industry observers wondering if Elio was heading for insolvency.
Proceeds from the security token will be used to, among other things, fund production of the Elio vehicle. JonesTrading Institutional Services LLC is expected to act as lead placement agent for the STO. Elio Motors believes that the digital token to be sold in the STO, anticipated to be called ElioCoin, will be the first of its kind – a digital token that is associated with the production of a motor vehicle – as well as the first digital token sale led by a major investment bank.
“This is a huge day for the digital asset movement,” said Bryan Turley Managing Director for JonesTrading, “We believe that we have designed a unique STO that will compete in the digital token space. We anticipate that the Elio STO will give investors a new kind of investment option while being structured with the intention to comply with U.S. federal securities law requirements for sales of securities, as opposed to taking an approach that assumes that the token sale would not be a sale of securities.”
Specifically, the ElioCoin STO is expected to be conducted under both Regulation D and Regulation S under the Securities Act of 1933, with initial tokens being sold only to institutional accredited investors. It is expected that the STO will include a pre-sale of the ElioCoin.
“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 Overstock.com’s own ICO and trading platform. While it is reported that tZero raised $100 million in its ICO, it is currently under SEC review.
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