And liftoff. The first JOBS Act company has gone public via Reg A+.
Elio Motors Inc., a Phoenix-based startup company that is developing a ultra-high-mileage three-wheeled car, went public last week on OTCQX, OTC Markets Groups top financial market, after raising $17 million.
The company was listed under the Jumpstart Our Business Startups (JOBS) Act Title IV, Regulation A+, which promotes capital raising for small and underserved companies. The company began trading Friday under the symbol ELIO. WR Hambrecht + Co was the market maker in the deal.
Elio Motors is the first company to go public under Regulation A.
The JOBS Act rule passed last March that allows small companies to raise up to $50 million in crowdfunded offerings from unaccredited investors and go public in what are being called mini-IPOs. Elio was one of the first companies to launch a formal stock offering utilizing Regulation A+ on Nov. 20 , 2015, after receiving qualification from the SEC. The company closed the Regulation A+ offering on Feb. 16, having raised nearly $17 million.
Unlike other JOBS Act rules, Regulation A+ securities purchased by non-affiliates are free trading on Day 1, allowing companies to provide immediate liquidity to investors. Securities raised under Regulation A+ Tier 2 offerings, including Elios offering, are also exempt from state Blue Sky laws governing the recommendation and sale of securities in all 50 states and U.S. territories. Companies that raise capital under Regulation A+ Tier 2 are required to publish audited annual financials and semi-annual unaudited financials as well as current event disclosure.
Companies that choose to trade on OTCQX, including Elio Motors, are also required to meet a minimum bid price and market value or net income standards as well as common sense corporate governance standards and to receive an annual audit by a PCAOB accounting firm.
Founded by car enthusiast Paul Elio in 2009, Elio Motors represents a revolutionary approach to manufacturing an ultra-high-mileage vehicle. The three-wheeled Elio is engineered to attain a highway mileage rating of up to 84 mpg while providing the comfort of amenities such as power windows, power door lock and air conditioning, accompanied by the safety of multiple air bags and an aerodynamic, enclosed vehicle body.
