SHREVEPORT, LA (KSLA) - Elio Motors is cutting expenses, including the furlough of employees, and will need to take out more loans and sell more stock in order to stay afloat for the next year, according to the company's latest filing with the U.S. Securities and Exchange Commission.
On top of that, the documents reveal that Elio Motors needs to raise $376 million to fund production of its 3-wheel car.
"We continue to focus all our current efforts on fundraising," Elio Motors founder Paul Elio said. "We have several different strategies that we are pursuing, but SEC regulations prohibit us from talking about them at this time."
The company previously reported that it needed $312 million to begin production.
However, the May 2 filing states that number did not include $64 million in supplier equipment commitments.
The company has experienced even deeper losses compared to past filings and will only be able to continue if it gets the cash needed.
Elio Motors' accumulated deficit now stands at $141,144,405 and it has a working capital deficit of $42,144,011 as of Dec. 31, 2016.
The working capital deficit increased by roughly $40 million compared to the previous year.
The filing attributes the rise to a decrease in cash because of increased operating expenses in 2016.
The filing also reveals at the end of 2016, the company only had $120,206 in cash.
Reservations for the 3-wheel vehicle have generated $27.3 million for the company at an average of $568,000 per month.
The filing states that much of the vehicle engineering is completed.
Further, company officials think once funding is secured for production, it will take a 76-week schedule to start commercial production.
The 76-week schedule includes the building of 158 pre-production prototypes.
The document states that "the majority" of the vehicles will be assembled in Shreveport.
However, the filing indicates the company is negotiating with RACER Trust about the agreement.
"Should our negotiations with RACER Trust be successful, we will make the appropriate adjustments in our balance sheet at that time."
The company has made several cuts to its budget as a result of lack of funding, including the furlough of several employees. That saved $49,000 in labor expenses previously paid to the Elio tour team.
Salaries for the company's executives officers remained the same. Chief Executive Officer Paul Elio earned $250,000 while Chief Financial Officer Connie Grennan received $175,000 after receiving a $25 thousand raise the year before.
The only exception is former Chief Operating Officer Hari Iyer, who resigned as COO in May 2016 but continued on for Elio as a consultant. Iyer received a $250,000 salary in 2015 and was paid $184,167 in total compensation in 2016.
The filing states that engineering, research and development costs decreased by $4.1 million because of a lack of funding.
The company also decreased its consulting expense for state and federal lobbying by $1.23 million and cut back on travel expenses by $360,000.
The company states in the document that it does not anticipate generating any revenue until late in 2018.
Marshall, Texas resident Deborah McAteer has invested in Elio Motors and reserved a place in line to get a car. She reviewed the SEC filling and looks at the situation with a glass half full and 'refillable' approach.
"I'm still hoping the best for them, I certainly don't know anything that could be going on in the background that they aren't free to talk about," she said.
McAteer believes it is possible the company has a solution to their financial woes that the public isn't privy to.
"I still hope they can make it happen, they certainly are in a tough position," she said. "I guess I will be the last one to go down and when I do, I won't be embarrassed, I won't be mad, if anything I'll be a little sad."
Texarkana, Arkansas resident Mark Muenzmaier has also reserved a place in line for the three-wheeled car, but has lost hope in the company ever producing the vehicles.
"I think this is, is a done deal now, it's not going to happen, there is no way they are going to come up with 300 million dollars before this thing gets going."
Muenzmaier is not optimistic Elio Motors will succeed.
"But for the city of Shreveport and the Arklatex, I hope that these jobs develop. If not, they need to get out of the way at that GM plant and let something else move in."
As far as the government is concerned, Parish Spokesman Krystle Grindley says Caddo has no contractual relationship with Elio Motors.
"The parish remains excited about new opportunities for our region at the plant, including the recent relocation of Glovis America."
Parish Commission President Steven Jackson believes action needs to be taken about the current agreement involving the former General Motors Plant.
He released the following statement:
Former Caddo Commissioner and current Shreveport City Council member Stephanie Lynch was the lone dissenting vote against the plan to purchase the plant in 2013. She says the commission knew then and knows now the company is not going to produce 1,500 jobs.
"I begged them, I said, 'Don't do this to people. You know these people are not going to produce any jobs,'" she said. "I said don't mislead people because people are making life decisions that is going to impact them forever. So how can you fool people like that?"
She wants Elio Motors to give the money back or provide the jobs they promised.
"I think the citizens of Caddo should be saying, show me the money, show me the jobs or show me the money. Not just show, but produce tangibly."
As far as the other commissioners who voted the initial deal through, she doesn't think it was done the right way.
"I just think that for people to continue, particularly the people who were closely involved and supported it, to continue to try and fool the public that their hands are clean that they had no culpability in this matter is just wrong."
She hopes the truth will come out one day about why the events unfolded the way they did.
"We just don't have a whistle blower," she said. "Someone knows something. Intricate details."
She hopes if someone knows something, they'll come forward.
"I think this is going to go down as one of the biggest tax payer scandals in the history of Louisiana."
KSLA News 12 reached out to CEO Paul Elio for a comment and he released this statement:
During their May meeting, the Industrial Development Board voted to invite Stu Lichter, the head of the Industrial Realty Group in charge of subleasing the plant, to a board meeting. According to IDB attorney David Wolf, they want him there to "discuss activities at the plant".
"No date, time or format for that meeting has been determined as of yet, nor do we know if Mr. Lichter will accept the invitation," Wolf said.
Elio Motors has been told to appear at 10 a.m. May 8 at the Louisiana Motor Vehicle Commission headquarters in Metairie to discuss possible state law violations regarding its binding reservation program.
Company officials missed their initial hearing in January, claiming they had not been notified.
An Elio Motors spokesman confirmed this time the company knows about the LMVC hearing.
Joel Sheltrown, Elio Motors' vice president of governmental affairs will attend the meeting.