Picture Credit: Kirsten KorosecEV startup Fisker is pausing manufacturing of its electrical Ocean SUV for six weeks because it scrambles for a money infusion.
The corporate mentioned in a Monday morning regulatory submitting that it had simply $121 million in money and money equivalents as of March fifteenth, $32 million of which is restricted or not instantly accessible. Fisker additionally mentioned Monday that its accounts payable steadiness is as much as $182 million and that there’s “substantial doubt” that it may proceed operations with out elevating new capital, after saying in February that it was prone to problem such a warning.
The submitting comes at a troubling second for the startup, which went public in 2020 when it merged with a particular goal acquisition firm. Fisker began delivery the Ocean SUV within the U.S. and Europe in the course of 2023, however the rollout has been tormented by problematic software program and lackluster customer support, as TechCrunch not too long ago reported. The Nationwide Freeway Visitors Security Administration is investigating the Ocean for rollaway issues and points with the braking system. Fisker introduced in February it was shedding 15% of its employees, or round 200 individuals.
Fisker completed 2023 having shipped roughly 5,000 of the ten,000 vehicles that its contract manufacturing accomplice, Magna Steyr, produced. The corporate mentioned Monday that it delivered 1,300 autos in January and February.
It’s at the moment attempting to pivot away from a direct gross sales mannequin in favor of vendor partnerships, although at the very least one of many first dozen-or-so early vendor companions has already walked away from the startup. The Wall Road Journal reported final week that it has employed restructuring advisers to guage a possible chapter submitting.
Reduction could possibly be tough to come back by. Automotive manufacturing is extremely costly, even for an organization like Fisker which is outsourcing a lot of the work to suppliers like Magna. Fisker ended 2023 with $326 million in money, and despite the fact that Magna produced zero vehicles in January and only one,000 since February 1 — figures Fisker shared for the primary time on Monday morning — it nonetheless drained its money reserves by round $200 million throughout the final 11 weeks.
Fisker mentioned Monday that it stays in negotiations with an automaker a couple of potential partnership that might convey an funding; Reuters has reported that this automaker is Nissan. Within the near-term, Fisker mentioned Monday it’s attempting to boost $150 million by means of the sale of convertible notes. That deal, with an undisclosed investor, shouldn’t be closing and the funds will likely be launched in $35 million tranches which are topic to quite a lot of situations.
On the identical time, Fisker introduced that it’s late in submitting its annual outcomes for 2023, together with lacking the 15-day extension interval from the SEC that expired March 15. That has triggered a default in one of many firm’s different convertible notes. Whereas Fisker says the investor behind these notes has waived the default, the investor can nonetheless convert the quantity remaining on the observe — which as of late January was greater than $300 million — into shares.