Fisker plans to stop producing vehicles for six weeks and raise up to $150 million by selling convertible notes as it fights for survival, according to a press release on Monday.

The electric vehicle startup missed an $8.4 million interest payment on March 15, even though it has enough liquidity to make the payment, according to a regulatory filing. Fisker is taking advantage of a 30-day grace period to work with “certain stakeholders in the Company’s capital structure,” the company said in the filing.

Fisker said the moves could improve its balance sheet as it seeks a partnership with a major automaker. Reuters reported earlier this month Fisker was closing in on a deal with Nissan.

Fisker had a tumultuous 2023, during which the automaker dealt with production delays, weak sales, high interest rates, labor shortages, and a lack of real estate for its retail stores.

The convertible notes would provide needed liquidity for the startup until it can strike a deal.

In the regulatory filing, Fisker said its cash, cash equivalents and restricted cash fell from $395.9 million at the end of 2023 to 120.9 million as of Friday.

“We expect to require additional cash in 2024 for debt service and investment needs, and our ability to generate cash from operating activities will depend on our ability to transition to a dealer model and sell vehicles,” Fisker said in the regulatory filing. “Accordingly, we have concluded there is substantial doubt as to our ability to continue as a going concern.”

The EV startup will pause production on Monday “to align inventory levels and progress strategic and financing initiatives,” according to the release. The automaker has 4,700 vehicles in its inventory, most of which were manufactured in 2023. As of Friday, Fisker had produced about 1,000 vehicles and delivered about 1,300 in 2024.

In January, Fisker announced it would sell its vehicles through dealers and abandon its direct-to-consumer sales model in a last-ditch effort to juice sales and revenue.

But in February, less than two weeks after the New York Stock Exchange threatened to delist the company for failing to maintain a share price above $1, Fisker reported losing $762 million in 2023. With its survival in question, Fisker announced it would seek a partnership with a major automaker and slash its staff by 15%.

By: DocMemory
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